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MA AND PA GROCERS` WHOLESALE GUARDIAN

If Hollywood were to cast a corporate version of ”My Bodyguard,” it might well choose Super Valu Stores Inc. for the title role.

The role of the giant hired by a runt to protect him from a bully would fit Super Valu, a corporate bodyguard of sorts for thousands of independent grocers.

It`s a customer of such food titans as Pillsbury Co., Quaker Oats Co. and General Mills Inc., but its $6.5 billion in sales last year topped any of its huge suppliers. Its 3,300 customers are today`s versions of the Ma and Pa groceries of old, carrying on the battle against the big chains.

Perhaps appropriately, the Super Valu chairman clearing a path to profits for the independent grocers is a husky former All-Big Ten tackle and Canadian Football League player named Michael Wright.

”Given the help of a strong wholesaler, the independent grocery can continue to be strong and growing,” said Wright, 47, who is also president and chief executive of the nation`s largest grocery wholesaler.

Super Valu is a leader in a fragmented and shrinking field comprising some 380 wholesale grocery companies. The firm evolved from early wholesalers and, after several mergers, became Super Valu in 1954.

Through a series of acquisitions of smaller wholesalers and growth fed by successful independent retailers, Super Valu has mushroomed. In 1976, it was a $1.7 billion-a-year firm in sales, with $11.8 million in net earnings. Last year, it posted $83.3 million in earnings on its $6.5 billion in sales.

”You`ve got to have the two ingredients (for success). You need the strong wholesaler and the strong independent retailer. We`ve been able to do it because our retailers have been very, very good retailers and we`ve been able to help them grow,” Wright said.

Besides its wholesaling business, the firm owns and operates more than 55 Shopko stores, a general merchandiser at the upper end of the discount scale. Super Valu also operates or franchises 28 Cub warehouse grocery stores and franchises County Market stores, a smaller, more flexible version of the Cub warehouses. It also operates Hornbachers grocery stores in North Dakota and Sunshine stores in the South.

The wholesaling side of its business, which accounted for $5.59 billion in sales last year, has grown by leaps and bounds through acquisitions and innovative support for its retail customers.

Witness its most recent and largest acquisition. For years, Super Valu had tried to get a foothold in the West Coast market. Last July, it bought West Coast Grocery Co., a $1.1 billion Tacoma, Wash.-based firm with distribution in Washington, Idaho, Montana, Oregon and Alaska. Terms were withheld.

”In the wholesale grocery business, the only way you can grow territorially is (to) merge with another company that`s in that territory and has some retailers to start with. . . .” Wright said. And then it`s our job to bring to the management of that company capital, services for the retailers . . . and often times we bring technology,” Wright said.

But Wright is not looking at California.

In its annual report, Super Valu calls itself a retail support company, not a wholesaling company. Selling goods wholesale is but a slice of the Super Valu pie.

”We act as a catalyst to try to make things happen. We find them

(independent grocers) locations. We survey the sites and introduce the opportunities to our retailers, and we then give him a turnkey project, with everything from design engineering to store training and the other parts of the business,” he said.

In addition, Super Valu provides radio and television advertising and promotions, finances additions and acquisitions and offers advice on tax matters, payroll, store arrangement and whatever other services a retailer might need.

Super Valu supplies 75 to 80 percent of the products sold in its customers` stores from a network of giant warehouses dotting the country, some with capacities of nearly 1 million square feet.

Wright said Super Valu also is valuable to its suppliers.

”We do a hell of a service for the manufacturer, because they only have to deal with us. They don`t have to deal with 3,300 food stores. . . . And we`re the guarantor of the manufacturer`s credit,” he said.

One such manufacturer is McCain OJ Inc., a juice manufacturer on Chicago`s West Side and a longtime supplier and fan of Super Valu.

”Super Valu is one of the most respected and innovative (operators) in the country. The company stresses quality and good value in every phase of its operations,” said Roger J. Walsh Sr., president and chief executive of McCain.

And the financial community is well aware of the Super Valu record. It has watched Super Valu grow spectacularly over the last 10 years.

”They are highly innovative and offer retailers more support than any other wholesaler. They have earnings and a balance sheet to support an innovative and aggressive growth. They have found a way to improve the retailers` profitability, and that`s the basis for their corporate

philosophy,” said Marty McDevitt, an analyst with Robert Baird & Co. Inc. in Milwaukee.

McDevitt praised Super Valu for capitalizing on new ideas, such as the Cub and County Market stores, and for a management he says is ”literally super.” Besides Wright, he singled out Gene Hoffman, the wholesale foods president, and Jack Morrissey, senior vice president in charge of

distribution.

”And the stock has done very well. We call it a quality growth stock. They have not had a down year (in earnings) since 1959. Their earnings were $1.13 (per share) last year and should be $1.30 this year. For fiscal 1987, we project $1.50,” McDevitt said.

In 1974, the stock sold at a high of $2.50 a share. At the end of the last fiscal year, it was at $32. On Wednesday it closed at $21.50.

Wright joined Super Valu as a senior vice president for administration in 1977 after practicing law for 13 years. In 1978, he became president and chief operating officer. In 1981, he became chief executive. In 1982, he added the chairmanship.

Just before he became chief executive, Super Valu purchased Cub Inc., a group of five high-volume warehouse stores that expanded into the Chicago area two years ago. About half of the present 28 stores are franchised, with the rest company owned. But the direction is toward franchising.

”We do not intend to become a corporate chain of stores. So it was just natural for us to franchise Cubs to independent operators, which is much more in keeping with our philosophy to serve them,” Wright said. Wholesale is, indeed, Super Valu`s game.