April 28, 2022

Iowa-based Hy-Vee Inc. announced it’s cutting up to 500 more corporate jobs ahead of projections that a “severe economic downturn” could be coming as soon as next year.

The grocer announced its latest cost-cutting measure in an advertisement it placed in the Des Moines Register.

“As a trusted retailer that millions of people depend on every day, we need to make adjustments to better serve our customers and our more than 93,000 employees,” chairman and CEO Randy Edeker said in the advertisement.

Pointing to what “a growing number of financial experts predict will be a severe economic downturn as early as next year” combined with ongoing industry challenges, Hy-Vee this week is asking up to 500 corporate employees to consider a move to a retail position – following a similar move with 100 employees in March.

Goldman Sachs sets the odds for a recession in the next 24 months at 35 percent, while a Bloomberg survey showed half of investors expect a recession by mid- to late 2023, Hy-Vee said.

In addition, inflation, which Hy-Vee estimated at 11 percent in the nation’s food sector, is taking an immediate toll on the industry – in addition to labor costs, supply chain disruption and changes in consumer behavior.

“Many consumer trend reports are noting that more than 70 percent of consumers are spending less due to recent inflation,” said Donna Tweeten, executive vice president, chief merchandising officer and chief of staff at Hy-Vee.

“They are cutting back on indulgence items and impulse buys – both of which were on the rise during the pandemic but now are coming to an abrupt halt.”

Hy-Vee said it is trying to deliver value through daily digital deals on the company’s website and social media, along with increasing its Fuel Saver program that saves customers on gasoline.

Cost-saving measures

In its advertisement, Hy-Vee acknowledged that multiple moves made pre-pandemic were focused on cost savings, including reducing store hours from 24 hours to restructuring leadership of the stores through district store director and store manager positions.

More recently, it has shifted Aisles Online to locations where demand is the highest.

Hy-Vee also stopped construction on some projects, though it recently received building permits to convert its former west-central Sioux Falls location to a warehouse focused on bakery and pharmacy.

It also announced last week it’s pulling back plans for a half-dozen stores in the Twin Cities.

The need for staffing is critical, the company said.

This week, Hy-Vee will hold an internal job fair focused on 400 open retail positions that is intended to provide options for corporate staff whose positions are being eliminated.

“The company will provide incentives and moving bonuses to entice more office employees to relocate to its retail stores to help fill open positions and will work one-on-one with employees on their placement,” it said. “As the company looks closer at the retail landscape, it’s making moves to be as lean as possible and moving many of its leaders into stores to serve customers.”

Hy-Vee also is launching a campaign called Food Bank Fridays to raise money in support of food insecurity, along with donating $54.6 million last year – much of it to local hunger-relief organizations.  Food Bank Fridays have raised hundreds of thousands so far, the company said.