Hy-Vee CEO talks expansion of Wahlburgers and grocery stores

After months of anticipation, Hy-Vee opens its first Wahlburgers restaurant on Tuesday, and another 25 will quickly follow over the next three years as the grocery store chain revs up its franchise partnership with Wahlberg brothers Mark, Donnie and Paul.

Sitting in one of the booths in the new restaurant in Mall of America last week, Hy-Vee chief executive Randy Edeker said all 26 restaurants are expected to be open by the end of 2021 in the eight Midwestern states where it has Hy-Vee stores, including four in the Twin Cities.

"We have a site we're looking at in Maple Grove, but we haven't chosen any sites beyond that," said Edeker.

After putting five Twin Cities Hy-Vee stores on hold last year, Edeker said, "there are five stores in the Twin Cities that we're considering for next year's budget." One of those stores will be in Maple Grove, according to Edeker, but Hy-Vee officials would not say whether it is the location at Highway 101 and Bass Lake Road or at Highway 610 and Maple Grove Parkway, both of which have already been approved for Hy-Vee stores.

Why is a West Des Moines-based supermarket chain going into business with two stars in the entertainment industry and their chef sibling? Hy-Vee's chief retail operator Jeremy Gosch noticed in Men's Fitness magazine last year that Mark Wahlberg was coming out with a line of sports nutrition products called Performance Inspired.

Eventually, Hy-Vee started selling the line exclusively in its eight-state markets. "We did a big launch with them, and we noticed whenever Mark came out to promote his nutrition products we'd get a lot of requests on Twitter and Facebook about Wahlburgers," Edeker said.

When Mark Wahlberg asked Hy-Vee early on to consider a partnership in building a Wahlburgers, Edeker said his initial response was a firm no.

"But I promised him I'd consider it. Then we researched it and ate at a couple of them and finally asked him how the partnership would work," said Edeker.

None of the restaurants will be in Hy-Vee stores, but the eight Twin Cities' Hy-Vees will start selling several Wahlburgers' entrees and drinks in the fall at their Market Grille restaurants.

The Mall of America restaurant, on the north side of the second floor near Zara, will celebrate its grand opening May 31 with an appearance by the three brothers in the mall rotunda at 6 p.m. In addition to its burgers, the restaurant also will have a full-service bar and be able to seat 200 guests. Nearly all sandwiches and salads are under $10.

The opening for the Robbinsdale Hy-Vee store has now been moved up to late summer and construction in Spring Lake Park and Columbia Heights will begin later this year.

Hy-Vee did not provide any further details on proposed stores in Farmington and Chaska.

Edeker said late last year that the company was pumping the brakes on expansion as it reassessed its growth and store sizes. Besides putting on hold six proposed stores in the Twin Cities, it also delayed building a 1-million-square-foot distribution center in Austin, Minn. It remains on hold.

With grocery stores such as Aldi, Fresh Thyme and Trader Joe's having success with stores around 30,000 to 40,000 square feet, Edeker said, Hy-Vee's new stores will shrink a bit.

"You'll see us come down off 95,000-square-feet stores and build 65,000- to 80,000-square-feet stores," he said. "We're designing the stores with more e-commerce and digital shopping in mind."

A few departments are likely to drop out, such as the juice and smoothie space, which the newest store in Shakopee also dropped. Some average-performing deli stations may disappear, too, including Cocina Mexicana.

Edeker also mentioned opening stores in vacant locations in the Twin Cities, something it has not yet done here. Two potential locations will be purchased and remodeled, but the company is not releasing details yet.

John Ewoldt • 612-673-7633