<PAGE>
                                                                               .
                                                                               .
                                                                               .

                                                                      EXHIBIT 13

FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts and number of stores)

<TABLE>
<CAPTION>
                                                           2005          2004          2003
                                                       ------------   ----------    -----------
<S>                                                    <C>            <C>           <C>
Total revenues.................................        $  1,747,436   $1,653,915    $ 1,655,735

Income from continuing operations..............               4,162        3,037            406

Diluted earnings per share from
  continuing operations........................        $        .52   $      .38    $       .05
Dividends declared per share...................                 .52          .52            .46

Total assets...................................        $    546,868   $  542,405    $   549,322
Long-term liabilities..........................             212,709      245,074        267,981
Shareholders' equity...........................             124,315      128,276        127,809

Number of shares outstanding at year end.......               7,908        7,948          7,947

Book value per share...........................        $      15.72   $    16.14    $     16.08

Income from continuing operations
  as a percentage of:
   Sales and other revenues....................                  .2%          .2%           n/m
   Average shareholders' equity................                 3.3%         2.4%            .3%

Stores open at year-end:
   Supermarkets.................................                117          114            112
   Convenience stores...........................                161          164            167
</TABLE>

n/m - not meaningful

Marsh(R) Supermarkets, Inc. was founded in 1931 with one store in Muncie,
Indiana. In 1953, the Company went public with 16 stores. Today, it is a leading
regional food retailer headquartered in Indianapolis, Indiana. The Company
operates 69 Marsh(R) Supermarkets, 38 LoBill(R) Foods, 8 O'Malia(R) Food
Markets, 1 Arthur's Fresh Market(R), 161 Village Pantry(R) convenience stores,
and 1 Savin*$(SM) store, all in Indiana and Ohio; Crystal Food Services(SM), a
specialist in catering, office coffee, coffee roasting, business cafeteria
management, vending and concessions; Primo(SM) Banquet Catering and Conference
Centers; Floral Fashions(R), and McNamara(R) Florist and Enflora(R) Flowers for
Business.

The 14,900 Marsh employees serve two million customers each week.

<PAGE>

SELECTED FINANCIAL DATA
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                             April 2,     March 27,      March 29,       March 30,     March 31,
As of and for the year ended                  2005          2004           2003            2002           2001
----------------------------               -----------   -----------   -------------    -----------   -----------
<S>                                        <C>           <C>           <C>              <C>            <C>
Total revenues .........................   $ 1,747,436   $ 1,653,915   $   1,655,735    $ 1,642,599    $ 1,545,903

Income from continuing operations before
  income taxes .........................         6,545         5,556           1,544         17,613         15,795

Income from continuing operations ......         4,162         3,037             406         11,541         10,646

Discontinued operation:
 Income (loss), net of tax .............            --            --              --           (859)         1,290
 Gain (loss) on disposal, net of tax ...            --            --            (354)         2,726             --
                                           -----------   -----------   -------------    -----------    -----------
 Net income ............................   $     4,162   $     3,037   $          52    $    13,408    $    11,936
                                           ===========   ===========   =============    ===========    ===========

Basic earnings per common share:
    Continuing operations ..............   $       .53   $       .38   $         .05    $      1.45    $      1.30
    Discontinued operation .............            --            --              --           (.11)           .16
    Disposal of discontinued
      operation ........................            --            --            (.04)           .34             --
                                           -----------   -----------   -------------    -----------    -----------
Net income .............................   $       .53   $       .38   $         .01    $      1.68    $      1.46
                                           ===========   ===========   =============    ===========    ===========

Diluted earnings per common share:
    Continuing operations ..............   $       .52   $       .38   $         .05    $      1.31    $      1.20
    Discontinued operation .............            --            --              --           (.09)           .13
    Disposal of discontinued
      operation ........................            --            --            (.04)           .29             --
                                           -----------   -----------   -------------    -----------    -----------
Net income .............................   $       .52   $       .38   $         .01    $      1.51    $      1.33
                                           ===========   ===========   =============    ===========    ===========

Dividends declared per share ...........   $       .52   $       .52   $         .46    $       .44    $       .44

Total assets ...........................   $   546,868   $   542,405   $     549,322    $   583,230    $   577,814
Long term liabilities and deferred
   items................................       243,382       281,918         294,813        313,944        296,538
Total shareholders' equity .............       124,315       128,276         127,809        140,797        138,276
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

At April 2, 2005, Marsh Supermarkets, Inc. (the "Company" or "Marsh") operated
through wholly-owned subsidiaries, 117 supermarkets under the Marsh, LoBill
Foods, O'Malia's Food Markets, Arthur's Fresh Market and Savin*$ banners, and
161 Village Pantry convenience stores in central Indiana and western Ohio. Marsh
also owns and operates Crystal Food Services, which provides upscale and
mid-scale catering, vending, concessions, coffee roasting and distribution, and
business cafeteria management services; and McNamara, which operates seven
upscale retail floral shops under the name McNamara and one business florist
under the name Enflora.

BUSINESS OVERVIEW

Revenues from supermarket operations represented 78.3% of total revenues for
2005, while convenience stores and food services contributed 17.1% and 3.5% of
revenues, respectively. Revenues for 2004 from supermarkets, convenience stores
and food services were 80.1%, 15.6% and 3.3%, respectively, of total revenues.
The Company's major supermarket competitors include Walmart, Kroger and Meijer.

MARKET TRENDS

The Company's efforts to increase revenues, operating income and cash flows
continue to be affected by competitive store openings and remodels and the
challenging local economy. At April 2, 2005, there were 13 major competitors'
stores opened or remodeled within the last 12 months, compared to 7 stores at
March 2004 and 17 stores at March 2003. The Company expects that new stores will
continue to be opened in the market area. According to U.S. Department of Labor
statistics, employment in the six largest cities in central Indiana decreased
0.3% from December 2003 to December 2004.

The Company's ability to maintain or increase gross profit rates continues to be
a challenge due to competitors' pricing and promotional activity. Also, recent
commodity price increases, particularly in beef and gasoline, have created
additional pressures on gross profit rates.

MANAGEMENT FOCUS

Given the continued pressures on revenues and gross profit rates, the Company's
management continues its focus on merchandising strategies, expense reduction,
and asset and cash flow management.

The Company continues to pursue expense reduction initiatives that were begun
two years ago. Those initiatives included changes to employee medical benefits
plans, seeking greater efficiencies in store labor scheduling, lowering interest
expense by replacing fixed rate debt with lower variable rate debt, pursuing
lower costs of goods, supplies and services, in-house handling versus
outsourcing of certain support services, and improving warehousing and delivery
logistics. The initiatives completed to date have partially offset increases in
non-controllable and other selling, general and administrative expenses.

<PAGE>

RESULTS OF OPERATIONS

The following table sets forth certain income statement components, expressed as
a percentage of sales and other revenues, and the percentage change in such
components:

<TABLE>
<CAPTION>
                                                                Percentage of Revenues
                                                                       Year Ended                Percentage Change
                                                           ---------------------------------   ---------------------
                                                           April 2,    March 27,    March 29,    2005         2004
                                                             2005        2004         2003     vs. 2004     vs. 2003
                                                           --------    ---------    ---------  --------     --------
<S>                                                        <C>         <C>          <C>        <C>          <C>
Total revenues ........................................     100.0%       100.0%       100.0%      5.7%        (0.1)%

Gross profit ..........................................      29.5         30.1         29.7       3.6          1.0
Selling, general and administrative ...................      26.7         27.1         26.9       3.8          0.8
Depreciation ..........................................       1.5          1.5          1.5       3.7          2.2
Operating income ......................................       1.3          1.4          1.4      (0.8)         4.5
Interest ..............................................       1.1          1.2          1.4       0.9        (18.1)
Other non-operating income ............................      (0.1)        (0.1)        (0.1)    138.4        (55.9)
Income from continuing operations before income
  taxes ...............................................       0.4          0.3          0.1      17.8        259.8
Income taxes ..........................................       0.1          0.2          0.1      (5.4)       121.4
Income from continuing operations .....................       0.2          0.2           --      37.0          n/m
</TABLE>

n/m = not meaningful

TOTAL REVENUES

Total revenues were $1,747.4 million in 2005, a 53-week year, compared to
$1,653.9 million in 2004, a 52-week year. The increase in 2005 was primarily due
to higher gasoline prices, new stores and the additional week. Gasoline sales
were $161.4 million in 2005, compared to $122.5 million in 2004, and total
revenues excluding gasoline sales were $1,586.0 million in 2005, compared to
$1,531.4 million in 2004. In addition to considering total revenues, the Company
also considers total revenue excluding gasoline sales because gasoline prices
fluctuate widely and frequently. Sales in comparable supermarkets and
convenience stores increased 1.6% including gasoline sales, but declined 0.8%
excluding gasoline sales. Comparable stores include stores open at least one
full year, replacement stores and format conversions. Continued high levels of
competitive promotional activity, competitors' new store openings and the weak
local economy all continue to adversely affect comparable stores sales.

Total revenues included gains from sales of property of $3.8 million and $3.0
million for 2005 and 2004, respectively. Although results may vary from period
to period, future property gains may not equal or exceed historical levels due
to the limited real estate holdings available for sale in the normal course of
business, which could materially adversely affect the Company's results of
operations.

Total revenues were $1,653.9 million in 2004, compared to $1,655.7 million in
2003. Gasoline sales were $122.5 million in 2004 compared to $107.8 million in
2003. Total revenues excluding gasoline sales were $1,531.4 million for 2004,
compared to $1,547.9 million in 2003. Sales in comparable supermarkets and
convenience stores including gasoline sales declined 1.4% in 2004 from 2003.
Sales in comparable supermarkets and convenience stores excluding gasoline sales
declined 2.5% in 2004 from 2003. Increased competitor's square footage adversely
affected comparable store sales.

A reconciliation of total revenues to total revenues excluding gasoline, and to
comparable store merchandise sales for supermarkets and convenience stores is
shown below:

<TABLE>
<CAPTION>
                                        2005         2004
                                     ----------   ----------
<S>                                  <C>          <C>
Total revenues ...................   $1,747,436   $1,653,915
Less gasoline sales ..............      161,402      122,518
                                     ----------   ----------
Total revenue excluding
  gasoline .......................    1,586,034    1,531,397
Less non-comparable sales ........      166,088      100,710
                                     ----------   ----------
Comparable store merchandise
  sales...........................   $1,419,946   $1,430,687
                                     ==========   ==========
</TABLE>

GROSS PROFIT

Gross profit is calculated net of promotional expenses and warehousing and
transportation costs, excluding depreciation. Gross profit as a percentage of
revenues may not be comparable to other supermarket retailers as purchasing
personnel costs and advertising expenses are not included in the calculation.

Gross profit was 29.5% of total revenues in 2005 compared to 30.1% in 2004. The
percentage decline was primarily attributable to higher gasoline sales at a low
gross profit rate.

Gross profit was 30.1% of total revenues in 2004 compared to 29.7% in 2003.

<PAGE>

In 2003, the Company changed its accounting policy with respect to slotting
allowances and similar consideration received from vendors. As more fully
discussed in NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS, the Company had
previously recognized certain vendor allowances when the Company had fulfilled
its obligations under the related contract. Effective January 1, 2003, the
Company now includes those allowances as a reduction in inventory value.
Adoption of this policy resulted in a decrease in gross profit of $5.6 million
for fiscal year 2003.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative (SG&A) expenses include store expenses,
administrative and corporate expenses, advertising and purchasing personnel
costs.

SG&A expenses were 26.7% of total revenues in 2005 compared to 27.1% in 2004.
Increases, as a percentage of sales, in credit and debit card fees, building and
equipment rent, and workers compensation costs were offset by a decline in
administrative and general expenses combined with lower medical costs resulting
primarily from a change in service provider network. Wages in stores open both
years, excluding format conversions, declined 2.2% due to continued refinement
of labor scheduling and the reduction of premium pay hours.

In 2004, SG&A expenses were 27.1% of total revenues, compared to 26.9% in 2003.
The increase, as a percentage of total revenues, was primarily attributable to
higher building and equipment rent and repairs, advertising, store opening costs
and credit card fees. Excluding supermarket format conversions, wages in stores
open both years decreased 3.8% in 2004 from 2003 due to improved labor
scheduling utilizing store specific labor profiles.

During the fourth quarter of 2003, the Company reorganized its headquarters
staff, discontinued its home delivery service and closed a LoBill supermarket.
As a result of the headquarters staff reorganization, the Company recorded a
$1.1 million charge against earnings in 2003.

DEPRECIATION

Depreciation expense was $26.0 million, $25.0 million and $24.5 million in 2005,
2004, and 2003, respectively. Expressed as a percentage of revenues,
depreciation expense was 1.5% in all three years.

In the fourth quarter of 2005, the Company completed its previously announced
review of its accounting for leases. The Company concluded that certain aspects
of its accounting for leases did not comply with GAAP. The Company corrected its
accounting for leases and recorded an $0.8 million charge to depreciation in the
fourth quarter of 2005.

INTEREST

Interest expense was $19.2 million in 2005, $19.1 million in 2004, and $23.3
million in 2003. As a percentage of revenues, interest expense was 1.1% in 2005,
1.2% in 2004 and 1.4% in 2003. The decline in expense for 2004 resulted from
repurchases of a portion of the Company's 8 7/8% senior subordinated notes in
2004 and 2003 and retirement of the Company's 7% convertible debentures in 2003.

OTHER NON-OPERATING INCOME

In 2005, the Company, a) received $2.4 million in settlement of litigation
against two of the Company's general liability insurance carriers for costs
related to the remediation of petroleum contamination, b) sold its minority
interest in a real estate partnership resulting in a $0.8 million gain, and c)
incurred $0.9 million in net expense to settle a claim previously announced on
May 19, 2005, brought by a former officer of the Company.

In 2004, the Company purchased $16.8 million of its outstanding 8 7/8% senior
subordinated notes on the open market at discounts to face value resulting in
gains of $1.0 million, net of pro-rata debt issuance costs. In 2003, the Company
repurchased $30.5 million of its 8 7/8% senior subordinated notes resulting in
gains of $2.2 million, net of pro-rata debt issuance costs.

INCOME TAXES

The effective income tax rate was 36.4% for 2005, 45.3% for 2004, and 73.7% for
2003. The decrease in the effective rate for 2005 resulted from higher pre-tax
income in 2005 and the expiration of charitable deductions in 2004.

CAPITAL EXPENDITURES

Capital expenditures and major capital projects completed during the last three
years consisted of:

<TABLE>
<CAPTION>
                                          2005       2004       2003
                                        -------    -------    ---------
<S>                                     <C>        <C>        <C>
Capital expenditures
  (millions)...................         $  63.8    $  26.5    $    48.7
                                        =======    =======    =========
Supermarkets
       New/acquired stores .....              4          4            3
       Closed stores ...........              1          1            1
       Major remodels/
         expansions.............              4          1            3
       Format conversions ......              2          1            1
Convenience stores
       New/acquired stores .....              -          -            -
       Closed stores ...........              3          3           22
</TABLE>

In 2005, the Company constructed two new Marsh supermarkets, one new LoBill, and
one smaller format Arthur's Fresh Market, remodeled four supermarkets, began the
remodel of one supermarket, and converted two Marsh stores to the LoBill format.

<PAGE>

In 2006, the Company plans to open one new Marsh supermarket, remodel five
supermarkets and construct one new smaller format supermarket. The cost of these
projects and other capital commitments is estimated to be $60 million. Of this
amount, the Company plans to fund approximately $25 million through
sale/leasebacks or build to suit arrangements, $21 million through equipment
leasing, and believes it can finance the balance with cash provided by operating
activities.

The Company's plans with respect to store construction, expansion, conversion
and remodeling are subject to known and unknown risks and uncertainties and may
be revised in light of changing conditions, such as the availability of capital,
competitive influences, its ability to negotiate successfully site acquisitions
or leases, zoning limitations and other governmental regulations. The timing of
projects is subject to normal construction and other delays. It is possible that
projects described above may not commence, others may be added, a portion of
planned expenditures with respect to projects commenced during the current
fiscal year may carry over to the subsequent fiscal year, and that the Company
may use other financing arrangements.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities in 2005 was $26.5 million, compared to
$43.7 million in 2004. The $17.2 million decline resulted primarily from a
decrease of $5.8 million in deferred taxes in 2005, compared to a $10.3 million
increase in 2004.

For 2005, investing activities consisted primarily of $63.8 million in
expenditures for acquisition of property, equipment and land for expansion. The
Company's capital requirements are traditionally financed through long-term
borrowings and lease financings, including capital and operating leases, and
internally generated funds. The Company anticipates continued access to such
financing sources.

The Company has a revolving credit facility that permits total borrowings of
$82.5 million, as more particularly described in Note 6 - Debt. The facility
matures in February 2006, and the Company believes that it will be able to
secure an extension or other financing prior to the credit facility maturity
date.

The Company's long-term debt and capital lease obligations, net of current
maturities, were $160.5 million at April 2, 2005, compared to $202.3 million at
March 27, 2004, with the decrease primarily attributable to $43.0 million in
borrowings under the revolving credit facility classified as current at April 2,
2005. At April 2, 2005, all of the long-term debt and capital lease obligations
were at fixed rates of interest with a 9.4% weighted-average rate.

Long-term contractual obligations (in millions) as of April 2, 2005:

<TABLE>
<CAPTION>
                                          Payments due by period
                        --------------------------------------------------------
                                  Less than      1-3         4-5        After 5
                          Total    1 year       years       years        years
                        --------  ---------    -------    ---------    ---------
<S>                     <C>       <C>          <C>        <C>          <C>
Long-term debt,
  including current
  maturities ........   $  180.7   $  47.2     $ 109.0    $    24.5    $       -
Capital leases ......       56.3       4.5         9.0          8.5         34.3
Operating leases ....      290.6      39.6        66.0         44.2        140.8
Purchase
  obligations........       27.0       7.2        14.4          5.4            -
                        --------   -------     -------    ---------    ---------
Total                   $  554.6   $  98.5     $ 198.4    $    82.6    $   175.1
                        ========   =======     =======    =========    =========
</TABLE>

Assuming no change in the amount or interest rates of the Company's long-term
debt, the approximate payments for interest on long-term debt will be $14.5
million in 2006 declining each year to $1.3 million in 2010.

REPURCHASE OF COMMON SHARES

In July 1994, the Board of Directors announced a plan for the repurchase of the
Company's Class A Common Stock and/or Class B Common Stock. The amount
originally authorized has been subsequently amended, most recently to $18.0
million.

Repurchases during 2005 were as follows:

<TABLE>
<CAPTION>
                         Class A shares     Class B shares
                        ----------------    ---------------
                                 Average            Average
    Month                Number   price     Number   price
-------------           -------  -------    ------  ------
<S>                     <C>      <C>        <C>     <C>
March 2004                   -        -        100   12.42
April 2004               1,700    14.48        200   13.74
May 2004                51,300    14.76          -       -
June 2004                  599    13.78          -       -
July 2004                  200    13.75          -       -
August 2004                500    11.82        799   11.76
September 2004             300    11.47        300   11.52
October 2004               100    11.40        500   11.41
November 2004                -        -      2,500   11.60
January 2005            10,227    11.65         62   13.35
March 2005                  31    12.59         20   14.34
                        ------               -----
  Total                 64,957    14.21      4,481   11.75
                        ======    =====      =====   =====
</TABLE>

All of the share purchases in 2005 were made under the plan. At April 2, 2005,
the maximum amount that may yet be purchased under the plan was $0.8 million.
The plan does not have a specified termination date.

MARKET RISK - INTEREST

The Company, as a policy, does not engage in speculative or leveraged
transactions, nor does it hold or issue financial instruments for trading
purposes. The Company is exposed to changes in interest rates primarily as a
result of its borrowing activities. Based on interest rates at April 2, 2005, a
1% change in interest rates would not have had a material impact on the Company.

<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements requires management to make assumptions
and estimates that can have a material impact on the reported results of
operations. Although management applies its judgment based on assumptions
believed to be reasonable under the circumstances, actual results could vary
from those assumptions and it is possible that materially different amounts
would be reported using different assumptions.

The Company is self-insured for most healthcare claims, workers compensation
claims, and general liability and automotive liability losses. Reported claims
and related loss reserves are estimated by third party administrators and
utilized by management to develop appropriate accruals. Claims incurred but not
reported are recorded based on historical experience and industry trends, which
are regularly monitored, and accruals are adjusted when warranted by changes in
facts and circumstances.

Pension and other retirement benefits are administered by the Retirement
Committee of the Employees' Pension Plan of Marsh Supermarkets, Inc. and
Subsidiaries. An independent financial consulting firm is engaged to advise the
Retirement Committee regarding investment manager performance and independent
actuaries are consulted to assist in determining appropriate assumptions and are
engaged to calculate estimated future obligations under the various retirement
plans.

Long-lived assets are depreciated over estimated useful lives based on the
Company's historical experience and prevailing industry practice. Estimated
useful lives are periodically reviewed to ensure they remain appropriate.
Long-lived assets are tested for impairment whenever an event occurs that
indicates impairment may exist.

Income tax assets and liabilities are recognized generally based upon tax
statutes, regulations and case law, but also include estimates. The estimated
amounts are reviewed periodically and adjusted based upon factual changes and
the related impact on management's judgment.

The Company receives allowances and credits from many of the vendors whose
products the Company purchases for resale. Allowances that are related to a
specific purchase quantity are recorded as a component of item cost inventory
and recognized in merchandise costs when the item is sold. Other allowances
include consideration received for new item introduction, item shelf placement
and temporary retail price reduction. Due to system constraints and the nature
of certain of these allowances, it is sometimes not practicable to apply
allowances to the item cost of inventory. In those instances, the allowances are
applied as a reduction of merchandise costs using a systematic and rational
methodology, which results in the recognition of these incentives when the
related merchandise is sold.

Notes and accounts receivable are reviewed for collectibility on a regular and
periodic basis. Valuation allowances are adjusted for small recurring type
transactions based on past experience, while large notes and amounts receivable
are reviewed and allowances adjusted on a specific transaction basis.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes certain forward-looking statements (statements other than
those made solely with respect to historical fact). Actual results could differ
materially and adversely from those contemplated by the forward-looking
statements due to known and unknown risks and uncertainties, many of which are
beyond the Company's control. The forward-looking statements and the Company's
future results, liquidity and capital resources are subject to risks and
uncertainties including, but not limited to, the following: the entry of new
competitive stores and their impact on the Company; the level of discounting and
promotional spending by competitors; the Company's ability to improve comparable
store sales; the level of margins achievable in the Company's operating
divisions; the stability and timing of distribution incentives from suppliers;
softness in the local economy; the Company's ability to control expenses
including employee medical costs, labor, credit card fees, and workers
compensation and general liability expense; uncertainties regarding gasoline
prices and margins; the success of the Company's new and remodeled stores;
uncertainties regarding future real estate gains due to limited real estate
holdings available for sale; potential interest rate increases on variable rate
debt; the ability of the Company to extend the maturity of, or replace on
satisfactory terms, its revolving credit facility; the Company's ability to
collect outstanding notes and accounts receivable; uncertainties related to
state and federal taxation and tobacco and environmental legislation;
uncertainties associated with pension and other retirement obligations;
uncertainties related to the outcome of pending litigation; the timely and on
budget completion of store construction, conversion and remodeling; and other
known and unknown risks and uncertainties. The Company undertakes no obligation
to update or revise any forward-looking statements to reflect subsequent events
or circumstances.

<PAGE>

REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL REPORTING

The management of Marsh Supermarkets, Inc. is responsible for the preparation
and integrity of the consolidated financial statements included in this annual
report. The financial statements were prepared in accordance with accounting
principles generally accepted in the United States and necessarily include some
amounts based on management's best estimates and judgment. All financial
information appearing in this annual report is consistent with that in the
financial statements.

The Company maintains a system of internal controls designed to provide
reasonable assurance, on a cost-effective basis, that assets are safeguarded and
transactions are properly authorized and recorded accurately in the financial
records. The Company believes its control system is enhanced by its
long-standing emphasis on conducting business in accordance with the highest
standards of conduct and ethics.

Ernst & Young LLP, independent registered public accounting firm, has audited
the accompanying financial statements. Their report is included herein. Their
audits, conducted in accordance with the standards of the Public Company
Accounting Oversight Board (United States), included the review and evaluation
of selected internal accounting controls for purposes of designing their audit
tests.

The Audit Committee of the Board of Directors meets periodically with the
independent registered accountants to discuss the scope and results of their
audit work, their assessment of internal controls, and the quality of the
Company's financial reporting. The independent registered accountants are
engaged by the Audit Committee of the Board of Directors.

Don E. Marsh                                Mark Varner
Chairman of the Board and                   Vice President -
Chief Executive Officer                     Corporate Controller

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Marsh Supermarkets, Inc.

We have audited the accompanying consolidated balance sheets of Marsh
Supermarkets, Inc. as of April 2, 2005 and March 27, 2004, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the three years in the period ended April 2, 2005. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Company's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Marsh
Supermarkets, Inc. at April 2, 2005 and March 27, 2004, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended April 2, 2005, in conformity with U.S. generally accepted
accounting principles.

As discussed in NOTE 2, the Company adopted Emerging Issues Task Force Issue No.
02-16, "Accounting by a Customer (Including a Reseller) for Certain
Consideration from a Vendor," on January 1, 2003.


                                             /s/ Ernst & Young LLP

Indianapolis, Indiana
May 27, 2005

<PAGE>

CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares)

<TABLE>
<CAPTION>
ASSETS                                                      April 2, 2005  March 27, 2004
------                                                      -------------  --------------
<S>                                                         <C>            <C>
Current Assets
   Cash and equivalents .................................   $      27,364  $       27,584
   Accounts and notes receivable, less allowances of $806
    and $1,141 ..........................................          22,153          23,864
   Inventories ..........................................         132,758         126,840
   Prepaid expenses .....................................           6,619           6,495
   Recoverable income taxes .............................             841           5,400
                                                            -------------  --------------
       TOTAL CURRENT ASSETS .............................         189,735         190,183

Property and Equipment
   Land ..................................................         42,395          45,268
   Buildings and land improvements .......................        195,396         186,737
   Fixtures and equipment ................................        156,812         151,343
   Leasehold improvements ................................         91,074          83,119
   Construction in progress ..............................         12,485           5,670
   Property under capital leases .........................         32,330          32,133
                                                            -------------  --------------
                                                                  530,492         504,270
  Accumulated depreciation ..............................        (222,676)       (207,242)
                                                            -------------  --------------
       TOTAL PROPERTY AND EQUIPMENT .....................         307,816         297,028

Other Assets ............................................          49,317          55,194
                                                            -------------  --------------
                                                            $     546,868  $      542,405
                                                            =============  ==============
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY                                 April 2, 2005    March 27, 2004
------------------------------------                                 -------------    --------------
<S>                                                                  <C>              <C>
Current Liabilities
   Accounts payable ...............................................  $      75,786    $       80,614
   Employee compensation and other liabilities ....................         15,378            15,929
   State and local taxes ..........................................         17,775            16,306
   Other accounts payable and accrued expenses ....................         10,710             8,573
   Dividends payable ..............................................          1,025             1,032
   Deferred income taxes ..........................................         10,053             6,330
   Current maturities of long-term liabilities ....................         48,444             3,427
                                                                     -------------    --------------
        TOTAL CURRENT LIABILITIES .................................        179,171           132,211

Long-term Liabilities
   Long-term debt .................................................        133,268           174,161
   Capital lease obligations ......................................         27,212            28,188
   Pension and post-retirement benefits ...........................         52,229            42,725
                                                                     -------------    --------------
        TOTAL LONG-TERM LIABILITIES ...............................        212,709           245,074

Deferred Items
   Income taxes ...................................................          8,823            18,309
   Gains from sale/leasebacks .....................................         16,487            15,238
   Other ..........................................................          5,363             3,297
                                                                     -------------    --------------
        TOTAL DEFERRED ITEMS ......................................         30,673            36,844

Shareholders' Equity
   Series A Junior Participating Cumulative Preferred Stock:
      Authorized: 5,000,000 shares; Issued:  None .................             --                --
   Class A Common Stock, no par value:
      Authorized: 15,000,000 shares; Issued: 4,695,253 ............          9,680             9,682
   Class B Common Stock, no par value:
      Authorized: 15,000,000 shares; Issued: 5,265,158 ............         16,950            16,888
   Retained earnings ..............................................        130,890           130,813
   Cost of Common Stock in treasury
      Class A: 2005 - 947,321 shares; 2004 882,364 shares..........         (6,678)           (5,752)
      Class B: 2005 - 1,105,364 shares; 2004 - 1,129,597 shares....         (9,077)           (9,259)
   Deferred cost - restricted stock ...............................           (137)             (211)
   Notes receivable - stock purchases .............................            (11)              (11)
   Accumulated other comprehensive loss ...........................        (17,302)          (13,874)
                                                                     -------------    --------------
        TOTAL SHAREHOLDERS' EQUITY ................................        124,315           128,276
                                                                     -------------    --------------
                                                                     $     546,868    $      542,405
                                                                     =============    ==============
</TABLE>

<PAGE>

CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
YEAR ENDED                                                            April 2, 2005    March 27, 2004    March 29, 2003
----------                                                            -------------    --------------    --------------
<S>                                                                   <C>              <C>               <C>
Sales and other revenues ..........................................   $   1,743,609    $    1,650,868    $    1,647,534
Gains from sales of property ......................................           3,827             3,047             8,201
                                                                      -------------    --------------    --------------
Total revenues ....................................................       1,747,436         1,653,915         1,655,735
Cost of merchandise sold, including warehousing and transportation,
  excluding depreciation ..........................................       1,231,840         1,156,255         1,163,157
                                                                      -------------    --------------    --------------
Gross profit ......................................................         515,596           497,660           492,578
Selling, general and administrative ...............................         466,179           449,002           445,480
Depreciation ......................................................          25,950            25,013            24,464
                                                                      -------------    --------------    --------------
Operating income ..................................................          23,467            23,645            22,634
Interest ..........................................................          19,213            19,050            23,270
Other non-operating income ........................................          (2,291)             (961)           (2,180)
                                                                      -------------    --------------    --------------
Income from continuing operations before income taxes .............           6,545             5,556             1,544
Income taxes ......................................................           2,383             2,519             1,138
                                                                      -------------    --------------    --------------
Income from continuing operations .................................           4,162             3,037               406
Loss on disposal of discontinued operation, net of tax ............              --                --              (354)
                                                                      -------------    --------------    --------------
Net income ........................................................   $       4,162    $        3,037    $           52
                                                                      =============    ==============    ==============

Basic earnings (loss) per common share:
  Continuing operations ...........................................   $         .53    $          .38    $          .05
  Disposal of discontinued operation ..............................              --                --              (.04)
                                                                      -------------    --------------    --------------
  Net income ......................................................   $         .53    $          .38    $          .01
                                                                      =============    ==============    --------------

Diluted earnings (loss) per common share:
  Continuing operations ...........................................   $         .52    $          .38    $          .05
  Disposal of discontinued operation ..............................              --                --              (.04)
                                                                      -------------    --------------    --------------
  Net income ......................................................   $         .52    $          .38    $          .01
                                                                      =============    ==============    ==============

Dividends declared per share ......................................   $         .52    $          .52    $          .46
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)

<TABLE>
<CAPTION>
                                               Common Stock                                            Other
                                             -----------------   Retained   Treasury               Comprehensive
                                             Class A   Class B   Earnings    Stock       Other          Loss          Total
                                             -------   -------   --------   --------    -------    -------------    ---------
<S>                                          <C>       <C>       <C>        <C>         <C>        <C>              <C>
Balance at March 30, 2002................    $ 9,573   $16,830   $135,534   $(14,509)   $(1,307)   $      (5,324)   $ 140,797
Comprehensive income:
    Net income...........................                              52                                                  52
    Minimum pension liability adjustment,
      less tax benefit of $5,259.........                                                                (10,060)     (10,060)
                                                                                                                    ---------
  Total comprehensive loss...............                                                                             (10,008)
                                                                                                                    ---------
  Cash dividends declared................                          (3,662)                                             (3,662)
  Amortization of restricted stock
    grants...............................                                                   308                           308
  Restricted stock grant.................                                         92        (92)                            -
  Repurchase shares......................                                       (643)                                    (643)
  Exercise of stock options .............                   16                    97                                      113
  Reduction in notes receivable - stock..                                                   899                           899
  Other..................................                   20        (13)        35        (37)                            5
                                             -------   -------   --------   --------    -------    -------------    ---------
Balance at March 29, 2003................      9,573    16,866    131,911    (14,928)      (229)         (15,384)     127,809
Comprehensive income:
    Net income...........................                           3,037                                               3,037
    Minimum pension liability adjustment,
      less tax of $789...................                                                                  1,510        1,510
                                                                                                                    ---------
  Total comprehensive income.............                                                                               4,547
                                                                                                                    ---------
  Cash dividends declared................                          (4,127)                                             (4,127)
  Amortization of restricted stock
    grants...............................                                                    56                            56
  Restricted stock grant.................        109                             104       (213)                            -
  Repurchase shares......................                                       (248)                                    (248)
  Reduction in notes  receivable -
    stock ...............................                                                   164                           164
  Other..................................                   22         (8)        61                                       75
                                             -------   -------   --------   --------    -------    -------------    ---------
Balance at March 27, 2004................      9,682    16,888    130,813    (15,011)      (222)         (13,874)     128,276
Comprehensive income:
    Net income...........................                           4,162                                               4,162
    Minimum pension liability adjustment,
      less tax of $1,792.................                                                                 (3,428)      (3,428)
                                                                                                                    ---------
  Total comprehensive income.............                                                                                 734
                                                                                                                    ---------
  Cash dividends declared................                          (4,104)                                             (4,104)
  Amortization of restricted  stock
     grants..............................                                                    74                            74
  Repurchase shares......................                                       (976)                                    (976)
  Exercise of stock options..............                   33                   176                                      209
  Other..................................         (2)       29         19         56                                      102
                                             -------   -------   --------   --------    -------    -------------    ---------
Balance at April 2, 2005.................    $ 9,680   $16,950   $130,890   $(15,755)   $  (148)   $     (17,302)   $ 124,315
                                             =======   =======   ========   ========    =======    =============    =========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
YEAR ENDED                                                            April 2, 2005    March 27, 2004    March 29, 2003
----------                                                            -------------    --------------    --------------
<S>                                                                   <C>              <C>               <C>
OPERATING ACTIVITIES
   Net income .....................................................   $       4,162    $        3,037    $           52
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation ...............................................          25,950            25,013            24,464
       Disposal of discontinued operation .........................              --                --               354
       Increase (decrease) in deferred income taxes ...............          (5,763)           10,263            (2,084)
       Changes in operating assets and liabilities:
         Accounts and notes receivable ............................           3,575              (653)           10,996
         Inventories ..............................................          (5,918)            3,457             2,643
         Prepaid expenses and recoverable income taxes ............           6,227            (6,952)            2,929
         Accounts payable and accrued expenses ....................          (1,773)            5,679            (2,592)
       Other operating activities .................................              77             3,872             1,590
                                                                      -------------    --------------    --------------
       NET CASH PROVIDED BY OPERATING ACTIVITIES ..................          26,537            43,716            38,352

INVESTING ACTIVITIES
   Acquisition of property, equipment and land held for
       expansion ..................................................         (63,778)          (26,457)          (48,673)
   Disposition of property, equipment and land held for
       expansion ..................................................          19,683             2,700            11,387
   Other investing activities .....................................           1,005            (2,190)             (813)
                                                                      -------------    --------------    --------------
       NET CASH USED FOR INVESTING ACTIVITIES .....................         (43,090)          (25,947)          (38,099)

FINANCING ACTIVITIES
   Proceeds (repayments) of short-term borrowings .................              --            (1,700)              400
   Proceeds of long-term borrowings ...............................         140,000            50,000            76,000
   Proceeds of sales/leasebacks ...................................          16,368            12,338            34,537
   Payments of long-term debt and capital lease obligations .......        (136,852)          (74,833)         (116,043)
   Cash dividends paid ............................................          (4,110)           (4,130)           (3,506)
   Purchases of Class A and Class B Common Stock for treasury .....            (976)             (248)             (643)
   Stock options exercised ........................................             209                --               113
   Other financing activities .....................................           1,694                75              (314)
                                                                      -------------    --------------    --------------
       NET CASH PROVIDED BY (USED FOR) FINANCING
              ACTIVITIES ..........................................          16,333           (18,498)           (9,456)

DECREASE IN CASH AND EQUIVALENTS ..................................            (220)             (729)           (9,203)
   Cash and equivalents at beginning of year ......................          27,584            28,313            37,516
                                                                      -------------    --------------    --------------
          CASH AND EQUIVALENTS AT END OF YEAR .....................   $      27,364    $       27,584    $       28,313
                                                                      =============    ==============    ==============
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except per share amounts or as otherwise noted)

NOTE 1 -  SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies followed in preparation of the consolidated
financial statements are:

DESCRIPTION OF BUSINESS

Marsh Supermarkets, Inc. (the "Company") operates supermarkets, convenience
stores, and florist shops, and provides vending, catering and food management
services, all primarily in central Indiana and western Ohio.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Marsh
Supermarkets, Inc. and all direct and indirect majority-owned subsidiaries.
Significant intercompany accounts and transactions have been eliminated.

BUSINESS SEGMENTS

The Company operates one business segment: the retail sale of food and related
products through supermarkets, convenience stores and food services.

FISCAL YEAR

The Company's fiscal year ends on Saturday of the thirteenth week of each
calendar year. All references to "2005", "2004" and "2003" relate to the fiscal
years ended April 2, 2005, March 27, 2004, and March 29, 2003, respectively.
Fiscal year 2005 was 53 weeks, while fiscal years 2004 and 2003 were 52 weeks.

REVENUE RECOGNITION

Revenues from retail sales are recognized at the time of sale. Manufacturer
coupons are not recognized as a reduction of revenues. Revenues from the
Company's gift cards are recognized at the time of customer redemption.

EXCISE TAXES

Sales and cost of merchandise sold include state and federal excise taxes on
tobacco, gasoline and alcohol products of approximately $62 million in 2005, $58
million in 2004, and $56 million in 2003.

COST OF MERCHANDISE SOLD

Cost of merchandise sold includes the cost of merchandise, net of vendor
allowances, and warehousing and transportation costs, excluding depreciation,
and excludes the cost of purchasing personnel.

VENDOR ALLOWANCES

Vendor allowances are applied as a reduction of merchandise costs using a
systematic and rational methodology, which results in the recognition of those
allowances when the related merchandise is sold.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative costs include store expenses, administrative
support departments, advertising, purchasing personnel costs and other corporate
expenses, all excluding depreciation. Included in those costs are purchasing
personnel costs of approximately $1.2 million in 2005 and $1.3 million in both
2004 and 2003.

ADVERTISING COSTS

Advertising costs are expensed in the period incurred, except production costs,
which are expensed the first time the respective advertising is displayed.
Advertising costs in the amounts of $24.7 million, $23.3 million, and $22.3
million were included in selling, general and administrative expenses for 2005,
2004, and 2003, respectively.

COST OF OPENING STORES

Non-capital expenditures associated with opening new stores are expensed as
incurred.

CASH AND EQUIVALENTS

Cash and equivalents consist of highly liquid investments maturing in three
months or less when purchased. The carrying amount approximates the fair value
of those assets.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined by the
last-in, first-out method for the principal components of inventories, and by
the first-in, first-out method for the remainder.

ACCOUNTS AND NOTES RECEIVABLE

Accounts and notes receivable are reviewed for collectibility on a regular and
periodic basis. Valuation allowances are adjusted for small recurring type
transactions based on past experience, while large notes and amounts receivable
are reviewed and allowances adjusted on a specific transaction basis.

Notes receivable, including interest, related to the sale of real estate were
$8.6 million at April 2, 2005, and $13.0 million at March 27, 2004. Past due
notes receivable, included in Other Assets, were approximately $7.3 million at
April 2, 2005.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, including amounts capitalized for
interest. For financial reporting purposes, depreciation is computed by the
straight-line method over the estimated useful lives of the assets, generally 33
years for buildings and 20 years for land improvements, five to 12 years for
fixtures and equipment, and 20 years for leasehold improvements. For income tax
purposes, accelerated methods and statutory lives are used to compute
depreciation. Maintenance and repairs are charged to expense as incurred.
<PAGE>

IMPAIRMENT OF LONG-LIVED ASSETS AND GOODWILL

Long-lived assets are reviewed for impairment if an event occurs that indicates
impairment may exist. The Company tests operating units for impairment using the
non-discounted cash flows, including the cash flow from disposal of the
underlying unit's assets. Goodwill is tested annually for impairment using a
discounted net cash flow method. Goodwill included in Other Assets was $22.7
million at April 2, 2005, and $22.8 million at March 27, 2004.

CAPITALIZED LEASE PROPERTY

Capitalized lease assets are amortized using the straight-line method over the
term of the lease, or in accordance with practices established for similar owned
assets if ownership transfers to the Company at the end of the lease term.
Amortization is included with depreciation expense.

INCOME TAXES

Deferred tax assets and liabilities result from differences between financial
reporting and tax basis of assets and liabilities measured using enacted tax
rates and laws expected to be in effect when the differences reverse.

ENVIRONMENTAL LIABILITIES

Environmental liabilities are recorded when environmental assessments indicate
remediation efforts are required and the costs can be reasonably estimated.
Current estimates of the total compliance costs to be incurred, net of estimated
recoveries from an excess liability fund, are not material.

STOCK OPTIONS

The Company has employee stock benefit plans, which are described more fully in
NOTE 10 - SHAREHOLDERS' EQUITY AND EMPLOYEE STOCK PLANS. The Company's stock
option plans are accounted for under the intrinsic value method of APB Opinion
25 and related interpretations. Since the exercise price of options granted
under the plans is equal to the market price of the underlying common stock on
the grant date, no stock-based compensation cost is recognized.

The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of FAS 123:

<TABLE>
<CAPTION>
                                           2005          2004          2003
                                        ----------    ----------    ----------
<S>                                     <C>           <C>           <C>
Net income, as reported ..............  $   4,162     $   3,037     $      52
Compensation recorded, net of tax ....         45            37           169
Compensation using
  the fair value method, net of tax ..       (600)         (815)       (1,139)
                                        ---------     ---------     ---------
Pro-forma net income (loss) ..........  $   3,607     $   2,259     $    (918)
                                        =========     =========     =========

Earnings per share, as reported:
  Basic ..............................  $     .53     $     .38     $     .01
  Diluted ............................        .52           .38           .01

Pro-forma earnings (loss) per share:
  Basic ..............................  $     .46     $     .28     $    (.12)
  Diluted ............................        .45           .28          (.12)
</TABLE>

USE OF ESTIMATES

Preparation of the consolidated financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain reclassifications have been made to prior periods to conform to current
presentation.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2003, the Medicare Prescription Drug, Improvement and Modernization
Act of 2003 (the Act) was signed. The Act allows a possible subsidy to
retirement health plan sponsors to help offset the costs of participant
prescription drug benefits. In 2004, the FASB issued Staff Position No. 106-2
(FSP No. 106-2), "Accounting and Disclosure Requirements Related to the Act",
which was effective for interim or annual periods beginning after June 15, 2004.
The effect of the Act on the Company's consolidated financial statements was not
material.

EITF (Emerging Issues Task Force) Issue No. 02-16, "Accounting by a Customer
(Including a Reseller) for Certain Consideration Received from a Vendor", became
effective as to the Company on January 1, 2003. As a result of the guidance, the
Company adopted a new policy for recognizing slotting allowances and similar
consideration received from vendors; allowances related to a specific purchase
quantity are recorded as a component of the item cost of inventory and
recognized in merchandise costs when the item is sold, and allowances not
related to a specific purchase quantity are applied as a reduction of
merchandise costs using a systematic and rational methodology, which results in
the recognition of those incentives when the related merchandise is sold. Under
the Company's previous accounting policy for vendor allowances, those credits
were recognized as a reduction to cost of goods sold when the Company had
fulfilled its obligations under the related contract. In connection with the
implementation of the new accounting policy, the Company applied the provisions
of EITF No. 02-16 prospectively, which resulted in deferring recognition of $4.5
million of allowances at April 2, 2005, and $4.3 million of allowances at March
27, 2004. The deferral reflects an adjustment of the Company's inventory
balance.

In December 2004, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 123 (revised 2004), "Share-Based Payment", which revised FASB
Statement No. 123, "Accounting for Stock-Based Compensation." Statement 123(R)
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Statement No. 123(R) requires all share-based payments to

<PAGE>

employees, including grants of stock options, to be recognized in the income
statement based on their fair values; pro forma disclosure is no longer an
alternative.

Statement No. 123(R) will be effective for the first fiscal year beginning after
June 15, 2005, and, accordingly, the Company will adopt the statement at the
beginning of its fiscal year 2007. The Company expects to adopt Statement No.
123(R) using the modified prospective method, in which compensation cost, if
any, will be recognized beginning with the effective date.

As permitted by Statement No. 123, the Company currently accounts for
shared-based payments using APB Opinion No. 25's intrinsic value method and, as
such, recognizes no compensation cost for employee stock options. The impact of
the adoption of Statement No. 123(R) cannot be predicted because it will depend
on levels of stock options and any other forms of share-based payments granted
in the future. Had the Company adopted Statement No. 123(R) in prior periods,
the impact of the standard would have approximated the impact of Statement No.
123 as described in the disclosure of pro forma net income and earnings per
share above. However, the Company expects the adoption will not have an
immediate material impact on the financial statements as there will be a minimal
number of unvested stock options outstanding at the adoption date.

NOTE 3 - EARNINGS PER SHARE

The following table sets forth the computation of the numerators and
denominators used in the computation of basic and diluted earnings per share
(EPS). Convertible debentures have been excluded from the 2003 computation
because the effect would have been anti-dilutive.

<TABLE>
<CAPTION>
                                             2005        2004        2003
                                           --------    --------    --------
<S>                                        <C>         <C>         <C>
Income from continuing operations .....    $ 4,162     $ 3,037     $   406
Discontinued operation ................         --          --        (354)
                                           -------     -------     -------
Net income - basic and diluted
  EPS numerator .......................    $ 4,162     $ 3,037     $    52
                                           =======     =======     =======

Weighted average shares outstanding ...      7,913       7,945       7,965
  Non-vested restricted shares ........        (16)         (5)        (22)
                                           -------     -------     -------
Basic EPS denominator .................      7,897       7,940       7,943
Effect of dilutive securities:
  Non-vested restricted shares ........         16           5          22
  Employee stock options ..............         91          61         136
                                           -------     -------     -------
Adjusted weighted average shares -
   diluted EPS denominator ............      8,004       8,006       8,101
                                           =======     =======     =======
</TABLE>

NOTE 4 - INVENTORIES

Inventories are comprised of finished goods and goods held for resale.
Inventories valued by the LIFO method represented approximately 65% of
consolidated inventories at both April 2, 2005, and March 27, 2004. Current
inventory cost exceeded the carrying amount of LIFO inventories by $0.8 million
at April 2, 2005, and $1.2 million at March 27, 2004. Valuation allowances
related to inventories were $1.2 million at both April 2, 2005, and March 27,
2004.

NOTE 5 - EMPLOYEE BENEFIT PLANS

The Company has a 'frozen' qualified defined benefit pension plan covering
grandfathered employees and unfunded supplemental retirement plans for officers
designated by the Board of Directors. The plans provide for payment of
retirement benefits on the basis of an employee's length of service and earnings
history. Pension plan assets consist principally of listed stocks, corporate and
government notes and bonds.

A defined contribution savings plan allows 401(k) contributions by employees who
elect to participate and can satisfy age and service requirements. The Company
matches a portion of employees' contributions and may make discretionary
contributions depending upon the Company's profitability. Expense for the plan
was $2.2 million in 2005, $2.5 million in 2004 and $2.4 million in 2003.

The Company provides certain post-retirement healthcare benefits for non-union
retirees and their eligible spouses. The plans are contributory with retiree
contributions adjusted annually and certain other cost sharing features, such as
deductibles and co-insurance.

The Company also participates in two multi-employer plans that provide defined
benefits to union employees. Expense for the plans amounted to $2.0 million in
2005, $1.9 million in 2004, and $1.3 million in 2003. The increase in plan
expenses in 2004 and 2005 is attributable to the addition of drivers during the
second half of 2003. Previously, the Company had contracted for delivery service
from a third party.

Amounts disclosed below for pension and post-retirement plans were measured as
of March 31, 2005, and March 31, 2004.

Benefit plans amounts recognized in the consolidated balance sheets were as
follows:

<TABLE>
<CAPTION>
                                              Pension              Post-retirement
                                       2005          2004        2005         2004
                                     ---------    ---------    ---------    ---------
<S>                                  <C>          <C>          <C>          <C>
Change in benefit obligation:
Benefit obligation at
  beginning of year ...............  $ 76,124     $ 69,320     $  4,901     $  5,131
Service cost ......................     1,100          866          523          558
Interest cost .....................     4,447        4,407          258          310
Plan amendments ...................        --           --           --         (350)
Actuarial (gain)loss ..............     4,108        4,380         (506)        (387)
Benefits paid .....................    (3,096)      (2,849)        (323)        (361)
                                     --------     --------     --------     --------
Benefit obligation at end of year..  $ 82,683     $ 76,124     $  4,853     $  4,901
                                     ========     ========     ========     ========
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                     Pension               Post-retirement
                                2005        2004          2005        2004
                             ---------    --------      --------   ----------
<S>                          <C>          <C>           <C>        <C>
Change in plan assets:
Fair value of plan assets
  at beginning of year ....  $ 40,379     $ 34,384      $    --    $      --
Return on plan assets .....     1,036        8,592           --           --
Company contribution ......       368          252          323          361
Benefits paid .............    (3,096)      (2,849)        (323)        (361)
                             --------     --------      -------    ---------
Fair value of plan assets
  at end of year ..........  $ 38,687     $ 40,379      $    --    $      --
                             ========     ========      =======    =========
</TABLE>

The accumulated benefit obligation, funded status and accrued benefit costs of
the plans were as follows:

<TABLE>
<CAPTION>
                                                    Pension               Post-retirement
                                              2005          2004         2005        2004
                                            ---------    ---------    ---------    ---------
<S>                                         <C>          <C>          <C>          <C>
Accumulated benefit obligation ...........  $(79,633)    $(72,883)    $ (4,853)    $ (4,901)

Projected benefit obligation .............   (82,683)     (76,124)      (4,853)      (4,901)
Plan assets at fair value ................    38,687       40,378           --           --
                                            --------     --------     --------     --------
Funded status of the plan (underfunded)...   (43,996)     (35,746)      (4,853)      (4,901)
Unrecognized net actuarial loss ..........    29,550       24,522        1,031          851
Unrecognized prior service costs .........       766        1,136         (413)        (184)
                                            --------     --------     --------     --------
Net amount recognized ....................  $(13,680)    $(10,088)    $ (4,235)    $ (4,234)
                                            ========     ========     ========     ========
Accrued benefit liability ................  $(40,946)    $(32,505)    $ (4,235)    $ (4,234)
Intangible asset .........................       766        1,136           --           --
Accumulated other comprehensive loss .....    26,500       21,281           --           --
                                            --------     --------     --------     --------
Net amount recognized ....................  $(13,680)    $(10,088)    $ (4,235)    $ (4,234)
                                            ========     ========     ========     ========

Increase (decrease) in minimum liability
  included in other comprehensive income..  $  5,220     $ (2,299)    $     --     $     --
                                            ========     ========     ========     ========
</TABLE>

The components of net pension benefit expense were as follows:

<TABLE>
<CAPTION>
                                        2005        2004        2003
                                      --------    --------    --------
<S>                                   <C>         <C>         <C>
Service cost .......................  $ 1,100     $   866     $   687
Interest cost ......................    4,447       4,407       4,320
Expected return on plan assets .....   (3,316)     (2,826)     (3,498)
Recognized actuarial loss ..........    1,360       1,714         403
Amortization of prior service cost..      370         370         370
                                      -------     -------     -------
Benefit cost .......................  $ 3,961     $ 4,531     $ 2,282
                                      =======     =======     =======
</TABLE>

The weighted-average assumptions used to determine benefit obligations were:

<TABLE>
<CAPTION>
                                Pension         Post-retirement
                            2005      2004      2005       2004
                            ----      ----      ----      -----
<S>                         <C>       <C>       <C>       <C>
Discount rate ...........   6.00%     6.00%     6.00%     6.00%
Compensation increases...   4.00%     4.00%      n/a       n/a
</TABLE>

The weighted-average assumptions used to determine net periodic benefit cost
were:

<TABLE>
<CAPTION>
                                 Pension       Post-retirement
                             2005     2004      2005     2004
                             ----     ----      ----     ----
<S>                          <C>      <C>       <C>      <C>
Discount rate .............  6.00%    6.50%     6.00%    6.50%
Expected long-term return
  on plan assets ..........  8.50%    8.50%      n/a      n/a
Compensation increases ....  4.00%    4.00%      n/a      n/a
</TABLE>

The expected long-term rate of return assumptions are developed based on
historical experience, the evaluation of input from several consultants and
economists, a review of asset class return expectations and long-term inflation
assumptions. The expected long-term rate of return is based on a target
allocation of assets, which is based on earning the highest rate of return while
maintaining a reasonable risk level. The plan administrator strives to have
assets sufficiently diversified such that adverse or unexpected results from one
security class, or investments within a class, will not have an unduly
detrimental effect on the entire portfolio.

The components of net post-retirement benefits costs were as follows:

<TABLE>
<CAPTION>
                  2005     2004     2003
                 ------    -----    -----
<S>              <C>       <C>      <C>
Service cost...  $ 523     $ 558    $ 434
Interest cost..    258       310      306
Other .........     (7)       47        8
                 -----     -----    -----
Benefit cost...  $ 774     $ 915    $ 748
                 =====     =====    =====
</TABLE>

The Company's assumed healthcare cost trend rate is 10.00% for 2005, decreasing
gradually to 6.00% by 2015, and thereafter. The assumed healthcare cost trend
rate for 2004 was 10.00%, decreasing to 6.00% by 2014, and thereafter. A one
percentage point change in the assumed rate would not have had a material effect
on the benefit obligation or expense.

Pension plan weighted-average asset allocations at March 31, 2005, and March 31,
2004 were as follows:

<TABLE>
<CAPTION>
                       2005       2004
                      ------     ------
<S>                   <C>        <C>
Equity securities...   53.7%      68.8%
Debt securities.....   23.5       21.8
Real estate ........    2.9        2.5
Other ..............   19.9        6.9
                      -----      -----
  Total ............  100.0%     100.0%
                      =====      =====
</TABLE>

The Company's policy with respect to pension plan investments is to invest for
maximum return at a reasonable risk level using a diversified portfolio of
investment holdings. Weighted-average target asset allocations are currently
70.0% equity securities, 22.5% debt securities and 7.5% real estate and other
holdings.

<PAGE>

Equity securities included Marsh common stock in the amounts of $2.8 million
(7.3% of total plan assets) and $3.1 million (7.8% of total plan assets) at
March 31, 2005, and March 31, 2004, respectively. The number of shares of Marsh
A common stock and Marsh B common stock were 151,213 and 92,675, respectively,
at both April 2, 2005, and March 27, 2004.

The Company expects to contribute $0.3 million to its pension plans and $0.4
million to its post-retirement plan in fiscal 2006.

The following benefit payments, which reflect future service, as appropriate,
are expected to be paid:

<TABLE>
<CAPTION>
                     Pension     Post-retirement
                     -------     ---------------
<S>                  <C>         <C>
2006 ..............  $ 3,119         $   402
2007 ..............    3,439             429
2008 ..............    3,685             421
2009 ..............    5,036             440
2010 ..............    5,346             507
2011 through 2015..   28,639           3,731
</TABLE>

NOTE 6 - DEBT

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                          2005           2004
                                        ----------    ----------
<S>                                     <C>           <C>
10.05% notes ......................     $   9,656     $  11,243
8.25% mortgage ....................        15,021        15,523
8.95% mortgage ....................         8,662         9,648
Revolving credit facility .........        43,000        36,000
8 7/8% senior subordinated notes ..       102,795       102,795
      Less discount ...............          (194)         (278)
Other .............................         1,600         1,605
Less current maturities ...........       (47,272)       (2,375)
                                        ---------     ---------
                                        $ 133,268     $ 174,161
                                        =========     =========
</TABLE>

The 10.05% notes are payable in monthly installments (principal and interest) of
$220,000 through 2009. Land and buildings with a net carrying amount of $23.6
million are pledged as collateral for the notes.

The 8.25% mortgage is payable in monthly installments (principal and interest)
of $147,000 and matures in January 2010. The mortgage is secured by land and
buildings with a net carrying amount of $17.6 million.

The 8.95% mortgage is payable in monthly installments (principal and interest)
of $94,000 and matures in May 2010. The mortgage is secured by land and
buildings with a net carrying amount of $7.0 million.

The revolving credit facility permits total borrowings of $82.5 million. Amounts
borrowed are for terms selected by the Company at the time of borrowing.
Interest rates are based on LIBOR or floating prime rate, and principal and
interest are payable at maturity. Commitment fees of 0.5% are paid on unused
amounts and the facility matures in February 2006. Land and buildings with a net
carrying amount of $67.5 million are pledged for the credit facility. The
Company believes that it will be able to secure an extension or other financing
prior to the credit facility maturity date.

Interest on the 8 7/8% senior subordinated notes is payable semi-annually and
the principal matures in August 2007. The effective interest rate is 9.0%.
During 2004 and 2003, the Company purchased $16.8 million and $30.5 million,
respectively, of the notes on the open market. The gains recognized from
retirement of the notes are reported in the consolidated statements of income as
other non-operating income.

The fair market value of the Company's long-term debt was approximately $183.9
million at April 2, 2005. The fair market value was estimated using quoted
market rates for publicly traded debt and current incremental borrowing rates
for non-public debt.

The revolving credit facility and senior subordinated notes both require
maintenance of minimum working capital and limit cash dividends, repurchases of
common stock, future indebtedness, lease obligations and disposition of assets.

Aggregate future principal payments of long-term debt outstanding at April 2,
2005 were:

<TABLE>
<S>             <C>
2006..........  $ 47,272
2007..........     2,940
2008..........   106,048
2009..........     3,578
2010..........    20,896
Thereafter....         -
</TABLE>

Interest expense consisted of:

<TABLE>
<CAPTION>
                                2005       2004        2003
                              -------     -------     -------
<S>                           <C>         <C>         <C>
Long-term debt .............  $15,640     $15,517     $19,742
Capital lease obligations ..    3,501       3,528       3,518
Other ......................       72           5          10
                              -------     -------     -------
Total interest expense .....  $19,213     $19,050     $23,270
                              =======     =======     =======

Interest capitalized .......  $   238     $   533     $   474
                              =======     =======     =======

Cash payments for interest..  $18,158     $18,780     $23,472
                              =======     =======     =======
</TABLE>

NOTE 7 - DEBT AND GUARANTOR SUBSIDIARIES

Other than three minor subsidiaries, all of the Company's subsidiaries (the
"guarantors") have fully and unconditionally guaranteed on a joint and several
basis the Company's obligations under the 8 7/8% senior subordinated notes. The
guarantors are 100% direct or indirect wholly-owned subsidiaries of the Company.

NOTE 8 - LEASES

Of the Company's 286 retail stores, 207 are leased under commercial lease
agreements providing for initial terms generally from 15 to 20 years with
options to extend the initial terms up to an additional 20 years. The Company
also leases a portion of its transportation and store equipment for periods of
three to eight years plus renewal options.

<PAGE>

Capitalized lease property consisted of store facilities having a net carrying
cost of $22.9 million at April 2, 2005, and $24.6 million at March 27, 2004.

Future minimum lease payments for capital and operating leases with terms in
excess of one year, and the present value of capital lease obligations, at April
2, 2005 were as follows:

<TABLE>
<CAPTION>
                                       Capital     Operating
                                       Leases       Leases
                                      --------     ---------
<S>                                   <C>          <C>
2006 ...............................  $  4,487     $ 39,590
2007 ...............................     4,500       35,283
2008 ...............................     4,500       30,692
2009 ...............................     4,288       24,638
2010 ...............................     4,225       19,577
Thereafter .........................    34,319      140,819
                                      --------     --------
                                        56,319     $290,599
                                                   ========
Less amounts representing interest..    27,935
                                      --------
Present value of net minimum
   lease payments ..................  $ 28,384
                                      ========
</TABLE>

Minimum annual lease payments will be reduced by $1.6 million from future
sublease rentals.

Rental expense consisted of:

<TABLE>
<CAPTION>
                             2005        2004         2003
                          ---------    ---------    ---------
<S>                       <C>          <C>          <C>
Minimum rentals ........  $ 43,615     $ 38,545     $ 37,224
Contingent rentals .....       155          195          193
Sublease rental income..    (1,653)      (1,431)      (1,514)
                          --------     --------     --------
                          $ 42,117     $ 37,309     $ 35,903
                          ========     ========     ========
</TABLE>

During 2005 and 2004, the Company completed sale leaseback transactions for
certain supermarkets and convenience stores. The leases were generally for base
terms of 20 years, with options to renew following the base term. Gains from the
sales were deferred and will be recognized over the term of the lease.

In the fourth quarter of 2005, the Company completed its previously announced
review of its accounting for leases. The Company concluded that certain aspects
of its accounting for leases did not comply with GAAP. The Company corrected its
accounting for leases and recorded an $0.8 million charge to depreciation in the
fourth quarter of 2005.

NOTE 9 - INCOME TAXES

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

<TABLE>
<CAPTION>
                                            2005         2004
                                          ---------    ---------
<S>                                       <C>          <C>
Deferred tax assets:
   Compensation and benefit accruals ...  $ 19,089     $ 15,599
   Self-insurance reserves .............       548          751
   Other ...............................     5,711        6,331
                                          --------     --------
      Total deferred tax assets ........    25,348       22,681
Deferred tax liabilities:
   Property and equipment, including
      leased property ..................   (28,747)     (35,503)
   Prepaid employee benefits ...........        --         (297)
   Inventory ...........................   (11,654)      (8,187)
   Other ...............................    (3,823)      (3,333)
                                          --------     --------
      Total deferred tax liabilities ...   (44,224)     (47,320)
                                          --------     --------
Net deferred tax liability .............  $(18,876)    $(24,639)
                                          ========     ========
</TABLE>

Income tax expense consisted of the following:

<TABLE>
<CAPTION>
                          2005       2004      2003
                        --------   --------   -------
<S>                     <C>        <C>        <C>
Current - Federal....   $ 6,189    $(7,062)   $ 3,000
           State.....       166        (97)       137
Deferred - Federal...    (3,917)     9,593     (1,947)
           State.....       (55)        85        (52)
                        -------    -------    -------
                        $ 2,383    $ 2,519    $ 1,138
                        =======    =======    =======

Cash payments........   $ 2,712    $   801    $ 1,272
                        =======    =======    =======
</TABLE>

A reconciliation of income tax expense is as follows:

<TABLE>
<CAPTION>
                                        2005        2004        2003
                                       -------    --------    -------
<S>                                    <C>        <C>         <C>
Federal statutory tax rate ..........  $ 2,291    $ 1,945     $   541
State and local, net of federal tax..       72         (8)         55
Other ...............................       20        582         542
                                       -------    -------     -------
Total income tax expense ............  $ 2,383    $ 2,519     $ 1,138
                                       =======    =======     =======
</TABLE>

NOTE 10 - SHAREHOLDERS' EQUITY AND EMPLOYEE STOCK PLANS

COMMON STOCK

Class A Common Stock has one vote per share; Class B Common Stock is non-voting
except with respect to certain matters affecting the rights and preferences of
that class. Each class is entitled to equal per share dividends and
consideration in any merger, consolidation or liquidation of the Company. A
person who acquires 10% or more of outstanding Class A Common Stock without
acquiring a like percentage of Class B Common Stock must make a public tender
offer to acquire additional Class B Common Stock. Failure to do so results in
suspension of the voting rights of the Class A Common Stock held by such person.

STOCK REPURCHASE PLAN

The board of directors has authorized the repurchase of the Company's Class A
and/or Class B Common Stock to an aggregate limit of $18.0 million. During 2005,
the Company repurchased 64,957 shares of Class A Common Stock at an average
price of $14.21 and 4,481 shares of Class B Common Stock at an average price of
$11.75.

<PAGE>

CHANGES IN SHARES OUTSTANDING

Changes in shares issued and treasury shares during the three years ended April
2, 2005 were as follows:

<TABLE>
<CAPTION>
                                     Class A    Class B
                                     -------    -------
<S>                                  <C>        <C>
Issued shares:
Balance at March 29, 2003,
March 27, 2004, and April 2, 2005     4,695      5,265
                                     ======     ======
Treasury shares:
Balance at March 30, 2002 .......       849      1,139
  Shares repurchased ............        35         12
  Stock options exercised .......        --        (12)
  Director stock purchases ......        --         (4)
  Restricted stock grant ........        (6)        --
                                     ------     ------
Balance at March 29, 2003 .......       878      1,135
  Shares repurchased ............        20          1
  Director stock purchases ......        --         (7)
  Restricted stock grant ........       (16)        --
                                     ------     ------
Balance at March 27, 2004 .......       882      1,129
  Shares repurchased ............        65          4
  Stock options exercised .......        --        (21)
  Director stock purchases ......        --         (7)
                                     ------     ------
Balance at April 2, 2005 ........       947      1,105
                                     ------     ------
Net outstanding at April 2, 2005      3,748      4,160
                                     ======     ======
</TABLE>

STOCK OPTION PLANS AND SHARES RESERVED

The 1998 Stock Incentive Plan, as amended in 2002, reserved 1,500,000 shares of
common stock, in any combination of Class A and Class B, for the grant of stock
options, restricted stock and/or other stock-based awards. The option price for
any incentive stock option may not be less than 100% of the fair market value of
the Common Stock as of the date of grant and for any non-qualified stock option
may not be less than 85% of the fair market value as of the date of grant.
Options granted to date become exercisable pro-rata over three or four-year
periods beginning one year from the date of grant and expire 10 years from date
of grant.

The 1999 Outside Directors' Stock Option Plan reserved 150,000 shares of common
stock, in any combination of Class A and Class B, for the grant of stock options
and restricted stock to non-employee directors. The Board of Directors
administers the plan and determines the terms and conditions of the awards,
subject to the terms of the plan. The option price may not be less than 85% of
the market value as of the date of the grant.

All equity compensation plans of the Company have been approved by its
shareholders. Following is summary information for options outstanding and
shares reserved for all plans:

<TABLE>
<CAPTION>
                                         Class A       Class B
                                        ----------    --------
<S>                                     <C>           <C>
Shares to be issued
  upon exercise of options .........      1,324            527
Weighted average exercise price ....    $ 14.12       $  10.95
Shares available for future
  issuance                                  145(a)          --
</TABLE>

      (a) in any combination of Class A and Class B

A summary of the Company's stock option activity follows: (price is weighted
average; options are in thousands):

<TABLE>
<CAPTION>
                       Class A    shares   Class B     shares
                       -------   -------   -------    --------
                        Price    Options    Price     Options
                       -------   -------   -------    --------
<S>                    <C>       <C>       <C>        <C>
Outstanding at
  March 30, 2002 ....  $13.86       971     $10.85       588
  Granted ...........   14.77       453         --        --
  Exercised .........      --        --       9.51       (12)
  Expired/forfeited..   14.51       (66)     10.44       (25)
                                  -----                  ---
Outstanding at
  March 29, 2003 ....   14.13     1,358      10.90       551
  Expired/forfeited..   14.70       (34)     10.55        (3)
                                  -----                  ---
Outstanding at
  March 27, 2004 ....   14.12     1,324     $10.90       548
  Exercised .........      --        --       9.70       (21)
                                  -----                  ---
Outstanding at
  April 2, 2005 .....  $14.12     1,324     $10.95       527
                                  =====                  ===
</TABLE>

Related stock option information is as follows:

(options are in thousands)

<TABLE>
<CAPTION>
                                            2005          2004          2003
                                         ---------     ---------     ---------
<S>                                      <C>           <C>           <C>
Vested options at the end of the year
    Class A shares ..................        1,183           870           625
    Class B shares ..................          527           453           363
Weighted average exercise price
   of vested options
    Class A shares ..................    $   14.04     $   13.99     $   13.99
    Class B shares ..................        10.95         11.03         11.20
Weighted average exercise price
   of options granted during the year
    Class A shares ..................    $      --     $      --     $   14.77
    Class B shares ..................           --            --            --
</TABLE>

At April 2, 2005, the range of option exercise prices for Class A shares was
$13.01 to $15.38 and for Class B shares was $9.50 to $14.75 and the
weighted-average remaining contractual life of those options for Class A and
Class B shares was 5.0 years and 3.3 years, respectively.

The fair value of granted options reported in NOTE 1 - Significant Accounting
Policies was estimated using a Black-Scholes option-pricing model with the
following assumptions for 2003; a 3.5% dividend yield, 21.0% volatility, a 5.2%
risk free interest rate, and a 10 year life. The weighted average fair value of
Class A stock options granted during 2003 was $3.35; no Class B stock options
were granted. No options were granted in 2004 and 2005.

OTHER STOCK PLANS

The 1998 Executive Stock Purchase Plan allowed designated officers to purchase
issued and outstanding shares of the Company's common stock, in any combination
of Class A and Class B, to an aggregate of 300,000 shares. In prior years, the
Company arranged for participants to obtain a bank loan to fund the purchase of
shares and guaranteed the repayment to the bank of all principal, interest and
other obligations of each participant. The total amount of principal

<PAGE>

and interest owed by participants at April 2, 2005, was $0.6 million and at
March 27, 2004, was $2.2 million.

The 1998 Outside Directors' Stock Plan provides outside directors the
opportunity to use all or any portion of the fees paid by the Company for their
services as directors to purchase Class B Common Stock from the Company in lieu
of a cash payment of such fees. The plan authorized 100,000 shares of Class B
Common Stock and shares issued pursuant to the plan may be authorized but
unissued shares or treasury shares. Shares are purchased quarterly at market
price.

AMENDED AND RESTATED RIGHTS PLAN

In December 1998, the Company announced that the Board of Directors had amended
and restated the 1989 Shareholder Rights Plan, pursuant to which preferred stock
purchase rights ("Rights") were previously distributed as a dividend at the rate
of one Right for each common share held. Each Right entitles a shareholder to
buy one one-hundredth of a share of Series A Junior Participating Cumulative
Preferred Stock of the Company at an exercise price of $65. The Rights will be
exercisable only if a person or group acquires beneficial ownership of 20% or
more of either class of the Company's common stock or commences a tender or
exchange offer upon consummation of which such person or group would
beneficially own 20% or more of either class of the Company's common stock. If
the rights become exercisable, each Right not owned by such 20% shareholder or
related parties will entitle its holder to purchase, at the Right's then-current
exercise price, shares of common stock (or, in certain circumstances as
determined by the Board, cash, property or other securities of the Company)
having a value of twice the Right's exercise price. The Company will generally
be entitled to redeem the rights at $.01 per Right, at any time until the 15th
day following public announcement that a 20% position has been acquired. The
Rights expire on December 24, 2008, but the plan is periodically reviewed by a
committee of the Board of Directors.

NOTE 11 - CONTINGENCIES

A complaint was filed against the Company on August 26, 2004, in the United
States District Court for the Southern District of Indiana, Indianapolis
Division, entitled C. Alan Marsh v. Marsh Supermarkets, Inc., Cause No.
1:04-CV-1407-SEB-VSS. The case involved claims for breach of contract and civil
conversion and sought damages and treble damages. The Company settled the matter
during the fourth quarter of 2005; the net effect of the settlement was a $0.9
million charge to other non-operating income.

The Company may be involved in litigation from time to time in the normal course
of business. The Company is not aware of any contingencies that would have a
material adverse impact on its financial statements.

<PAGE>

NOTE 12 - SELECTED QUARTERLY FINANCIAL DATA (unaudited)

(in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                          2005                                       2004
                                        ----------------------------------------- -----------------------------------------
                                         Fourth      Third     Second     First     Fourth     Third    Second      First
                                        ---------- --------- ---------- --------- ---------- --------- ---------- ---------
<S>                                     <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>
Sales and other revenues ............   $ 418,387  $ 401,752 $ 524,074  $ 399,396 $ 375,486  $ 388,417 $ 508,955  $ 378,010
Gains from sales of property.........         663      1,890       818        456       879        354     1,814         --
                                        ---------  --------- ---------  --------- ---------  --------- ---------  ---------
Total revenues.......................     419,050    403,642   524,892    399,852   376,365    388,771   510,769    378,010
                                        ---------  --------- ---------  --------- ---------  --------- ---------  ---------
Gross profit ........................     122,568    119,607   154,692    118,729   113,463    117,882   152,384    113,931
Selling, general and administrative..     115,045    105,099   139,996    106,039   104,956    103,874   138,053    102,119
Depreciation.........................       6,563      5,815     7,787      5,785     5,810      5,781     7,660      5,762
                                        ---------  --------- ---------  --------- ---------  --------- ---------  ---------
Operating income.....................         960      8,693     6,909      6,905     2,697      8,227     6,671      6,050
Interest.............................       4,751      4,475     5,704      4,283     4,287      4,268     5,925      4,570
Other non-operating income...........      (1,453)        --      (838)        --        --         --      (327)      (634)
                                        ---------  --------- ---------  --------- ---------  --------- ---------  ---------
Income (loss) before income taxes....      (2,338)     4,218     2,043      2,622    (1,590)     3,959     1,073      2,114
Income taxes (benefit)...............        (905)     1,545       739      1,004      (362)     1,635       390        856
                                        ---------  --------- ---------  --------- ---------  --------- ---------  ---------
Net income (loss)....................   $  (1,433) $   2,673 $   1,304  $   1,618 $  (1,228) $   2,324 $     683  $   1,258
                                        =========  ========= =========  ========= =========  ========= =========  =========
Earnings (loss) per common share:
Basic................................   $    (.18) $     .34 $     .17  $     .20 $    (.15) $     .29 $     .09  $     .16
Diluted..............................        (.18)       .34       .16        .20      (.15)       .29       .09        .16

Cash Dividend: Class A...............   $     .13  $     .13 $     .13  $     .13 $     .13  $     .13 $     .13  $     .13
               Class B...............         .13        .13       .13        .13       .13        .13       .13        .13
</TABLE>

Cash dividends have been paid on the common stock during each quarter for the
past 45 years.

Quarterly earnings per share are based on weighted-average shares outstanding
for the quarter; therefore, the sum of the quarters may not equal the full year
earnings per share amount.

The first, second and third quarters were 12 weeks, 16 weeks and 12 weeks,
respectively. The fourth quarter of 2005 was 13 weeks; the fourth quarter of
2004 was 12 weeks.

Income before taxes for the fourth quarter of 2005 includes an $0.8 million
charge to depreciation to correct the Company's accounting for leases, and other
non-operating income of $2.4 million in settlement of litigation against two of
the Company's general liability insurance carriers for costs related to the
remediation of petroleum contamination, net of $0.9 million in expense to settle
a claim brought by a former officer of the Company.

<PAGE>

SHAREHOLDER INFORMATION

STOCK LISTINGS

At April 2, 2005, there were 2,393 record holders of Class A Common Stock and
2,678 record holders of Class B Common Stock (a composite total of 2,967 holders
of Marsh common stock).

Both classes of common stock trade on the NASDAQ National Market System under
the symbols MARSA (Class A Common Stock) and MARSB (Class B Common Stock). As of
April 2, 2005, the following firms acted as market makers:

Knight Equity Markets, L.P.
McDonald Investments Inc.
UBS Capital Markets, L.P.

RANGE OF MARKET PRICE OF COMMON STOCK

<TABLE>
<CAPTION>
                   A shares        B shares
               ---------------  --------------
                High     Low     High    Low
               ------   ------  ------  ------
<S>     <C>    <C>      <C>     <C>     <C>
2005    1Q     $15.00   $13.00  $14.18  $12.32
        2Q      14.00    11.09   13.90   11.01
        3Q      12.00    10.82   13.00   10.98
        4Q      13.00    11.00   14.75   12.20

2004    1Q      14.03    11.00   13.23   10.43
        2Q      13.78    10.51   13.28   10.61
        3Q      11.10    10.45   11.35   10.73
        4Q      13.75    10.82   13.49   10.82
</TABLE>

SHAREHOLDER INVESTMENT PLAN

The plan provides shareholders a means by which to acquire shares of common
stock through regular dividend reinvestment and voluntary cash payments.

For details, contact the Plan Administrator:
National City Bank, Reinvestment Services - Loc 5352, Post Office Box 94946,
Cleveland, OH 44101-4509; Telephone (800) 622-6757 Fax (216) 257-8367.

SHAREHOLDER INQUIRIES

Shareholders may direct inquiries to the stock transfer agent:National City
Bank, Shareholder Services
P.O. Box 92301 - Loc 5352
Cleveland, Ohio 44101-4301
Telephone (800) 622-6757
Fax (216) 257-8508
e-mail: shareholder.inquiries@nationalcity.com

FORM 10-K AND FINANCIAL INFORMATION

Shareholders, members of the financial community, and news media desiring
further information or copies of the annual report or Form10-K to the Securities
and Exchange Commission should contact:

Chief Financial Officer
Marsh Supermarkets, Inc., 9800 Crosspoint Boulevard, Indianapolis, IN
46256-3350; Telephone (317) 594-2628.

Financial releases may be accessed the following way, 24 hours a day, 7 days a
week:

Via the Internet at www.marsh.net

ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of Shareholders will be held at 10:00 a.m., Tuesday, August
2, 2005, at the Company's principal executive offices at 9800 Crosspoint
Boulevard, Indianapolis, Indiana.