Hy-Vee nixes distribution center plans in Minnesota
- Hy-Vee has halted plans to open a distribution center in Austin, Minnesota, according to the Austin Daily Herald.This would have been Hy-Vee’s first distribution center outside of Iowa, and its third overall.
- In September 2017 the grocer announced that it was exploring a possible 1 million-square-foot distribution center in Austin that would bring hundreds of jobs to the area, but shortly after said the project would be delayed due to a change in the company’s growth strategy.
- The recent announcement confirms that Hy-Vee will not be moving forward with the distribution center, though in a statement Hy-Vee assistant vice president Pete Hosch said Hy-Vee is "not saying that we won’t ever revisit the facility in Austin."
The discontinuation of a distribution center in Austin confirms a slower pace for Hy-Vee in Minnesota that CEO Randy Edeker has alluded to in recent months. Last year, Edeker told the Minnesota Star Tribune that the company would take a step back on its expansion plans in the state to reevaluate the size of Hy-Vee stores and see how e-commerce would impact growth plans.
In a recent interview with Grocery Dive, Edeker said that Hy-Vee has slowed growth in the Twin Cities region "just a little bit" because the company is spending money elsewhere. In addition to investments in e-commerce, Edeker said the company has been remodeling stores across the Midwest, building new concepts and focusing on foodservice.
Edeker noted the grocer is evaluating the success of its first Hy-Vee Healthmarket and expanding its Fast & Fresh c-store concept to 15 stores this year. Growing its restaurant arm also appears to be a strategic priority for Hy-Vee as it opens some of its 26 planned Wahlburgers locations and continues to add more Market Grille locations at Hy-vee stores.
A slowdown in the North Star State doesn’t necessarily spell trouble. The retailer opened two stores in Minnesota last fall, and local reports anticipate as many as 12 total stores around the Twin Cities by the end of this year. Hy-Vee has also stayed active in the state with its pharmacy business, recently acquiring 10 Weber & Judd locations.
While disappointing to the city of Austin, Hy-Vee’s pause on distribution center plans don’t seem to indicate a broader issue across the company. The grocer is committed to making sure its current stores and endeavors are succeeding, and is showing its ability to remain nimble during an uncertain time in the grocery business.
- Austin Daily Herald Hy-Vee: 'No Austin distribution center'
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