Hy-Vee now offers 5 alternative store formats. Here’s how they evolve.

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Hy-Vee executives are thinking a lot about what the future of its stores will look like.

This goes for its proven supermarket model, which is now getting a facelift. This also applies to the stable of alternative store banner grocers who are also adapting to a rapidly changing industry and consumer landscape.

Hy-Vee currently has five store concepts in various stages of scale and development, including a convenience store, a dollar format and a recently announced liquor outlet. In some cases, these scaled-down locations are a way to bring Hy-Vee into communities where a full-size grocery store doesn’t make sense. In others, they’re a way to increase spending for existing customers, like weekday warriors who want a quick lunch from Fast & Fresh, or wellness-conscious people who appreciate the wide selection of vitamins and supplements in HealthMarket format.

However, not all private labels work well. One of them will soon pass by the wayside while another will attempt a change of scenery in Hy-Vee’s hometown of Des Moines, Iowa. This speaks to the perilous nature of grocers who venture beyond their main stores. But it’s also something Hy-Vee, who has embraced a will to fail that’s rare in the grocery store, agrees. Asked about the failure of his first HealthMarket site, CEO Randy Edeker announced the result, saying it was likely due to a poor location.

“We chose badly, so we’ll move on,” he said.

Grocers have been rolling out alternative formats for years, but with the pandemic changing consumer habits and filling investment coffers, the strategy is showing signs of shifting into high gear. Here’s a look at how one of the country’s busiest regional grocers handles its various store formats.

Fast and fresh

Number of pitches: Over 80

Next : Hy-Vee plans to convert all of its convenience stores to the Fast & Fresh format early next year.

Source of images

After launching standalone Fast & Fresh stores in 2018, Hy-Vee quickly decided to refresh all of its convenience stores into a more modern format. Now the company is making its final push to convert the rest of those sites within the next few months, a spokesperson said.

Edeker called Fast & Fresh the company’s “stop meal solution” and said the format adds more services and menu items to deepen that focus. Select locations now have a Market Grille Express where customers can purchase store-prepared meals like burgers and empanadas.

Fast & Fresh stores have also become alternate grocery destinations and e-commerce hubs during the pandemic, with pick-up orders fulfilled from many locations. The stores carry an assortment not typically associated with convenience stores, such as sushi and fresh produce, and try to provide an elevated experience. In West Des Moines, there’s a Fast & Fresh co-located with a Smokey Row cafe — a local chain — with a lounge area and a see-through fireplace.

As automakers increasingly go electric, the Fast & Fresh format becomes more than just a fuel stop for Hy-Vee.

“They’re really becoming a bit of a neighborhood grocery store, and we’re getting more sites targeting that,” Edeker said.

fresh dollar

Number of pitches: 16

Next : A spokesperson said the company had no expansion plans for next year, although Edeker said 20 stores were “in our budget” for 2022.

Courtesy of Hy-Vee

Hy-Vee’s response to dollar stores and discounters in rural Midwestern communities continues to grow and change its assortment.

Dollar Fresh stores offer a full assortment of groceries as well as a large section of common discount shopping in dollar format. Recent openings have taken place in cities like Cresco, Iowa and Lexington, Nebraska. A store slated to open later this year in Orange City, Iowa is 29,000 square feet, significantly larger than a traditional dollar store.

In select stores, Dollar Fresh shoppers can now find smaller Joe Fresh fashion outlets and DSW shoe departments. The selections are very curated, Edeker said, and are meant to complement shopping trips.

The Hy-Vee brand isn’t often associated with low prices, Edeker acknowledged, but Dollar Fresh gives the company a fresh look in that regard. The focus on groceries, meanwhile, is effectively hitting operators like Dollar General and Dollar Tree who have recently increased their fresh and frozen selections.

“We chose the name Dollar Fresh, and we wanted to focus more on fresh produce, because we believe that’s where it’s weakest,” Edeker said.

Fourth + Court

Number of pitches: 1

Next : After nearly five years in business, Hy-Vee’s urban concept will be replaced by its HealthMarket format at a date yet to be announced.

Jeff Wells / Grocery Dive

Fourth + Court opened in downtown Des Moines in 2017 to allow Hy-Vee to reach young shoppers living and working in urban markets. The store, which is still open for now, offers a wide selection of liquor, prepared meals, a sushi counter and a Wahlburgers restaurant.

The location was also one of the first for the company to offer pick-up lockers, which are still located just outside the store entrance.

But the pandemic has been difficult for urban grocers, who have had to deal with dwindling office worker numbers, especially during mealtimes. A company spokesperson said the move to the HealthMarket format would be better suited to the changing makeup of consumers living and working in downtown Des Moines.

“The Fourth + Court Hy-Vee site has served as a testing location for many Hy-Vee offerings since it opened in 2017, and we have been able to leverage this information and implement various components into new store formats in our region of eight states. “, wrote the spokesperson in an e-mail.

HealthMarket

Number of pitches: None currently

Next : The format will relaunch in downtown Des Moines on a date yet to be determined.

Jeff Wells / Grocery Dive

Opened in 2018 as a larger, stand-alone version of its in-store health and specialty section, Hy-Vee’s HealthMarket store offered a wide variety of vitamins, supplements and natural products, as well as services like a pharmacy, a medical clinic and a sports nutrition center.

But the store never really attracted shoppers and closed last month. Edeker admitted this may have been because the store was located too close to a few Hy-Vee supermarkets in the West Des Moines area, and said he still had faith in the brand.

“We think this concept is still the right concept,” he said. “Honestly, I don’t think we did it very well. I think we have to start over. »

A spokesperson for Hy-Vee did not give a timeline for the concept’s downtown reopening, noting only that it will occur in the “near future.” She said the store will include meat, bakery, wine and spirits and other grocery selections, as well as an expanded department of vitamins and supplements. The store will also be the site of Hy-Vee’s first HyChi Chinese restaurant.

Edeker said he would eventually like to move Healthmarket to the home delivery service, noting the widespread popularity of the grocer’s health and wellness assortment. He said his wide selection of gluten-free products has caught the eye of shoppers across the United States.

“We can easily start shipping nationwide,” he said.

Wall to Wall Wines and Spirits

Number of pitches: None currently

Next : Hy-Vee plans to open four locations across Iowa and Nebraska, beginning with the West Des Moines location at the former HealthMarket site which is expected to open by the end of the year.

Courtesy of Hy-Vee

The pandemic has boosted alcohol sales and prompted retailers across the country to open stand-alone outlets. Hy-Vee’s new liquor store, announced this summer, will offer wine, spirits and beer at various price points, as well as barware and side dishes like fries and deli meats.

The main focus, Edeker said, will be on wine.

“It’s about having the extension of wine that we’ve really never set foot in our liquor stores on the side of our [grocery] stores,” he said.

Edeker said Hy-Vee plans to operate the store as a subsidiary and not brand Hy-Vee to it. He envisions one or two stores in metropolitan areas of Hy-Vee’s eight-state operating region.

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