Though buying shares of grocers might sound like a boring investment prospect, it's been extremely lucrative over the past five years. As Americans have become far more conscious of where their food comes from and what's in it, these upstarts have started grabbing huge shares of the country's enormous food budget.
Of course, the behemoth in the industry is Whole Foods Market (NASDAQ:WFM), but newcomers like The Fresh Market (UNKNOWN:TFM.DL), Natural Grocers (NYSE:NGVC) and Sprouts Farmers Market (NASDAQ:SFM) are differentiating themselves from Whole Foods by building smaller stores that can exist with a more mom-and-pop feel.
In the last two quarters, one of the fastest-growing of this cohort has been Sprouts -- which is primarily located within the American Southwest. The company is reporting earnings later this week, and in order for investors to know what to look for, Motley Fool contributor Brian Stoffel has isolated two variables that he thinks will be the most important for long-term investors to keep an eye on.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Brian Stoffel owns shares of Whole Foods Market. The Motley Fool recommends The Fresh Market and Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.