Hy-Vee Shuts Down In-Store Bars | Is Experiential Retail Dying?
In this Omni Talk Retail Fast Five discussion, sponsored by the A&M Consumer and Retail Group, Simbe, Mirakl, Ocampo Capital, Infios, and ClearDemand, Chris and Anne explore Hy-Vee’s decision to shutter most in-store bars and eliminate full-service dining in favor of counter-only service (0:02). Chris critiques the overuse of “experiential retail” as a vague, unscalable buzzword (1:00), calling Hy-Vee’s move a necessary correction in an era where operational simplicity and consistency matter more than novelty.
He shares a personal anecdote from his days at Gap about the hidden complexity of over-segmentation in retail (2:59) and warns about the challenges of managing stores with differing formats. Anne supports the shift as a logical step for maximizing floor space and profitability, citing successful models like Aldi and Sprouts that keep formats tightly controlled (4:50). The episode closes with a spirited debate on whether experiential retail ever really worked—and if retailers should let go of the fantasy altogether (7:40).
For the full episode head here: https://youtu.be/US96EqI2Bnk
#hyvee #retailstrategy #grocery
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Transcript
Hy Vee plans to shutter most in store bars and to eliminate full service dining in some locations.
Speaker A:According to Supermarket News, Hy Vee is shutting down all but a few of its in store bars while making further changes to its Market Grill dining facilities.
Speaker A:Additionally, some Market Grill locations were full service, but now all will be limited service with all orders placed at the counter.
Speaker A:The changes are designed to ensure consistency across the brand.
Speaker A:Hy Vee spokesperson Tina Patoff said the changes come about three months after the midwestern grocery chain said that it would close all 79 Wahlburgers locations in its stores, replacing them with its Market Grill concept.
Speaker A:Chris, two parter question for you here.
Speaker A:First, what do you think the Hy Vee decisions to shut down its bars and shutter its full service restaurants says about the quote, experiential retail trend?
Speaker A:And part two, this is our A and M put you on the spot question.
Speaker A:Oh, they would like to know have that yet is this, is this a high V issue or a bar restaurant within a grocery store concept issue more broadly?
Speaker B:Okay, wow.
Speaker B:Okay.
Speaker A:Two responses required.
Speaker B:Okay, well I actually think my answer is the same for both.
Speaker B:I think actually.
Speaker B:Oh, all right.
Speaker B:I think it, it's, it's, it's definitely a, it's a, you know, bar and restaurant inside of a grocery store issue.
Speaker B:I think.
Speaker B:I don't think this is okay issue at all because Hybe is more equipped than anyone to be able to make this work or as equipped as anyone to make this work.
Speaker B:And, and to that point, I think it's really an indictment on the experiential retail trend in general, which is something I've railed about on this show a lot.
Speaker B:I remember talking about yoga studios down, you know, out in the east coast, you know, in stores or wellness centers in grocery stores.
Speaker B:And because, you know, I think for me, experiential as a term or a phrase is the most blowhard, overused phrase in our industry.
Speaker B:I can't stand when I hear someone say it.
Speaker B:I absolutely hate it.
Speaker B:Yeah, it just drives me crazy.
Speaker B:Like experiential meaning what I mean, it's so vague.
Speaker B:It is, does it mean put a bar in it?
Speaker B:Does it mean display my product a certain way?
Speaker B:Like, what are you really trying to say?
Speaker B:And it, when people say it, I'm kind of like, what are you, how much do you even know?
Speaker B:Like, because it just doesn't mean anything.
Speaker B:So at the end of the day you have to, and here's why I get back to the, to the question now at the end of the day, you have to answer why?
Speaker B:As in, why come to the store and do the things that the store offers?
Speaker B:And kudos to Hybe, because they're realizing that most people don't want a full service restaurant experience.
Speaker B:Why they shop for groceries.
Speaker B:They just don't, you know, and they don't want to go there for a drink.
Speaker B:Like, they don't want to, like, I don't want to go to a bar to have a drink at a grocery store.
Speaker B:You know, like, that's just.
Speaker B:It's not a.
Speaker B:This is not appealing.
Speaker B:I think it's not appealing for most people and operationally it's probably not appealing for.
Speaker B:For Hyvee either.
Speaker B:So.
Speaker B:And then the second point too, and this is where I want to get a little personal.
Speaker B:The other point about this, when I read the headline too, is I think there's a point about consistency here.
Speaker B:Stuff just gets really hard to manage the more variations there are that are out there.
Speaker B:And I'm going to tell an anecdote.
Speaker B:When I was at the Gap, I had a boss.
Speaker B:His name was Jess Wilson.
Speaker B:Jess Wilson.
Speaker B:And I remember coming to him one day and I was like, super geeked up.
Speaker B:And I was like, hey, my.
Speaker B:I was.
Speaker B:I was an inventory ass at the time.
Speaker B:And, and my, my buyer for denim was like, he was going to create all these, like, different variations of denim jeans and washes.
Speaker B:He's going to have white jeans and, you know, like, you know, ripped.
Speaker B:I don't remember what it was, but like, ripped jeans.
Speaker B:You go with the idea.
Speaker B:He's like, you have all these different store groups.
Speaker B:I need you to create all these segments of groups.
Speaker B:We're going to send these jeans.
Speaker B:And I walked into his office, super excited about.
Speaker B:And he crapped on it.
Speaker B:He's like, dude, Chris, like, how are you going to manage that?
Speaker B:How are you going to tell the stores what products they have, you know, and.
Speaker B:And how are you going to keep that all straight?
Speaker B:How are they going to know what to display where, you know, across all these different groups of stores?
Speaker B:And so I always think about that because there is a lot of talk about segmentation in the industry.
Speaker B:And isn't the idea really, at the end of the day to scale one business model that works over and over again?
Speaker B:And so that's why I wonder if Hybe's getting at here, because you start to get it.
Speaker B:When you start to get into situations where every store looks different, it calls into question the idea of real scalability.
Speaker B:At least it does to me.
Speaker B:An Anyway, but yet we hear executives all the time.
Speaker B:I can think about some of them who probably are even listening to this podcast, who talk about making every single one of their stores different as a key piece of their strategy.
Speaker B:And I just worry that that is fool's gold at the end of the day.
Speaker B:So there are two parts to this one.
Speaker B:I think bars and restaurants, full service restaurants, don't work in grocery.
Speaker B:But also worried about you get too segmented with your stores here.
Speaker B:They become really hard to manage and stay on top of.
Speaker A:Yeah, no, I think that you hit on a really good point, Chris.
Speaker A:I think if you look at the, the players that are winning in the grocery space right now, it's Sprouts, it's Aldi.
Speaker A:And what are they doing?
Speaker A:They're focusing on, you know, Aldi, we talked to their head of store construct at a few years ago at retail spaces and like, they have multiple formats.
Speaker A:They're doing everything they can to keep the formats as consistent as possible so that their customers know exactly what to expect when they come in and they can maximize each of their, their store spaces.
Speaker A:You look at sprouts, Sprouts is they don't even have windows.
Speaker A:They are maximizing every square foot of that store and trying to do, see, we have stuff for sale so that they can bring new inventory in and that they can have the freshest inventory, the most consistent invent and just maximize the sales they can get out of that box.
Speaker A:So I think what Hy Vee is doing here, when you look at the amount of space that, that, that those concepts are taking up, I think it makes a lot of sense that they're kind of reverting back to like, what's the, what do people really need?
Speaker A:And that gets to your other point of like, do I need a full bar?
Speaker A:Like, do I need to take up all of this space with a full bar here?
Speaker A:Or will people still come?
Speaker A:Is it just the grab and go food that they want?
Speaker A:Is that how I can fulfill this need of like, walk up to the corner or walk up to the counter, order my food?
Speaker A:If it's ready to go, will I go grab my milk and my eggs and I'm ready to go?
Speaker A:Like, that serves a purpose.
Speaker A:I'm not saying that I wouldn't love our own, you know, Jerry's food store to sell, you know, beer and wine and cocktails in addition to breakfast, but is it going to stop me from going there?
Speaker A:Absolutely not.
Speaker A:Like, this is still a place that I'm going to go that serves a need for me, and I think that you're right on that.
Speaker A:Hy Vee is just looking at what's the minimum viable product we need to give our consumers to still make this a relevant shopping experience for them, and how can we take this floor space and really use that to maximize what we can sell from a grocery assortment standpoint?
Speaker A:So I think that's where this is really change the game.
Speaker A:Now, the experiential point, I don't know that I, I agree that this is like experiential as much.
Speaker A:I think it's more about like the amount of sales that they could be doing in that footprint over like an experiential concept.
Speaker A:But I do agree with you that it.
Speaker A:The term is vague.
Speaker A:I went through experiential, the baby out with the bathwater here.
Speaker A:I still think that experiential is a term that can apply to good retail experiences.
Speaker A:But for me, it's more about like, what are the memories that you have or what was good about that experience and how do you do that?
Speaker A:And I think in this way, Hy Vee is really trying to just say, we're just, we're going to make it convenient for you to get a meal to go.
Speaker A:That's all we need to do here.
Speaker A:We don't need to like, provide a full restaurant environment.
Speaker A:We're just going to give you that high quality and that convenience.
Speaker A:But I'll give you the last word here.
Speaker B:No, I think my.
Speaker B:Well, my one retort would be like, just name one of those experiences.
Speaker B:It's actually worked and rolled out.
Speaker B:Like, I still.
Speaker B:We've had this discussion before and I can't really.
Speaker B:But then I think the other point I make is your point about Aldi is really good too, because especially from a prototype standpoint, I think it bolsters the case of, you know, they, they went into that agreement with Southeastern Grocers, I think.
Speaker B:Right.
Speaker B:And they ended up selling them back because they're like, these ones aren't going to work for us.
Speaker B:Yep.
Speaker B:You know, and that's a really smart way to think about things.
Speaker B:And, and that's what business is about.
Speaker B:It's about finding a model that scales everywhere.
Speaker B:So if you, if you.
Speaker B:So strategically, that's why I just get my head.
Speaker B:I'm having trouble wrapping my head around, like, the idea of making every store different.
Speaker B:Is that really what you want to do?
Speaker B:Even if technology in theory allows you to do it right?
Speaker B:Is that really what you want to do?
Speaker B:Because that's going to be really hard to come back from if it doesn't work and you make a mistake.
Speaker B:So.
Speaker A:Right.
Speaker A:Maybe focusing more on assortment like can, is that what makes your store more unique?
Speaker A:Like, do you skew a little bit higher in one product versus another or something based on the demographics in and around your store?
Speaker A:But yeah, from a, from an infrastructure standpoint, I think, I think those days are infrastructure 100%.
Speaker B:Yeah.
