A ‘strong grocer’: Sprouts Farmers Market plans Wheaton store as part of suburban expansion push

When Sprouts Farmers Market opened its latest store in Texas, the grocer rolled out $5 sushi Wednesdays, highlighted local farmers and appealed to the granola crowd with a bulk department featuring “hundreds of bins and barrels.”

The Phoenix-based chain is not yet a household name in the Chicago region, but that will soon change with a planned Wheaton store and others in the pipeline.

“They have several new deals teed up in the Chicago area,” said John Melaniphy, president of retail consulting firm Melaniphy & Associates.

With roots as a farm stand, Sprouts had stores in 24 states by the end of last year. Melaniphy has visited one in Florida.

“To compete today with Walmart and Costco and Kroger and Albertsons, it's really challenging. So it's refreshing to see a new, strong grocer come into the market, which is good for the consumer, because it provides another alternative, and it keeps pricing in check,” he said.

Sprouts carries organic, gluten-free, plant-based and non-GMO items. About 20% to 25% of their merchandise mix is produce, Melaniphy said. Earlier in his career, Sprouts CEO Jack Sinclair led Walmart’s U.S. grocery business.

“They are more of a health-conscious, natural, organic type of grocery store than some others, but I think their prices are very competitive and below Whole Foods,” Melaniphy said.

Sprouts wants to open a store across the street from the Wheaton Nurseries garden center. A developer proposes construction of a roughly 24,000-square-foot store at the northwest corner of the long-vacant site at Roosevelt Road and Chase Street.

In Buffalo Grove, village officials confirmed that a Sprouts will occupy about 27,000 square feet of a former Dominick’s.

Sprouts could be a candidate for filling some of the Amazon Fresh vacancies and others, Melaniphy said.

“We’ve had a lot of market segmentation in the grocery field,” he said. The growth in new stores is mostly being driven by new concepts coming in and taking over former grocery stores, Melaniphy said, or what he calls second-generation retail space.

“There hasn’t been a lot of new ground-up development for grocery stores,” he said.

Many of the grocers in the Chicago area also put development on hold because of the proposed merger between Albertsons and Kroger, Melaniphy said. The parent company of Jewel-Osco, Albertsons, terminated its merger agreement with Kroger at the end of 2024.

“Many grocery operators were looking at how that might change the dynamics of the grocery market, not only in the Chicago metropolitan area, but across the U.S. in markets where those two stores operate, and then what stores they were going to have to close as a result of antitrust concerns,” Melaniphy said.

Overall, the Chicago area is a fiercely competitive market, and today’s consumer doesn't have loyalty to any one particular grocer, he said.

“They shift their shopping habits and patterns based upon the need of that particular shopping trip. So for bulk items, they might go to Walmart or Costco,” Melaniphy said. “For gourmet items, they might go to Trader Joe's.”

Sprouts is known for a “farm-stand” atmosphere where fresh and organic products are the main attraction, noted David Bishop, a partner at Brick Meets Click in Barrington, an analytics and consultancy firm to the grocery industry.

Stores are “typically smaller than the average supermarket and their assortment focuses on healthy, natural, and niche items catering to specific dietary preferences,” such as keto and paleo, Bishop wrote via email.

“There are economies of scale in advertising. So I think that you will see additional stores in short order as they finalize their real estate deals and build out those locations,” Melaniphy said.

With strong grocery sales productivity in Wheaton, Sprouts might not have been able to find an appropriate location with a vacant grocery store “because it's such a desirable community,” Melaniphy said.

The city’s planning and zoning board is slated to hold a public hearing on the proposed development Tuesday, April 28. It also calls for a nursery school to be constructed at the southeast corner of the site. Quattro Development of Oak Brook owns the property.

“I think it's a very dynamic grocery market in Wheaton with an average household income that is higher than some of its neighboring communities, and it has a very well-educated population base and a lot of children,” Melaniphy said. “It's a great community to raise a family in, so I expect them to do very well in that market.”

• Daily Herald staff writer Steve Zalusky contributed to this report.