Spatial cues can facilitate segregation of target speech from maskers. However, in clinical practice, masked speech understanding is most often evaluated using co-located speech and maskers (i.e., without spatial cues). Many hearing aid centers in France are equipped with five-loudspeaker arrays, allowing masked speech understanding to be measured with spatial cues. It is unclear how hearing status may affect utilization of spatial cues to segregate speech and noise. In this study, speech reception thresholds (SRTs) for target speech in "diffuse noise" (target speech from 1 speaker, noise from the remaining 4 speakers) in 297 adult listeners across 9 Audilab hearing centers. Participants were categorized according to pure-tone-average (PTA) thresholds: typically-hearing (TH; ≤ 20 dB HL), mild hearing loss (Mild; >20 ≤ 40 dB HL), moderate hearing loss 1 (Mod-1; >40 ≤ 55 dB HL), and moderate hearing loss 2 (Mod-2; >55 ≤ 65 dB HL). All participants were tested without aided hearing. SRTs in diffuse noise were significantly correlated with PTA thresholds, age at testing, as well as word and phoneme recognition scores in quiet. Stepwise linear regression analysis showed that SRTs in diffuse noise were significantly predicted by a combination of PTA threshold and word recognition scores in quiet. SRTs were also measured in co-located and diffuse noise in 65 additional participants. SRTs were significantly lower in diffuse noise than in co-located noise only for the TH and Mild groups; masking release with diffuse noise (relative to co-located noise) was significant only for the TH group. The results are consistent with previous studies that found that hard of hearing listeners have greater difficulty using spatial cues to segregate competing speech. The data suggest that speech understanding in diffuse noise provides additional insight into difficulties that hard of hearing individuals experience in complex listening environments.