Hy-Vee narrows its focus as it competes with Costco and other grocers
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The main Court Avenue entrance at the downtown Hy-Vee has been closed for weeks, directing customers to its rear or side entrances. Photo: Jason Clayworth/Axios
After years of expanding into different ventures, Hy-Vee is refocusing on two priorities: food and health care, CEO Jeremy Gosch told the Business Record.
Why it matters: The refocus comes as Hy-Vee competes for grocery dollars from stores growing in popularity, like Costco and Sam's Club.
Catch up quick: Gosch has served as the company's CEO since 2022, and since then, Hy-Vee has ended some of its partnerships that extended beyond groceries and pharmacy.
- The company's previous CEO, Randy Edeker, was known for experimenting beyond the traditional grocery model.
Zoom in: In 2025, Hy-Vee closed its Wahlburgers locations and converted them into Market Grilles.
- Partnerships with clothing brand Joe Fresh and shoe retailer DSW ended in 2022. They had a short run showcasing treadmills and ellipticals with Johnson Fitness & Wellness.
- This year, Hy-Vee sold its standalone Fast & Fresh stores to Pump & Pantry and began converting its rural Dollar Fresh discount stores into Hy-Vee locations.
What's new: Traditional grocery stores made up 72.2% of Americans' food spending in 1997. By 2025, that fell to 56.2%, according to USDA data cited by the Business Record.
- Warehouse clubs and supercenters grew their share from 9.4% to 26.4% during that period.
Now, Hy-Vee's strategy for beating competitors centers on three things: service, quality and price, Gosch told the Business Record.
- The company recently reviewed the suppliers behind its produce and meat, ending some partnerships while expanding others as it tries to improve quality.
- Hy-Vee also cut prices on thousands of products in 2024 and has lowered more prices in recent weeks to better match major competitors.
Plus: The company is working to improve its pharmacies, a longstanding part of Hy-Vee's portfolio, Gosch told the Business Record.
- A new pickup system will let customers alert the pharmacy that they're coming, pay ahead and retrieve prescriptions more quickly.
- Hy-Vee plans to test it in Waukee, Grimes and Ankeny.
What's next: The focused strategy is helping Hy-Vee put more money into expanding and renovating its stores.
- The Jordan Creek Parkway Hy-Vee in West Des Moines is undergoing a $4.8 million remodel that includes upgrades to produce, meat, seafood, deli and bakery areas.
- Hy-Vee also plans to keep adding stores within its existing nine-state footprint, the Business Record reports.