UPDATE: This story has been updated to include comments from Wahlburgers.
Hy-Vee is closing the 79 Wahlburgers locations in its stores and replacing them with its own Market Grille concept, the grocery chain said Tuesday.
The closures will erase a huge chunk of the burger chain created by celebrity brothers Mark, Donnie and Paul Wahlberg. As of the end of 2023, Wahlburgers had 109 locations, according to Technomic data. Most of them were inside Hy-Vees, which has stores in eight Midwestern states.
But Wahlburgers was not happy with the performance of the Hy-Vee-operated locations, which made up only a small portion of sales, said CEO Randy Sharpe. He said the chain wants to focus more on its actual restaurants rather than what were essentially kiosks in grocery stores. Wahlburgers will, however, take over the Hy-Vee-operated full-service location at the Mall of America.
"We are growing restaurants," Sharpe said. "We’re not going to be in the grocery business.
"It's best that everyone stay in what their skill sets are and move on."
The closures will leave Wahlburgers with about 40 locations nationwide, he said.
Hy-Vee will replace its in-store Wahlburgers with Market Grille, an in-house concept that was itself replaced by Wahlburgers in some locations in 2020. Hy-Vee first began opening Wahlburgers in 2018. It has restaurants in 221 of its stores, most of which are Market Grilles.
The reimagined Market Grille will offer a wider variety of options at an affordable price, Hy-Vee said. It will also have more of a breakfast focus. But old favorites such as burgers, BLTs, club sandwiches and chicken wings will return.
At most locations, customers can order at the counter and have their food brought to their table. Takeout and delivery will also be available.
The transition will start this week and is expected to be completed by Feb. 4.
Previously, Hingham, Massachusetts-based Wahlburgers had been growing quickly for years. From 2019 to 2023, it more than tripled in size, going from 30 locations to 109, largely thanks to its relationship with Hy-Vee. In 2023, systemwide sales rose 9% on 5.2% unit growth, according to Technomic.
It plans to open 15 locations this year, giving it a total of 65, Sharpe said.
It also closed some restaurants last year, according to local media reports out of Wisconsin, Missouri, Indiana and Georgia.
The Wahlbergs opened the first Wahlburgers in 2011 in Hingham, outside of Boston, and began to expand it in 2014 via franchising. The restaurant spawned a reality TV show of the same name that ran for 10 seasons, from 2014 to 2019.
It comes as many grocery stores are investing more in prepared food and even developing their own in-store restaurants. Restaurant menu price inflation has outpaced groceries for years, creating an opportunity for grocers to take share.
CORRECTION: A previous version of this story said Market Grille was discontinued. Only 79 of Hy-Vee's roughly 221 Market Grilles were replaced by Wahlburgers.
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