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Hy-Vee sets stage for future as Edeker era winds down

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ORLANDO, Fla. — After spending several months fine-tuning its corporate structure and management team, Hy-Vee Inc., which operates more than 285 stores in eight Midwestern states, faces the future with confidence as it embarks on the final two years of the Randy Edeker era.

Known first and foremost for its eponymous food/drug combination stores, Hy-Vee has flourished under Edeker, who led the retailer as chairman and chief executive officer from 2012 until last July, when he first announced that he would cede the latter role and became executive chairman. During his tenure, Hy-Vee has expanded its geographical footprint, doubled its employee count and sales volume (the latter figure now stands at $13 billion a year), and earned a reputation as a inveterate innovator.

“I turned 60 last year, and it really started me thinking about transition,” he said at the recent FMI Midwinter Executive Conference. “We’re a very complex company, which is something I don’t think a lot of people really understand. We run supermarkets, but we also have a strong presence in pharmacy and health care, as well as an e-commerce business and other retail formats. The CEO of a company like that doesn’t just walk away. I wanted to leave a solid foundation for the future.”

The company late last year unveiled its official organizational plan for the future, one that reflects the diversity of its business. Jeremy Gosch, who joined Hy-Vee as a part-time clerk in Coralville, Iowa, in 1996 and rose through the ranks to become president and chief operating officer in 2021, succeeded Edeker as CEO last December and is now also vice chairman. Reporting to Gosch are chief operating officer Kevin Sherlock, who oversees retail grocery operations, and Donna Tweeten and Aaron Wiese, both of whom hold the title of president.

Tweeten oversees Hy-Vee’s store brand offerings, merchandising, marketing and digital initiatives. She will run the company’s soon-to-be-launched retail media network. Wiese oversees the company’s pharmacy and health care business, including its newest subsidiary, Hy-Vee Healthcare. In addition, he is responsible for technology initiatives, the supply chain and several Hy-Vee subsidiaries.

Edeker expressed satisfaction with the new structure. “Jeremy is by far the best tactical, hands-on operator that we’ve got,” he said during a joint interview with Gosch at FMI. “Jeremy is really smart and super knowledgable. He’s the right guy to take on the whole of the company, with Aaron, Donna and Kevin supporting him. I’m going to do this for about two more years, and then I’ll transition everything to Jeremy.”

In the meantime, he and Gosch work together to keep Hy-Vee on the cutting edge of a rapidly evolving industry. “We discuss a lot of things,” the latter said. “I’m shocked by how many things come up even in a single day that just maybe shift how you think about something. It’s great to have somebody of Randy’s caliber and experience to talk things through with.”

Ongoing reverberations from the pandemic, shifts in consumer behavior relative to both food and health care, and high inflation are just some of the issues that the two executives indicated place a premium on finding new ways to help the customer.

“Innovation is what we do,” Edeker asserted. “Look at the big buckets that we’re focused on: Hy-Vee Healthcare and everything that revolves around that; retail media; and new formats like Dollar Fresh, a very focused value strategy for small towns, and Hy-Vee Fast & Fresh, a convenient store for meal solutions. We’re all in on them. At the same time, we’re still running amazing grocery stores that really drive volume. They’re the heart and soul of the company.”

Enhancements in the core business are readily apparent at new stores. One of the two locations that Hy-Vee unveiled last month in Wisconsin (the second was a remodel of a former Bill’s Food Center) includes a host of notable features. The 97,000-square-foot store, in the town of Janesville, includes a new layout, a Food Hall for casual dining, a bar area, all-digital shelf labels, self-checkout lanes, and Hy-Vee Aisles Online pickup and delivery.

The new tools enable store directors and other staff members at the employee-owned company to do a better job serving customers in the local community. One reason for Hy-Vee’s success under Edeker is the knack the retailer has shown for striking the right balance between central control and autonomy.

“The challenge we always face is how do you incent and how do you allow people in the stores to think and react and use autonomy as a true strength, but then execute on the things that make sense for the company as a whole,” Gosch said. “Our store directors are very independent by nature; they don’t want us to tell them how to operate. But there are certain things our stores must execute for our suppliers and other partners.

“It’s all about harnessing that autonomy to really be able to go after whatever competitor you have in your market and knowing what’s best for your community. Having the right strategy for Minneapolis is much different than having one for Kansas City. That’s the whole purpose of being structured the way we are. It’s allowing smart people to think and operate freely.”

Gosch, who early in his career served as a Hy-Vee store director in several states, including Iowa and Minnesota, added, “That’s how our company’s been built. For example, some of our best items were developed at the stores, which we then learned how to manufacture and brought to customers throughout our trading area. That’s the whole mission of our company.”

Hy-Vee will continue to leverage that model when it launches another large-format store in Gretna, Neb., later this year. Plans call for shoppers at the opening to encounter even more new offerings and in-store innovation.


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