UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549
                              
                                FORM 10-Q
                              
  (Mark One)
          Quarterly Report Under Section 13 or 15 (d) of the Securities
    X     Exchange Act of 1934
          For the quarterly period ended:  March 28, 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 No.:  33-48862


                       HOMELAND HOLDING CORPORATION
          (Exact name of registrant as specified in its charter)
                              
       Delaware                                            73-1311075
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

                       2601 Northwest Expressway
                      Oil Center-East, Suite 1100
                       Oklahoma City, Oklahoma                73112
              (Address of principal executive offices)      (Zip Code)
                              
                            (405) 879-6600
         (Registrant's telephone number, including area code)
                              
      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 ___

      Indicate by check mark whether the registrant has filed all documents 
and reports required to be filed by Section 12, 13 or 15 (d) of the Securities 
Exchange Act of 1934 subsequent to the distribution under a plan confirmed by  
a court.  Yes    X    No  ___

      Indicate the number of shares outstanding of each of the registrant's 
classes of common stock as of May 1, 1998:

                  Homeland Holding Corporation Common Stock:  4,976,172 shares









                        HOMELAND HOLDING CORPORATION
            
                                FORM 10-Q

                 FOR THE TWELVE WEEKS ENDED MARCH 28, 1998


                                  INDEX


                                                                        Page
PART I FINANCIAL INFORMATION

ITEM 1.  Financial Statements..........................................   1

          Consolidated Balance Sheets
           March 28, 1998, and January 3, 1998.........................   1
          Consolidated Statements of Operations
           Twelve Weeks ended March 28, 1998,  
           and March 22, 1997..........................................   3
          Consolidated Statements of Stockholders' Equity (Deficit)
           Twelve Weeks ended March 28, 1998, 
           and March 22, 1997..........................................   4
          Consolidated Statements of Cash Flows
           Twelve Weeks ended March 28, 1998, 
           and March 22, 1997..........................................   5
          Notes to Consolidated Financial Statements...................   6

ITEM 2.  Management's Discussion and Analysis of Financial Conditions
          and Results of Operations....................................   7


PART II  OTHER INFORMATION

ITEM 5.  Other Information.............................................   10

ITEM 6.  Exhibits and Reports on Form 8-K..............................   11




                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       i







PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
                             

                    HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

                 (In thousands, except share and per share amounts)

                                         ASSETS


                                              March           January
                                               28,               3,
                                              1998              1998
                                          (unaudited)
Current assets:                                  
 Cash and cash equivalents                 $   5,031         $   4,778
 Receivables, net of allowance                        
  for uncollectible                            6,210             9,313
  accounts of $1,193 and $1,198
 Inventories                                  45,490            45,946
 Prepaid expenses and other                      
  current assets                               2,337             2,581
                                                          
      Total current assets                    59,068            62,618
                                                          
Property, plant and equipment:                            
 Land and land improvements                    9,409             9,303
 Buildings                                    20,010            19,995
 Fixtures and equipment                       23,387            22,267
 Leasehold improvements                       13,481            13,459
 Software                                      4,993             4,991
 Leased assets under capital leases            8,610             8,610
 Construction in progress                      3,060             2,769
                                                          
                                              82,950            81,394
Less, accumulated depreciation                            
 and amortization                             13,473            11,299
                                                          
Net property, plant and equipment             69,477            70,095


Reorganization value in excess               
 of amounts allocable to identifiable                          
 assets, less accumulated amortization  
 of $23,627 at March 28, 1998, and $20,346 
 at January 3, 1998                           19,403            23,162
                                                          
Other assets and deferred charges             10,096            10,166
                                                          
     Total assets                          $ 158,044         $ 166,041
                                      
                                                             Continued
               The accompanying notes are an integral part
               of these consolidated financial statements.
                              


                                   
                                       1


                HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                  CONSOLIDATED BALANCE SHEETS, Continued

            (In thousands, except share and per share amounts)


                  LIABILITIES AND STOCKHOLDERS' EQUITY


                                              March           January
                                               28,               3,
                                              1998              1998
                                          (unaudited)
Current liabilities:                             
 Accounts payable - trade                 $  17,831          $  18,941
 Salaries and wages                           1,706              2,508
 Taxes                                        3,014              3,605
 Accrued interest payable                     1,345              2,619
 Other current liabilities                    8,475             10,042
  Current portion of long-term                1,753              1,728
   debt
 Current portion of obligations under 
  capital leases                              1,286              1,286
                                                          
       Total current liabilities             35,410             40,729
                                                          
Long-term obligations:                                    
 Long-term debt                              78,332             78,353
 Obligations under capital leases             2,304              2,608
 Other noncurrent liabilities                 2,057              2,027
                                                          
       Total long-term obligations           82,693             82,988
                                                          
Stockholders' equity:                                     
 Common Stock                                           
   Class A, $0.01 par value, authorized 
   - 7,500,000 shares, issued 4,822,857                          
   shares at March 28, 1998, and 4,820,637 
   at January 3, 1998                            48                 48
 Additional paid-in capital                  56,067             56,040
 Accumulated deficit                        (16,174)           (13,764)
                                                          
       Total stockholders' equity            39,941             42,324
                                                          
       Total liabilities and stockholders' 
       equity                               158,044            166,041
                                       
                              
                              
                              
                              
                              
                The accompanying notes are an integral part
                of these consolidated financial statements.
                              
                                      
                                      
                                      
                                      
                                 
                                        2
                              
                              
                              
                  HOMELAND HOLDING CORPORATION AND SUBSIDIARY
                              
                     CONSOLIDATED STATEMENT OF OPERATIONS
                              
              (In thousands, except share and per share amounts)
                                  (Unaudited)
                              

                                              
                                              

                                                  12              12
                                                 weeks           weeks
                                                 ended           ended
                                                March 28,       March 22,
                                                  1998            1997

Sales, net                                      $ 121,403      $ 120,050
                                       
Cost of sales                                      91,922         90,878
                                                      
 Gross profit                                      29,481         29,172
                                                      
Selling and administrative expenses                26,180         25,187
                                                      
Amortization of excess reorganization value         3,281          3,460

                                                      
 Operating profit                                      20            525
                                                      
Interest expense                                    1,951          1,982
                                                      
Loss before income taxes                           (1,931)        (1,457)
                                                      
Income tax expense                                    479            801

                                                      
Net loss                                         $ (2,410)      $ (2,258)
                                                      
Basic and diluted earnings per share:
 Net loss per common share                       $  (0.50)      $  (0.47)
                                                      
Weighted average shares outstanding              4,822,112      4,758,025
                                                      








                     The accompanying notes are an integral part
                     of these consolidated financial statements.
                             
                                         
                                         


                                     
                                       3

                                    
                     HOMELAND HOLDING CORPORATION AND SUBSIDIARY
                                        
             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                        
               (In thousands, except share and per share amounts)
                                       (Unaudited)
                                        
<TABLE>
<CAPTION>
part 1 of 2
                                       Common Stock     Additional
                                                         Paid-In    Accumulated
                                  Shares       Amount    Capital      Deficit
<S>                              <C>           <C>       <C>        <C>

Balance, December 28, 1996       4,758,025      $ 48     $56,013    $  (3,120)

Net Loss                             -           -          -          (2,258)

Balance, March 22, 1997          4,758,025      $ 48     $56,013    $  (5,378)


Balance, January 3, 1998         4,820,637      $ 48     $56,040    $ (13,764)

Net Loss                             -           -          -          (2,410)

Issuance of common stock             2,220       -            27         -

Balance, March 28, 1998          4,822,857      $ 48     $56,067    $ (16,174)

</TABLE>

<TABLE>
<CAPTION>
part 2 of 2

                                    Total
                                  Stockholders'
                                Equity (Deficit)
<S>                               <C>

Balance, December 28, 1996        $  52,941

Net Loss                             (2,258)

Balance, March 22, 1997           $  50,683


Balance, January 3, 1998          $  42,324

Net Loss                             (2,410)

Issuance of common stock                 27

Balance, March 28, 1998           $  39,941 

</TABLE>

                   The accompanying notes are an integral part
                    of these consolidated financial statements.
                   
                                        4

                                     
                      HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                        CONSOLIDATED STATEMENT OF CASH FLOWS

                 (In thousands, except share and per share amounts)
                                    (Unaudited)

                                                 
                                                               
                                                   12 weeks        12 weeks 
                                                    ended           ended    
                                                   March 28,       March 22,
                                                     1998            1997
                                                     
Cash flows from operating activities:
 Net loss                                         $  (2,410)      $  (2,258)
 Adjustments to reconcile net loss to net
  cash provided by operating activities:
   Depreciation and amortization                      2,192           1,717
   Amortization of excess reorganization value        3,281           3,460
   Amortization of financing costs                       17              14
   Loss on disposal of assets                            32               7
   Amortization of beneficial interest in 
    operating leases                                     28              28
   Adjustment to excess reorganization value           -                292
   Deferred income taxes                                479             801
   Change in assets and liabilities:
     Decrease in receivables                          3,103           2,801
     Decrease in inventories                            456             477
     Decrease in prepaid expenses and 
      other current assets                              244             210
     Increase (decrease) in other assets and 
      deferred charges                                   17            (101)
     Decrease in accounts payable - trade            (1,110)           (559)
     Decrease in salaries and wages                    (802)           (832)
     Increase (decrease) in taxes                      (591)            148
     Decrease in accrued interest payable            (1,274)         (1,513)
     Decrease in other current liabilities           (1,567)         (1,262)
     Increase in other noncurrent liabilities            37             108
                                                     
       Net cash provided by operating activities      2,132           3,538
                                                     
Cash flow used in investing activities:
 Capital expenditures                                (1,605)         (1,254)
 Cash received from sale of assets                     -                 12
                                                     
       Net cash used in investing activities         (1,605)         (1,242)
                                                     
Cash flows used by financing activities:
 Borrowings under revolving credit loans             26,416          29,595
 Payments under revolving credit loans              (26,398)        (27,640)
 Proceeds from issuance of common stock                  27            -
 Principal payments under note payable                  (15)            (15)
 Principal payments under capital lease obligations    (304)           (346)
                                                     
       Net cash provided  by (used in) financing 
        activities                                     (274)          1,594
                                                     
Net increase (decrease) in cash and cash 
 equivalents                                            253           3,890
                                                     
Cash and cash equivalents at beginning of period      4,778           1,492
                                                     
Cash and cash equivalents at end of period          $ 5,031         $ 5,382
                                                     
Supplemental information:                            
 Cash paid during the period for interest           $ 3,312         $ 3,490
                              
                    The accompanying notes are an integral part
                     of these consolidated financial statements.
                                       





















































                                
                                       5




                  HOMELAND HOLDING CORPORATION AND SUBSIDIARY
                              
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)
                              
                              
1.   Basis of Preparation of Consolidated Financial Statements:

                 The accompanying unaudited interim consolidated financial 
     statements of Homeland Holding Corporation ("Holding") and its Subsidiary,
     Homeland Stores, Inc. ("Stores" and, together with Holding, the "Company"),
     reflect all adjustments, which consist only of normal and recurring 
     adjustments, which are, in the opinion of management, necessary for a
     fair presentation of the consolidated financial position and the
     consolidated results of operations and cash flows for the periods
     presented. 
     
                 These unaudited consolidated financial statements should be  
     read in conjunction with the consolidated financial statements of the  
     Company for the period ended January 3, 1998, and the notes thereto.
     
2.   Accounting Policies:

                 The significant accounting policies of the Company are 
     summarized in the consolidated financial statements of the Company for  
     the 53 weeks ended January 3, 1998, and the notes thereto.
     
3.   Earnings Per Share:     
     
                 Options to purchase 298,500 shares of common stock with a     
     weighted average exercise price of $6.80 were outstanding at March 28,
     1998 but were not included in the computation of diluted earnings per
     share because the effect would be antidilutive.
     
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       6

     
     
     
Item 2.  Management's Discussion and Analysis of Financial Conditions and 
         Results of Operations

         General

     
                 The table below sets forth selected items from the 
         Company's consolidated income statement as a percentage of net 
         sales for the periods indicated:
     
                                                    12 weeks ended            
                                                  March         March
                                                    28,           22,
                                                   1998          1997
               Net sales                          100.0%        100.0%
               Cost of sales                       75.7          75.7
                Gross profit                       24.3          24.3
               Selling and administrative          21.6          21.0
               Amortization of excess                       
                reorganization value                2.7           2.9
               Operating profit                     -             0.4
               Interest expense                     1.6           1.6
               Loss before income taxes            (1.6)         (1.2)
               Income tax provision                 0.4           0.7 
        
                 Net loss                          (2.0)         (1.9)
     
             Results of Operations
     
                 Net sales for the first quarter ended March 28, 1998, 
         were $121.4 million, an increase of 1.1% over the corresponding
         period of 1997.  The increase in net sales was due to an additional
         four stores in operation during the quarter versus the same quarter
         a year ago. The higher sales from the additional stores were 
         partially offset by a decline in comparable store sales of 4.4%.  The
         decrease in comparable store sales was due primarily to competitive
         store openings after the 1st quarter of 1997. In addition, to a 
         lesser degree, comparable store sales were affected by a shift in the 
         1998 New Year's Day selling week.  The 1997 New Year's Day selling
         week was included in the first quarter of 1997.  This is traditionally
         a strong sales' week.  Because the Company had a 53-week fiscal
         year in 1997, the 1998 New Year's Day sales week was included in
         fiscal 1997 instead of the first quarter of 1998.

                 There were no new competitive store openings during the
         first quarter of 1998.  Management believes that this, combined with  
         improvement in stores that were affected by competitive openings 
         in 1997, will result in improved comparable store sales in the 
         second quarter. 
         



                                       7
     

                 Gross profit as a percentage of net sales remained stable
         and was 24.3% for both the first quarter of 1998 and the first 
         quarter of 1997.  

                 Selling and administrative expenses increased by 0.6%, as a 
         percentage of net sales, to 21.6% in the first quarter of 1998 from 
         21.0% in the first quarter of 1997.  The primary causes of the 
         increase are additional depreciation expense resulting from higher 
         levels of capital expenditures and higher wages from the minimum wage 
         increase.  The last minimum wage increase took effect September 1, 
         1997.

                 The Company recorded amortization of excess reorganization
         value of $3.3 million for the twelve weeks ended March 28, 1998.
         For the 12 weeks ended March 22, 1997, the Company recorded $3.5
         million for amortization of excess reorganization value.  The
         amortization of the excess reorganization value will negatively
         affect earnings for the next six fiscal quarters.
     
                 Interest expense for the first quarter of 1998 was $2.0 
         million and did not change from the first quarter of 1997.  Average 
         borrowing increased but the additional interest expense from the 
         higher borrowing was offset by higher interest income from the 
         interest bearing certificate of Associated Wholesale Grocers, Inc.

                 The Company recorded an income tax provision of $0.5 million 
         for the first quarter of 1998.  The effective tax rate differs from
         the statutory rate due to amortization of excess reorganization 
         value, which is not deductible for income tax purposes.  The net 
         operating loss carryforwards available for utilization in 1998 are
         limited to approximately $3.3 million, the benefit of which is being
         recorded as a reduction of excess reorganization value rather than a
         reduction of income tax expense.

                 EBITDA (as defined hereinafter) amounted to $5.5 million or 
       4.6% of net sales in the first quarter of 1998 as compared to $5.7 
       million or 4.8% of net sales for the first quarter of 1997.  The 
       decrease in EBITDA is due primarily to the increased selling and 
       administrative expenses and was somewhat offset by the increased gross 
       margin contribution that was a result of increased sales.
     
                 Net loss for the 12 weeks ended March 28, 1998, was $2.4
       million or $0.50 per share compared to a net loss of $2.3 million or
       $0.47 per share for the corresponding period of 1997.  

                 The Company is amortizing its excess reorganization value
       of $45 million over a three-year period, and such amortization has
       affected earnings significantly.  Income before amortization of excess
       reorganization value for the 12 weeks ended March 28, 1998, was 
       $0.9 million or $0.18 per share.


                                       8


       Liquidity and Capital Resources
     
                 The primary sources of liquidity and capital for the 
       Company's operations have been borrowings under the revolving credit 
       facility and internally-generated funds.
     
                 The Company's EBITDA (earnings before interest, taxes, 
       depreciation and amortization) before financial restructuring costs, 
       as presented below, is the Company's measurement of internally-
       generated cash for working capital needs, capital expenditures and 
       payment of debt obligations:
     
                                                         12 weeks ended        
                                                      March          March
                                                        28,            22,
                                                       1998           1997 

            Loss before income taxes                   (1,931)       (1,457)
                                              
            Interest expense                            1,951         1,982
                                              
            Amortization of reorganization value        3,281         3,460
                                              
            Depreciation and amortization               2,220         1,745
                                              
                    EBITDA                              5,521         5,730
                                              
                 As a percentage of sales                4.55%         4.77%
                                              
                 As a multiple of interest expense       2.83x         2.89x
     
                 Cash flow from operations provided $2.1 million for the 
       12 weeks ended March 28, 1998, and $3.5 million for the 12 weeks ended 
       March 22, 1997.  The decrease in cash flow from operations for the  
       12 weeks ended March 28, 1998, was primarily due to an increase in
       the selling and administrative expense and decreases in trade accounts
       payable and taxes.

                 The investing activities of the Company used net cash of 
       $1.6 million and $1.2 million for the 12 weeks ended March 28, 1998,  
       and March 22, 1997, respectively.  The funds for the first quarter 
       1998 investing activities were provided primarily by internally-
       generated cash.


                                        9

     
                 Financing activities of the Company used net cash of 
       $0.3 million for the 12 weeks ended March 28, 1998, and provided net 
       cash of $1.6 million for the 12 weeks ended March 22, 1997.
     
                 As of March 28, 1998, the Company had $10.8 million of  
       borrowings and $3.3 million of letters of credit outstanding under 
       its $32.0 million revolving credit facility.  The revolving credit
       facility provides for borrowings to the lesser of (a) $32.0
       million or (b) the applicable borrowing base.  The applicable 
       borrowing base on March 28, 1998, was $29.7 million.  Management 
       believes that the revolving credit facility and cash flow from 
       operations will be adequate for the Company's short-term requirements.
     
                 The Company is continuing to improve its store 
       facilities through its capital expenditure program to maintain and 
       enhance its market competitiveness.  Cash capital expenditures for 
       1998 are expected to be $12.9 million.  The credit agreement limits 
       the Company to $13.0 million cash capital expenditures for 1998.  The 
       Company is also allowed $7.0 million of new capital leases each year.  
       
       Safe Harbor Statements Under the Private Securities Litigation Reform
       Act of 1995
     
                 The statements made under Item: Management's Discussion and
       Analysis of Financial Condition and Results of Operations and other 
       statements in this Form 10-Q which are not historical facts, 
       particularly with respect to future net sales, are forward-looking
       statements.  These forward-looking statements are subject to risks
       and uncertainties that could render them materially inaccurate or
       different.  The risks and uncertainties include, but are not limited
       to, the effect of economic conditions, the impact of competitive 
       promotional and new store activities, labor cost, capital constraints,
       availability and costs of inventory, changes in technology and the
       effect of regulatory and legal developments.
     
     
     PART II - OTHER INFORMATION
     
     Item 5.   Other Information
     
                    Mr. Larry W. Kordisch resigned his position as Executive
               Vice President/Finance, C.F.O. and Secretary effective May 15,
               1998.  The Company is currently recruiting a replacement for
               Mr. Kordisch.
               


                                       10

     
     Item 6.   Exhibits and Reports on Form 8-K
     
               (a)  Exhibit:  The following exhibit is filed as part of this 
                              report:
     
               Exhibit No.    Description
     
                     27       Financial Data Schedule.
     
     
     
               (b)  Report on Form 8-K:  The Company did not file
                    any Form 8-K during the quarter ended March 28, 1998.
          
          



          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       11
          
          
          
          
          
                                     SIGNATURES
                              
                              
                 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.
     
                            HOMELAND HOLDING CORPORATION
                              
                              
     Date:  May 8, 1998     By: /s/ David B. Clark_____________________
                                David B. Clark, President,
                                Chief Executive Officer
                                and Director
                                (Principal Executive Officer)
     
     
     Date:  May 8, 1998     By: /s/ Larry W. Kordisch__________________
                                Larry W. Kordisch, Executive
                                Vice President/
                                Finance, Chief Financial
                                Officer and Secretary
                                (Principal Financial Officer)