Hy-Vee Plans Small-Format Store

JON SPRINGER

WEST DES MOINES, Iowa — Hy-Vee, which has made its name behind large combination stores, is drawing up plans to debut a small format.

The retailer here said it is planning to open a store of 20,000 to 25,000 square feet in Lincoln, Neb. — a footprint less than one-third the size of Hy-Vee's current combination store prototype. The store would allow Hy-Vee to continue to service residents of Lincoln's University Place neighborhood who were affected by the recent relocation of a Hy-Vee store there to a site two miles away.

“The company has been studying a number of options that would allow it to serve areas with unique needs,” Hy-Vee said in a statement. “The University Place neighborhood is one such area.”

The planned store would carry less variety than a typical Hy-Vee location and would not include a pharmacy, the company said. However, the store would provide the majority of items customers typically shop for, including packaged and canned goods, and would have departments for dairy, frozen, produce and meat.

“We think there is a value in developing a smaller store model with a limited assortment of merchandise,” Ric Jurgens, chief executive officer of Hy-Vee, said in a statement. “It was important to us to come up with a format that would be intriguing, practical and successful. We think we've found one.”

Though Hy-Vee has typically been building new stores of 70,000 square feet or more that include pharmacies, health clinics, and extensive prepared-food and nonfood offerings, smaller formats are something of an emerging industry trend. Most notably, Tesco is rolling out the Fresh & Easy format in the West, and Safeway and Wal-Mart are among those said to be preparing small-format stores to counter-strike.

Elsewhere, retailers including Sobeys and A&P have introduced “express” versions of their typical stores, designed to fit into limited spaces in urban environments.

A Hy-Vee spokeswoman said that a smaller Hy-Vee is also under consideration for an area of Des Moines expected to be similarly affected by a store relocation.

Hy-Vee officials said additional information about the small store — including a potential new name — will be revealed in coming weeks.