Hy-Vee to acquire 22-store Indiana grocery chain
Des Moine-based company to keep Stack & Van Til name, branding
Hy-Vee is jumpstarting its eastward expansion, announcing plans Wednesday to acquire the Strack & Van Til Food Markets, a northwest Indiana-based grocer with 22 stores.
Privately held Hy-Vee did not reveal how much it is paying for the chain, but spokesperson Tina Potthoff said the purchase is one of the largest in Hy-Vee’s history. Also privately owned, Strack & Van Til will become a subsidiary of Hy-Vee but will retain its own logos, name and branding, Potthoff said.
The sale will close in mid-May, she said. Highland, Indiana-based Strack & Van Til will become at least the 11th Hy-Vee subsidiary.
The Strack & Van Til stores will be Hy-Vee’s first in Indiana. It already was planning this year to start construction on two Indianapolis-area stores, with additional stores slated for Kentucky and Tennessee.
West Des Moines-based Hy-Vee, which is the Des Moines metro’s largest employer, has about 300 supermarkets as well as convenience, drug and liquor stores in eight states, more than 75,000 employees and annual sales of $13 billion. Forbes has ranked the chain as the 38th-largest private company in America.
Strack & Van Til has 2,800 employees, with many of its stores in Indiana’s eastern Chicago suburbs. The companies have numerous similarities, Potthoff said, noting that Hy-Vee’s company slogan is “making lives easier, healthier happier,” while Strack & Van Til’s is “making lives easier.”
Hy-Vee CEO Jeremy Gosch said in a news release that as Hy-Vee expands into Indiana and the Southeast, “Strack & Van Til’s customer-centric focus and company vision to ‘make lives easier’ aligns with HyVee’s values and growth strategy. We look forward to welcoming Strack & Van Til’s employees into the
Hy-Vee family in the weeks to come.”
Matthew Caito, a lecturer in operations management at Butler University in Indianapolis and a grocery analyst, said Hy-Vee’s plans to maintain the Strack & Van Til banner could help it gain a foothold in Indiana, but is more about competing in the metro Chicago market.
“Northwest Indiana is a very distinct market from Central Indiana,” Caito wrote in an emal. “‘The Region,’ as it is known, operates more like Chicago, with different demographics, consumer tastes, and retail price points. I think it is (a) good decision that Hy-Vee plans on maintaining the Stack & Van Til banner for those stores.”
Strack & Van Til has long history in Indiana’s Chicago suburbs
The Strack & Van Til chain traces its heritage back to 1929, when Ernie Strack opened his first grocery store. According to the Strack & Van Til website, Strack partnered with another established Indiana grocer, Nick Van Til, to open their first combined store the following year.
The Strack and Van Til families ran the company until 1997, when they sold it to Central Grocers, according to the Northwest Indiana Times.
Ernie Strack’s grandson, Jeff Strack, had remained with the chain after the sale and became president and CEO in 2016. At one point, Strack & Van Til had 37 stores, according to the Times of Munster, Indiana, but sold many off before Central Grocers filed for bankruptcy in 2017.
Strack and his family then joined with the Van Tils to buy the remaining 20 stores in a bankruptcy auction. They paid what the Times reported was $91.3 million.
Strack remains CEO and president of Strack & Van Til and will continue in that role after the sale to Hy-Vee, Potthoff said.
Hy-Vee board chair Randy Edeker said in a news release that “much like Hy-Vee founders Charles Hyde and David Vredenberg, Strack & Van Til’s growth and success remains rooted in the philosophy and principles of its two founders Ernie Strack and Nick Van Til. Like Hy-Vee, the Strack & Van Til chain is also committed to delivering everyday value and providing quality groceries, perishables and freshly prepared foods. As we remain focused on our future growth, Strack & Van Til is a great addition to the Hy-Vee family.”
“We know Hy-Vee is the perfect partner,” Jeff Strack said in a news release. “With our combined focus on providing excellent customer service, taking care of our employees and giving back to our local communities, we believe this acquisition is a win-win for both our associates and our company.”
Strack & Van Til will be the first separate grocery subsidiary of Hy-Vee, Potthoff said. While new for Hy-Vee, it’s common in the grocery industry for large chains to have a portfolio of brands. For example, Boise, Idahobased Albertsons brands include Safeway and Vons. Cincinnati-based Kroger, which is trying to merge with Albertsons, owns supermarkets under 19 brands, including Ralphs, Food 4 Less and Gerbes.
Future Indiana expansion plans are still a go; timeline may change
Hy-Vee planned to start construction on Hy-Vee branded stores in Indianapolis suburbs Zionsville and Fishers later this year. But when the chain had the opportunity to buy Strack & Van Til, everything changed, Potthoff said.
Previously, Hy-Vee had not said where else in Indiana it would like to expand to. With the acquisition of Strack & Van Til, the company plans to keep building in Indiana, Potthoff said, though the timeline may change.
“We plan to continue to build in these areas,” Potthoff said. “Due to this acquisition, we are reviewing and finalizing our construction timeline for those locations.”
Hy-Vee has existing distribution centers in Chariton and Cherokee and a perishable foods distributor in Ankeny. In June the company is expected to open a new distribution center in Cumming, south of Des Moines.
But Strack & Van Til stores will continue being served by its existing suppliers, according to the Hy-Vee news release.