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 February 28, 1999.

[ ]    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 April 13, 1999, 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
                 February 28,1999 and November 29, 1998                   Page 3

            Consolidated Statements of Operations for
                 the quarters ended
                 February 28, 1999 and March 1, 1998                      Page 4

            Consolidated Statements of Stockholders' Equity
                 for the year  ended  November  29,  1998 
                 and the  quarter ended February 28, 1999                 Page 5

            Consolidated  Statements  of Cash  Flows for 
                 the  quarters ended February 28, 1999 
                 and March 1, 1998                                        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>

<TABLE>
<CAPTION>
Item 1
Financial Statements

                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES
                      UNAUDITED CONSOLIDATED BALANCE SHEETS


                                                                                                     February 28,      November 29,
ASSETS                                                                                                   1999              1998
                                                                                                     ------------      ------------
<S>                                                                                                  <C>               <C>         
CURRENT ASSETS:
           Cash ...............................................................................      $     29,853      $     53,794
           Accounts receivable - net of allowance for doubtful accounts
              of $0 at February 28, 1999 and $0 November 29, 1998 .............................         4,619,221         5,091,174
           Inventory ..........................................................................        19,749,574        18,425,802
           Prepaid expenses and other current assets ..........................................         1,499,935         1,320,931
           Notes receivable - current portion .................................................           370,305         1,032,203
                                                                                                     ------------      ------------

           Total current assets ...............................................................        26,268,888        25,923,904
                                                                                                     ------------      ------------

PROPERTY AND EQUIPMENT:
           Furniture, fixtures and equipment ..................................................        14,934,652        14,610,788
           Capitalized equipment leases .......................................................         8,346,045         8,267,999
           Leaseholds and leasehold improvements ..............................................        36,114,537        34,388,652
                                                                                                     ------------      ------------
                                                                                                       59,395,234        57,267,439
           Less accumulated depreciation and amortization .....................................        26,769,552        25,716,915
                                                                                                     ------------      ------------

           Net property and equipment .........................................................        32,625,682        31,550,524

           Deposits and other assets ..........................................................           727,946           719,429
           Deferred costs .....................................................................         2,190,215         1,968,859
           Notes receivable - noncurrent portion ..............................................           474,324           543,793
                                                                                                     ------------      ------------

TOTAL .........................................................................................      $ 62,287,055      $ 60,706,509
                                                                                                     ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
           Accounts payable, trade ............................................................      $ 13,036,065      $ 11,951,436
           Accrued payroll, vacation and withholdings .........................................           819,607         1,543,748
           Accrued expenses and other current liabilities .....................................         1,350,460           896,716
           Note payable .......................................................................           319,138           319,138
           Capitalized lease obligation - current portion .....................................           771,331           695,665
           Current portion of long term debt ..................................................         3,314,283         3,314,283
                                                                                                     ------------      ------------

           Total current liabilities ..........................................................        19,610,884        18,720,986

           Long-term debt - noncurrent portion ................................................        18,547,030        18,663,935
           Due to Affiliate ...................................................................         4,211,394         4,031,394
           Deferred advertising ...............................................................           216,154           248,654
           Capitalized lease obligation - noncurrent portion ..................................         3,072,410         2,986,007
               Deferred rents .................................................................         1,840,803         1,673,850
                                                                                                     ------------      ------------

            Total liabilities .................................................................        47,498,675        46,324,826
                                                                                                     ------------      ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
           Common stock, $0.02 par value - shares authorized 25,000,000; outstanding
           19,636,574 shares at February 29, 1999 and November 29, 1998 .......................           392,732           392,732
           Additional paid-in capital .........................................................        14,136,674        14,136,674
           Retained eanings/ (deficit) ........................................................           258,974          (147,723)
                                                                                                     ------------      ------------

           Total stockholders' equity .........................................................        14,788,380        14,381,683
                                                                                                     ------------      ------------

TOTAL .........................................................................................      $ 62,287,055      $ 60,706,509
                                                                                                     ============      ============

See accompanying notes.

</TABLE>


                                       -3-


<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
               13 WEEKS ENDED FEBRUARY 28, 1999 AND MARCH 1, 1998

                                                   13 weeks          13 weeks
                                                    ended              ended
                                                 February 28,         March 1,
                                                     1999              1998
                                                 ============      ============

Sales ......................................     $ 44,187,791      $ 39,420,880
Cost of sales ..............................       27,135,886        23,513,947
                                                 ------------      ------------

Gross profit ...............................       17,051,905        15,906,933

Store operating, general and
administrative expense .....................       13,438,014        13,290,951

Depreciation and amortization ..............        1,138,484         1,053,960

Non-store operating expenses:

  Administrative payroll and fringes .......          979,417           780,382
  General office expense ...................          321,065           317,243
  Professional fees ........................          196,189            56,486
  Corporate expense ........................           39,250            36,813
                                                 ------------      ------------

Total non-store operating expense ..........        1,535,921         1,190,924
                                                 ------------      ------------

Operating profit ...........................          939,487           371,098
                                                 ------------      ------------

Other income (expense):

  Interest expense .........................         (544,854)         (379,567)
  Interest income ..........................           28,788            51,007
                                                 ------------      ------------

Total other expense - net ..................         (516,066)         (328,560)
                                                 ------------      ------------

Income before income taxes .................          423,421            42,538

Provision for income taxes .................           16,724            12,500
                                                 ------------      ------------

Net income .................................     $    406,697      $     30,038
                                                 ============      ============

Income per share ...........................     $       0.02      $       0.00
                                                 ============      ============

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


See accompanying notes


                                       -4-


<PAGE>

<TABLE>
<CAPTION>
                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES
            UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
    FOR THE YEAR ENDED NOVEMBER 29, 1998 AND 13 WEEKS ENDED FEBRUARY 28, 1999


                                                                                      Additional        Retained          Total
                                                          Common stock                  Paid-In         earnings       Stockholders'
                                                    Shares             Amount           Capital         (Deficit)         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


Net loss for the year ended
   November  29, 1998 ......................                                                              (288,339)        (288,339)
                                                  -----------       -----------       -----------      -----------      -----------

Balance at November 29, 1998 ...............       19,636,574           392,732        14,136,674         (147,723)      14,381,683

Net income for the thirteen weeks
   ended February 28, 1999 .................                                                               406,697          406,697
                                                  -----------       -----------       -----------      -----------      -----------

Balance at February 28, 1999 ...............       19,636,574       $   392,732       $14,136,674      $   258,974      $14,788,380
                                                  ===========       ===========       ===========      ===========      ===========


See accompanying notes.


</TABLE>



                                       -5-


<PAGE>

<TABLE>
<CAPTION>
                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               13 WEEKS ENDED FEBRUARY 29, 1999 AND MARCH 1, 1998


                                                        February 28,     March 1,
                                                           1999            1998
                                                        ===========    ===========
<S>                                                     <C>            <C>        
Cash flows from operating activities:

  Net income ........................................   $   406,696    $    30,038

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

  Depreciation and amortization .....................     1,138,484      1,053,960

  Changes in operating assets and liabilities:

    Accounts receivable - net .......................       471,953       (816,043)
    Inventory .......................................    (1,323,772)    (1,161,275)
    Prepaid expenses and other current assets .......      (179,004)        64,202
    Notes receivable ................................       731,367        124,734
    Receivable from office ..........................             0         (4,825)
    Due from related parties ........................       180,000              0
    Other assets ....................................      (315,720)      (564,709)
    Accounts payable, trade .........................     1,084,630        (35,506)
    Accrued payroll, vacation and withholdings ......      (724,141)      (760,390)
    Accrued expenses and other current liabilities ..       453,744        608,574
    Deferred rents ..................................       166,953        196,326
    Other credits ...................................       (32,500)       (32,500)
                                                        -----------    -----------

    Net cash provided by operating activities .......     2,058,690     (1,297,414)
                                                        -----------    -----------

Cash flows from investing activities:

  Capital expenditures - net ........................    (2,127,795)    (1,906,027)
                                                        -----------    -----------

    Net cash used in investing activities ...........    (2,127,795)    (1,906,027)
                                                        -----------    -----------

Cash flows from financing activities:

  Repayments of bank loan ...........................      (816,905)      (428,571)
  Repayment capitalized lease obligations ...........      (172,430)
  Proceeds from bank loans ..........................       700,000      3,750,000
  Proceeds from capitalized lease obligations .......       334,499        (93,500)
                                                        -----------    -----------

    Net cash used in financing activities ...........        45,164      3,227,929
                                                        -----------    -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS        (23,941)        24,488

CASH AND CASH EQUIVALENTS, beginning of period .......        53,794         88,970
                                                        -----------    -----------

CASH AND CASH EQUIVALENTS, end of period ............   $    29,853    $   113,458
                                                        ===========    ===========

Supplemental disclosures of cash flow information:

  Cash paid for interest ............................   $   440,990    $   369,164
  Cash paid for taxes ...............................         5,097         10,429


See accompanying notes.

</TABLE>


                                       -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  40  supermarkets  (the  "Supermarkets").   35
Supermarkets are located in Manhattan,  New York, three Supermarkets are located
in Westchester  County,  New York, one  Supermarket is located in Brooklyn,  New
York  and one  Supermarket  is  located  in Long  Island,  New  York.  11 of the
Supermarkets are operated under the "Sloan's" name and 29 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.


                                      - 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)

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.

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 12 month period ended November
29, 1998 contains information which should be read in conjunction herewith.

2. RELATED PARTY TRANSACTIONS

Under a management  agreement dated November 10, 1997, Namdor Inc., a subsidiary
of  the  Company,   performs   consulting  and  managerial  services  for  three
supermarkets  owned  by  corporations   controlled  by  John  Catsimatidis.   In
consideration  of such  services,  Namdor  Inc.  is  entitled  to  receive  on a
quarterly basis a cash payment of 1.25% of all sales of merchandise  made at the
managed  supermarkets.  During the quarters ended February 28, 1999 and March 1,
1998 the management fee income was $27,541 and $29,779, respectively.

C&S Acquisition Corp.  (formerly Red Apple Leasing,  Inc.) a corporation  wholly
owned by John  Catsimatidis,  leases  equipment to the Company.  Such leases are
primarily for store  operating  equipment.  Obligations  under capital leases at
February 28, 1999 were $733,788 and require monthly  payments of $35,114 through
March 1, 2001.  Obligations under operating leases were $41,676 per month during
the quarter ended February 28, 1999.

Advertising  services are provided to the Company by an affiliated company,  MCV
Advertising  Associates  Inc., a  company  owned by John  Catsimatidis.  For the
quarters  ended  February  28,  1999 and March 1, 1998 the costs  incurred  were
$285,032 and $295,758, respectively.

The Company leases three  locations from Red Apple Real Estate,  Inc., a company
solely owned by John  Catsimatidis.  During the quarters ended February 28, 1999
and March 1, 1998 the Company paid to Red Apple Real Estate,  Inc.  $225,666 and
$170,100, respectively.

Wolf,  Block,  Schorr and  Solis-Cohen  LLP, a law firm of which Martin Bring, a
director  of the Company is a member,  received  fees of $36,644 and $35,177 for
the quarters ended February 28, 1999 and March 1, 1998, 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 FEBRUARY
              28, 1999 AND MARCH 1, 1998

RESULTS OF OPERATIONS
The following table sets forth items from the Company's Consolidated  Statements
of Operations as a percentage of sales.

                                                        13 weeks        13 weeks
                                                         ended            ended
                                                      February 28,      March 1,
                                                          1999             1998
                                                        -------          -------
Sales ..........................................          100.0           100.0
Cost of sales ..................................           61.4            59.7
                                                        -------          -------
Gross profit ...................................           38.6            40.3
Store operating, general and
    administrative expense .....................           30.4            33.7
Depreciation and amortization ..................            2.6             2.7
Non-store operating expense ....................            3.5             3.0
                                                        -------          -------
Operating profit ...............................            2.1             0.9
Other income (expense) .........................           (1.2)           (0.8)
                                                        -------          -------
Income from operations
    before income taxes ........................            0.9             0.1
Provision for income taxes .....................           --              --
                                                        -------          -------
Net income .....................................            0.9             0.1
                                                        =======          =======

Sales for the quarter ended February 28, 1999 were  $44,187,791 as compared with
$39,420,880  for the  quarter  ended  March 1, 1998.  The  increase in sales was
primarily the result of the Company's remodeling program, which is continuing.

                                      - 9 -


<PAGE>


Gross profit was  $17,051,905  or 38.59% of sales for the quarter ended February
28,  1999 as compared to  $15,906,933  or 40.35% of sales for the quarter  ended
March 1,  1998.  The  decrease  in gross  profit  as a  percentage  of sales was
primarily due to selected  promotional  price  reductions in connection with the
grand reopening periods of the newly remodeled stores.

Store operating,  general and administrative expenses were $13,438,014 or 30.41%
of sales for the quarter ended  February 28, 1999 as compared to $ 13,290,951 or
33.72 % of sales for the  quarter  ended  March 1, 1998.  The  decrease in store
operating,  general and administrative  expenses as a percentage of sales in the
1999 period was mainly due to better cost  controls in relation to the increased
sales.

Non-store  operating  expenses were $1,535,921 or 3.48% of sales for the quarter
ended  February  28, 1999 as compared  to  $1,190,924  of 3.02% of sales for the
quarter  ended  March 1, 1998.  Administrative  payroll and fringes was 2.22% of
sales for the quarter  ended  February 28, 1999 as compared  with 1.98% of sales
for the quarter  ended March 1, 1998.  The  increase  reflects  the  addition of
supervisory  and data  processing  personnel,  during the second  half of fiscal
1998,  to handle  the  additional  business  generated  by the store  remodeling
program. General office expenses as a percentage of sales decreased to 0.73% for
the quarter  ended  February 28, 1999 from 0.81% of sales for the quarter  ended
March 1, 1998 primarily due to office efficiencies. Professional fees were 0.44%
of sales for the quarter ended February 28, 1999 as compared with 0.14% of sales
for the quarter ended March 1, 1998.  The  increase  was due to the  additional
needs  for  outside  accounting  and  legal  services.  Corporate  expense  as a
percentage of sales was 0.09% of sales for both the 1999 and 1998 quarters.

Interest  expense  for the  quarter  ended  February  28,  1999  was $544,854 as
compared to $379,567  for the quarter  ended March 1, 1998.  The increase in the
1999 quarter was primarily  attributable to increased  borrowings under our bank
credit facility and capitalized equipment leasing.

Interest  income was $28,788 for the quarter ended February 28, 1999 as compared
with  $51,007 for the  quarter  ended  March 1, 1998.  The  decrease in the 1999
quarter was due to the reduction in outstanding  notes receivable as compared to
the 1998 quarter.

As a result of the items  reviewed  above the net income  before  provision  for
income taxes for the quarter ended February 28, 1999 was $423,421 as compared to
$42,538 for the quarter ended March 1,1998.

                                     - 10 -


<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

On November 10, 1997, the Company  completed its financial  arrangements  with a
group of banks for a credit  facility in the  aggregate  amount of  $25,000,000.
Under the credit  agreement  the  Company  obtained a term loan in the amount of
$12,000,000  to  refinance  prior bank debt,  an  improvement  term loan line of
credit in the  amount of  $8,000,000  to  finance  capital  improvements  to its
supermarkets  and a  revolving  line of credit in the  amount of  $5,000,000  to
provide working capital.  The $12,000,000 term loan matures on October 31, 2002.
The improvement term loan line of credit and the revolving line of credit mature
on October  31,2002 and March 1, 2000,  respectively,  at which time all amounts
outstanding thereunder are payable.

Presently, the bank facilities are fully utilized and the Company is negotiating
an increase in the credit facilities with its banks.  There is no assurance that
the Company will be able to negotiate such an increase on terms  satisfactory to
the Company.  If the Company is unable to obtain its desired  financing from its
bank,  the  Company  will seek  increased  financing  from third  party  leasing
companies and/or additional  financing from the Company's principal  shareholder
and other sources.

The Company has not incurred any material commitments for capital  expenditures,
although  it  anticipates  spending  approximately   $10,000,000  on  its  store
remodeling  and  expansion  program in fiscal  1999.  Such  amount is subject to
adjustment based on the availability of funds.

Borrowings  under the facility  bear  interest at a spread over either the prime
rate of the bank  acting as agent for the group of banks or a LIBOR  rate,  with
the spread  dependent on the ratio of the Company's funded debt to EBITDA ratio,
as  defined  in the  credit  agreement.  The  average  interest  rate on amounts
outstanding  under the facility  during the 13 weeks ended February 28, 1999 was
7.7 % per annum.

The credit facility contains  covenants,  representations  and events of default
typical of credit  facility  agreements,  including  financial  covenants  which
require the Company to meet,  among other things,  a minimum tangible net worth,
debt service coverage ratios and fixed charge coverage  ratios,  and which limit
transactions with affiliates. The facility is secured by equipment,  inventories
and accounts receivable.  During the quarter ended February 28, 1999 the Company
and the banks amended the credit facility to, among other things, modify certain
of the financial  covenants and extend the term of the revolving  line of credit
until March 1, 2000.

The Company has  available  approximately  $2.5  million in third party  leasing
lines  of  credit  to lease  finance  equipment  for its  store  remodeling  and
expansion program.


YEAR 2000 ISSUE

The Company has assessed its  information   technology  ("IT")  systems for Year
2000  readiness  and has given  the  highest  priority  to those IT  systems  it
considers mission  critical.  The systems the Company considers mission critical
are its store  automation  systems  (including  point of sale  systems)  and its
computer systems at its main office which support these store systems.

As of March 1, 1999, the Company, working with the original vendor, successfully
tested and  implemented  the Year 2000  compliant  version of the systems at its
main office,  which support the in store automation  systems.  In March of 1999,
the  Company,  working  with  the  original  vendor,   successfully  tested  and
implemented the Year 2000 complaint  version of its store  automation  system in
one of its automated  stores.  This Year 2000 compliant  version of the in store
automation system will be implemented in the remaining  stores, as required,  by
the end of June, 1999.

                                     - 11 -


<PAGE>


No  additional  expense  has or will be  incurred  by the Company to bring these
systems into Year 2000  compliance as any necessary  changes are provided by the
vendors under software maintenance programs in place.

The Company has assessed the other IT systems,  including accounting and payroll
systems, deployed at its main office and its City Produce warehouse facility for
Year 2000 compliance and has identified the steps necessary to ensure that these
systems will be Year 2000 compliant.

The  Company  has decided to  substantially  expand and enhance its  information
technology systems to further leverage the investment the Company has made on in
store  automation  and  networking  in the last few years.  The Company  will be
implementing  state of the art client  server  systems on  Microsoft  windows NT
platforms,  using best of breed applications from selected vendors, for time and
attendance,   payroll,   inventory  control  and  distribution,   and  financial
applications.  These  systems  will  allow for better  decisionmaking  tools and
quicker  information flow between the stores,  the main office,  and the Company
owned distribution facility.

The cost of this program,  including new network  enabled time clocks,  computer
hardware,  software, and implementation services is budgeted to be approximately
$850,000 and will be completed by the end of Fiscal 1999  (November  28,  1999).
The Company had previously expected to spend $100,000 out of cash flow generated
from its  operations to modify its existing  systems to be Year 2000  compliant.
The Company will redirect those  resources  towards this new effort and plans on
leasing  the  systems,  where  appropriate,  in a manner  similar to the way the
Company currently leases its store automation  systems.  The new systems will be
Year 2000 compliant.

The Company does not currently  intend to hire an outside firm to  independently
verify that its systems are Year 2000 compliant.

The  Company  has  assessed  the  majority  of its non-IT  systems for Year 2000
readiness  and has  identified  a small  number of  systems,  including  certain
equipment  at store  level,  which may not be Year 2000  ready.  The  Company is
working with the vendor of these  systems to identify the best  approach.  While
these systems have an internal clock and date, the date is not necessary for the
systems to be productive.  Such systems could therefore  continue to function as
needed and  management  does not  anticipate  that these  systems  will pose any
significant Year 2000 problem or expense.

The Company is continuing to review the Year 2000  readiness  plans of its major
vendors in an effort to ensure that  operations  remain  unaffected by Year 2000
related  failures.  The Company  will place  preset  orders with  certain  major
vendors  to help  ensure  product  deliveries  in the event  that the  vendor is
affected  by  failures  at some  level of its  operations  but is still  able to
deliver  merchandise.  In the event a major vendor is unable to provide products
the Company will increase  purchases  from other vendors from which it currently
buys.

                                     - 12 -


<PAGE>


The Company  purchases  merchandise sold in its stores from multiple vendors and
is not reliant on any one vendor for the normal conduct of its  operations.  The
Company is not dependent on these supplier  relationships  since  merchandise is
readily available from numerous sources under different brand names,  subject to
conditions affecting food supplies generally.

The  Company  believes  that its efforts  will  result in year 2000  compliance.
However,  the impact on business operations of failure by the Company to achieve
compliance or failure by external  entities  which the Company  cannot  control,
such as vendors,  to achieve  compliance,  could be  material  to the  Company's
consolidated results of operations.





                                     - 13 -


<PAGE>


                    GRISTEDE'S SLOAN'S, INC. AND SUBSIDIARIES



PART II - OTHER INFORMATION


Item 1.     Legal Proceedings

                  None.

Item 2.     Change in Securities and Use of Proceeds

                  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

                  10.   Fourth  amendment to Loan Agreement dated as of February
                        27, 1999 between the Company,  European  American  Bank,
                        Israel  Discount  Bank of New  York,  Keybank  and  Bank
                        Leumi (filed herewith).

                  27. Financial Data Schedule (filed herewith).

            (b) No Current  Reports on Form 8-K were filed for the  quarter  for
            which this report is being filed.



                                     - 14 -


<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: April 14, 1999



                                            By:    /s/ Stuart Spivak
                                                   -------------------------
                                                   Stuart Spivak
                                                   Executive Vice President and
                                                   Chief Financial Officer


Dated: April 14, 1999




                                     - 15 -