SUPERVALU REPORTS MAKING GAINS IMPLEMENTING ADVANTAGE PROGRAM

MINNEAPOLIS -- Supervalu here continues to make strides in implementing its Advantage project, making strong advances in the first quarter, company executives told shareholders at the wholesaler's annual meeting.

, Supervalu chairman and chief executive officer. Gains in the Advantage program, Supervalu's wholesale segment realignment, include the following, the company reported:

The firm's newly developed category management program is being rolled out in the North, Southeast and Midwest marketing regions with category reviews, training and resets under way. The program had been tested in the Denver market.

The early steps necessary to fully implement the new pricing program called Activity Based Sell are being introduced in Wisconsin and Illinois. The program determines the sell price of a product by using its net product price plus fees to recover the cost to serve the retailer and to earn an adequate profit margin.

The shipping of products to stores from the new Southeast regional distribution center began last month.

The groundbreaking for the Midwest regional distribution facility also began last month. It is slated to start operations in the fall of 1997.

Supervalu also reported first-quarter results at the meeting. Overall sales and earnings were basically flat, at just under $5 billion and $46 million, respectively. (See Page 8 for details.)

In the food distribution arm, results were squeezed in part by high Advantage costs, due to heavy implementation activity in the quarter, plus transition expenses for increased information systems support, according to the company.

The retail segment posted healthy gains from improved performance in the price superstores and limited-assortment stores, strong merchandising efforts at some operations, the strike affecting competitors in Denver and the closing of underperforming stores in the previous fiscal year, Supervalu reported.