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SUPERVALU 2ND-QUARTER SALES RISE 2%

MINNEAPOLIS -- Supervalu here said recent acquisitions and the expansion of its corporate retail business contributed to a 2% sales increase in the second quarter ended Sept. 10.to "transform" operations negatively affected earnings comparisons.Supervalu's corporate retail sales rose 9.2% in the quarter to $904.1 million. The addition of 30 Texas T limited assortment stores contributed to the increase.

MINNEAPOLIS -- Supervalu here said recent acquisitions and the expansion of its corporate retail business contributed to a 2% sales increase in the second quarter ended Sept. 10.

to "transform" operations negatively affected earnings comparisons.

Supervalu's corporate retail sales rose 9.2% in the quarter to $904.1 million. The addition of 30 Texas T limited assortment stores contributed to the increase. Corporate same-store sales declined approximately 1%. On the wholesale side, sales rose 2.8% to $3.4 billion. Sales eliminations -- wholesale sales to corporate-owned stores -- amounted to $531 million in the quarter.

Earnings were affected by the costs of facility consolidations in the Midwest, the Northeast and the Southeast. Earnings also were impacted by a $3.1 million after-tax inventory expense.

Michael W. Wright, chairman, president and chief executive officer, said a challenging operating environment has made it necessary for Supervalu to take "dramatic steps" to transform its operations.

"The food retailing and distribution industry is changing in many respects," he said. In response to the changes, Supervalu has created the Supervalu Advantage project, which, Wright said, is aimed at making fundamental changes in the company's operations.

Supervalu already has invested about $6.7 million in the Advantage project this year and it expects to spend about $9 million more this year, he said.

One industry analyst, who asked not to be named, said he's inclined to view the Advantage project as Supervalu's effort to preempt the new low-cost sell plan being offered by competitor Fleming Cos., Oklahoma City.

"Supervalu says this year will be a transition year because of spending in general and because of the competitiveness of the marketplace, and I'm inclined to agree," the analyst said.

2ND-QUARTER RESULTS

Qtr Ended 9/10/94 9/11/93

Sales $3.77 billion $3.7 billion

Change +1.9%

Net Income $33.5 million $36.3 million

Change -7.7%

Inc/Share 47 cents 51 cents

28 Weeks 1994 1993

Sales $8.76 billion $6.6 billion

Change +2.2%

Net Income $84.1 million $87.4 million

Change -3.8%

Inc/Share $1.18 $1.22

TAGS: Supervalu