UNITED STATES
	              SECURITIES AND EXCHANGE COMMISSION
	                   Washington, D.C.  20549

	                          FORM 10-K

(Mark One)


        Annual report pursuant to Section 13 or 15(d) of the Securities
    X   Exchange Act of 1934 [No Fee Required]
        For the fiscal year ended December 30, 2000

                                    OR

        Transition report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 [No Fee Required]
        For the transition period from                 to                  .

Commission file number 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 N. W. Expressway
                       Oil Center - East, Suite 1100E
                            Oklahoma City, Oklahoma               73112
          (Address of principal executive offices)  (Zip Code)

Registrant's telephone number, including area code: (405) 879-6600

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
par value $ .01 per share.

      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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [  ]

      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 of securities under a plan
confirmed by a court.   Yes    X        No

      State the aggregate market value of the voting stock held by non-
affiliates of the registrant as of April 23, 2001:

$985,174, based on a closing price of $0.20 of the registrant's common stock
on the NASDAQ/NMS.

      Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of April 23, 2001:

                      Homeland Holding Corporation
                   Common Stock: 4,925,871 shares

      Documents incorporated by reference: Portions of the definitive Proxy
Statement for the 2001 Annual Stockholders Meeting are incorporated into Part
III of this Form 10-K by reference.



                     HOMELAND HOLDING CORPORATION


                              FORM 10-K
             FOR THE FISCAL YEAR ENDED DECEMBER 30, 2000

                          TABLE OF CONTENTS


                                                                       Page

PART I

ITEM 1.	BUSINESS                                                    1

            General                                                     1
            Background                                                  1
            AWG Transaction                                             1
            Restructuring                                               2
            Business Strategy                                           2
            Homeland Supermarkets                                       2
            Merchandising Strategy and Pricing                          3
            Customer Services                                           4
            Advertising and Promotion                                   4
            Products                                                    4
            Supply Arrangements                                         5
            Employees and Labor Relations                               5
            Computer and Management Information Systems                 5
            Competition                                                 6
            Trademarks and Service Marks                                6
            Regulatory Matters                                          6

ITEM 2.     PROPERTIES                                                  7

ITEM 3.     LEGAL PROCEEDINGS                                           7

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE
            OF SECURITY HOLDERS                                         7

PART II

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY
            AND RELATED STOCKHOLDERS MATTERS                            8

ITEM 6.     SELECTED CONSOLIDATED FINANCIAL DATA                        8

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS
            OF FINANCIAL CONDITION AND RESULTS
            OF OPERATIONS                                              11

            Results of Operations                                      11
            Liquidity and Capital Resources                            14
            Inflation/Deflation                                        18
            Recent Accounting Pronouncements                           18

ITEM 8.     FINANCIAL STATEMENTS AND
            SUPPLEMENTARY DATA                                         18

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH
            ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE                                       18



                                     i


                                                                       Page


PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS
            OF THE REGISTRANT                                          19

ITEM 11.    EXECUTIVE COMPENSATION                                     19

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN
            BENEFICIAL OWNERS AND MANAGEMENT                           19

ITEM 13.    CERTAIN RELATIONSHIPS AND
            RELATED TRANSACTIONS                                       19

PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENTS
            AND REPORTS ON FORM 8-K                                    20



SIGNATURES                                                             II-1

INDEX TO FINANCIAL STATEMENTS AND EXHIBITS                             F-1

EXHIBIT INDEX                                                          E-1

















                                     ii





                       HOMELAND HOLDING CORPORATION

                               FORM 10-K
               FOR THE FISCAL YEAR ENDED DECEMBER 30, 2000



ITEM 1.     BUSINESS

General

            Homeland Holding Corporation ("Holding"), through its wholly-owned
subsidiary, Homeland Stores, Inc. ("Homeland") and Homeland's wholly-owned
subsidiary, JCH Beverage, Inc. ("JCH"), and JCH's wholly-owned subsidiary, SLB
Marketing, Inc. (collectively referred to herein as the "Company"), is a
leading supermarket chain in the Oklahoma, southern Kansas and Texas Panhandle
region. The Company operates in four distinct market places: Oklahoma City,
Oklahoma; Tulsa, Oklahoma; Amarillo, Texas; and certain rural areas of Oklahoma,
Kansas and Texas. As of December 30, 2000, the Company operates 85 stores
throughout these markets.

            The Company's executive offices are located at 2601 N.W. Expressway,
Oklahoma City, Oklahoma 73112, and its telephone number is (405) 879-6600.

Background

            Holding and Homeland were organized as Delaware corporations in
1987 by a group of investors led by Clayton, Dubilier & Rice, Inc. ("CD&R"),
a private investment firm specializing in leveraged acquisitions with the
participation of management, for the purpose of acquiring substantially all
of the assets and assuming specified liabilities of the Oklahoma division of
Safeway Inc. ("Safeway").  The stores changed their name to "Homeland" in
order to highlight the Company's regional identity.

AWG Transaction

            On April 21, 1995, the Company sold 29 of its stores and its
warehouse and distribution center to Associated Wholesale Grocers, Inc.
("AWG") pursuant to an Asset Purchase Agreement dated as of February 6, 1995
(the "AWG Purchase Agreement"), for a cash purchase price of approximately
$72.9 million, including inventory, and the assumption of certain liabilities
by AWG. At the closing, the Company and AWG also entered into a seven-year
supply agreement, whereby the Company became a retail member of the AWG
cooperative and AWG became the Company's primary supplier. The Company has
purchased 15 shares of AWG Class A Common Stock, representing an equity
position of 0.3%, in order to be a member of AWG. The transactions between
the Company and AWG are referred to herein as the "AWG Transaction."

            AWG is a buying cooperative which sells groceries on a wholesale
basis to its retail member stores.  AWG serves more than 800 member stores
located in a ten state region with approximately $3.3 billion in revenues in
2000.

            The AWG Transaction enabled the Company: (a) to reduce the Company's
borrowed money indebtedness by approximately $37.2 million in the aggregate; (b)
to have AWG assume, or provide certain undertakings with respect to, certain
contracts and leases and certain pension liabilities of the Company; (c) to sell
the Company's warehouse and distribution center, which eliminated the high fixed
overhead costs associated with the operation of the warehouse and distribution
center and thereby permitted the Company to close marginal and unprofitable
stores; and (d) to obtain the benefits of becoming a member of the AWG
cooperative, including increased purchases of private label products, special
product purchases, dedicated support programs and access to AWG's store systems
and participation in the membership rebate and patronage programs.


                                     1


Restructuring

            On May 13, 1996, Holding and Homeland filed voluntary petitions
under Chapter 11 of the United States Bankruptcy Code with the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").
Simultaneously with such filings, the Company submitted a "pre-arranged" plan
of reorganization which set forth the terms of the restructuring of the
Company (the "Restructuring").  The purpose of the Restructuring was to
substantially reduce the Company's debt service obligations and labor costs
and to create a capital and cost structure that would allow the Company to
maintain and enhance the competitive position of its business and operations.
 The Restructuring was negotiated with, and supported by, the lenders under
the Company's then existing revolving credit facility, an ad hoc committee
(the "Noteholders Committee") representing approximately 80% of the Company's
outstanding Old Notes and the Company's labor unions.  The Bankruptcy Court
confirmed the Company's First Amended Joint Plan of Reorganization, as
modified (the "Plan of Reorganization") on July 19, 1996, and the Plan of
Reorganization became effective on August 2, 1996 (the "Effective Date").

Business Strategy

            The Company's general business strategy is to improve the sales and
profitability of its core business through a consumer marketing strategy which
positions the Company as a faster, fresher, better alternative to other food
outlets.  Usage of the Homeland Savings Card as a relationship marketing tool,
as well as strong weekly promotions communicated through extensive use of print,
television and radio are intended to help the Company achieve this business
strategy.  The Company is committed to high quality perishable departments and
quick and friendly checkout.

            Having been in its market for more than 68 years (through its
predecessor Safeway), the Company enjoys a high recognition with its customers.
The Company continues to build this rapport with its customers by participating
in local community events and offering the "Apples for Students" program,
whereby schools can obtain computers and other educational products by
collecting Homeland receipts.  The Company is also a major sponsor of the
Easter Seals program in its markets.

            The Company's plan also involves reviewing marginal and unprofitable
stores for closing and reviewing new sites, independent stores or new markets
for growth in its market share.  In 1997, the Company acquired four stores, two
in Oklahoma City, Oklahoma, one in Shawnee, Oklahoma and one in Lawton,
Oklahoma.  The Company closed one store in Amarillo, Texas in 1998. During 1999,
the Company completed the acquisition of nine stores located in eastern
Oklahoma, one of which was subsequently closed, completed the acquisition of
four stores in Muskogee, Oklahoma, and closed 1 store in Yukon, Oklahoma. During
the first quarter of 2000, the Company completed the acquisition of three stores
located in Oklahoma City, Oklahoma, one of which was subsequently closed as
planned.  In the second quarter of 2000, the Company completed the acquisition
of four stores, three of which are in Oklahoma City, and one in Lawton,
Oklahoma.  In the second quarter 2000, one of the acquired stores in Oklahoma
City was actually under construction at the time and ultimately opened in
September 2000.  This store was a replacement store for an existing Homeland
store that was closed upon its opening.  In the first quarter of 2001, the
Company closed seven stores due to poor financial performance of the stores and
the high costs of potential renovation.

            For additional information, see also "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

Homeland Supermarkets

            The Company's current network of stores features three basic store
formats. The Company's conventional stores are primarily in the 21,000 total



                                     2


square feet range and carry the traditional mix of grocery, meat, produce and
general merchandise products.  These stores contain more than 20,000 stock
keeping units, including food and general merchandise. Sales volumes of
conventional stores range from $53,000 to $115,000 per week.  The Company's
superstores are in the 36,000 total square feet range and offer, in addition
to the traditional departments, two or more specialty departments.  Sales
volumes of superstores range from $76,000 to $297,000 per week. The Company's
combo store format includes stores of approximately 58,000 total square feet
and larger and was designed to enable the Company to expand shelf space
devoted to general merchandise.  Sales volumes of combo stores range from
$115,000 to $342,000 per week.  The Company's new stores and certain remodeled
locations have incorporated the Company's new, larger superstore and combo
formats.

            Of the 85 stores operated by the Company as of December 30, 2000,
18 are conventional stores, 48 are superstores and 19 are combo stores.


            The chart below summarizes Homeland's store development over the
last three fiscal years:

                                                Fiscal Year Ended
                                       12/30/00          1/1/00       1/2/99

Average sales per store (1)
  (in millions)                        $  7.1            $  7.8       $  7.6

Average total square feet
  per store                            37,765            35,786       37,473

Average sales per
  square foot (1)                        $197              $206         $206

Number of stores:
  Stores at start of period                80                69           70
  Stores remodeled                          0                 5            8
  New stores opened                         7                13            0
  Stores sold or closed                     2                 2            1
  Stores at end of period                  85                80           69

Size of stores:
  Less than 25,000 sq. ft.                 13                13            7
  25,000 to 35,000 sq. ft.                 28                28           25
  35,000 sq. ft. or greater                44                39           37

Store formats:
  Conventional                             18                18           10
  SuperStore                               48                49           47
  Combo                                    19                13           12

(1) For those stores open entire fiscal year.

		The Company's network of stores is managed by district managers on a
geographical basis through five districts. Store managers are responsible for
determining staffing levels, managing store inventories (within the confines of
certain parameters set by the Company's corporate headquarters) and purchasing
products. Store managers have significant flexibility with respect to the
quantities of items carried while the Company's corporate headquarters is
directly responsible for merchandising, advertising, pricing and capital
expenditure decisions.

Merchandising Strategy and Pricing

		The Company's merchandising strategy emphasizes a competitive
pricing structure, as well as leadership in quality products and service,
selection, convenient store locations, specialty departments and perishable
products (i.e., meat, produce, bakery and seafood).  The Company's strategy is


                                     3


to price competitively with targeted supermarket operators in each market area.
The Company also offers double coupons, with some limitations, in all areas in
which it operates.

		The in-store merchandising strategy combines a strong presentation
of fresh products along with meaningful values throughout the store on a wide
variety of fresh and shelf stable products each week. The Company's main
vehicle of value delivery is its "Homeland Savings Card" which allows customers
with the card, the opportunity to purchase over 2,000 items at a reduced cost
each week. In addition, information gathered through card usage allows the
Company to target product and service offerings in order to increase loyalty
among targeted customers.

Customer Services

		The Company's stores provide a variety of customer services
including, among other things, carry-out services, facsimile services, automated
teller machines, pharmacies, check cashing, utility payments, money transfers
and money orders.  The Company believes it is able to attract new customers
and retain its existing customers because of its level of customer service
and convenience.

Advertising and Promotion

		All advertising and promotion decisions are made by the Company's
corporate merchandising and advertising staff.  The Company's advertising
strategy is designed to enhance its value-oriented merchandising concept and
emphasize its reputation for variety and quality. Accordingly, the Company is
focused on presenting itself as a competitively-priced, promotions-oriented
operator that offers value to its customers and an extensive selection of high
quality merchandise in clean, attractive stores.  This strategy allows the
Company to accomplish its marketing goals of attracting new customers and
building loyalty with existing customers.  In addition, signage in the stores
calls attention to various in-store specials thereby creating a friendlier and
more stimulating shopping experience.

		The Company currently utilizes a broad range of print and broadcast
advertising in the markets it serves, including newspaper advertisements,
advertising inserts and circulars, television and radio commercials and
promotional campaigns that cover substantially all of the Company's markets.
The Company receives cooperative and performance advertising reimbursements
from vendors which reduce its advertising costs.

Products

		The Company provides a wide selection of name-brand and private
label products to its customers.  All stores carry a full line of meat, dairy,
produce, frozen food, health and beauty care and selected general merchandise.
As of the close of fiscal year 2000, approximately 82% of the Company's stores
had service delicatessens and/or bakeries and approximately 61% had in-store
pharmacies.  In addition, some stores provide additional specialty departments
that offer ethnic food, fresh and frozen seafood, floral services and salad
bars.

		As a result of the Company's supply relationship with AWG, the
Company's stores also offer AWG private label goods, including Best Choicer
and Always Saver.

		Private label products generally represent quality and value to
customers and typically contribute to a higher gross profit margin than
national brands.  The promotion of private label products is an integral part
of the Company's merchandising philosophy of building customer loyalty as well
as improving the Company's "pricing image."  The Company intends to use the
Best Choicer line of products as the main vehicle to accomplish these goals.


                                   4



Supply Arrangements

           The Company is a party to the supply agreement with AWG (the
"Supply Agreement"), pursuant to which the Company became a member of the AWG
cooperative and AWG became the Company's primary supplier. AWG currently
supplies approximately 70% of the goods sold in the Company's stores.  See
"Business -- AWG Transaction."

           Pursuant to the Supply Agreement, AWG is required to supply
products to the Company at the lowest prices and on the best terms available
to AWG's retail members. In addition, the Company is: (a) eligible to
participate in certain cost-savings programs available to AWG's other retail
members; (b) is entitled to receive certain member rebates and refunds based
on the dollar amount of the Company's purchases from AWG's distribution center;
and (c) is to receive periodic cash payments from AWG, up to a maximum of $1.2
million per fiscal quarter, based on the dollar amount of the Company's
purchases from AWG's distribution centers during such fiscal quarter.

           The Company purchases goods from AWG on an open account basis. AWG
requires that each member's account be secured by a letter of credit or certain
other collateral in an amount based on such member's estimated weekly purchases
through the AWG distribution center. The Company's open account with AWG no
longer requires a letter of credit, however, the open account is secured by a
first lien on all "AWG Equity" owned from time to time by the Company, which
includes, among other things, AWG membership stock, the Company's right to
receive monthly payments and certain other rebates, refunds and other credits
owed to the Company by AWG (including patronage refund certificates, direct
patronage or year-end patronage and concentrated purchase allowances).  In the
event that the Company's open account with AWG exceeds the amount of the
required collateral for the Company's open account, AWG is not required to
accept orders from, or deliver goods to, the Company until a letter of credit
has been established for any such deficiency.

           The Supply Agreement with AWG contains certain "Volume Protection
Rights," including: (a) the right of first offer (the "First Offer Rights")
with respect to any proposed sales of stores supplied under the Supply Agreement
(the "Supplied Stores") and a sale of more than 50% of the outstanding stock of
Holding or Homeland to an entity primarily engaged in the retail or wholesale
grocery business; (b) the Company's agreement not to compete with AWG as a
wholesaler of grocery products during the term of the Supply Agreement; and
(c) the Company's agreement to dedicate the Supplied Stores to the exclusive use
of a retail grocery facility owned by a retail member of AWG (the "Use
Restrictions").  The Company's agreement not to compete and the Use Restrictions
contained in the Supply Agreement are terminable with respect to a Supplied
Store upon the occurrence of certain events, including the Company's compliance
with AWG's First Offer Rights with respect to any proposed sale of such store.
In addition, the Supply Agreement provides AWG with certain purchase rights in
the event the Company closes 90% or more of the Supplied Stores.

Employees and Labor Relations

            At December 30, 2000, the Company had a total of 4,381 employees, of
whom 2,864, or approximately 65%, were employed on a part-time basis.  The
Company employs 4,281 in its supermarket operations. The remaining employees are
corporate and administrative personnel.

            The Company is the only unionized grocery chain in its market areas.
Approximately 92% of the Company's employees are union members, represented
primarily by the United Food and Commercial Workers of  North America
("UFCWNA").


                                      5


Computer and Management Information Systems

            The Company utilizes client/server systems in order to enhance its
information management capabilities and improve its competitive position.  The
systems include the following features: time and attendance, human resource,
accounting and budget tracking, and scan support and merchandising systems. In
1997, the Company installed a direct store delivery system and a check
verification and credit card system.  The Company installed a centralized scale
and pricing system for its meat, deli and bakery departments in 1998.

            The Company has scanning checkout systems in all of its 85 stores.
As a result of store acquisitions, the Company currently utilizes three separate
scanning systems.  The Company will continue to evaluate a common system for all
stores and to evaluate the need to invest and upgrade its scanning and point-of-
sale systems to improve efficiency.  The Company also collects information on
the purchases made by its "Homeland Savings Card" holders with the intent to
target its promotional activities on this market segment.  See "Business --
Advertising and Promotion."

Competition

            The supermarket business in the Company's market area is highly
competitive, but very fragmented, and includes numerous independent operators.
The Company estimates that these operators represent a substantial percentage
of its markets.  The Company also competes with larger store chains such as
Albertson's and Wal-Mart, which operate 28 stores and 31 stores, respectively,
in the Company's market areas, "price impact" stores such as Crest, large
independent store groups such as IGA, regional chains such as United and
discount warehouse stores.

            The Company is a leading supermarket chain in Oklahoma, southern
Kansas and the Texas Panhandle region. The Company attributes its market
position to advantages it has over certain of its competitors including
its high quality perishable departments, effective advertising, excellent long-
standing store locations and a strong reputation within the communities in
which the Company operates.

            The Company's business has been adversely affected in recent years
by the entry of new competition into the Company's key markets, which has
resulted in a decline in the Company's comparable store sales in 1997 and 1998.
In 1997, there were 8 competitive openings in the Company's market area,
including 3 new Wal-Mart Supercenters and 2 new Albertson's.  In 1998, there
were 7 additional competitive openings, including 4 new Wal-Mart Supercenters
and 3 new independent stores. In 1999, the Company's comparable sales increased
despite 8 competitive openings, including 4 new Albertson's, 3 new Wal-Mart
Supercenters and one new independent store.  In 2000, the Company once again
experienced a decline in comparable store sales.  During the year ended December
30, 2000, there were 13 competitive openings including 4 new Wal-Mart
Supercenters, 7 new Wal-Mart Neighborhood Markets and two new independent
stores.  Based on information publicly available, the Company expects that,
during 2001, Wal-Mart will open 2 new Supercenters and 4 new Neighborhood
Markets, Albertsons will open 1 new store and independents will open 3 new
stores in the Company's markets.

Trademarks and Service Marks

            During the transition from "Safeway" to "Homeland," the Company was
able to generate a substantial amount of familiarity with the "Homeland" name.
The Company continues to build and enhance this name recognition through
promotional advertising campaigns. The "Homeland" name is considered material
to the Company's business and is registered for use as a service mark and
trademark. The Company has received federal and certain state registrations of
the "Homeland" mark as a service mark and a trademark for use on certain
products.  The Company also received a federal registration of the service mark
"A Good Deal Better."


                                      6



Regulatory Matters

            Homeland is subject to regulation by a variety of local, state
and federal governmental agencies, including the United States Department of
Agriculture, state and federal pharmacy regulatory agencies and state and
local alcoholic beverage and health regulatory agencies.  By virtue of this
regulation, Homeland is obligated to observe certain rules and regulations,
the violation of which could result in suspension or revocation of various
licenses or permits held by Homeland.

ITEM 2.     PROPERTIES

            Of the 85 supermarkets operated by the Company as of December 30,
2000, 15 are owned by Homeland and the balance are held under leases which
expire at various times between 2001 and 2030. Most of the leases are subject
to up to six (6) five-year renewal options.  Out of 70 leased stores, only 6
have terms (including option periods) of fewer than 10 years remaining.  Most
of the leases require the payment of taxes, insurance and maintenance costs
and many of the leases provide for additional contingent rentals based on
sales in excess of certain stipulated amounts. No individual store operated
by Homeland is by itself material to the financial performance or condition
of Homeland as a whole.

            Substantially all of the Company's properties are subject to
mortgages and security agreements securing the borrowings under the Loan
Agreement (as defined hereinafter) and a number of the stores acquired from
AWG and its retail members are subject to mortgages and security agreements
in favor of AWG.  See "Management's Discussion and Analysis of Financial
Conditions and Results of Operations -- Liquidity and Capital Resources."

ITEM 3.     LEGAL PROCEEDINGS

            The Company is a party to ordinary routine litigation incidental
to its business.

            Homeland and Holding were debtors in cases styled In re Homeland
Holding Corporation, Debtor, Case No. 96-748 (PJW), and In re Homeland Stores,
Inc., Debtor, Case No. 96-747 (PJW), initiated with the Bankruptcy Court on
May 13, 1996.  While the Plan of Reorganization was confirmed on July 19, 1996,
and became effective on August 2, 1996, the Company is still involved in the
resolution of claims filed in these proceedings.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            No matters were submitted by Holding to a vote of Holding's
security holders during the quarter ended December 30, 2000.








                                     7


                                    PART II

ITEM 5.     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS
MATTERS

            The Common Stock of Holding commenced public trading on the Nasdaq
National Market System ("Nasdaq/NMS") on April 14, 1997. High and low sales
prices of the Common Stock as reported by Nasdaq/NMS for each fiscal quarter of
1999 and 2000 are listed below:

                                     High              Low
		March 27, 1999          $4.000            $3.000
		June 19, 1999           $3.625            $2.875
		September 11, 1999      $4.125            $3.000
		January 1, 2000         $3.938            $3.281
		March 25, 2000          $4.531            $3.375
		June 17, 2000           $4.500            $3.438
		September 9, 2000       $4.375            $3.125
		December 30, 2000       $3.375            $0.313

		On April 23, 2001, there were 843 stockholders of record.

            As additional claims are resolved pursuant to the Plan of
Reorganization, the Company expects that the number of stockholders will
increase, assuming that there is no change in the number of current
stockholders.

            The Company received notification on March 8, 2001 from NASDAQ of a
staff determination to delist the Company's Common Stock for failing to maintain
the required minimum market value of public float and received notification on
March 29, 2001, from NASDAQ of a staff determination to delist the Company's
Common Stock for failing to meet the minimum share price. The Company has
requested a review of the staff determination with NASDAQ's Listing
Qualifications Panel, which it expects to occur by the end of April 2001. If
there is no change in the staff determination, the Company expects that trading
in its Common Stock would move to the OTC Bulletin Board.

            No cash dividends were declared or paid since the Effective Date of
the Plan of Reorganization.  Holding is restricted from paying dividends by the
Loan Agreement and Indenture.  See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

ITEM 6.     SELECTED CONSOLIDATED FINANCIAL DATA

            The following table sets forth selected consolidated financial data
of the Company which has been derived from financial statements of the Company
for the 52 weeks ended December 30, 2000, the 52 weeks ended January 1, 2000,
the 52 weeks ended January 2, 1999, the 53 weeks ended January 3, 1998, and
the 20 weeks ended December 28, 1996 (Successor Company), and the 32 weeks
ended August 10, 1996 (Predecessor Company), respectively. See "Notes to
Selected Consolidated Financial Data" for additional information.

            As discussed in "Business -- Restructuring," the Company emerged
from Chapter 11 proceedings effective August 2, 1996.  For financial reporting
purposes, the Company accounted for the consummation of the Restructuring
effective as of August 10, 1996.  The Company has adopted "fresh-start"
reporting pursuant to SOP No. 90-7.  The periods prior to the Restructuring
have been designated "Predecessor Company" and the periods subsequent to the
Restructuring have been designated "Successor Company."  Because of the
adjustments associated with the adoption of "fresh-start" reporting, historical
financial data of the Predecessor Company and Successor Company is not
necessarily comparable.

            The selected consolidated financial data should be read in
conjunction with the respective consolidated financial statements and notes
thereto which are contained elsewhere herein.



                                     8



                  (In thousands, except per share amounts)

                                              Successor Company
                                       52 weeks     52weeks     52 weeks
                                        ended        ended       ended
                                       12/30/00      1/1/00      1/2/99
Summary of Operating Data:

Sales, net                            $  600,835   $  559,554  $  529,576

Cost of sales                            460,735      425,394     402,261

Gross profit                             140,100      134,160     127,315

Selling and administrative expenses      133,244      120,594     114,335

Store closing charge (1)                   2,823            -           -

Amortization of excess
  reorganization value (2)                    -         6,890      13,672

Asset impairment                              -           925           -

Operating profit (loss)                   4,033         5,751        (692)

Gain (loss) on disposal of assets           (61)          (15)         34

Interest income                             751           569         426

Interest expense                        (10,612)       (9,011)     (8,484)

Income (loss) before reorganization
   items, income taxes and
   extraordinary items                   (5,889)       (2,706)     (8,716)

Reorganization items (3)                      -             -           -

Income tax provision                          -        (1,588)     (1,875)

Loss before extraordinary items          (5,889)       (4,294)    (10,591)

Extraordinary items (4)                       -             -           -

Net income (loss)                     $  (5,889)    $  (4,294)  $ (10,591)

Basic and diluted net income (loss)
   per common share                   $   (1.20)    $   (0.87)  $   (2.18)


Consolidated Balance Sheet Data:       12/30/00        1/1/00      1/2/99

   Total assets                       $ 179,758     $ 175,630   $ 165,084

   Long-term obligations, including
      current portion of long-term
      obligations                     $ 114,247     $ 100,785   $  89,979

   Redeemable common stock (5)        $       -     $       -   $       -
   Stockholders' equity (deficit)     $  21,097     $  27,654   $  31,868


                               continued



                                          Successor Company     Predecessor
                                                                  Company

                                        53 weeks     20 weeks     32 weeks
                                          ended        ended        ended
                                         1/3/98      12/28/96      8/10/96

Summary of Operating Data: continued

Sales, net                             $ 527,993    $ 204,026    $ 323,747

Cost of sales                            401,691      154,099      244,423

Gross profit                             126,302       49,927       79,324

Selling and administrative expenses      112,590       43,995       73,183

Store closing charge (1)                       -            -            -

Amortization of excess
  reorganization value (2)                14,527        5,819            -

Asset impairment                               -            -            -

Operating profit (loss)                     (815)         113        6,141

Gain (loss) on disposal of assets           (117)         (90)         114

Interest income                              385           56           69

Interest expense                          (8,408)      (3,199)      (5,639)

Income (loss) before reorganization
  items, income taxes and
  extraordinary items                     (8,955)      (3,120)         685

Reorganization items (3)                       -            -      (25,996)

Income tax provision                      (1,689)           -            -

Loss before extraordinary items          (10,644)      (3,120)     (25,311)

Extraordinary items (4)                        -            -       63,118

Net income (loss)                      $ (10,644)   $  (3,120)    $ 37,807

Basic and diluted net income (loss)
  per common share                     $   (2.23)   $   (0.66)    $   1.16

                                           1/3/98      12/28/96     8/10/96
Consolidated Balance Sheet Data:

  Total assets                         $ 172,768    $ 176,123     $ 139,217

  Long-term obligations, including
    current portion of long-term
    obligations                        $  86,002    $  80,568     $ 124,411

  Redeemable common stock (5)          $       -    $       -     $      17

  Stockholders' equity (deficit)       $  42,324    $ 52,941      $ (38,057)



                                       9



               NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA
                               (In thousands)


(1)   The Company recorded a $2,823 store closing charge related to seven
      stores closed in January 2001.  The charge was recorded to write-off
      the fixed assets, to recognize expenses attributable to closing the
      stores, and to accrue for the remaining lease obligations.
      Additionally, a charge of $1,423 was recorded in cost of sales to
      reflect a reduction to inventory attributable to the closeout of the
      inventory.  In the aggregate, the Company recorded a $4,246 charge
      related to the closing of these seven stores.

(2)   The Company's reorganization value in excess of amounts allocable to
      identifiable assets, established in accordance with "fresh-start"
      reporting, of $40,908 was amortized on a straight-line basis over three
      years.  The excess reorganization value was fully amortized during the
      Company's 1999 third quarter ended September 11, 1999.

(3)   As a result of the Company's Restructuring, the Company recorded certain
      reorganization expenses separately in accordance to SOP 90-7.
      Reorganization items for 1996 consist of: (a) $7,200 of allowed claims in
      excess of liabilities; (b) $4,250 in professional fees; (c) $6,386 in
      employee buyout expenses; and (d) $8,160 in adjusting certain assets and
      liabilities to estimated fair value.

(4)   Extraordinary items during 1996 consist of obligations of the Company that
      were discharged by the Bankruptcy Court pursuant to the Company's Plan of
      Reorganization.

(5)   Common Stock held by management investors prior to the Effective Date is
      presented as redeemable common stock and excluded from stockholder's
      equity since the Company had agreed to repurchase such shares under
      certain defined conditions, such as death, retirement or permanent
      disability.




                                       10



ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

Results of Operations

		General

			The table below sets forth selected items from the Company's
Consolidated Statements of Operations as a percentage of net sales for the
periods indicated:

                                                 Fiscal Year

                                         2000         1999	        1998

Sales, net                              100.00%      100.00%       100.00%
Cost of sales                            76.68        76.02         75.96
  Gross profit                           23.32        23.98         24.04
Selling and administrative expenses.     22.18        21.55         21.59
Store closing charge                      0.47         -             -
Amortization of excess
  reorganization value                    -            1.23          2.58
Asset impairment                          -            0.17          -
Operating profit (loss)                   0.67         1.03         (0.13)
Gain (loss) on disposal of assets        (0.01)        -             0.01
Interest income                           0.13         0.10          0.08
Interest expense                         (1.77)       (1.61)        (1.60)
Loss before income taxes                 (0.98)       (0.48)        (1.64)
Income tax provision                      -           (0.28)        (0.36)

Net loss                                 (0.98)%      (0.76)%       (2.00)%

Comparison of Fifty-Two Weeks Ended December 30, 2000 ("2000"), with Fifty-Two
Weeks Ended January 1, 2000 ("1999").

            Net sales increased $41.2 million, or 7.4%, from $559.6 million
for 1999 to $600.8 million for 2000.  The increase in sales is attributable
to the acquisition of nine stores in April 1999, the acquisition of four
stores in November 1999, the acquisition of three stores in February 2000,
and the acquisition of three stores in April 2000, partially offset by a
4.4% decrease in comparable store sales and the closing of one store in 1999.
The decrease in comparable store sales is the result of competitive openings
during fiscal year 2000, the advancement of purchases by customers into the
final week of 1999 due to uncertainty with the year 2000 year-end transition,
a labor dispute at AWG, and the cycling of strong promotions in 1999.

		There were 13 significant competitive openings during 2000,
consisting of: six Wal-Mart Neighborhood Markets and three Wal-Mart
Supercenters, in Oklahoma City; one Wal-Mart Neighborhood Market in Tulsa;
one United Supermarket in Amarillo, Texas; and, one Wal-Mart Supercenter and
one independent store, in rural Oklahoma.  Based upon currently available
public information, the Company anticipates that during 2001, Wal-Mart will
open two Supercenters and four Neighborhood Markets and Albertsons will open
one store, while regional chains and independents could open 3 additional
stores, for a total of ten competitive openings.  Of these ten stores, the
Company expects that there will be two supercenters and one neighborhood
market in Oklahoma City; three neighborhood markets, one Albertsons and one
independent in the Tulsa Market; and, one independent each in Amarillo and
rural Oklahoma.

		The AWG labor dispute involved AWG's warehousing and transportation
employees and impacted the Company's sales through informational leaflets
dissuading customers from patronizing Company stores, through inaccurate store
order fulfillment, and late deliveries.  Although the labor dispute was resolved
in mid-June 2000, management believes that the impact of the dispute continued
into the beginning of the first few weeks of the third quarter.  The most
significant impact of the labor dispute is the reduced annual AWG patronage
rebate which had an estimated $1.6 million negative impact on the Company's
results.



                                       11


		During the fourth quarter of 2000, the Company made the decision to
close seven stores that had become unprofitable and in which the Company saw
limited potential.  These seven stores in the aggregate had sales of $32.5
million, and were closed by the end of January 2001.  In the fourth quarter of
2000, the Company recorded closed store expenses in the amount of $4.2 million.
These expenses include a $1.4 million charge relating to the closeout of
inventory which is included in cost of sales, and a $2.8 million charge relating
to expenses incurred to close the stores, the write-off of fixed assets and the
accrual of remaining lease obligations.

		The Company also has plans for an ongoing store development and
remodeling program, and believes that it will continue to experience temporary
disruptions and lost sales during store remodelings in the future.  The extent
to which this program is executed is contingent upon the availability of
capital.

		Based in part on the anticipated impact of proposed and recent new
store openings and remodelings by competitors, management believes that market
conditions will remain highly competitive, placing continued pressure on
comparable store sales and net sales.  Management believes that comparable store
sales will decline approximately 7.8%, during the first quarter of 2001.
In response to this highly competitive environment, the Company intends to
utilize it's merchandising strategy to emphasize a competitive pricing
structure, as well as leadership in quality products and services, selection
and convenient store locations.  The in-store merchandising strategy combines a
strong presentation of fresh products along with meaningful values throughout
the store on a wide variety of fresh and shelf stable products each week. The
Company's main vehicle of value delivery is its Homeland Savings Card, a
customer loyalty card program, which allows customers with the card the
opportunity to purchase over 2,000 items at a reduced cost each week.
Additionally, the Company continues the use of market research in order to
maintain a better understanding of customer behavior and trends in certain
markets.  Finally, the Company intends to upgrade its stores by focusing its
discretionary capital expenditures on projects that will improve the overall
appeal of its stores to targeted customers.

		Gross profit as a percentage of sales decreased 0.7% from 24.0% for
1999, to 23.3% for 2000.  The decrease in gross profit margin is primarily
attributable to the reduction in the annual AWG patronage rebate due to the AWG
labor dispute and the one-time charge for the seven closed stores, both issues
which have been previously discussed.  Excluding these two events, gross profit
as a percentage of sales decreased 0.2% from 24.0% for the 52 weeks ended
January 1, 2000, to 23.8% for the 52 weeks ended December 30, 2000.  The
remaining decrease in gross margin reflects the impact of specific promotional
activities as the Company responded to certain new competitive store openings;
special advertisements for the grand openings of the Company's acquired stores;
and, the increased cost of goods for pharmaceutical products.

		Selling and administrative expenses as a percentage of sales
increased 0.6% from 21.6% for 1999, to 22.2% for 2000.  The increase in the
expense ratio is attributable to increased occupancy costs associated with the
acquired stores; to increased depreciation costs attributable to the Company's
capital expenditure program for store remodels and maintenance and
modernization; to increased labor costs; to increases in the cost of store
supplies; to increases in utility costs; to start-up expenses related to the
Company's February and April 2000 acquisitions as well as the opening of the
Company's new store in September, partially offset by a reduction in the
reserves for doubtful accounts due to a collection of a fully reserved
receivable of $0.6 million and improved collections experience and a reduction
in general liability reserves due to improved claims experience.  The Company
continues to review alternatives to reduce selling and administrative expenses
and cost of sales in order to provide opportunities to pass additional savings
along to its customers in the form of price reductions in certain categories.

		The Company recorded a store closing charge of $2.8 million in 2000
related to the closing of seven stores in January 2001.  The store closing
charge relates to expenses incurred to close the stores, to write-off fixed
assets and to accrue remaining lease obligations. Additionally, the Company
recorded, as a charge to cost of sales in 2000, a $1.4 million expense


                                      12



related to the closeout of merchandise for these stores.  Combining
these two elements, the total estimated cost of closing these stores was
$4.2 million.

		The amortization of the excess reorganization value amounted to $6.9
million in 1999.  The excess reorganization value was amortized over three
years, on a straight-line basis, and became fully amortized in the third quarter
of 1999.

		The Company recorded an asset impairment provision in 1999 in the
amount of $0.9 million related to a previously closed store.  The provision
reduced the carrying value of the real property to a current estimate of fair
value.

		Operating profit decreased $1.8 million from $5.8 million for 1999,
to $4.0 million for 2000.  Excluding the $4.2 million store closing costs from
the 2000 results and the amortization of excess reorganization value and asset
impairment from the 1999 results, operating profit decreased $5.3 million from
$13.6 million for 1999, to $8.3 million for 2000.  The decline in operating
profit reflects the decline in gross profit as a percentage of sales combined
with the increase in selling and administrative expenses.

		Interest expense, net of interest income, increased $1.5 million
from $8.4 million in 1999 to $9.9 million in 2000.  The increase reflects
additional interest expense attributable to the acquired stores and increases in
variable interest rates, partially offset by additional interest income from the
interest bearing certificates of AWG.  During 2001, the Company anticipates that
interest expense will increase primarily due to the increased debt.  See
"Liquidity and Capital Resources."

		The Company did not record income tax expense or benefit for 2000.
In accordance with SOP 90-7, the tax benefit realized from utilizing pre-
reorganization net operating loss carryforwards is recorded as a reduction of
the reorganization value in excess of amounts allocable to identifiable assets
rather than realized as a benefit on the statement of operations. Additionally,
upon the completion of the amortization of reorganization value in excess of
amounts allocable to identifiable assets, the tax benefit realized from
utilizing pre-reorganization net operating loss carryforwards is recorded
as a reduction of other intangibles existing at the reorganization date until
reduced to zero and then as an increase to stockholder's equity.  At December
30, 2000, the Company had a tax net operating loss carryforward of
approximately $32.5 million, which may be utilized to offset future taxable
income to the limited amount of $11.4 million in 2001 and $3.3 million per year
thereafter.  Due to the uncertainty of realizing future tax benefits, a full
valuation allowance was deemed necessary to offset entirely the net deferred
tax assets as of December 30, 2000.

		Net loss increased $1.6 million from a net loss of $4.3 million,
$0.87 per share for 1999, to a net loss of $5.9 million, or $1.20 per share for
2000.  Excluding the $4.2 million store closing costs from the 2000 results, the
amortization of excess reorganization value and asset impairment from the 1999
results, and the loss on disposal of assets from both years, net income declined
$4.8 million from net income of $3.2 million, or $0.65 per share in 1999, to a
net loss of $1.6 million or $0.32 per share for 2000.

		EBITDA (as defined hereinafter) decreased $4.2 million from $24.3
million, or 4.4% of sales, in 1999 to $20.1 million, or 3.4% of sales in 2000.
The Company believes that EBITDA is a useful supplemental disclosure for the
investment community. EBITDA, however, should not be construed as a substitute
for earnings or cash flow information required under generally accepted
accounting principles.

		Comparison of Fifty-Two Weeks Ended January 1, 2000 ("1999"), with
Fifty-Two Weeks Ended January 2, 1999 ("1998").

		Net sales increased $30.0 million, or 5.7%, from $529.6 million for
1998 to $559.6 million for 1999.  The increase in sales is attributable to the
acquisition of nine stores in April 1999, the acquisition of four stores in
November 1999, and a 1.2% increase in comparable store sales, partially offset
by the closing of one store in 1999.  The increase in comparable store sales


                                   13



during 1999 was achieved despite 8 competitive openings, including 4 new
Albertson's, 3 new Wal-Mart Supercenters and 1 new independent store, the loss
of sales during the remodeling of Company stores, and limited inflation in
selected food categories. Sales in comparable stores were positively impacted
by grand opening events at certain of the Company's stores, incremental
improvements from continued usage of frequency card based promotions and direct
marketing efforts, and additional sales in the final week of the year
attributable to year 2000 events.

		Gross profit as a percentage of sales of 24.0% was the same as in
1998. Gross profit margin reflects the impact of specific promotional activities
as the Company responded to certain new competitive store openings and special
advertisements for the grand openings of the Company's remodeled and acquired
stores; the increased cost of goods for pharmaceutical products; and, the
increased shrink in certain perishable departments. The pressure on gross profit
margin described above was offset by a general improvement in the management of
promotional spending and the implementation of initiatives to lower cost of
goods.

	Selling and administrative expenses as a percentage of sales of
21.6% was the same as in 1998.  The expense ratio includes improvements in labor
productivity; reductions in costs associated with advertising expenditures;
increased sales which has allowed the Company to leverage certain fixed and
administrative costs; the reduction in reserves for general liability expenses
as a result of improved claims experience by the Company; and, the return of net
premiums relating to the final settlement of pre-bankruptcy workers compensation
claims.  The improvements in the expense ratio described above were offset by an
increase in expenses associated with the acquired stores, an increase in
depreciation costs attributable to the Company's capital expenditure program for
store remodels and maintenance and modernization, and an increase in the reserve
for doubtful accounts relating to the uncertainty of an accounts receivable from
one of the Company's vendors.

		The amortization of the excess reorganization value amounted to $6.9
million in 1999.  The excess reorganization value was amortized over three
years, on a straight-line basis, and became fully amortized in the third quarter
of 1999.

		The Company recorded an asset impairment provision in the amount of
$0.9 million related to a previously closed store.  The provision reduced the
carrying value of the real property to a current estimate of fair value.

		Interest expense, net of interest income, increased $0.3 million
from $8.1 million in 1998 to $8.4 million in 1999.  The increase reflects
additional interest expense attributable to the acquired stores and increases in
variable interest rates, partially offset by additional interest income from the
interest bearing certificates of AWG. See "Liquidity and Capital Resources."

		The Company recorded $1.6 million of income tax expense for 1999, of
which $1.5 million was deferred income tax. At January 1, 2000, the Company had
a tax net operating loss carryforward of approximately $29.5 million.

		EBITDA increased $1.4 million from $22.9 million, or 4.3% of sales,
in 1998 to $24.3 million, or 4.4% of sales in 1999.

Liquidity and Capital Resources

		Debt.  The primary sources of liquidity for the Company's
operations have been borrowings under credit facilities and internally
generated funds.

		On December 17, 1998, the Company entered into a Loan Agreement
with National Bank of Canada ("NBC"), as agent and lender, and two other
lenders, Heller Financial, Inc. and IBJ Whitehall Business Credit, Inc.,
under which these lenders provide a working capital and letter of credit
facility ("Revolving Facility"), a term loan ("Term Loan") and an acquisition
term loan ("Acquisition Term Loan") through August 2, 2002.


                                     14



		The Loan Agreement, as amended, permits the Company to borrow under
the Revolving Facility up to the lesser of (a) $37.0 million or (b) the
applicable borrowing base.  The Company, with the consent of lenders, can access
an over-advance facility which allows the Company to borrow amounts above the
borrowing base but not above the total Revolving Facility.  The lenders have
consented to the use of the over-advance facility through April 30, 2001.
Funds borrowed under the Revolving Facility are available for general corporate
purposes of the Company.  Effective April 24, 2001, the Loan Agreement was
amended and the changes are hereinafter discussed within this Liquidity and
Capital Resources section.

		The Term Loan, which had an outstanding balance as of December 30,
2000, of $8.8 million, represents the remaining balance of $5.0 borrowed under
the prior loan agreement to finance costs and expenses associated with the
consummation of the restructuring of the Company under its bankruptcy
reorganization proceedings in August, 1996, plus $5.0 million borrowed in
connection with the termination of the Acquisition Term Loan, permitting a
corresponding reduction in the Revolving Facility, in April 2000.  The Company
is required to make quarterly principal paydowns of approximately $0.6 million.


	The interest rate payable quarterly, or monthly if the borrowings are
characterized as a London Interbank Offered Rate Loan, under the Loan Agreement
is based on the prime rate publicly announced by National Bank of Canada from
time to time in New York, New York plus a percentage which varies based on a
number of factors, including: (a) whether it is the Revolving Facility or the
Term Loan; (b) the time period; and (c) whether the Company elects to use a
London Interbank Offered Rate.

		The obligations of the Company under the Loan Agreement are
secured by liens on, and security interests in, substantially all of the
assets of Homeland and are guaranteed by Holding, with a pledge of its
Homeland stock to secure its obligation.

		The Loan Agreement includes certain customary restrictions on
acquisitions, asset dispositions, capital expenditures, consolidations and
mergers, distributions, divestitures, indebtedness, liens and security
interests and transactions with affiliates and payment of dividends.  The
Loan Agreement also requires the Company to comply with certain financial
and other covenants.

            In addition, the Loan Agreement provides for acceleration of
principal and interest payments in the event of certain material adverse
changes, as determined by the lender.

		As of August 2, 1996, the Company entered into an Indenture with
Fleet National Bank (predecessor to State Bank and Trust Company), as trustee,
under which the Company issued $60.0 million of 10% Senior Subordinated Notes
due 2003 ("New Notes"). The New Notes, which are unsecured, will mature on
August 1, 2003.  Interest on the New Notes accrues at the rate of 10% per
annum and is payable on February 1 and August 1 of each year.

		The Indenture contains certain customary restrictions on
acquisitions, asset sales, consolidations and mergers, distributions,
indebtedness, transactions with affiliates and payment of dividends.

		Working Capital and Capital Expenditures.  The Company's primary
sources of capital have been borrowing availability under the Revolving
Facility and cash flow from operations, to the extent available.  The Company
uses the available capital resources for working capital needs, capital
expenditures and repayment of debt obligations.

		The Company's EBITDA (earnings before net interest expense, taxes,
depreciation and amortization, store closing charges, asset impairment, and
gain/loss on disposal of assets), as presented below, is the Company's
measurement of internally-generated operating cash for working capital needs,
capital expenditures and payment of debt obligations:




                                       15



                            52 Weeks Ended    52 Weeks Ended    52 Weeks Ended
                          December 30, 2000   January 1, 2000   January 2, 1999

Loss before income taxes      $ (5,889)         $ (2,726)          $ (8,716)

Interest income                   (751)             (569)              (426)

Interest expense                10,612             9,011              8,484

(Gain) loss on disposal
    of assets                       61                15                (34)

Store closing charges            4,246                 -                  -

Amortization of excess
   reorganization value	             -             6,890             13,672

Asset impairment                     -               925                  -

Depreciation and amortization   11,849            10,774              9,923

EBITDA                        $ 20,128          $ 24,340           $ 22,903

As a percentage of sales         3.35%             4.35%              4.32%

As a multiple of interest
   expense, net of interest
   income                        2.04x             2.88x              2.84x

            Net cash provided by operating activities decreased $8.4 million,
from $13.2 million in 1999 to $4.8 million in 2000.  The increase principally
reflects the decrease in EBITDA, trade payables and other liabilities partially
offset by decreases in accounts receivable and inventory.

            Net cash used in investing activities decreased $1.5 million, from
$10.6 million in 1999 to $9.1 million in 2000.  The Company invested $5.5
million, $9.0 million, and $12.4 million in capital expenditures for 2000, 1999,
and 1998, respectively.

            In April 1999, the Company completed its acquisition of nine stores
from AWG, in eastern Oklahoma.  The net purchase price was $1.3 million which
represents $5.6 million for real property, and fixtures and equipment, plus $2.3
million for inventory, $0.2 million for transaction costs, offset by $6.8
million in long-term debt assumed by the Company.  The Company acquired title to
one store and leases the remaining eight from AWG.  The one store to which
Homeland acquired title in Pryor, Oklahoma, was closed (and subsequently sold to
a non-grocery user) as a result of the proximity to an existing Company store.
The Company financed this acquisition principally through the assumption of $6.8
million in long-term debt, together with increased borrowings under its
Revolving Facility. The debt incurred by the Company to AWG is secured by liens
on, and security interest in, the assets associated with the nine stores.
Subsequent to the closing of the acquisition, the Company repaid a portion of
its indebtedness to AWG which related to inventory and the Pryor store which was
sold.  Therefore, AWG released its security interest in the assets relating to
the Pryor store and the inventory.

            In November 1999, the Company completed its acquisition of four
stores from Brattain Foods, Inc. ("BFI"), in Muskogee, Oklahoma.  The net
purchase price was $1.1 million which represents $6.0 million for fixtures and
equipment, plus $1.9 million for inventory, $0.2 million for transaction costs,
offset by $7.0 million of long-term debt (BFI's obligation to AWG) assumed by
the Company.  The Company leased three of the stores from AWG and leased the
fourth from a third party.  The Company financed this acquisition principally
through the assumption of $7.0 million in long-term debt, together with
increased borrowings under its Revolving Facility.  The debt incurred by the
Company to AWG is secured by liens on, and security interest in, the assets
associated with the four stores.  Subsequent to the closing of the acquisition,
the Company repaid a portion of its indebtedness to AWG, which related to
inventory and therefore, AWG released its security interest in the inventory.



                                    16



            In February 2000, the Company completed its acquisition of three
stores from Belton Food Center, Inc. ("BFC") in Oklahoma City.  The net
purchase price, prior to the closed store reserve discussed below, was $0.2
million which represents $4.2 million for fixtures and equipment, and
leasehold improvements, plus $2.0 million for inventory and $0.2 million for
transaction costs, offset by $6.2 million of long-term debt (BFC's obligation
to AWG) assumed by the Company.  The Company leases all three of the stores
from AWG. The Company financed this acquisition principally through the
assumption of $6.2 million in long-term debt, together with increased
borrowings under its Revolving Facility.  The debt incurred by the Company to
AWG is secured by liens on, and security interest in, the assets associated
with the three stores. Subsequent to the closing of the acquisition, the
Company repaid a portion of its indebtedness to AWG, which related to
inventory and therefore, AWG released its security interest in the inventory.
In April 2000, the Company closed one of the acquired stores due to its
proximity to other Company stores and established a reserve, which
approximated $1.3 million, for future rent payments and other holding costs.
Establishment of the reserve increased the goodwill balance associated with
the acquisition.  In October 2000, the lease on the closed store was assigned
relulting in a reduction in the reserve and goodwill of $0.5 million.
Substantially all other costs reserved were paid in 2000.

            In April 2000, the Company completed its acquisition of three
Baker's Supermarkets.  The purchase price was approximately $4.2
million, which represents $2.4 million for fixtures and equipment, leasehold
improvements, and a non-compete agreement, $1.6 million for inventory,
and approximately $0.2 million in transaction costs. In conjunction with the
transaction, the Company also recorded $1.6 million of identified intangibles
and $1.6 million in liabilities related to an unfavorable contract.  The
The unfavorable contract represents a five-year minimum purchase commitment
and is expected to result in payments of $449, $864 and $321 in 2001, 2002
and 2003, respectively.  The related intangible asset is amortized on a
straight-line basis over the life of the contract.  The Company will sublease
the three stores. On September 15, 2000, the Company subsequently leased a
fourth location upon the completion of its construction. Concurrent with the
opening of the acquired store, the Company closed an existing store resulting
in a charge to operations of approximately $0.3 million, which included future
rent payments, other holding costs, and the write-off of property, plant and
equipment.  Payments of rent and other holding costs are expected to continue
through 2001.  The Company financed this acquisition principally through
increased borrowings under its working capital facility.

            As of December 30, 2000, the Company had an outstanding balance on
these assumed obligations to AWG of $10.3 million.  The loans have a seven year
term with principal and interest payments scheduled each week, and have a
variable interest rate equal to the prime rate plus 100 basis points. Under the
various agreements with respect to these acquisitions, the individual markets
where the stores are located are subject to non-compete, supply and right-of-
first-refusal agreements with AWG.  In addition to the other customary terms
associated with a right-of-first refusal agreement, the right-of-first refusal
agreement provides for the repurchase by AWG of the stores based upon the
occurrence of certain exercise events.  The exercise events include, among
other events, a change in control of Homeland and a transfer of more than 20%
of the ownership interest of Holding or Homeland.

            Net cash provided by financing activities increased $7.1 million,
from $2.9 million used in financing activities in 1999 to $4.2 million provided
by financing activities in 2000.  The increase primarily reflects the increase
in the Term Loan and lower principal payments of the obligations during 2000.

            The Company considers its capital expenditure program a strategic
part of the overall plan to support its market competitiveness.  Cash
capital expenditures for 2001 are expected to be at approximately $2.0 million.
The Loan Agreement limits the Company's capital expenditures for 2001 to $5.0
million.  The estimated 2001 capital expenditures of $2.0 is expected to be
invested primarily in the on-going maintenance and modernization of certain


                                     17



stores and does not include provisions for acquisitions. The funds for
the capital expenditures are expected to be provided by internally-generated
cash flows from operations and borrowings under the Loan Agreement.  As of
December 30, 2000, the Company had under its Revolving Facility $29.2
million of borrowings, $30,000 letter of credit outstanding and $6.0 million
of availability.

            The markets in which the Company operates remain increasingly
competitive negatively affecting the the Company's liquidity.  The Company's
near and long-term operating strategies focus on improving sales, improving
operational efficiencies, and the productivity of assets.  The Company intends
to pursue its merchandising strategy in an attempt to increase its sales and
the Company has devised plans to improve its gross margin and expense
performance.  Also, if necessary, the Company will close or sell under-
performing stores or assets.  Currently, the Company has letters of intent
regarding certain asset sales to transfer leases and sell property related to
four of the seven stores closed in January 2001 and to sell a parcel of
undeveloped land.  The estimated proceeds from these asset sales are $1.4
million and the transactions are subject to, among other things the signing
of definitive agreements for each transaction.  The Company has also retained
McDonald Investments Inc. as a financial advisor to explore options for re-
financing and raising capital.

            Adequate liquidity in 2001 is predicated on the Company's ability
to achieve improvements in gross margin and expense performance over
historical results and successful completion of the $1.4 million asset sale
in the second quarter of 2001.  Improvement over historical gross margin and
expense performance is expected to occur in part as a result of the January
closing of seven underperforming stores.  Further improvement in gross margin
is projected to result from an increase in the annual AWG patronage rebate as
AWG is expected to return to a more historic level of profitability.

            The Company's lowest level of liquidity is expected to occur in
the third quarter of 2001.  If the Company is successful in meeting its cash
flow projections, including completion of the asset sale in the second quarter
of 2001, sufficient borrowings under the Revolving Facility will be available
to meet the Company's liquidity needs during the third and fourth quarters of
2001.  Furthermore, the projections do not include the potential favorable
cash flow impact of closing or selling additional underperforming stores or
assets.

            The Company believes that it continues to have the support of the
agent and the lenders to the Loan Agreement.  Effective April 24, 2001, the
Company entered into an amendment to the Loan Agreement which, among other
things, amends the financial covenants pertaining to minimum availability,
EBITDA, funded debt to EBITDA ratio, and capital expenditures.  In addition
to the covenant changes, the Loan Agreement was amended to increase the
applicable interest rates by 25 basis points and limit the use of London
Interbank Offered rates.  The Company does not expect the increase in rates
will have a material impact on its ability to meet its cash flow projections
or financial covenants.  Based on its current projections, management believes
that the Company will be able to meet the revised covenants set forth in the
Loan Agreement, as amended, throughout 2001.  If the Company is unable to meet
these revised covenants, the Company will need to obtain waivers or classify
the related borrowings as current obligations.  There can be no assurances the
Company will be able to obtain such waivers.  However, since the amendment to
the financial covenants is applicable only through 2001 and since the Loan
Agreement matures on August 2, 2002, the Company intends to refinance its
existing Loan Agreement indebtedness during 2001.  There can be no assurance
that the Company will be able to successfully refinance its existing
indebtedness on terms that are acceptable to it.

            The Company believes that cash on hand, net cash flow from
operations, proceeds from certain expected asset sales and borrowings under
the Revolving Facility will be sufficient to fund its cash requirements
through fiscal year 2001, which will consist primarily of payment of
principal and interest on outstanding indebtedness, working capital
requirements and capital expenditures.  However, there can be no assurance
that the asset sales will be consummated as planned.  The Company's future
operating performance and ability to service or refinance its current
indebtedness will be subject to future economic conditions and to financial,
business and other factors, many of which are beyond the Company's control.

            Information discussed herein includes statements that are forward-
looking in nature, as defined in the Private Securities Litigation Reform Act.
As with any forward-looking statements, these statements are subject to a
number of factors and assumptions, including competitive activities, economic
conditions in the market area and results of its future capital expenditures.
In reviewing such information, it should be kept in mind that actual results
may differ materially from those projected or suggested in such forward-looking
statements.

Inflation/Deflation

            Although the Company does not expect inflation or deflation to have
a material impact in the future, there can be no assurance that the Company's
business will not be affected by inflation or deflation in future periods.

Recent Accounting Pronouncements

            The Financial Accounting Standards Board (the "FASB") Statment of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities", as amended by Statements 137 and 138, requires
adoption by the Company on January 1, 2001.  This statement establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities.  It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
financial instruments at fair value.  The accounting for changes in the fair
value of a derivative instrument depends on the intended use of the derivative
and its resulting designation.  The adoption of this standard did not have a
material effect on the Company's financial statements.

            In September 2000, the FASB issued Statement of Financial
Accounting Standards No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities - A Replacement for FASB
Statement No. 125".  This Statement is effective for transfers occurring
March 31, 2001 and for disclosures relating to securitization transactions
and collateral for fiscal years ending after December 15, 2000.  The Company
does not expect the adoption of this standard will have a material effect
on its financial statements.


                                     18



ITEM 7a.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

            None.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

            The Company's consolidated financial statements and notes thereto
are included in this report following the signature pages.

ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

            None.






                                     19




                               PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            In accordance with the provisions of General Instruction G (3), the
information required by this item will be contained in the Company's Proxy
Statement for its Annual Stockholders Meeting to be held May 31, 2001, to be
filed with the Securities and Exchange Commission within 120 days after
December 30, 2000, and is incorporated herein by reference thereto.

ITEM 11.    EXECUTIVE COMPENSATION

            In accordance with the provisions of General Instruction G (3), the
information required by this item will be contained in the Company's Proxy
Statement for its Annual Stockholders Meeting to be held May 31, 2001, to be
filed with the Securities and Exchange Commission within 120 days after December
30, 2000, and is incorporated herein by reference thereto.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

            In accordance with the provisions of General Instruction G (3), the
information required by this item will be contained in the Company's Proxy
Statement for its Annual Stockholders Meeting to be held May 31, 2001, to be
filed with the Securities and Exchange Commission within 120 days after December
30, 2000, and is incorporated herein by reference thereto.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            In accordance with the provisions of General Instruction G (3), the
information required by this item will be contained in the Company's Proxy
Statement for its Annual Stockholders Meeting to be held May 31, 2001, to be
filed with the Securities and Exchange Commission within 120 days after December
30, 2000, and is incorporated herein by reference thereto.







                                    20



                               PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

      The following documents are filed as part of this Report:

	(a)   Financial Statements and Exhibits.

            1.    Financial Statements.  The Company's financial statements are
included in this report following the signature pages. See
Index to Financial Statements on page F-1.

            2.    Exhibits.  See attached Exhibit Index on page E-1.

      (b)   Reports on Form 8-K.  No reports on Form 8-K were filed during the
last quarter of the period covered by this report.







                                      21




                               SIGNATURES


            Pursuant to the requirements of Section 13 or 15(d) 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:      April 24, 2001              By:     / s /  David B. Clark
                                               David B. Clark, President
                                               & C.E.O.


            Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.


        Signature                      Title                         Date

  / s /   John A. Shields        Chairman of the Board         April 24, 2001
John A. Shields


  / s /   David B. Clark         President, Chief Executive    April 24, 2001
David B. Clark                   Officer and Director
                                 (Principal Executive Officer)


  / s /  Wayne S. Peterson       Senior Vice President/        April 24, 2001
Wayne S. Peterson	               Finance, C.F.O. and Secretary
                                 (Principal Financial Officer)


  / s /  Deborah A. Brown        Vice President, Controller,   April 24, 2001
Deborah A. Brown		         Treasurer and Asst. Secretary
				         (Principal Accounting Officer)






                                    II-1





	Signature                          Title                       Date


  / s /   Robert E. (Gene) Burris      Director                April 24, 2001
Robert E. (Gene) Burris


  / s /   Edward B. Krekeler, Jr.      Director                April 24, 2001
Edward B. Krekeler, Jr.


  / s /   Laurie M. Shahon             Director                April 24, 2001
Laurie M. Shahon


  / s /   William B. Snow              Director                April 24, 2001
William B. Snow


  / s /   David N. Weinstein           Director                April 24, 2001
David N. Weinstein






                                     II-2



                     INDEX TO FINANCIAL STATEMENTS

                     HOMELAND HOLDING CORPORATION
                   Consolidated Financial Statements




Report of Independent Accountants	                            F-2

Consolidated Balance Sheets as of December 30, 2000,
  and January 1, 2000	                                        F-3

Consolidated Statements of Operations and
  Comprehensive Income for the 52 weeks ended
  December 30, 2000,  January 1, 2000, and
  January 2, 1999	                                              F-5

Consolidated Statements of Stockholders' Equity
  for the 52 weeks ended December 30, 2000,
  January 1, 2000, and January 2, 1999 	                      F-6

Consolidated Statements of Cash Flows
  for the 52 weeks ended December 30, 2000,
  January 1, 2000, and January 2, 1999	                      F-7

Notes to Consolidated Financial Statements	                F-9






                                     F-1




Report of Independent Accountants

To the Board of Directors and Stockholders of
Homeland Holding Corporation

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations and comprehensive income, stockholders'
equity and cash flows present fairly, in all material respects, the financial
position of Homeland Holding Corporation and its subsidiaries (the "Company")
at December 30, 2000 and January 1, 2000, and the results of their operations
and their cash flows for the 52 weeks ended December 30, 2000, January 1,
2000, and January 2, 1999, in conformity with accounting principles generally
accepted in the United States of America.  These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for our
opinion.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 13 to the
financial statements, the increasingly competitive market conditions under
which the Company operates has negatively impacted the Company's liquidity and
may continue to in the future.  This raises substantial doubt about the
Company's ability to continue as a going concern.  Management's plans in regard
to these matters are also described in Note 13.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.



PRICEWATERHOUSECOOPERS LLP
March 14, 2001, except for Note 13, as to which the date is April 24, 2001





                                   F-2



              HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS

           (In thousands, except share and per share amounts)




                                         December 30,              January 1,
                                            2000                      2000
Current assets:
  Cash and cash equivalents	           $   10,198              $   10,237
  Receivables, net of allowance for
    uncollectible accounts of $331
    and $1,361	                           14,079                  15,028
  Inventories	                           54,707                  52,663
  Prepaid expenses and other current
    assets	                                  1,610                   2,176

     Total current assets                    80,594                  80,104

Property, plant and equipment:
  Land and land improvements                  8,797                   9,046
  Buildings	                                 21,691                  21,962
  Fixtures and equipment                     43,305                  36,818
  Leasehold improvements                     21,202                  20,446
  Software                                    7,760                   7,181
  Leased assets under capital leases          9,886                   8,737
  Construction in progress                      165                      19

                                            112,806                 104,209

Less, accumulated depreciation
  and amortization                           41,036                  30,728

Net property, plant and equipment            71,770                  73,481

Other assets and deferred charges            27,394                  22,045

     Total assets                        $  179,758              $  175,630

                                                                  Continued








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


                                  F-3




             HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

                CONSOLIDATED BALANCE SHEETS, Continued

            (In thousands, except share and per share amounts)


                 LIABILITIES AND STOCKHOLDERS' EQUITY



                                            December 30,       January 1,
                                               2000               2000
Current liabilities:
  Accounts payable - trade                  $   28,869        $   30,744
  Salaries and wages                             2,107             3,168
  Taxes	                                     3,606             3,616
  Accrued interest payable                       2,819             2,671
  Other current liabilities                      7,013             6,992
  Current portion of long-term debt              3,860             2,918
  Current portion of obligations under
    capital leases                                 564               501

     Total current liabilities                  48,838            50,610

Long-term obligations:
  Long-term debt                               104,592            94,668
  Obligations under capital leases               1,996             1,197
  Other noncurrent liabilities                   3,235             1,501

     Total long-term obligations               109,823            97,366

Commitments and contingencies	                       -                 -

Stockholders' equity:
  Common stock $0.01 par value,
    authorized - 7,500,000 shares,
    issued 4,925,871 shares and
    4,917,860 shares at December 30,
    2000, and January 1, 2000,
    respectively                                    49                49
  Additional paid-in capital                    56,274            56,254
  Accumulated deficit                          (34,538)          (28,649)
  Accumulated other comprehensive
    income                                        (688)                -
     Total stockholders' equity                 21,097            27,654

Total liabilities and stockholders'
     equity                                 $  179,758        $  175,630



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



                                   F-4



              HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                      AND COMPREHENSIVE INCOME

            (In thousands, except share and per share amounts)




                                  52 weeks          52 weeks        52 weeks
                                    ended             ended           ended
                                 December 30,        January 1,      January 2,
                                     2000               2000           1999

Sales, net                       $  600,835        $  559,554      $  529,576

Cost of sales                       460,735           425,394         402,261

   Gross profit                     140,100           134,160         127,315

Selling and administrative
   expenses                         133,244           120,594         114,335
Amortization of excess
   reorganization value                   -             6,890          13,672
Store closing charge                  2,823                 -               -
Asset Impairment                          -               925               -

   Operating profit (loss)            4,033             5,751            (692)

Gain (loss) on disposal of assets       (61)              (15)             34
Interest income                         751               569             426
Interest expense                    (10,612)           (9,011)         (8,484)

Loss before income taxes             (5,889)           (2,706)         (8,716)

Income tax provision                      -            (1,588)         (1,875)


Net loss                         $   (5,889)       $   (4,294)     $  (10,591)

Other comprehensive loss
   Minimum pension liability
     adjustment                  $     (688)       $        -      $        -

Comprehensive loss               $   (6,577)       $   (4,294)     $  (10,591)
Basic and diluted earnings per
   share:
   Net loss per share            $    (1.20)       $    (0.87)     $    (2.18)
Weighted average shares
   outstanding                    4,923,236         4,911,958       4,857,130



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

                                   F-5



                 HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

              (In thousands, except share and per share amounts)


				                                        Additional
                                       Common Stock              Paid-In
                                     Shares      Amount          Capital

Balance, January 3, 1998		4,820,637   $    48          $ 56,040

Net loss                                  -           -                 -

Issuance of common stock               83,780         1               134

Balance, January 2, 1999            4,904,417        49            56,174

Net loss                                  -           -                 -

Issuance of common stock               13,443         -                80

Balance, January 1, 2000            4,917,860        49            56,254

Net loss                                  -           -                 -

Other comprehensive loss
   Minimum pension liability
      adjustment                          -           -                 -

Issuance of common stock                8,011         -                20

Balance, December 30, 2000          4,925,871   $    49          $ 56,274

                                                                Continued



                 HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)

              (In thousands, except share and per share amounts)



                                              Accumulated
                                                 Other            Total
                               Accumulated    Comprehensive    Stockholders'
                                 Deficit         Income           Equity


Balance, January 3, 1998        $(13,764)      $     -          $ 42,324

Net loss                         (10,591)            -           (10,591)

Issuance of common stock               -             -               135

Balance, January 2, 1999         (24,355)            -            31,868

Net loss                          (4,294)            -            (4,294)

Issuance of common stock               -             -                80

Balance, January 1, 2000         (28,649)            -            27,654

Net loss                          (5,889)            -            (5,889)

Other comprehensive loss
  Minimum pension liability
    adjustment                         -          (688)             (688)

Issuance of common stock               -             -                20

Balance, December 30, 2000      $(34,538)      $  (688)         $ 21,097



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

                                  F-6




              HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF CASH FLOWS

           (In thousands, except share and per share amounts)



                                         52 weeks       52 weeks      52 weeks
                                           ended          ended         ended
                                        December 30,    January 1,    January 2,
                                            2000           2000          1999


Cash flows from operating activities:
   Net loss	                            $  (5,889)    $  (4,294)    $  (10,591)

   Adjustments to reconcile net loss
      to net cash provided by
      operating activities:
      Depreciation and amortization	       11,008        10,427          9,802
      Amortization of beneficial interest
         in operating leases	                121           121            121
      Amortization of excess
         reorganization value	                  -         6,890         13,672
      Amortization of goodwill                720           226              -
      Amortization of financing costs          62            42            120
      Loss (gain) on disposal of assets        61            15            (34)
      Store closing costs                   4,246             -              -
      Asset impairment                          -           925              -
      Deferred income taxes                     -         1,451          1,699
      Change in assets and liabilities:
         (Increase)decrease in receivables    949        (1,858)          (950)
         (Increase)decrease in inventories     55        (2,355)          (334)
         (Increase)decrease in prepaid
            expenses and other current
            assets                            400           458             54
         (Increase) in other assets
            and deferred charges           (2,478)       (2,498)        (2,487)
         Increase(decrease)in accounts
            payable - trade                (1,875)        4,597            479
         Increase(decrease) in salaries
            and wages                      (1,061)          293            319
         Increase(decrease) in taxes           47           426           (512)
         Increase(decrease) in accrued
            interest payable                  148            49              3
         Increase(decrease) in other
            current liabilities            (1,397)       (1,813)        (1,494)
         Increase(decrease) in other
            non-current liabilities          (316)           69           (531)

         Net cash provided by operating
            activities                      4,801        13,171          9,336

                                                                     Continued



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

                                    F-7




               HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued

            (In thousands, except share and per share amounts)



                                          52 weeks     52 weeks      52 weeks
                                           ended         ended         ended
                                         December 30,   January 1,    January 2,
                                            2000          2000          1999

  Cash flows from investing activities:
   Capital expenditures                    (5,497)       (8,980)       (12,404)
   Store acquisitions                      (4,224)       (2,374)             -
   Cash received from sale of assets          659           750            775

      Net cash used in investing
         activities                        (9,062)      (10,604)       (11,629)


Cash flows from financing activities:
   Borrowings under term loan               5,000             -              -
   Payments under term loan                (2,019)       (1,667)        (1,667)
   Borrowings under revolving
    credit loans                          160,126       142,707        129,567
   Payments under revolving
    credit loans                         (154,075)     (137,400)      (122,340)
   Principal payments under notes
    payable                                   (50)          (46)           (61)
   Principal payments under AWG notes      (4,278)       (5,294)             -
   Principal payments under capital
      lease obligations                      (502)       (1,237)        (1,412)
   Proceeds from issuance of common stock      20            80            135

       Net cash provided by (used in)
          financing activities              4,222        (2,857)         4,222

Net increase (decrease) in cash and
   cash equivalents                           (39)         (290)         1,929

Cash and cash equivalents at beginning
   of period                               10,237        10,527          8,598

Cash and cash equivalents at end
   of period                             $ 10,198     $  10,237      $  10,527

Supplemental information:
     Cash paid during the period for
       interest                          $ 10,442     $   8,993      $   8,419

    Cash paid during the period for
       income taxes                      $     30     $     110      $     100

Supplemental schedule of non-cash
    investing activities:
    Capital lease obligations assumed    $  1,363     $       -      $     453
    Debt assumed in acquisitions         $  6,162     $  13,706      $       -




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

                                  F-8



             HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

           (In thousands, except share and per share amounts)


1.    Organization:

      Homeland Holding Corporation ("Holding"), a Delaware corporation, was
incorporated on November 6, 1987, but had no operations prior to November 25,
1987.  Effective November 25, 1987, Homeland Stores, Inc. ("Homeland"), a
wholly-owned subsidiary of Holding, acquired substantially all of the net
assets of the Oklahoma Division of Safeway Inc. Holding, its consolidated
subsidiary, Homeland, Homeland's wholly-owned subsidiary, SLB Marketing, Inc.,
and SLB's wholly-owed subsidiary, JCH Beverage, Inc., are collectively
referred to herein as the "Company."  The Company is a leading supermarket
chain in the Oklahoma, southern Kansas and Texas Panhandle regions. The
Company operates in four distinct market places: Oklahoma City, Oklahoma;
Tulsa, Oklahoma; Amarillo, Texas; and certain rural areas of Oklahoma, Kansas
and Texas.

      Holding has guaranteed substantially all of the debt issued by Homeland.
Holding is a holding company with no significant operations other than its
investment in Homeland. Separate financial statements of Homeland are not
presented herein since they are identical to the consolidated financial
statements of Holding in all respects except for stockholders' equity which
is as follows:

                                              December 30,      January 1,
		                                     2000              2000
	   Homeland stockholder's equity:
	      Common stock, $.01 par value,
             authorized, issued and
             outstanding 100 shares           $       1         $       1
 	    Additional paid-in capital             56,322            56,302
           Accumulated deficit                  (34,538)          (28,649)
           Accumulated other comprehensive
             income                                (688)                -

             Total Homeland stockholder's
               equity                         $  21,097         $  27,654

2.    Summary of Significant Accounting Policies:

      Fiscal year - The Company has adopted a fiscal year which ends
on the Saturday nearest December 31.

      Basis of consolidation - The consolidated financial statements
include the accounts of Homeland Holding Corporation and its wholly-owned
subsidiaries. All significant intercompany balances and transactions have
been eliminated in consolidation.

      Revenue recognition - The Company recognizes revenue at the
"point of sale," which occurs when groceries and related merchandise are
sold to its customers.  The Company was required to adopt Securities and
Exchange Commission Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" in the fourth quarter of 2000.
The impact of adopting this guidance had no effect on the Company's
financial statements for any year presented.

      Concentrations of credit and business risk - The Company purchases
approximately 70% of its products from Associated Wholesale Grocers, Inc.
("AWG").  Although there are similar wholesalers that could supply the
Company with merchandise, if AWG were to discontinue shipments, this
could have a material adverse effect on the Company's financial condition.
The Company receives certain rebates and allowances from AWG as well as
an annual distribution from AWG's cooperative arrangements.  A portion of


                                F-9



             HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

          (In thousands, except share and per share amounts)



2.     Summary of Significant Accounting Policies, continued:

the annual distribution is in the form of cash, while the remainder is in
the form of patronage certificates.  Receivables from AWG and the AWG
patronage refund certificates subject the Company to a concentration of
credit risk.  Other financial instruments which potentially subject the
Company to concentrations of credit risk consist of principally of
temporary cash investments and non-AWG receivables.  The Company places
its temporary cash investments with high quality financial institutions.
Concentration of credit risk with respect to non-AWG receivables are
limited due to the diverse nature of those receivables, including the
large number of retail customers within the region and receivables from
vendors throughout the country.

      Cash and cash equivalents -  For purposes of the statements of cash
flows, the Company considers all short-term investments with an original
maturity of three months or less when purchased to be cash equivalents.
Book overdrafts of $6,361 and $4,101, as of December 30, 2000 and January
1, 2000, respectively, are included in accounts payable.

      Inventories -  Inventories are stated at the lower of cost or market,
with cost being determined primarily using the gross margin method.

      Property, plant and equipment - In conjunction with the emergence
from Chapter 11 proceedings in August, 1996, the Company implemented "fresh-
start" reporting and, accordingly, all property, plant and equipment was
restated to reflect reorganization value, which approximates fair value in
continued use. Depreciation and amortization, including amortization of leased
assets under capital leases, are computed on a straight-line basis over the
lesser of the estimated useful life of the asset or the remaining term of the
lease. Property, plant and equipment acquired subsequent to "fresh start" are
stated at cost. Depreciation and amortization of newly acquired assets, for
financial reporting purposes, are based on the following estimated lives:


                                                  Estimated lives
           Buildings                                   10 - 40
           Fixtures and equipment                       5 - 12.5
           Leasehold improvements                         15
           Software                                     3 - 5

      The costs of repairs and maintenance are expensed as incurred, and
the costs of renewals and betterments are capitalized and depreciated at the
appropriate rates. Upon sale or retirement, the cost and related accumulated
depreciation are eliminated from the respective accounts and any resulting gain
or loss is included in the results of operations for that period.

      Reorganization value in excess of amounts allocable to identifiable
assets -  The Company's reorganization value in excess of amounts allocable to
identifiable assets, established in accordance with "fresh start" reporting,
had been amortized on a straight-line basis over three years and became fully
amortized in the third quarter of 1999.

      Store Closings / Asset Impairment - Provision is made on a current basis
for the write-down of identified owned-store closings to their net realizable
value. For identified leased-store closings, leasehold improvements are written
down to their net realizable value and a provision is made on a current basis
if anticipated expenses are in excess of expected sublease rental income.
The Company's long-lived assets, including goodwill, are reviewed for
impairment and written down to fair value whenever events or changes in
circumstances indicate that the carrying value may not be recovable.  Goodwill
has primarily been recorded in conjunction with the four separate store


                                  F-10




              HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

         (In thousands, except share and per share amounts)




2.     Summary of Significant Accounting Policies, continued:

acquisitions.  For purposes of review, goodwill and the assets of those stores
associated with a specific acquisition are combined to determine if impairment
is appropriate.

      Other assets and deferred charges - Other assets and deferred charges
consist primarily of patronage refund certificates issued by AWG (as part of
its year-end distribution of income from AWG's cooperative operations),
beneficial interests in operating leases, and goodwill and intangibles
acquired in the Company's 1999 and 2000 acquisitions.  The beneficial interest
in operating leases is being amortized on a straight-line basis over the
remaining terms of the leases, including all available renewal option periods,
and the goodwill is being amortized over a 15 year period. The AWG patronage
refund certificates which bear annual interest of 6%, are redeemable for cash
seven years from the date of issuance.  The carrying value of certificates,
including those earned not yet received, at December 30, 2000 and January 1,
2000 was $13,884 and $11,726, respectively.  Goodwill, net of accumulated
amortization, was $10,043 and $8,011 at December 30, 2000 and January 1, 2000,
respectively.

      Earnings per share - The Company presents the two earnings per share
("EPS") amounts as required under Statement of Accounting Standard No. 128,
Earnings Per Share ("SFAS 128"). Basic EPS is computed using the weighted
average number of common shares outstanding. Diluted earnings per share is
computed using the weighted average number of common shares outstanding and
equivalent shares based on the assumed exercise of stock options and warrants
(using the treasury method).

      Advertising costs - Costs of advertising are expensed as incurred.  Gross
advertising costs for 2000, 1999, and 1998, were $9,743, $9,112, and $8,349,
respectively.

      Income taxes - The Company provides for income taxes based on enacted tax
laws and statutory tax rates at which items of income and expense are expected
to be settled in the Company's income tax return.  Certain items of revenue and
expense are reported for Federal income tax purposes in different periods than
for financial reporting purposes, thereby resulting 	in deferred income taxes.
Deferred taxes also are recognized for operating losses that are available to
offset future taxable income and tax credits that are available to offset future
Federal income taxes. Valuation allowances are established when necessary to
reduce deferred tax assets to the amounts expected to be realized.

      Self-insurance reserves - The Company is self-insured for property loss,
general liability and employee medical coverage subject to specific retention
levels. Estimated costs of these self-insurance programs are accrued based on
projected settlements for claims using actuarially determined loss development
factors based on the Company's prior experience with similar claims.  Any
resulting adjustments to previously recorded reserves are reflected in current
operating results.

      Pre-opening costs - Store pre-opening costs are charged to expense as
incurred.

      Use of estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues and expenses



                                     F-11




               HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

           (In thousands, except share and per share amounts)



2.    Summary of Significant Accounting Policies, continued:

during the reporting periods.  The most significant assumptions and estimates
relate to the reserve for self-insurance programs, reserves for closed stores,
the deferred income tax valuation allowance, the accumulated benefit obligation
relating to the employee retirement plan and the allowance for bad debts. It is
reasonably possible that the Company's estimates for such items could change in
the near term.

      In the second quarter of 2000, the Company collected a receivable from a
vendor of approximately $600 that had been reserved for as of January 1, 2000.

      Reclassifications - Certain January 1, 2000 and January 2, 1999 amounts
have been reclassified to conform with December 30, 2000 presentation.

      Recent Accounting Pronouncements:

      The Financial Accounting Standards Board (the "FASB") Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended by Statements 137 and 138,
requires adoption by the Company on January 1, 2001.  This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and
for hedging activities.  It requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position and
measure those financial instruments at fair value.  The accounting for changes
in the fair value of a derivative instrument depends on the intended use of the
derivative and its resulting designation.  The adoption of this standard did
not have a material effect on the Company's financial statements.

      In September 2000, the FASB issued Statement of Financial Accounting
Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities - A Replacement for FASB Statement No. 125".
This Statement is effective for transfers occurring after March 31, 2001 and
for disclosures relating to securitization transactions and collateral for
fiscal years ending after December 15, 2000.  The Company does not expect the
adoption of this standard will have a material effect on its financial
statements.

3.    Store Acquisitions:

      In April 1999, the Company completed its acquisition of nine stores from
AWG, in eastern Oklahoma.  The net purchase price was $1.3 million which
represents $5.6 million for real property, and fixtures and equipment,
plus $2.3 million for inventory, $0.2 million for transaction costs, offset by
$6.8 million in long-term debt assumed by the Company.  The Company acquired
title to one store and leases the remaining eight from AWG.  The one store to
which Homeland acquired title in Pryor, Oklahoma, was closed (and subsequently
sold to a non-grocery user) as a result of the proximity to an existing Company
store.  The Company financed this acquisition principally through the assumption
of $6.8 million in long-term debt, together with increased borrowings under its
Revolving Facility. The debt incurred by the Company to AWG is secured by liens
on, and security interest in, the assets associated with the nine stores.
Subsequent to the closing of the acquisition, the Company repaid a portion of
its indebtedness to AWG which related to inventory and the Pryor store which was
sold. Therefore, AWG released its security interest in the inventory and the
assets relating to the Pryor store.

      In November 1999, the Company completed its acquisition of four stores
from Brattain Foods, Inc. ("BFI"), in Muskogee, Oklahoma.  The net purchase
price was $1.1 million which represents $6.0 million for fixtures and equipment,
plus $1.9 million for inventory, $0.2 million for transaction costs, offset by


                                  F-12




             HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

          (In thousands, except share and per share amounts)



3.    Store Acquisitions, continued:

$7.0 million of long-term debt (BFI's obligation to AWG) assumed by the Company.
The Company will lease three of the stores from AWG and lease the fourth from a
third party. The Company financed this acquisition principally through the
assumption of $7.0 million in long-term debt, together with increased borrowings
under its Revolving Facility. The debt incurred by the Company to AWG is secured
by liens on, and security interest in, the assets associated with the four
stores.  Subsequent to the closing of the acquisition, the Company repaid a
portion of its indebtedness to AWG, which related to inventory and therefore,
AWG released its security interest in the inventory.

      In February 2000, the Company completed its acquisition of three stores
from Belton Food Center, Inc. ("BFC") in Oklahoma City.  The net purchase price,
prior to the closed store reserve discussed below, was $0.2 million which
represents $4.2 million for fixtures and equipment and leasehold improvements,
plus $2.0 million for inventory and $0.2 million for transaction
costs, offset by $6.2 million of long-term debt (BFC's obligation to AWG)
assumed by the Company.  The Company leases all three of the stores from AWG.
The Company financed this acquisition principally through the assumption of
$6.2 million in long-term debt, together with increased borrowings under its
Revolving Facility. The debt incurred by the Company to AWG is secured by liens
on, and security interest in, the assets associated with the three stores.
Subsequent to the closing of the acquisition, the Company repaid a portion of
its indebtedness to AWG, which related to inventory and therefore, AWG released
its security interest in the inventory.  In April 2000, the Company closed one
of the acquired stores due to its proximity to other Company stores and
established a reserve, which approximated $1.3 million, for future rent
payments and other holding costs.  Establishment of the reserve increased the
goodwill balance associated with the acquisition.  In October 2000, the lease
on the closed store was assigned resulting in a reduction in the reserve and
goodwill of $0.5 million.  Substantially all other costs reserved were paid
in 2000.

      In April 2000, the Company completed its acquisition of three Baker's
Supermarkets.  The purchase price was approximately $4.2 million, which
represents $2.4 million for fixtures and equipment, leasehold improvements and
a non-compete agreement, $1.6 million for inventory, and approximately
$0.2 million in transaction costs. In conjunction with the transaction, the
Company also recorded $1.6 million of identified intangibles and $1.6 million
in liabilities related to an unfavorable contract.  The unfavorable contract
represents a five-year minimum purchase commitment and is expected to result
in payments of $449, $864 and $321 in 2001, 2002 and 2003, respectively.  The
related intangible asset is amortized on straight-line basis over the life of
the contract.  The Company will sublease the three stores. On September 15,
2000, the Company subsequently leased a fourth location upon the completion
of its construction. Concurrent with the opening of the acquired store, the
Company closed an existing store resulting in a charge to operations of
approximately $0.3 million, which included future rent payments, other holding
costs, and the write-off of property, plant and equipment.  Payments of rent
and other holding costs are expected to continue through 2001.  The Company
financed this acquisition principally through increased borrowings under its
working capital facility.

      All of the above acquisitions were accounted for using the purchase
method of accounting.  The result of operations from these stores from the
acquisition dates through fiscal year-end are included in the fiscal 1999 and
2000 Consolidated Statements of Operations and Comprehensive Income.


                               F-13



            HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

         (In thousands, except share and per share amounts)


4.    Store Closings / Asset Impairment:

      In December 2000, the Company committed to a plan to close seven stores
in January 2001 and recorded a store closing charge of $4,246.  The charge
included the write-down of property, plant and equipment and other assets
of $2,010, inventory write-downs of $1,423, which was recorded as a part of
cost of sales, and holding costs of $813.  Holding costs primarily consist
of obligations under operating leases and related expenses expected to be
paid over the remaining lease terms which range from 2001 to 2004.

      During 1999, the Company made the decision to dispose of a previously
closed store and related assets.  The Company decided to sell these assets
rather than continue the previous plan of leasing the assets.  The carrying
value of the assets held for sale was reduced to a value of $385, based on
current estimates of selling value less costs to dispose.  The resulting
adjustment of $925 was recorded.  In 2000, the assets were sold for an amount
which approximated the then carrying value.

5.    Long-Term Debt:

      Long-term debt at year-end consists of:


                                         December 30,         January 1,
                                            2000                2000

    	10% Notes due 2003 (the "Notes")   $   60,000           $  60,000
    	Revolving Facility                     29,245              23,194
      Term Loan                               8,814               5,833
    	AWG Loans                              10,295               8,412
	Note Payable                               98                 147
                                            108,452              97,586
   	Less current portion                    3,860               2,918

   	Long-term debt due after one year  $  104,592           $  94,668


      The Notes bear an interest rate of 10%, which is payable semi-annually
each February 1 and August 1.  The Notes are uncollateralized and will mature
on August 1, 2003.  The Indenture relating to the Notes has certain customary
restrictions on consolidations and mergers, indebtedness, issuance of preferred
stocks, asset sales and payment of dividends.

      The Company's Revolving Facility and Term Loan are maintained under a
single loan agreement (the "Loan Agreement").  The Revolving Facility permits
the Company to borrow up to the lesser of $37,000 or the applicable borrowing
base.  Pursuant to an amendment to the Loan Agreement, the Company, with the
consent of the lenders, can access an over-advance facility which allows
the Company to borrow amounts above the borrowing base but not above the total
Revolving Facility.  This over-advance facility, currently set at $2,000, is
available to the Company through April 30, 2001.  At December 30, 2000, the
Company had availability of $6,041 under the Revolving Facility.  The Term
Loan represents the remaining balance of $5,000 borrowed under a prior loan
agreement plus $5,000 borrowed in connection with the April 2000 termination
of a previously available acquisition term loan.

      The interest rate under the Loan Agreement, as amended, is based on the
Prime Rate, as defined, plus a percentage that varies based on a number of
factors, including (a) whether it is a Revolving Facility or the Term Loan,
(b) the time period, (c) whether the Company elects to use the London Interbank



                                 F-14




             HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

         (In thousands, except share and per share amounts)



5.    Long-Term Debt, continued:

Offered Rate ("LIBOR").  Interest for borrowings under the LIBOR rate is
payable monthly.  Interest for other borrowings is payable quarterly.  At
December 30, 2000, the interest rate on borrowings on the Revolving Facility
was 9,26% (weighted average) and the Term Loan was 9.76% (weighted average).

      The Revolving Facility provides for certain mandatory prepayments based
on occurrence of certain defined and specified transactions.  The Term Loan
requires quarterly principal payments of $595 and will mature, along with the
Revolving Facility, on August 2, 2002.

      The obligations of the Company under the Loan Agreement are collateralized
by liens on, and a security interest in, substantially all of the assets of
Homeland and are guaranteed by Holding. The Loan Agreement, among other things,
requires a maintenance of EBITDA, consolidated fixed charge ratio, debt-to-
EBITDA ratio, current ratio, excess cash flow paydown, each as defined, and
limits the Company's capital expenditures, incurrence of additional debt,
consolidation and mergers, acquisitions and payments of dividends. In
addition, the Loan Agreement provides for acceleration of principal and
interest payments in the event of certain material adverse changes, as
determined by the lender.  As discussed in Note 13, the Loan Agreement was
amended further effective April 24, 2001.

      The obligations of the Company as it relates to AWG Loans are secured by
liens on, and security interest in, the fixtures and equipment associated with
the stores acquired in 1999 and 2000, as referenced in Note 3.  Each of the AWG
Loans is a seven-year note, which is amortized weekly, and has interest rates
associated with it equal to the prime rate plus 1%.  At December 30, 2000, the
interest rate was 10.50%.

      At December 30, 2000, the aggregate annual debt maturities were as
follows:

            2001            $  3,860
            2002              37,296
            2003              61,766
            2004               1,926
            2005               2,140
	      Thereafter         1,464
                            $108,452

      The Company has outstanding at December 30, 2000, $30 in letters of
credit which are not reflected in the accompanying financial statements.
The letters of credit are issued under the credit agreements and the
Company paid associated fees of $4, $12, and $43, in 2000, 1999, and 1998,
respectively.



                                 F-15



            HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

         (In thousands, except share and per share amounts)



6.    Stockholders' Equity:

      At December 30, 2000, the Company has warrants outstanding to purchase
263,158 shares of common stock.  Each warrant entitles the holder to purchase
one share of common stock at an exercise price of $11.85 at any time up to
August 2, 2001.


7.    Fair Value of Financial Instruments:

      The carrying amounts of cash and cash equivalents, receivables, AWG
patronage refund certificates, accounts payable and accrued expenses and
other liabilities are reasonable estimates of their fair values at December
30, 2000 and January 1, 2000.  Based on borrowing rates currently available
to the Company for borrowings with similar terms and maturities, the Company
believes the carrying amount of borrowings under the Loan Agreement and the
AWG Loans approximate fair value at December 30, 2000 and January 1, 2000.
The fair value of publicly-traded debt is valued based on quoted market values.
At December 30, 2000, the carrying amount and the fair value of the Notes were
$60,000 and $28,200, respectively.  On March 14, 2001, the fair value of the
Notes is $13,2000.  At January 1, 2000, the carrying amount and the fair value
of the Notes were $60,000 and $48,330, respectively.

8.    Income Taxes:

      The components of the income tax provision for 2000, 1999, and 1998 were
as follows:

                               52 Weeks          52 Weeks             52 Weeks
                                Ended             Ended                Ended
                          December 30, 2000   January 1, 2000   January 2, 1999
	Federal and State:
	  Current - AMT	     $      -           $   (137)          $    (176)
	  Deferred	                  -             (1,451)             (1,699)
	Total income tax
        provision	           $      -           $ (1,588)          $  (1,875)


      A reconciliation of the income tax benefit provision at the statutory
Federal income tax rate to the Company's effective tax rate is as follows:

                              52 Weeks          52 Weeks             52 Weeks
                               Ended             Ended                Ended
                          December 30, 2000   January 1, 2000   January 2, 1999

      Federal income tax
        benefit at statutory
        rate                 $  2,061           $     947          $   3,051
	Amortization of
        intangibles                 -              (2,412)            (4,785)
	Change in valuation
        allowance and other    (2,061)               (123)              (141)
      Total income tax
        provision            $      -           $  (1,588)         $  (1,875)




                                      F-16



              HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

          (In thousands, except share and per share amounts)



8.    Income Taxes, continued:

      The components of deferred tax assets and deferred tax liabilities are as
follows:

                                                 December 30,        January 1,
                                                     2000               2000
      Current assets (liabilities):
        Allowance for uncollectible receivables $      126	       $     517
        Inventory                                      541                 -
        Prepaid pension                               (108)             (224)
        Other, net                                     131                22

          Net current deferred tax assets	             690               315

      Noncurrent assets (liabilities):
        Property, plant and equipment                3,029             2,221
        Employee compensation and benefits             285               285
        Self-insurance reserves                        487               606
        Net operating loss carryforwards            12,338            11,210
        AMT credit carryforwards                       959               963
        Capital leases                                 (42)              (71)
        Other, net                                     870               627
          Net noncurrent deferred tax assets        17,926            15,841
        Total net deferred tax assets               18,616            16,156
        Valuation allowance                        (18,616)          (16,156)

      Net deferred tax assets            	      $        -         $       -

      Due to the uncertainty of realizing the future tax benefits, a
full valuation allowance was deemed necessary to entirely offset the net
deferred tax assets as of December 30, 2000, and January 1, 2000. At
December 30, 2000, the Company had the following operating loss and tax
credit carryforwards available for tax purposes:

                                                             Expiration
                                               Amount            Dates
	   Federal regular tax net
          operating loss carryforwards        $32,469          2002-2010
	   Federal AMT credit carryforwards
          against regular tax                    $959          indefinite

      The net operating loss carryforwards are subject to utilization
limitations due to ownership changes.  The net operating loss carryforwards
may be utilized to offset future taxable income as follows: $11,368 in 2001,
$3,251 in each of years 2002 through 2007 and $1,595 in 2008. Loss
carryforwards not utilized in any year that they are available may be
carried over and utilized in subsequent years, subject to their expiration
provisions.

      In accordance with SOP 90-7, the tax benefit realized from utilizing the
pre-reorganization net operating loss carryforwards is recorded first as a
reduction of the reorganization value in excess of amounts allocable to
identifiable assets, then as a reduction of noncurrent intangible assets
existing at the reorganization date, and finally as an increase to stockholders'
equity rather than realized as a benefit in the statement of operations.  The
Company recorded $1,451 and $1,699 of reductions to reorganization value and/or
intangible assets in 1999 and 1998, respectively.



                                 F-17



            HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

         (In thousands, except share and per share amounts)




9.    Incentive Compensation Plans:

      The Company has bonus arrangements for store management and other key
management personnel.  During 2000, 1999, and 1998, approximately $734, $1,760,
and $1,480, respectively, were charged to costs and expenses for such bonuses.

      In December 1996, the Board of Directors of the Company adopted the
Homeland Holding Corporation 1996 Stock Option Plan (the "Stock Option Plan").
In 1997, the Company established the 1997 Non-Employee Directors Stock Option
Plan (the "Directors Stock Option Plan").  The Company applies APB Opinion No.
25, "Accounting for Stock Issued to Employees" and related Interpretations in
accounting for these plans.  SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") was issued by the FASB in 1995 and, if fully
adopted, changes the methods for recognition of expense on plans similar to
the Company's.  Adoption of SFAS 123 is optional; however, pro forma
disclosures as if the Company adopted the cost recognition requirements under
SFAS 123 in 2000, 1999, and 1998 are presented below.

      The Stock Option Plan and the Directors Stock Option Plan, to be
administered by the Board of Directors (the "Board"), or a committee of the
Board (the "Committee"), provides for the granting of options to purchase up to
an aggregate of 832,222 and 200,000 shares of Common Stock, respectively.
Options granted under the plans must be "non-qualified options."  The option
price of each option is determined by the Board or the Committee and it must be
not less than the fair market value at the date of grant.  Unless the Board or
the Committee otherwise determines, options must become exercisable ratably
over a five-year period, a two-year period in regards to the Directors Stock
Option Plan, or immediately in the event of a "change of control" as defined
in each of the plans.  Each option must be evidenced by a written agreement and
must expire and terminate on the earliest of: (a) ten years from the date the
option is granted; (b) termination for cause; or (c) three months after
termination for other than cause.

      Options granted under the Company's stock option plans have exercise
prices ranging from $2.00 to $7.63 per share and have a weighted average
remaining contractual life of 8.5 years. A summary of the status of the
Company's outstanding stock options as of December 30, 2000, January 1, 2000,
and January 2, 1999, and changes during the years ended on those dates is as
follows:

                         2000                1999                1998
                           Wgtd. Avg.          Wgtd. Avg.          Wgtd. Avg.
                            Exercise            Exercise            Exercise
                     Shares  Price      Shares   Price     Shares     Price

   Outstanding as
     of beginning
     of year        542,000  $5.38     429,000   $6.09    198,500     $7.48

   Granted          425,000   3.29     120,500    3.01    319,000      5.64
   Exercised              -      -           -       -     13,200      6.50
   Forfeited          5,000   7.63       7,500    7.63     75,300      7.80

  Outstanding at
    end of year     962,000  $4.08     542,000   $5.38    429,000     $6.09




                                      F-18



                HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

          (In thousands, except share and per share amounts)



9.    Incentive Compensation Plans, continued:

Stock options outstanding and exercisable on December 30, 2000 are as follows:

                                        Weighted average   Weighted average
   Range of exercise     Shares under    exercise price  remaining contractual
   prices per share         option         per share        life in years
   Outstanding:
      $2.00 - $4.00           725,500    	    $3.10               8.9
       4.75 -  7.63           236,500          7.11               7.0
      $2.00 - $7.63           962,000         $4.08               8.5
   Exercisable:
      $2.00 - $4.00           120,100         $2.81
       4.75 -  7.63           181,000          7.25
      $2.00 - $7.63           301,100         $5.48

      The weighted average fair value of options granted during 2000, 1999,
and 1998 was $1.36, $1.46 and $2.83, respectively. No compensation was
charged against income in 2000, 1999, and 1998.

      The fair value of the options granted was estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions
used:

                                      2000       1999       1998

  Expected dividend yield              0%         0%         0%

  Expected stock price volatility  	  41%        40%        37%

  Weighted average risk-free
    interest rate      	             6.0%       5.8%       5.3%

  Weighted average expected
    life of options               6 years      6 years    6 years

      Had compensation cost of the Company's option plans been determined
using the fair value at the grant date of awards consistent with the method
of SFAS 123, the Company's net loss and net loss per common share would have
been reduced to the pro forma amounts indicated in the table below:

                                    2000       1999         1998
	Net loss - as reported	   $ (5,889)  $ (4,294)   $ (10,591)
      Net loss - pro forma	   $ (6,165)  $ (4,466)   $ (10,722)

  	Basic and diluted EPS -
        as reported	         $  (1.20)  $  (0.87)	  $   (2.18)

  	Basic and diluted EPS -
        pro forma                $  (1.25)  $  (0.91)   $   (2.21)

      No options or warrants outstanding at December 30, 2000, January
1, 2000, and January 2, 1999, were included in the computation of diluted
earnings per share because the effect would be antidilutive to applicable
periods.

      Pursuant to the terms of the Union Agreements, the Company
established an employee stock bonus plan for the benefit of the unionized
employees (the "Stock Bonus Plan").  The Stock Bonus Plan consists of three
separate elements: (a) the issuance of 58,025 shares of Common Stock each plan



                                F-19



            HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

          (In thousands, except share and per share amounts)




9.    Incentive Compensation Plans, continued:

year of the three year period ended July 31, 1999; (b) up to 58,025 shares of
Common Stock may be purchased by the plan participants during each plan year of
the three year period ending July 31, 2000 (the "Stock Purchase") and (c) the
granting of 58,025 shares of Common Stock for each plan year of the three year
period ended July 31, 1999 upon the Company's achievement of certain escalating
EBITDA-based performance goals.  The purchase price of the shares under the
Stock Purchase element shall be equal to their appraised value or at fair value
if the shares are readily tradable on a securities market.  For each share of
Common Stock purchased by a participant under the Stock Purchase element, the
Company will match 33 1/3% of such purchase in the form of stock.  The Stock
Bonus Plan does not fall under the provisions of SFAS 123.

10.	Retirement Plans:

      Effective January 1, 1988, the Company adopted a non-contributory,
defined benefit retirement plan for all executive and administrative personnel.
Benefits are based on length of service and career average pay with the Company.
The Company's funding policy is to contribute an amount equal to or greater than
the minimum funding requirement of the Employee Retirement Income Security Act
of










                                  F-20



             HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

         (In thousands, except share and per share amounts)



10.	Retirement Plans, continued:

	1974, but not in excess of the maximum deductible limit.  Plan assets
were invested in mutual funds during 2000, 1999, and 1998.

	Information regarding the plan follows:

                                                     2000        1999
	Change in benefit obligation:
        Benefit obligation at
           beginning of year	                   $   10,528   $   11,432
        Service cost	                                473          562
        Interest cost	                                857          792
        Actuarial (gain) loss	                          644       (1,980)
        Benefits paid	                               (320)        (278)
        Benefit obligation at end
           of year	                         $   12,182   $   10,528

      Change in plan assets:
        Fair value of plan assets at
           beginning of year	                   $   11,234   $   10,692
        Actual return on plan assets	              126          820
        Employer contribution	                            -            -
        Benefits paid	                               (320)        (278)
        Fair value of plan assets at
           end of year	                         $   11,040   $   11,234

      Reconciliation of funded status:
        Funded status	                         $   (1,142)  $      707
        Unrecognized actuarial
           (gain)loss                                 1,465          (66)
        Unrecognized prior service
           cost	                                      (40)         (51)
        Prepaid benefit cost	                   $      283   $      590

      Amounts recognized in the
        financial statement of
        financial position consist of:
        Prepaid benefit cost                     $        -   $      590
        Accrued benefit liability                      (405)           -
        Accumulated other
          comprehensive income                          688            -
        Net amount recognized                    $      283   $      590

      Weighted-average assumptions as
         of end of year:
        Discount rate	                               7.50%        7.75%
        Expected return on plan assets	             9.00%        9.00%
        Rate of compensation increase
          Before Age 35	                               5.50%        5.50%
          Ages 35 - 49	                               4.50%        4.50%
          After Age 49	                               3.50%        3.50%

      Components of net periodic
         pension cost:                        2000       1999      1998
        Service cost                      $      473  $     562  $    514
        Interest cost	                         857        792       725
        Expected return on plan
           assets	                            (1,012)      (953)     (868)
        Amortization of prior
           service cost	                         (11)       (11)      (11)
        Recognized net actuarial loss              0         11        46
        Net periodic pension cost         $      307  $     401  $    406



                                      F-21



                HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

             (In thousands, except share and per share amounts)



10.   Retirement Plans, continued:

      The Company also contributes to various union-sponsored, multi-employer
defined benefit plans in accordance with collective bargaining agreements.
The Company could, under certain circumstances, be liable for the Company's
unfunded vested benefits or other costs of these multi-employer plans. The
allocation to participating employers of the actuarial present value of
vested and nonvested accumulated benefits in multi-employer plans as well as
net assets available for benefits is not available and, accordingly, is not
presented. The costs of these plans for 2000, 1999, and 1998, were $1,226,
$1,271, and $1,235, respectively.

      Effective January 1, 1988, the Company adopted a defined contribution
plan covering substantially all non-union employees of the Company.
Participants may contribute from 1% to 12% of their pre-tax compensation.
The plan allows for a discretionary Company matching contribution formula based
on the Company's operating results.  The Company did not make any contributions
to this plan in 2000, 1999, or 1998.

11.   Leases:

      The Company leases 70 of its retail store locations under noncancellable
agreements, which expire at various times between 2001 and 2030.  These leases,
which include both capital leases and operating leases, generally are subject to
six five-year renewal options. Most leases also require the payment of taxes,
insurance and maintenance costs and many of the leases covering retail store
properties provide for additional contingent rentals based on sales in excess of
certain stipulated amounts.

      Leased assets under capital leases consists of the following:


                                               December 30,   January 1,
                                                  2000           1999

            Buildings                          $    2,426     $    2,554
            Equipment                               4,494          3,169
            Beneficial interest in capital
               leases                               2,966          3,014
                                                    9,886          8,737
            Less accumulated amortization           4,833          4,163
            Net leased assets	                 $    5,053     $    4,574





                                       F-22



                   HOMELAND HOLDING CORPORATION AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

              (In thousands, except share and per share amounts)




11.   Leases, continued:

      Future minimum lease payments under capital leases and noncancellable
operating leases as of December 30, 2000, are as follows:

                                                  Capital        Operating
       Fiscal Year                                Leases           Leases

      2001                                      $     803       $    9,953
      2002                                            708            8,427
      2003                                            713            7,891
      2004                                            182            7,300
      2005                                            182            6,648
      Thereafter                                      924           23,353
      Total minimum obligations                     3,512       $   63,572

      Less estimated interest                         952
      Present value of net minimum
        obligations                                 2,560
      Less current portion                            564
      Long-term obligations under
        capital leases                          $   1,996



      Rent expense for 2000, 1999 and 1998 is as follows:

                                      2000          1999          1998

      Minimum rents                 $ 9,789       $ 7,200       $ 6,680
      Contingent rents                   83            86           115

                                    $ 9,872       $ 7,286       $ 6,795

12.   Commitments and Contingencies:

      In 1995, the Company and AWG entered into a seven-year supply agreement
(the "Supply Agreement"), whereby the Company became a retail member of the AWG
cooperative and AWG became the Company's primary supplier (see Note 2 -
Concentrations of credit and business risk).  The terms of the Supply Agreement
allow the Company to purchase products at the lowest prices and best terms
available to AWG members and also entitle the Company to participate in its
store cost savings programs and receive member rebates and refunds on purchases.
In addition, the Supply Agreement includes certain Volume Protection Rights, as
defined therein.

      The Company has entered into employment contracts with certain key
executives providing for the payment of minimum salary and bonus amounts in
addition to certain other benefits in the event of termination of the executives
or change of control of the Company.

      The Company is party to various lawsuits arising from the 1996 Chapter 11
proceedings and also in the normal course of business.  Management believes that
the ultimate outcome of these matters will not have a material effect on the
Company's consolidated financial position, results of operations and cash flows.

      Approximately 92% of the Company's employees are union members.  The
collective bargaining agreements associated with the majority of these employees
expire in August 2001.  Preliminary negotiations have begun and the Company
intends that new agreements will be in place prior to the expiration dates.
However, the negotiated wages and benefits under those contracts could
significantly impact the operating results of the Company.



                                    F-23




                HOMELAND HOLDING CORPORATION & SUBSIDIARIES


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

              (In thousands, except share and per share amounts)




13.   Business Conditions and Liquidity:

      In 2000, the Company incurred a net loss of $5.9 million.  Futhermore, the
markets in which the Company operates remain increasingly competitive negatively
affecting the Company's liquidity.  These factors raise substantial doubt about
the Company's ability to continue as a going concern.  The Company's near and
long-term operating strategies focus on improving sales, improving operational
efficiencies, and the productivity of assets.  The Company intends to pursue its
merchandising strategy in an attempt to increase its sales and the Company has
devised plans to improve its gross margin and expense performance.  Also, if
necessary, the Company will close or sell under-performing stores or assets.
Currently, the Company has letters of intent regarding certain asset sales to
transfer leases and sell property related to four of the seven stores closed in
January 2001 and to sell a parcel of undeveloped land.  The estimated proceeds
from these asset sales are $1.4 million and the transactions are subject to
among other things the signing of definitive agreements for each transaction.
The Company has also retained McDonald Investments Inc. as a financial advisor
to explore options for re-financing and raising capital.

      Adequate liquidity in 2001 is predicated on the Company's ability to
achieve improvements in gross margin and expense performance over historical
results and successful completion of the $1.4 million asset sale in the second
quarter of 2001.  Improvement over historical gross margin and expense
performance is expected to occur in part as a result of the January closing
of seven underperforming stores.  Further improvement in gross margin is
projected to result from an increase in the annual AWG patronage rebate as AWG
is expected to return to a more historic level of profitability.

      The Company's lowest level of liquidity is expected to occur in the third
quarter of 2001.  If the Company is successful in meeting its cash flow
projections, including completion of the asset sale in the second quarter of
2001, sufficient borrowings under the Revolving Facility will be available to
meet the Company's liquidity needs during the third and fourth quarters of 2001.
Furthermore, the projections do not include the potential favorable cash flow
impact of closing or selling additional underperforming stores or assets.

      The Company believes that it continues to have the support of the agent
and the lenders to the Loan Agreement.  Effective April 24, 2001, the Company
entered into an amendment to the Loan Agreement which, among other things,
amends the financial covenants pertaining to minimum availability, EBITDA,
funded debt to EBITDA ratio, and capital expenditures.  In addition to the
covenant changes, the Loan Agreement was amended by increasing the applicable
interest rates by 25 basis points and limiting the use of London Interbank
Offered rates, although the Company does not expect these changes will have a
material impact on its ability to meet its cash flow projections or financial
covenants.  Based on its current projections, management believes that the
Company will be able to meet the revised covenants set forth in the Loan
Agreement, as amended, throughout 2001.  If the Company is unable to meet
these revised covenants, the Company will need to obtain waivers or classify
the related borrowings as current obligations.  There can be no assurances
the Company will be able to obtain such waivers.  However, since the amendment
to the financial covenants is applicable only through 2001 and since the Loan
Agreement matures on August 2, 2002, the Company intends to refinance its
existing Loan Agreement indebtedness during 2001.  There can be no assurance
that the Company will be able to successfully refinance its existing
indebtedness on terms that are acceptable to it.

       The Company believes that cash on hand, net cash flow from operations,
proceeds from certain expected asset sales and borrowings under the Revolving
Facility will be sufficient to fund its cash requirements through fiscal year
2001, which will consist primarily of payment of principal and interest on
outstanding indebtedness, working capital requirements and capital expenditures.
However, there can be no assurance that the asset sales will be consummated as
planned.  The Company's future operating performance and ability to service or
refinance its current indebtedness will be subject to future economic conditions
and to financial, business and other factors, many of which are beyond the
Company's control.




                                     F-24



                                EXHIBIT INDEX


   Exhibit No.    Description

      2a          Disclosure Statement for Joint Plan of Reorganization of
                  Homeland Stores, Inc. ("Homeland") and Homeland Holding
                  Corporation ("Holding") dated as of May 13,1996.
                  (Incorporated by reference to Exhibit 2a to Form 8-K dated
                  May 31, 1996.)

      2b          First Amended Joint Plan of Reorganization, as modified,
                  of Homeland and Holding, dated July 19, 1996.
                  (Incorporated by reference to Exhibit 2b to Form 10-Q for
                  the quarterly period ended June 15, 1996.)

      3a          Restated Certificate of Incorporation of Holding, dated
                  August 2, 1996. (Incorporated by reference to Form 10
                  filed as of November 20, 1996.)

      3b          By-laws of Holding, as amended and restated on November
                  14, 1989 and further amended on September 23, 1992.
                  (Incorporated by reference to Exhibit 3b to Form 10-Q for
                  quarterly period ended June 19, 1993.)

      3c          Restated Certificate of Incorporation of Homeland, dated
                  August 2, 1996. (Incorporated by reference to Form 10
                  filed as of November 20, 1996.)

      3d          By-laws of Homeland, as amended and restated on November
                  14, 1989, and further amended on September 23, 1992.
                  (Incorporated by reference to Exhibit 3d to Form 10-Q for
                  quarterly period ended June 19, 1993.)

      4a          Indenture, dated as of August 2, 1996, among Homeland,
                  Fleet National Bank, as Trustee, and Holding, as
                  Guarantor.  (Incorporated by reference to Exhibit T3C to
                  Form T-3 of Homeland, SEC File No. 22-22239.)

      4b          Warrant Agreement, dated as of August 2, 1996, between
                  Holding and Liberty Bank and Trust Company of Oklahoma
                  City, N.A., as Warrant Agent.  (Incorporated by reference
                  to Exhibit 4h to Amendment No. 1 to Form 10.)

      4c          Equity Registration Rights Agreement, dated as of August
                  2, 1996, by Holding for the benefit of holders of Old
                  Common Stock. (Incorporated by reference to Exhibit 4i to
                  Amendment No. 1 to Form 10.)

      4d          Noteholder Registration Rights Agreement, dated as of
                  August 2, 1996, by Holding for the benefit of holders of
                  Old Notes.  (Incorporated by reference to Exhibit 4j to
                  Amendment No. 1 to Form 10.)

      10a 1       Homeland Profit Plus Plan, effective as of January 1,
                  1988. (Incorporated by reference to Exhibit 10q to Form
                  S-1 Registration Statement, Registration No. 33-22829.)

      10a.1 1     Homeland Profit Plus Plan, effective as of January 1,
                  1989.  (Incorporated by reference to Exhibit 10q.1 to Form
                  10-K for the fiscal year ended December 29, 1990.)


                                     E-1


   Exhibit No.    Description

      10b         Homeland Profit Plus Trust, dated March 8, 1988, between
                  Homeland and the individuals named therein, as Trustees.
                  (Incorporated by reference to Exhibit 10r to Form S-1
                  Registration Statement, Registration No. 33-22829.)

      10c         Homeland Profit Plus Trust, dated January 1, 1989, between
                  Homeland and Bank of Oklahoma, N.A., as Trustee.
                  (Incorporated by reference to Exhibit 10r.1 to Form 10-K
                  for the fiscal year ended December 29, 1990.)

      10d.1 1     1995 Homeland Management Incentive Plan.  (Incorporated by
                  reference to Exhibit 10s.7 to Form 10-K for fiscal year
                  ended December 30, 1995.)

      10d.21      1996 Homeland Management Incentive Plan.  (Incorporated by
                  reference to Exhibit 10.d3 to Form 10-K for fiscal year
                  ended December 28, 1996.)

      10d.31      1997 Homeland Management Incentive Plan.

      10e 1       Form of Homeland Employees' Retirement Plan, effective as
                  of January 1, 1988. (Incorporated by reference to Exhibit
                  10t to Form S-1 Registration Statement, Registration No.
                  33-22829.)

      10e.1 1     Amendment No. 1 to Homeland Employees' Retirement Plan
                  effective January 1, 1989.  (Incorporated herein by
                  reference to Form 10-K for fiscal year ended December 30,
                  1989.)

      10e.2 1     Amendment No. 2 to Homeland Employees' Retirement Plan
                  effective January 1, 1989.  (Incorporated herein by
                  reference to Form 10-K for fiscal year ended December 30,
                  1989.)

      10e.3 1     Third Amendment to Homeland Employees' Retirement Plan
                  effective as of January 1, 1988.  (Incorporated herein by
                  reference to Exhibit 10t.3 to Form 10-K for fiscal year
                  ended December 29, 1990.)

      10e.4 1     Fourth Amendment to Homeland Employees' Retirement Plan
                  effective as of January 1, 1989.  (Incorporated herein by
                  reference to Exhibit 10t.4 to Form 10-K for the fiscal
                  year ended December 28, 1991.)

      10e.5 1     Fifth Amendment to Homeland Employees' Retirement Plan
                  effective as of January 1, 1989.  (Incorporated herein by
                  reference to Form 10-Q for the quarterly period ended
                  September 9, 1995.)

      10f 1       Executive Officers Medical/Life Insurance Benefit Plan
                  effective as of December 9, 1993. (Incorporated by
                  reference to Exhibit 10kk to Form 10-K for the fiscal year
                  ended January 1, 1994.)

      10g         Asset Purchase Agreement, dated as of February 6, 1995,
                  between Homeland and Associated Wholesale Grocers, Inc.
                  (Incorporated by reference to Exhibit 10pp.1 to Form 10-K
                  for fiscal year ended December 30, 1995.)


                                    E-2


   Exhibit No.    Description

      10h1        Employment Agreement dated as of February 25, 1998,
                  between Homeland and Steven M. Mason.

      10i1        Employment Agreement dated as of February 17, 1998,
                  between Homeland and David B. Clark.

      10j         Indenture, dated as of August 2, 1996, among Homeland,
                  Fleet National Bank, as Trustee, and Holding, as
                  Guarantor. (Incorporated by reference to Exhibit 10aaa to
                  Form 8-K dated September 30, 1996.)

      10k1        Employee Stock Bonus Plan for union employees
                  effective as of August 2, 1996.  (Incorporated by
                  reference to Exhibit 10s to Form 10-K for fiscal year
                  ended December 28, 1996.)

      10l1        Management Stock Option Plan effective as of December 11,
                  1996. (Incorporated by reference to Exhibit 10t to Form
                  10-K for fiscal year ended December 28, 1996.)

      10m         Loan Agreement dated as of December 17, 1998, among IBJ
                  Schroder Business Credit Corporation, Heller Financial,
                  Inc., and National Bank of Canada, Homeland and Holding.

      10n1        1998 Homeland Management Incentive Plan.

      10o1        Employment Agreement dated as of July 6, 1998, between
                  Homeland and Wayne S. Peterson.

      10p1        Employment Agreement dated as of September 14, 1998,
                  between Homeland and John C. Rocker.

      10q1        Letter agreement regarding severance arrangements dated as
                  of December 8, 1998, between Homeland and Steven M. Mason.

      10r1        Letter agreement regarding severance arrangements dated as
                  of December 8, 1998, between Homeland and Prentess E.
                  Alletag, Jr.

      10s1        Letter agreement regarding severance arrangements dated as
                  of December 8, 1998, between Homeland and Deborah A.
                  Brown.

      10t1        Stock Option Agreement dated as of October 21, 1998,
                  between Homeland and Wayne S. Peterson.

      10u1        Stock Option Agreement dated as of September 14, 1998,
                  between Homeland and John C. Rocker.

      10v1        Letter agreement regarding severance arrangements dated as
                  of December 8, 1999, between Homeland and Prentess E.
                  Alletag, Jr..

      10w1        Letter agreement regarding severance arrangements dated as
                  of December 8, 1999, between Homeland and Deborah A.
                  Brown.

      10x*1       Letter agreement regarding severance arrangements dated as
                  of December 8, 1999, between Homeland and Steven M. Mason.



                                   E-3



   Exhibit No.    Description


      10y1        Letter agreement regarding severance arrangements dated as
                  of December 8, 1999, between Homeland and John C. Rocker.

      10z         First Amendment to Loan Agreement dated as of December 17,
                  1998, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10aa        Second Amendment to Loan Agreement dated as of December
                  17, 1998, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10ab        Third Amendment to Loan Agreement dated as of December 17,
                  1998, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10ac        Fourth Amendment to Loan Agreement dated as of December
                  17, 1998, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10ad        Fifth Amendment to Loan Agreement dated as of December 17,
                  1998, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10ae        Sixth Amendment to Loan Agreement dated as of April 25,
                  2000, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10af        Letter Agreement and Promissory Note to David B. Clark
                  regarding relocation expenses.

      10ag*       Seventh Amendment to Loan Agreement dated as of December
                  22, 2000, among IBJ Whitehall Business Credit Corporation,
                  Heller Financial, Inc., and National Bank of Canada,
                  Homeland and Holding.

      10ah*       Letter Agreement regarding severance arrangements dated as
                  of December 15, 2000, between Homeland and Prentess E.
                  Alletag, Jr.

      10ai*       Letter Agreement regarding severance arrangements dated as
                  of December 15, 2000, between Homeland and Deborah A.
                  Brown.

      10aj*       Letter Agreement regarding severance arrangements dated as
                  of December 15, 2000, between Homeland and Steven M.
                  Mason.

      10ak*       Letter Agreement regarding severance arrangements dated as
                  of December 15, 2000, between Homeland and John C. Rocker.

      10al*       Letter Agreement regarding change of control arrangements
                  dated as of December 26, 2000, between Homeland and
                  Prentess E. Alletag, Jr.

      10am*       Letter Agreement regarding change of control arrangements
                  dated as of December 26, 2000, between Homeland and
                  Deborah A. Brown


                                   E-4



      10an*       Letter Agreement regarding change of control arrangements
                  dated as of December 26, 2000, between Homeland and David
                  B. Clark.

      10ao*       Letter Agreement regarding change of control arrangements
                  dated as of December 26, 2000, between Homeland and Steven
                  M Mason.

      10ap*       Letter Agreement regarding change of control arrangements
                  dated as of December 26, 2000, between Homeland and Wayne
                  S. Peterson.

      10aq*       Letter Agreement regarding change of control arrangements
                  dated as of December 26, 2000, between Homeland and John
                  C. Rocker.

      21*         Subsidiaries.

      23*         Consent of Independent Accountants.

      27*         Financial Data Schedule.



                                  E-5



 *  Filed herewith
(1) Management contract or compensatory plan.