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

                                    FORM 10-Q

     (Mark One)

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

For the quarterly period ended March 1, 1998.


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

For the transition period from .............to ............

Commission File Number 1-7013


                            GRISTEDE'S SLOAN'S, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


                     Delaware                           13-1829183
            -------------------------------          ----------------
            (State or Other Jurisdiction of          (I.R.S. Employer
             Incorporation or Organization)         Identification No.)


                  823 Eleventh Avenue, New York, New York 10019
                  ---------------------------------------------
                    (Address of Principal Executive Offices)



                                 (212) 956-5803
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

                                       N/A
              ----------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

Indicate by check mark  whether the  registrant  (1) has filed all reports to be
filed  by  Section  13 or 15 (d) of  the  Securities  Exchange  Act  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 [ ]

At May 31, 1998, the registrant had issued and outstanding  19,636,574 shares of
common stock.


<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES


                          PART I-FINANCIAL INFORMATION


Item 1. Financial Statements


               Consolidated Balance Sheets as of
                    March 1, 1998 and November 30, 1997           Page 3


               Consolidated Statements of Operations for
                    the quarter ended
                    March 1, 1998 and March 2, 1997               Page 4


               Consolidated Statements of Stockholders'
                    Equity for the quarter ended
                    March 1, 1998                                 Page 5


               Consolidated Statements of Cash Flows for
                    the quarter ended
                    March 1, 1998 and March 2, 1997               Page 6


               Notes to Consolidated Financial Statements         Page 7




Item 2. Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations                                         Page 9



                                      - 2 -


<PAGE>

Item 1
Financial Statements

<TABLE>
<CAPTION>

                            GRISTEDE'S SLOAN'S, INC.
                           CONSOLIDATED BALANCE SHEETS

                                                                                                         March 1,       November 30,
ASSETS                                                                                                     1998             1997
                                                                                                        Unaudited          Audited
                                                                                                      ===========       ============
<S>                                                                                                   <C>                <C>        
CURRENT ASSETS:
          Cash ...............................................................................        $   113,458        $    88,970
          Accounts receivable - net of allowance for doubtful accounts
             of $300,000 at March 1, 1998 and November 30, 1997 ..............................          5,926,069          5,110,026
          Inventory ..........................................................................         17,382,740         16,221,465
          Prepaid expenses and other current assets ..........................................            850,342            914,544
          Notes receivable- current portion ..................................................            607,381            584,912
                                                                                                      -----------        -----------

                   Total current assets ......................................................         24,879,990         22,919,917
                                                                                                      -----------        -----------

PROPERTY AND EQUIPMENT:
          Furniture, fixtures and equipment ..................................................         14,151,349         13,393,803
          Capitalized equipment leases .......................................................          5,574,369          5,574,369
          Leaseholds and leasehold improvements ..............................................         31,624,178         30,296,510
                                                                                                      -----------        -----------
                                                                                                       51,349,896         49,264,682
          Less accumulated depreciation and amortization .....................................         24,770,212         23,567,986
                                                                                                      -----------        -----------

                   Net property and equipment ................................................         26,579,684         25,696,696

          Due from affiliate .................................................................            356,603            351,778
          Deposits and other assets ..........................................................            715,262            717,429
          Deferred costs .....................................................................          2,081,880          1,515,004
          Notes receivable - noncurrent portion ..............................................          1,357,528          1,504,731
                                                                                                      -----------        -----------

                                                                                                      $55,970,947        $52,705,555
                                                                                                      ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
          Accounts payable, trade ............................................................        $15,636,456        $15,671,962
          Accrued payroll, vacation and withholdings .........................................            861,137          1,276,535
          Accrued expenses and other current liabilities .....................................          1,210,767            947,395
          Capitalized lease obligation - current portion .....................................            421,180            389,809
          Current portion of long term debt ..................................................          1,714,284          1,714,284
                                                                                                      -----------        -----------

                   Total current liabilities .................................................         19,843,824         19,999,985

          Long-term debt .....................................................................         14,607,145         11,285,716
          Due to affiliate ...................................................................          4,000,000          4,000,000
          Deferred advertising ...............................................................            346,154            378,654
          Capitalized lease obligation - non current portion .................................          1,252,533          1,377,194
          Deferred rent ......................................................................          1,190,310            993,984
                                                                                                      -----------        -----------

                   Total liabilities .........................................................         41,239,966         38,035,533
                                                                                                      -----------        -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
          Preferred stock, $50 par, - shares authorized 500,000; none issued
          Common stock, $.02 par, - shares authorized 25,000,000; outstanding
               19,636,574 shares issued at November 30, 1997  and  March 1, 1998 .............            392,732            392,732
          Additional paid-in capital .........................................................         14,167,595         14,136,674
          Retained earnings ..................................................................            170,654            140,616
                                                                                                      -----------        -----------

                   Total stockholders' equity ................................................         14,730,981         14,670,022
                                                                                                      -----------        -----------

                                                                                                      $55,970,947        $52,705,555
                                                                                                      ===========        ===========

See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>


                            GRISTEDE'S SLOAN'S, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE QUARTER ENDED MARCH 1, 1998 AND MARCH 2, 1997



                                                    13 weeks         13 weeks
                                                     ended            ended
                                                    March 1,         March 2,
                                                      1998             1997
                                                 =============    ============


Sales .........................................   $ 39,420,880    $ 26,123,871
Cost of sales .................................     23,513,947      16,245,331
                                                  ------------    ------------

Gross profit ..................................     15,906,933       9,878,540

Store operating, general and
administrative expenses .......................     13,290,951       8,780,586

Depreciation and amortization .................      1,053,960         451,083
                                                  ------------    ------------

                                                     1,562,022         646,871

Non-store operating expenses ..................      1,190,924       1,502,848
                                                  ------------    ------------

Operating profit/(loss) .......................        371,098        (855,977)
                                                  ------------    ------------

Other income (expense)
Interest income ...............................         51,007          17,791
Interest expense ..............................       (379,567)       (126,625)
                                                  ------------    ------------

                                                      (328,560)       (108,834)
                                                  ------------    ------------

Income/(loss) before provision for income taxes         42,538        (964,811)

Provision for income taxes ....................         12,500               0
                                                  ------------    ------------

Net income/(loss) .............................   $     30,038    $   (964,811)
                                                  ============    ============

Net income per share ..........................          $0.00         N/A
                                                  ============    ============

Weighted average number of shares and
equivalents outstanding .......................     19,636,574         N/A
                                                  ============    ============


See accompanying notes to unaudited consolidated financial statements.


                                       -4-


<PAGE>

<TABLE>
<CAPTION>

                            GRISTEDE'S SLOAN'S, INC.
            UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                           QUARTER ENDED MARCH 1, 1998



                                                                                     Additional                            Total
                                                            Common stock               Paid-In          Retained       Stockholders'
                                                       Shares           Amount         Capital          Earnings           Equity
                                                  ===========      ===========      ===========      ===========      ===========

<S>                                                <C>                 <C>           <C>                 <C>           <C>       
Balance at November 30 , 1997 ..............       19,636,574          392,732       14,136,674          140,616       14,670,022

To reflect acquisition of new store
#53 on February 6, 1998 ....................                                             30,921                            30,921

Net income for the quarter
ended March 1, 1998 ........................                                             30,038                            30,038
                                                  -----------      -----------      -----------      -----------      -----------

Balance at March 1, 1998 ...................       19,636,574      $   392,732      $14,167,595      $   170,654      $14,730,981
                                                  ===========      ===========      ===========      ===========      ===========


See accompanying notes to unaudited consolidated financial statements.

</TABLE>


                                       -5-


<PAGE>



                            GRISTEDE'S SLOAN'S, INC.
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE QUARTER ENDED MARCH 1, 1998 AND MARCH 2, 1997


                                                         13 weeks      13 weeks
                                                          ended         ended
                                                         March 1,      March 2,
                                                           1998          1997
                                                       ==========    ===========

Net  income/(loss) .................................   $   30,038    $ (964,811)

Adjustments to reconcile net loss to net cash
provided by operating activities:

Depreciation and amortization ......................    1,053,960       451,083

Changes in operating assets and liabilities:

Accounts receivable - net ..........................     (816,043)     (521,308)
Inventory ..........................................   (1,161,275)      760,734
Prepaid expenses and other current assets ..........       64,202
Notes receivable ...................................      124,734
Receivable from officer ............................       (4,825)
Other assets .......................................     (564,709)
Accounts payable, trade ............................      (35,506)   (1,503,426)
Accrued payroll, vacation and withholdings .........     (760,390)
Accrued expenses and other current liabilities .....      608,364
Accrued rent leveling ..............................      196,326
Capitalized lease obligations ......................      (93,290)
Other credits ......................................      (32,500)
                                                       ----------    ----------

   Net cash (used)/ provided by operating activities   (1,390,914)   (1,777,728)
                                                       ----------    ----------

Capital expenditures - net .........................   (1,906,027)      502,580
                                                       ----------    ----------

   Net cash used in investing activities ...........   (1,906,027)      502,580
                                                       ----------    ----------

Proceeds from bank loan ............................    3,750,000
Repayments of bank loan ............................     (428,571)
                                                       ----------    ----------

   Net cash provided /(used) in financing activities    3,321,429             0
                                                       ----------    ----------

NET INCREASE  IN CASH AND CASH EQUIVALENTS .........       24,488             0

CASH AND CASH EQUIVALENTS, beginning of period ......       88,970             0
                                                       ----------    ----------

CASH AND CASH EQUIVALENTS, end of period ...........   $  113,458    $        0
                                                       ==========    ==========

INCREASE IN NET ASSETS PURCHASED ...................                 $ *761,420

*   The Unaudited Consolidated Statement of  Cash  Flows  for  the Quarter Ended
March 2, 1997  reflects  the  difference  between the  Statement of Assets to be
Purchased and Liabilities to be Assumed at March 2, 1997 as compared to December
1, 1996. No cash was transferred as part of the acquisition. The increase in Net
Assets Purchased was $ 761,420.


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                                                                     ----------

       Cash  paid for interest .....................   $  369,164       241,449
       Cash paid for taxes .........................       10,429         9,572

NONCASH TRANSACTIONS
                                                                     ----------

       Acquisition of new store ....................   $   30,921          --


See accompanying notes  to unaudited consolidated financial statements.

                                       -6-



<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS - On November 4, 1997, Sloan's  Supermarkets,  Inc. ("Sloan's") changed
its name to Gristede's Sloan's,  Inc. ("GRI" or the "Company").  On November 10,
1997,  GRI  acquired  certain  assets,  net  of  liabilities,   of  29  selected
supermarkets and a wholesale distribution business ("The Food Group") controlled
by  Mr.  John  Catsimatidis,  Chairman  and  37%  stockholder  of  Sloan's.  The
transaction  was accounted for as the  acquisition  of Sloan's by The Food Group
pursuant  to  Emerging  Issues  Task  Force  90-13 as a result of The Food Group
obtaining  control of Sloan's after the transaction.  The assets and liabilities
of The Food Group were recorded at their  historical  cost.  Sloan's  assets and
liabilities   were  recorded  at  their  fair  value  to  the  extent  acquired.
Consideration  for the  transaction  was based on an aggregate of $36,000,000 in
market value of the Company's  common stock and the  assumption of $4,000,000 of
liabilities.  16,504,298  shares of common  stock were issued on the date of the
acquisition based on a market price of $2.18 per share.

The Company  presently  operates 42 supermarkets  and one health and beauty aids
store (the "Supermarkets").  37 Supermarkets are located in Manhattan, New York,
three   Supermarkets   are  located  in  Westchester   County,   New  York,  two
Supermarkets,  are located in Brooklyn,  New York and one Supermarket is located
in Long  Island,  New  York.  23 of the  Supermarkets  are  operated  under  the
"Sloan's"  name and 20 are operated  under the  "Gristede's"  name.  The Company
leases all of its Supermarket locations.

The Company also owns City Produce Operating Corp., a corporation which operates
a  warehouse  and  distribution  center  primarily  for fresh  produce on leased
premises in the Bronx, New York.

PRINCIPLES OF CONSOLIDATION - The consolidated  financial statements include the
accounts  of  the  Company  and  its  wholly-owned  subsidiaries.  All  material
intercompany accounts and transactions have been eliminated in consolidation.

QUARTER END - The Company  operates  using the  conventional  retail  52/53 week
fiscal year.  The fiscal  quarter  ends on the Sunday  closest to the end of the
quarter. The Company's fiscal year ends on the Sunday closest to November 30.

INVENTORY - Store  inventories  are valued  principally  at the lower of cost or
market with cost determined under the retail first in, first out (FIFO) method.

PROPERTY AND EQUIPMENT -  Depreciation  of furniture,  fixtures and equipment is
computed by the  straight-line  method over the  estimated  useful  lives of the
assets.

LEASES - The Company charges the cost of noncancelable  operating lease payments
and beneficial  leaseholds to operations on a straight-line basis over the lives
of the leases.

PROVISION FOR INCOME TAXES - Income taxes reflect Federal and State  alternative
minimum tax only, as all regular income taxes have been offset by utilization of
the Company's net operating loss carry forward.


                                      - 7 -


<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
   (Continued)

INCOME PER SHARE - Per share data are based on the  weighted  average  number of
shares of common stock and equivalents  outstanding during each quarter.  Income
per share is computed by the treasury  stock  method;  primary and fully diluted
income per share are the same.

In the opinion of management, the information furnished reflects all adjustments
(consisting  of normal  recurring  adjustments)  which are  necessary for a fair
statement  of the  results of  operations  for the interim  period.  The interim
figures are not  necessarily  indicative  of the results to be expected  for the
fiscal year.

The Company's Annual Report on Form 10-K for the transition 9 month period ended
November  30, 1997  contains  information  which  should be read in  conjunction
herewith.


2. RELATED PARTY TRANSACTIONS

The Company has advanced  funds to a company  owned by the Chairman of the Board
who is also the principal  stockholder of the Company.  As of March 1, 1998, the
Company is owed $356,603  including accrued  interest.  As of November 30, 1997,
advances and accrued interest totaled $351,778.

Advertising  services are provided to the Company by an  affiliated  company MCV
Advertising  Associates,  Inc. For the quarters ended March 1, 1998 and March 2,
1997 the costs incurred were $295,758 and $174,121, respectively.

The Company has entered into capital and operating leases with an affiliate, Red
Apple  Leasing,  Inc. Such leases are primarily for store  operating  equipment.
Obligations  under capital  leases at March 1, 1998 were  $1,134,683 and require
monthly payments of $35,114 through March 1, 2001.  Obligations  under operating
leases require monthly payments of $41,675.

Legal fees  incurred  by the  company to a law firm,  of which a director of the
Company is a member,  were $35,177 and $26,034 for the  quarters  ended March 1,
1998 and March 2, 1997, respectively.


                                      - 8 -


<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES



PART I

ITEM 2.        MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND
               RESULTS OF  OPERATIONS  FOR THE QUARTERS  ENDED MARCH 1, 1998 AND
               MARCH 2, 1997

RESULTS OF OPERATIONS

As a result of the reverse  acquisition  which occurred on November 10, 1997 the
following discussion of the Results of Operations  encompasses the operations of
29 Supermarkets  plus the City Produce  operation for the quarter ended March 2,
1997 and the operations of such 29 Supermarkets  and the City Produce  operation
combined with the  operations of an additional 15  Supermarkets  for the quarter
ended March 1, 1998.

Sales for the quarter  ended  March 1, 1998 were  $39,420,880  as compared  with
$26,123,871  for the quarter ended March 2, 1997.  The sales increase was mainly
attributable to the 15 additional stores included in the 1998 quarter. Sales for
the same 29 stores  were  $26,222,307  for the  quarter  ended  March 1, 1998 as
compared  with  $24,894,966  for the quarter ended March 2, 1997, an increase of
5.33%.  The increase in sales for the 29 stores in the 1998 period was primarily
the result of the Company's remodeling program, which is continuing.

Gross profit as a percentage  of sales was 40.35% for the quarter ended March 1,
1998 as compared  with 37.81% for the quarter  ended March 2, 1997.  The quarter
ended March 1, 1998  includes the results of the  additional  15 Sloan's  stores
which traditionally achieved a higher gross margin (41.19% for the quarter ended
August 31, 1997).

Store  operating  general and  administrative  expenses as a percentage of sales
were 33.72% for the quarter  ended March 1, 1998 as compared with 33.61% for the
quarter  ended March 2, 1997.  The increase was mainly due to increased  payroll
costs associated with the remodeled stores as well as increased occupancy costs.

Nonstore  operating  expenses were 3.02% of sales for the quarter ended March 1,
1998 as  compared to 5.75% of sales for the  quarter  ended  March 2, 1997.  The
decrease in nonstore operating expenses were mainly the result of a reduction in
administrative personnel and the reduced need for outside professional services.

Interest  income was $51,007 for the quarter  ended March 1, 1998 as compared to
$17,791 for the quarter ended March 2, 1997. The increase during the 1998 period
reflects  interest  on the  notes  received  for  the  sale of  various  stores,
subsequent to March 2, 1997.


                                      - 9 -


<PAGE>


Interest  expense for the quarter  ended March 1, 1998 was  $379,567 as compared
with  $126,625  for the quarter  ended March 2, 1997.  The  increase in the 1998
quarter was primarily  attributable to the borrowings  under the new bank credit
facility which became effective November 10, 1997.

As a result of the items  reviewed  above the net income for the  quarter  ended
March 1, 1998 was $30,038 as compared to a net loss of $964,811  for the quarter
ended March 2, 1997.


LIQUIDITY AND CAPITAL RESOURCES

On November 10, 1997,  the Company  entered into an aggregate  $25,000,000  five
year credit facility with a group of banks.  The credit facility is comprised of
(i) a  $12,000,000  five year term loan to  refinance  debt and general  working
capital  purposes,  (ii) a  $8,000,000  five year term loan to  finance  capital
improvements  to its  supermarkets,  and (iii) a $5,000,000  two year  revolving
credit for general  working capital  purposes.  As of March 1, 1998, the Company
had drawn down the  $12,000,000  term loan and  $4,750,000  under the  revolving
credit facility.

As of May 31, 1998, the Company still has available $4,650,000 under the capital
improvements line to finance the continuing major store remodeling  program.  It
is anticipated  that the Company will generate  sufficient  cash flow to finance
its future working capital needs.


                                     - 10 -


<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES


                           PART II - OTHER INFORMATION



Item 1.       Legal Proceedings

                      None.

Item 2.       Change in Securities

                      None.

Item 3.       Defaults Upon Senior Securities

                      None.

Item 4.       Submission of Matters to a Vote of Security Holders

                      None.

Item 5.       Other Information

                      None.

Item 6.       Exhibits and Reports on Form 8-K

              (a) Exhibits

                      27.  Financial Data Schedule

              (b) On January 13,  1998,  the Company  filed a Current  Report on
              Form 8-K to report the change in its fiscal year end to the Sunday
              closest to November 30.


                                     - 11 -


<PAGE>


                                   SIGNATURES


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

                                   Gristede's Sloan's, Inc.

                              By:  /s/ John A. Catsimatidis

                                   John A. Catsimatidis
                                   Chairman of the Board and
                                   Chief Executive Officer


Dated: June 10, 1998



                              By:  /s/ Stuart Spivak

                                   Stuart Spivak
                                   Executive Vice President and
                                   Chief Financial Officer


Dated: June 10, 1998



                                     - 12 -