Hy-Vee will lay off nearly 600 Kansas City employees as part of wider company cuts
Grocery chain Hy-Vee will lay off nearly 600 workers as it shutters its Kansas City fulfillment center.
The Iowa-based grocer confirmed last week that it would close four fulfillment centers in the Midwest, including the Kansas City facility at 8700 Elmwood St. It’s also closing fulfillment operations in Omaha, Des Moines and Eagan, Minnesota.
On Saturday, Hy-Vee spokesman Christina Gayman said those facilities would stop fulfilling orders the week of March 23, but she would not provide numbers of expected job losses. A notice filed with Missouri state regulators posted online this week says up to 583 employees in Kansas City will be affected.
Hy-Vee opened the Kansas City fulfillment center in 2019 as part of a reported $90 million investment in Kansas City operations. It was created to serve online orders for grocery pickup and delivery customers in the metro. But now, the chain says, those operations will shift to retail stores.
“We are listening to our customers and they are wanting a full assortment of products, personalized shoppers and same-day pick up at the store, which we are unable to fully provide when we process orders at a fulfillment center,” Gayman wrote in an email to The Star. “Fulfillment center operations will be transferred to our retail stores in the market later this month — that means customers’ orders will once again be fulfilled at their local Hy-Vee store.”
She said employees were given 60 days notice and that the company’s human resources department was working to help employees find other job opportunities. Some workers could move to other positions in the company, Gayman said.
The grocery company received a 10-year, 50% personal property tax abatement for its Kansas City facility, the Kansas City Business Journal reported. The building, owned by NorthPoint Development, also benefits from a property tax exemption granted by the Port Authority of Kansas City.
Mayor Quinton Lucas called the news “incredibly disappointing for Kansas City.”
“Probably one of the sadder parts of it is that I believe they just moved in there about a year ago and received significant incentives in connection with it,” Lucas told reporters Tuesday. “Kansas City’s been taken a lot of times on these incentive deals. And it’s why we’re asking more questions about it now. Because everybody comes to town and they tell us 1,000 exceptional things and all that sort of stuff and then it’s not carried out to fruition. So I’m disappointed today that Hy-Vee made that choice.”
The closure of the four Midwestern fulfillment centers is just the latest structural change for the grocery chain in recent months.
In February, the company cut back hours at many stores, discontinuing the practice of keeping them open overnight. The same month, the company said a restructuring of store-level management could lead to “promotions, reallocations or reductions,” according to trade publication Progressive Grocer.
The grocery chain, based in West Des Moines, last year announced it would nix plans to build a new distribution center in Austin, Minnesota.
Hy-Vee is an employee-owned corporation with more than 265 retail stores across eight Midwestern states. With sales of $10 billion annually, it ranks among the nation’s largest privately held companies, according to Forbes.
This story was originally published March 10, 2020 at 1:50 PM.
