Which grocery store could Cedar Rapids recruit to replace Hy-Vee on First Avenue?

• A grocery market study suggests "high opportunity" to recruit what it calls a "price impact" store around downtown.
• Such stores appeal to price conscious low- and moderate-income shoppers with an emphasis on offering low prices.
• Examples of such stores include Aldi, Price Chopper and Walmart that are all 200,000 square feet or less.
• The city of Cedar Rapids will use this study as a tool to recruit another grocer to the area to replace Hy-Vee when it shutters its First Avenue NE store.

CEDAR RAPIDS — A grocery study the city of Cedar Rapids commissioned last summer found there is high opportunity in the core of the city around the New Bohemia District, the MedQuarter and downtown for a grocery store that appeals to lower- and moderate-income residents who are more price conscious when they shop.

As city officials work to fill the gap Hy-Vee’s closure of its 1556 First Ave. NE store, they say this study will be a tool used to help find another grocer to locate in the area and serve Wellington Heights and Mound View residents. Hy-Vee will leave the core neighborhoods without a grocery store and pharmacy when it closes June 23.

The study indicated opportunity to recruit a “price impact format” store, which would be a warehouse format facility focused on offering low prices with a “no-frills interior with limited service departments” such as a deli or bakery. Examples of such stores are Aldi (8,000-16,000 square feet), Price Chopper (50,000-80,000 square feet), Walmart Neighborhood Market and Walmart Supercenter (40,000-200,000 square feet).

According to the study prepared by SiteSeer Technologies, smaller limited-assortment stores locate where they can find space that is most affordable. Larger ones need a second-use facility or site large enough for their desired footprint. The study states they also prefer a large parking space and to be a stand-alone store with retail or restaurant pads.

Most “price impact” stores prefer to locate in areas with low- and middle-income residents “who are price conscious,” the study found. Walmart can locate in a variety of locations “because they are large enough to drive their own traffic and are not reliant on existing traffic generators.”

These limited-assortment stores appeal to shoppers who are often older — either on fixed incomes, retirees or middle-class empty nesters. They draw single parents and small working-class families. Shoppers are more likely to be blue-collar workers and high school graduates, with some having earned bachelor’s degrees or studied the trades.

The study was completed in September, before Hy-Vee announced it would shutter its First Avenue NE location. It opened in 2002 after Cedar Rapids dedicated a $915,000 incentive package to replace a small, rundown Hy-Vee store nearby.

Last November, Cedar Rapids officials were assured that Hy-Vee had extended the lease of its First Avenue NE store another five years. Six months later, the company announced the store’s closure.

A Hy-Vee spokesperson did not answer a question about whether its lease agreement with the property owner, Agree Limited Partnership, includes a noncompete clause that would hinder the city from recruiting another grocer here.

With more than four years left on the lease, Hy-Vee also has not said whether it plans to terminate its lease or hold the property for the remainder of the lease as it has with its former Collins Road NE store, but spokesperson Tina Potthoff said Tuesday, “we will work with the landlord so they can find another tenant for this space.”

City officials have said they don’t know whether there’s a noncompete clause and do not have access to the lease agreement.

Is Aldi interested?

Since Hy-Vee’s announcement, some residents have voiced support for stores like Aldi to fill the grocery gap Hy-Vee will leave with its departure. Local nonprofit Advocates for Social Justice is calling for people to boycott Hy-Vee for what the group calls a “classist and racist pattern of disinvesting in marginalized communities and creating food deserts.”

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Meanwhile, Aldi has made headlines for cutting prices on select items this summer to help customers save money as inflation has driven prices up.

Cedar Rapids City Council member Ashley Vanorny has posted on social media to gauge community interest in recruiting Aldi. She posted Tuesday on X, formerly known as Twitter, that she's “all in for welcoming another @AldiUSA to Cedar Rapids.” Aldi commented that it had three other Cedar Rapids locations — at 1860 Edgewood Rd. SW, 5425 Blairs Forest Blvd. NE and 180 Collins Rd. NE D — and asked, “You want a fourth?”

Aldi did not respond to a request for comment on whether it is exploring another Cedar Rapids location in the area around the First Avenue Hy-Vee or whether the company has had discussions with city officials about adding a store.

Linn County asks Hy-Vee to reconsider closure

While the city and other community stakeholders explore options to meet residents’ grocery and pharmacy needs, Linn County is asking Hy-Vee to engage in collaborative dialogue with the community to find solutions or a way to stay in the location.

The Linn County Board of Supervisors on Wednesday unanimously approved a letter asking Hy-Vee to reconsider the store’s closure and emphasizing the social consequences of shuttering the store.

Linn County’s General Assistance program, which provides temporary services and supports for qualifying individuals and families experiencing a financial crisis, serves residents in this neighborhood who “will be disproportionally impacted with few alternatives,” according to the letter.

“We recognize that Hy-Vee faces the challenging task of balancing business decisions to remain competitive in the marketplace with its social responsibilities,” the letter states. “This decision to close, however, will destabilize an already socially and economically sensitive neighborhood. The ripple effect of having fewer options to access basic food needs will be seismic and immediate.”

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Supervisor Ben Rogers, who wrote the letter and is part of a city work group advocating for short- and long-term solutions to Hy-Vee’s impending closure, said his goal was to spur discussion about where the nonprofit sector and local governments can assist in filling the grocery and pharmacy gap.

Not all residents can afford food delivery when the store closes, so he urged Hy-Vee to be “a two-way community partner” in discussions about how to proceed.

Funding will be a key issue, Rogers said, but he hopes local governments can work with the state of Iowa to understand the short- and long-term effects of Hy-Vee closures. Other communities including Waterloo and Davenport also are losing Hy-Vee stores in socially vulnerable neighborhoods.

Supervisor Louie Zumbach, the board’s lone Republican, said he normally would not support such a letter but felt it was “not political” and can open dialogue about the root issues behind Hy-Vee being among businesses to close in the First Avenue East area.

“It’s a bigger issue than most of us really comprehend,” Zumbach said. “… I do feel really bad for the people who have used this place for a long time.”

Supervisor Kirsten Running-Marquardt said she wants the county to be part of the solution as the property hopefully transitions to another grocery and/or pharmacy use.

“It really impacts this critical neighborhood, but it truly impacts the entire county and it impacts our entire community,” Running-Marquardt said.

City crafting long-term First Avenue East vision

In addition to addressing residents’ immediate needs resulting from Hy-Vee’s closure, the city of Cedar Rapids this week launched its process of drafting a First Avenue East micro plan. It’s intended to help the city understand barriers to private development and how the city can alleviate them.

The plan area spans from 12th Street SE and Coe Road NE in the west to 17th Street SE in the east, and Second Avenue SE in the south to A Avenue NE in the north. The city will study existing conditions this spring, conduct stakeholder engagement over the summer, then share the draft plan and final plan this fall.

“We do have an immediate crisis … but we also need to look long term at what this area looks like, what can we provide long term to support the community,” said council member Ann Poe, chair of the Development Committee.

Comments: (319) 398-8494; marissa.payne@thegazette.com