Hy-Vee and Amazon target Twin Cities growth

Dive Brief:

Hy-Vee plans to open two grocery stores paired with wine and liquor stores in Minnesota's Twin Cities area, stepping up its presence in the region, the Star Tribune in Minneapolis first reported. One store, in Spring Lake Park, Minnesota, is expected to open in the spring, while another, in Maplewood, Minnesota, is slated to debut by early summer, Christina Gayman, a spokesperson for the Midwest grocer, wrote in an email.
Meanwhile, Amazon is reportedly looking to expand its grocery business in the Twin Cities market, with two Amazon Fresh stores possibly coming to Eagan and Coon Rapids, Minnesota, according to Axios.
Hy-Vee’s reignited expansion coupled with Amazon’s possible interest could further shake up a St. Paul and Minneapolis metropolitan area where market share leader Cub Foods has courted sales offers.

Dive Insight:

The developing Twin Cities market is seeing growing competition for grocery shoppers’ dollars. Currently, shoppers have a range of choices from specialty local and regional grocers, ranging from Lunds & Byerlys and Kowalski's Markets to larger chains, including Target, Aldi and Costco.

Specialty grocery Kowalski's Markets is expanding in the area, with plans for two stores in shopping centers. Meanwhile, United Natural Foods, Inc., aims to sell off its market-leading Cub Foods within the next two years or so after hitting pause on that process last year due to the pandemic.

For its Spring Lake Park location, “Hy-Vee may add a large canopy covering nearly a dozen parking spaces on the building’s north side for curbside pickup of Aisles Online orders,” Gayman said. “In addition, Hy-Vee will include a drive-through pharmacy canopy on the south side of the building for customer prescription pickup.” The store will also have an attached wine and spirits store.

The Maplewood location includes a separate wine and liquor store in the adjacent strip mall that opened in December and a Fast & Fresh Express fueling station, which is slated to open this month in the store’s parking lot, Gayman said.

When Hy-Vee first came to the Twin Cities market in 2015, it planned to open four stores each year but switched course two years later, the Star Tribune reported.

Amazon’s potential entry into the Twin Cities area with Fresh stores, which are known for their low prices and quality produce, could pose a serious threat to grocers appealing to price-conscious shoppers. Amazon declined to comment on the report that it might open stores in the area.