Sprouts Farmers Market Inc.'s Palm Harbor location is likely the first of many in the Tampa Bay region — ramping up competition in the organic grocery market and creating opportunity for retail developers.
RMC Property Group of Tampa said Tuesday that it has secured a lease with Sprouts (NASDAQ: SFM) for Palm Harbor Commons, where the grocer will occupy 32,500 square feet.
"[Sprouts is] certainly in active discussions with several developers throughout the Tampa Bay region, in both Hillsborough and Pinellas County," said Justin Boudreau, principal with Hybridge Commercial Real Estate in Tampa.
Phoenix-based Sprouts has been looking at sites throughout Florida for years. It is also widely speculated to be the anchor tenant in a South Tampa redevelopment.
Sprouts specializes in fresh, organic groceries and nutritional supplements. Publix Super Markets Inc. in recent years has put an emphasis on organic and natural products, making a play for more affluent shoppers — and it's worked, as the Lakeland-based grocer has succeeded in taking market share from specialty grocers like Whole Foods Market Inc. (NASDAQ: WFM).
The entrance of Sprouts into Florida adds another dimension to the grocery market here, which is largely dominated by Publix and Walmart Stores Inc. Sprouts is growing at a rapid pace, with plans to grow to 418 stores from 216 in five years, MarketWatch reports.
Publix isn't the only one adding to its organic foods selection. German discount grocer Aldi, which has been expanding throughout Florida — and has several locations in the Tampa Bay region — is also emphasizing organic and natural foods. It is working to expand its SimplyNature and gluten-free liveGfree lines of products.
Whole Foods has launched a new concept to compete with more millennial-focused chains — 365 by Whole Foods. The first Florida location of Whole Foods' new concept will be in Gainesville.
Lucky's Market, based in Colorado, is also expanding in the Sunshine State.
The Fresh Market (NASDAQ: TFM), which already has 40 stores in Florida, could also become a more serious contender. Kroger Co. (NYSE: KR), one of the best supermarket operators in the U.S., is reportedly in talks to buy Fresh Market.