Is Albertsons pursuing Sprouts?

Albertsons Cos. is reportedly in preliminary merger talks with Sprouts Farmers Market. Early-stage discussions have involved a plan to take organic grocer Sprouts private and add it to the Albertsons’ family of stores, Bloomberg reported.

Phoenix-based Sprouts and Boise, Idaho-based Albertsons declined to comment.

"If a deal gets done, Albertsons would benefit from the higher-end Sprout's customer," noted Robert Costello, Jr., president of Feasterville, Pa.-based Costello Asset Management Inc. "Sprout's stores tend to be located in high population areas and has posted higher sales growth and profit margin than most U.S. food retailers. Sprout's would also improve the investment profile whenever Albertsons is taken public."

Earlier this year, Albertsons was said to be pursuing an acquisition of New York-based Price Chopper. 

Backed by Cerberus Capital Management, the Albertsons network includes its own banner as well as Safeway, Jewel-Osco, Shaw’s and Acme.