Sprouts Farmers Market Inc (SFM): Could This Tiny “Farmers Market” Challenge Whole Foods Market, Inc. (WFM)?

Why Sprouts shareholders should worry about Whole Foods

And yet, despite this rosy growth outlook, I still think Whole Foods stock is a better bet today. Currently, Sprouts trades hands at 227 times earnings, while Whole Foods is a much more reasonable 37 times earnings.

But more importantly, if Sprouts is going to meet its expansion plans, it’s going to need to expand outside of its home territory of the American Southwest. And as it does that, it will be opening stores in areas where Whole Foods has already established operations.

And as people pay ever more attention to where their food comes from, they’ll be more aware of their shopping experience. John Mackey has shown that he knows what it takes to create a truly transcendent shopping experience. Based on the relative employee satisfaction at Sprouts, I highly doubt that its in-store experience will approach what Whole Foods has accomplished.

The article Could This Tiny “Farmers Market” Challenge Whole Foods? originally appeared on Fool.com and is written by Brian Stoffel.

Fool contributor Brian Stoffel owns shares of Whole Foods Market (NASDAQ:WFM). The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of Whole Foods Market.

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