Hy-Vee is cut­ting nearly 600 jobs at KC ful­fill­ment cen­ter

The Kansas City Star - - Business - BY KEVIN HARDY [email protected]­star.com Kevin Hardy: 816-234-4337, @kev­in­mhardy

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 storelevel 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 em­ploy­ee­owned 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.

Star file photo

Hy-Vee, based in West Des Moines, Iowa, has more than 265 re­tail stores across eight Mid­west­ern states. The lo­ca­tion above is in Lee’s Sum­mit.

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