WEST DES MOINES, Iowa — Cracking the code is never enough in the retail industry, because the code keeps changing. A&P cracked the code in the late 1800s, and it was the nation’s dominant grocery chain by 1930, but it is gone today.
Hy-Vee Inc., founded in 1930 by Charles Hyde and David Vredenburg in Beaconsfield, Iowa, has no intention of being left behind by changing times or overtaken by new competitors. The company is determined to evolve fast enough to keep up with the changing wants and needs of its customers.
Under the leadership of chairman, chief executive officer and president Randy Edeker, the employee-owned company is building on its strengths — including its “helpful smile in every aisle” approach to customers, and its three strategic pillars of customer experience, health and wellness, and culinary expertise.
But Hy-Vee also recognizes that customers’ attitudes toward things like culinary excellence and expertise are changing. People are eating out more, and Edeker notes that in 2016 the balance shifted, and Americans began eating more meals away from home than at home. That was a change with profound implications for the supermarket industry, and there are others coming that could be similarly jarring, including the move toward shopping online instead of shopping in brick-and-mortar stores. Hy-Vee is watching those trends, and is responding to them.
For example, the company is getting into the restaurant business in a major way. Hy-Vee has long offered prepared food options in its stores, from salad bars to pizza ovens and Asian food stations. The company has also embraced the “groceraunt” trend, opening Hy-Vee Market Grille and Hy-Vee Market Grille Express restaurants inside many of its supermarkets.
This summer Hy-Vee is opening its first stand-alone Wahlburgers restaurant in the Mall of America, located in Bloomington, Minn. Hy-Vee announced a deal last summer that will make it one of the largest franchisees of the casual dining chain. Hy-Vee plans to build, own and operate 26 stand-alone Wahlburgers restaurants, and will add select Wahlburgers menu items to its own Market Grille and Market Grille Express restaurants.
Hy-Vee also launched a partnership with Orangetheory Fitness, which operates 750 fitness studios nationwide, and is on track to add 1,500 more in the next two years.
The deal calls for Hy-Vee to open Orangetheory studios inside or adjacent to its stores. In addition, Hy-Vee dietitians will work with Orangetheory members to offer dietetic services, provide samples of nutritional products and lead store tours to showcase items that align with member needs.
Hy-Vee says the partnership adds an integrated fitness component to its already strong focus on health and wellness, which includes pharmacies, in-store dietitians, HealthMarket departments, chefs, fresh and organic produce, and pharmacies.
The first Hy-Vee Orangetheory Fitness location opened last year adjacent to the Shakopee, Minn., Hy-Vee.
“There is a changing landscape in the retail industry,” Edeker said of the partnerships. “Hy-Vee has a responsibility to our customers, employees and communities to look for new ways to strengthen our company. With this type of progressive action, Hy-Vee is well positioned for future growth.”
Hy-Vee is also trying out new store formats. Last year it debuted its first urban concept store with the Fourth + Court Hy-Vee location, which occupies 36,000 square feet on the ground level of a four-story building in downtown Des Moines. (There are 82 apartments in the upper three floors of the building.)
“There is nothing traditional about it,” Edeker told The Des Moines Register before the store opened. “You’re not going to walk in and say ‘grocery store.’ This is about food and about the lifestyle of today.”
The store has a curated assortment of packaged goods, but the main emphasis is on fresh and ready-to-eat food. There is a Market Grille restaurant with a bar and a temperature-controlled wine room, and the store has seven food-service stations (including deli, sushi, charcuterie, and Italian and Mexican food).
The store also a features a beer growler station, and there are lockers outside the store where consumers can pick up products they ordered via Hy-Vee’s online grocery ordering website, Aisles Online.
This year the retailer will introduce its new Fast & Fresh convenience and meal solution stores, which will measure about 10,000 square feet. The stores, set to debut in Des Moines and Davenport, Iowa, offer grocery items, prepared food and a coffee shop.
Another new small-store concept is set to open this year in West Des Moines. This one will focus on health, with a health food department, a pharmacy, a clinic and a fitness studio.
“We’re a private company, and we get to try new things,” Edeker explained. “We sometimes make mistakes, but we are able to learn from them and move on to something else that is exciting and new.”