<PAGE>1
                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

                           FORM 10-Q


(X)QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934

   For the quarterly period ended July 4, 1998  or

(  )     TRANSITION  REPORT PURSUANT TO SECTION 13  OR  15(d)  OF  THE
   SECURITIES EXCHANGE ACT OF 1934

   For the transition period from                       to


   Commission file number                        2-20910

                                 TRUSERV
                               CORPORATION
           (Exact  name  of  registrant  as  specified  in  its charter)
   

               DELAWARE                                 36-2099896
   (State or other jurisdiction of                 (I.R.S. Employer
   incorporation   or  organization)                    Identification
   No.)

   8600 West Bryn Mawr Avenue
        Chicago, Illinois                               60631-3505
   (Address of principal executive offices)              (Zip Code)

                               (773) 695-5000
         (Registrant's telephone number, including area code)

                          not applicable
         (Former name, former address and former fiscal year,
                     if changed since last report)

   Indicate  by  check mark whether the registrant (1) has  filed  all
   reports  required  to  be  filed by Section  13  or  15(d)  of  the
   Securities Exchange Act of 1934 during the preceding 12 months  (or
   for  such shorter period that the registrant was required  to  file
   such   reports),   and  (2)  has  been  subject  to   such   filing
   requirements for the past 90 days.
   Yes   X   No


   The  number  of shares outstanding of each of the issuer's  classes
   of common stock, as of August 1, 1998.

      Class A Common Stock, $100 Par Value.           486,368  Shares.
      Class B Common Stock, $100 Par Value.         1,790,157  Shares.


<PAGE> 2
                 PART I - FINANCIAL INFORMATION



Item 1.     FINANCIAL STATEMENTS



                      TRUSERV CORPORATION

              CONDENSED CONSOLIDATED BALANCE SHEET

                        (000's Omitted)


<TABLE>
<CAPTION>
                                            July 4,     December 31,
                                             1998             1997
                                          ----------     -----------
                                          (UNAUDITED)
                                      
<S>                                    <C>           <C>
ASSETS

Current assets:
 Cash and cash equivalents              $    2,156    $    2,224

 Accounts and notes receivable             648,642       476,527
 Inventories                               616,021       543,946
 Prepaid expenses                           22,555        16,092
                                        ----------    ----------
 Total current assets                    1,289,374     1,038,789

Properties less
 accumulated depreciation                  254,872       241,236

Goodwill, net                              110,319       107,711

Other assets                                57,486        51,177
                                        ----------    ----------
TOTAL ASSETS                            $1,712,051    $1,438,913
                                        ==========    ==========

</TABLE>

   See Notes to Condensed Consolidated Financial Statements.

<PAGE> 3
                      TRUSERV CORPORATION

              CONDENSED CONSOLIDATED BALANCE SHEET

                        (000's Omitted)

<TABLE>
<CAPTION>
                                                       July 4,    December 31,
                                                       1998             1997
                                                    ---------    -----------
                                                   (UNAUDITED)
                                              
<S>                                                   <C>          <C>
LIABILITIES AND CAPITALIZATION


Current Liabilities
 Accounts payable and accrued expenses                 $  633,654  $  572,565
 Short-term borrowings                                    373,777     215,467
 Current maturities of notes,
   long-term debt and lease obligations                    63,048      62,640
 Patronage dividends payable in cash                        5,574      12,142
                                                        ---------  ----------
 Total current liabilities                              1,076,053     862,814
                                                        ---------  ----------
Long-term debt and obligations under
 capital leases                                           220,674     169,209
                                                        ---------  ----------
Capitalization:
 Promissory (subordinated) and installment notes          172,118     172,579
 Class A common stock
   authorized 750,000 shares; issued and fully paid
   493,120 and 183,790 shares                              49,312      47,423
 Class B nonvoting common stock and
   paid-in capital; authorized 4,000,000 shares;
   issued and fully paid, 1,800,510 and 2,338,755
   shares; issuable as partial payment of patronage
   dividends 130,006 shares as of July 4, 1998
   payable as of December 31, 1998; issuable as
   partial payment of patronage dividends 177,655
   shares as of December 31, 1997.                        194,389     187,259
                                                                               
 Retained earnings                                            684         685
                                                       ----------  ----------
                                                          416,503     407,946
 Foreign currency translation adjustment                   (1,179)     (1,056)
                                                       ----------  ----------
 Total capitalization                                     415,324     406,890
                                                       ----------  ----------
TOTAL LIABILITIES AND CAPITALIZATION                   $1,712,051  $1,438,913
                                                       ==========  ==========
</TABLE>


       See Notes to Condensed Consolidated Financial Statements.
                                   
                                   
                                   
<PAGE> 4
                                   
                                   
                          TRUSERV CORPORATION

             CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                            (000's Omitted)
                                   
                              (UNAUDITED)
                                   



<TABLE>
<CAPTION>
                            FOR THE THIRTEEN              FOR THE TWENTY-SIX 
                             WEEKS ENDED                    WEEKS ENDED
                       -------------------------      ------------------------- 
                       July 4,1998 June 28, 1997      July 4, 1998 June 28, 1997
                       ----------- -------------      ------------ -------------

<S>                      <C>           <C>             <C>          <C>
Revenues                 $1,155,449    $645,070        $2,185,654   $1,206,766
                         ----------    --------        ----------   ---------- 

Cost and expenses:

  Cost of revenues        1,055,302     597,740         2,005,028    1,115,919
  Warehouse, general and
   administrative            68,231      26,900           132,340       61,409    
  Interest paid to Members    3,766       4,255             7,656        8,552
  Other interest expense      9,492       3,472            17,913        6,505
  Other income, net            (385)       (306)             (225)        (469)
  Income tax expense (benefit)  439        (219)              320          (59)
                          ---------     -------         ---------    ---------
                          1,136,845     631,842         2,163,032    1,191,857
                          ---------     -------         ---------    ---------
Net margin before
   integration costs         18,604      13,228            22,622       14,909

Integration costs             2,195       1,422             4,042        2,032
                          ---------     -------         ---------    ---------
Net margins              $   16,409   $  11,806        $   18,580   $   12,877
                         ==========   =========        ==========   ==========
  
</TABLE>


        See Notes to Condensed Consolidated Financial Statements.
                                   
<PAGE> 5
                                                                    
                                                               
                                   
                               
                                  
                          TRUSERV CORPORATION

            CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                   FOR THE TWENTY SIX WEEKS ENDED               
                   
                          (000's Omitted)

                              (UNAUDITED)

<TABLE>
<CAPTION>
                                                      July 4,      June 28,
                                                        1998         1997
                                                    ----------   ---------
                                                                                              
                                                        
                                                           
<S>                                                <C>          <C>
Operating activities:
  Net margins                                       $   18,580   $  12,877
  Adjustments to reconcile net margins to cash and
   cash equivalents from operating activities:
    Statement of operations components not affecting
     cash and cash equivalents                          16,510      12,373
   Net change in working capital components           (188,411)    (58,541)
                                                    ----------   ---------
 Net cash and cash equivalents used for
   operating activities                               (153,321)    (33,291)
                                                    ----------   ---------
Investing activities:
  Additions to properties owned                        (31,090)    (15,158)
  Changes in other assets                               (6,309)     (8,218)
                                                    ----------   ---------    
  Net cash and cash equivalents used for
   investing activities                                (37,399)    (23,376)
                                                    ----------   ---------
Financing activities:
  Proceeds from short-term borrowings                  158,310      76,836
  Proceeds from long-term borrowings                    52,616       2,371
  Payment of annual patronage dividend                 (12,142)    (16,142)
  Payment of notes,  long-term debt, lease
   obligations and common stock                         (8,132)     (6,184)
                                                    ----------   ---------
  Net cash and cash equivalents provided by
   financing activities                                190,652      56,881
                                                    ----------   ---------

Net increase (decrease) in cash and cash equivalents       (68)        214

Cash and cash equivalents at beginning of the period     2,224       1,662
                                                     ---------   ---------
Cash and cash equivalents at end of the period       $   2,156   $   1,876
                                                     =========   =========
</TABLE>

       See Notes to Condensed Consolidated Financial Statements.
                                   
<PAGE> 6
                                   
                                   
                          TRUSERV CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                          (UNAUDITED)


NOTE 1 - BUSINESS COMBINATIONS

On  July  1,  1997, pursuant to an Agreement and Plan of Merger  dated
December  9,  1996  between Cotter & Company  ("Cotter"),  a  Delaware
corporation and Servistar Coast of Coast ("SCC"), SCC merged with  and
into   Cotter,  with  Cotter  being  the  surviving  corporation  (the
"Merger").  Cotter was renamed TruServ Corporation ("TruServ"  or  the
"Company"), effective with the Merger. Each outstanding share  of  SCC
Common  Stock and SCC Series A Stock (excluding those shares  canceled
pursuant  to Article III of the Merger Agreement) were converted  into
the right to receive one fully paid and nonassessable share of TruServ
Class  A common stock and each two outstanding shares of SCC Preferred
Stock were converted into the right to receive one fully paid and non-
assessable share of TruServ Class B Common Stock.  A total of  270,500
and  1,170,670  shares of TruServ Class A Common  Stock  and  Class  B
Common Stock, respectively, were issued in connection with the Merger.
Also  231,000 additional shares of TruServ Class A Common  Stock  were
issued in exchange for Class B common stock to pre-Merger Stockholders
of Cotter to satisfy the Class A Common Stock ownership requirement of
60  shares per store (up to a maximum of 5 stores) applicable to  such
Members as a result of the Merger.

The  Condensed  Consolidated Balance Sheets as of  July  4,  1998  and
December  31,  1997  reflect the post-Merger Company.   The  financial
information for the twenty-six weeks ended July 4, 1998, reflects  the
post-Merger  results of the Company. The twenty-six weeks  ended  June
28,  1997  reflect the financial information of the pre-Merger Company
only.

The  following summarized unaudited pro forma operating data  for  the
twenty-six weeks ended June 28, 1997 are presented below giving effect
to  the Merger, as if it had been consummated at the beginning of  the
period.   These  pro forma results have been prepared for  comparative
purposes  only and do not purport to be indicative of the  results  of
operations that actually would have resulted had the Merger   been  in
effect  on the date indicated, or which may result in the future.  The
pro  forma  results exclude one-time non-recurring charges or  credits
directly attributable to the transaction.

The   pro  forma  adjustments  consist  of   (i)  an  adjustment   for
amortization  of the estimated excess of cost over the fair  value  of
the  net  assets  of SCC, (ii) an adjustment for interest  expense  on
promissory  notes  issued  in connection with  the  Merger,  (iii)  an
adjustment  for interest expenses on short-term borrowings  issued  in
connection  with  the  Merger and (iv) an adjustment  for  incremental
differences in depreciation expense.
<TABLE>
<CAPTION>
                                                TWENTY-SIX WEEKS ENDED
                                                ---------------------- 
                                               July 4,           June 28,    
                                                 1998              1997
                                             ---------       ------------  
                                               Actual        Pro Forma (1)
                                             ---------       ------------    
                                                   (000's OMITTED)

<S>                                        <C>              <C>
Revenue                                     $2,185,654       $2,105,852

Net margin                                  $   22,622       $   25,465

  (1) Assumes the Merger was consummated at January 1, 1997.
</TABLE>

<PAGE> 7

To  refinance  the  existing debt of SCC  and  pay  related  fees  and
expenses, the Company entered into a revolving loan agreement of up to
$300,000,000 in short-term credit facilities with a group of banks and
an additional $100,000,000 of  long-term debt.

The  total  purchase price of approximately $141,400,000 was allocated
to  assets and liabilities of the Company based on the estimated  fair
value  as  of  the date of acquisition.  The allocation was  based  on
preliminary  estimates which could be revised up until July  1,  1998.
The  excess of consideration paid over the estimated fair value of net
assets  acquired  in the amount of $113,173,000 has been  recorded  as
goodwill  and is being amortized on a straight-line basis  over  forty
years.

In  connection  with the purchase business combination,  an  estimated
liability of $38,200,000 was recognized for costs associated with  the
Merger  plan.  The  Merger  plan specifies  that  certain  former  SCC
positions   approximately   1,200  in  total,   will   be   eliminated
substantially  within one year. As of July 4, 1998, approximately  93%
of  these  employees  have been terminated with the  related  cost  of
benefits  of  approximately $9,425,000 charged against the  liability.
The  Merger  plan  specifies  the  closing  of  redundant  former  SCC
distribution  centers  and the elimination of overlapping  former  SCC
inventory  items  stockkeeping units.  Distribution center closing costs
include net occupancy  and costs  after  facilities are vacated. In
addition, stockkeeping unit reduction  costs include losses on the sale
of inventory  items  which have  been discontinued solely as a result of
the Merger.  As of  July 4,  1998,  $2,134,000 relating to distribution
center closing cost and the  reduction  of  stockkeeping units have been
charged  against  the liability.   Merger integrations costs of $4,042,000
consist  of  one time  non-recurring  expenses  directly  attributable  to
the  Merger including  distribution  center closings, severance  pay,
information service costs and general and administrative costs.

NOTE 2 - GENERAL

The  condensed consolidated balance sheet, statement of operations and
statement of cash flows at and for the periods ended July 4, 1998  and
the  condensed  consolidated statement of operations and statement  of
cash  flows for the periods ended June 28, 1997 are unaudited and,  in
the opinion of the management of the Company, include all adjustments,
consisting only of normal recurring adjustments, necessary for a  fair
presentation  of  financial position, results of operations  and  cash
flows  for the respective interim periods.  The accompanying unaudited
condensed  consolidated financial statements  have  been  prepared  in
accordance  with generally accepted accounting principles for  interim
financial  information  and with the instructions  to  Form  10-Q  and
Article 10 of Regulation S-X.  Accordingly, they do not include all of
the   information   and  footnotes  required  by  generally   accepted
accounting   principles  for  complete  financial  statements.    This
financial  information  should  be  read  in  conjunction   with   the
consolidated financial statements for the year ended December 31, 1997
included in the Company's  1997 Annual Report on Form 10-K.

NOTE 3 - ESTIMATED PATRONAGE DIVIDENDS

Patronage  dividends are declared and paid by the  Company  after  the
close  of  each  fiscal year. The 1997 annual patronage  dividend  was
distributed  through  a  payment of 30% of the total  distribution  in
cash,  with  the  balance  being paid  through  the  issuance  of  the
Company's  Class  B nonvoting common stock. Such patronage  dividends,
consisting  of  substantially all of the  Company's  patronage  source
income,  have been paid since 1949.  The estimated patronage  dividend
for the twenty-six weeks ended July 4, 1998 is $18,581,000 compared to
$13,014,000 for the corresponding period in 1997.

<PAGE> 8

NOTE 4 - INVENTORIES
<TABLE>
<CAPTION>
   Inventories consisted of:                      July 4,    December 31,
                                                    1998           1997
                                                --------      ----------   
                                               (UNAUDITED)
                                                       (000's Omitted)
   

   
<S>                                            <C>            <C>
   Manufacturing inventories:
     Raw materials                              $ 13,634       $  4,878
     Work-in-process and finished goods           32,173         29,241
</TABLE>
                                                --------       --------
                                                  45,807         34,119
   Merchandise inventories                       570,214        509,827
                                                --------       --------       
                                                $616,021       $543,946
                                                ========       ========       

NOTE 5 - COMPREHENSIVE INCOME

As  of  January 1, 1998, the Company adopted Statement 130,  Reporting
Comprehensive  Income.  Statement 130 establishes new  rules  for  the
reporting  and  display of comprehensive income  and  its  components;
however, the adoption of this Statement had no impact on the Company's
net  income margin or shareholders' equity capitalization.   Statement
130  requires  unrealized  gains or losses on  the  Company's  foreign
currency  translation  adjustments,  which  prior  to  adoption   were
reported  separately in shareholders' equity to be included  in  other
comprehensive  income.   Prior  year financial  statements  have  been
reclassified  to  conform to the requirements of Statement  130.   The
impact  of the foreign currency translation adjustment had no material
impact on the Comprehensive Income of the Company.


Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
     AND RESULTS OF OPERATIONS

BUSINESS COMBINATION

On  July 1, 1997, TruServ Corporation (the "Company"), formerly Cotter
& Company ("Cotter"), merged with Servistar Coast to Coast Corporation
("SCC")  (the "Merger").  The transaction was accounted for using  the
purchase  accounting  method.  Accordingly, the financial  information
for  the  twenty-six weeks ended July 4, 1998 reflects the results  of
the  post-Merger Company and the financial information for the twenty-
six  weeks  ended June 28, 1997 reflects the results of the pre-Merger
Company.  To facilitate the comparison of interim results for 1998 and
1997,  supplemental  comparisons have been provided  using  pro  forma
financial information. This unaudited pro forma information  has  been
prepared  for  comparative purposes only and does not  purport  to  be
indicative  of  the  results of operation  that  actually  would  have
resulted  had  the  Merger been in effect on the dates  indicated,  or
which may result in the future.
<TABLE>
<CAPTION>
                                Twenty-six weeks ended  Twenty-six weeks ended
                                 July 4, 1998            June 28, 1997

                                      Actual             Actual     Pro Forma(1)
                                ----------------------   -------    -----------
                                           (000'S OMITTED)

<S>                                 <C>               <C>            <C>
Revenue                             $2,185,654        $1,206,766     $2,105,852
Gross margin                           180,626            90,847        173,594
Warehouse, general and
 administrative expense                132,340            61,409        128,714
Interest  expense                       25,569            15,057         20,259
Merger integration cost                  4,042             2,032            --
Net margin                              18,580            12,877         25,465

 (1) Assumes the Merger was consummated at January 1, 1997.
</TABLE>

<PAGE> 9

TWENTY-SIX WEEKS  ENDED JULY 4, 1998 COMPARED TO TWENTY-SIX WEEKS  ENDED
JUNE 28, 1997

RESULTS OF OPERATIONS:

Revenues  for  the  twenty-six  weeks  ended  July  4,  1998   totaled
$2,185,654,000.  This represented an increase of $978,888,000 or 81.1%
compared to the comparable period last year.  The increase was due  to
the  addition of  Servistar Coast to Coast revenues that resulted from
the July 1, 1997 merger of Cotter and SCC.

Gross margins increased by $89,779,000 or 98.8% and as a percentage of
revenues,  increased to 8.3% from 7.5% for the comparable period  last
year.  The increase in gross margin percentage resulted primarily from
increased sales in manufactured products and improved margins from the
Distribution/Transportation network.

Warehouse,   general   and  administrative expenses as a percentage of
revenues increased to  6.1%  from 5.1%  compared  with the prior year.
The  Company incurred additional warehousing expenses  in association
with   commonizing  inventory   assortments,   increased inventory
levels, and the implementation of the distribution  network strategy.
Many  of the potential cost efficiencies  related  to  the Merger
have not yet been realized and costs should be reduced as  the
Merger strategy is further implemented.

Interest paid to Members decreased by $896,000 or 10.5% primarily  due
to  a  lower average interest rate and lower principal balance.  Other
interest  expense  increased  $11,408,000  due  to  higher  borrowings
compared  to  the  same period last year.  The higher borrowings  were
required because of the increased cash requirement resulting from  the
merger  and the Merger and increased inventory levels.  The  effective
borrowing rate has been lowered due to the renegotiation of the  rates
since the date of the Merger.

The  combination  of  increased  gross margins,  offset  by  increased
expenses  and increased borrowing costs, resulted in a net  margin  of
$18,580,000 compared to $12,877,000 for the same period last year.

ACTUAL  TWENTY-SIX  WEEKS ENDED JULY 4, 1998  COMPARED  TO  PRO  FORMA
TWENTY-SIX  WEEKS  ENDED  JUNE  28,  1997  ASSUMING  THE  MERGER   WAS
CONSUMMATED ON JANUARY 1, 1997

RESULTS OF OPERATIONS:

Revenues  for  the  twenty-six  weeks  ended  July  4,  1998   totaled
$2,185,654,000.  This represented an increase of $79,802,000  or  3.8%
compared  to  the  comparable  period last  year.   The  increase  was
attributable  to  revenue increases in lumber/building  materials  and
manufacturing products.

Gross  margins increased by $7,032,000 or 4.1% and as a percentage  of
revenues,  increased to 8.3% from 8.2% for the comparable period  last
year.  The  increase  in  gross  margins resulted  from  improved
transportation  and  manufacturing  margins.  Certain  estimates  of 
expenses are  recorded  throughout  the  year including  expenses related
to capitalizable inventory related  costs.  During the twenty-six weeks
ended July 4, 1998, the Company recorded a reduction of approximately
$6,000,000 of these estimated costs.

Warehouse, general and administrative expenses increased by $3,626,000
or  2.8% and as a percentage of revenues is  6.1% for both the current
period  and  prior period. The Company incurred additional warehousing
expenses   in  association  with  commonizing  inventory  assortments,
increased inventory levels, and the implementation of the distribution
network strategy.  Many of the potential cost efficiencies related  to
the  Merger have not yet been realized and costs should be reduced  as
the Merger strategy is further implemented.

Interest  expense increased from $20,259,000 to $25,569,000  primarily
due  to  higher  short-term borrowings because of the  increased  cash
requirement resulting from increased inventory levels.

The  combination of increased gross margin partially offset by  higher
warehouse,  general  and administrative expense  and  higher  interest
expense,  resulted  in  a  net  margin  of  $18,580,000  compared   to
$25,465,000 for the comparable period last year.

<PAGE> 10
TWENTY-SIX WEEKS  ENDED JULY 4, 1998 COMPARED WITH THE YEAR ENDED  DECEMBER
31, 1997

LIQUIDITY AND CAPITAL RESOURCES:

The Company has a seasonal need for cash.  During the first twenty-six
weeks of the year, as seasonal inventories are purchased for resale or
manufacture  and  shipment, cash and cash  equivalents  are  used  for
operating  activities.  In subsequent quarterly periods,  the  Company
anticipates  that  cash  and  cash equivalents  will  be  provided  by
operating activities and financing activities, if necessary.

During  the  first twenty-six weeks of 1998, inventories increased  by
$72,075,000   to  support  anticipated  future  orders   of   seasonal
merchandise  resulting from the commonization of inventory.   Accounts
and  notes  receivable increased by $172,115,000 due to  the  seasonal
payment   terms   extended  to  the  Company's  Members.    Short-term
borrowings increased by $158,310,000  and accounts payable and accrued
expenses   increased  by  $61,089,000  in  support  of  the  increased
inventories  and favorable seasonal terms obtained from vendors  which
were passed on to the Company's Members.

At  July  4, 1998, net working capital increased to $213,321,000  from
$175,975,000  at  December  31,  1997.   The  current  ratio  remained
comparable at 1.20 for both period ends.

At December 31, 1997, the Company had established a $300,000,000 five-
year  revolving credit facility with a group of banks.   In  addition,
the  Company  has  various short-term lines of credit available  under
informal  agreements with lending banks, cancelable  by  either  party
under  specific circumstances.  The borrowings under these  agreements
were  $363,000,000 and $210,000,000 at July 4, 1998 and  December  31,
1997, respectively.

The  Company's capital is primarily derived from Class A common  stock
and  retained earnings, together with promissory (subordinated)  notes
and  nonvoting  Class  B common stock issued in  connection  with  the
Company's  annual patronage dividend.  The Company believes the  funds
derived  from these capital resources, as well as operations  and  the
credit  facilities noted above, will be sufficient to satisfy  capital
needs.

Total capital expenditures, including those made under capital leases,
were  $31,090,000 for the twenty-six weeks ended July 4, 1998 compared
to  $15,158,000 during the comparable period in 1997.   These  capital
expenditures   relate  to  additional  equipment   and   technological
improvements at the regional distribution centers and at the corporate
headquarters.

THIRTEEN  WEEKS  ENDED JULY 4, 1998 COMPARED TO THIRTEEN  WEEKS  ENDED
JUNE 28, 1997

To  facilitate  the comparison of interim results for 1998  and  1997,
supplemental comparisons have been provided using pro forma  financial
information.  This unaudited pro forma information has  been  prepared
for comparative purposes only and does not purport to be indicative of
the  results  of operation that actually would have resulted  had  the
Merger  been in effect on the dates indicated, or which may result  in
the future.

<TABLE>
<CAPTION>
       
                                         Thirteen weeks ended
                                  ---------------------------------------
                                  July 4, 1998            June 28, 1997
                                  ------------         --------------------            

                                     Actual            Actual   Pro Forma(1)
                                     ------            ------   -----------
                                                (000'S OMITTED)

<S>                               <C>                <C>         <C>
Revenue                           $1,155,449         $645,070    $1,138,679
Gross margin                         100,147           47,330        99,229
Warehouse, general and
 administrative expense               68,231           26,900        65,572
Interest  expense                     13,258            7,727         9,847
Merger integration cost                2,195            1,422           --
Net margin                            16,409           11,806        24,089

 (1) Assumes the Merger was consummated at January 1, 1997.

<PAGE> 11
RESULTS OF OPERATIONS:

Revenues  increased  by $510,379,000 or 79.1%  compared  to  the  same
period  last year. The increase was due to the addition of   Servistar
Coast to Coast revenues that resulted from the July 1, 1997 merger  of
Cotter and SCC.

Gross margins increased by $52,817,000 or 111.6% compared to the  same
period last year.  Gross margins as a percentage of revenues increased
to  8.7%  from  7.3% for the same period last year.  The  increase  in
gross  margin  percentage resulted primarily from increased  sales  in
manufactured    products    and    improved    margins    from     the
Distribution/Transportation network.

Warehouse,   general   and  administrative   expenses   increased   by
$41,331,000 or 153.6% and as a percent of revenues, increased to  5.9%
from  4.2%  for  the  same  period last  year.  The  Company  incurred
additional   warehousing  expenses  in  association  with  commonizing
inventory  assortments, increased inventory and the implementation  of
the distribution network strategy.

Interest paid to Members decreased by $489,000 or 11.5% primarily  due
to a lower principal balance and a lower average interest rate.  Other
interest  expense  increased  $6,020,000  or  173.4%  due  to   higher
borrowings  compared  to  the  same  period  last  year.   The  higher
borrowings  was  required because of increased  inventory  levels  and
other merger requirements.

Integration  costs consist of expenses incurred with the consolidation
and  restructuring  of  certain functions due  to  the  aforementioned
merger.

Net  margins  were $16,409,000 compared to $11,806,000  for  the  same
period last year.

ACUTAL  THIRTEEN  WEEKS   ENDED JULY 4, 1998  COMPARED  TO  PRO  FORMA
THIRTEEN WEEKS ENDED JUNE 28, 1997

RESULTS OF OPERATIONS:

Revenues increased by $16,770,000 or 1.5% compared to the same  period
last  year.  Most merchandise categories were comparable to  the  same
period  last year with Lumber & Building Materials showing an increase
for the thirteen week period.

Gross  margins  increased by $918,000 or 0.9%  compared  to  the  same
period last year. The increase in gross margins resulted from improved
transportation  and  manufacturing  margins.  Certain   estimates   of
expenses  are recorded throughout the year including expenses  related
to  capitalizable inventory related costs.  During the thirteen  weeks
ended  July 4, 1998, the Company recorded a reduction of approximately
$4,000,000 of these estimated costs.

Warehouse, general and administrative expenses increased by $2,659,000
or  4.1% and as a percent of revenues, increased to 5.9% from 5.8% for
the same period last year. The Company incurred additional warehousing
expenses   in  association  with  commonizing  inventory  assortments,
increased inventory and the implementation of the distribution network
strategy.

Interest   expense  increased  $3,411,000  or  34.6%  due  to   higher
borrowings  compared  to  the  same  period  last  year.   The  higher
borrowings were required because of increased  inventory levels.

Integration  costs consist of expenses incurred with the consolidation
and  restructuring  of  certain functions due  to  the  aforementioned
merger.

Net  margins  were $16,409,000 compared to $24,089,000  for  the  same
period last year.

<PAGE> 12

Year 2000

A  portion  of  the Company's information systems are not  "Year  2000
Compliant".   This means that the Company will need to  incur  certain
costs  to modify non-compliant systems prior to the Year 2000 in order
to  ensure  that  those systems continue to serve  the  needs  of  the
Company  and  its Membership.  Based upon an initial investigation  of
the  Company's  systems, the Company estimates that such  costs  could
exceed  $10,000,000.  Actual costs may exceed this estimate  depending
on  Merger efforts and system resource constraints.  Actual  costs  to
date  are  $7,800,000.   Further, based upon current  FASB  Guideline,
costs  incurred  to modify systems to be Year 2000 compliant  must  be
expensed.  Accordingly, such costs will reduce patronage dividends  in
years in which they are incurred.

                                   
                                   
                                   
                      PART II - OTHER INFORMATION



Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

     Exhibit 4. Instruments defining the rights of security holders,
        including indentures; incorporated herein by reference those
        items included as Exhibits 4A through 4K, inclusive, in the
        Company's Post-Effective Amendment No. 5 on Form S-2 to Form S-
        4  Registration Statement (No. 333-18397) filed with the
        Securities and Exchange Commission on April 4, 1998.

     (b)  Reports on Form 8-K
     
          NONE

<PAGE> 13
                               SIGNATURE






Pursuant  to the requirements of the Securities Exchange Act of  1934,
the  Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.




                                        TRUSERV CORPORATION




Date:                                    August 18, 1998     By    /s/
KERRY J. KIRBY
                                          Kerry J. Kirby
                                           Executive  Vice  President,
Finance
                                               and   Chief   Financial
Officer



(Mr.  Kirby  is  the principal accounting officer and  has  been  duly
authorized to sign on behalf of the Registrant.)





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