Hy-Vee Restructures Fulfillment Centers, Restaurants

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Hy-Vee restructures fulfillment centers, restaurants

April 1, 2020

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Much to the surprise of some Hy-Vee employees, the company announced in an emergency meeting that its Market Grille restaurants were closing and are all being replaced by Wahlburgers, the Massachusetts-based burger chain. This restaurant transition comes as part of a larger Hy-Vee restructuring. It’s also closing down four online fulfillments centers and ending 24-hour service at its stores.

On March 23, Hy-Vee discontinued filling orders at its fulfillment center in Eagan, MN. More than 300 employees will be laid off from the facility on May 6 but some workers will have the opportunity to transfer to another Hy-Vee location.

“Our customers are wanting more fresh and convenient meal options,” said Hy-Vee spokesperson Christina Gayman. “Our 21 Hy-Vee Market Grille restaurants will transition to a casual, counter- service Wahlburgers restaurant by early summer.”

Plans call for the Market Grille locations to be remodeled into Wahlburgers restaurants during the spring. The new Wahlburgers will preserve the seating area and bar like the Market Grille, but will replace table ordering with counter service.

The transition will not affect the more than 100 Market Grille Express outlets across Hy-Vee’s eight- state market area, which already provide a quick-service model. At the Express locations, customers go to a station to order food and pay and then a server brings the food order to the customer.

The company had hoped to keep its Market Grille restaurants and bars open with limited hours and a kiosk-based modified menu during the conversion, but the coronavirus outbreak forced a complete shutdown. The pandemic will probably also affect the remodeling and re-opening.

“Information about Wahlburgers grand opening dates and additional details will be shared at a later date,” said a Hy-Vee spokesperson.

The changeover will definitely result in layoffs. Gayman said the company doesn’t know how many people will be affected at this time.

“Some employees will transition to other positions with the store, some will join the Wahlburgers team, and some will need to find other positions within the community,” said Gayman.

However, one Twin Cities Market Grille employee who asked not to be identified said that of the 45 employees who worked at the restaurant, seven or eight were asked to stay on to work at Wahlburgers at a lower pay rate and some general managers were simply given two weeks severance pay.

The West Des Moines, Iowa-based retailer operates Market Grille restaurants in five states — nine locations in Minnesota, six in Iowa, three in Illinois, two in Missouri and one in Nebraska. All of the restaurants are either inside or abut Hy-Vee stores, with customers having direct access to both the restaurant and the grocery store.

These Market Grille conversions will give Hy-Vee a total of 27 Wahlburgers restaurants, and will increase the number of Wahlburgers locations from 32 to 53. Chef Paul Wahlberg — with his celebrity brothers Donnie and Mark Wahlberg — launched the restaurant franchise in Massachusetts in 2011 and parlayed that into an A&E reality show in 2014. Hy-Vee entered into a franchising agreement with Wahlburgers in 2017 and began offering select Wahlburgers items in its Market Grille

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restaurants and selling the Wahlburgers proprietary blend of beef in its grocery stores.