March 19, 2024

More stores in more states, expanded categories such as toys and sports apparel, and an emphasis on retail media are among the themes Hy-Vee leaders shared in an interview about the company’s future.

Jeremy Gosch became CEO last year, succeeding Randy Edeker, who held the role for more than a decade and will serve as executive chairman of the board until July 31.

In an interview with Progressive Grocer, Gosch said expansion has slowed some.

“With all that’s going on with inflation, construction costs, frankly, inventory-carrying costs, we’ve been really going a bit slower,” he said.

Hy-Vee is focused on a “massive warehouse” in the Des Moines area and plans to focus on its expansion in the Southeast after that. Previously announced plans talked about expanding in Indiana, Kentucky and Tennessee, which is set to begin this summer, he said.

New stores in the works don’t necessarily include Sioux Falls.

“At this time, no additional development is happening in the Sioux Falls market,” according to a Hy-Vee spokesperson.

There have been some renovations, including at the store at 3000 S. Minnesota Ave., where Starbucks recently was moved within the store and replaced by an enlarged grab-and-go section.

Hy-Vee’s food service has centered around Wahlbugers, which now has several locations in Sioux Falls, Gosch said.

“We have also focused on our seasonal departments, with us putting a massive toy aisle and housewares department in many of our stores,” he said. “We also are adding sports shops that carry authentic gear from teams like the Kansas City Chiefs and Minnesota Vikings as well as local high schools and colleges. That’s been very successful for us. Also, beauty is a huge win for our stores, so we will continue to roll beauty shops out wherever we can.”

Gosch also talked about Hy-Vee’s pharmacy fulfillment centers, which include one in Sioux Falls in the former store at 10th Street and Kiwanis Avenue. Three in four prescriptions now are filled by a machine, he said.

“Our ultimate goal is to have our pharmacists operating at the top of their license and focusing on patient care versus counting pills.”

The vision for the company is not to be a coast-to-coast, brick-and-mortar retailer, he added, calling the company’s approach “very calculated” growth, noting, however, that there is the capacity to be a nationwide grocery provider through shipping, particularly in organic and natural foods.

In his interview with Progressive Grocer, Edeker spoke to the challenges of the past decade, particularly the pandemic, but more recently retail crime.

“We have professionals that have joined our company from law enforcement; I never believed they would leave law enforcement to come work for a private company. But they gladly have,” he said.

The future of grocery, he predicts, will be driven by “retail media,” the concept of retailers leveraging their platforms to advertise other brands and using that revenue to offset the prices consumers pay. Hy-Vee launched RedMedia, its own retail media network, last year.

“I predicted then that someday grocery will be eradicated, and groceries will almost be given away for media dollars,” Edeker said.