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

                                 SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
                                          1934
                             (Amendment No. _____)

Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [   ]
Check the appropriate box:
[   ]	Preliminary Proxy Statement
[   ]	Confidential, for Use of the Commission Only (as permitted by Rule 14a-
      6(e)(2))
[ X ]	Definitive Proxy Statement
[   ] Definitive Additional Materials
[   ]	Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12

Homeland Holding Corporation
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):
[ X ]	No fee required.
[   ]	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
      11.
     	1)  Title of each class of securities to which transaction applies:
	    ____________________________________________________________________
	2)  Aggregate number of securities to which transaction applies:
	    ____________________________________________________________________
      3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
          the filing fee is calculated and state how it was determined):
          ____________________________________________________________________
     	4)  Proposed maximum aggregate value of transaction:
          ____________________________________________________________________
      5)  Total fee paid:
          ____________________________________________________________________
[   ]     Fee paid previously with preliminary materials.
[   ]     Check box if any part of the fee is offset as provided by Exchange
          Act Rule 0-11(a)(2) and identify the filing for which the offsetting
          fee was paid previously.  Identify the previous filing by
          registration statement number, or the Form or Schedule and the date
          of its filing.
          1) Amount Previously Paid:

          ____________________________________________________________________
          2) Form, Schedule or Registration Statement No.:

	    ____________________________________________________________________
          3) Filing Party:

	    ____________________________________________________________________
          4) Date Filed:

          ____________________________________________________________________


                          Homeland Holding Corporation
                        2601 N.W. Expressway, Suite 1100E
                            Oklahoma City, OK  73112
                         ______________________________

                  NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
                      TO BE HELD ON THURSDAY, MAY 31, 2001
                         ______________________________

To the Stockholders of Homeland Holding Corporation:

       NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders ("Annual Meeting") of Homeland Holding Corporation
("Company") will be held at the Hilton Oklahoma City Northwest, 2945
Northwest Expressway, Oklahoma City, Oklahoma, on Thursday, May 31,
2001, at 8:00 a.m., Oklahoma City, Oklahoma time, to consider the
following matters:

       1. the election of directors;

       2. a proposal to ratify PricewaterhouseCoopers LLP as independent
          auditors for fiscal year 2001; and

       3. the transaction of any other business as may properly be
          brought before the Annual Meeting.

       Details concerning those matters to come before the Annual Meeting
are set forth in the accompanying Proxy Statement for your information.

       The Form 10-K of your Company for the fiscal year ended December
30, 2000, is enclosed.  We hope you will find it informative.

       Pursuant to the Bylaws of the Company, the Board of Directors has
fixed the close of business on April 16, 2001, as the date for
determining stockholders of record entitled to notice of, and to vote
at, the Annual Meeting.  Each share of the Company's Common Stock, $0.01
par value, will entitle the holder thereof to one vote on all matters
which may properly come before the Annual Meeting.

                                       By Order of the Board of Directors,


                                       Wayne S. Peterson
                                       Secretary


Dated:  May 3, 2001

                     _________________________________
                            PROXY STATEMENT
                     _________________________________

       This Proxy Statement is being furnished in connection with the 2001
Annual Meeting of Stockholders ("Annual Meeting") of Homeland Holding
Corporation ("Company") to be held at the Hilton Oklahoma City Northwest, 2945
Northwest Expressway, Oklahoma City, Oklahoma, on Thursday, May 31, 2001, at
8:00 a.m., Oklahoma City, Oklahoma time.  This Proxy Statement and the
accompanying materials will be mailed on or about May 3, 2001, to stockholders
of record as of the record date.

       At the Annual Meeting, the stockholders will consider two matters: (1)
the election of directors of the Company; and (2) a proposal to ratify
PricewaterhouseCoopers LLP as independent auditors for fiscal year 2001.

       The record date for determining stockholders entitled to notice of, and
to vote at, the Annual Meeting has been established as of the close of
business on April 16, 2001.  On that date, the Company had 4,925,871 issued
and outstanding shares of Common Stock, par value $0.01 ("Common Stock"), of
which 529,098 shares are held by the Company and Homeland Stores, Inc.
("Stores"), the wholly-owned subsidiary of the Company, in the Class 5
Disputed Claim Reserve ("Disputed Claim Reserve") pursuant to the First
Amended Joint Plan of Reorganization of Homeland Stores, Inc. and Homeland
Holding Corporation, as amended ("Plan of Reorganization").

       A complete list of the holders of Common Stock entitled to notice of,
and to vote at, the Annual Meeting will be available for inspection during
normal business hours at the principal executive offices of the Company for
ten days prior to the Annual Meeting and will be available at the Annual
Meeting.

       Holders of record are entitled to one vote for each share held of
record on each matter properly before the Annual Meeting and the presence of
the holders of a majority of the shares of Common Stock, in person or by
proxy, will be necessary for a quorum.

       The affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Annual Meeting will be required for
the election of directors and for the approval of the other matters to be
submitted to the stockholders at the Annual Meeting.  The Company and Stores
will vote the shares of Common Stock in the Disputed Claim Reserve in the same
proportion as the other shares of Common Stock are voted at the Annual
Meeting.  Abstentions and broker non-votes will not be included for purpose of
voting.

       This enclosed Proxy is being solicited by the Board of Directors.
Proxies may be solicited by personal interview, telephone or mail.  Banks,
brokerage houses and other custodians, nominees or fiduciaries will be
requested to forward soliciting materials to their principals and to obtain
authorization for the execution of Proxies and, upon request, will be
reimbursed for their reasonable out-of-pocket expenses incurred in that
process.  The Company will bear the cost of the solicitation of Proxies,
which is expected to be nominal.

       Any holder of Common Stock returning his, her or its Proxy may revoke
the Proxy at any time prior to its exercise: (a) by giving written notice of
revocation to the Company; (b) by voting in person at the Annual Meeting; or
(c) by executing and delivering to the Company a later dated proxy.  Written
revocations and later dated proxies should be sent to the Company at its
principal executive offices:

                       Homeland Holding Corporation
                         Oil Center, Suite 1100E
                        2601 Northwest Expressway
                       Oklahoma City, Oklahoma 73112
                            Attn:  Secretary


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Set forth below is certain information as of April 16, 2001,
regarding the beneficial ownership of the Common Stock:  (a) by each
person known by the Company to have beneficial ownership of more than 5%
of the Common Stock of the Company; (b) by each director and each Named
Executive Officer (as defined below), individually; and (c) by all
directors and officers as a group:


                                             Shares
                                           Beneficially    Percent of
	Name of Beneficial Owner               Owned **        Class
      Soros Fund Management, LLC (1)          640,541        12.14%
	888 Seventh Avenue, 33rd Floor
	New York, NY  10106

      Ironwood Capital Management, LLC (2)    424,700         8.05%
	21 Custom House Street
	Boston, MA 02109

      Jeffrey D. Tannebaum (3)                371,195         7.04%
      Fir Tree Partners
      1211 Avenue of the Americas
      New York, NY  10036

      John A. Shields (4)(5)                   98,611         1.87%
      David B. Clark (6)(7)                   111,700         2.12%
      Wayne S. Peterson (8)(9)                 64,000         1.21%
      Steven M. Mason (10)(11)                 27,908          *
      John C. Rocker (12)                      18,000          *
      Deborah A. Brown (13)(14)                16,600          *
      Robert E. (Gene) Burris (4)              27,500          *
      Edward B. Krekeler, Jr. (4)(16)          27,975          *
      Laurie M. Shahon (4)(15)                 33,000          *
      William B. Snow (4)(16)                  28,500          *

	Officers and directors as
        a group (11 persons)                  478,980         9.08%
	______________________
	*  Less than 1%
** Shares beneficially owned reflect Common Stock owned and
exercisable options including options that will become exercisable
within sixty days of the date hereof.

(1)   Based on the Schedule 13G filed by Soros Fund Management
      LLC, these shares are held for the accounts of Quantum
      Partners (as defined below) and Quasar Partners (as defined
      below). Soros Fund Management LLC, a Delaware limited
      liability company, serves as principal investment manager to
      Quantum Partners LDC, a Cayman Island exempted duration
      company ("Quantum Partners"), and as such, has been granted
      investment discretion over the shares of Common Stock.

(2)   Based on the Schedule 13G filed on behalf of Ironwood
      Capital Management, LLC, Warren J. Isabelle, Richard L.
      Droster, and Donald Collins.


                                 -2-


(3)   Based on the Schedule 13F filed by Mr. Jeffrey Tannebaum and
      Fir Tree Partners, these shares are for the accounts of Fir
      Tree Value Fund, L.P., Fir Tree Institutional Value Fund,
      L.P. and Fir Tree Value Partners LDC.  Mr. Tannebaum is the
      sole shareholder, officer, director and principal of Fir
      Tree Partners and he serves as general partner of the Fir
      Tree Value Fund L.P. and the Fir Tree Institutional Value
      Fund L.P. and as an investment advisor to the Fir Tree Value
      Partners LDC.

(4)   Stock options for 15,000 shares, all of which are
      exercisable at an exercise price of $7.625 per share, were
      granted to each director under the Directors Plan (as
      defined below) in 1997, and will expire on July 14, 2007.
      In July 1998, stock options for 5,000 shares, all of which
      are exercisable at an exercise price of $7.50 per share,
      were granted to each director under the Directors Plan, and
      will expire on July 10, 2008.  In June 1999, stock options
      for 5,000 shares, all of which are exercisable at an
      exercise price of $3.00 per share, were granted to each
      director under the Directors Plan in 1997, and will expire
      on June 30, 2009.  On June 1, 2000, stock options for 5,000
      shares, of which 2,500 shares are exercisable at an exercise
      price of $4.00 per share, were granted to each director
      under the Directors Plan. The options are exercisable
      ratably over two years commencing June 1, 2001.

(5)   Mr. Shields is the beneficial owner of 71,111 shares of
      Common Stock.

(6)   Mr. Clark was granted options to purchase 100,000 shares of
      Common Stock at an exercise price of $5.50 per share, under
      the Stock Option Plan (as defined below) as provided for
      under his employment agreement with the Company.  This
      option agreement terminated on December 6, 2000, and was
      replaced by the Amended & Restated Stock Option Agreement
      dated December 6, 2000, granting Mr. Clark options to
      purchase 100,000 shares of Common Stock, of which 60,000
      shares are exercisable, at an exercise price of $2.00 per
      share.  The options become exercisable ratably over five
      years commencing February 17, 1999, and will expire on
      February 17, 2008.  Mr. Clark was granted stock options to
      purchase 30,000 shares of Common Stock on June 1, 1998.
      This option agreement terminated on December 8, 1998, and
      was replaced by the Amended & Restated Stock Option
      Agreement dated December 8, 1998, granting Mr. Clark options
      to purchase 30,000 shares of Common Stock, of which 18,000
      shares are exercisable, at an exercise price of $3.625 per
      share. The options become exercisable ratably over five
      years commencing June 1, 1999, and will expire on June 1,
      2008.  Mr. Clark was granted options to purchase 20,000
      shares of Common Stock, of which 4,000 are exercisable, on
      June 30, 1999, at an exercise price of $3.00 per share. The
      options become exercisable ratably over five years
      commencing June 30, 2000, and will expire on June 30, 2009.
      Mr. Clark was granted options to purchase 60,000 shares of
      Common Stock, of which 12,000 are exercisable, on June 1,
      2000, at an exercise price of $4.00 per share. The options
      become exercisable ratably over five years commencing June


                              -3-


      1, 2001, and will expire on June 1, 2010. Mr. Clark was
      granted options to purchase 50,000 shares, on December 6,
      2000, at an exercise price of $2.00 per share. The options
      become exercisable ratably over five years commencing
      December 6, 2001, and will expire on December 6, 2010.

(7)   Mr. Clark is the beneficial owner of 17,700 shares of Common
      Stock.

(8)   Mr. Peterson was granted options to purchase 50,000 shares
      of Common Stock, of which 20,000 are exercisable at an
      exercise price of $3.50 per share outside the Stock Option
      Plan as provided for under his employment agreement with the
      Company.  The options become exercisable ratably over five
      years commencing October 19, 1999, and will expire on
      October 19, 2008.  Mr. Peterson was granted options to
      purchase 20,000 shares of Common Stock, of which 4,000 are
      exercisable, on June 30, 1999 at an exercise price of $3.00
      per share. The options become exercisable ratably over five
      years commencing June 30, 2000, and will expire on June 30,
      2009.  Mr. Peterson was granted options to purchase 50,000
      shares of Common Stock, of which 10,000 are exercisable, on
      June 1, 2000, at an exercise price of $4.00 per share. The
      options become exercisable ratably over five years
      commencing June 1, 2001, and will expire on June 1, 2010.
      Mr. Peterson was granted options to purchase 100,000 shares,
      on December 6, 2000, at an exercise price of $2.00 per
      share. The options become exercisable ratably over five
      years commencing December 6, 2001, and will expire on
      December 6, 2010.

(9)   Mr. Peterson is the beneficial owner of 30,000 shares of
      Common Stock.

(10)  On May 13, 1997, Mr. Mason was granted options to purchase
      12,000 shares of Common Stock, all of which are exercisable
      at an exercise price of $6.50 per share.  The options will
      expire on May 13, 2007.  Mr. Mason was granted options in
      July 1998 to purchase 13,000 shares of Common Stock, of
      which 7,800 are exercisable at an exercise price of $7.625
      per share. The options are exercisable ratably over five
      years commencing May 13, 1999, and will expire on July 10,
      2008. Mr. Mason was granted options to purchase 15,000
      shares of Common Stock, of which 3,000 are exercisable, on
      June 30, 1999 at an exercise price of $3.00 per share. The
      options become exercisable ratably over five years
      commencing June 30, 2000, and will expire on June 30, 2009.
      Mr. Mason was granted options to purchase 25,000 shares of
      Common Stock, of which 5,000 are exercisable, on June 1,
      2000, at an exercise price of $4.00 per share. The options
      become exercisable ratably over five years commencing June
      1, 2001, and will expire on June 1, 2010.

(11)  Mr. Mason is the beneficial owner of 108 shares of Common
      Stock and 341 warrants to purchase shares of Common Stock.

(12)  Mr. Rocker was granted options to purchase 25,000 shares of
      Common Stock, of which options with respect to 10,000 shares
      are presently exercisable at an exercise price of $4.75 per
      share outside the Stock Option Plan as provided for under


                                 -4-


      his employment agreement with the Company.  The options
      become exercisable ratably over five years commencing
      September 14, 1999, and will expire on September 14, 2008.
      Mr. Rocker was granted options to purchase 15,000 shares of
      Common Stock, of which 3,000 are exercisable, on June 30,
      1999 at an exercise price of $3.00 per share. The options
      become exercisable ratably over five years commencing June
      30, 2000, and will expire on June 30, 2009.  Mr. Rocker was
      granted options to purchase 25,000 shares of Common Stock,
      of which 5,000 are exercisable, on June 1, 2000, at an
      exercise price of $4.00 per share. The options become
      exercisable ratably over five years commencing June 1, 2001,
      and will expire on June 1, 2010.

(13)  On June 22, 1998, Ms. Brown was granted options to purchase
      13,000 shares of Common Stock, of which 7,800 are
      exercisable at an exercise price of $6.125 per share. The
      options become exercisable ratably over five years
      commencing June 22, 1999, and will expire on June 22, 2008.
      Ms. Brown was granted options to purchase 9,000 shares of
      Common Stock, of which 1,800 are exercisable, on June 30,
      1999 at an exercise price of $3.00 per share. The options
      become exercisable ratably over five years commencing June
      30, 2000, and will expire on June 30, 2009.  Ms. Brown was
      granted options to purchase 25,000 shares of Common Stock,
      of which 5,000 are exercisable, on June 1, 2000, at an
      exercise price of $4.00 per share. The options become
      exercisable ratably over five years commencing June 1, 2001,
      and will expire on June 1, 2010.

(14)  Ms. Brown is the beneficial owner of 2,000 shares of Common
      Stock.

(15)  Ms. Shahon is the beneficial owner of 5,500 shares of Common
      Stock.

(16)  Mr. Snow is the beneficial owner of 1,000 shares of Common
      Stock.

(17)  Mr. Krekeler is the beneficial owner of 475 shares of Common
      Stock.

                            PROPOSAL ONE

                       ELECTION OF DIRECTORS

      The Board of Directors consists of seven directorships, one of
which is currently vacant.  Under the Bylaws, each director serves for a
term of one year commencing at the annual meeting of stockholders at
which he or she is elected and ending at the annual meeting of
stockholders at which his or her successor is elected.

      David N. Weinstein resigned as a director on April 24, 2001,
creating a vacant directorship.  His resignation did not involve a
disagreement on any matter relating to the operations, the policies or
the practices of the Company.


                               -5-


      The following is certain information about the current directors,
each of whom has been nominated for re-election as a director at the
Annual Meeting:

                                                          Director
 	Name                        Age   	Position	   	Since

	Robert E. (Gene) Burris	     53     Director          1996

	David B. Clark               48     Director          1998

	Edward B. Krekeler, Jr.      57     Director          1996

	Laurie M. Shahon             49     Director          1996

	John A. Shields              57     Director          1993

	William B. Snow              69     Director          1996

      Assuming the re-election of the six directors, one vacant
directorship would remain.

      Robert E. (Gene) Burris became a director of the Company on August
2, 1996.  Since 1988, Mr. Burris has been President of the UFCW Local
No. 1000, which represents approximately 96% of the Store's unionized
employees.  Pursuant to the present collective bargaining agreements,
the UFCW has the right to designate one member of the Boards of
Directors of the Company and Stores.  Mr. Burris is the designee of the
UFCW. Since February 1995, Mr. Burris has been the Chief Executive
Officer and owner of G&E Railroad, a retail store.

      David B. Clark became President, Chief Executive Officer and a
director of the Company in February 1998.  From 1996 to February 1998,
Mr. Clark was Executive Vice President, Merchandising and Distribution,
for Bruno's, Inc., a $2.8 billion sales company with over 200 stores,
having joined in 1995 as Senior Vice President, Operations and
Distribution. Bruno's Inc. filed Chapter 11 bankruptcy on February 2,
1998.  From 1992 through 1995, Mr. Clark was Vice President, Operations
and subsequently Executive Vice President, Merchandising and Operations
for the Cub Foods Division of Super Valu, Inc., responsible for stores
producing sales volume of $1.7 billion.  Mr. Clark is a director of
Associated Wholesale Grocers, Inc., a retail buying cooperative of which
Stores is a member.

      Edward B. Krekeler, Jr. became a director of the Company on August
2, 1996.  Mr. Krekeler is a Vice-President and Portfolio Manager at
Investors Management Group since September 1999.  From September 1997 to
April 1999, he was a senior product manager of First National Bank North
Dakota.  From 1994 to August 1997, he was the President of Krekeler
Enterprises, Ltd., a corporate financial consulting firm.  From 1984 to
1994, he served in various positions as an officer of Reliastar
Investment Research, Inc. (formerly known as Washington Square Capital,
Inc.), including Vice-President, Special Investments, Vice-President,
Administration, Private Placements, Vice-President, Portfolio Manager,
Private Placements, and Chief Investment Analyst. From 1970 to 1984, Mr.
Krekeler was Director, Fixed Income Investments, of The Ohio National
Life Insurance Company, Inc. He was Chairman of the Board of Directors
of Convenient Food Marts, Inc. from 1990 to 1994.


                               -6-


      Laurie M. Shahon became a director of the Company on August 2,
1996. Ms. Shahon has been President of Wilton Capital Group, a private
direct investment firm since January 1994.  Ms. Shahon previously served
as Vice Chairman and Chief Operating Officer of Color Tile, Inc. in
1989.  From 1988 to 1993, she served as Managing Director of `21'
International Holdings, Inc., a private holding company.  From 1980 to
1988, she was Vice President of Salomon Brothers Inc, where she was
founder and head of the retailing and consumer products group.  Ms.
Shahon is a director of One Price Clothing Stores, Inc., Bradlees, Inc.
and Factory Card Outlet Corp.

      John A. Shields became a director of the Company in May 1993,
Acting Chairman of the Board in September 1997 and Chairman of the Board
on July 9, 1998. From 1994 to 1997, Mr. Shields was the Chairman and
Chief Executive Officer of Delray Farms Fresh Markets.  From 1983 to
1993, he was President and Chief Executive Officer of First National
Super Markets, Inc., a retail grocery store chain. He is currently
Chairman of the Board of Wild Oats Markets, Inc., a publicly reporting
health food supermarket, and a director of Shore Bank Corp., a publicly
reporting bank.

      William B. Snow became a director of the Company on August 2,
1996. Since 1994, Mr. Snow has served as Vice Chairman of Movie Gallery,
Inc., the second largest video specialty retailer in the United States.
From 1985 to 1994, he was Executive Vice President and a director of
Consolidated Stores Corporation.  From 1980 to 1985, Mr. Snow was
Chairman, President and Chief Executive Officer of Amerimark, Inc., a
diversified supermarket retailer and institutional food service
distributor.  From 1974 to 1980, he was President of Continental
Foodservice, Inc.  From 1966 to 1974, Mr. Snow was Senior Vice President
of Hartmarx, Inc. Mr. Snow is a director of Movie Gallery, Inc.

      No family relationships exist among the directors and the officers
of the Company.

      The election of each nominated director requires a majority of the
votes cast at the Annual Meeting.  If a stockholder wishes to withhold
authority to vote for any nominee, such stockholder can do so by
following the directions set forth on the enclosed Proxy or, if such
stockholder wishes to vote in person, on the ballot to be distributed at
the Annual Meeting.  The persons named in the enclosed Proxy will vote
the shares of Common Stock covered by such Proxy for the election of the
nominees set forth above, unless instructed to the contrary.

      Directors who are not employees of the Company are paid annual
retainers of $20,000 and $1,000 for each meeting of the Board or any
Committee, respectively, attended in person, but not to exceed $1,000 if
more than one meeting is held on the same day, and $500 for each meeting
of the Board or any Committee attended by telephonic conference call.
During 2000, Mr. Shields was compensated for his services as Chairman in
the amount of $50,000 in lieu of his Board stipend.  Mr. Shields'
compensation as Chairman will be $50,000 in 2001.

      During 2000, the Board of Directors had five meetings.  Each
director has attended at least 75% of the meetings of the Board of
Directors.


                               -7-


      The Company has four standing committees: an Audit Committee
(consisting of Messrs. Krekeler (Chairman) and Burris and Ms. Shahon)
which is responsible for recommending the independent auditor to the
Company and reviewing the audit conducted by the independent auditor; a
Compensation and Benefits Committee ("Compensation Committee")
(consisting of Ms. Shahon (Chairman) and Messrs. Shields and Snow) which
is responsible for reviewing executive compensation and benefits and
making recommendations with respect thereto; an Executive Committee
(consisting of Messrs. Shields (Chairman), Clark and Krekeler) which is
responsible for the strategic direction and guidance for the growth and
development of the Company; and a Capital Expenditures Committee
(consisting of Clark and Shields) which is responsible for approving any
capital expenditures by the Company in excess of $1 million.  During
2000, the Audit Committee, the Compensation and Benefits Committee, the
Executive Committee and the Capital Expenditures Committee have each had
meetings. Mr. Weinstein has served as Chairman of the Capital
Expenditures Committee prior to his resignation on April 24, 2001,
leaving the chairmanship vacant.

      THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE RE-ELECTION OF THE DIRECTORS.

                            PROPOSAL TWO

                      RATIFICATION OF AUDITORS

      The Board of Directors has selected PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), who also served as independent auditors for
the most recently completed fiscal year, as the independent auditors to
examine and to report on the financial statements of the Company for
fiscal year 2001.  At the Annual Meeting, the stockholders will consider
a proposal to ratify the selection of PricewaterhouseCoopers.

      Representatives of PricewaterhouseCoopers are expected to be
present at the Annual Meeting, with the opportunity to make a statement
if they desire to do so, and will be available to respond to appropriate
questions.

      THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS.

Fees

      Audit Fees. Audit fees for 2000 were $190,000, of which an
aggregate amount of $135,000 has been billed by PricewaterhouseCoopers
through December 30, 2000.  Such fees include the audit of the financial
statements of the Company as filed on Form 10-K and the review of
quarterly financial information as filed on Form 10-Q for the first
three quarters of 2000.  Financial Information Systems Design and
Implementation Fees.  No fees were billed for this item during 2000.
All other Fees.  Additional fees totaling $19,500 primarily relating to
audits of employee benefit plans.


                               -8-


                        EXECUTIVE OFFICERS

      The officers of the Company are elected by the Board of Directors
at their annual meeting or at any regular or special meeting of the
Board of Directors and are elected to hold office until the next
succeeding annual meeting of the Board of Directors.

                     BIOGRAPHICAL INFORMATION

      Set forth below is certain information concerning each current
executive officer of the Company or Stores:

                                                          Years with the
                                                          Company and/or
                          Age       Position                 Safeway

John A. Shields            57       Chairman of the Board,       --
                                     Director
David B. Clark             48       President, Chief Executive    3
                                     Officer and Director

Wayne S. Peterson          43       Senior Vice President         2
                                     Finance, Chief Financial
                                     Officer and Secretary

John C. Rocker*            46       Vice President - Operations   2

Steven M. Mason*           46       Vice President - Marketing   30

Deborah A. Brown           40       Vice President, Corporate     5
                                     Controller, Treasurer and
                                     Assistant Secretary
Prentess E. Alletag, Jr.*  54       Vice President - Human       31
                                     Resources

* Messrs. Mason, Rocker and Alletag only serve as officers for Stores.

      John A. Shields became a director of the Company in May 1993,
Acting Chairman of the Board in September 1997 and Chairman of the Board
on July 9, 1998. From 1994 to 1997, Mr. Shields was the Chairman and
Chief Executive Officer of Delray Farms Fresh Markets.  From 1983 to
1993, he was President and Chief Executive Officer of First National
Super Markets, Inc., a retail grocery store chain. He is currently
Chairman of the Board of Wild Oats Markets, Inc., a publicly reporting
health food supermarket, and a director of Shore Bank Corp., a publicly
reporting bank.

      David B. Clark became President, Chief Executive Officer and a
director of the Company in February 1998.   From 1996 to February 1998,
Mr. Clark was Executive Vice President, Merchandising and Distribution,
for Bruno's, Inc., a $2.8 billion sales company with over 200 stores,
having joined in 1995 as Senior Vice President, Operations and
Distribution. Bruno's Inc. filed Chapter 11 bankruptcy on February 2,
1998.  From 1992 through 1995, Mr. Clark was Vice President, Operations
and subsequently Executive Vice President, Merchandising and Operations
for the Cub Foods Division of Super Valu, Inc., responsible for stores
producing sales volume of $1.7 billion.  Mr. Clark is a director of


                                 -9-


Associated Wholesale Grocers, Inc., a retail buying cooperative of which
Stores is a member.

      Wayne S. Peterson joined the Company in October 1998 as Senior
Vice President - Finance, Chief Financial Officer and Secretary.  From
October 1990 to October 1998, Mr. Peterson served as director and Senior
Vice President, Chief Financial Officer and Secretary of Buttrey Food
and Drug Stores Company.

      John C. Rocker joined the Company in September 1998 as Vice
President - Operations.  From October 1980 to September 1998, Mr. Rocker
was with the Kroger Company, most recently as Director of Human
Resources, Labor Relations and Safety.

      Steven M. Mason joined Safeway in 1970 and the Oklahoma Division
in 1986. At the time of the acquisition of the Oklahoma division of
Safeway by Homeland, he was serving as Special Projects Coordinator for
the Oklahoma Division.  In November 1987, he joined Stores and in
October 1988, he was appointed to the position of Vice President -
Retail Operations.  In October 1993, Mr. Mason was appointed to the
position of Vice President - Marketing.

      Deborah A. Brown joined the Company in November 1995 and became
Vice President, Corporate Controller, Treasurer and Assistant Secretary
as of June 1998.  From October 1985 to January 1995, Ms. Brown served as
Consolidation Manager of Scrivner Inc., the nation's third largest
grocery wholesaler, prior to its acquisition by Fleming Companies, Inc.

      Prentess E. Alletag, Jr. joined the Oklahoma Division in October
1969, where, at the time of the acquisition of the Oklahoma division of
Safeway by Homeland, he was serving as Human Resources and Public
Affairs Manager.  In November 1987, Mr. Alletag became Vice President -
Human Resources.

COMPENSATION

      Summary of Cash and Certain Other Compensation

      The following table provides certain summary information
concerning compensation paid or accrued by the Company to, or on behalf
of, the Company's Chief Executive Officer and each of the four other
most highly compensated executive officers of the Company during the
fiscal year ended December 30, 2000 (hereinafter referred to as the
"Named Executive Officers") and for the fiscal years ended January 1,
2000, and January 2, 1999:


                               -10-


                      SUMMARY COMPENSATION TABLE
                         Annual Compensation

                                                      Long-Term
Name and                                             Compensation  All Other
Principal Position         Year  Salary    Bonus    Option Awards Compensation

David B. Clark (1)(2)(3)   2000  $265,000  $   -       110,000      $55,069
President, Chief           1999   262,403   192,617     20,000       24,671
Executive Officer and      1998   216,346   153,374    130,000       17,336
Director

Wayne S. Peterson(1)(4)(5) 2000  $155,192  $   -       150,000      $ 8,956
Senior Vice President      1999   150,000    73,350     20,000        8,887
Finance, Chief Financial   1998    28,846    18,653     50,000       56,178
Officer and Secretary

Steven M. Mason (6)(7)     2000  $136,274  $   -        25,000      $10,831
Vice President/Marketing   1999   133,737    65,423     15,000       10,749
                           1998   130,500    57,942     13,000        7,106

John C. Rocker (1)(8)(9)   2000  $129,327  $   -        25,000      $ 9,705
Vice President/Operations  1999   125,000    61,125     15,000       13,785
                           1998    36,058    16,595     25,000       62,273

Deborah A. Brown (10)(11)  2000  $ 85,385  $    -       25,000      $ 8,446
Vice President, Corporate  1999    75,000     41,675     9,000        7,124
Controller, Treasurer and  1998    60,558     33,300    13,000          615
Assistant Secretary
_____________


(1)   Mr. Clark joined the Company in February 1998, Mr. Peterson joined
the Company in October 1998 and Mr. Rocker joined the Company in
September 1998.

(2)   Other compensation during 2000 for Mr. Clark includes
reimbursement of a portion of relocation expenses of $45,356; auto
allowance of $7,800; reimbursement for private life insurance
premium of $1,281; and Company-provided life insurance premium of
$632.

(3)   Mr. Clark was granted options to purchase 100,000 shares of Common
Stock at an exercise price of $5.50 per share, under the Stock
Option Plan as provided for under his employment agreement with
the Company.  This option agreement terminated on December 6,
2000, and was replaced by the Amended & Restated Stock Option
Agreement dated December 6, 2000, granting Mr. Clark options to
purchase 100,000 shares of Common Stock, of which 60,000 shares
are exercisable, at an exercise price of $2.00 per share.  The
options become exercisable ratably over five years commencing
February 17, 1999, and will expire on February 17, 2008.  Mr.
Clark was granted stock options to purchase 30,000 shares of
Common Stock on June 1, 1998.  This option agreement terminated on
December 8, 1998, and was replaced by the Amended & Restated Stock
Option Agreement dated December 8, 1998, granting Mr. Clark
options to purchase 30,000 shares of Common Stock, of which 18,000
shares are exercisable, at an exercise price of $3.625 per share.
The options become exercisable ratably over five years commencing
June 1, 1999, and will expire on June 1, 2008.  Mr. Clark was
granted options to purchase 20,000 shares of Common Stock, of


                                 -11-


which 4,000 are exercisable, on June 30, 1999, at an exercise
price of $3.00 per share. The options become exercisable ratably
over five years commencing June 30, 2000, and will expire on June
30, 2009. Mr. Clark was granted options to purchase 60,000 shares
of Common Stock, of which 12,000 are exercisable, on June 1, 2000,
at an exercise price of $4.00 per share. The options become
exercisable ratably over five years commencing June 1, 2001, and
will expire on June 1, 2010. Mr. Clark was granted options to
purchase 50,000 shares, on December 6, 2000, at an exercise price
of $2.00 per share. The options become exercisable ratably over
five years commencing December 6, 2001, and will expire on
December 6, 2010.

(4)   Other compensation during 2000 for Mr. Peterson includes auto
allowance of $7,800; reimbursement for private life insurance
premium of $862; and Company-provided life insurance premium of
$294.

(5)   Mr. Peterson was granted options to purchase 50,000 shares of
Common Stock, of which 20,000 are exercisable at an exercise price
of $3.50 per share outside the Stock Option Plan as provided for
under his employment agreement with the Company.  The options
become exercisable ratably over five years commencing October 19,
1999, and will expire on October 19, 2008.  Mr. Peterson was
granted options to purchase 20,000 shares of Common Stock, of
which 4,000 are exercisable, on June 30, 1999 at an exercise price
of $3.00 per share. The options become exercisable ratably over
five years commencing June 30, 2000, and will expire on June 30,
2009.  Mr. Peterson was granted options to purchase 50,000 shares
of Common Stock, of which 10,000 are exercisable, on June 1, 2000,
at an exercise price of $4.00 per share. The options become
exercisable ratably over five years commencing June 1, 2001, and
will expire on June 1, 2010. Mr. Peterson was granted options to
purchase 100,000 shares, on December 6, 2000, at an exercise price
of $2.00 per share. The options become exercisable ratably over
five years commencing December 6, 2001, and will expire on
December 6, 2010.

(6)   Other compensation during 2000 for Mr. Mason includes auto
allowance of $7,800; reimbursement for private life insurance
premium of $2,781; and Company-provided life insurance premium of
$250.

(7)   On May 13, 1997, Mr. Mason was granted options to purchase 12,000
shares of Common Stock, all of which are exercisable at an
exercise price of $6.50 per share.  The options will expire on May
13, 2007.  Mr. Mason was granted options in July 1998 to purchase
13,000 shares of Common Stock, of which 7,800 are exercisable at
an exercise price of $7.625 per share. The options are exercisable
ratably over five years commencing May 13, 1999, and will expire
on July 10, 2008. Mr. Mason was granted options to purchase 15,000
shares of Common Stock, of which 3,000 are exercisable, on June
30, 1999 at an exercise price of $3.00 per share. The options
become exercisable ratably over five years commencing June 30,
2000, and will expire on June 30, 2009.  Mr. Mason was granted
options to purchase 25,000 shares of Common Stock, of which 5,000
are exercisable, on June 1, 2000, at an exercise price of $4.00
per share. The options become exercisable ratably over five years
commencing June 1, 2001, and will expire on June 1, 2010.


                                -12-


(8)   Other compensation during 2000 for Mr. Rocker includes auto
allowance of $7,800; reimbursement for private life insurance
premium of $1,684; and Company-provided life insurance premium of
$221.

(9)   Mr. Rocker was granted options to purchase 25,000 shares of Common
Stock, of which options with respect to 10,000 shares are
presently exercisable at an exercise price of $4.75 per share
outside the Stock Option Plan as provided for under his employment
agreement with the Company.  The options become exercisable
ratably over five years commencing September 14, 1999, and will
expire on September 14, 2008. Mr. Rocker was granted options to
purchase 15,000 shares of Common Stock, of which 3,000 are
exercisable, on June 30, 1999 at an exercise price of $3.00 per
share. The options become exercisable ratably over five years
commencing June 30, 2000, and will expire on June 30, 2009.  Mr.
Rocker was granted options to purchase 25,000 shares of Common
Stock, of which 5,000 are exercisable, on June 1, 2000, at an
exercise price of $4.00 per share. The options become exercisable
ratably over five years commencing June 1, 2001, and will expire
on June 1, 2010.

(10)  Other compensation during 2000 for Ms. Brown includes auto
allowance of $7,800; reimbursement for private life insurance
premium of $572; and Company-provided life insurance premium of
$74.

(11)  On June 22, 1998, Ms. Brown was granted options to purchase 13,000
shares of Common Stock, of which 7,800 are exercisable at an
exercise price of $6.125 per share. The options become exercisable
ratably over five years commencing June 22, 1999, and will expire
on June 22, 2008. Ms. Brown was granted options to purchase 9,000
shares of Common Stock, of which 1,800 are exercisable, on June
30, 1999 at an exercise price of $3.00 per share. The options
become exercisable ratably over five years commencing June 30,
2000, and will expire on June 30, 2009.  Ms. Brown was granted
options to purchase 25,000 shares of Common Stock, of which 5,000
are exercisable, on June 1, 2000, at an exercise price of $4.00
per share. The options become exercisable ratably over five years
commencing June 1, 2001, and will expire on June 1, 2010.





                              -13-



The following table sets forth certain information with respect to
grants of options to the Named Executive Officers during 2000:

                     Option Grants in Last Fiscal Year

                                                       Potential Realized
                                                       Value at Assumed Rates
                                                       of Stock Appreciation
               Individual Grants for Option Terms

                               % of
                               Total
                  Number of   Options
                 Securities   Granted
                 Underlying  Employees
                  Options    in Fiscal Exercise  Expiration
Name              Granted      Year    Price      Date            5%      10%

David B. Clark       60,000   15.19%   $4.00   June 1, 2010     150,935  382,498

David B. Clark       50,000   12.66%   $2.00   December 6, 2010  62,889  159,374

Wayne S. Peterson    50,000   12.66%   $4.00   June 1, 2010     125,779  318,748

Wayne S. Peterson   100,000   25.32%   $2.00   December 6, 2010 125,779  318,748

Steven M. Mason      25,000    6.33%   $4.00   June 1, 2010      62,889  159,374

John C. Rocker       25,000    6.33%   $4.00   June 1, 2010      62,889  159,374

Deborah A. Brown     25,000    6.33%   $4.00   June 1, 2010      62,889  159,374

EMPLOYMENT CONTRACTS WITH NAMED EXECUTIVE OFFICERS

      On February 17, 1998, the Company entered into an employment
agreement with David B. Clark, the Company's President and Chief
Executive Officer, for an indefinite period.  The agreement provides a
base annual salary of $250,000, subject to increase from time to time at
the discretion of the Board of Directors.  Mr. Clark is also entitled to
participate in the Company's incentive plan with a target annual bonus
of 75% of his base annual salary. The agreement also provides for (a)
relocation expenses, including a temporary residence; (b) a company car;
and (c) a loan of $125,000. Under the agreement, Mr. Clark is entitled
to participate in the Company's employee benefit plans and programs
generally available to employees and senior executives, if any. If the
Company terminates Mr. Clark's employment for any reason other than
cause or disability or his employment is terminated by Mr. Clark
following a change of control or certain trigger events (each as
defined), Mr. Clark will receive (a) his annual base salary, (b) a pro
rata amount of incentive compensation for the portion of the incentive
year that precedes the date of termination, and (c) continuation of
welfare benefit arrangements for a period of one year after the date of
termination. Pursuant to the employment agreement, Mr. Clark's loan of
$125,000 plus all accrued interest was deemed cancelled on February 16,
2001.  The loan had an annual interest rate of 5.50%, and the total amount
of indebtedness cancelled was $146,780.  On June 1, 2000, the Company
entered into a letter agreement with Mr. Clark whereby the Company agreed
to loan Mr. Clark $90,000 as a result of the loss Mr. Clark incurred on the
sale of his Birmingham, Alabama home.  Mr. Clark agreed to use the proceeds
of the loan to purchase a minimum of 15,000 shares Company stock in open
market purchases.  Payments due on the loan are payable in equal principal
amounts of $30,000, plus accrued interest, on the anniversary date of the
loan.  So long as Mr. Clark remains employed by the Company on an


                                 -14-


anniversary date, such date's payment of principal and interest will be
forgiven.  Additionally, if Mr. Clark terminates his employment following a
Trigger Event (as defined in his employment agreement), the outstanding
principal balance and accrued interest will be forgiven.  This loan has an
annual interest rate of 6.50%, and the total amount of indebtedness as of
December 30, 2000 was $93,413.  On December 26, 2000, the Company entered
into a letter agreement with Mr. Clark.  The letter agreement provides
that, in the event of a change of control of the Company or Stores, the
Company will pay to Mr. Clark an amount equal to his target amount of
incentive compensation.  Such amount is not dependent on achievement of the
criteria under the Management Incentive Plan or subject to pro ration.

      On July 6, 1998, the Company entered into an employment agreement
with Wayne S. Peterson, the Company's Senior Vice President, Chief
Financial Officer and Secretary.  The agreement provides for a base
salary of $150,000, subject to increase from time to time at the
discretion of the Board of Directors.  Mr. Peterson is also entitled to
participate in the Company's incentive plan with a target annual bonus
of 50% of his base annual salary. The agreement also provides for (a)
relocation expenses, including a temporary residence; (b) a company car
or car allowance; and (c) an executive term life insurance policy in the
face amount of $500,000. If the Company terminates Mr. Peterson's
employment for any reason other than cause or disability, Mr. Peterson
will be paid (a) his base salary for one year and (b) a lump sum payment
of an amount equal to the product of (i) Mr. Peterson's target bonus
under the Company's incentive bonus plan for the year in which
employment terminates and (ii) a fraction, the numerator of which is the
number of days during such year prior to and including the date of
termination of employment and the denominator of which is 365. On
December 26, 2000, the Company entered into a letter agreement with Mr.
Peterson.  The letter agreement provides that, in the event of a change of
control of the Company or Stores, the Company will pay to Mr. Peterson an
amount equal to his target amount of incentive compensation.  Such amount
is not dependent on achievement of the criteria under the Management
Incentive Plan or subject to pro ration.

      On December 15, 2000, the Company entered into a letter agreement
regarding severance arrangements with Steven M. Mason, the Company's
Vice President of Marketing. The agreement provides that in the event
his employment is terminated prior to December 31, 2001, for any reason
other than cause or disability, the Company will continue to pay his
base salary for a period of one year plus a pro rata target amount of
the incentive compensation for the portion of the incentive year that
precedes the date of termination. The pro rata incentive compensation is
payable only in the event that the results of the Company are such that
the criteria for paying bonus has been achieved pursuant to the
Management Incentive Plan. On December 26, 2000, the Company entered into
a letter agreement with Mr. Mason.  The letter agreement provides that, in
the event of a change of control of the Company or Stores, the Company will
pay to Mr. Mason an amount equal to his target amount of incentive
compensation.  Such amount is not dependent on achievement of the criteria
under the Management Incentive Plan or subject to pro ration.

      On September 14, 1998, the Company entered into an employment
agreement with John C. Rocker, the Company's Vice President of
Operations.  The agreement provides for a base salary of $125,000,
subject to increase from time to time at the discretion of the Board of
Directors.  Mr. Rocker is also entitled to participate in the Company's
incentive plan with a target annual bonus of 50% of his base annual


                               -15-


salary. The agreement also provides for (a) signing bonus of $25,333;
(b) relocation expenses and (c) a company car or a car allowance.

      On December 15, 2000, the Company entered into a letter agreement
regarding severance arrangements with Mr. Rocker. The agreement provides
that in the event his employment is terminated prior to December 31,
2001, for any reason other than cause or disability, the Company will
continue to pay his base salary for a period of one year plus a pro rata
target amount of the incentive compensation for the portion of the
incentive year that precedes the date of termination. The pro rata
incentive compensation is payable only in the event that the results of
the Company are such that the criteria for paying bonus has been
achieved pursuant to the Management Incentive Plan. On December 26,
2000, the Company entered into a letter agreement with Mr. Rocker.
The letter agreement provides that, in the event of a change of control of
the Company or Stores, the Company will pay to Mr. Rocker an amount equal
to his target amount of incentive compensation.  Such amount is not
dependent on achievement of the criteria under the Management Incentive
Plan or subject to pro ration.

      On December 15, 1999, the Company entered into a letter agreement
regarding severance arrangements with Deborah A. Brown, the Company's
Vice President - Accounting, Corporate Controller, Treasurer and
Assistant Secretary. The agreement provides that in the event her
employment is terminated prior to December 31, 2001, for any reason
other than cause or disability, the Company will continue to pay her
base salary for a period of one year plus a pro rata target amount of
the incentive compensation for the portion of the incentive year that
precedes the date of termination. The pro rata incentive compensation is
payable only in the event that the results of the Company are such that
the criteria for paying bonus has been achieved pursuant to the
Management Incentive Plan. On December 26, 2000, the Company entered into
a letter agreement with Ms. Brown.  The letter agreement provides that, in
the event of a change of control of the Company or Stores, the Company will
pay to Ms. Brown an amount equal to his target amount of incentive
compensation.  Such amount is not dependent on achievement of the criteria
under the Management Incentive Plan or subject to pro ration.

MANAGEMENT INCENTIVE PLAN

      The Company maintains a Management Incentive Plan to provide
incentive bonuses for members of its management and key employees.
During 2000, bonuses were determined according to a formula based on
both corporate and store performance and accomplishments or other
achievements and were paid only if minimum performance and/or
accomplishment targets are reached.  At minimum performance level, the
bonus payout ranges from 25% to 50% of salaries for officers (as set
forth in the plan), including the Chief Executive Officer.  Maximum
bonus payouts range from 100% to 200% of salary for officers and up to
150% of salary for the Chief Executive Officer.  Performance levels must
significantly exceed target levels before the maximum bonuses are paid.
Under limited circumstances, individual bonus amounts can exceed these
levels if approved by the Compensation Committee.  Incentive bonuses
paid to managers and supervisors vary according to their reporting and
responsibility levels.  The plan is administered by the Compensation
Committee, all of whom are ineligible to participate in the plan.
Incentive bonuses were not earned for the Named Executive Officers under
the plan for performance during fiscal year 2000.


                                -16-


RETIREMENT PLAN

      The Company maintains a retirement plan in which all non-union
employees, including members of management, participate.  Under the
plan, employees who retire at or after age 65 and after completing five
years of vesting service (defined as calendar years in which employees
complete at least 1,000 hours of service) are entitled to retirement
benefits equal to the product of (a) 1.50% of career average annual
compensation (including basic, overtime and incentive compensation) plus
 .50% of career average annual compensation in excess of the social
security covered compensation multiplied by (b) years of benefit service
(not to exceed 35 years).  Retirement benefits will also be payable upon
early retirement beginning at age 55, at rates actuarially reduced from
those payable at normal retirement. Benefits are paid in annuity form
over the life of the employee or the joint lives of the employee and his
or her spouse or other beneficiary.

      Under the retirement plan, estimated annual benefits payable to
the Named Executive Officers of the Company upon retirement at age 65,
assuming no changes in covered compensation or the social security wage
base, would be as follows: David B. Clark, $55,353; Wayne S. Peterson,
$66,864; Steven M. Mason, $84,725; John C. Rocker, $60,064; and Deborah
A. Brown, $39,794.

MANAGEMENT STOCK OPTION PLAN

      In December 1996, the Board of Directors adopted the Homeland
Holding Corporation 1996 Stock Option Plan ("Stock Option Plan").  The
Stock Option Plan, which is administered by the Compensation Committee,
provides for the granting of options to purchase up to an aggregate of
up to 832,222 shares of Common Stock. Options granted under the Stock
Option Plan are "non-qualified options."  The option price of each
option must not be less than the fair market value as determined by the
Compensation Committee.  Unless the Compensation Committee otherwise
determines, options become exercisable ratably over a five-year period
or immediately in the event of a "change of control" as defined in the
Stock Option Plan.  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; and (c) three
months after termination for other than cause.

COMPENSATION COMMITTEE REPORT

      The Compensation Committee is composed entirely of non-employee
directors. The Compensation Committee reviews and approves all
compensation arrangements for executive officers and, in that regard,
has developed compensation policies for the executives which seek to
enhance the profitability of the Company and to assure the ability of
the Company to attract and retain executive employees with competitive
compensation. Actions by the Compensation Committee are reported to the
Board of Directors and, in appropriate cases, ratified by the Board of
Directors prior to implementation.

      The compensation program of the Company seeks specifically to
motivate the executives of the Company to achieve objectives which
benefit the Company within their respective areas of responsibility,
with particular emphasis on continued growth in revenues, expense
control, operating efficiency, and the ultimate realization of profits
for the Company.


                                 -17-


      Base salary levels for the Company's executive officers, including
the Chief Executive Officer, are set so that the overall cash
compensation package for executive officers, including bonus
opportunities, compares reasonably to companies with which the Company
competes for executive talent.  In determining salaries, the
Compensation Committee also takes into account a number of factors,
which primarily include individual experience and performance, the
officer's level of responsibility, the cost of living and historical
salary levels. The measures of individual performance considered
include, to the extent applicable to an individual executive officer, a
number of quantitative and qualitative factors such as the Company's
financial performance, the individual's achievement of particular
nonfinancial goals within his or her responsibility and other
contributions made by the officer to the Company's success.

      In addition to base salary, certain executives, including the
Chief Executive Officer, may earn an incentive of up to 150% of such
executive's base pay.  The compensation policies of the Company are
general and subjective both as to salary and as to the other components
of the compensation program.  The Company's compensation program also
includes benefits typically offered to executives of similar businesses
to promote management stability, consisting of a retirement plan, stock
option plan and employment agreements.

					Laurie M. Shahon, Chairman
					John A. Shields
					William B. Snow

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      Except for Mr. Shields, none of the persons serving on the
Compensation Committee during fiscal year 2000 was an officer or an
employee of the Company or Stores or was formerly an officer or an
employee of the Company or Stores.  There are no interlocks with respect
to the Compensation Committee.






                                  -18-




PERFORMANCE GRAPH

      Shown below is a line graph comparing cumulative total shareholder
return for the Company, the S & P Retail Stores (Food), and the S & P
500 since April 14, 1997.

Comparison of Cumulative Total Return* -- Homeland Holding Corporation,
S&P 500 Retail Food Stores, and S & P 500

--Homeland --S&P 500 Retail -- S & P 500





               Date       Homeland      S&P 500 Retail      S & P 500
------------------------------------------------------------------------

               04/97      $100.00       $100.00             $100.00
               01/98        78.79        133.18              130.48
               01/99        41.67        190.32              165.28
               01/00        43.94        110.16              197.55
               12/00         6.06        145.94              177.52
------------------------------------------------------------------------
           *Total return assumes reinvestment of dividends on a
            quarterly basis.

Note:  Companies comprising the S & P Retail Stores (Food) Index
include: Albertson's, Inc.; Kroger Co.; Safeway Inc.; and Winn-Dixie
Stores Inc.

AUDIT COMMITTEE REPORT

      In accordance with its written Charter which has been adopted by
the Board, attached as Exhibit 1, adopted by the Board of Directors, the
Audit Committee of the Board assists the Board in fulfilling its
responsibility for oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of the Company.
Each member of the Committee is independent as defined by the Securities
and Exchange Commission.  The Committee reviewed the interim financial
information contained in each quarterly earnings announcement with
management prior to public release and obtained the assurance that the
required review of quarterly results by the independent auditors had


                                 -19-


been conducted on a timely basis.  In discharging its oversight
responsibility as to the audit process, the Committee obtained from the
independent auditors a formal written statement describing all
relationships between the independent auditors and the Company that
might bear on the independent auditors' independence consistent with
Independence Standards Board Standard No. 1, "Independence Discussions
with Audit Committees'; discussed with the independent auditors any
relationships that may impact their objectivity and independence,
including whether the independent auditors' provision of non-audit
services was compatible with maintaining their independence; and
satisfied itself as to the independent auditors' independence.  The
Company also discussed with management, the internal auditors and the
independent auditors the quality of the Company's internal controls and
the organization, responsibilities, budget and staffing of the internal
auditors.  The Committee also reviewed with both the independent
auditors and the internal auditors their audit plans for the year 2000.

      The Committee discussed with the independent auditors all
communications required by generally accepted auditing standards,
including those described in Statement on Auditing Standards No. 61, as
amended, "Communication with Audit Committees" and, with and without
management present, discussed and reviewed the results of the
independent auditors' audit of the financial statements.

      The Committee reviewed and discussed the audited financial
statements of the Company as of and for the fiscal year ended December
30, 2000, with management and the independent auditors.  Management is
responsible for preparing the Company's financial statements and the
independent auditors are responsible for auditing those statements.

      Based on the above-mentioned review and discussions with
management and the independent auditors, the Committee recommended to
the Board that the Company's audited financial statements be included in
its Annual Report on Form 10-K for the fiscal year ended December 30,
2000, for filing with the Securities and Exchange Commission.  The
Committee also recommended the reappointment, subject to stockholder
approval, of the independent auditors and the Board concurred in such
recommendation.

Audit Committee

Edward B. Krekeler, Jr., Chairman
Robert E. (Gene) Burris
Laurie M. Shahon

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Mr. Gene Burris, a director of the Company, is President of UFCW
Local No. 1000, which represents approximately 96% of Store's unionized
employees.  Pursuant to the present collective bargaining agreements,
the UFCW has the right to designate one member of the Board of Directors
of Company and Stores. Mr. Burris is the designee of the UFCW.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act requires directors,
executive officers and persons who are the beneficial owners of more
than 10% of any class of any equity security of the Company to file
reports with the Securities and Exchange Commission.  During the year


                                  -20-


ended December 30, 2000, all required reports under Section 16 (a) were
filed on time.

                        STOCKHOLDERS' PROPOSALS

      The Board of Directors will consider proposals of the stockholders
intended to be presented for action at the 2002 Annual Meeting of
Stockholders.  For a shareholder proposal to be considered by the Board
of Directors, it must be received by the Secretary of the Company at the
principal executive offices of the Company no later than January 31,
2002.

                            OTHER MATTERS

      Management of the Company does not know of any other matters to be
brought before the meeting.  If any other matter properly comes before
the Annual Meeting, it is intended that the holders of Proxies will act
in respect thereof in accordance with their best judgment.

      A COPY OF ITS REPORT ON FORM 10-K FOR THE 2000 FISCAL
YEAR ENDED DECEMBER 30, 2000, IS BEING MAILED IN THIS PROXY
STATEMENT TO EACH OF THE STOCKHOLDERS OF RECORD ON APRIL 16,
2001, AND EACH BENEFICIAL STOCKHOLDER ON THAT DATE. IF YOU
HAVE NOT RECEIVED YOUR COPY, THE COMPANY WILL PROVIDE A COPY
WITHOUT CHARGE (A REASONABLE FEE WILL BE CHARGED FOR
EXHIBITS), UPON RECEIPT OF A WRITTEN REQUEST THEREFOR MAILED
TO THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES, ATTENTION:
SECRETARY.










(2001 Proxy)



                                 -20-




                              Exhibit 1

                    HOMELAND HOLDING CORPORATION
                       AUDIT COMMITTEE CHARTER

      The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the integrity of the financial statements of the Company, (2)
the compliance by the Company with legal and regulatory requirements and (3)
the independence and performance of the Company's external auditors.

      The members of the Audit Committee shall meet the independence,
experience and composition requirements of the Nasdaq Stock Market, Inc.  The
members of the Audit Committee shall be appointed by the Board.

      The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee.  The Audit Committee
may request any officer or employee of the Company or the Company's outside
counsel or independent auditor to attend a meeting of the Committee or to meet
with any members of, or consultants to, the Committee.

      The Audit Committee shall make regular reports to the Board.  The Audit
Committee shall:

      1.   Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.

      2.   Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles and
practices as well as the adequacy of internal controls that could
significantly affect the Company's financial statements.

      3.   Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in connection with
the preparation of the Company's financial statements.

      4.   Review with management and the independent auditor the Company's
quarterly financial statements prior to the filing of its Form 10-Q.

      5.   Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.

      6.   Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor or management.


                                      -1-


      7.   Recommend to the Board the appointment of the independent
auditor, which firm is ultimately accountable to the Audit Committee and the
Board.

      8.   Approve the fees to be paid to the independent auditor.

      9.   Receive periodic reports from the independent auditor regarding
the auditor's independence consistent with Independence Standards Board
Standard 1, discuss such reports with the auditor, and if so determined by
the Audit Committee, take or recommend that the full Board take appropriate
action to oversee the independence of the auditor.

      10.  Evaluate together with the Board the performance of the independent
auditor and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.

      11.  Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.

      12.  Obtain from the independent auditor assurance that Section 10A of
the Securities Exchange Act of 1934 has not been implicated.

      13.  Obtain reports from management that the Company's subsidiaries
are in conformity with applicable legal requirements and the Company's Code of
Conduct.

      14.  Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61, as amended, relating to
the conduct of the audit.

      15.  Review with the independent auditor any problems or difficulties
the auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter.  Such review should include:

           a.  Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to required
information.

           b.  Any changes required in the planned scope of the audit.

      16.  Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy statement.

      17.  Advise the Board with respect to the Company's policies and
procedures regarding compliance with applicable laws and regulations and with
the Company's Code of Conduct.


                                       -2-


      18.  Review with the Company's General Counsel legal matters that may
have a material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.

      19.  Meet at least annually with the chief financial officer and the
independent auditor in separate executive sessions.

      While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles.  This is the responsibility of management and the independent
auditor.   Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditor or to assure compliance with laws and regulations and the Company's
Code of Conduct.








                                    -3-