Dive Brief:
- Hy-Vee is investing nearly $90 million to remodel 14 stores in Kansas and Missouri, according to a press release. Construction is currently in progress at several stores, with more slated for 2020.
- Among the upgrades will be new and expanded departments, self-checkout lanes, enhanced health and wellness services and the addition of Joe Fresh clothing. New foodservice options will include Hibachi, sushi and Mia Pizza locations.
- Some of the investment has also gone toward Hy-Vee's new fulfillment center in Kansas City, Missouri, which will open this fall to support the grocer's Aisles Online grocery pickup and delivery service.
Dive Insight:
Hy-Vee's decision to put more resources into its operations in the Kansas City metro area signals strong customer support and belief that there is potential for more growth there. Hy-Vee faces plenty of local competition around Kansas City, with other retailers in the area including Walmart, Whole Foods, Trader Joe's and Price Chopper.
The new fulfillment center in Kansas City is a significant development to support expansion of Hy-Vee's Aisles Online program, which the company is emphasizing over its partnerships with Shipt and Instacart. Customers can currently buy an Aisles Online membership for $99 a year, which will offer unlimited same-day delivery. Store pickup is always free, according to the company website.
Hy-Vee is no stranger to innovation and changes to store formats. It opened two scaled-down formats last year, including health-focused HealthMarket and Fast & Fresh, a new convenience store providing more fresh offerings. For Hy-Vee’s CEO Randy Edeker, being innovative is necessary to stay relevant in the crowded Midwest.
Health and wellness is a big focus in its remodeled stores. When it comes to their health, 55% of consumers trust their primary store as an ally above drugstores and online grocery providers. Hy-Vee has been betting hard on this trend, acquiring ten Weber & Judd pharmacies in southeastern Minnesota earlier this year that will be rebranded under the Hy-Vee HealthMarket RX name and opening several new HealthMarket stores.
Other retailers are taking a similar approach when it comes to remodeling and adding convenience-focused features to differentiate from one another. Walmart is doling out hundreds of millions of dollars this year in store models across the country aimed at expanding customer-focused innovations, while Kroger is investing $97 million to update its Michigan stores. Tops Market, Weis Markets and Hannaford have all made similar investments in different markets.
