SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, D.C. 20549

FORM 10-K

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

FOR THE FISCAL YEAR ENDED JULY 31, 1998
							OR
 [] TRANSITION REPORT TO SECTION 13 OR 15 (d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-4183

CHOCK FULL O' NUTS CORPORATION

 (Exact name of registrant as specified in its charter)

          NEW YORK                            13-0697025      	
(State or Other Jurisdiction of		(I.R.S. Employer   
Incorporation of Organization)              Identification No.)

370 Lexington Avenue, New York, New York         10017   
(Address of Principal Executive Offices)       (Zip Code)

		  			212-532-0300   			  
	      (Registrant's Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:
                                                   Name of Each Exchange
          Title Of Each Class                      On Which Registered 
Common Stock, par value $.25 per share             New York Stock Exchange
8% Convertible Subordinated Debentures,            American Stock Exchange
   due September 15, 2006
7% Convertible Senior Subordinated Debentures,     New York Stock Exchange
   due April 1, 2012
Securities Registered Pursuant to Section 12(g) of the Act: NONE

                                                                    
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.
Yes   x       No ____   

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [].

Aggregate market value of the Common Stock ($.25 par value) held by non
affiliates of the registrant as of October 8,1998: $51,800,000
Number of Shares of Common Stock ($.25 par value) outstanding as of 
October 8 1998:  10,831,000							     


DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual proxy statement for the year ended July 31, 1998 are
incorporated by reference into Part III.

Certain statements in the Letter of the President and Chief Executive Officer
and Chairman of the Board included in the Annual Report to Shareholders and in
the "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and elsewhere in this Form 10-K constitute "forward-looking
statements" within the meaning of the Reform  Act. See "Forward-Looking
Statements".

							PART I

Item 1.  BUSINESS
		      Item 101 (a) and (c) of Regulation S-K
The Company is the fourth largest roaster, packer, and marketer of coffee in
the United States based on coffee pounds sold by the Company.  Its broad
range of regular and decaffeinated, ground roast, instant and specialty coffees
for the Foodservice and Retail Grocery Industries are sold regionally
throughout the United States and Canada under various well known trademarks,
including Chock full o' Nuts, LaTouraine and Cain's. Best known among its
products is Chock full o' Nuts brand premium, vacuum packed, all-method grind
coffee.  The Company is also one of the largest marketers of Foodservice and
private label coffees.  The balance of the Company's business is derived from
its developing Quikava outlets and from real estate operations.

Incorporated in 1932, for many years, the Company's primary business was the
operation of counter service restaurants, under the Chock full o' Nuts name.
In 1953, the Company expanded its business by marketing the coffee made
famous in its restaurants to consumers via supermarkets and other Retail
Grocery outlets. Impactful advertising, featuring the "Heavenly Coffee" jingle,
made Chock full o' Nuts brand premium coffee a market leader.  In 1983,
Management discontinued the Company's restaurant operations and concentrated
its efforts on the sale of coffee and related food products. In 1994, the
Company commenced opening a limited number of Chock Cafes in the New York
metropolitan area.  In October 1996, the Company adopted a plan to discontinue
operations of these company-owned cafes.  See Note 5 of Notes to Consolidated
Financial Statements.

In July 1998, the Company acquired the hot beverage business of Park Foods, LLP
("Park").  Park's business consists primarily of sales of coffee, cappuccino,
cocoa and leaf tea to a nationwide customer base.  See Note 2 of Notes to
Consolidated Financial Satements.

In January 1997, the Company acquired substantially all of the assets and
assumed substantially all of the liabilities of Ireland Coffee & Tea Company
a leading roaster and distributor of coffees to hotels, restaurants and
institutions on the East Coast.  See Note 2 of Notes to Consolidated Financial
Statements.

In March 1994, the Company acquired all the assets and liabilities of a company
("Quikava") whose menu features a full assortment of the most popular specialty
coffee beverages, plus a variety of freshly prepared foods and snacks
specifically suited for in-car consumption. Quikava's unique "double drive-
thru" format targets the suburban commuter and is uniquely suited to take
advantage of the growth of Specialty Coffees "away from home", where annual
growth rates are significant.



In December 1992, the Company acquired the stock of Cain's Coffee Co.
("Cain's") and certain trademarks related to that business. Cain's primary
business is the direct sale and distribution of coffee and related products
under the Cain's label to Foodservice Customers in twelve states primarily
West of the Mississippi. Cain's also sells coffee and tea to Retail Customers,
using a direct store distribution system.

In November 1992, the Company acquired a controlling interest in a partnership,
which owned Dana Brown Private Brands, Inc., a company which markets and sells
private label coffee and tea products to food retailers and distributors,
located primarily in the Midwest.

In December 1986, the Company acquired Greenwich Mills Company ("Greenwich").
Established in 1912, Greenwich is a leading manufacturer and supplier of
coffee, tea and allied products to Foodservice and private label customers.
The majority of their customers are located in markets East of the
Mississippi. Greenwich's best known trademark is LaTouraine.

Corporate Management is currently focused on the following growth initiatives:
(1) Maximizing the Company's Foodservice franchise by significantly broadening
its customer base for Cain's, Chock full o' Nuts and LaTouraine brand coffee,
tea and allied products; (2) Increasing Retail Grocery Market shares for such
higher margin products as Chock full o' Nuts brand Cafe Blend, decaffeinated,
instant and Rich French Roast coffees; (3) Selectively pursuing new business
development opportunities that will deliver significant volume and profit
growth; and (4) Expansion of its developing Quikava drive-thru outlets through
franchising.

The following table sets forth revenues and operating results from continuing
operations, before interest and corporate expenses, attributable to the
Company's beverage products sales, Quikava sales and real estate operations,
for the fiscal years ended July 31, 1998, 1997 and 1996:
                                             
                                                 Fiscal Years Ended July 31,
		
                                             1998          1997         1996
                                                     (In Thousands)
Revenues Net Sales - Beverage Products   $  390,731     $360,467     $319,213  
   Net Sales - Quikava                        3,626        3,737        1,922
   Rentals from Real Estate                   2,011        2,091        2,156  

Operating Profit/(Loss):
   Beverage Products                         17,854       23,498       16,708  
   Quikava                                   (1,781)      (1,998)      (1,649)
   Real Estate Operations                       260         140          671   
			    


COFFEE AND RELATED PRODUCTS

Description of Coffee Market 
According to certain available industry surveys and Company estimates, total
United States coffee sales by manufacturers in 1997 were approximately $6
billion. Approximately 34% of total United States coffee sales in 1997 were
to Foodservice customers.
	
BEVERAGE PRODUCTS OPERATIONS

Foodservice Sales and Marketing
In January 1985, the Company began using Company sales personnel and
independent food brokers to market its coffee and allied products to
Foodservice customers.  These include chain and independent restaurants,
hospitals, airlines, schools, governmental institutions, vending and office
coffee service operators and other institutional distributors. In December
1986, the Company acquired Greenwich, which is a major direct sales and
distribution supplier in the Eastern United States of coffee, tea and allied
products to Foodservice Customers and private label customers.  Greenwich's
best-known label is LaTouraine, which enjoys a reputation for high quality.
LaTouraine also distributes spices, international coffee mixes, specialty
coffees, whole bean and pod Espresso, hot chocolate, iced and hot tea,
powdered soft drinks, soup bases, and portion controlled jams, jellies and
condiments.

In December 1992, the Company acquired Cain's, which is a major supplier in
the Midwest and Southwest of products similar to those sold by Greenwich and
LaTouraine to Foodservice Customers.

In fiscal 1998, approximately 48% of sales were derived from processing and
marketing coffee and allied products for sale to Foodservice Customers (49%
and 46% in fiscal 1997 and 1996, respectively). Sales of coffee products to
Foodservice Customers have traditionally been less price-sensitive and depend
more on the level of customer service provided. These sales also tend to
generate higher operating margins, due to lower marketing and advertising
expenses, than do sales of coffee products to Retail Customers. In addition,
the absence of competitors with a dominant market position, makes the
Company's pricing to Foodservice Customers less susceptible, as compared to
pricing to Retail Customers, to changes in price in response to pricing actions
of any single competitor.

Retail Sales and Marketing
The Company currently sells most of its Retail Grocery coffee products to
supermarket chains, wholesalers and independent food outlets ("Retail
Customers") through independent food brokers. The Company's retail products
include coffees sold under the Chock full o' Nuts, Cain's, Ireland and Safari
labels.  The Company believes that its best known product, Chock full o' Nuts
premium, vacuum packed, all-method grind coffee, is superior to most
competitors in being able to produce a more consistent, better tasting,
finished brew from a single, "all-method grind", regardless of the coffee maker
used.  The Company also sells an "extended yield" coffee, which produces more
cups than equivalent quantities of standard yield coffee. Additionally, the
Company sells decaffeinated roast and ground coffee, instant coffees, a
premium quality Cafe blend and a Rich French Roast coffee.

The Company and Greenwich roast, pack and market regular, decaffeinated and
instant coffees for sale by others under a variety of private labels.

In fiscal 1998, the Company's coffee sales to Retail Customers accounted for
approximately 46% of sales (44% and 48% in fiscal 1997 and 1996, respectively)
and coffee sales under the Chock full o'Nuts label represented approximately
4% of total Branded Retail Grocery coffee sales in the United States.

Chock full o' Nuts all-method grind coffee is sold in most major metropolitan
areas of the United States and in the provinces of Ontario and Quebec, Canada.
Sales are concentrated in the New York metropolitan area, upstate New York,
New England, Philadelphia, Washington, D.C. and Florida.  The Company
believes that its distinctive packaging design and one grind concept are
important factors in the marketing of its coffee products. Marketing a single
grind coffee has enabled the Company's all-method grind coffee to be
consistently one of the fastest moving items off supermarket shelves in its
core markets.

The sales of Cain's, Ireland and Safari brand products are concentrated in the
Midwest, East and Southwest, respectively.

Suppliers and Manufacturing
The Company's coffee is primarily a blend of readily available Central and
South American coffees.  The Company purchases approximately 100 million
pounds of green coffee beans annually.  All such coffee is purchased from
approximately 25 importers located in New York City, New Orleans and Miami,
who assume the risk of delivering beans that meet the Company's quality
requirements at a guaranteed price. The Company generally buys its coffee
pursuant to contracts providing for delivery in 4 to 12 weeks and supplements
such contracts with purchases on the spot market.  All purchases are subject
to inspection and approval by the United States Food and Drug Administration.

Manufacturing activities for coffee and related products are presently 
conducted at the following facilities:

	Location                     Principal Use

   Brooklyn, New York............Coffee Roasting Plant, Warehouse
   St. Louis, Missouri...........Coffee Roasting Plant, Warehouse
   Hialeah, Florida..............Coffee Roasting Plant, Warehouse
   Rochester, New York...........Coffee Roasting Plant, Warehouse
   Oklahoma City, Oklahoma.......Coffee Roasting Plant and Processing
                                 Plant for Tea and Related Food
                                 Products, Warehouse
   Springfield, Missouri.........Processing Plant for Spices, Warehouse
   Pleasantville, New Jersey.....Coffee Roasting Plant, Warehouse


All of the above facilities are owned, except the Rochester, New York,
Springfield, Missouri and Pleasantville, New Jersey facilities, which are
leased. The Company believes that it has sufficient production capacity to
meet its current and future needs.

The Company also rents executive office space in New York City and maintains
arehousing facilities in over forty-five locations throughout the United
States. None of these facilities are material to the Company's operations.

Competition
The coffee business is highly competitive. The Company competes for Retail
Customers with a number of nationally and regionally established brands. Its
largest competitors are Kraft Foods (Maxwell House, Yuban and Sanka coffees),
Procter & Gamble (Folger's coffees) and The Nestle Company (Hills, MJB and
Chase & Sanborn coffees), with combined annual sales accounting for
approximately 80% of the United States coffee market. The profitability of the
Company's coffee sales to Retail Customers is largely dependent on competitive
pricing conditions.  See "Management's Discussion and Analysis of Financial
Condition and Results of Operations".

There are many competitors in the business of selling coffee to Foodservice
Customers. However, the Company believes that no single competitor's sales
constitute more than 20% of this market.  Sales of coffee, tea and allied
products to Foodservice Customers have traditionally been less price-sensitive
and more dependent on the level of service provided to such customers than
sales of such products to Retail Customers.  In addition, the absence of
direct competitors with a dominant market position has traditionally made the
Company's pricing to Foodservice Customers less susceptible, as compared to
pricing to Retail Customers, to changes in price in response to pricing
actions of any single competitor.

    

QUIKAVA OPERATIONS
Quikava is the operator and franchiser of double-drive thru outlets, which
offer a variety of specialty coffees, espresso-based drinks, fresh baked
goods, sandwiches, other "finger foods" and snacks.  Quikava units are
situated on major commuter thoroughfares in suburban markets and offer quick-
service of quality beverages and snacks.  The Company intends to develop
additional Quikava units, most of which will be franchised.  At the fiscal
year end, the Company was operating eight company owned units and there were
30 operating franchised units.

CAFES  
In June 1994, with the opening of a flagship store in Midtown Manhattan, the
Company began to develop the business of operating retail cafes which offered
moderately priced specialty coffees, sandwiches, salads, bakery products,
snacks, and other assorted food and beverage products.  In October 1996, the
Company discontinued the operations of its Cafes due to store operating losses
esulting from high food and labor costs and insufficient volume to cover high
fixed and operating costs related to Midtown Manhattan operations as well as
a Cafe Corporate structure organized to support a much higher number of
locations. See Note 5 of Notes to the Consolidated Financial Statements.

RESEARCH AND DEVELOPMENT
The Company invested a nominal amount in research and development for the 
three years ended July 31, 1998.

TRADEMARKS
Certain trademarks (i.e. Chock full o' Nuts, LaTouraine, Eppen Smith, Cain's,
Safari and Ireland) are important to the business of the Company.

EMPLOYEES
The Company employs approximately 1,430 employees, 18% of whom are represented
by labor unions. The Company believes that its relations with both union and
non-union employees are good.



REAL ESTATE OPERATIONS
The Company is both lessor and lessee on certain properties.  Such properties
had been part of the Company's original restaurant operations. Additionally,
the Company owns a coffee roasting facility in Castroville, California which
it leases to another coffee company.

OTHER MATTERS
Reference is made to Notes 2 and 5 of Notes to Consolidated Financial
Statements with respect to the acquisition and disposition of certain assets.

			  Item 101 (b) of Regulation S-K

Segment Information is included elsewhere in this document after Management's
Discussion and Analysis of Financial Consolidation and Results of Operations.

			  Item 101 (d) of Regulation S-K

All of the Company's operations are located in the United States.  Export sales
are not significant.

Item 2.  PROPERTIES

The Company leases certain premises which are under long-term leases expiring
on various dates through 2009 and certain of which contain renewal options.
Reference should be made to Note 6 of Notes to Consolidated Financial
Statements for additional information about these leases. The following table
sets forth the location and certain information with respect to the Company's
plants and certain other properties as of October 8, 1998, all of which
premises the Company considers adequate for its present and anticipated needs.


PLANTS AND OTHER PROPERTIES
					
		
                                                    Approximate     Whether
                                                    Square Feet     Owned     
                                                         of           or 
Location               		 Principal Use      Floor Space     Leased (1)      
Brooklyn, New York               Coffee Roasting
                                 Plant, Warehouse       55,000       Owned
St. Louis, Missouri    		 Coffee Roasting
                                 Plant,  Warehouse      77,000       Owned
Secaucus, New Jersey             Warehouse and 
                                 Offices               104,000       Owned
Hialeah, Florida       		 Coffee Roasting 
                                 Plant,  Warehouse      50,000       Owned
Rochester, New York    		 Coffee Roasting 
                                 Plant, Warehouse       50,000       Leased
Oklahoma City, Oklahoma		 Coffee Roasting Plant
                                 and Processing 
                                 Plant for
                                 Tea and Related 
                                 Food Products, 
                                 Warehouse             150,000       Owned
Springfield, Missouri  		 Processing Plant 
                                 for Spices, 
                                 Warehouse              30,000       Leased



Pleasantville, New               Coffee Roasting        47,000       Leased
Jersey                           Plant, Warehouse                         
574 Fifth Avenue       		 Real Estate     
New York, New York               Operation              13,000       Leased
422 Madison Avenue     		 Real Estate 
New York, New York               Operation               8,750       Leased
532 Madison Avenue     		 Real Estate
New York, New York               Operation              12,250       Leased
49 Broadway                      Real Estate
New York, New York               Operation              12,000       Leased
1420 Broadway                    Real Estate
New York, New York               Operation               6,750       Leased
370 Lexington Avenue             Corporate
New York, New York               Headquarters           11,000       Leased
Waverly Place corner
Green Street                     Real Estate
New York, New York               Operation               2,500       Leased
Castroville,                     Real Estate
California                       Operation              66,000       Owned
Queen Ann Plaza         	 	
Norwell, Mass                    Quikava Operation         250       Leased
2297 Brown Avenue       		
Manchester,            		
New Hampshire                    Quikava Operation         500       Leased
917 Lynnfield Street    		
Lynn, Mass                       Quikava Operation         600       Leased
1184 Main Street        		
Haverhill, Mass                  Quikava Operation         600       Leased
84 Milfod Road          	 	
Amherst, New Hampshire           Quikava Operation         600       Leased
374 Bridge Street       	 	
N. Weymouth, Mass                Quikava Operation         600       Leased
895 Bald Hill Road      	 	
Warwick, Rhode Island            Quikava Operation         600       Leased
190 Old Derby Street             Headquarters
Hingham, Mass.                   Quikava                 1,196       Leased
83 Brocton Avenue       	 	
Abington, Mass.                  Quikava Operations        600       Leased

(1) -- No Company-leased premises are owned by any officer or director of the
Company. See Note 6 of Notes to Consolidated Financial Statements.


Item 3.  LEGAL PROCEEDINGS
None

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF
	   SECURITY HOLDERS                  
Not applicable.
							PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND
	   RELATED SECURITY HOLDER MATTERS             

"Common Share Prices" and related security holder matters may be found
immediately after "Segment Information."

Item 6.  SELECTED FINANCIAL DATA

"Selected Financial Data" may be found immediately after Note 11 of Notes to
Consolidated Financial Statements.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
	   AND RESULTS OF OPERATIONS                                  

"Management's Discussion and Analysis of Financial Condition and Results of
Operations" may be found immediately after "Forward-Looking Statements."

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this Item is submitted in a separate section of this report.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
	  FINANCIAL DISCLOSURE

Applicable-Report dated May 5, 1998 - The Company engaged Grant Thornton LLP
as its independent auditors for the year ending July 31, 1998.



							PART III


Item 10.  DIRECTORS AND OFFICERS OF THE REGISTRANT
				       and

Item 11.  EXECUTIVE COMPENSATION
				       and

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
				       and

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Omitted, per General Instruction G. The information required by Part III shall
be incorporated by reference from the Registrant's definitive proxy statement
pursuant to Regulation 14A for the fiscal year ended July 31, 1998 which is to
be filed with the Commission.


					
							PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report.

   (3) The response to this portion of Item 14 is submitted as a separate
   section of this report (see below).

(b) Reports on Form 8-K: Filed on May 5, 1998 - The Company engaged Grant
Thornton LLP as its independent auditors for the year ending July 31, 1998.

(c) The response to this portion of Item 14 is submitted as a separate section
of this report (see below).

(d) The response to this portion of Item 14 is submitted as a separate section
of this report.

Pursuant to Regulation S-K Item 601, following is a list of Exhibits.

Exhibit 3  Articles of incorporation and by laws.

       (a) Articles of incorporation filed as an Exhibit to Form 10-K for the
        fiscal year ended July 31, 1994 is incorporated herein by reference.

       (b)  By-laws filed as an Exhibit to Form 10-K for the fiscal year ended
       July 31, 1994 is incorporated herein by reference.

Exhibit 4   Instruments defining the rights of security holders, including
indentures.

       (a)  Indenture dated as of September 15, 1986 between the Company and
       Manufacturers Hanover Trust Company ("Manufacturers") filed as an
       Exhibit to  Form 10-K for the fiscal year ended July 31, 1994 is
       incorporated herein by  reference.

       (b)  Form of the Company's 8% Convertible Subordinated Debenture
       included in Exhibit 4(a)filed as an Exhibit to Form 10-K for the fiscal
       year ended July 31, 1994 is incorporated herein by reference.

       (c)  Instrument of resignation, appointment and acceptance dated August
        9, 1993 among the Company, Manufacturers and Liberty Bank and Trust
        Company of Oklahoma City filed as an Exhibit to Form 10-K for the
        fiscal year ended July 31, 1994 is incorporated herein by reference.

       (d)  Indenture dated as of April 1, 1987 between the Company and IBJ
       Schroder Bank and Trust Company filed as an Exhibit to Form 10-K for the
       fiscal year ended July 31, 1994 is incorporated herein by reference.

       (e)  Form of the Company's 7% Convertible Senior Subordinated Debenture
       included in Exhibit 4(d) filed as an Exhibit to Form 10-K for the fiscal
       year ended July 31, 1994 is incorporated herein by reference.

Exhibit 9   Voting Trust Agreement, not applicable.

Exhibit 10  Material contracts


(a)   Amended and Restated Rights Agreement, dated as of December 30, 1997,
      between Chock full O' Nuts Corporation and American Stock Transfer
      Company, as Rights Agent, the   Form of Rights Certificate and Summary
      of Rights to Purchase Common Stock filed as an Exhibit to Form 8-K
      dated December 30, 1997 is incorporated herein by reference.

(b)   Benefits protection trust with State Street Bank and Trust Company
      filed as an Exhibit to Form 10-K for the fiscal year ended July 31, 1994
      is incorporated herein by reference.

(c)   Resolution of the Board of Directors adopting severance policy filed as
      an Exhibit to Form 10-K for the fiscal year ended July 31, 1994 is
      incorporated herein by reference.

(d)   Chock full o' Nuts Corporation Employees' Stock Ownership Plan dated
      December 16,1988 filed as an Exhibit to From 10-K for the fiscal year
      ended July 31, 1995, is incorporated herein by reference.

(e)   Amended and Restated Credit Agreement dated December 4, 1992, amended
      and restated as of January 1, 1996, among Chock full o' Nuts Corporation
      and its Subsidiaries and National Westminster Bank N.A., now known as
      Fleet Bank, N.A., and Chemical Bank, now known as the Chase Manhattan
      Bank, filed as an Exhibit to Form 10-K for the fiscal year ended July 31,
      1996, is incorporated herein by references.

(f)   Form of restricted stock agreement dated January 2,1988 with key
      employees (including certain officers and directors) filed as an Exhibit
      to Form 10-K for the fiscal year ended July 31, 1994 is incorporated
      herein by reference.

(g)   Asset Purchase Agreement dated as of January 16, 1997 by and between
      Chock full o' Nuts Corporation and Ireland Coffee-Tea, Inc. filed as an
      Exhibit to Form 8-K dated February 3, 1997 is incorporated herein by
      reference.

(h)   Asset Purchase Agreement dated as of July 13, 1998 by and between
      Chock full o' Nuts Corportion and Park, L.P. attached herein.

(i)   Employment agreements of executive officers dated August 5, 1998
      attached herein.

(j)   Supplemental Executive Retirement Plan effective January 1, 1998
      attached herein.

(k)   1984 Incentive Compensation Plan attached herein.

Exhibit 11  Statement re:  Computation of Per Share Earnings

Exhibit 12  Statement re:  Computation of ratios, not applicable.

Exhibit 13  Not applicable.

Exhibit 18  Letter re: change in accounting principles, not applicable.

Exhibit 21  Subsidiaries of the registrant.

Exhibit 22  Published report regarding matter submitted to vote of security
            holders, not applicable.

Exhibit 23  Consent of experts and counsel, not applicable.

Exhibit 24  Power of attorney, not applicable.

Exhibit 27  Financial Data Schedule.

Exhibit 99  Additional exhibits, not applicable.



                                            SIGNATURES
	

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934,  the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



					   CHOCK FULL O' NUTS CORPORATION
						     (Registrant)

October 23, 1998                   /s/ Howard M. Leitner
				   Howard M. Leitner, Vice President,
				   Chief Financial and Accounting Officer
				   and Director    

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated.

October 23, 1998 /s/ Norman E. Alexander October 23, 1998 /s/ Mark A. Alexander
		     Norman E. Alexander                      Mark A. Alexander
		     Chairman of the Board                    Director


October 23, 1998 /s/ Stuart Z. Krinsly   October 23, 1998 /s/ Martin J. Cullen
		     Stuart Z. Krinsly                        Martin J. Cullen
		     Director                                 Vice President 
	and Director

October 23, 1998 /s/ Howard M. Leitner   October 23, 1998 /s/ Marvin I. Haas
		     Howard M. Leitner                        Marvin I. Haas
		     Vice President and                       President and 
		     Chief Financial Officer                  Chief Executive 
		     and Director                             Officer
	and Director 

October 23, 1998 /s/ R. Scott Schafler   October 23, 1998 /s/ Henry Salzhauer
		     R. Scott Schafler                        Henry Salzhauer
		     Director                                 Director 
	
October 23, 1998 /s/ Jerry Columbus      October 23, 1998 ____________________
		     Jerry Columbus                           David S. Weil
		     Director                                 Director


		     
		     


	ANNUAL REPORT ON FORM 10-K
	ITEM 8, ITEM 14(a)(1) AND (2), (c) and (d)

	LIST OF FINANCIAL STATEMENTS 
	AND FINANCIAL STATEMENT SCHEDULES

	CERTAIN EXHIBITS

	YEAR ENDED JULY 31, 1998

	CHOCK FULL O' NUTS CORPORATION

	NEW YORK, NEW YORK
	




FORM 10-K--ITEM 14(a)(1) and (2)

CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES

LIST OF FINANCIAL STATEMENTS AND SCHEDULES


The following consolidated financial statements of the Registrant and its
subsidiaries are included in Item 8:

                                                                 Page
Report of Independent Certified Public Accountants................15
Report of Independent Auditors....................................16
Consolidated Balance Sheets--July 31, 1998 and 1997...............17 and 18
Consolidated Statements of Operations--Years Ended
  July 31, 1998, 1997 and 1996....................................19
Consolidated Statements of Cash Flows--
  Years Ended July 31, 1998, 1997 and 1996........................20 and 21
Consolidated Statements of Stockholders' Equity--
  Years Ended July 31, 1998, 1997 and 1996........................22 and 23
Notes to Consolidated Financial Statements........................24 to  34

The following consolidated financial statement schedule of the registrant and
its subsidiaries is included in Item 14(d):

                                                                 Page 
Schedule II -- Valuation and Qualifying Accounts..................42


All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and therefore have been omitted.


						GRANT THORNTON LLP
						Report of Independent Auditors





The Board of Directors and Stockholders
Chock Full o' Nuts Corporation
New York, New York


We have audited the accompanying consolidated balance sheet of Chock Full o'
Nuts Corporation and subsidiaries as of July 31, 1998, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Chock
Full o' Nuts Corporation and subsidiaries as of July 31, 1998, and the
consolidated results of their operations and their cash flows for the year then
ended in conformity with generally accepted accounting principles. We have also
audited Schedule II for the year ended July 31, 1998. In our opinion, this
Schedule presents fairly, in all material respects, the information required
to be set forth therein.

						 GRANT THORNTON LLP





New York, New York
October 15, 1998



						ERNST & YOUNG LLP
						Report of Independent Auditors





The Board of Directors and Stockholders
Chock Full o' Nuts Corporation
New York, New York


We have audited the accompanying consolidated balance sheet of Chock Full o'
Nuts Corporation and subsidiaries as of July 31, 1997, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the two years in the period ended July 31, 1997. Our audit also
included the financial statement schedule listed in the index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Chock
Full o' Nuts Corporation and subsidiaries at July 31, 1997, and the
consolidated results of their operations and their cash flows for each of the
two years in the period ended July 31, 1997 in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

						  ERNST & YOUNG LLP





New York, New York
September 30, 1997


CONSOLIDATED BALANCE SHEETS
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998 and 1997

ASSETS                                                    1998           1997

CURRENT ASSETS:
Cash and cash equivalents                         $  6,148,068   $  4,585,633
Receivables, principally trade, less
  allowances for doubtful accounts and
  discounts of $1,329,000 and $1,422,000--                        
     Notes 3 and 10(a)                              40,559,581     37,554,412
Inventories--Notes 1 and 3                          60,641,309     82,951,688
Prepaid expenses and other -- Note 4                 3,636,446      2,457,221
               OTAL CURRENT ASSETS                 110,985,404    127,548,954 
PROPERTY, PLANT AND EQUIPMENT, at cost-
     Note 3:
Land                                                 3,127,640      3,114,889
Buildings and improvements                          15,161,611     14,805,429
Leaseholds and leasehold improvements                2,304,715      2,526,691
Machinery and equipment                             84,778,461     78,162,457
                                                   105,372,427     98,609,466 
Less allowances for depreciation and
  amortization                                      56,346,824     49,933,489 
                                                    49,025,603     48,675,977
REAL ESTATE HELD FOR DEVELOPMENT OR SALE
  at cost -- Note 3                                  2,175,344      7,635,427 

OTHER ASSETS AND DEFERRED CHARGES, net--
   Note 10 (b)                                      23,223,366     23,799,057


EXCESS OF COST OVER NET ASSETS  
  ACQUIRED, net                                     15,773,875      9,670,551 
                                                  $201,183,592   $217,329,966



See notes to consolidated financial statements




CONSOLIDATED BALANCE SHEETS - Continued
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998 and 1997

                                                        1998          1997
						      
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                $ 8,502,778   $13,590,697
  Accrued expenses                                  9,159,994    12,148,313 
  Income taxes--Note 4                              1,093,979     1,957,788 
  Current installments of long-term debt --           
    Note 3                                         __________       766,000
               TOTAL CURRENT LIABILITIES           18,756,751    28,462,799

LONG-TERM DEBT, Excluding Current Installments-- 
    Note 3                                         92,246,967   106,065,753 

OTHER NON-CURRENT LIABILITIES                       3,854,833     3,265,078  

DEFERRED INCOME TAXES -- Note 4                     8,770,000     7,655,000 

STOCKHOLDERS' EQUITY--Notes 3 and 7:
    Common stock, par value $.25 per share;
    Authorized 50,000,000 shares;
        Issued 11,306,444 and 11,211,068 shares     2,826,611      2,802,767 
    Additional paid-in capital                     52,064,121     51,357,008 
    Retained earnings                              30,848,452     25,349,146
                                                   85,739,184     79,508,921  
    Deduct:
    Cost of 475,522 shares in treasury             (6,573,719)    (6,573,719) 
    Deferred compensation under stock   
	bonus plan and employees' stock                         
        ownership plan                             (1,610,424)    (1,053,865)
               TOTAL STOCKHOLDERS' EQUITY          77,555,041     71,881,337  

LEASES--Note 6                                       _________    __________
                                                  $201,183,592  $217,329,966 


See notes to consolidated financial statements



CONSOLIDATED STATEMENTS OF OPERATIONS
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
Years ended July 31, 1998, 1997 and 1996


                                           1998            1997           1996
Revenues:
  Net sales                        $394,356,822    $364,203,601   $321,134,537
  Rentals from real estate            2,011,257       2,091,307      2,156,070
                                    396,368,079     366,294,908    323,290,607
Costs and expenses:
  Cost of sales                     293,304,109     257,078,504    229,477,193
  Selling, general and
   administrative expenses           85,682,621      86,018,181     77,223,407
  Expenses of real estate             1,751,005       1,951,137      1,484,681
                                    380,737,735     345,047,822    308,185,281
OPERATING PROFIT                     15,630,344      21,247,086     15,105,326
Gain on sale of real estate -
  Note 10(c)                          1,281,698                        460,000
Interest and dividend income            628,333       1,061,160        865,145
Interest expense                     (7,903,211)     (8,599,963)    (8,783,798)
Other (deductions)/income--        
  Notes 10(d) and (e)                  (166,859)     (1,495,891)        60,692

INCOME BEFORE INCOME TAXES            9,470,305       12,212,392     7,707,365
Income taxes--Note 4:
  Current:
    Federal                           2,126,000        1,885,000     1,905,000
    State and local                     709,000          753,000       488,000
  Deferred                            1,136,000        1,660,000       683,000
                                      3,971,000        4,298,000     3,076,000
INCOME FROM CONTINUING
 OPERATIONS                           5,499,305         7,914,392    4,631,365
Discontinued operations --
  Note 5:
(Loss)from operations, net of
  income tax credits of
    $1,073,000                                                      (1,757,044)
(Loss) on disposition, net of
  deferred income tax credit of
    $2,590,000                                                      (4,410,000)
                                                                    (6,167,044)
NET INCOME/(LOSS)                    $5,499,305        $7,914,392  $(1,535,679)
 Income /(loss) per share--
   Note 1:
   Basic:
    Continuing operations                 $ .53             $ .76        $ .45
    Discontinued operations                                               (.60)
    Net income/(loss)                     $ .53             $ .76        $(.15)
   Diluted:
    Continuing operations                 $ .45             $ .55        $ .41
    Discontinued operations                                               (.28)
    Net income                            $ .45             $ .55        $ .13

    See notes to consolidated financial statements








CONSOLIDATED STATEMENTS OF CASH FLOWS
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
Years Ended July 31, 1998, 1997 and 1996


                                            1998            1997          1996
Operating Activities - Continuing
Operations:
Income from continuing operations
  before income taxes                 $9,470,305     $12,212,392    $7,707,365

Adjustments to reconcile pretax
   income from continuing operations
   to net cash provided by
   continuing operations:
Depreciation and amortization of
  property, plant and equipment        6,724,977      7,386,215      6,380,262
Amortization of deferred
  compensation
  and deferred charges                 3,732,609      4,437,262      4,561,305
Gain on sale of real estate           (1,281,698)                     (460,000)
Other, net                              (443,670)      (312,060)    (1,000,099)
Changes in operating assets and
  liabilities, net of aquisitions:
   (Increase)/decrease in
     receivables                        (407,866)     (4,889,186)    6,818,278

Decrease/(increase) in
  inventories                          28,875,289    (21,960,180)      913,733

(Increase)/decrease in
  prepaid expenses                     (1,455,579)     1,600,484      (281,086)
(Decrease)/increase in accounts
payable, accrued expenses and
income taxes                           (9,871,375)     1,259,724    (5,098,044)
       Net cash provided by /(used
        in)operating activities -
        continuing operations          35,342,992       (265,349)   19,541,714
Operating Activities - Discontinued
Operations:
  Discontinued operations exclusive
    of income taxes
  Adjustments to reconcile pretax
    loss from discontinued                                          (9,830,044)
    operations to net cash used
    in discontinued operations
  Provision for close down and
    write-off of equipment                                           7,000,000
  Depreciation and amortization                                        431,623
  Other                                                               (192,929)
        Net cash (used in)
         discontinued operations                                    (2,591,350)
Income taxes - current                (2,835,000)     (2,638,000)   (1,320,000)
  NET CASH PROVIDED BY/(USED IN)
  OPERATING ACTIVITIES                32,507,992      (2,903,349)   15,630,364



CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
Years Ended July 31, 1998, 1997 and 1996

                                            1998           1997          1996
Investing Activities -
 Continuing Operations:
  Purchases of marketable
    securities                           (41,646)       (34,026) (152,018,726)
  Proceeds from sale and
    collection of principal of
    marketable securities                                 79,99   158,863,555
  Purchases of property, plant and
    equipment                          (6,926,061)   (6,123,523)   (7,411,199)
  Acquisition of businesses           (14,900,112)   (5,872,858)
   (Advances to)/proceeds from
    co-packer                            (923,893)    1,549,328    (3,132,245)
  Proceeds from sale of real-estate     6,685,941                     460,000
  Other                                                               (13,147)
    Net Cash (used in)
    investing activities -
    continuing operations             (16,105,771)  (10,401,086)   (3,251,762)
  Net cash (used in)investing
      activities -
      discontinued operations -
      Purchases of property and
           equipment                                               (2,608,543)
    NET CASH (USED IN)
     INVESTING ACTIVITIES            (16,105,771)   (10,401,086)   (5,860,305)
Financing activities - Continuing
 Operations:
 Loan to employees' stock
   ownership plan                     (1,000,000)                    (500,000)
 Net (payments of)/proceeds from
   long-term debt                    (13,839,786)     1,596,285    (1,333,428)
    NET CASH (USED IN)/ PROVIDED BY
      FINANCING ACTIVITIES           (14,839,786)     1,596,285    (1,833,428)
    INCREASE/(DECREASE) IN CASH AND
     CASH EQUIVALENTS - CONTINUING
      OPERATIONS                       1,562,435    (11,708,150)    7,936,631
   Cash and cash equivalents at
   beginning of year -
     continuing operations             4,585,633     16,293,783     8,357,152
CASH AND CASH EQUIVALENTS AT END
OF YEAR-CONTINUING OPERATIONS         $6,148,068     $4,585,633   $16,293,783
Supplemental Information
   Cash paid during the year:               1998           1997          1996
      Interest                        $7,688,931     $8,143,201    $8,259,325
      Income taxes                     3,958,061      2,168,425       848,539

See notes to consolidated financial statements


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
Years Ended July 31, 1998, 1997 and 1996

                                                     Common Stock       
                                       Shares      Amount     Shares   Amount
                                                     In Thousands
Balance at July 31, 1995               11,211      $2,803      476     $6,574
Net(loss)
Deferred compensation under stock
  bonus plan and employees' stock
  ownership plan:
    Amortization
    Loan to employees' stock 
    ownership plan                    ______       _____       ___      _____ 
Balance at July 31, 1996              11,211       2,803       476      6,574
Net income                                                      
Deferred compensation under stock
  bonus plan and employees' stock
  ownership plan:
    Amortization                      ______       _____       ___      _____
Balance at July 31, 1997              11,211       2,803       476      6,574
Net income
Conversion of debentures                  95          24
Deferred compensation under stock
  bonus plan and employees' stock
  ownership plan:
    Loan to employees' stock
    ownership plan
    Amortization                       _____         _____     ____     _____
Balance at July 31, 1998              11,306        $2,827      476    $6,574
							

See notes to consolidated financial statements




CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - Continued
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
Years Ended July 31, 1998, 1997, and 1996



                               Deferred
                               Compensation
                               Under Stock
                               Bonus Plan
                               and Employees'   
                               Stock               Additional
                               Ownership           Paid-In          Retained
                               Plan                Capital          Earnings
                                                   In Thousands      
  			
Balance at July 31, 1995             $1,620          $51,357         $18,970
Net (loss)                                                            (1,535)
Deferred compensation 
  under stock  bonus plan and
  employees' stock ownership 
  plan:
    Amortization                       (586)
    Loan to employees' stock               
    ownership plan                      500            ______         ______   
Balance at July 31, 1996              1,534            51,357         17,435
Net income                                                             7,914
Deferred compensation 
  under stock bonus plan and
  employees' stock ownership plan:
    Amortization                       (480)            ______        ______
Balance at July 31, 1997              1,054             51,357        25,349
Net income                                                             5,499
Conversion of debentures                                   707
Deferred compensation understock
  bonus plan and employees' stock
  ownership plan:
    Loan to employees' stock
    ownership plan                    1,000
    Amortization                       (444)            ______        ______
Balance at July 31, 1998             $1,610            $52,064       $30,848

See notes to consolidated financial statements                  



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Fiscal year: The Company's year ends on the last Friday in July. Fiscal years
are designated as ending July 31 for convenience of reference.

Principles of Consolidation:  The consolidated financial statements include
the accounts of the Company and its subsidiaries. Significant intercompany
accounts and transactions have been eliminated in consolidation.

Use of Estimates:  The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Receivables - Concentration of Credit Risk: The Company's primary business is
the roasting, packing and marketing of a broad range of regular and
decaffeinated, ground roast, instant and specialty coffees for the
Foodservice and Retail Grocery Industries.  These products are sold
regionally throughout the United States and Canada.  The Company performs
periodic credit evaluations of its customers' financial condition and
generally does not require collateral. Credit losses relating to customers
have consistently been within management's expectations.

Cash Equivalents: The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.

Inventories: Inventories are stated at the lower of cost (first-in, first-out)
or market and consist of:

    July 31,                         1998           1997   

    Finished goods              $35,775,998     $41,747,129                   
    Raw materials                17,539,666      36,412,728                
    Supplies                      7,325,645       4,791,831
                                $60,641,309     $82,951,688

Commodities:	 The Company uses coffee futures and options for hedging
purposes to reduce the effect of changing green coffee prices.  The contracts
that effectively meet the risk reduction and correlation criteria are recorded
using hedge accounting.  Effectiveness is measured based upon high correlation
between commodity gains and losses on the futures and options and those on the
 firm commitment.  Under hedge accounting, the gain or loss on the hedge is
 deferred and recorded as a component of the underlying inventory purchase.
 Gains and losses on hedges that are terminated prior to inventory purchases
 are recorded in inventory until the inventory is sold.

Property, Plant and Equipment: Depreciation and amortization of property,
plant and equipment are computed by the straight-line method for financial
reporting purposes and by accelerated methods for income tax purposes.

Long-Lived Assets: In accordance with Financial Accounting Standards Board
("FASB") Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of", the Company records
impairment losses on long-lived assets used in operations, including
intangible assets, when events and circumstances indicate that the assets
might be impaired and the undiscounted cash flows estimated to be generated
by those assets are less than the carrying amounts of those assets.

Pre-opening Costs: Pre-opening costs are charged to operations as incurred.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996

Excess of Cost over Net Assets Acquired:  The Company evaluates goodwill
impairment at the end of each quarter based on recoverability measured by
undiscounted estimated operating profits (i.e., pretax earnings before
interest expense and goodwill amortization). Under this approach, the carrying
value would be reduced to estimated realizable value if it is probable that
Management's best estimate of future operating profits during the goodwill
amortization period will be less than the carrying amount of the related
goodwill. Excess of cost over net assets acquired is being amortized on a
straight-line basis over periods of 40 and 15 years.  Accumulated amortization
amounted to $2,319,000 and $2,010,000 at July 31, 1998 and 1997,
respectively.

Other Intangibles: Other intangibles consist principally of trademarks,
covenants not to compete and customer lists. Such items are being amortized
on a straight-line basis over periods of 40, 5 and 7.5 years, respectively.
See Note 10(b). The Company evaluates any impairment of these assets on a
basis similar to goodwill.

Advertising Expenses: The cost of advertising is expensed as incurred. The
Company incurred $4,632,000, $4,253,000 and $3,130,000 in advertising costs
during 1998, 1997 and 1996, respectively.

Stock-Based Compensation: In October 1995, the FASB issued Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, which provides an alternative to APB Opinion No. 25,
Accounting for Stock Issued to Employees, in accounting for stock-based
compensation issued to employees.  The Statement allows for a fair value based
method of accounting for employee stock options and similar equity instruments.
The Company has determined it will continue to use APB Opinion No. 25 in
accounting for stock-based compensation for all options that are issued.

Per Share Data:  Basic per share data is based on the following weighted
average number of common shares outstanding during each year adjusted for
unallocated shares in the employees' stock ownership plan and contingent
shares: 10,416,000, 10,395,000 and 10,308,000 in 1998, 1997 and 1996,
respectively. Diluted per share data, assuming conversion of debentures, the
aforementioned unallocated and contingent shares and the dilutive effect of
stock options, is based on 21,766,000, 22,216,000 and 22,129,000 common shares
outstanding in 1998, 1997 and 1996,respectively.  In addition, net income/
(loss) is increased/(decreased) due to a reduction in interest and amortization
charges of $4,237,000, $4,392,000 and ($4,396,000) for the years ended July 31,
1998, 1997 and 1996, respectively.

Recently Issued Accounting Standards:  In June 1997, the FASB issued SFAS
No. 130, "Reporting Comprehensive Income," which is effective for the Company's
fiscal year ending July 31, 1999.  the statement addresses the reporting and
displaying of comprehensive income and its components.  Adoption of SFAS
No. 130 is not expected to have a material effect on the Company's financial
statement disclosures.

In June 1997, the FASB also issued SFAS No.131, "Disclosures About Segments of
an Enterprise and Related Information," which is effective for the Company's
fiscal year ending July 31, 1999.  The statement changes the way public
companies report information about segments of their business in their annual
financial statements and requires them to report selected segment information
in their quarterly reports.  Adoption of SFAS No. 131 is not expected to have
a material effect on the Company's financial statement disclosures.









NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996

In June 1998, the FASB issued Statement No. 133, accounting for Derivative
Instruments and Hedging Activities, which is effective for the Company's
fiscal year ending July 31, 2000.  The Statement permits early adoption as of
the beginning of any fiscal quarter after its issuance.  The Company expects
to adopt the new Statement effective August 1,1999.  The Statement will
require the Company to recognize all derivatives on the balance sheet at fair
value.  Derivatives that are not hedges must be adjusted to fair value through
income.  If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the hedged
item is recognized in earnings.  The ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings.  The Company
has not yet determined what the effect of Statement 133 will be on the earnings
and financial position of the Company.

NOTE 2--ACQUISITIONS

In July 1998, the Company acquired the hot beverage business of Park Foods LLP
("Park") for an adjusted purchase price of approximately $11,300,000 which
includes $750,000 for contingent payments.  Park's business consists primarily
of sales of coffee, cappuccino, cocoa and leaf tea to a nationwide customer
base.  In connection with the acquisition, which has been accounted for as a
purchase transaction, the Company acquired identifiable net tangible and
intangible assets with an estimated fair value of approximately $5,300,000.
The excess of cost over net assets acquired (approximately $6,000,000) is
being amortized over a period of 40 years using the straight-line method.
The Company used its existing cash to fund the purchase price.  The Company
is still gathering certain information required to complete the allocation of
the purchase price.  Further adjustments may arise as a result of the
finalization of the ongoing study.

The following unaudited pro forma results of operations assume the acquisition
of Park occurred at the beginning of fiscal 1997 and give effect to certain
adjustments, including amortization of excess of cost over net assets acquired
and reduced interest income, resulting from the acquisition and related cash
funding.  Amounts for 1998 and 1997 include the pre-acquisition results of
operations for Park for the year ended June 30, 1998 and 1997. The results are
not necessarily indicative of what actually would have occurred if the
acquisition had been in effect for the entire period presented.

Year Ended July 31
(in thousands,
except per share)                               1998              1997
Net sales                                   $461,523          $415,540     
Net income                                     5,740             8,629
Net income per share:			
   Basic                                         .55               .83 
   Diluted                                       .46               .59

















NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996

In January 1997, the Company acquired substantially all of the assets and
assumed substantially all of the liabilities of Ireland Coffee & Tea Company,
a leading roaster and distributor of coffees to hotels, restaurants and
institutions on the East Coast for approximately $8,000,000 which includes
$1,500,000 for contingent payments.  In connection with the acquisition which
is being accounted for as a purchase, the Company acquired identifiable net
tangible and intangible assets with an estimated fair value of approximately
$3,900,000.  The excess of cost over net assets acquired (approximately
$4,100,000) is being amortized over a period of 40 years using the straight-
line method.  The pro forma effects on the Company's operations as if this
business had been acquired on August 1, 1995 are not material.


NOTE 3--LONG TERM DEBT

Long-term debt consists of the following:
                                                      JULY 31,
                                                     1998             1997
     7% Convertible senior subordinated
       debentures due 2012                   $ 51,693,000     $ 51,693,000
     8% Convertible subordinated debentures
       due 2006                                37,240,000       43,266,000
     Revolving credit and term loan             3,313,967       11,872,753
                                               92,246,967      106,831,753      
     Less current installments                 __________          766,000  
                                             $ 92,246,967     $106,065,753

The 7% and 8% debentures require annual sinking fund payments of $3,000,000
and $3,750,000, respectively, which after giving effect to previous
conversions and redemptions, commence April 1, 2000 and September 15, 1999,
respectively, and provide for balloon payments of $18,000,000 and $12,500,000
on April 1, 2012 and September 15, 2006, respectively.  The debentures are
convertible at the option of the debenture holders into shares of the Company's
common stock at a price of $8.23 per share and $7.81 per share, respectively
(subject to adjustment). As of July 31, 1998, approximately 11,049,000 common
shares are reserved for issuance upon conversion of debentures.

Under the Company's amended and restated revolving credit and term loan
agreements (collectively the "Loan Agreements") with Fleet Bank, N.A. and
The Chase Manhattan Bank (the "Banks"), the Company may, from time to time,
borrow funds from the Banks, provided that the total principal amount of all
such loans outstanding through November 30, 1998 may not exceed $40,000,000
and after such date may not exceed $20,000,000. Interest on all such loans is
equal to the prime rate or at the Company's option the London Interbank
Offering Rate ("LIBOR") plus 1.75%, subject to adjustment based on the level
of loans outstanding (8.5% at prime and 7.44% at LIBOR, at July 31, 1998).
Outstanding borrowings under the Loan Agreements may not exceed certain
percentages of and are collateralized by, among other things, the trade
accounts receivable and inventories, and substantially all of the machinery
and equipment and real estate of the Company and its subsidiaries.  All loans
made under the term loan agreement ($3,000,000 at July 31, 1998) are to be
repaid in December 1999. Outstanding loans under the revolving credit a
agreements are to be repaid in December 1999.  Pursuant to the terms of the
Loan Agreements, the Company and its subsidiaries, among other things, must
maintain a minimum net worth and meet ratio tests for liabilities to net worth
and coverage of fixed charges and interest, all as defined. The Loan




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996


Agreements also provide, among other things, for restrictions on dividends
(except for stock dividends) and require repayment of outstanding loans with
excess cash flow, as defined.

As of July 31, 1998, long-term debt matures as follows:  $6,246,967 (year
ending July 31, 2000),$6,750,000 (years ending July 31, 2001, 2002, and 2003)
and $65,750,000 thereafter.

The Company believes that the fair value of its 7% and 8% convertible
subordinated debentures approximates $50,659,000 and $37,240,000,
respectively, as indicated by the public trading prices of such debt.


NOTE 4--INCOME TAXES
The provision for income taxes for continuing operations differs from the
expected Federal income tax for the reasons shown in the following table:

                                              1998         1997          1996 
  Federal income tax provision
    expected at the statutory rate       $3,219,800  $4,152,213    $2,620,504   
  Effect on Federal income tax of:
    State and local income taxes,                        
	net of Federal income tax 
	benefit                             467,940     496,980       322,080        
    Amortization of excess of cost 
	over net assets acquired             69,020      68,000        68,000         
    Other                                   214,240     347,807        65,416 
    Realization of prior year capital 
        loss not previously recorded      _________    (767,000)    _________ 
                                         $3,971,000  $4,298,000    $3,076,000 

Deferred tax liabilities and assets are comprised of the following at July 31,
                                                       1998         1997
   Net deferred non-current tax liabilities:                
     Net difference between tax and book basis       
        of property, plant and equipment         $8,477,000     $7,755,000     
     Prepaid pension expense                      1,143,000        779,000  
     Compensation under stock bonus plan, 
       employees' stock ownership plan and
         other qualified plans                     (501,000)      (387,000)  
     Other                                         (349,000)      (492,000)  
                                                 $8,770,000     $7,655,000     
   Net deferred current tax assets:
     Net difference between tax and book
        basis of inventory                         $339,000       $356,000   
     Allowance for doubtful accounts and discounts  485,000        463,000    
     Accrued expenses - close-down                   28,000        169,000    
     Accrued cash bonus                              20,000        208,000
     Other                                           79,000         72,000   













NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996
 

NOTE 5--DISCONTINUED OPERATIONS

In October 1996, the Company's Board of Directors adopted a plan to discontinue
operations of the Chock Cafes. Accordingly, the operating results of the Chock
Cafe operations,  including provisions for estimated lease termination costs,
employee benefits and losses during the phase-out period of approximately
$1,800,000 and a write-off of leasehold improvements and equipment and
deferred charges of approximately $5,200,000 have been segregated from
continuing operations and reported as a separate line item on the statement
of operations. During the years ended July 31, 1998 and 1997, respectively,
approximately $480,000 and $1,250,000 were charged against the previously
established reserves.
 
Operating results for the year ended July 31, 1996 (exclusive of any corporate
charges or interest expense and the aforementioned provisions)from discontinued
operations are as follows: Net sales $3,783,397; Cost of sales $5,903,142;
Selling, general and administrative expenses $710,299; Operating loss
$2,830,044; Income tax credits $1,073,000; and Loss from operations $1,757,044.



NOTE 6 -- LEASES 

The Company and subsidiaries lease manufacturing plants, warehouses, office
space and  Quikava locations and related premises. Leases which provide for
payment of property taxes, utilities and certain other expenses, expire on
various dates through 2009 and contain renewal options. As of July 31, 1998,
the Company's obligation for future minimum rental payments, assuming the
 exercise of renewal options, aggregated $17,674,000. Payments required in
 the following five fiscal years amount to $4,654,000 (1999), $3,983,000
 (2000), $2,747,000 (2001),$1,577,000 (2002) and $1,115,000 (2003). Rental
 expense charged to continuing operations under operating leases for the years
 ended July 31, 1998, 1997 and 1996 was $4,531,000, $4,751,000 and
 $4,150,000, respectively.

As of July 31, 1998, future minimum rental payments due from tenants under
sub-leases of retail facilities and related premises aggregated $16,313,000.
Amounts receivable in the following five fiscal years amount to $2,000,000
(1999), $2,014,000 (2000), $1,954,000 (2001), $1,820,000 (2002) and
$1,778,000(2003).






















NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996


NOTE 7--STOCKHOLDERS' EQUITY

A non-contributory employee stock ownership plan ("ESOP") acquires shares of
the Company's common stock for the benefit of all eligible employees. The
Company has made loans to the ESOP to be repaid in equal annual installments
over 8 years with interest primarily at 9% and 10%. Deferred compensation
equal to the loans has been recorded as a reduction of stockholders' equity
representing the Company's prepayment of future compensation expense.  As the
Company makes annual contributions to the ESOP, these contributions will be
used to repay the loans to the Company, together with accrued interest, and
common stock is allocated to ESOP participants and deferred compensation is
reduced.

As of December 30, 1997, the Company's Board of Directors extended the
Company's Shareholder Rights Plan through December 30, 2007.  The original
Shareholder Rights Plan was adopted in 1987 and would have expired on December
 30, 1997.  The Company's Shareholder Rights Plan is designed to deter
 coercive or unfair takeover tactics and to prevent a person or group from
 gaining control of the Company without offering a fair price to all
 shareholders. The Company's Shareholder Rights Plan provides for distribution
 to shareholders of a right to purchase one share of the Company's common
 stock currently for $28 (subject to anti-dilution adjustments) as a dividend
 on each of the Company's outstanding common shares. These rights are not
 currently exercisable and will only become exercisable upon the happening of
 certain events. Under certain circumstances, the rights entitle the holders
 to receive, upon payment of the then current exercise price of the right,
 that number of shares of Company common stock having a market value of two
 times the then current exercise price of the right. The rights are redeemable
 at $.01 per right at any time prior to the occurrence of certain events.

The Company's incentive compensation plan provides, among other things, for
incentive or non-qualified stock options, stock appreciation rights,
performance units, restricted stock and incentive bonus awards.  During the
years ended July 31, 1998 and 1996, respectively, non-qualified stock options
for the purchase of 53,000 and 16,000 shares, at prices of $6.94 and $5.25
per share were granted to key executives under the plan. During the year ended
July 31, 1998 options to purchase 8,500 shares with an exercise price of $8.50
per share were forfeited.  At July 31, 1998, there were outstanding options
for 401,000 shares with an average exercise price of $6.52 per share. Options
granted are exercisable at the fair market value at date of grant and, subject
to termination of employment (a) expire five years from the date of grant with
respect to the fiscal 1998 grants and (b) expire ten years from the date of
grant with respect to all prior grants, are non-transferable other than on
death, and are exercisable in three equal annual installments commencing (a) one
year from date of grant with respect to the fiscal 1998 grants (b) three years
 from date of grant with respect to all prior grants.



















NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996


Had compensation cost for the Company's stock option plan been determined
based on the fair market value at the grant date for awards in 1998 and 1996
consistent with the provisions of SFAS 123, the Company's net income would
have been reduced by approximately $25,000 in 1998 and $1,000 in 1997 and net
loss would have been increased by approximately $2,000 in 1996, with no affect
on per share amounts.  These pro forma amounts may not be representative of
future disclosures since the estimated fair value of stock options is amortized
to expense over the vesting period, and additional options may be granted in
future years. The fair value for the options awarded was estimated at the date
of grant using the Black-Scholes model with the following assumptions:
expected dividend yield - 0, expected stock price volatility : 1998 - 24%,
1997 and 1996 - 22%, risk-free interest rate: 1998 - 5.69%, 1997 - 6.15% and
1996 - 5.34% and expected life of options - 4 years.

Under the incentive compensation plan, as of July 31, 1998, 31,000 common
shares are outstanding which were issued to key executives in 1987 and 1988.
These shares are subject to restricted stock agreements which provide that
the shares will vest ratably over periods through 2001. Such shares are
subject, upon the occurrence of certain events, to either forfeiture or
accelerated vesting.  The fair value of the shares on the dates of issuance
is being charged to operations as compensation during the period the
restrictions remain in effect.  At July 31, 1998, 76,500 shares were available
under the plan.

NOTE 8--PENSION PLANS

The Company has non-contributory defined benefit pension plans covering all
employees who have completed six months of service, have attained age twenty
and one-half and are not covered by union-sponsored plans. The benefits are
based on years of service and the employee's compensation during the last 60
months of employment. The pension plans are funded to accumulate sufficient
assets to provide for accrued benefits.  In addition, contributions are made
to multi-employer plans which provide defined benefits to union employees.

A summary of the components of net periodic pension cost for the defined
benefit plans for the three years ended July 31, 1998 and total contributions
charged to pension expense for the union-sponsored plans follows (in
thousands):
                                                 1998         1997      1996
        Service cost-benefits earned
          during the year                      $1,886       $1,681    $1,729
      Interest cost on projected benefit        
        obligation                              2,441        2,246     1,985 
      Actual return on plan assets             (2,370)      (2,021)   (1,866)
      Net amortization and deferral               174          211       144
      NET PENSION COST OF DEFINED BENEFIT               
        PLANS                                   2,131        2,117     1,992  
      UNION-SPONSORED PLANS                       339          335       319   
      TOTAL PENSION EXPENSE                    $2,470       $2,452    $2,311  













NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996

The following table sets forth the funded status and amounts recognized in
the consolidated balance sheet at July 31, for the defined benefit pension
plans (in thousands):               1998              1997
                                        Plans Whose      Plans Whose     
                                        Assets Exceed    Assets Exceed   
                                        Accumulated      Accumulated     
                                        Benefits         Benefits           
Actuarial present value of
 benefit obligations:
 Vested benefit obligation              $ (29,263)       $ (27,641)     
 Accumulated benefit
  obligation                            $ (29,937)       $ (27,967)
 Projected benefit	
  obligation                            $ (33,991)       $ (31,141)        
 Plan assets, consisting
  primarily of U.S. 
  treasury notes, other 
  U.S. agency issues, 
  guaranteed insurance
  contracts and corporate 
  investments, at fair 
  value                       	 	   31,923           29,404  
Projected benefit obligation        	        
 (in excess of)plan assets       	   (2,068)          (1,737)           
Unrecognized prior service cost               333              280             
Unrecognized net loss                       6,862            5,586       
Unrecognized net asset at 
 August 1, 1987; net of 
 amortization                                (397)            (484)            
Net pension asset                                   
 recognized in the consolidated
 balance sheet                             $4,730           $3,645       

The weighted-average discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of the projected
benefit obligation were 7.5% and 4% and 8% and 4%, respectively, at July 31,
1998 and 1997.  The expected long-term rate of return on plan assets was 8.0%
in 1998, 1997 and 1996, respectively.


During fiscal 1998, the Company adopted an unfunded supplemental executive
retirement plan for certain key executives.  The plan provides for benefits
that supplement those provided by a defined benefit plan and for immediate
funding in the event of a change in control of the Company (as defined).  At
July 31, 1998, the projected benefit obligation for this plan was
approximately $450,000 and expense for this plan was approximately $50,000.



















NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O'NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996


NOTE 9--QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of the unaudited quarterly results of operations 
for the years ended July 31, 1998 and 1997:


				
                                             Fiscal 1998    
                                         Three Months Ended
                           October 31 January 31   April 30    July 31
                           (Thousands of Dollars Except Per Share Data)

Net sales                  $108,275   $102,124     $95,896     $88,062

Gross profit                $26,740    $26,529     $25,026     $22,757

  Net income/(loss)          $1,568     $2,685      $1,313        $(67)

Per share:
  Basic                       $ .15      $ .26 (1)   $ .13      $ (.01)

  Diluted                     $ .12      $ .17 (1)   $ .11      $ (.01)

                                               Fiscal 1997
                                            Three Months Ended
                           October 31 January 31   April 30    July 31
                           (Thousands of Dollars Except Per Share Data)

Net sales                   $82,577    $84,242     $95,306     $102,079

Gross profit                $23,421    $25,787     $29,110      $28,807

  Net income                $ 1,451    $ 1,748     $ 2,236      $ 2,479 (2)

Per share:
  Basic                       $ .14      $ .17       $ .21        $ .24 (2)

  Diluted                     $ .11      $ .13       $ .15        $  16

1) Includes gain on sale of real estate of $725,000 or $.07 per basic share and
$.03 per diluted share (see Note 10(c)).

(2) Includes write-off of $1,500,000
relating to litigation, $.09 per basic share and $.05 per diluted share and
$767,000 income tax credit relating to realization of prior year capital loss
not previously recorded , $.07 per basic share and $.03 per diluted share,
(see Notes 10(d) and 4).




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
July 31, 1998, 1997 and 1996

NOTE 10--OTHER ITEMS

a. 	Receivables other than trade at July 31,1998 and 1997 amount to 
	$4,352,000 and $576,000, respectively.  The 1998 amount includes
        $2,400,000 from the seller of Park resulting from an adjustment to
        the purchase price (see Note 2) and the amount of an insurance claim
        (see Note 10(e)).

b.	Other assets and deferred charges consist of (in thousands):

    July 31,                                         1998             1997

Deferred financing costs (1)                       $2,051	    $2,460        
Non-compete agreements, net                           854	     1,424         
Trademarks, net                                     5,062	     5,207        
Customer lists, net                                 2,359	     3,512         
Due from co-packer                                  2,574	     1,711          
Prepaid pension expense                             4,730	     3,645         
Other                                               5,593	     5,840
                                                  $23,223          $23,799 

				

(1) Being amortized over the terms of the related indebtedness (see Note 3).

c. In November 1997, the Company consummated the sale of one of its downtown
   Manhattan properties for $6,900,000, resulting in an after tax gain of
   $725,000.

d. In connection with closing a business and termination of a pension plan the
   Company paid a liability for an underfunded pension plan of approximately
   $1,500,000 and recorded a similar amount receivable at July 31, 1994 from
   the previous owner of such business pursuant to certain provisions of the
   acquisition agreement.  The previous owner of the business contested the
   liability to the Company and the Company commenced litigation seeking
   collection of such amount.  In August 1997, the United States District
   Court Southern District of New York granted the previous owner's motion
   for summary judgment. The Company then appealed the decision to the Second
   Circuit. However, due to the then uncertainty surrounding the outcome of
   such appeal and in light of the aforementioned decision, the Company wrote-
   off the $1,500,000 due from the previous owner. Such amount is included in
   other deductions in fiscal 1997.  In August 1998, the Second Circuit
   affirmed the decision of the District Court.

e. Other deductions in fiscal 1998, includes a $650,000 charge for the write-
   off of leasehold improvements and equipment and provision for estimated
   lease termination costs related to the Quikava operations.  Other income
   in fiscal 1998, includes $570,000 of income resulting from an insurance
   claim of approximately $1,000,000 (the balance is shown as a reduction of
   cost of sales) related to the unauthorized distribution of inventory.


NOTE 11 -- INDUSTRY SEGMENT INFORMATION

The Company's financial information by industry segment for 1998, 1997 and 
1996 may be found immediately after "Managements Discussion and Analysis of
Financial Condition and Results of Operations."









SELECTED FINANCIAL DATA 
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES

			 _________________YEAR ENDED JULY 31__________________          
                                  1998      1997      1996      1995      1994
			(Dollar Amounts in Thousands, Except Per Share Amounts)

Net sales                     $394,357  $364,204  $321,135  $326,141  $263,511
Income from
  continuing operations          5,499     7,914     4,631     6,738     8,243
Working capital                 92,229    99,086    87,053    89,612    81,590
Working capital ratio         5.9 to 1  4.5 to 1  4.7 to 1  4.3 to 1  3.6 to 1
Total assets                   201,184   217,330   199,435   207,005   208,807
Long-term debt                  92,247   106,066   105,235   106,569   110,427
Stockholders' equity            77,555    71,881    63,487    64,937    58,262
Per common share (1):
 Income from continuing
   operations:
   Basic                           .53       .76       .45       .65       .80
   Diluted                         .45       .55       .41       .51       .57
   Stock dividends distributed                                     3%        3%
   Stockholders' equity           7.16      6.70      5.91      6.05      5.43
   ________________________

   (1)  Per share data has been retroactively adjusted for a 3% stock dividend
   in July 1995 and 1994.

FORWARD-LOOKING STATEMENTS

Certain statements under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and elsewhere in this Form
10-K and in the letter of the President and Chief Executive Officer and
Chairman of the Board and elsewhere in the Company's Annual Report to
Shareholders, constitute "forward looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward looking
statements are based on current expectations and information available to
management at this time.  They may involve known risks, uncertainties, and
other factors which may cause the actual results, performance or achievements
 of the Company to be materially different from any future results,
 performance or achievements expressed or implied by such forward looking
 statements. Factors which could cause actual results to differ from the
 forward looking statements include, among others, the following: general
 economic and business conditions; the availability of green coffee; green
 coffee prices; competition; the success of operating initiatives; development
 and operating costs, including green coffee prices; advertising and
 promotional efforts; brand awareness; the existence of or adherence to
 development schedules; the existence or absence of adverse publicity;
 availability, locations and terms of sites for Quikava franchised outlets;
 changes in business strategy or development plans; quality of management;
 availability, terms and deployment of capital; business abilities and
 judgment of personnel; availability of qualified personnel; labor and employee
 benefit costs; changes in or the failure to comply with government
 regulations; construction costs, and the Year 2000 issue.

















MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES


RESULTS OF OPERATIONS

The discussion and analysis that follows relates solely to continuing
operations of the Company. Net income for 1998 and 1997, is the same as the
results from continuing operations.

Net sales from beverage products increased to $390,731,000 or 8.4% for the
year ended July 31, 1998 compared to $360,467,000 for the prior year.  The
increase was primarily due to increases in the average selling price of coffee
and to a lesser extent a 2.8% increase in coffee pounds sold. Operating profit
from beverage products was $17,854,000, a decrease of 24% for the year ended
July 31, 1998 compared to the prior year.  The decrease resulted primarily
from decreased gross margins attributable to an increase in the average cost 
of green coffee greater than the increase in the average selling price of
coffee and increased manufacturing costs, partially offset by increased coffee
pounds sold and increased  sales of allied products.  During the year ended
July 31, 1998 prices for green coffee ranged from a high of $2.11 to a low of
$1.06 per pound.  Selling ,general and administrative expenses decreased
slightly primarily due to reduced coupon, compensation and bad debt costs and
decreased amortization of purchased intangibles, partially offset by increased
advertising, delivery and legal costs.  Certain of the Company's selling
expenses vary with the number of pounds sold, therefore these selling
expenses have increased in 1998 compared to 1997.

Quikava's growth plans involve franchising the concept, thereby generating
initial franchise fees and continuing royalty income to cover headquarters'
expenses.  Franchise operated shop sales were $3,531,000 for the year ended
July 31, 1998 versus $2,437,000 an increase of 45% over 1997.  Quikava
company-operated shop sales were $3,626,000 for the year ended July 31, 1998
compared to $3,737,000 in 1997.  Company operated shops generate potential
franchise interest and gain exposure to the concept.  Operating losses
amounted to $1,781,000 for the year ended July 31, 1998, compared to
$1,998,000 in the prior year.  The operating losses consist primarily of
headquarters' expenses (primarily payroll and related expenses for franchising
infrastructure) and shop level losses, partially offset by initial franchise
fee income in 1998 and royalty income on franchisee sales.

Net income was $5,499,000 ($.53 per basic share and $.45 per diluted share)
for the year ended July 31, 1998, compared to $7,914,000 ($.76 per basic share
and $.55 per diluted share).  The difference was primarily due to reduced
operating profits from beverage products and to lesser extent reduced interest
income (resulting from decreased invested funds), partially offset by decreased
income taxes (attributable to decreased income before income taxes), the
unfavorable litigation result in fiscal 1997, the gain on sale of real estate
in 1998 ($.07 per basic share and $.03 per diluted share) and to a lesser
extent reduced interest expense (resulting from reduced amounts of debt
outstanding in the second half of the year).












In January 1997, the Company acquired substantially all of the assets and
assumed substantially all of the liabilities of Ireland Coffee and Tea Company
("Ireland"). The business of Ireland consists of roasting and distributing
coffees to hotels, restaurants and institutions on the East Coast.

Net sales from beverage products increased $41,254,000 or 13% for the year
ended July 31, 1997, compared to the prior year. The increase was primarily
due to a 15% increase in coffee pounds sold. Operating profits from beverage
products were $23,498,000, an increase of 41% for the year ended July 31, 1997
compared to the prior year. The increase resulted primarily from increased gross
margins and the operations of Ireland from date of acquisition, partially
offset by increased selling, general and administrative expenses. Increased
gross margins were primarily due to increased coffee pounds sold and a decrease
 in the average cost of green coffee.  During the year ended July 31, 1997
 prices for green coffee ranged from a high of $3.15 to a low of $1.03 per
 pound. Selling, general and administrative  expenses increased primarily due
 to increased advertising, brokerage and data processing costs and salaries.
 Certain of the Company's selling expenses vary with the number of pounds sold,
 therefore these selling expenses have increased in 1997 compared to 1996.

 Net sales of Quikava franchise operated shops increased to $2,437,000 for the
 year ended July 31, 1997 from $1,747,000 in the prior year.  Company operated
 shops with net sales of $3,737,000 (fiscal 1997) and $1,922,000 (fiscal 1996)
 were opened in new markets to generate potential franchisee interest and gain
 exposure to the concept. Operating losses increased to $1,998,000 for the year
 ended July 31, 1997 compared to $1,649,000 in the prior year.  The increase in
 operating losses consists primarily of increased headquarters' expenses
 (primarily payroll and related expenses for franchising infrastructure and
 pre-opening costs) and increased shop level losses (primarily due to the
 number of shops open less than 12 months), partially offset by increased
 royalty income on increased franchisee sales.  The first year shops opening
 in new markets with lack of brand recognition resulted in slower sales growth
 and greater shop level losses than established comparable shops.

Income from continuing operations was $7,914,000 or $.76 per basic share and
$.55 per diluted share for the year ended July 31, 1997, compared to
$4,631,000 or $.45 per basic share and $.41 per diluted share for the prior
year.  The difference was primarily due to increased operating profits from
beverage products and to a lesser extent increased interest income (resulting
from increased invested funds in the early part of fiscal 1997) and reduced
interest expense (resulting from lower amounts of debt outstanding), partially
offset by increased income taxes, the write-off of amounts due from the
previous owner of an acquired business due to the result of unfavorable
litigation and increased operating losses from Quikava. Increased income taxes
are primarily attributable to increased income before income taxes, partially
offset by realization of a prior year capital loss not previously recorded.
The net loss for 1996 is due to a loss from discontinued operations of
$6,167,000 or $.60 per basic share and $.28 per diluted share (see Note 5 of
Notes to Consolidated Financial Statements).

General inflation has been relatively low for the last several years; however,
green coffee prices have changed significantly during fiscal 1998, 1997 and
1996. While the Company manages its inventory to have rapid turnover, the
changes in green coffee prices have required the Company at times to carry
higher inventories (dollars) than it might otherwise have done in a more
stable green coffee market and impacted the Company's gross profit percentage.












LIQUIDITY AND CAPITAL RESOURCES

As of July 31, 1998, working capital was approximately $92,229,000 and the
ratio of current assets to current liabilities was 5.9 to 1.

As of July 31, 1998, the Company had unused borrowing capacity of approximately
$37 million under its credit facilities of $40 million with  Fleet Bank,  N.A.
and The Chase Manhattan Bank (see Note 3 of Notes to Consolidated Financial
Statements).

The Company plans on expanding its Quikava franchised operations, which are
currently operating in 30 locations. The sales of Company operated and
franchised units are not material to the Company's consolidated sales.  Total
Quikava store level operations are not currently profitable but are being
offset by franchise income and, in addition, Quikava headquarters' expenses
of approximately $1,100,000 on an annual basis are not being absorbed.

The Company believes that its cash flow from operations, its cash equivalents
and its revolving credit and term loan agreements with its Banks provide
sufficient liquidity to meet its working capital, expansion and capital
requirements.

GREEN COFFEE MARKET

Coffee is one of the leading commodities traded on futures exchanges. Supplies
fluctuate with the weather and prices can be and have been volatile. The
supply and price is affected by multiple factors, such as weather, weather
forecasts, consumption trends, changes in stock levels, export restrictions
observed by members of the Association of Coffee Producing Countries ("ACPC"),
activities of hedge funds, politics and economics in the coffee producing
countries, many of which are lesser developed nations. While coffee trades
primarily on the futures market, coffee of the quality level sought by the
Company can trade on a negotiated basis at a substantial premium above
commodity coffee pricing, depending upon the supply and demand at the time of
purchase.

In the sixties some coffee exporting countries plus a group of coffee
importing countries together formed the International Coffee Organization
("ICO").  The principal aim of the organization was to stabilize coffee prices
in the world market. One of the instruments which the ICO used to achieve
this goal was a system allocating an export quota to each of the coffee
producing countries.  In July 1989, this system was abandoned due to
disagreements involving several exporting as well as importing countries. In
1994, a new International Coffee Agreement came into force which no longer
included the price stability mechanism.  As a consequence, the function of
the ICO changed.  This organization now provides a forum where exporting and
importing countries can discuss matters pertaining to coffee.  In addition,
the ICO publishes statistics about the coffee market and has become an
administrative organization.

When the export quota system was abandoned in 1989, coffee prices declined in
the global market.  Certain exporting countries were dissatisfied with the new
situation and tried to regain their grip on the international coffee market.
In 1993, they established the ACPC to boost coffee prices in the global market
by keeping part of annual production out of the world market.  The ACPC members
account for around 70% of world coffee exports.  The ACPC attempts to achieve
 better prices by agreeing on export quotas for each member country and an
 export volume ceiling for the organization as a whole.
 
The effect of the ACPC on coffee prices is difficult to determine in light of
the dramatic price increases resulting from the 1994 frosts in Brazil
discussed below.  Nonetheless, the ACPC met in November 1994 and resolved to
sustain green coffee prices.  In January 1996, the ACPC agreed to extend its
current limitations on the supply of green coffee which were scheduled to
expire in June 1996 through the 1996/1997 green coffee year.  No further
actions have been taken by the ACPC subsequent to that date. The Company is
unable to predict whether the ACPC will be successful in achieving its goals.
Based on published statistics the supplies of green coffees held by consumers
(roasters and buyers) are currently near historically low levels.

Brazil, the world's largest coffee producer, experienced frosts in June and
July of 1994 which reportedly damaged approximately 40% of the green coffee
crop. The announcement of the Brazilian frost damage caused a substantial
increase in green coffee prices and other coffee-product prices worldwide.
The Company purchases a modest amount of its green coffee from Brazil. In the
third and fourth quarter of 1994 the Company experienced a significant
increase in the price of green coffee which carried over into the first three
quarters of 1995. The Company was not able to immediately pass through to
customers all of the price increases in the third and fourth quarters of 1994
and the first quarter of 1995 following the significant increase in green
coffee prices that resulted from the Brazilian frosts.  Subsequent to such
period through January 1997, the Company's green coffee purchases and
commitments returned to pricing levels closer to those that existed prior to
aforementioned frosts. In February 1997, green coffee prices began to rise
significantly reaching a high of $3.18 per pound in May 1997. This bull
market was somewhat unique in that the fundamental cause was very tight
stocks of arabica coffee in consuming countries. Historically, bull markets
have been the direct result of weather developments in Brazil, specifically
cold weather and drought that damages the following crop.

During fiscal 1998, the green coffee market has been in the $1.09 to $2.11
per pound range, most recently at the lower end of this range.  From August
1997 until February 1998, coffee remained relatively high, most of the time
at above $1.70 per pound, when a fast, substantial and sustained drop occurred,
caused by a significantly large Brazilian crop.  This left the Company with
large quantities of high-priced inventory while sales slowed as retailers
waited for the green coffee market to effect the price they pay for roasted
coffee and pressure intensified as major competitors cut prices in response.
The result was lower net income in the third quarter of fiscal 1998 compared
to the first and second quarters and an approximate break-even in the fourth
quarter.

The Company is unable to predict weather events in particular countries that
may adversely affect coffee supplies and price. Except for late 1994 and
early 1995, the Company generally has been able to pass green coffee price
increases through to its customers, thereby maintaining its gross margins.
The Company cannot predict whether it will be able to pass inventory price
increases through to its customers in full in the future.

A significant portion of the Company's green coffee supply is contracted for
future delivery, generally between three and twelve months forward (with
declining percentages of the supply being subject to future contracts in the
latter portions of each year), to ensure both an adequate supply and reduce
the risk of price fluctuations. In addition, the Company uses options and
futures for hedging purposes to reduce the risk of changing green coffee
prices.  Green coffee is a large market with well-established brokers,
importers and warehousemen though which the Company manages its requirements.
In addition to forward purchases, the Company keeps physical inventory in each
of its production facilities and third-party warehouses representing anywhere
from four to ten weeks of supply requirements.

All coffee purchase transactions are in U.S. dollars, the industry's standard
currency.  The Company believes that it is not dependent upon any one
importer or broker for its supply of green coffee from any particular country.

Retail Customers are very price-sensitive about the purchase of coffee in
supermarkets. When retail prices increase dramatically, take away declines and
consumers switch to less expensive brands and high yield roasts. Likewise,
Foodservice Customers in times of price increase tend to stretch the use of
inventory.






Year 2000 Issue

In 1998, the Company established an oversight committee, to review all of the
Company's computer systems and programs, as well as the computer systems of
the third parties upon whose data or functionality the Company relies in any
material respect, and to assess their ability to process transactions in the
Year 2000.  The Company has a formal Year 2000 Program focusing on three key
readiness areas: 1) Internal hardware/software and non-information technology
systems; 2) Supplier readiness; and 3) Customer readiness.  For each readiness
area, the Company has identified steps to perform and developed timetables for
Year 2000 compliant.  The Company has conducted an assessment of internal
applications and hardware.  Some software applications have been made Year
2000 compliant and resources have been assigned to address other applications
based on their criticality and the time required to make them Year 2000
compliant.  All software remediation is scheduled to be completed no later
than the beginning of 1999.  The Year 2000 compliant evaluation of hardware,
including roasters, grinders, bagging machines, telecommunication equipment,
workstations and other items, is nearing completion.  The Company has
identified and contacted key suppliers.  To date, the Company has received
responses from the majority of its key suppliers, most of which indicate that
the suppliers are in the process of developing remediation plans.  Based on
the supplier's progress to adequately address the Year 2000 issue, the Company

will develop a suppliers action list and contingency plan.  The Company has
identified and been in contact with key customers.  The customers have
responded that they are or will be Year 2000 compliant.

The Company has expensed approximately $350,000 for Year 2000 costs in fiscal
1998 and estimates future expenditures for Year 2000 compliance to be
approximately $275,000.  There can be no assurance, however, that there will
not be a delay in, or increased costs associated with, the programs described
in this section.  Since the programs described in this section are ongoing,
all potential Year 2000 complications have not yet been identified. 
Therefore, the potential impact of these complications on the Company's
financial condition and results of operations cannot be determined at this
time.  If computer systems used by the Company, its suppliers or customers
fail or experience significant difficulties related to the Year 2000, the
Company's results of operation and financial condition could be materially
affected.




SEGMENT INFORMATION
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES

					___________Year Ended July 31_______   
                                                  1998        1997       1996   
						(Amounts in Thousands)								   
Net sales - Beverage products                 $390,731    $360,467   $319,213
Net sales - Quikava                              3,626       3,737      1,922
                                              $394,357    $364,204    321,135

Rental revenues                               $  2,011    $  2,091   $  2,156

Operating profit\(loss):
    Beverage products                         $ 17,854    $ 23,498   $ 16,708
    Quikava                                     (1,781)     (1,998)    (1,649)
    Real estate                                    260         140        671
    Eliminations                                  (703)       (393)      (625)
                                              $ 15,630    $ 21,247   $ 15,105
Identifiable assets:
    Beverage products                         $171,642    $186,304   $152,168
    Quikava                                      4,198       4,835      4,720
    Real estate                                  3,901       9,356      9,493
    Corporate                                   21,443      16,835     33,054
                                              $201,184    $217,330   $199,435
Depreciation and amortization:
    Beverage products                         $  6,170    $  6,843   $  6,006
    Quikava                                        378         366        197
    Corporate                                      177         177        177
                                              $  6,725    $  7,386   $  6,380

Capital expenditures:
    Beverage products                         $  6,648    $  5,154   $  4,831
    Quikava                                        170         953      2,566
    Corporate                                      108          17         14
                                              $  6,926    $  6,124   $  7,411


______________________


The beverage products segment is engaged in the (a) roasting, packing and
marketing of regular, instant, decaffeinated and specialty coffees and (b)
packing and marketing of regular and decaffeinated tea for sale to Retail,
Foodservice and Private Label customers.  Additionally, other related food
products are marketed and sold to Foodservice customers. Quikava operations
feature a full assortment of specialty coffee beverages and a variety of
freshly prepared foods and baked goods specifically suited for in-car
consumption. See Note 5 of Notes to Consolidated Financial Statements for
discontinued cafe operations. Operations of real estate represent rental and
other income principally from the Company's original restaurant facilities.


All of the Company's operations are located in the United States. Export
sales are not significant.

Identifiable assets under the caption "Corporate" include (1) cash and cash
equivalents, investments in marketable securities and short-term investments
of $5,214,000 (1998), $3,781,000 (1997) and  $15,180,000 (1996) and (2) net
assets of discontinued operations of $895,000 (1997) and $941,000 (1996).




CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES COMMON SHARE PRICES

The Company's Common Stock is traded on the New York Stock Exchange under
the symbol CHF.  The Company has approximately 14,000 shareholders of 
record as of October 8, 1998.

                                        _____1998____        _____1997____    

                                        High     Low           High    Low

    1st Quarter                         8 3/4    6 1/2        5 3/8   4 5/8   
    2nd Quarter                     	7 7/8    6 1/2	      5 3/8   4 5/8    
    3rd Quarter                     	7 15/16  6 5/8	      6 1/8   5 1/8 
    4th Quarter                     	7 15/16  6 1/4	     7 7/16   5 5/8      

Pursuant to certain provisions of a revolving credit and term loan agreement,
the Company may not declare or pay any dividend (except for stock dividends).


Item 14(d)
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES SCHEDULE II- VALUATION AND
QUALIFYING ACCOUNTS
  
  Column A               Column B     Column C          Column D    Column E
				       	 Additions
                         Balance at   Charged to                     Balance
                         Beginning    Costs and                     at End of  
Description              of Period    Expenses   Other  Deductions   Period
                                                            (1)
Year ended July 31, 1998:
 Allowance for doubtful
  accounts and discounts $1,422,000  $2,062,928 $22,508 $2,178,436 $1,329,000
Year ended July 31, 1997:
 Allowance for doubtful
  accounts and discounts $1,133,000  $2,440,846         $2,151,846 $1,422,000

Year ended July 31, 1996:
 Allowance for doubtful
  accounts and discounts $1,251,000  $2,315,902         $2,433,902 $1,133,000

 (1) Discounts taken by customers and uncollectible accounts written-off, net
     of recoveries.