How will Hy-Vee fare with latest expansion plans?

Hy-Vee has announced plans to expand its empire to Indiana, Tennessee, and Alabama in 2023.

The West Des Moines chain plans 20 new stores over the next four years, per a report from the Supermarket News.

This aggressive expansion follows Hy-Vee cutting 121 corporate jobs — about 8% of its corporate staff, per an Axios report. Most of the cuts were in marketing and IT. Hy-Vee was also cutting back the number of stores offering Aisles Online, the company’s service that shops for customers who order online and either pick up their groceries or have them delivered.

Aisles Online was so popular during the early days of the pandemic that it was nearly impossible to get a delivery spot. Apparently, as restrictions have lifted, so has the demand to pay other people to do their shopping.

This expansion worries me. Hy-Vee is doing well. Hy-Vee ranked as the 24th largest privately owned company, per Forbes.

Yet I worry.

There once was a dominant grocery chain named Dahl’s. Founded by Wolverine Thilbert Dahl, the chain was known for innovation. They invented drive-thru grocery pick-up. The first debit card transactions in the country took place at Dahl’s on Ingersoll Avenue. 

Dahl’s was among the first chains to have an in-store pharmacy, a sit-down deli, and a bakery. Much of what we think of as standard stuff for a supermarket started with or was heavily promoted by Dahl’s.

But W.T. Dahl tried expansion. He opened stores in Missouri in 1979, attempting to crack the Kansas City market. Dahl’s struggled and after 18 years, pulled out of Missouri. Dahl later said the money and effort poured into expansion in Missouri allowed Hy-Vee to become the top chain in Des Moines.

Dahl’s never recovered. It fell behind on the most important measure in the business: prices.

The chain filed for bankruptcy in 2014 and it was bought by a Kansas City, Kansas, food distributor which rebranded the remaining Dahl’s stores Price Chopper.

Hy-Vee is in a much better position to expand than Dahl’s ever was.

The chain founded in 1930 by Charles Hyde and David Vredenburg already has more than 280 locations in Iowa, Illinois, Minnesota, Missouri, Nebraska, South Dakota, and Wisconsin.

It sure seems like they know what they’re doing.

Then again, I miss the old Hy-Vee sit-down deli. They replaced those with supposedly classier restaurants with wine and beer. I don’t think fine dining when I think Hy-Vee, but it seems to be working for them.

Hy-Vee is also tied up with this Wahlburger franchise. I’ve not heard many positive reviews of Wahlburger’s food. I’ve not been there. I’m not a big Mark Wahlberg, the actor and chain’s co-owner with his family.

One of the stores in Wisconsin has a nail salon and its own line of clothing.

That’s a bridge too far in my mind.

You can try to sell me all the varieties of kumquats you want, but don’t push high fashion on me when I’m just there to grab bread, milk, and eggs.

The duty of every CEO is to make more money than the year before. I accept that.

I’m not sold that Hy-Vee is going about this in the right way.

But what do I know?

In my lifetime, Hy-Vee faced challenges from Hinky Dinky, SuperValue, and Safeway. Those stores are all ghosts. Hy-Vee is still standing and expanding.

In the late 1990s, Albertsons invested in the Des Moines market heavily with both supermarkets and their Osco Drug Stores. Albertsons is now the second-largest grocery store chain in America, but you won’t find one in central Iowa.

Hy-Vee whipped them.

The largest chain in America is Kroger. And Hy-Vee will be going into their turf when they roll into Tennessee and Alabama.

But Hy-Vee already duels Kroger in the competitive Omaha grocery market. They’re both still standing.

Maybe I shouldn’t worry about Hy-Vee.

What a story it could be: The little town store from Beaconsfield rises up to be one of the great supermarket success stories of all time.

Then again, I remember going to the Hinky Dinky in the Beaverdale neighborhood of Des Moines. There was a butcher named Sam, which my sister and I thought was hilarious because Alice from “The Brady Bunch” dated a barber named Sam. I bought my first comics off the wire rack by the magazine stand there.

The lot is a Walgreens now.

There are always winners and losers in business.

I hope Hy-Vee is on the right side of this one.

Former journalist and future teacher Daniel P. Finney writes columns for the Marion County Express. Reach him at newsmanone@gmail.com.

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