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Hy-Vee purchased the former Shell station near its downtown Mankato store and reopened it as a Hy-Vee gas station last week.

Higher gas prices are fueling a popular promotions among grocery chains offering fuel discounts with grocery purchases.

Both Cub and Hy-Vee have fuel discount programs and Hy-Vee is expanding rapidly into owning gas stations, opening its latest one in downtown Mankato.

Hy-Vee bought the former Shell station near its downtown store and opened as Hy-Vee Gas last week. 

“The station is run under the store but we have a separate manager for it,” said Hy-Vee store director John Peterman. 

Hy-Vee has 124 stations across the Midwest, including seven in southern Minnesota.

Gas discount cards have grown in popularity with grocers teaming up with gas station chains – Cub Foods cards can be used at Holiday stations while Hy-Vee discounts can be used at Casey’s or Hy-Vee stations.

Customers get a certain amount off per gallon for buying selected items at the grocery store and can accumulate discounts.

“It can really add up. A customer was in last week and said he paid $1.83 a gallon,” Peterman said.

Since starting the program in December, Hy-Vee reported it has attracted 1.2 million customers.

The local Hy-Vee discount promotion and new gas station comes on the heels of a complete store reset last fall in which 80 linear feet of shelf space was added and many items were rearranged.

“It was 12 years since we did a major reset,” Peterman said.

How to pair up food offerings and where to place different items around the store is part science and part art.

“It starts with customer requests and corporate has data, and it has to work within the store,” he said.

“Some of it’s obvious, like all the baking things together. Other times it’s not. We wanted to get like items together. For example, all the snacks are in one aisle, from potato chips to Oreo cookies.”

While no firm plans have been announced, Peterman said it’s likely that the  downtown store will be expanded and upgraded. Hy-Vee owns more land behind their store, toward the depot and across the street from the civic center.

“Hy-Vee does plan on making an investment in Mankato. We have a 30-year-old building.”

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