Dive Brief:

• Hy-Vee plans to build a new health-focused concept store in Urbandale, Iowa, just west of Des Moines, according to the Des Moines Register. The 17,000 square-foot location will include grocery aisles, a health market, a pharmacy, a medical clinic and a fitness studio.
• Up for approval before the Des Moines City Council next week, the store could also include a gas station and a full-service restaurant.
• The company is planning to build similar stores, a spokeswoman told the Des Moines Register, though she declined to provide details. 

Dive Insight:

Hy-Vee is testing a lot of different initiatives right now, from food-focused convenience stores to small hybrid locations optimized for online order pickup. This spring, the Midwestern grocer opened an upscale concept store in downtown Des Moines, a historically tough area for grocers. Fourth + Court, as it’s called, features hip fare like Italian street food, a beer bar and an old-fashioned soda fountain.

“Hy-Vee is experimenting,” David J. Livingston, a Wisconsin-based grocery analyst, told the Register. “It doesn’t mean they are all great ideas, but at least they’re out there trying things.”

Amid these and many other experiments through the years, Hy-Vee has remained focused on health. It was one of the first retailers to put dietitians in its stores, as well as one of the first to add health clinics. Recently, it announced a diabetic management program as part of a larger lifestyle and weight management program. Hy-Vee currently staffs dietitians in all 244 of its stores, and has health clinics in nearly 60 stores.

The company’s early bet on health was smart considering the growing demand for healthier, fresher food that’s remaking food retail. It’s also become a crucial point of differentiation in an increasingly crowded industry.

Hy-Vee’s new health-first store takes this focus a step further by offering many of its core services in one location. With a health market, a clinic and a pharmacy all under the same roof, there’s an opportunity to integrate key services and products in the same place and build customer loyalty. Food plays an important role, too, and Hy-Vee stands to see high sales of high-margin perimeter items promoted under its health services.

As for the fitness center, this may be more of a symbol of the company’s health focus than a money-maker. It also wouldn’t be the first Hy-Vee location to have a gym. Another Des Moines store has a 5,500 square-foot studio with elliptical machines, treadmills and weight lifting equipment.

According to a Hy-Vee spokeswoman contacted by Food Dive, no date has been set for the store's opening.

Hy-Vee’s health experiment may push the healthy grocery concept too far. On the other hand, it could bring about a wider rollout like other past experiments, such as the retailer’s Market Grille restaurants and its Aisles Online e-commerce platform. Experimentation doesn’t always work, but when it does it can really pay off. It’s an approach that’s especially important now that Amazon, a highly-capitalized experimenter, is in the game.