Hy-Vee Sizing Down with New Format in Lincoln, Neb.

As more consumers shun sprawling stores in favor of more manageable and convenient footprints, W. Des Moines, Iowa-based Hy-Vee Inc. is planning to test a small format in Lincoln, Neb. that will serve a neighborhood where the employee-owned chain is also closing a full-sized supermarket.

The smaller format store will offer a smaller variety of product but will provide customers with most of the basic items they generally shop for, such as packaged and canned goods, produce, dairy, and meat departments. according to Hy-Vee's c.e.o. Ric Jurgens.

"We think there is a value in developing a smaller store model with a limited assortment of merchandise," said Jurgens. "It was important to us to come up with a format that would be intriguing, practical and successful. We think we've found one."

The company said it has been studying a number of options that would allow it to serve areas with unique needs, and the University Place neighborhood in Lincoln is one such area.

The store will be approximately 20,000 to 25,000 square feet-larger than a convenience store and without the limitations of that format, but smaller than Hy-Vee's metropolitan supermarkets.

Hy-Vee said the store's floor plans are still being drawn up, and that it would release more details over the next four to six weeks. Once final plans are approved, the grocer will set a timetable for construction and re-opening.

The district's existing store will close this Sunday, while a larger Hy-Vee will open two miles away next Tuesday, according to local press reports.

Hy-Vee, Inc. is an employee-owned corporation operating 223 retail stores in seven Midwest states. In 2007 the company recorded total sales of $5.6 billion, ranking it among the top 30 supermarket chains and the top 50 private companies in the United States.