Vs Goliath: Fareway vs Hy-Vee

Grocery stores always have stiff competition, with the largest chains holding firmly at the top. Despite this, there is still room for local grocery stores to expand and become goliaths, even if they never challenge the biggest players. Hy-Vee is one of those stores that achieved high status after starting as a local market. The company has evolved significantly over its long history to create an iconic brand. Another competitor with a similarly long history is Fareway, a local grocer who has expanded their operations. One of these companies has become a goliath and the other has all the tools to join the conversation.

Hy-Vee has been in business for almost a century. It was founded in 1930 by Charles Hyde and David Vredenburg who opened the small store in Beaconsfield, Iowa. The duo got lucky as the store was leased just before the stock market crash of 1929. Hyde & Vredenburg was a successful local store that saw an expansion to 16 stores by 1938. The company has expanded their corporate operations as well by opening a warehouse, mill, and meat plant. The company changed their name in 1952 when a contest was held between the stores to determine the best name. The co-founders of the company had already retired, yet the contraction of their name, Hy-Vee, won the contest. What sets Hy-Vee apart from traditional grocery stores is the autonomy that they give to each store location. Store directors chose inventory and set their own prices. They are also able to implement their ideas to their store as well alter any ad plans that come from corporate. The company also pays on a profit-sharing basis, something they have done since 1933. In 2001 the company decided to shift their private-label products to focus on consumer health and even provided customers with in-store dietitians. Between 2010 and 2020, the company experienced a period of explosive growth as it entered 11 new markets. Even today the company continues to focus on wellness options for its customers and the ability for each store to thrive independently. The nearly century-long commitment to those core values sets Hy-Vee apart, especially at a time when consumers are shopping based on things like company culture.

Every successful grocery store started small and Fareway is about to celebrate their 90^th year in business. Paul Beckwith founded the store in Boone, Iowa, in 1938. Fareway’s concept was built on self-service. The concept was considered revolutionary as shoppers were able to pick their own groceries instead of submitting a list. The company’s founder had started as a meat supervisor, and he did not like how customers and employees were being treated in the major grocery chains of the time. That frustration birthed his vison for Fareway, a place where both consumers and employees could be satisfied, and the name of the store derives from his desire to have a store that treated everyone in a fair way. The company has expanded over their long history with a focus on areas that have blue collar workers currently operating over 100 stores. Each location is focused on being a part of the community and maintaining that local grocer feel. The company’s main goal is to make sure that employees are treated fairly and have the best workplace possible. They may not have expanded like others that originate from the same era, yet they are focused on maximizing each location they have without losing their original vision that made customers and employees fall in love with them.

The beautiful part about both Hy-Vee and Fareway is how they have taken their long histories as a point of pride. Both stores began in the 1930’s and they have yet to compromise their core values and the goals that the company founders set out. Despite their commitment to these values, both have been able to expand and find new avenues for success. Hy-Vee has entered the conversation as a goliath and while Fareway has not expanded as greatly, they have carved out their own space with a loyal following.