Kroger, Fresh Market & Sprouts Are Grocery Store Winners In 'Barbell'-Shaped Market
February 16, 2016 | 1 min to read
Stifel initiated coverage of three grocery stores — Kroger Co, The Fresh Market Inc., and Sprouts Farmers Market Inc.—with Friday notes that rate the shares at buy or hold based on quality goods, smaller stores, and strategic pricing, all big trends in the grocery space.
Stifel analysts describe the grocery landscape as a “barbell,” with large format grocers, like warehouse clubs, on one end, and high-end, smaller shops on the other. In the middle are traditional stores that are largely being “squeezed.”
Sprouts stores, for instance, occupy about 27,000 square feet, while traditional grocery stores are in the 45,000-square-feet range.
Among those on the large end of the barbell are Wal-Mart Stores Inc. WMT, +0.29% which recently announced that it was closing all 102 of its smallest Walmart Express locations to focus on its Supercenters and Neighborhood Markets. Supercenters average about 178,000 square feet and Neighborhood Markets average between 38,000 and 40,000 square feet.
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