Hy-Vee opens fitness-focused grocery store concept

Discussion
Photo: Hy-Vee
Aug 13, 2018
Tom Ryan

Hy-Vee has opened a mini-grocer that features healthy foods along with a fitness boutique next door.

The Hy-Vee HealthMarket in West Des Moines, measuring 15,700 square feet, is an expanded version of the HealthMarket in-store shops found in the chain’s larger stores. The Midwestern grocer’s stores typically range from 70,000- to 80,000-square-feet.

The new location stocks 11,000 items, such natural and organic foods, Hy-Vee Short Cuts pre-cut vegetables and fruit, vitamins and supplements along with meat and other groceries. A sports nutrition area, a Basin beauty and baths products department and a “hydration station” offering nitro coffee, kombucha and infused water are also featured.

The location also includes a full-service pharmacy, health clinic and a hearing aid center.

Said Matt Pertzborn, store director at the West Des Moines Hy-Vee HealthMarket, in a statement, “Shopping for healthy lifestyle and personal care items while picking up your groceries has never been easier.”

Randy Edeker, Hy-Vee’s CEO, told the Des Moines Register that the grocer explored the concept due to heightened competition from Fresh Thyme and Sprouts. He said, “I see us having 50 or 60 of these.”

Hy-Vee opens fitness-focused grocery store concept
Photo: Hy-Vee

To further differentiate, Hy-Vee has paired the store with an Orangetheory Fitness franchise.

Last September, Hy-Vee partnered with Orangetheory to build studios adjacent to and inside stores. The first Hy-Vee Orangetheory Fitness location opened in November in Shakopee, MN. The high-intensity cardio and strength-training routines offered by the franchise typically last 60 minutes.

As part of the partnership, Hy-Vee dietitians will work with Orangetheory members to offer dietetic services, provide samples of nutritional products and lead store tours to showcase items that align with their needs. The partnership aligns with Hy-Vee’s focus on health and wellness, including the HealthMarkets sections, in-store dietitians, fresh and organic produce and pharmacies found in its larger stores.

Said Orangetheory Fitness Chief Brand Officer Kevin Keith, last September, “Like our members, we know that many Hy-Vee customers are looking for more convenient ways to access fitness and healthy eating options in one location — this partnership solves that need.”

The fitness center/grocer pairing comes as malls are increasingly seeking out health clubs and fitness studios as anchors. 

DISCUSSION QUESTIONS: How would you rate the growth potential for the Hy-Vee HealthMarket concept and Hy-Vee’s partnership with Orangetheory? Do you see more grocers or other types of retailers doing something similar?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I see this trend continuing, especially in markets where a healthy and active lifestyle is more of the norm instead of the exception."
"Smart. On point. Thoughtful. Timely. And these are just a few of the adjectives I would use to applaud this move."
"This is lifestyle selling and merchandising. It’s on trend, it’s differentiated and it’s customer-centric around their healthy lifestyle customer."

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19 Comments on "Hy-Vee opens fitness-focused grocery store concept"


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Neil Saunders
BrainTrust

This is very interesting and I see it as having potential. Many gyms, especially independent ones, have stores selling healthy drinks and snacks, so there is no reason a grocer cannot partner with a fitness player and do well.

Some other grocers could do this, but many could not – for the simple reason that their own dark, dingy and down-at-heel stores are the antithesis of health and wellness.

Zel Bianco
BrainTrust

It makes total sense to those that are really trying to integrate their fitness routine with eating healthier. Gyms typically have monitors that showcase healthy choices from nutritionists that members can now easily shop for after their workout. Good idea for those that are like-minded and determined to eat right so that their workout pays off. I see this trend continuing, especially in markets where a healthy and active lifestyle is more of the norm instead of the exception.

Art Suriano
BrainTrust

I see a stronger potential for the Hy-Vee HealthMarket than I do for the partnership with Orangetheory. Eating healthier continues to become more popular and grocery chains like Fresh Thyme and Earth Fare are doing very well as they are building a loyal customer base who shop them exclusively. The healthy food market is growing so having Hy-Vee getting into the game is wise. As for the Orangetheory partnership, that may not be as successful because the competition is enormous with another health club opening every day. So I would look for Hy-vee to make the Orangetheory partnership worthwhile for the customer by offering discounts and special offers. Then there is a stronger chance for success and it is an excellent way to beat the competition.

Susan O'Neal
BrainTrust
3 months 23 hours ago

This is lifestyle selling and merchandising. It’s on trend, it’s differentiated and it’s customer-centric around their healthy lifestyle customer. It’s also a very expensive way to go about it. Hard to tell, however, if it’s smart given niche market plays have high cost/benefit ratios. Most lifestyle brands are direct-to-consumer because the business economics demand it and the niche customers they are going after aren’t often geographically concentrated. They solve this problem in part by co-locating with Orangetheory though, so we’ll see. I’m intrigued.

David Weinand
BrainTrust

Great idea. As they say, 85 percent of healthy living is what you put into your body. Combining fitness and diet is what the health gurus advocate and making it easier for consumers to get access to both is a win. This is definitely a concept that the players already associated with health (Sprouts, Whole Foods, etc.) could steal and probably make a big dent in Hy-Vee’s plans.

Lee Peterson
BrainTrust

We did a satisfaction survey within the top grocers in the U.S. and Hy-Vee scored higher than anyone else by far, and that was before they started trying new ventures like this one. They’ve got more loyal customers than Publix and that’s saying something. I love the way they keep pushing it and to think — they’re in Iowa! This should be a message to all other regional grocers: fail fast, get out there and try new things — don’t let the 900-pound gorilla beat you to it.

Peter Charness
BrainTrust

There’s going to be a lot of space to re-purpose out there. Good concept. With the right population near the store this should work well.

John Karolefski
BrainTrust

I like the concept. Will other grocers adopt the same? Most won’t, but some will. They would be wise to do so if they have the resources and receptive customers. I can see such a concept working in states where good health and exercise are embraced — places like Colorado and Oregon.

Lisa Goller
Guest

Brilliant move. This strategy hits multiple hot health and wellness trends (natural, organic, nutritional supplements, fresh perimeter shopping, post-workout sports drinks).

Beyond product benefits, this move delivers “people benefits” of convenience and integrated wellness options that make it simpler to live a healthy lifestyle. Consumers may also feel motivated to stay on track with their health goals and feel a sense of belonging among a fitness community, which can boost sales, word of mouth and loyalty.

Jane Sarasohn-Kahn
Guest

Self-care is the new black, and most consumers are shopping with health and wellness on their minds, Nielsen and other consumer data are showing. Kudos to Hy-Vee, who have also begun to pilot gyms in their stores, for joining this health ecosystem. They’ll be relevant to the growing cohort of patients growing health-consumer muscles in the expanding retail health ecosystem.

Dave Wendland
BrainTrust

Absolutely Jane. As we’ve recently discussed, the self care movement is gaining steam every day. Exciting time to be in the health and wellness space.

Samantha Alston
Guest

This is a super interesting idea and certainly only the beginning in terms of growth potential. I agree with Lee– I love that this is coming out of the Des Moines market. As a consumer in NYC, it feels like innovators in the retail health ecosystem are either “luxury” players (Equinox + Juice Press), or one-off or mom-and-pop concepts (HealHaus Brooklyn). Very interested to see a larger/mass chain delivering a self-care “lifestyle” destination and I’m curious to see what this sparks in the market. It seems like a no-brainer!

David Naumann
BrainTrust

This is a smart strategy to tap into the fitness kick by offering small format stores that exclusively have health products. While many of the products offered at the HealthMarket stores is probably available at traditional grocery stores, the benefit is that shoppers won’t be tempted to buy unhealthy products if they are not available in the store.

It is a great concept, but it is also a niche that will only work in select markets. I applaud Hy-Vee creatively and hope to see one open in my neighborhood one day.

Dave Wendland
BrainTrust

Smart. On point. Thoughtful. Timely. And these are just a few of the adjectives I would use to applaud this move. Congratulations to Hy-Vee for pushing the envelope to be relevant to today’s shopper. And to Orangetheory for recognizing the gap to be filled. Eager to see this expanded further.

Matt Sebek
BrainTrust

I admire what Hy-Vee is trying to do; namely, form compelling partnerships (e.g., Orange Theory) and content strategies (e.g., HSTV) that enhance their overall value beyond traditional grocery/product competitors.

Craig Sundstrom
Guest

My thoughts on the prospects for this idea are tempered by the location: Des Moines doesn’t strike me as either large or “hip” enough to give this idea its best prospects (though, admittedly, this perception is based on rather shallow and perhaps inaccurate stereotypes).

As for the idea itself, it seems like a knock-off of Whole Foods, more-or-less, and while that idea obviously took WF far, it has also become widely imitated … perhaps to the point of saturation. We’ll just have to see how well it does, but if I were Hy-Vee, I’d give the pilot a thorough study before expanding .

Ricardo Belmar
BrainTrust

This is a fascinating strategy to leverage trends in health and wellness by Hy-Vee. We’re seeing more of a move to smaller stores, set up to focus on convenience and this is another great application of that. Combining this with fitness centers and other health-oriented themes creates a unique space for Hy-Vee. There is definitely a potential for more personalization here to appeal to consumers. It will be interesting to see if their competitors begin introducing similar concepts.

Mel Kleiman
BrainTrust
3 months 18 hours ago

Every one hear seems to love the idea and I am going along with the crowd. There is one other thing that I feel will make Hy-Vee successful with this concept. That is, this is not new to them, it is just an expansion of their core values. They have been focusing on healthy living for at least the last 15 years if not longer. They just moved the ball a little further up court.

Mike Osorio
BrainTrust

My addition to the conversation is cheers for the statement that Randy Edeker makes of seeing 50-60 of these (not 100s). It is a niche play with a good concept that could be additive to EBITDA if executed well.

wpDiscuz
Braintrust
"I see this trend continuing, especially in markets where a healthy and active lifestyle is more of the norm instead of the exception."
"Smart. On point. Thoughtful. Timely. And these are just a few of the adjectives I would use to applaud this move."
"This is lifestyle selling and merchandising. It’s on trend, it’s differentiated and it’s customer-centric around their healthy lifestyle customer."

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