Twin Cities grocery rivalry intensifies

Published 4:08 pm Sunday, June 18, 2017

MINNEAPOLIS — A grocery chain rivalry in the Twin Cities is becoming more intense.

Hy-Vee will have eight stores in the Twin Cities by the end of the year and plans to open at least seven more.

Hy-Vee plans to compete with more established chains in the area by offering online ordering, home delivery and in-store, sit-down casual dining restaurants that have full bars and serve everything from sushi to steaks.

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Cub has the most grocery stores in the market with about 70 locations. But many other chains, such as Target and Aldi, have been making moves on the market. Cub’s parent company, Supervalu, racked up big losses and debt when it undertook a massive nationwide expansion. It later sold most of the stores and now the company says its struggling to operate its five remaining grocery chains.

“The sale and earnings trajectory at retail over the past two years is not acceptable,” CEO Mark Gross said in an April conference call with industry analysts.

Gross plans to continue investing in exiting Cub stores and opening new ones to improve performance.

Grocery industry consultant David Livingston said he thinks the Twin Cities will continue to see new grocery competitors and that the competition is good for consumers.

“It’s like when Aldi came into the market,” he said. “Consumers realized how much they’ve been overcharged. And now when they see Hy-Vee, they now realize what poor competitors many of the others were all this time. Hy-Vee is a step up in class to your typical, middle-of-the road conventional supermarket.”