Three years later: Where’s Hy-Vee?

It has become a familiar question on Fishers and Zionsville social media: “Has anybody heard when Hy-Vee is going to open?” There’s still no clear answer to that question.

In 2022, West Des Moines, Iowa-based grocery chain Hy-Vee Inc. announced plans to expand outside its home base in the central and upper Midwest. Hy-Vee would build a pair of 150,000-square-foot stores in the suburbs north of Indianapolis: one at the southwest corner of Whitestown Parkway and South County Road 700 East in Zionsville and another at the southeast corner of East 136th Street and Olio Road in Fishers. Hy-Vee also planned further expansion into Kentucky and Tennessee.

More than three years later, Hy-Vee hasn’t broken ground at either site.

“Currently, there are no updates on store development in Zionsville and Fishers to share at this time,” Hy-Vee Assistant Vice President of Communications Dawn Buzynski said in an email. “At this time, we have not announced construction plans in any of the other states.”

Buzynski did not elaborate when asked why Hy-Vee has not yet moved forward with developing its proposed stores.

Zionsville Mayor John Stehr said he keeps in touch with Hy-Vee officials. His understanding is that the company still plans to build a store in Zionsville. But he said building costs have increased to the point that Hy-Vee has pressed pause.

Hy-Vee initially filed plans for a grocery store development in Zionsville in 2021. In August 2022, members of the Zionsville Plan Commission approved a development plan for a store and gas station.

“The cost of building has gone up to a point where they’re not able to make the numbers work right now,” Stehr said. “It’s still in their plans to do it. There’s a little bit of uncertainty right now with tariffs and construction costs and all that kind of stuff. So they’re playing the long game, I think, is the short answer. They say they still plan to come into this market.”

Fishers Mayor Scott Fadness said he has not received an update recently from Hy-Vee representatives about when the company plans to begin work on their store. But he said the company indicated it wants a roundabout constructed at East 134th Street and Olio Road on the west side of the Hy-Vee site before construction can begin. The city has not announced any plans for a roundabout there. Hy-Vee’s project site is currently zoned for a big-box store and will not require any additional rezoning.

“The only consistent message I’ve gotten over the time is that they’re waiting on a particular road project to be done on Olio Road before they would commence work in Fishers,” Fadness said.

Still growing

While Hy-Vee has not moved forward with its plans in central Indiana, the company has been busy.

In summer 2022, Hy-Vee announced that company executives Jeremy Gosch and Aaron Wiese would serve as co-CEOs, replacing longtime CEO Randy Edeker, who remains company board chair. However, in early 2023, Hy-Vee changed course and announced Gosch would be CEO and Wiese would be board vice chair.

Last year, Hy-Vee purchased the northwestern Indiana grocery chain Strack & Van Til Food Market, also known as Indiana Grocery Group LLC. Strack & Van Til retained its name and operates as a subsidiary of Hy-Vee Inc. The company did not publicly disclose how much it paid for Strack & Van Til, but the Des Moines Register reported that the acquisition is thought to be one of the largest in Hy-Vee’s history.

The Strack & Van Til acquisition added 22 stores to Hy-Vee’s more than 550 retail business units, which include grocery stores, drugstores, pharmacies, restaurants and convenience stores. There are 304 Hy-Vee grocery stores in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin.

Privately held Hy-Vee, which reported $13 billion in revenue last year, has an employee stock ownership plan, or ESOP, which provides employees with an ownership stake in the company by granting them stock in an amount based on tenure.

“As our company continues to expand into Indiana and the Southeast region, Strack & Van Til’s customer-centric focus and company vision to ‘make lives easier’ aligns with Hy-Vee’s values and growth strategy,” Gosch said in an announcement of the Strack & Van Til purchase.

Also last year, Hy-Vee opened a $170 million distribution center in Cumming, Iowa. Buzynski said the 560,000-square-foot facility, which runs Lomar Distributing Inc., a specialty products division of Hy-Vee, represents Hy-Vee’s largest investment in its distribution operations in company history.

Matthew Caito, a lecturer in operations management at Butler University’s Lacy School of Business, said the Strack & Van Til purchase and the new distribution center represent “big-money spends” that might have also led Hy-Vee to delay its plan to expand outside its natural territory.

“[The Strack & Van Til purchase] definitely gives them quite a presence in Indiana,” Caito said. “A lot of times, you have strategic plans, and you don’t know how the deals are going to come together. So perhaps the Strack deal became available sooner than expected, and that can temper your cadence or how quickly your plans go into place.”

Similarly, John Talbott, a senior lecturer at the Indiana University Kelley School of Business in Bloomington, said Hy-Vee leadership might want to put some distance between its recent investments and future expansion in the current economic environment.

“The problem with growth and extension is that it potentially comes with issues around profitability,” Talbott said. “When you open a new store, you don’t know if it’s going to work. They have made these investments in the warehouse. Now they have at least a footprint in Indiana, and so I do think it’s possible that could be one of the reasons why they sort of held off.”

Big presence

Throughout the central and upper Midwest, and especially in its home state of Iowa, Hy-Vee is the grocery store where most people shop. The name Hy-Vee is a portmanteau of the names of Charles Hyde and David Vredenburg, who founded the company in 1930.

In Iowa, Hy-Vee is a cultural touchstone that has put its name on some of the state’s most high-profile sporting events, such as the Iowa-Nebraska college football game (the Hy-Vee Heroes Game) and the former men’s basketball doubleheader featuring the University of Iowa, Iowa State University, Drake University and Northern Iowa University (the Hy-Vee Classic).

Until last year, Hy-Vee also sponsored a car for Zionsville-based Rahal Letterman Lanigan Racing in the NTT IndyCar Series, and it was title sponsor of the IndyCar races in Newton, Iowa, and West Alis, Wisconsin. In Kansas City, Hy-Vee is the official grocery of the NFL’s Kansas City Chiefs and holds the naming rights to the former Kemper Arena.

“They really dominate that area,” Caito said. “They’re highly competitive in an area that’s been traditionally dominated by super-centers like Walmart, so they compete very well in that area. They’re a dominant traditional retailer.”

Talbott said that while Hy-Vee is dwarfed in size by Arkansas-based Walmart, which generated $648 billion in revenue last year, it is able to “own the upper and central Midwest” because of its community focus. He compared Hy-Vee as a privately held regional grocer to Lakeland, Florida-based Publix in the Southeast and Rochester, New York-based Wegman’s along the East Coast.

Last year, Hy-Vee was named the best grocery store in America by USA Today’s 10Best Readers’ Choice Awards.

“These private, highly customer-focused businesses seem to be the ones that have been able to go toe-to-toe with the big boys,” Talbott said. “And I think they have been able to do it based on a higher level of customer service, and they do it well because their associates are happy, they’re well-paid, and they’re not there because that’s just the only job they can get.”

Lots of competition

Hy-Vee would face more competition in Fishers and Zionsville than it does in its home base. “It’s going to be a battleground, and it’s the traditional fighting for the consumer’s pocketbook,” Caito said.

In Fishers, there are two Kroger Marketplace stores, one traditional Kroger grocery store, one Walmart Supercenter, one Walmart Neighborhood Market, one Target Supercenter and stores operated by Aldi and Fresh Thyme, both based in suburban Chicago. The closest grocery to the proposed Hy-Vee site, a Kroger Marketplace, is about 2 miles south at East 116th Street and Olio Road.

Last year, Midwest retail giant Meijer Inc. also announced plans to build a medium-format Meijer Grocery on the north side of the roundabout at Cyntheanne Road and Southeastern Parkway. Grand Rapids, Michigan-based Meijer Inc. opened a Meijer Grocery last year in Noblesville.

Hy-Vee would have more immediate competition in Zionsville, along the town limits with Whitestown, near Interstate 65 Exit 130.

Along Whitestown Parkway, there are currently Aldi and Meijer stores, and Cincinnati-based Kroger submitted plans last month to build a Marketplace store west of the proposed Hy-Vee site. Kroger also has a traditional store closer to downtown Zionsville, plus Kroger, Aldi and Minneapolis-based Target have stores at West 106th Street and Michigan Road, along the Zionsville/Carmel border.

Stehr said the proposed Kroger Marketplace has not dissuaded Hy-Vee from its plan.

“They’re just going to wait until the numbers come more in-line,” he said.

The cities and towns in Boone and Hamilton counties are grocery hotbeds. In Carmel, Fishers, Lebanon, Noblesville, Westfield, Whitestown and Zionsville, there are currently 11 Kroger stores, seven Meijers, seven Aldis, four Walmarts, three Targets, two B.J.’s Wholesale Clubs, two Fresh Thymes, two Market Districts, one Costco, one Niemann Harvest Market and one Whole Foods Market.

Talbott said the closure of local grocery chain Marsh Supermarkets in 2017 opened the door to national brands that want to open in affluent suburbs.

“The north Indianapolis marketplace … is the center of the universe in terms of testing new [grocery] concepts,” Talbott said.

But in terms of the oft-asked question, “Has anybody heard when Hy-Vee is going to open?” Time will tell.•