_________________________________________________
  
              PROXY DESIGNATION AND INSTRUCTION CARD
          _________________________________________________
  
                 ZION'S COOPERATIVE MERCANTILE INSTITUTION
  
               Salt Lake City, Utah 84137
  
  THIS PROXY DESIGNATION AND INSTRUCTION IS SOLICITED BY THE BOARD OF DIRECTORS 
               FOR THE ANNUAL MEETING OF SHAREHOLDERS
                         to be held on
                           May 20, 1998
  
  The undersigned hereby appoints Richard H. Madsen and Keith C. Saunders,
  or either of them, jointly or severally as agent and Proxy for the
  undersigned, with full power of substitution, to vote the shares of
  Zion's Cooperative Mercantile Institution's common stock held by the
  undersigned to the same extent which the undersigned would be entitled to
  vote such shares if personally present at the Annual Meeting of
  Shareholders of Zion's Cooperative Mercantile Institution, or any
  adjournment thereof, to be held in the Memorial House in Memory Grove,
  485 No. Canyon Road,  Salt Lake City, Utah, on Wednesday, the 20th day of
  May, 1998, at 2:30 o'clock P.M. for the purpose of electing Directors and
  for the purpose of conducting any other business properly brought before
  the Meeting.
  
  Without limiting the general powers hereby conferred, the undersigned
  instructs said Proxies to vote as specified on the reverse side hereof.
  Shares represented by signed Proxy Designations & Instructions will be
  voted: (1) as specified on the matters listed on the reverse side of this
  form; (2) in accordance with the Directors' recommendations where a
  choice is not specified; and (3) in accordance with the judgment of the
  Proxies on any other matters that properly come before the meeting. 
  
  (Please complete and sign on reverse side)
    <PAGE>
1.  ELECTION OF DIRECTORS     FOR all nominees listed below (except) 
      WITHHOLD AUTHORITY to vote 
      (The Directors recommend as marked to the contrary below) __all
  nominees listed below  __
      a vote FOR all nominees)
  
  (INSTRUCTION:TO VOTE FOR SOME BUT WITHHOLD AUTHORITY TO VOTE FOR ANY
  OTHER INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
  LIST BELOW AS TO WHICH YOU WITHHOLD AUTHORITY.)
  
  R. Barry Arnold, Fred S. Ball, Spencer F. Eccles, Lela Ence, A. Blaine
  Huntsman, James S. Jardine, Patricia Madsen, Richard H. Madsen,  and
  Keith C. Saunders. 
  
  
  
  IMPORTANT:  Please  sign exactly  as your name  appears.  
DATED:_____________________________, 1998
  When shares are held by joint tenants, both should sign.
  When signing as  attorney,  as executor,  administrator,      
 __________________________________________ 
  trustee or guardian, please give full title as such.  If 
           (Stockholder's Signature)
  a corporation,  please sign in  full  corporate name  by
       __________________________________________ 
  President or other authorized officer.  If a partnership,      (Joint
  Stockholder's Signature {if any})
  please sign in partnership name by authorized person.          
  
  _______________________________________________________
     PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY 
    CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.     
  
     PLEASE INDICATE ANY CHANGE OF ADDRESS
   __________________________________________________
     (Street and Number)
  
  __________________________________________________   
    (City)            (State)     (Zip Code)
               ZION'S COOPERATIVE MERCANTILE INSTITUTION
                    2200 South 900 West
                   Salt Lake City, Utah 84137
  
               NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
  
                    To Be Held on May 20, 1998
  
  To the Shareholders of
  ZION'S COOPERATIVE MERCANTILE INSTITUTION
  
  Pursuant to the laws of the State of Utah and its Bylaws, the Annual
  Meeting of the Shareholders of Zion's Cooperative Mercantile Institution
  ("the Corporation") will be held in the Memorial House in Memory Grove,
  485 No. Canyon Road, Salt Lake City, Utah, on Wednesday, May 20, 1998 at
  2:30 p.m. for the following purposes:  
  
  1. To elect a Board of Directors for the ensuing year, 
  
  2. To transact such other business as may properly come before the
       meeting and any adjournments thereof.
  
  The close of business on Wednesday, April 15, 1998, was fixed by the
  Board of Directors as the time for the determination of the shareholders
  of record entitled to notice of and to vote at the Annual Meeting and any
  and all adjournments thereof. 
  
  We hope that all shareholders who can conveniently do so will attend the
  Annual Meeting in person.  Whether or not you expect to attend, it will
  facilitate the conduct of the Corporation's business if you will
  immediately sign the enclosed proxy instruction card and return it in the
  envelope provided in order that your shares may be represented at the
  Annual Meeting.  No postage is required if the proxy instruction card is
  mailed in the United States.  
  
               by ORDER OF THE BOARD OF DIRECTORS 
  Dated at Salt Lake City, Utah
  April 20, 1998
  
                              KEITH C. SAUNDERS
                         Executive Vice President and Secretary
    <PAGE>
                              Z C M I
  
                    ZION'S COOPERATIVE MERCANTILE INSTITUTION
                         2200 South 900 West
                      Salt Lake City, Utah 84137
    
                         PROXY STATEMENT
                         April 20, 1998
  
                    GENERAL INFORMATION FOR SHAREHOLDERS
  
  This Proxy Statement is furnished in connection with the solicitation by
  the Board of Directors of Zion's Cooperative Mercantile Institution, a
  Utah corporation (hereinafter called the "Corporation") of Proxy
  Designations and Instructions for use at the Corporation's Annual Meeting
  of Shareholders to be held in the Memorial House in Memory Grove, 485 No.
  Canyon Road, Salt Lake City, Utah on Wednesday, May 20, 1998 at 2:30
  p.m., and at any and all adjournments thereof.
  
  A Proxy Designation and Instruction Card ("Proxy Card") is enclosed for
  your use in voting at the Annual Meeting.  You are requested to date and
  sign the enclosed Proxy Card, and to return it in the envelope provided. 
  All duly executed Proxy Cards received prior to the Annual Meeting will
  have the shares represented thereby voted in accordance with the choices
  specified therein.  As to any matter for which no choice has been
  specified in a duly executed Proxy Card, the shares represented thereby
  will be voted at the Meeting or any adjournment thereof for election as
  directors all of the nominees listed herein, and otherwise as recommended
  by the Directors, or otherwise as deemed appropriate by the Proxies on
  other business properly coming before the meeting.  Any shareholder
  signing a Proxy Card has the power to revoke his/her voting directions at
  any time before the designated Proxies vote at the Annual Meeting by
  notifying the Secretary of the Corporation in writing prior to 2:30 p.m.
  M.S.T. on May 20, 1998, or by voicing such revocation in person at the
  Annual Meeting at the time voting occurs.  If you wish to give your proxy
  to someone other than the named Proxies on the enclosed Proxy Card, you
  may do so by crossing out the names of all of the designated Proxies and
  writing in the name of another person or persons (not more than two). 
  The signed Proxy Card must be presented at the Meeting by the person or
  persons you have designated on the card.
  
  The cost of preparing, assembling and mailing these proxy materials will
  be borne by the Corporation.  The solicitation of Proxy Designations and
  Instructions by the Board of Directors is being made by mail, and in
  addition may be made by officers and directors of the Corporation, or
  their agents, in person or by telephone.  No additional compensation will
  be given to officers or directors for such solicitation.  Non-employee
  agents of the Board of Directors may be retained to assist in the proxy
  solicitation process at a cost to the Corporation, if any, not expected
  to exceed $10,000.  Custodians of securities held for shareholders of
  record (e.g., banks, brokers, etc.) may be paid their reasonable 
  out-of-pocket expenses incurred in forwarding proxy materials to shareholders.
  
  This Proxy Statement, the enclosed Proxy Card, and the Corporation's 1997
  Annual Report to Shareholders are being sent to Shareholders for delivery
  beginning May 4, 1998.  Shareholders who have not received a copy of any
  of these materials should contact the Corporation at (801) 579-6404 to
  obtain a copy.
  
  VOTING AT THE ANNUAL MEETING
  
  Shareholders of record will be entitled to one vote for each share of
  Common Stock held at the close of business on April 15, 1998, which is
  the record date for determination of the shareholders entitled to notice
  of and to vote at the Annual Meeting and at any and all adjournments. 
  Shares may be voted, without cumulation, as to each Director-nominee, and
  as to any other proposal for shareholder action as may properly come
  before the Annual Meeting.  On April 15, 1998, the Corporation had
  2,198,087 shares (2,168,942 issued less 16,855 treasury shares plus
  46,000 restricted shares) of Common Stock (par value $0.001) issued and
  outstanding.  The issued and outstanding shares do not include any shares
  of stock options.
  
     The presence in person or by proxy of a majority of the outstanding
  voting shares is required to constitute a quorum at the Annual Meeting. 
  Once a quorum is determined to exist, a plurality of votes cast at the
  Annual Meeting is required to elect each Director.  Only Proxies marked
  "FOR all nominees (except as marked to the contrary below)" or "WITHHOLD
  AUTHORITY to vote all nominees below" will be cast in the election of
  Directors and considered in determining the plurality of votes in favor
  of a Director-nominee.  Abstentions and broker non-votes will not be
  counted in determining the shares voting or the plurality of votes for
  any Director nominee.  Certain shareholders beneficially owning, as a
  group, in excess of 50% of the outstanding shares have indicated an
  intention to vote in favor of all  director nominees described in this
  Proxy Statement.  Such votes, if cast, will be determinative of the
  voting results with respect to the election of Directors.
  
  PRINCIPAL SHAREHOLDERS
  
  The following table provides information with respect to any person known
  to the Corporation to be the beneficial owner (within the meaning of
  applicable governmental regulations) of five percent (5%) or more of any
  class of the Corporation's voting securities as of April 15, 1998:
                         Table 1
                                 Amount and Nature of  Percent of
  Name and Address     Title of Class      Beneficial Ownership      Class
  ZCMI Reserve Trust    Common Stock        1,135,882 shares         51.68%
  50 East North Temple
  Salt Lake City, UT 84150
            
  Richard H. Madsen     Common Stock          188,167 shares*         8.56%
  4111 Parkview Dr
  Salt Lake City, UT 84124  
  
  
  
  _______________________
     *Includes 146,905 shares as to which Mr. Madsen shares voting and
  investment power as a co-trustee of Francis A. Madsen Family Voting Trust.
  
  
  
                    MANAGEMENT OF THE CORPORATION
  
  Board of Directors
  
  The business of the Corporation is managed under the direction of its Board
  of Directors, currently chaired by  Richard H. Madsen.  The Directors have
  responsibility for establishing broad corporate policies and for the overall
  performance of the Corporation.  The Directors are not, however, involved
  in operating the Corporation's business on a day-to-day basis.   This
  day-to-day management is entrusted to the Executive Officers elected by the
  Board of Directors.   The Board is kept advised of the Corporation's
  business through regular written reports, analyses, and discussions with the
  Executive Officers of the Corporation.
  
  The Board meets on a regularly scheduled basis during the year to review
  significant developments affecting the Corporation and to act on matters
  requiring Board approval.  It also holds special meetings when an important
  matter requires Board action between scheduled meetings.  Members of senior
  management are regularly invited to Board meetings to report on and discuss
  their areas of responsibility.  The Directors met six times as a full Board
  during 1997.  All Directors attended all of the meetings except Messrs.
  Madsen, Huntsman, Arnold, Ball, and Mrs. Ence who attended five meetings. 
  
  The Directors of the Corporation beneficially own, as a group, 297,249
  shares of the Corporation's Common Stock (including 35,300 currently
  exercisable but unexercised option shares and 32,000 shares of restricted
  stock ), or  13.52% of the Corporation's outstanding Common Stock as of
  April 15, 1998. 
  
  The Bylaws permit payment of Directors' expenses incurred in attending
  meetings and some, but not all, of the Directors received reimbursement for
  such expenses.  Additionally, fees of $700 were paid to Directors for each
  of the six meetings held.   
  
  The Executive Committee of the Board of Directors exercises the powers of
  the Board in the management of the business and affairs of the Corporation
  between the Board's regularly scheduled meetings.  The Executive Committee
  serves as the nominating committee for  the election of Directors and,
  although there are no formal procedures for shareholders to recommend
  nominations, the Committee will consider any recommendations from
  shareholders that may be made.  The Executive Committee also functions as
  the Retirement Committee and administers the plans and retirement programs
  of the Corporation, including a review of the actuary reports, and reports
  to the Board of Directors.  Also, the Executive Committee makes compensation
  recommendations to the Board for all corporate officers.  The Executive
  Committee keeps regular minutes of its meetings and reports to the Board at
  the regular Directors' meetings.  The Executive Committee met eleven times
  during the year.  All members attended all meetings except Mr. Madsen who
  attended ten meetings.  Members of the Executive Committee are paid an
  annual fee of $6,000 for their service which is in addition to any other
  fees earned as a Director of the Corporation.
  
  The Audit Committee of the Board, which met twice during 1997, reports to
  the Board of Directors with respect to various auditing and accounting
  matters, the scope of the audit procedures, the performance of the internal
  auditors, and accounting practices of the Corporation.  All members attended
  all meetings.   Fees of $400 are paid to Committee Members for each meeting
  held.
  
  Information on Executive Officers
  
  Set forth in Table 2, below,  are the names, ages, positions and beneficial
  ownership of shares (as of April 15, 1998) in the Corporation of all
  Executive Officers, other than Messrs. Madsen, Saunders, and Arnold, whose
  biographical information is disclosed together with the other nominees for
  Director in Table 7, below.  Executive Officers serve until the election of
  their successors by the Board of Directors.
  
          Table 2 - Executive Officers of the Corporation
  
  Nancy Mortensen, 56, is the Corporation's Vice President-Marketing.  Ms.
  Mortensen is the beneficial owner of 21,550 shares of the Corporation's
  Common Stock, including 10,000 option shares exercisable within 60 days but
  not yet exercised and 10,000 shares of restricted stock.
  
  Darrell F. Robinette, 71, is the Corporation's Vice President-Stores.  Mr.
  Robinette is the beneficial owner of 21,000 shares of the Corporation's
  Common Stock, including 4,000 shares of restricted stock and 8,500 option
  shares exercisable within 60 days but not yet exercised.
  
  All current Executive Officers as a group (5 persons), beneficially own
  274,296 shares, or 12.48%, of the Corporation's Common Stock (of which
  52,500 shares are option shares exercisable within 60 days of the record
  date but not yet exercised and 46,000 shares are restricted stock.)
  
               COMPENSATION OF EXECUTIVE OFFICERS
  
  The Executive Committee acts as the Compensation Committee of the Board of
  Directors as to compensation of Executive Officers.  Messrs. Madsen and
  Saunders do not vote on Executive Officer compensation matters.
  
     BASE SALARY.  In assessing salaries and salary increases, the primary
       factors considered are: the Committee's assessment of  performance on
       the job, salaries of comparable jobs in similar size retail
       companies, and compensation that the Committee believes will help
       attract, motivate and retain qualified executives.
  
          Chief Executive Officer Salary Action.  In an effort to pay Mr.
            Madsen a salary more in line  with the Committee's view of his
            performance and position, Mr. Madsen was given base salary 
            raises of 6%, 0%, and 5%  respectively in 1995, 1996, and 1997.
    
          Other Named Executive Officers.  The other Executive Officers
            named in Table 3  received  increases  ranging  between 2.8% to
            4%, 0%, and 4.8% to 5%, respectively in 1995, 1996, and 1997, 
            based  on  subjective  evaluations  made  by  the  Committee 
            in consultation with Mr. Madsen.
  
  SHORT-TERM INCENTIVES.  All the named Executive Officers participate in an
  annual cash bonus plan.  The bonuses awarded are 3% of the increase or
  decrease in the Corporation's pretax profits from year to year added to or
  subtracted from the previous year's bonus.  Bonuses are distributed between
  the executive officers based on base salary and rating points determined by
  an officer's position in the Corporation. Bonuses awarded in 1995, 1996, and
  1997 amounted to $187,581, $0, and $80,999 respectively, for all Executive
  Officers combined.  Bonuses are earned in the preceding year and paid in
  March the following year after Company profits are determined in the second
  close of the Company books.  This is prior to audited results.
  
  LONG-TERM INCENTIVES.  Stock options have been awarded based on a plan
  approved by shareholders in 1982 at an exercise price of $16.50 and in 1996
  at an option price of $11.25.  During the year 1996, the Board approved
  46,000 shares of common stock to be awarded to Executive Officers and
  124,000 shares of common stock as stock options granted to the Executive
  Officers and key management associates of the Company. There are 80,000
  stock options that have not been granted.   (See Table 5)
  
  The Committee believes that this compensation mix is in the best interests
  of the shareholders and supports the business and financial objectives of
  the organization.
                    Richard Madsen, Chairman
                    Patricia Madsen
                    James S. Jardine
                    Keith C. Saunders
  
  Table 3, below, is a statement of compensation paid by the Corporation
  during 1997 to its Chief Executive Officer and to each of the four (4)
  Executive Officers who were paid in excess of $100,000 in salary and bonus
  during the year. 
<TABLE>
  
               Table 3 - SUMMARY COMPENSATION TABLE
               Annual Compensation      Long-Term Compensation Awards
Name and         Year Salary(1) Bonus(2)  Stock     Options    All Other
Principal Position                        Awards    /SARS    Compensation(3)
<S>              <C>  <C>       <C>       <C>        <C>        <C>
Richard H. Madsen1997 $246,892  $27,996   $ -0-                 $3,618
President & CEO  1996 $233,184  $ -0-     $135,000   13,000     $2,862
                 1995 $220,354  $62,483   $ -0-       -0-       $4,254

Keith C. Saunders1997  $156,262  $17,231  $ -0-                 $2,322
Executive V. P.  1996  $150,000  $ -0-    $112,500   11,000     $1,830
 Secretary & CFO 1995  $149,415  $41,699  $ -0-       -0-       $2,785

R. Barry Arnold  1997  $129,153  $13,688  $ -0-                 $1,974
Vice President   1996  $123,800  $ -0-    $112,500   10,000     $1,594
                 1995  $123,092  $31,327  $ -0-       -0-       $2,387

Darrell F.       1997  $109,895  $11,097  $ -0-                 $1,692
Robinette        1996  $105,040  $ -0-    $45,000    10,000     $1,351
 Vice President  1995  $104,418  $26,166  $  -0-      -0-       $1,961

Nancy Mortensen  1997  $108,800  $10,987  $ -0-                 $1,801
Vice President   1996  $104,000  $ -0-    $112,500  10,000      $1,413
                 1995  $103,385  $25,906  $ -0-       -0-       $2,052
</TABLE>
  
  1  Amounts shown as Salary include directors' fees, if any, paid by the
       Corporation, but do not include expenditures for company cars or
       merchandise or service discounts made available to the Executive
       Officers, or other expenses paid by the Corporation on behalf of or
       reimbursed to Executive Officers, which the Corporation believes
       constitute ordinary and necessary business-related expenses.  All
       such expenses are paid or reimbursed by the Corporation in the
       interest of assisting those individuals to do their jobs effectively,
       and to attract and retain qualified personnel and clients, and do not
       exceed $25,000 per Executive Officer per year.
  2  Amounts shown as bonus are earned in the preceding year but are not
       paid until March of  the year indicated.
  3  Amounts shown include contributions by the Corporation to the
       Employee Savings Plan (a 401(k) plan open to all full-time employees
       of the Corporation).  The named Executive Officers were able to
       contribute up to 4.00% of their annual and bonus salary (up to
       $150,000) to this plan in 1997, up to the IRS limitation of $9,500
       and the Corporation contributed a matching amount equal to 37.5% of
       the Executive Officers contribution.
  
  Compensation/Benefit Plans.
  
     Compensation and benefit plans available generally for employees of
  the Corporation that are available to Executive Officers are as follows:
  
  Retirement Plan.  After one year of employment, employees of the Corporation
  who are age 21 and older and who work 1,000 hours or more each year become
  participants in the ZCMI Retirement Plan, which is fully funded by the
  Corporation.  At  the  time of  a  participant's  retirement,  the  benefit
  payable is equal to the sum of  the benefit  earned  as of  April 30, 1990,
  plus, commencing May 1, 1990, the total of 1% of  taxable  earnings  for
  each year of Credited Service.  The benefit for retirement prior to age 65
  is actuarily adjusted for the age difference.  The Plan allows vesting of
  employer contributions after five (5) years of service. 
  
  The figures shown in Table 4, below, are estimated annual benefits as of
  December 31, 1997, based upon retirement at age 65 under the Retirement
  Plan.
<TABLE>
          Table 4 - Annualized Retirement Plan Projection
  Yearly      10 Years of 15 Years of 20 Years of 25 Years of 30 Years of
  Salary         Service    Service  Service       Service      Service
  <S>            <C>        <C>       <C>          <C>           <C>
  $100,000       10,000     15,000    20,000       25,000        30,000
  $125,000       12,500     18,750    25,000       31,250        37,500
  $150,000       15,000     22,500    30,000       37,500        45,000
  $200,000       20,000     30,000    40,000       50,000        60,000
  $250,000       25,000     37,500    50,000       62,500        75,000
</TABLE>
  
  These estimated annual benefits on Retirement have been computed on the
  basis of assumed continuation of remuneration at their respective rates as
  received for 1991 until retirement at age 65 and the earned benefit frozen
  as of December 31, 1989.  The Corporation does not have any supplemental
  retirement plan for its Executive Officers.  Salary for purposes of the
  Retirement Plan does not include Directors' fees.  (Benefits shown on Table
  4 are in addition to the "frozen" benefit calculated at December 31, 1989.
  For Messrs. Saunders, Arnold, and Robinette this amount is $25,352.88,
  $18,999.82, and $24,409.09 respectively.  For Ms. Mortensen this amount is
  $13,461.69.)  As of December 31, 1997 the credited years of service under
  the retirement plan for the Executive Officers named in Table 3 were eight
  years for Mr. Madsen, 23 years for Mr. Saunders, 29 years for Mr. Arnold,
  23 years for Mr. Robinette, and 35 years for Ms. Mortensen.
  
  
  
  Employee Savings Plan.  The Corporation's 401(k) salary deferral plan allows
  covered employees to make pre-tax contributions of up to 16% of salary (but
  no more than $9,500  for 1997) to their Plan account.  To meet requirements
  of applicable law, highly paid employees were limited to a maximum salary
  deferral of 4% of salary in 1997.  The Corporation contributes a matching
  amount equal to 50% of the eligible employee's contribution for the first
  2% of pay contributed and a 25% match on amounts over 2% of pay, up to a
  maximum of 2% of  a participating employee's salary.  Covered employees have
  a choice of ten (10) investment plans into which they may direct their
  contributions and the matching employer contribution in the Plan.  An
  employee is fully vested in the employer contribution to the Plan after 2
  years of service.  Employer matching contributions made for the benefit of
  the five Executive Officers named in Table 3 are shown under "All Other
  Compensation".
  
  Stock Options Granted in 1997.  There were no stock options granted in 1997. 
  
  Aggregated Option-SAR Exercises in last Fiscal Year and FY-End Option-SAR
  Values.  Table 5, below, sets out the aggregate Option-SAR Exercises by the
  named Executive Officers in Table 3, and by all Executive Officers as a
  group, during 1997, and also sets out numbers of shares of Common Stock
  underlying currently outstanding options and the putative value of such
  options at fiscal year-end.
<TABLE>
                              Table 5
  
  Name           Number of      Value         Number of       Value of  
                  Shares        Realized      Securities     Unexercised
                 Acquired on       ($)       Underlying     In-the-Money
                   Exercise                  Unexercised      Options/SARs at
                                           Options/SARs at  Fiscal Year-End
                                           Fiscal Year-End       ($)
                                                 (#)          (Exercisable/
                                            (Exercisable/      Unexercisable)
                                           Nonexercisable)
  <S>                 <C>         <C>           <C>             <C>
  Richard H. Madsen   -0-         $0.00         13,000          $48,750
  Keith C. Saunders   -0-         $0.00         11,000          $41,250
  R. Barry Arnold     -0-         $0.00         10,000          $37,500 
  Darrell F. 
     Robinette       1500         $2,875         8,500          $31,875
  Nancy Mortensen     -0-         $0.00         10,000          $37,500
  All Executive 
  Officers as         1500        $2,875        52,500          $196,875
  a Group (5 persons,                                             
   including those named
   above)
</TABLE>
  
  # options exercisable within sixty days
  
  
               TRANSACTIONS WITH MANAGEMENT AND OTHERS
  
  Some of the Directors and Executive Officers of the Corporation, members of
  their immediate families, and corporations and organizations of which they
  are executive officers or in which they or their immediate families have at
  least a 10% interest, are customers of, or service providers to, the
  Corporation.  Between January 1, 1997 and December 31, 1997, these persons
  have had immaterial business transactions in the ordinary course of business
  with the Corporation, all of which were on substantially the same terms as
  those prevailing at the time for comparable transactions with unaffiliated
  persons, and did not involve more than the normal risk of collectibility or
  present other unfavorable features.  The Corporation expects to continue to
  have such transactions on similar terms in the future.
  
          COMPLIANCE WITH SECTION 16 REPORTING OBLIGATIONS
  
  The Directors and Executive Officers of the Corporation are required under
  the Securities Exchange Act of 1934 to file reports with the Securities and
  Exchange Commission evidencing their ownership of, and their current
  transactions in, the Corporation's common stock.  This is a personal
  obligation of the Executive Officers and Directors.   Based on information
  provided to the Corporation by its Directors and Executive Officers, it
  appears that all Directors and Executive Officers have timely filed these
  reports during 1997.
  
  A Severance Pay Plan is available for all associates who have worked full
  time for at least one year including Executive Officers.  The plan pays one
  week's pay for those who have worked one year but less than two years, and
  two weeks' pay for those who have worked more than two years. 
  
               LAST YEAR'S (1997) ANNUAL MEETING
  
  The 1997 Annual Meeting of the Shareholders was held on May 21, 1997 in Salt
  Lake City, Utah.  There were 1,652,311 shares of Common Stock present at the
  1997 Annual Meeting in person or by proxy, which number was 75% of those
  entitled to vote, and thus constituted a legal quorum.  Each of the nominees
  to the Board of Directors was voted upon separately, and each was elected
  by the affirmative vote of more than 72% of the shares present and voting.
  
               PROPOSALS FOR SHAREHOLDER ACTION
  
  Election of Directors
  
  The persons named in Table 6, below, have been nominated by the Executive
  Committee for election to the Board of Directors of the Corporation, to
  serve until the next Annual Meeting or until their successors are elected
  and qualified.  Additional nominations will be accepted from the floor at
  the Annual Meeting, and interested shareholders are invited to suggest names
  to the Executive Committee from time to time for nomination as a Director
  of the Corporation.
  
  The Bylaws of the Corporation provide for a Board of Directors of up to 20
  members.  Nine (9) Directors are being nominated by the Executive Committee
  for election at the 1998 Annual Meeting.  The Board knows of no reason why
  any nominee may be unable to serve as a Director.  If any nominee is unable
  to serve, the shares represented by all valid proxies will be voted for the
  election of such other person as the Board may recommend, or the Board may
  reduce the number of Directors to eliminate the vacancy.  It is the
  intention of  the Proxies to  vote FOR the election  of  ALL of the nominees
  listed in Table 6, below, in the absence of contrary direction.  All of the
  nominees are current Directors, and were elected to their present term of
  office by a vote of shareholders at the 1997 Annual Meeting.
     
  There is set forth below, in Table 6, as to each of the nine (9) nominees
  for election as a Director, his/her age, the year he/she became a Director
  of the Corporation, his/her principal occupation, his/her business
  experience during the past five years, other directorships  held at this
  time and beneficial stock ownership in the Corporation.  Directors serving
  on the Executive (*) or Audit (+) Committees of the Board are also so
  identified:
  
  
               Table 6 - Nominees for Director
  R. BARRY ARNOLD, 53, has been a Director of the Corporation  since 1990.  
  He is Vice President and General Merchandise Manager of the Corporation. 
  Mr. Arnold beneficially owns 20,367 shares of the Corporation's Common
  Stock, including 10,000 option shares exercisable within 60 days but not yet
  exercised and 10,000 shares of restricted stock.  This amount represents
  approximately .93% of the issued and outstanding shares at the Record Date.
  
  FRED S. BALL, 65, has been  a Director of the Corporation since 1996.  He
  is a Senior Vice President of Zions First National Bank and President of
  CreaCtive Marketing.  He previously served as President and Chief Executive
  Officer  of the Salt Lake Area Chamber of Commerce.    Mr. Ball beneficially
  owns 400 shares of the Corporation's Common Stock. 
  
  +SPENCER F. ECCLES, 63, has been a Director of the Corporation since 1976. 
  He is Chairman, Chief Executive Officer, and a Director of First Security
  Corporation (a bank holding company).  Mr. Eccles is also a Director of
  Anderson Lumber Company,  Union Pacific Corporation and the Salt Lake
  Olympic Organizing Committee.  He is the beneficial owner of 7,500 shares
  of the Corporation's Common Stock.
  
  LELA "LEE" ENCE, 70, has been a Director of the Corporation since 1987.  She
  retired as Executive Director of the University of Utah Alumni Association
  in 1989.  Mrs. Ence beneficially owns 491 shares of the Corporation's Common
  Stock.
  +A. BLAINE HUNTSMAN, 61, has been a Director of the Corporation since 1977. 
  He was Chairman and Chief Executive Officer of Olympus Capital Corporation,
  the holding company of Olympus Bank, until its acquisition by Washington
  Mutual in April 1995.  He is also aTrustee of The Achievement Funds Trust,
  a group of seven mutual funds.   Mr. Huntsman is a former Dean and professor
  of the College of Business at the University of Utah.  Mr. Huntsman
  beneficially owns 3,700 shares of the Corporation's common Stock.
  
  *JAMES S. JARDINE, 51, has been a Director of the Corporation since 1985.
  He is the Managing Director of the law firm of Ray, Quinney & Nebeker (which
  acts as legal counsel to the Corporation).  Mr. Jardine is also a Director
  of Daw Technologies Inc. and is Secretary to the Salt Lake Olympic
  Organizing Committee.  Mr. Jardine beneficially owns 400 shares of the
  Corporation's Common Stock.
  
  *+PATRICIA MADSEN, 69, has been a Director of the Corporation since 1976. 
  She is President of Sterling Furniture Company, and beneficially owns 60,512
  shares of the Corporation's Common Stock.1,3
  
  *RICHARD H. MADSEN, 59, has been a Director of the Corporation since 1988
  and is currently the Chairman, President and Chief Executive Officer of the
  Corporation.  He was formerly Chairman and Chief Executive Officer and is
  currently a Director of Madsen Furniture Galleries.  He is also a Director
  of Zions Bancorporation.  Mr. Madsen beneficially owns 188,167 shares of the
  Corporation's Common Stock which includes 12,000 shares of restricted stock
  and 13,000 option shares exercisable within 60 days but not yet exercised. 
  This amount represents approximately 8.56% of the issued and outstanding
  shares at the Record Date.2,3
  
  
  
  *KEITH C. SAUNDERS, 55, has been a Director of the Corporation since 1981,
  and is Executive Vice President, Chief Financial Officer and Secretary of
  the Corporation.  Mr. Saunders beneficially owns 23,212 shares of the
  Corporation's Common Stock which includes 10,000 shares of restricted stock
  and 11,000 option shares exercisable within 60 days but not yet exercised. 
  This amount represents approximately 1.06% of the issued and outstanding
  shares at the Record Date.
  ______________________
  1Includes 17,137 shares as to which Ms. Madsen shares voting and investment
  power as a co-trustee or controlling partner of various Madsen family trusts
  and partnerships, but not including any shares shown for Richard Madsen, as
  co-trustee, above.
  2Includes 146,905 shares held of record by the Francis A. Madsen Family
  Voting Trust, as to which Mr. Madsen is Co-Trustee.
  3Madsen Furniture Galleries and Sterling Furniture Co., of which Mr. Madsen
  and Ms. Madsen are directors, respectively, compete with the Corporation's
  furniture sales. 
  
  Historical Performance of ZCMI Stock
  
     The following table and graph compares the cumulative total
  shareholder return on a hypothetical $100 purchase of  ZCMI common stock on
  December 31, 1992 over a five-year period, to that of a hypothetical $100
  purchase of (i) Retail Department Stores stock price index,  (ii) Retail
  Composite including department stores stock price index, and (iii) the
  average of the high and low stock prices of the Standard & Poor's Retail
  Stores Composite stock price index as of the same date.   The four   indices 
  assume  reinvestment of dividends.
     
  
<TABLE>
  
  MEASURE           Base93  Jan 94   Jan 95  Jan 96  Jan 97   Jan 98
  <S>               <C>     <C>      <C>     <C>     <C>      <C>
  ZCMI Common       100.00  123.52   144.12  167.69  191.62   232.70
  Retail Composite  100.00   96.38    89.25   96.23  114.87   170.34
  Retail DS-500     100.00  114.66   101.64  121.39  130.42   171.05
  S&P 500 Index     100.00  112.88   113.48  157.35  198.80   252.30
</TABLE>
  
  OTHER BUSINESS
  
  Management does not know of any other business to be presented at the
  Meeting.  However, if any other business is presented, it is the intention
  of the Proxies to vote according to their best judgment with respect to such
  other business.
  
  On written request, the Corporation will provide, without charge, a copy of
  the Corporation's Form 10-K Report for 1997 filed with the Securities and
  Exchange Commission (including the financial statements and the schedules
  thereto and a list briefly describing the exhibits thereto) to any
  shareholder.  The reports will be available for mailing in May, 1998, and
  requests should be sent to:  Keith C. Saunders, Executive Vice President and
  Chief Financial Officer, 2200 South 900 West, Salt Lake City, Utah 84137. 
  
  
  
  INDEPENDENT AUDITORS    
  
  Upon recommendation of its Audit Committee, the Board of Directors has
  appointed Deloitte & Touche LLP as the independent auditors to examine the
  accounts of the Corporation and its subsidiaries for the year ending January
  31, 1999.  This firm has audited the Corporation's accounts for many years
  and is one of the largest and best known firms of independent certified
  public accountants.  A member of the firm will be in attendance at the
  Annual Meeting to make a statement on behalf of the firm if he so desires
  and to answer appropriate questions, if any, from shareholders.
  
  DEADLINE FOR SHAREHOLDER PROPOSALS
  
  If any shareholder wishes to present a proposal for action at the 1999
  Annual Meeting of the Shareholders, the shareholder must comply with
  applicable Securities and Exchange Commission Regulations, including
  adequate notice to the Corporation.  Any proposal must be submitted in
  writing by Certified Mail -- Return Receipt Requested, to Zion's Cooperative
  Mercantile Institution, Attention: Secretary of the Corporation, 2200 South
  900 West, Salt Lake City, Utah, 84137, on or before December 31, 1998.