Hy-Vee to close Cedar Rapids store, leaving a grocery gap

CEDAR RAPIDS, Iowa (KCRG) - Hy-Vee will close its store on First Avenue NE store in Cedar Rapids, opening up a large area of the city without easy access to a grocery store.

Hy-Vee managers told KCRG-TV9 the store’s last day will be June 23rd. Hy-Vee spokesperson, Tina Pothoff, told KCRG-TV9 the chain is closing two locations, the Cedar Rapids one and a Waterloo Hy-Vee store on Logan Avenue. Both stores are in areas listed as “High Poverty” according to U.S. Census data.

“Unfortunately, these locations have not consistently met our financial expectations and sales goals over the past several years,” Pothoff said in an email statement to TV9. “All employees will be offered a position at another Hy-Vee store in the area, at the same rate of pay and will retain their existing benefits.”

Pothoff said the decision to close the Cedar Rapids location was based on the store not meeting financial and sales goals. Pothoff said Hy-Vee staff had met with City of Cedar Rapids leaders a year ago to let them know about the financial viability concerns with the First Avenue location.

The First Avenue Hy-Vee is a staple for the surrounding neighborhood with a large number of customers walking to the store from the nearby Wellington Heights and Mound View neighborhoods.

A handful of ethnic or niche markets are in the area but a search shows the closest full-service grocery store is now 2 miles away - a 6 or 7-minute drive in a densely populated area. This will likely create a food desert, which is an area with limited access to a variety of healthy foods. The USDA uses several criteria to define a food desert, including population density, poverty and at least a mile to the nearest grocery store.

Hy-Vee pointed out that despite the closure, it offers its Aisles Online grocery delivery service to the area. Pothoff also said Hy-Vee plans to open up e-WIC payments to allow recipients of the Women, Infant and Children food assistance to buy groceries online.

“Hy-Vee continues to be committed to the Waterloo and Cedar Rapids area through our involvement and continued investments in the local community, and we look forward to serving our customers at one of our other Hy-Vee locations,” Pothoff added in her statement.

The City of Cedar Rapids had given Hy-Vee incentives to build the First Avenue store in 2001 and keep a grocery store in the area, including a 20-year tax increment financing. The Gazette reported the head of Hy-Vee at the time made it clear that the store was not financially viable without the city’s tax incentives.

“We have looked at every number known to a human being and I can’t take it to our stockholders and tell them we’re going to build a project and lose money forever,” HyVee’s former President, Ron Pearson, told the city’s mayor at the time of the store’s opening in 2001.

Hy-Vee says that all employees in the store will have a chance to transfer to other locations.

Mayor Tiffany O’Donnel also released the following statement regarding the closure:

“Hy-Vee’s decision to close their First Avenue store is incredibly disappointing. Generations of customers have relied on this store for their basic needs. It is unfortunate the company is leaving at a time when the nearby neighborhoods are seeing significant improvements and public investment. We anticipate this momentum will continue when combined with efforts like the upcoming First Avenue Micro Area Action Plan community planning process. We know that access to fresh, affordable food is crucial for our community’s wellbeing and we will work with local agencies to meet the needs of those impacted most by this closure.”

This is a developing story and will be updated as more information becomes available.

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