Hy-Vee's push beyond traditional grocery is reflected in corporate restructuring

Dive Brief:

Hy-Vee recently announced it restructured corporate departments to focus on growth in its dedicated health and wellness sections, restaurant operations and information technology, according to a company release. The process will add 70 new staff positions in the weeks ahead.
50 of those jobs will go to Hy-Vee’s IT department, which will work with the retailer’s marketing department at its Grimes, IA office to develop new apps and online content for the company’s website.
The remaining 20 jobs will go towards developing HealthMarkets, Hy-Vee’s dedicated health departments, and the store's Market Grille restaurant concept. Currently, Hy-Vee operates 179 HealthMarkets and 103 Market Grilles.

Dive Insight:

In just this past year, Hy-Vee has opened concept stores that offer clothing, a special beauty and cosmetics department, and a glass-room wine cellar with more than 1,500 bottles on display. Clearly, the company is determined to develop beyond its traditional grocery capabilities.

This recent restructuring, while not an uncommon occurrence for a retailer, indicates that Hy-Vee intends to continue this development chain-wide. IT, an area that retailers have always been reluctant to invest in, saw the biggest staff increase. This seems to acknowledge the increasing role technology plays for retailers, both in-store and through e-commerce. With its larger staff, Hy-Vee says it will create more apps and store programs, which likely means more of the lists, special offers and other personalization features that are bringing stores into the digital age.

Increasing the culinary content on its website also holds the potential of crafting personalized solutions for customers. But attracting home cooks to a supermarket website can be a challenge with so many different recipe sites, food blogs, TV shows and other media already out there. The company’s best bet is to tie in special offers and promote the site through avenues like social media and email newsletters.

Hy-Vee’s Market Grille concept, meanwhile, which the company smartly promotes as a restaurant and community gathering place, has proven quite popular. Investing in restaurant operations can be a risky business for retailers, but Hy-Vee has won over customers with a slightly upmarket dining experience and trendy offerings like craft beer, breakfast skillets and flatbreads. As the concept evolves, it will be interesting to see how the company continues to drive traffic between the supermarket and the restaurant.

Finally, there’s the company’s HealthMarkets departments, which remain something of an outlier in an industry where most retailers have integrated their health and specialized diet offerings throughout stores. The thinking goes that standalone sections are a turn-off for all but health converts, and unnecessarily segregate healthful products that otherwise have broad appeal. Clearly, the reality is more complex than this, as Hy-Vee has steadily grown its HealthMarkets across the chain. The question is, how will the retailer use its investment to bring more shoppers into that department?