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By Craig McEwen, Published August 12 2006

Fargo distribution center feeds 80-plus area stores

SuperValu delivery truck 01848 arrives at Tony’s SuperValu in Hawley, Minn., under a star-lit, Tuesday morning sky.

It’s 5:02 a.m. Driver Bob Rudh climbs down from his semi cab 30 minutes after leaving the company’s 375,000-square-foot north Fargo distribution center.

It’s one of two weekly deliveries store owner Tony Laddusaw receives from the distribution hub that feeds more than 80 SuperValu stores in a 300-mile radius of Fargo, in eastern North and South Dakota, and central and northwestern Minnesota.

Seven Tony’s employees saunter in shortly after 5 a.m. to begin stocking grocery shelves.

Laddusaw opens the store’s loading dock door and steers a battery-powered pallet jack into the semi trailer, retrieving the first piece of Tuesday’s shipment – a pallet containing tomatoes and garlic.

At 6:25 a.m., Rudh climbs back into the driver’s seat and heads back to Fargo.

Customers begin trickling into the new store that Tony and Rhonda Laddusaw opened in December along U.S. Highway 10. His parents, Ron and Carol Laddusaw, had operated the store in downtown Hawley since 1979.

In June, Eden Prairie, Minn.-based SuperValu purchased Boise, Idaho-based Albertson’s Inc. for $17.4 billion.

The deal boosted SuperValu’s market stature to third-largest grocery retailer in the U.S. behind No. 1 Wal-Mart and No. 2 Krogers, said Jeff Noddle, SuperValu chairman and CEO.

SuperValu now operates 2,500 stores and 900 in-store pharmacies, and employs about 200,000 people, according to the Fortune 500 company’s Web site.

The Albertson’s acquisition will have little impact locally, Noddle said.

“In the near term, the Fargo distribution center will be unaffected,” said Noddle, who was president of the Fargo distribution division from 1982 to 1983. “They will continue tomorrow, just like they did six months ago.”

Over the next several years, this region will see the benefits of the merger, Noddle said.

He expects sales to double from $20 billion to $40 billion annually.

“We’re going to be the only company in the food business that operates in all 48 (contiguous) states,” Noddle said.

Over time, consumers may see more grocery items offered locally in the form of private labels provided by Albertson’s, he said.

Those decisions will be made by area store operators. “We believe very, very strongly in local merchandising and marketing,” he said.

Starting daily at 6:30 a.m., delivery trucks arrive from across the U.S. at SuperValu’s Fargo Distribution Center at 3501 12th Ave. N., said General Manager Gary Schmidt.

They are met by a squadron of forklift operators, their machines scurrying up and down long aisles, stacking goods onto 32-foot-tall shelving units.

“We get produce coming from Florida, California and Texas,” said Warehouse Manager Chet Rehder. “A lot of cereals out of Chicago; a lot of paper products out of Wisconsin.”

Some forklift drivers wear headsets, receiving computer-generated instructions for finding individual store orders before loading them onto outbound delivery trucks.

“It’s a paperless system for order selection,” said Schmidt, a 32-year SuperValu veteran.

At 5 p.m., another team begins loading the outgoing fleet of semis that last year logged 1.2 million miles supplying SuperValu stores.

One-by-one, between 8 p.m. and 4 a.m., the loaded trucks leave the terminal, headed for stores near and far.

“The stores want to have the product there first thing in the morning so they can stack shelves before they have customers coming through,” Schmidt said.

Each of the distribution center’s 25 semis log about a million miles during their projected 10-year road life without a major overhaul, said Mike Doyle, transportation manager.

“The new equipment is outstanding. The diesel trucks have come a long, long way. They are very good,” Doyle said.

SuperValu operates two distribution centers in North Dakota – one in Fargo, the other in Bismarck.

“Fargo distribution has always been one of our most productive facilities in the company,” Noddle said. “We’ve used the Fargo distribution center to test some things before we take them elsewhere in the country.”

As part of their long-term planning process, SuperValu leaders try to envision what will happen in the industry five to 10 years down the road, Noddle said.

“We saw consolidations – big retailers getting larger,” he said. “We got concerned that we weren’t of a comparable size to retain a supply chain that could compete long-term. We knew we would probably have to make some acquisitions over a number of years.”

Albertson’s provided that opportunity.

“We were able to go in and select out the pieces of Albertson’s that we wanted,” Noddle said.

Rather than waiting several years to expand its retail arm, SuperValu decided to do it in one transaction, he said.

The intent is not to become the largest grocery retailer and wholesaler in the country, he said.

“That’s not that important to us, to be the largest,” Noddle said. “What is important to us is to be the best place to work and to be the best place to shop. We don’t do anything just to be the biggest.”

Readers can reach Forum Business Editor Craig McEwen at (701) 241-5502