UNITED STATESSECURITIES 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 AND
EXCHANGE ACT OF 1934

For the quarterly period ended July 11,
2008

OR

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

**For the transition period from __________
to __________.**

Commission file
      number
    0-2396




BRIDGFORD FOODS
CORPORATION(Exact name of Registrant as
specified in its charter)

California
    95-1778176(State or other
      jurisdiction of
    (I.R.S. Employerincorporation or
      organization)
    identification
      number)1308 N.
      Patt Street, Anaheim, CA 92801(Address of principal
      executive offices-Zip code)714-526-5533(Registrant's
      telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [ X
]                           
 No [     ]

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer"
and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

|Large accelerated filer
      [     ]                                                | Accelerated filer
      [     ]      
|------------------------------------------------------------------------------------ | -------------------------------------
|                                                                                     |                                      
|Non-accelerated filer
      [     ](Do not check if smaller reporting
      company) | Smaller reporting company [
      X ]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

Yes [    
]                             No
[ X ]

As of
August 8, 2008 the registrant had 9,437,728 shares of common stock
outstanding.

1

---

BRIDGFORD FOODS
CORPORATIONFORM 10-Q QUARTERLY REPORT
INDEX

References to "Bridgford Foods" or the "Company"
contained in this Quarterly Report on Form 10-Q refer to Bridgford Foods
Corporation.



|                                | Page                                                                                                                                                             
|------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Part I. Financial Information   | 3                                                                                                                                                                
|                                |                                                                                                                                                                  
|Item 1.                         | Financial Statements                                                                                                                                             
|                                |                                                                                                                                                                  
|                                | a.
      Consolidated Condensed Balance Sheets at July 11, 2008 (unaudited) and
      November 2, 2007                                                           
|                                |                                                                                                                                                                  
|                                | b.
      Consolidated Condensed Statements of Operations for the twelve and
      thirty-six weeks ended July 11, 2008     and July 13,
      2007 (unaudited)   
|                                |                                                                                                                                                                  
|                                | c.
      Consolidated Condensed Statement of Shareholders' Equity and Comprehensive
      Loss for the     thirty-six weeks ended July 11, 2008
      (unaudited)
|                                |                                                                                                                                                                  
|                                | d.
      Consolidated Condensed Statements of Cash Flows for the thirty-six weeks
      ended July 11, 2008     and July 13, 2007
      (unaudited)              
|                                |                                                                                                                                                                  
|                                | e.
      Notes to Consolidated Condensed Financial Statements (unaudited)                                                                                        
|                                |                                                                                                                                                                  
|Item 2.                         | Management's Discussion and Analysis of Financial Condition and
      Results of Operations                                                                      
|                                |                                                                                                                                                                  
|Item 3.                         | Quantitative and Qualitative Disclosures about Market
Risk                                                                                                       
|                                |                                                                                                                                                                  
|Item 4.                         | Controls and Procedures                                                                                                                                          
|                                |                                                                                                                                                                  
|Part II.Other
      Information | 21                                                                                                                                                               
|                                |                                                                                                                                                                  
|Item 1A.Risk Factors            | 21                                                                                                                                                               
|                                |                                                                                                                                                                  
|Item 2.                         | Unregistered Sales of Equity Securities and Use of
    Proceeds                                                                                                  
|                                |                                                                                                                                                                  
|Item 6.                         | Exhibits                                                                                                                                                         
|                                |                                                                                                                                                                  
|Signatures                      | 23                                                                                                                                                               

Items 1, 3, 4 and 5 of Part II. have been omitted
because they are not applicable with respect to the current reporting
period.

2

---

Part I. Financial Information

Item 1. a.

BRIDGFORD FOODS
CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS(in thousands, except per share amounts)

|ASSETS                                                                  | July 11, 2008 |        | November 2, 2007
|----------------------------------------------------------------------- | ------------- | ------ | ----------------
|                                                                        | (Unaudited)   |        |                 
|Current
      assets:                                                   |               |        |                 
|                                                                       
|Cash and cash
      equivalents                                         | $             | 6,234  |                 
|Accounts receivable, less allowance for doubtful accounts of
      $374 |               |        |                 
|and $482, respectively, and promotional allowances of $2,210            |               |        |                 
|and $1,980, respectively                                                |               | 7,797  |                 
|Inventories
      (Note 3)                                              |               | 18,423 |                 
|Prepaid expenses and other current assets                               |               | 3,907  |                 
|                                                                       
|Total
      current assets                                              |               | 36,361 |                 
|                                                                       
|Property,
      plant and equipment, less                               |               |        |                 
|accumulated depreciation of
      $55,359                               |               |        |                 
|and $53,840,
      respectively                                         |               | 10,553 |                 
|                                                                       
|Other
      non-current assets                                          |               | 11,528 |                 
|                                                                        | $             | 58,442 |                 
|                                                                       
|LIABILITIES AND SHAREHOLDERS' EQUITY                                    |               |        |                 
|                                                                       
|Current
      liabilities:                                              |               |        |                 
|                                                                       
|Accounts
      payable                                                  | $             | 3,816  |                 
|Accrued payroll, advertising and other expenses                         |               | 7,954  |                 
|                                                                       
|Total
      current liabilities                                         |               | 11,770 |                 
|                                                                       
|Non-current
      liabilities                                           |               | 10,083 |                 
|                                                                       
|Commitments
      (Notes 5 and 6)                                       |               |        |                 
|                                                                       
|Shareholders' equity:                                                   |               |        |                 
|Preferred stock, without par value                                      |               |        |                 
|Authorized - 1,000 shares                                               |               |        |                 
|Issued and outstanding - none                                           |               |       |                 
|                                                                       
|Common stock,
      $1.00 par value                                     |               |        |                 
|Authorized - 20,000 shares                                              |               |        |                 
|Issued and outstanding - 9,438 and 9,889 shares                         |               | 9,495  |                 
|Capital in excess of par value                                          |               | 11,222 |                 
|Retained
      earnings                                                 |               | 19,424 |                 
|Accumulated other comprehensive loss                                    |               | (3,552 | )               
|                                                                        |               | 36,589 |                 
|                                                                        | $             | 58,442 |                 

See accompanying notes to consolidated condensed
financial statements.

3

---

Item 1. b.

BRIDGFORD FOODS
CORPORATIONCONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS(Unaudited)(in
thousands, except per share amounts)

|                                                                            | 12 weeks ended |        | 36 weeks ended
|--------------------------------------------------------------------------- | -------------- | ------ | --------------
|                                                                            | July 11, 2008  |        | July 13, 2007 
|Net
      sales                                                             | $              | 26,584 |               
|                                                                            |                |        |               
|Cost of
      products sold, excluding depreciation                         |                | 17,546 |               
|                                                                            |                |        |               
|Selling,
      general and administrative expenses                          |                | 10,218 |               
|Depreciation                                                                |                | 753    |               
|                                                                            |                | 28,517 |               
|(Loss)
      income before taxes                                            |                | (1,933 | )             
|                                                                            |                |        |               
|Income tax
      provision (benefit)                                        |                | 4,339  |               
|                                                                            |                |        |               
|Net (loss)
      income                                                     | $              | (6,272 | )             
|                                                                           
|Basic and
      diluted (loss) income per share (Note 4)                    | $              | (.66   | )             
|                                                                            |                |        |               
|Basic and
      diluted shares computed                                     |                | 9,445  |               
|                                                                            |                |        |               
|See accompanying notes to
      consolidated condensed financial statements |                |        |               

Item 1. c.

CONSOLIDATED CONDENSED STATEMENT OF
SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS
(Unaudited)(in thousands)

|                                    |  |              |   |           |   |          |   |               |         |        |   |       |   |        |       |  | Accumulated |        |   |  |  
|----------------------------------- |  | ------------ | - | --------- | - | -------- | - | ------------- | ------- | ------ | - | ----- | - | ------ | ----- |  | ----------- | ------ | - |  | -
|                                    |  |              |   |           |   |          |   |               | Capital |        |   |       |   |        | other |  |             |        |  
|                                    |  | Common Stock |   | in excess |   | Retained |   | comprehensive |         |        |   |      
|                                    |  | Shares       |   | Amount    |   | of par   |   | earnings      |         | loss   |   | Total
|November 2,
      2007              |  | 9,889        |   |           | $ | 9,946    |   |               | $       | 13,789 |   |       | $ | 26,837 |       |  | $           | (603   | ) |  | $
|Adoption of FIN#48 (Note
      8)   |  |              |   |           |   |          |   |               |         |        |   |       |   | (93    | )     |  |             |        |   |  |  
|Shares repurchased                  |  | (451         | ) |           |   | (451     | ) |               |         | (2,567 | ) |       |   |        |       |  |             |        |   |  |  
|Net loss                            |  |              |   |           |   |          |   |               |         |        |   |       |   | (7,320 | )     |  |             |        |   |  |  
|Other comprehensive loss:           |  |              |   |           |   |          |   |               |         |        |   |       |   |        |       |  |             |        |   |  |  
|Unrealized
      loss oninvestments |  |              |   |           |   |          |   |               |         |        |   |       |   |        |       |  |             | (56    | ) |  |  
|Increase in pensionliability        |  |              |   |           |   |          |   |               |         |        |   |       |   |        |       |  |             | (2,893 | ) |  |  
|Comprehensive loss                  |  |              |   |           |   |          |   |               |         |        |   |       |   |        |       |  |             |        |   |  |  
|July 11,
      2008                 |  | 9,438        |   |           | $ | 9,495    |   |               | $       | 11,222 |   |       | $ | 19,424 |       |  | $           | (3,552 | ) |  | $

See accompanying notes to consolidated condensed
financial statements.

4

---

Item 1. d.

BRIDGFORD FOODS
CORPORATIONCONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS(Unaudited) (in thousands)

|                                                            | 36 weeks ended
|----------------------------------------------------------- | --------------
|                                                            | July 11, 2008 
|Cash flows
      from operating activities:                 |               
|                                                           
|Net
      loss                                              | $             
|                                                           
|Income
      charges not affecting cash:                    |               
|Depreciation                                                |               
|Provision
      (recovery) on losses on accounts receivable |               
|Gain on sale of property, plant and equipment               |               
|Tax valuation
      allowance                               |               
|Effect on
      cash of changes in assets and liabilities:  |               
|Trading
      securities                                    |               
|Accounts
      receivable, net                              |               
|Inventories                                                 |               
|Prepaid
      expenses and other current assets             |               
|Other
      non-current assets                              |               
|Accounts
      payable                                      |               
|Accrued
      payroll, advertising and other expenses       |               
|Non-current
      liabilities                               |               
|                                                           
|Net cash (used)
      provided by operating activities      |               
|                                                           
|Cash used
      in investing activities:                    |               
|Proceeds from sale of property, plant and equipment         |               
|Additions to
      property, plant and equipment            |               
|                                                           
|Net cash used
      in investing activities                 |               
|                                                           
|Cash used
      in financing activities:                    |               
|Shares repurchased                                          |               
|                                                           
|Net cash used
      in financing activities                 |               
|                                                           
|Net
      (decrease) increase in cash and cash equivalents  |               
|                                                           
|Cash and
      cash equivalents at beginning of period      |               
|                                                           
|Cash and
      cash equivalents at end of period            | $             
|                                                           
|Cash paid
      for income taxes                            | $             

See accompanying notes to consolidated condensed
financial statements.

5

---

Item 1. e.

BRIDGFORD FOODS
CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS (Unaudited)(in thousands, except
share and per share amounts)

Note 1 - The Company and Summary of Significant
Accounting Policies:

The unaudited consolidated condensed financial
statements of Bridgford Foods Corporation (the "Company") for the twelve and
thirty-six weeks ended July 11, 2008 and July 13, 2007 have been prepared in
conformity with the accounting principles described in the Company's Annual
Report on Form 10-K for the fiscal year ended November 2, 2007 (the "Annual
Report") and include all adjustments considered necessary by management for a
fair statement of the interim periods. Such adjustments consist only of normal
recurring items. This report should be read in conjunction with the Annual
Report. Due to seasonality and other factors, interim results are not
necessarily indicative of the results to be expected for the full year. New
accounting pronouncements and their effect on the Company are included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in this Form 10-Q.

Note 2 - Trading Securities:

At July 11, 2008, the Company held no auction rate
securities. The Company elected to sell all auction rate securities during the
second quarter of fiscal 2007 and invest in 90-day treasury bills which are
classified as cash and cash equivalents on the accompanying consolidated
condensed balance sheet.

At January 26, 2007, the Company held $15,200 of
auction rate securities, identified as a separately stated current asset in
accordance with SFAS 115, "Accounting for Certain Debt and Equity Securities."
Auction rate securities are variable-rate bonds tied to short-term interest
rates with maturities on the face of the securities in excess of 90 days. The
Company's investments in these auction rate securities were classified as
trading securities under SFAS 115. The securities were recorded at cost, which
approximated fair market value because of their variable interest rates, which
typically reset every 7 to 35 days. Despite the long-term nature of their stated
contractual maturities, the Company had the intent and ability to quickly
liquidate these securities; therefore, the Company had no cumulative gross
unrealized holding gains or losses, or gross unrealized gains or losses from
these investments. All income generated from these investments was recorded as
interest income.

Note 3 - Inventories:

Inventories are comprised as follows at the
respective periods:

|                                          | July 11, 2008 |        | November 2, 2007
|----------------------------------------- | ------------- | ------ | ----------------
|Meat,
      ingredientsand
      supplies | $             | 4,907  |                 
|Work in progress                          |               | 2,865  |                 
|Finished
      goods                      |               | 10,651 |                 
|                                          | $             | 18,423 |                 

Inventories are valued at the lower of cost (which
approximates actual cost on a first-in, first-out basis) or market. Costs
related to warehousing, transportation and distribution to customers are
considered when computing market value. Inventories include the cost of raw
materials, labor and manufacturing overhead. The Company regularly reviews
inventory quantities on hand and writes down any excess or obsolete inventories
to net realizable value. An inventory reserve is created when potentially
slow-moving or obsolete inventories are identified in order to reflect the
appropriate inventory value. Changes in economic conditions, production
requirements, and lower than expected customer demand could result in additional
obsolete or slow-moving inventory that cannot be sold or can be sold at reduced
prices and could result in additional reserve provisions.

6

---

Note 4 - Basic and diluted earnings per
share:

The Company had 250,000 employee stock
options outstanding during the thirty-six week periods ended July 11, 2008 and
July 13, 2007. The effect of the employee stock options outstanding for the
thirty-six weeks ended July 11, 2008 and July 13, 2007 was not included in the
calculation of diluted shares and diluted earnings per share as to do so would
be anti-dilutive. No options were granted during the first thirty-six weeks
ended July 11, 2008 and July 13, 2007.

Note 5 - Retirement and Other Benefit
Plans:

The Company has noncontributory-trusteed
defined benefit retirement plans for sales, administrative, supervisory and
certain other employees. The benefits under these plans are primarily based on
years of service and compensation levels. The Company's funding policy is to
contribute annually the maximum amount deductible for federal income tax
purposes, without regard to the plans' unfunded current liability. The
measurement date for the plans is the Company's fiscal year end.

|Net pension cost
      consisted of the following:    |               
|----------------------------------------------------- | --------------
|                                                      | 36 weeks ended
|                                                      | July 11, 2008 
|Service cost                                          | $             
|Interest
      cost                                   |               
|Expected return on plan assets                        |               
|Amortization of
      unrecognized prior service cost |               
|Curtailment cost                                      |               
|Net pension
      cost                                | $             

The expected Company contribution to the
plans within the next twelve months is $1,252. The Company has funded the plans
in the amount of $1,792 through the third quarter of fiscal 2008.

Note 6 - Commitments:

The Company leases certain transportation
and computer equipment under operating leases. The terms of the transportation
leases provide for annual renewal options and contingent rental payments based
upon mileage and adjustments of rental payments based on the Consumer Price
Index. No material changes have been made to these contracts during the first
thirty-six weeks of fiscal 2008.

Note 7 - Segment
Information:

The Company has two reportable operating
segments, Frozen Food Products (the processing and distribution of frozen
products) and Refrigerated and Snack Food Products (the processing and
distribution of refrigerated meat and other convenience foods).

The Company evaluates each segment's
performance based on revenues and operating income. Selling, general and
administrative expenses include corporate accounting, information systems, human
resource management and marketing, which are managed at the corporate level.
These activities are allocated to each operating segment based on revenues
and/or actual usage.

The following segment information is
presented for the twelve and thirty-six week periods ended July 11, 2008 and
July 13, 2007:

|                                                    |   |             | Refrigerated |                  |   |        |   |             |  
|--------------------------------------------------- | - | ----------- | ------------ | ---------------- | - | ------ | - | ----------- | -
|                                                    |   |             | and          |                  |   |        |   |             |  
|Twelve Weeks
      Ended                            |   | Frozen Food |              | Snack
      Food |   |        |   |             |  
|July 11, 2008                                       |   | Products    |              | Products         |   | Other  |   | Elimination |  
|Sales from external customers                       | $ | 11,469      |              |                  | $ | 15,115 |   |             | $
|Intersegment sales                                  |   | -           |              |                  |   | 317    |   |             |  
|Net sales                                           |   | 11,469      |              |                  |   | 15,432 |   |             |  
|Cost
      of products sold, excluding depreciation |   | 8,477       |              |                  |   | 9,386  |   |             |  
|Selling, general and administrative expenses        |   | 3,599       |              |                  |   | 6,619  |   |             |  
|Depreciation                                        |   | 181         |              |                  |   | 498    |   |             |  
|                                                    |   | 12,257      |              |                  |   | 16,503 |   |             |  
|Loss
      before taxes                             |   | (788        | )            |                  |   | (1,071 | ) |             |  
|Income tax (benefit) provision                      |   | (265        | )            |                  |   | (337   | ) |             |  
|Net
      loss                                      | $ | (523        | )            |                  | $ | (734   | ) |             | $
|Total assets                                        | $ | 10,934      |              |                  | $ | 26,113 |   |             | $
|Additions to property, plant and equipment          | $ | 82          |              |                  | $ | 588    |   |             | $

7

---

|                                                    |   |             | Refrigerated |                  |        |       |  |             |       
|--------------------------------------------------- | - | ----------- | ------------ | ---------------- | ------ | ----- |  | ----------- | ------
|                                                    |   |             | and          |                  |        |       |  |             |       
|Twelve Weeks
      Ended                            |   | Frozen Food |              | Snack
      Food |        |       |  |             |       
|July 13, 2007                                       |   | Products    |              | Products         |        | Other |  | Elimination |       
|Sales from external customers                       | $ | 9,903       |              | $                | 16,783 |       |  | $           | -     
|Intersegment sales                                  |   | -           |              |                  | 741    |       |  |             | -     
|Net sales                                           |   | 9,903       |              |                  | 17,524 |       |  |             | -     
|Cost
      of products sold, excluding depreciation |   | 6,159       |              |                  | 11,536 |       |  |             | -     
|Selling, general and administrative
      expenses  |   | 3,146       |              |                  | 5,790  |       |  |             | -     
|Depreciation                                        |   | 203         |              |                  | 418    |       |  |             | 96    
|                                                    |   | 9,508       |              |                  | 17,744 |       |  |             | 96    
|Income
      (loss) before taxes                    |   | 395         |              |                  | (220   | )     |  |             | (96   
|Income tax provision (benefit)                      |   | 145         |              |                  | (99    | )     |  |             | -     
|Net
      income (loss)                             | $ | 250         |              | $                | (121   | )     |  | $           | (96   
|Total assets                                        | $ | 10,124      |              | $                | 28,307 |       |  | $           | 30,386
|Additions to property, plant and equipment          | $ | 22          |              | $                | 162    |       |  | $           | 37    
|                                                   
|                                                    |   |             | Refrigerated |                  |        |       |  |             |       
|                                                    |   |             | and          |                  |        |       |  |             |       
|Thirty-Six
      Weeks Ended                        |   | Frozen Food |              | Snack
      Food |        |       |  |             |       
|July 11, 2008                                       |   | Products    |              | Products         |        | Other |  | Elimination |       
|Sales from external customers                       | $ | 36,028      |              | $                | 46,774 |       |  | $           | -     
|Intersegment sales                                  |   | -           |              |                  | 1,065  |       |  |             | -     
|Net sales                                           |   | 36,028      |              |                  | 47,839 |       |  |             | -     
|Cost
      of products sold, excluding depreciation |   | 24,738      |              |                  | 31,199 |       |  |             | -     
|Selling, general and administrative
      expenses  |   | 10,641      |              |                  | 18,670 |       |  |             | -     
|Depreciation                                        |   | 538         |              |                  | 1,489  |       |  |             | 222   
|                                                    |   | 35,917      |              |                  | 51,358 |       |  |             | 222   
|Income
      (loss) before taxes                    |   | 111         |              |                  | (3,519 | )     |  |             | (222  
|Income tax provision (benefit)                      |   | 58          |              |                  | (1,308 | )     |  |             | 4,940 
|Net
      income (loss)                             | $ | 53          |              | $                | (2,211 | )     |  | $           | (5,162
|Total assets                                        | $ | 10,934      |              | $                | 26,113 |       |  | $           | 21,395
|Additions to property, plant and equipment          | $ | 139         |              | $                | 1,300  |       |  | $           | 147   
|                                                   
|                                                    |   |             | Refrigerated |                  |        |       |  |             |       
|                                                    |   |             | and          |                  |        |       |  |             |       
|Thirty-Six
      Weeks Ended                        |   | Frozen Food |              | Snack
      Food |        |       |  |             |       
|July 13, 2007                                       |   | Products    |              | Products         |        | Other |  | Elimination |       
|Sales from external customers                       | $ | 33,327      |              | $                | 53,566 |       |  | $           | -     
|Intersegment sales                                  |   | -           |              |                  | 1,316  |       |  |             | -     
|Net sales                                           |   | 33,327      |              |                  | 54,882 |       |  |             | -     
|Cost
      of products sold, excluding depreciation |   | 20,576      |              |                  | 37,194 |       |  |             | -     
|Selling, general and administrative
      expenses  |   | 10,174      |              |                  | 18,206 |       |  |             | -     
|Depreciation                                        |   | 609         |              |                  | 1,384  |       |  |             | 287   
|                                                    |   | 31,359      |              |                  | 56,784 |       |  |             | 287   
|Income
      (loss) before taxes                    |   | 1,968       |              |                  | (1,902 | )     |  |             | (287  
|Income tax provision (benefit)                      |   | 732         |              |                  | (754   | )     |  |             | -     
|Net
      income (loss)                             | $ | 1,236       |              | $                | (1,148 | )     |  | $           | (287  
|Total assets                                        | $ | 10,124      |              | $                | 28,307 |       |  | $           | 30,386
|Additions to property, plant and equipment          | $ | 159         |              | $                | 850    |       |  | $           | 47    

Note 8 - Income taxes:

In accordance with the provision of SFAS
109, the Company assesses, on a quarterly basis, the realizability of its
deferred tax assets. A valuation allowance must be established when, based upon
the evaluation of all available evidence, it is more likely than not that all or
a portion of the deferred tax assets will not be realized. Realization of
deferred tax assets is dependent upon taxable income in prior carryback years,
estimates of future taxable income, tax planning strategies and reversals of
existing taxable temporary differences.

As a result of recent losses, the
Company's deferred tax asset has been reduced by $4,940 in the twelve week
period ended July 11, 2008. This valuation allowance includes the portion of the deferred tax assets that may not be realized and the net-of-tax impact to
implement certain tax planning strategies. This valuation allowance may be
increased or decreased as conditions change or if the Company is unable to
implement certain tax planning strategies.

8

---

The Company's future realization of its
deferred tax assets ultimately depends on the existence of sufficient taxable
income in the carryforward periods (both federal and state). Changes in existing
laws could affect the valuation of deferred tax assets for future
periods.

In July 2006, the FASB issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," ("FIN 48"),
an interpretation of FASB Statement No. 109, "Accounting for Income Taxes,"
("FASB 109"). FIN 48 clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with FASB 109.
This Interpretation prescribes a recognition threshold and measurement attribute
for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The cumulative effect, if any, of applying
FIN 48 is reported as an adjustment to the opening balance of retained earnings
in the year of adoption.

As of November 3, 2007, the Company has
provided a liability of $93 for unrecognized tax benefits related to various
federal and state income tax matters. The cumulative effect of applying this
interpretation has been recorded as a decrease of $93 to opening retained
earnings with an offsetting increase in the accrued FIN 48 liability. This
entire amount would reduce the Company's effective income tax rate if an asset
is recognized in future reporting periods.

As of July 11, 2008, the Company has not
identified any new unrecognized tax benefits or losses.

The Company will recognize any future
accrued interest and penalties related to unrecognized tax benefits in income
tax expense. As of July 11, 2008, the Company had approximately $2 in accrued
interest and penalties which is included as a component of the $93 unrecognized
tax benefit noted above.

The Company is subject to U.S. federal
income tax, and is currently under audit by the Internal Revenue Service for the
years ended November 1, 2002 through October 28, 2005. The Company's federal
income tax returns are open to audit under the statute of limitations for the
years ended October 29, 2004 through November 3, 2006. The Company's statute of
limitations for its years ended November 1, 2002 and October 31,2003 have been
extended to September 30, 2008. The Company believes the appropriate provisions
for all outstanding issues have been made for all years under audit.

The Company is subject to income tax in
California and various other state taxing jurisdictions. The Companys state
income tax returns are open to audit under the statute of limitations for the
years ended October 31, 2003 through November 3, 2006.

The Company does not anticipate a
significant change to the total amount of unrecognized tax benefits within the
next twelve months.

9

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

NOTE REGARDING FORWARD-LOOKING
STATEMENTS

Certain statements under Managements
Discussion and Analysis of Financial Condition and Results of Operations and
elsewhere in this report constitute forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934
(the Exchange Act). Such forward-looking statements involve known and unknown
risks, uncertainties, and other factors which may cause the actual results,
performance or achievements of Bridgford Foods Corporation to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions; the impact of
competitive products and pricing; success of operating initiatives; development
and operating costs; advertising and promotional efforts; adverse publicity;
acceptance of new product offerings; consumer trial and frequency; changes in
business strategy or development plans; availability, terms and deployment of
capital; availability of qualified personnel; commodity, labor, and employee
benefit costs; changes in, or failure to comply with, government regulations;
weather conditions; construction schedules; and other factors referenced in this
Quarterly Report on Form 10-Q. Assumptions relating to budgeting, marketing, and
other management decisions are subjective in many respects and thus susceptible
to interpretations and periodic revisions based on actual experience and
business developments, the impact of which may cause the Company to alter its
marketing, capital expenditure or other budgets, which may in turn affect the
Company's business, financial position, results of operations and cash flows.
The reader is therefore cautioned not to place undue reliance on forward-looking
statements contained herein and to consider other risks detailed more fully in
the Companys Annual Report on Form 10-K for the fiscal year ended November 2,
2007. The Company undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date hereof, or to reflect the occurrence of
unanticipated events.

Critical Accounting Policies and
Management Estimates

The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported revenues and expenses
during the respective reporting periods. Actual results could differ from those
estimates. Amounts estimated related to liabilities for self-insured workers
compensation, employee healthcare and pension benefits are especially subject to
inherent uncertainties and these estimated liabilities may ultimately settle at
amounts not originally estimated. The Company records promotional and returns
allowances based on recent and historical trends. Management believes its
current estimates are reasonable and based on the best information available at
the time.

The Companys credit risk is diversified
across a broad range of customers and geographic regions. Losses due to credit
risk have recently been immaterial. The provision for doubtful accounts
receivable is based on historical trends and current collection risk. The
Company has significant amounts receivable with a few large, well known
customers which, although historically secure, could be subject to material risk
should these customers operations suddenly deteriorate.The Company monitors these customers
closely to minimize the risk of loss.Sales to Wal-Mart® comprised 13.1% of revenues in
the first thirty-six weeks of fiscal year 2008 and 16.4% of accounts receivable
was due from Wal-Mart® at July 11, 2008. Wal-Mart® comprised 15.0% of revenues
for the first thirty-six weeks of fiscal year 2007 and 17.0% of accounts
receivable at the end of the third quarter of fiscal year 2007.

Revenues are recognized upon passage of
title to the customer, typically upon product pick-up, shipment or delivery to
customers. Products are delivered to customers primarily through the Companys
own long-haul fleet or through a Company owned direct store delivery
system.

The Company records the cash surrender or
contract value for life insurance policies as an adjustment of premiums paid in
determining the expense or income to be recognized under the contract for the
period.

Deferred taxes are provided for items
whose financial and tax bases differ. A valuation allowance is provided against
deferred tax assets when it is expected that it is more likely than not that the
related asset will not be fully realized.

The Company provides tax reserves for
federal, state, local and international exposures relating to audit results, tax
planning initiatives and compliance responsibilities. The development of these
reserves requires judgments about tax issues, potential outcomes and timing, and
is a subjective estimate. Although the outcome of these tax audits is uncertain,
in managements opinion adequate provisions for income taxes have been made for
potential liabilities emanating from these reviews. Actual outcomes may differ
materially from these estimates.

10

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The Company assesses the recoverability of
its long-lived assets on an annual basis or whenever adverse events
orchanges in
circumstances or business climate indicate that expected undiscounted future
cash flows related to such long-lived assets may not be sufficient to support
the net book value of such assets. If undiscounted cash flows are not sufficient
to support the recorded assets, the Company recognizes an impairment to reduce
the carrying value of the applicable long-lived assets to their estimated fair
value.

Executive Level Overview of Business
Segments

The Company operates in two business
segments -- the processing and distribution of frozen products (the Frozen Food
Products Segment), and the processing and distribution of refrigerated and snack
food products, (the Refrigerated and Snack Food Products Segment). For
information regarding the separate financial performance of the business
segments refer to Note 7 of the Notes to the Consolidated Condensed Financial
Statements included in this Quarterly Report on Form 10-Q. The products
manufactured and distributed by the Company consist of an extensive line of food
products, including biscuits, bread dough items, roll dough items, dry sausage
products, beef jerky and a variety of sandwiches and sliced luncheon meats. The
products purchased by the Company for resale include a variety of jerky,
cheeses, salads, party dips, Mexican foods, nuts and other delicatessen type
food products. Although the Company has recently introduced several new
products, none are currently a significant source of revenue in the 2008 fiscal
year. However, the Companys new Shelf Stable Sandwich products contributed
sales of $941 in the third quarter of the 2008 fiscal year.

Frozen Food Products Segment

The products manufactured and distributed
by the Company in the Frozen Food Products Segment consist of an extensive line
of food products, including biscuits, bread dough items, roll dough items and
sandwiches. All items within this segment are considered similar products and
have been aggregated at this level. The Companys frozen food division serves
both food service and retail customers. The Company sells approximately 200
unique frozen food products through wholesalers, cooperatives and distributors
to approximately 21,000 retail outlets and 22,000 restaurants and institutions.

Refrigerated and Snack Food Products
Segment

The products distributed by the Company in
the Refrigerated and Snack Food Products Segment consist of both products
manufactured by the Company and products manufactured or processed by third
parties. All items within this segment are considered similar products and have
been aggregated at this level. The dry sausage division includes products such
as jerky, meat snacks, sausage, summer sausage and pepperoni products. The deli
division includes products such as ham, sandwiches, cheese, Mexican food,
pastries and other delicatessen type food products. The Companys refrigerated
and snack food products division sells approximately 260 different items through
a direct store delivery network serving approximately 35,000 supermarkets, mass
merchandise and convenience retail stores located in 49 states and Canada. These
customers are comprised of large retail chains and smaller independent
operators.

Results of Operations for the Twelve
Weeks ended July 11, 2008 and Twelve Weeks ended July 13, 2007(in thousands,
except percentages)

Net
Sales-Consolidated

Net sales decreased by $102 (0.4%) to
$26,584 in the third twelve weeks of the 2008 fiscal year compared to the same
twelve-week period last year. Unit volume decreased approximately 5.0% while
product mix changes resulted in a unit price increase of 2.6%. Promotional
allowances decreased by approximately 0.7%, as a percent of sales, compared to
the same twelve-week period last year. Product return levels increased 0.4% as a
percent of sales compared to the same twelve-week period last year.

11

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Compared to the prior twelve-week period
ended April 18, 2008 (not shown), average weekly sales increased $140
(6.8%). This
change included an average unit price increase of 3.2% and a unit volume
decrease of 0.2% during the third twelve weeks of the 2008 fiscal year compared
to the previous twelve-week period.

Net Sales-Frozen Food Products
Segment

Net sales in the Frozen Food Products
Segment, excluding inter-segment sales, increased by $1,566 (15.8%) to $11,469
in the third twelve weeks of the 2008 fiscal year compared to the same
twelve-week period last year. This change included a unit volume increase of
0.3% and a unit price increase of 11.6% when compared to the prior fiscal
year.

Net Sales-Refrigerated and Snack
Food Segment

Net sales in the Refrigerated and Snack
Food Products Segment, excluding inter-segment sales, decreased by $1,668 (9.9%)
to $15,115 in the third twelve weeks of the 2008 fiscal year compared to the
same twelve-week period last year. Unit volume decreased by 9.0% compared to the
same twelve-week period last year. Product mix changes resulted in a unit
selling price decrease of 6.0% compared to the same twelve-week prior in the
prior year.

Cost of Products Sold and Gross
Margin-Consolidated

Cost of products sold increased by $592
(3.5%) to $17,546 in the third twelve weeks of the 2008 fiscal year compared to
the same twelve-week period in fiscal 2007. The gross margin before depreciation
decreased from 36.5% to 34.0% primarily due to higher commodity costs when
compared to the same twelve-week period in fiscal 2007.

Compared to the prior twelve-week period
ended April 18, 2008 (not shown), the average weekly cost of products sold
during the third twelve weeks of fiscal year 2008 increased $100 (7.3%). This
increase is consistent with the overall sales volume increase from the prior
twelve week period.

Cost of Products Sold-Frozen Food
Products Segment

Cost of products sold in the Frozen Food
Products Segment increased by $2,318 (37.6%) to $8,477 in the third twelve weeks
of the 2008 fiscal year compared to the same twelve-week period in fiscal 2007.
Higher flour costs contributed significantly to this increase.

Cost of Products Sold-Refrigerated
and Snack Food Segment

Cost of products sold in the Refrigerated
and Snack Food Products Segment decreased by $2,150 (18.6%) to $9,386 in the
third twelve weeks of the 2008 fiscal year compared to the same twelve-week
period in fiscal 2007. This decrease corresponds to the reduction in sales
volume and increased in-sourcing of products previously purchased from outside
suppliers.

Selling, General and Administrative
Expenses-Consolidated

Selling, general and administrative
expenses increased by $1,282 (14.3%) to $10,218 in the third twelve weeks of
fiscal year 2008 compared to the same twelve-week period in the prior fiscal
year. The increase in this category for the twelve-week period ended July 11,
2008 did not directly correspond to the sales decrease. The table below
summarizes the primary expense increases affecting this category:

|                                 | 12 Weeks Ended |   | Expense/Loss 
|-------------------------------- | -------------- | - | -------------
|                                 | July 11, 2008  |   | July 13, 2007
|Fuel                             | $        1,001 |   |              
|Benefits-Health/Life             | 677            |   |              
|Benefits-Workers Compensation    | 401            |   |              
|Bad Debt
      Expense/Provision | 1              |   |              
|Cash Surrender Value (Gain)/Loss | 186            |   |              
|Interest
      Income            | (37            | ) |              
|Other                            | 7,989          |   |              
|Total                            | $      10,218  |   |              

12

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When comparing the third twelve weeks of
fiscal year 2008 to the prior twelve-week period ended April 18, 2008 (not
shown), average weekly selling, general and administrative expenses increased by
$96 (12.7%).The
increase includes the unfavorable impact of $372 in cash surrender value
decreases and Sarbanes-Oxley compliance costs of $80 that were recorded in the
third quarter of fiscal 2008.

Selling, General and Administrative
Expenses-Frozen Food Products Segment

Selling, general and administrative
expenses in the Frozen Food Products Segment increased by $453 (14.4%) to $3,599
in the third twelve weeks of fiscal year 2008 compared to the same twelve week
period in the prior fiscal year. Various benefit cost increases and cash
surrender value losses contributed significantly to this variance.

Selling, General and Administrative
Expenses-Refrigerated and Snack Food Segment

Selling, general and administrative
expenses in the Refrigerated and Snack Food Products Segment increased by $829
(14.3%) to $6,619 in the third twelve weeks of fiscal year 2008 compared to the
same twelve-week period in the prior fiscal year. Increases in various benefit
costs and decreased cash surrender values contributed to the increase in
selling, general and administrative expenses when compared to the same
twelve-week period in the prior fiscal year.

Depreciation
Expense-Consolidated

Depreciation expense increased by $36
(5.0%) to $753 in the third twelve weeks of the 2008 fiscal year compared to the
same twelve-week period in fiscal year 2007. The increase in depreciation
expense reflects certain significant assets being placed into service late in
fiscal year 2007 and during the third quarter of the 2008 fiscal year. Compared
to the prior twelve-week period ended April 18, 2008 (not shown), average weekly
depreciation remained constant.

Depreciation Expense-Frozen Food
Products Segment

Depreciation expense in the Frozen Food
Products Segment decreased by $22 (10.8%) to $181 in the third twelve weeks of
the 2008 fiscal year compared to the same twelve-week period in fiscal year
2007. This decrease reflects lower capital spending activity and certain
facilities becoming fully depreciated.

Depreciation Expense-Refrigerated
and Snack Food Segment

Depreciation expense in the Refrigerated
and Snack Food Products Segment increased by $80 (19.1%) to $498 in the third
twelve weeks of the 2008 fiscal year compared to the same twelve-week period in
fiscal year 2007. The increase in depreciation expense reflects the impact of a
major manufacturing line put in service in the last sixteen weeks of fiscal year
2007.

Income
Taxes-Consolidated

The Companys income tax provisions for
the first twelve weeks ended July 11, 2008 and July 13, 2007 are as follows:

|                                                               | July 11,
      2008 |       | July 13,
      2007
|-------------------------------------------------------------- | ------------------- | ----- | -------------------
|Tax (benefit) provision at regular annual effective
      rate | $                   | (601  | )                  
|Tax Valuation
      Allowance                                  |                     | 4,940 |                    
|Total Income tax provision                                     | $                   | 4,339 |                    
|                                                               |                     |       |                    
|Regular effective tax rate before valuation allowance          |                     | 31.1  | %                  

13

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Based upon the Companys recent
operating losses, management determined that it is more likely than not that a
portion of its deferred tax assets as of July 11, 2008 may not be realized.
Therefore, the Companys deferred tax asset was reduced by $4,940 in the
twelve week period ended July 11, 2008 and includes a portion of its deferred
tax assets that may not be realized as well as the net of tax impact to
implement certain tax planning strategies.

Before the recording of the income tax
valuation allowance, the Company recorded an income tax benefit based on an estimated annual
effective tax rate of 31.1% in the third twelve weeks of fiscal 2008 as compared
to an income tax provision of 58.2% in the prior fiscal year and 38.0% for the
prior twelve-week period. The change in the regular effective income tax rate
correlates to changes in non-taxable losses on life insurance policies and
revisions in the Companys projected tax rates related to updated income
estimates.

Net (Loss)
Income-Consolidated

The net loss of $6,272 in the twelve weeks
ended July 11, 2008 includes a non-taxable loss on life insurance policies in
the amount of $186. Gains and losses on life insurance policies are dependent
upon the performance of the underlying equities and future results may vary
considerably. Taxable investment income also decreased on a comparative basis
during the third twelve weeks of fiscal 2008 in the amount of $120 due to lower
cash balances and lower short-term interest rates.

After considering the effect of these
transactions, the Companys results for the twelve week periods ended July 11,
2008 and July 13, 2007 are as follows:

|                                                          | 12 Weeks
      Ended
|--------------------------------------------------------- | --------------------
|                                                          | July 11,
      2008 
|Net loss before taxes, life insurance gains (losses)      |                     
|and investment income                                     | $                   
|Life insurance
      (losses) gains and investment income |                     
|(Loss) income before taxes                                |                     
|Income tax
      provision                                |                     
|Net (loss) income                                         | $                   

The Company presents net income or loss
before taxes, life insurance gains (losses) and investment income because the
Company believes it is an important measure for investors to use in
understanding the Companys underlying operations.

Results of Operations for the
Thirty-Six Weeks ended July 11, 2008 and Thirty-Six Weeks ended July 13, 2007
(in thousands, except percentages)

Net
Sales-Consolidated

Net sales decreased by $4,091 (4.7%) to
$82,802 in the first thirty-six weeks of the 2008 fiscal year compared to the
same thirty-six week period last year. The sales decline resulted from a 10.6%
decrease in unit volume, offset partially by a 5.5% increase in unit price.
Promotional allowances, at 5.8% of sales, decreased by 0.2% compared to the same
thirty-six week period last year. Product returns, at 4.2% of sales, increased
0.2% compared to the first thirty-six weeks of the prior fiscal year.

Net Sales-Frozen Food Products
Segment

Net sales in the Frozen Food Products
Segment increased by $2,701 (8.1%) to $36,028 in the first thirty-six weeks of
the 2008 fiscal year compared to the same thirty-six week period last year. This
change resulted from a 2.2% unit volume decrease which was more than offset by a
unit price increase of 7.6%.

Net Sales-Refrigerated and Snack
Food Segment

Net sales in the Refrigerated and Snack
Food Products Segment, excluding inter-segment sales, decreased by $6,792
(12.7%) to $46,774 in the first thirty-six weeks of the 2008 fiscal year
compared to the same thirty-six week period last year. Unit volumes were 18.3%
lower than the comparative thirty-six week period and were partially offset by
average unit selling prices which were 3.9% higher.

14

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Cost of Products
Sold-Consolidated

Cost of products sold decreased by $1,582
(2.8%) to $54,872 in the first thirty-six weeks of the 2008 fiscal year compared
to the same thirty-six week period in fiscal 2007. The decrease in cost of
products sold on a comparative basis was due primarily to lower unit sales
volume. The 1.3% decrease in gross margin percentage was primarily due to higher
flour commodity costs when compared to the same thirty-six week period in fiscal
year 2007.

Cost of Products SoldFrozen Food
Products Segment

Cost of products sold in the Frozen Food
Products Segment increased $4,162 (20.2%) to $24,738 in the first thirty-six
weeks of the 2008 fiscal year compared to the same thirty-six week period in
fiscal 2007. Higher flour commodity costs contributed to the increase in costs
of products sold.

Cost of Products SoldRefrigerated
and Snack Food Segment

Cost of products sold in the Refrigerated
and Snack Food Products Segment decreased by $5,995 (16.1%) to $31,199 in the
first thirty-six weeks of the 2008 fiscal year compared to the same thirty-six
week period in fiscal 2007. Lower unit volume contributed to the decrease in
costs of products sold.

Selling, General and Administrative
Expenses-Consolidated

Selling, general and administrative
expenses increased by $931 (3.3%) to $29,311 in the first thirty-six weeks of
fiscal year 2008 compared to the same thirty-six week period in the prior fiscal
year. The increase in this category for the thirty-six week period ended July
11, 2008 did not directly correspond to the sales decrease.

The table below summarizes the primary
expense variances:

|                                 | 36 Weeks Ended |        | Expense/Loss 
|-------------------------------- | -------------- | ------ | -------------
|                                 | July 11, 2008  |        | July 13, 2007
|Fuel                             | $              | 2,713  |              
|Benefits-Health/Life             |                | 1,916  |              
|Benefits-Workers Compensation    |                | 690    |              
|Bad Debt
      Expense/Provision |                | (95    | )            
|Cash Surrender Value (Gain)/Loss |                | 376    |              
|Interest
      Income            |                | (231   | )            
|Other                            |                | 23,942 |              
|Total                            | $              | 29,311 |              

Selling, General and Administrative
Expenses-Frozen Food Products Segment

Selling, general and administrative
expenses in the Frozen Food Products Segment increased by $467 (4.6%) to $10,641
in the first thirty-six weeks of fiscal year 2008 compared to the same
thirty-six week period in the prior fiscal year. Higher fuel and health benefit
costs contributed to the increase in selling, general and administrative
expenses when compared to the same thirty-six week period in fiscal
2007.

Selling, General and Administrative
Expenses-Refrigerated and Snack Food Segment

Selling, general and administrative
expenses in the Refrigerated and Snack Food Products Segment increased by $464
(2.5%) to $18,670 in the first thirty-six weeks of fiscal year 2008 compared to
the same thirty-six week period in the prior fiscal year. Higher fuel and health
benefit costs as well as decreases in cash surrender values of life insurance
policies contributed to the increase in selling, general and administrative
expenses when compared to the same thirty-six week period in fiscal
2007.

15

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Depreciation
Expense-Consolidated

Depreciation expense decreased by $31
(1.4%) to $2,249 in the first thirty-six weeks of the 2008 fiscal year compared
to the same thirty-six week period in fiscal year 2007. The decrease in
depreciation expense was due to lower capital expenditures in recent years and
certain significant assets becoming fully depreciated in a prior
period.

Depreciation Expense-Frozen Food
Products Segment

Depreciation expense in the Frozen Food
Products Segment decreased by $71 (11.7%) to $538 in the first thirty-six weeks
of the 2008 fiscal year compared to the same thirty-six week period in fiscal
year 2007. The decrease in depreciation expense was due to lower capital
expenditures in recent years and certain significant assets becoming fully
depreciated in a prior period.

Depreciation Expense-Refrigerated
and Snack Food Segment

Depreciation expense in the Refrigerated
and Snack Food Products Segment increased by $105 (7.6%) to $1,489 in the first
thirty-six weeks of the 2008 fiscal year compared to the same thirty-six week
period in fiscal year 2007. This increase in depreciation expense results
primarily from the Jerky production line that was placed into service in late
fiscal year 2007.

Income
Taxes-Consolidated

The Companys income tax provisions for
the thirty-six week periods ended July 11, 2008 and July 13, 2007 are as
follows:

|                                                        | July 11, 2008 |        | July 13, 2007
|------------------------------------------------------- | ------------- | ------ | -------------
|Tax (benefit) provision at regular annual effectiverate | $             | (1,250 | )            
|Tax Valuation
      Allowance                           |               | 4,940  |              
|Total Income tax provision                              | $             | 3,690  |              
|                                                        |               |        |              
|Regular effective tax rate before valuationallowance    |               | 34.4   | %            

Based upon the Companys recent
operating losses, management determined that it is more likely than not that a
portion of its deferred tax assets as of July 11, 2008 may not be realized.
Therefore, the Companys deferred tax asset was reduced by $4,940 in the
twelve week period ended July 11, 2008 and includes a portion of its deferred
tax assets that may not be realized as well as the net of tax impact to
implement certain tax planning strategies.

Before the recording of the income tax
valuation allowance, the Company recorded an income tax provision based on an estimated annual
effective tax rate of 34.4% in the first thirty-six weeks of fiscal 2008 as
compared to 10.0% in the prior fiscal year and 38.2% in the prior period. The
change in the effective income tax rate relates to significant non-taxable
losses on life insurance policies and revisions to the Companys projected tax
rates related to updated estimates and the recognition of research and
development tax credits.

16

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Net
Loss-Consolidated

The net loss for the thirty-six weeks
ended July 11, 2008 was affected by non-taxable losses on life insurance
policies in the amount of $7,320. Gains and losses on life insurance policies
are dependent upon the performance of the underlying equities and future results
may produce losses of equal magnitude. Taxable investment income decreased $278
due to lower cash balances and a decrease in short-term interest rates. After
considering the effect of these transactions, the Companys results were as
follows:

|                                                       | 36 Weeks
      Ended
|------------------------------------------------------ | --------------------
|                                                       | July 11,
      2008 
|Net loss before taxes, life insurance loss             |                     
|and investment income                                  | $                   
|Life insurance
      (loss) gain and investment income |                     
|Loss before taxes                                      |                     
|Income tax
      provision                             |                     
|Net loss                                               | $                   

The Company presents net income or loss
before taxes, life insurance gain or loss and investment income because the
Company believes it is an important measure for investors to use in
understanding the Companys underlying operations.

Liquidity and Capital Resources (in
thousands)

The Companys need for operations growth,
capital expenses and share repurchases are expected to be met with cash flows
provided by future operating activities.

Cash flows from operating activities
for the thirty-six weeks ended:

|                                                                | July 11, 2008 |        | July 13, 2007
|--------------------------------------------------------------- | ------------- | ------ | -------------
|Net
      loss                                                  | $             | (7,320 | )            
|Adjustments to reconcile net loss
      to net cash provided by |               |        |              
|operating
      activities:                                     |               |        |              
|Depreciation                                                    |               | 2,249  |              
|Provision (recovery) on losses on accounts receivable           |               | 26     |              
|Gain on sale of property, plant and
      equipment             |               | (35    | )            
|Tax valuation
      allowance                                   |               | 4,940  |              
|Changes in
      working capital                                |               | (398   | )            
|Net cash (used)
      provided by operating activities          | $             | (538   | )            

Significant changes in working capital
for the thirty-six weeks ended:

July 11, 2008 Reductions in operating cash flows for the period ended July
11, 2008 included an increase in prepaid expenses and other current assets in
the amount of $839 as well as a reduction in accrued payroll, advertising and
other expenses in the amount of $792. These uses of cash were offset by
reductions in accounts receivable of $740 and increases in accounts payable and
accrued expenses of $567.

July 13, 2007-Operating cash flows for the period ended July 13, 2007
increased primarily due to the sale of trading securities in the amount of
$12,200 and a significant reduction in accounts receivable in the amount of
$3,204 offset by reductions in accounts payable of $1,078 and accrued payroll,
advertising and other expenses of $1,855.

Cash used in investing activities for
the thirty-six weeks ended:

|                                                 | July 11,2008 |        | July 13, 2007
|------------------------------------------------ | ------------ | ------ | -------------
|Proceeds from sale of property, plant and        |              |        |              
|equipment                                        | $            | 40     |              
|Additions to
      property, plant and equipment |              | (1,586 | )            
|Net cash used in investing activities            | $            | (1,546 | )            

17

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Expenditures for property, plant and
equipment include the acquisition of new equipment, upgrading of facilities to
maintain operating efficiency and investments in cost effective technologies to
lower costs. Overall capital spending has declined in recent years as the
Company carefully scrutinizes capital investments for short term pay-back of
investment.****

Cash used in financing activities for
the thirty-six weeks ended:

|                                      | July 11, 
      2008 |        | July 13,
    2007
|------------------------------------- | -------------------- | ------ | -----------------
|Shares repurchased                    | $                    | (3,018 | )                
|Net cash used in financing activities | $                    | (3,018 | )                

The Companys stock repurchase program was
approved by the Board of Directors in November 1999 and was expanded in June
2005. Under the stock repurchase program, the Company is authorized, at the
discretion of management and the Board of Directors, to purchase up to an
aggregate of 2,000 shares of the Companys common stock on the open market. As
of July 11, 2008, up to approximately 481 shares were still authorized for
repurchase under the program. No cash dividends were paid during the first
thirty-six weeks of the 2008 fiscal year. The Board of Directors suspended the
quarterly cash dividend at its May 2004 meeting in recognition of lower
profitability levels in recent periods.

The Company remained free of interest
bearing debt during the first thirty-six weeks of fiscal year 2008. TheCompany's revolving line of credit with Bank of
America expires on April 30, 2010 and provides for borrowings up to $2,000. The
Company has not borrowed under this line for more than twenty consecutive years
and expects to renew the line of credit prior to its expiration.

Recent Accounting
Pronouncements

In December 2007, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards No.
141R, Business Combinations (SFAS 141R). SFAS 141R establishes principles
and requirements for how an acquirer in a business combination: 1) recognizes
and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree; 2)
recognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase; and 3) determines what information to disclose to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. SFAS 141R is effective for business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008.
Therefore, the Company expects to adopt SFAS 141R for any business combinations
entered into beginning in fiscal 2010.

In September 2006, the FASB issued
Statement of Accounting Standards No. 157, Fair Value Measurements (SFAS
157). This Statement defines fair value, provides a framework for measuring
fair value, and expands the disclosures required for fair value measurements.
SFAS 157 applies to other accounting pronouncements that require fair value
measurements; it does not require any new fair value measurements. SFAS 157 was
originally effective for fiscal years beginning after November 15, 2007, the
Companys fiscal year 2009, but was partially delayed by one year for
non-financial assets and liabilities as detailed within FASB Staff Position
157-2. The Company is currently evaluating SFAS 157 and FASB Staff Position
157-2, and does not believe these pronouncements will materially affect its
financial position or results of operations.

In September 2006, the FASB issued SFAS
No. 158, Employers Accounting for Defined Benefit Pension and Other
Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and
132(R) (SFAS 158). SFAS 158 requires employers to recognize the over- or
under-funded status of defined benefit plans and other postretirement plans in
the statement of financial position and to recognize changes in the funded
status in the year in which the changes occur through comprehensive income. In
addition, SFAS 158 requires employers to measure the funded status of plans as
of the date of the year-end statement of financial position. The recognition and
disclosure provisions of SFAS 158 became effective for the Companys fiscal year
ended November 2, 2007 while the requirement to measure plan assets and benefit
obligations as of a companys year-end date is effective for fiscal years ending
after December 15, 2008 (effective for the Companys fiscal year ending October
30, 2009). The impact of the Companys initial adoption of SFAS 158 is disclosed
in Note 3 to the Consolidated Financial Statements of the Annual Report on Form
10-K for the fiscal year ended November 2, 2007 and is reflected in those
statements.

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In February 2007, the FASB issued
Statement of Financial Accounting Standards No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 expands
opportunities to use fair value measurement in financial reporting and permits
entities to choose to measure many financial instruments and certain other items
at fair value. This Statement is effective for fiscal years beginning after
November 15, 2007, or the Companys fiscal year ending October 30, 2009. The
Company does not expect this Statement will have a material impact on its
results of operations or financial position.

In December 2007, the FASB issued
Statement of Financial Accounting Standards No. 160, Noncontrolling Interests
in Consolidated Financial Statements (SFAS 160). SFAS 160 amends Accounting
Research Bulletin No. 51,Consolidated Financial
Statements to establish accounting and reporting standards for noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. This
statement clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity and should be reported as equity
in the consolidated financial statements, rather than in the liability or
mezzanine section between liabilities and equity. SFAS 160 also requires
consolidated net income to be reported at amounts that include the amounts
attributable to both the parent and the noncontrolling interest. SFAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008; therefore, the Company expects to adopt
SFAS 160 at the beginning of fiscal 2010. Adoption of SFAS 160 is not expected
to have a material impact on the Companys financial position.

In May 2008, the FASB issued SFAS No. 162,
Hierarchy of Generally Accepted Accounting Principles (SFAS 162). This
statement is intended to improve financial reporting by identifying a consistent
framework, or hierarchy, for selecting accounting principles to be used in
preparing financial statements of nongovernmental entities that are presented in
conformity with GAAP. This statement will be effective 60 days following the
U.S. Securities and Exchange Commissions approval of the Public Company
Accounting Oversight Board amendment to AU Section 411, The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting Principles. The
adoption of this Statement is not expected to have a material impact on the
Companys consolidated financial position or results of operations.

Off-Balance Sheet Arrangements

The Company is not engaged in any
off-balance sheet arrangements within the meaning of Item 303(a)(4)(ii) of
Regulation S-K.

Item 3. Quantitative and Qualitative
Disclosures about Market Risk

General Business Risks

General risk factors include, among
others, the following: general economic and business conditions; the impact of
competitive products and pricing; success of operating initiatives; development
and operating costs; advertising and promotional efforts; adverse publicity;
acceptance of new product offerings; consumer trial and frequency; changes in
business strategy or development plans; availability, terms and deployment of
capital; availability of qualified personnel; commodity, labor, and employee
benefit costs; changes in, or failure to comply with, government regulations;
weather conditions; construction schedules; and other factors referenced in this
Quarterly Report on Form 10-Q and in Bridgford Foods Annual Report on Form 10-K
for the fiscal year ended November 2, 2007. Because of these and other factors
that may affect the Companys operating results, past financial performance
should not be considered an indicator of future performance, and investors
should not use historical trends to anticipate results or trends in future
periods. The Company expressly disclaims any intent or obligation to publicly
release the results of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof, or to
reflect the occurrence of unanticipated events.

There can be no assurances that the
Companys growth objectives will be met or that product lines will be
profitable. Anticipated and unanticipated declines in customer demand or taste,
sales softness or aggressive competition may have a material adverse effect on
the Companys results of operations. The business is also exposed to the risk of
negative publicity, whether or not based in fact, which affects consumer
perceptions about the health, safety or quality of food and inputs of food
products.

19

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The Company's operating results are
heavily dependent upon the prices paid for raw materials. Other significant
factors that influence operating results include transportation and energy
costs. The marketing of the Company's value-added products does not lend itself
to instantaneous changes in selling prices. While the Company attempts to change
prices to offset changes in its cost structure, such changes cannot be made
frequently enough or quickly enough to mitigate the significant volatility in
its raw ingredient, transportation, fuel, and other costs. As a result, the
Companys operations and operating margins are impacted significantly by the
volatility of its costs.

Financial Instrument Risk

The Companys financial instruments
generally consist of cash and cash equivalents and life insurance policies. At
July 11, 2008, the carrying value of the Companys financial instruments
approximated their fair market values based on current market prices and rates.
It is not the Companys policy to enter into derivative financial
instruments.

Foreign Currency Risk

The Company did not have significant
foreign currency exposure at July 11, 2008.

Concentration of Credit Risk

The Companys credit risk is diversified
across a broad range of customers and geographic regions. Losses due to credit
risk have recently been immaterial. The provision for doubtful accounts
receivable is based on historical trends and current collection risk. The
Company has significant amounts receivable with a few large, well known
customers which, although historically secure, could be subject to material risk
should these customers operations suddenly deteriorate. The Company monitors
these customers closely to minimize the risk of loss.

Fixed  Price Contracts Risk

The Company purchases bulk flour under
short-term fixed price contracts during the normal course of business. Under
these arrangements, the Company is obligated to purchase specific quantities at
fixed prices, within the specified contract period. These contracts provide for
automatic price increases if agreed quantities are not purchased within the
specified contract period. No significant contracts remained unfulfilled at July
11, 2008.

Item 4. Controls and Procedures

Management of the Company, with the
participation and under the supervision of the Companys Chairman and Chief
Financial Officer, has evaluated the effectiveness of the Companys disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of the end of the period covered by this Quarterly Report on Form
10-Q. Based on this evaluation, the Chairman and Chief Financial Officer have
concluded that the Companys disclosure controls and procedures are effective as
of the end of the period covered by this report to provide reasonable assurance
that material information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified by the Securities and
Exchange Commissions rules and forms. There has been no change in the Companys
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) during the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.

The Companys management, including its
Chairman and Chief Financial Officer, does not expect that the Companys
disclosure controls and internal controls will prevent all error and all fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of inherent limitations in all control systems,
no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control.

The design of any system of controls is
also based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions; over time, a control may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of inherent limitations
in a cost-effective control system, misstatements due to error or fraud may
occur and not be detected.

20

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Section 404 of the Sarbanes-Oxley Act
of 2002:In order to comply with the Sarbanes-Oxley Act of 2002 (the Act), the
Company has undertaken and continues a comprehensive effort, which includes the
documentation and review of its internal controls. In order to comply with the
Act, the Company is in the process of centralizing most accounting and many
administrative functions at its corporate headquarters in an effort to control
the cost of maintaining its control systems. On July 11, 2006, The Committee of
Sponsoring Organizations issued guidance on how small companies should implement
an effective internal control framework over financial reporting and other
risks. This guidance is considered a key tool to help smaller public companies
to confront the challenges of the Act. As a result, the Company may incur
substantial additional expenses and diversion of managements time. During the
course of these activities, the Company may identify certain internal control
issues which management believes should be improved. These improvements, if
necessary, will likely include further formalization of policies and procedures,
improved segregation of duties, additional information technology system
controls and additional monitoring controls. Although management does not
believe that any of these matters will result in material weaknesses being
identified in the Companys internal controls as defined by the Public Company
Accounting Oversight Board Auditing Standard No. 5, no assurances can be given
regarding the outcome of these efforts. Additionally, control weaknesses may not
be identified in a timely enough manner to allow remediation prior to the
issuance of the auditors report on internal controls over financial reporting.
Any failure to adequately comply could result in sanctions or investigations by
regulatory authorities, which could harm the Companys business or investors
confidence in the Company.

The Securities and Exchange Commission, on
December 15, 2006, adopted new measures to grant relief to smaller public
companies by extending the date of compliance with Section 404 of the Act. Under
these new measures, the Company will be required to comply with the Act in two
phases. The first phase will be effective for the Companys fiscal year ending
October 31, 2008 and will require the Company to furnish a management report on
internal control over financial reporting. The second phase will require the
Company to provide an auditors attestation report on internal control over
financial reporting beginning with the Companys fiscal year ending in
2010.



Part II. Other Information

Item 1A. Risk Factors

The risk factors listed in Part I Item
1A. Risk Factors in the Annual Report on Form 10-K for the fiscal year ended
November 2, 2007, should be considered with the information provided elsewhere
in this Quarterly Report on Form 10-Q, which could materially adversely affect
the business, financial condition or results of operations. There have been no
material changes to the risk factors as previously disclosed in such Annual
Report on Form 10-K.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

The Company has not sold any equity
securities during the period covered by this report. The following table
provides information regarding repurchases by the Company of its common stock,
for each of the three four-week periods included in the interim twelve-week
period ended July 11, 2008.

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**ISSUER PURCHASES OF EQUITY SECURITIES**

|                                         |  |                 |        |                          |  |                  |  | Maximum        
|---------------------------------------- |  | --------------- | ------ | ------------------------ |  | ---------------- |  | ---------------
|                                         |  |                 |        |                          |  | Total Number of  |  | Number of      
|                                         |  |                 |        |                          |  | Shares           |  | Shares that May
|                                         |  |                 |        |                          |  | Purchased as     |  | Yet Be         
|                                         |  | Total Number of |        |                          |  | Part of Publicly |  | Purchased Under
|                                         |  | Shares          |        | Average
      Price      |  | Announced Plans  |  | the Plans or   
|Period(1)                                |  | Purchased       |        | **Paid Per
      Share** |  | or Programs(2)   |  | Programs(2)    
|April 19, 2008  May 16, 2008            |  |                 | 645    |                          |  | $6.20            |  |                
|May17,2008 
        June 13,
      2008 |  |                 | 11,584 |                          |  | $6.28            |  |                
|June14,2008   July 11, 2008             |  |                 | 162    |                          |  | $6.75            |  |                
|Total                                    |  |                 | 12,391 |                          |  | $6.29            |  |                

| | (1) |  | The periods shown are the
      Companys fiscal periods during the twelve-week quarter ended July 11,
      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| | (2) |  | Repurchases reflected in the
      foregoing table were made on the open market. The Companys stock
      repurchase program was approved by the Board of Directors in November 1999
      (1,500,000 shares authorized, disclosed in a Form 10-K filed on January
      26, 2000) and was expanded in June 2005 (500,000 additional shares
      authorized, disclosed in a press release and Form 8-K filed on June 17,
      2005). Under the stock repurchase program, the Company is authorized, at
      the discretion of management and the Board of Directors, to purchase up to
      an aggregate of 2,000,000 shares of the Companys common stock on the open
      market. The Companys Stock Purchase Plan (Purchase Plan) is
      administered by Citigroup Global Markets Inc. (CGM) for purchase of
      shares of common stock issued by the Company in compliance with the
      requirements of Rule 10b5-1 under the Exchange Act. Commencing on
      September 16, 2007 and continuing through and including September 15,
      2008, CGM shall act as the Companys exclusive agent to purchase Stock
      under the Purchase Plan. This Purchase Plan supplements any purchases of
      stock by the Company outside of the Purchase Plan, which may occur from
      time to time, in open market transactions pursuant to Rule 10b-18 of the
      Exchange Act or in privately-negotiated transactions. On June 5, 2008, the
      Company purchased 10,838 shares of its common stock from a shareholder in
      a privately-negotiated transaction for an aggregate purchase price of
      approximately $68,000. As of July 11, 2008, the total maximum number of
      shares that may be purchased under the Purchase Plan is 481,216 at a total
      maximum aggregate price (exclusive of commission) of
  $4,812,160.

Item 6.

Exhibits

| | Exhibit No. |  | Description                                                                                                                                      
| | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1        |  | Certification of Chairman (Principal Executive Officer), as
      required by Section 302 of the Sarbanes-Oxley Act of 2002.                     
| |             |  |                                                                                                                                                  
| | 31.2        |  | Certification of Chief Financial Officer (Principal Financial
      Officer), as required by Section 302 of the Sarbanes-Oxley Act of
      2002.
| |            
| | 32.1        |  | Certification of Chairman (Principal Executive Officer), as
      required by Section 906 of the Sarbanes-Oxley Act of 2002.                     
| |            
| | 32.2        |  | Certification of Chief Financial Officer (Principal Financial
      Officer), as required by Section 906 of the Sarbanes-Oxley Act of
      2002.

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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.

| | BRIDGFORD FOODS CORPORATION | 
| | --------------------------- | 
| | (Registrant)                | 

|Dated: August
      29, 2008 | By: | /s/ | Raymond F. Lancy                                                | 
|---------------------------- | --- | --- | --------------------------------------------------------------- | 
|                             |     |     | Raymond F. Lancy                                               
|                             |     |     | Chief
      Financial Officer                                  
|                             |     |     | (Duly
      Authorized Officer and Principal Financial Officer)

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