Speculation of an Albertsons Companies Inc. acquisition of Sprouts Farmers Market got us thinking, what does Albertsons stand to gain? It’s no secret that grocery chains are competing for market share in the United States. With just over 200 stores standing between Albertsons being the number one supermarket chain in America, Sprouts could be the answer.
Using credit and debit transaction data from 2016, which excludes all cash payments, 1010data looked at how much cross shopping regular customers of Sprouts and Albertsons are doing. We defined regular shoppers as customers who went to the supermarket at least 25 times in 2016. Although Albertsons Companies Inc. has over 15 grocery chains under its belt, we focused on the chains that compete in similar markets to Sprouts, like Vons, Safeway and Albertsons for this analysis. It appears that there is a fair amount of cross-shopping happening across these supermarkets.
The analysis showed that about one-third to half of all regular Sprouts customers made a purchase at an Albertsons-owned grocery store in 2016. However, the percentage of regular Sprouts customers who also shopped regularly at an Albertsons Companies chain was just 16%. And while 48% of regular Vons shoppers made purchases at Sprouts in 2016, only 6% were also regular Sprouts shoppers. The data is telling us that Sprouts’ customer base doesn’t overlap too much with the customer base of Safeway, Vons and Albertsons.
When looking at dollars spent over the year, our analysis showed that regular shoppers from Albertsons, Safeway, Vons spent minimal amounts of their grocery dollars at Sprouts. Regular shoppers across all three Albertsons brands spent no more than 15% of their dollars at Sprouts. However, regular Sprouts shoppers spent 27% to 45% of their dollars with Albertsons chains. Using the Albertsons brand as an example, the data indicates that Sprouts’ shoppers are spending almost an equal amount of money at both Sprouts and Albertsons throughout the year.
Overall, Sprouts has little overlap with Albertsons Companies customers. Should Albertsons actually acquire Sprouts Farmers Market, they will be welcoming a new base of customers who are used to shopping at Albertsons stores. It appears that an acquisition would create minimal internal competition and would give Albertsons the boost it needs to overcome Kroger as the top supermarket chain in the country.