<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)

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

For the quarterly period (13 weeks) ended November 3, 2001

                                       OR

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

For the transition period from ________________________ to _____________________

Commission file number 1-10876
                       -------

                               SHOPKO STORES, INC.
             (Exact name of registrant as specified in its Charter)

   Wisconsin                                41-0985054
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

   700 Pilgrim Way, Green Bay, Wisconsin                        54304
--------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)

 Registrant's telephone number, including area code    (920) 429-2211
                                                   -----------------------------

Former name, former address and former fiscal year, if changed since last
report:

  N/A
--------------------------------------------------------------------------------
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 report(s), and (2) has been subject to such filing
requirements for the past 90 days.

Yes    X      No
    -----

The number of shares outstanding of each of the issuer's classes of Common Stock
as of November 30, 2001 is as follows:

     Title of Each Class                         Shares Outstanding

     Common Shares                               28,723,590

     Exhibit Index                               Page 1 of Page 22
     on Page 21


<PAGE>


                               SHOPKO STORES, INC.

                                    FORM 10-Q

              FOR THE 13 WEEKS AND 39 WEEKS ENDED NOVEMBER 3, 2001

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                 Page
                                                                                                 ----
<S>          <C>                                                                                 <C>

Part I        Item 1 - Financial Statements

                      Condensed Consolidated Statements of Operations for the                     3
                      13 weeks ended November 3, 2001 and October 28, 2000

                      Condensed Consolidated Statements of Operations for the                     4
                      39 weeks ended November 3, 2001 and October 28, 2000

                      Condensed Consolidated Balance Sheets as of November 3, 2001                5
                      October 28, 2000 and February 3, 2001

                      Condensed Consolidated Statements of Cash Flows for the                     6
                      39 weeks ended November 3, 2001 and October 28, 2000

                      Condensed Consolidated Statement of Shareholders'                           7
                      Equity for the 39 weeks ended November 3, 2001

                      Notes to Condensed Consolidated Financial Statements                       8-10

              Item 2 - Management's Discussion and Analysis of Financial                         11-18
                       Condition and Results of Operations

              Item 3 - Quantitative and Qualitative Disclosure About                             18
                        Market Risk

Part II       Item 1 - Legal Proceedings                                                         19

              Item 6 - Exhibits and Reports on Form 8-K                                          19


              Signatures                                                                         20
</TABLE>


                                       2
<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1: Financial Statements


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------
ShopKo Stores, Inc. and Subsidiaries                              Third Quarter (13 Weeks) Ended
----------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
                                                          November 3,       October 28,      % Increase/
                                                              2001             2000           (Decrease)
----------------------------------------------------------------------------------------------------------
                                                                   (UNAUDITED)
<S>                                                    <C>              <C>                 <C>

Revenues:
   Net sales                                              $    797,540     $     814,191        (2.0)
   Licensed department rentals and other income                  3,368             3,388
                                                          -------------    --------------
                                                               800,908           817,579        (2.0)
Costs and expenses:
   Cost of sales                                               619,636           619,500
   Selling, general and administrative expenses                151,048           166,748
   Special charges                                                                 3,121
   Depreciation and amortization expenses                       22,700            24,314
                                                          -------------    --------------
                                                               793,384           813,683        (2.5)

Earnings from operations                                         7,524             3,896         93.1
Interest expense - net                                          16,221            16,881
                                                          -------------    --------------

Loss before income taxes                                       (8,697)          (12,985)         33.0
Credit for income taxes                                        (3,479)           (4,561)
                                                          -------------    --------------

Net  loss                                                 $    (5,218)     $     (8,424)         38.1
                                                          =============    ==============

Basic net loss per common share                           $     (0.18)     $      (0.29)
                                                          =============    ==============

Diluted net loss per common share                         $     (0.18)     $      (0.29)
                                                          =============    ==============

Weighted average number of common
      Shares outstanding                                        28,699            28,698

Adjusted weighted average number of common
      Shares outstanding                                        28,699            28,698

</TABLE>


See notes to condensed consolidated financial statements.


                                       3

<PAGE>



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------
ShopKo Stores, Inc. and Subsidiaries                               Year to Date (39 Weeks) Ended
----------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
                                                          November 3,       October 28,      % Increase/
                                                              2001             2000           (Decrease)
----------------------------------------------------------------------------------------------------------
                                                                   (UNAUDITED)
<S>                                                    <C>              <C>                  <C>

Revenues:
   Net sales                                              $  2,370,545     $   2,383,325        (0.5)
   Licensed department rentals and other income                  9,868             9,794
                                                          -------------    --------------
                                                             2,380,413         2,393,119        (0.5)
Costs and expenses:
   Cost of sales                                             1,832,676         1,783,409
   Selling, general and administrative expenses                437,484           487,647
   Special charges                                                                 7,233
   Depreciation and amortization expenses                       70,035            69,112
                                                          -------------    --------------
                                                             2,340,195         2,347,401        (0.3)

Earnings from operations                                        40,218            45,718       (12.0)
Interest expense - net                                          51,334            47,636
                                                          -------------    --------------

Loss from continuing operations before
   Income taxes                                                (11,116)           (1,918)     (479.6)
Provision (credit) for income taxes                             (4,448)              789
                                                          -------------    --------------

Loss from continuing operations                                 (6,668)           (2,707)     (146.3)
Discontinued operations:
Earnings from discontinued operations, net of income
   taxes of $1,201                                                                 1,567
Gain on sale of discontinued business, net of income
   taxes of $14,496                                                               32,590
                                                          -------------    --------------

Net (loss) earnings                                       $     (6,668)    $      31,450      (121.2)
                                                          =============    ==============

Earnings per share of common stock:
   Basic:
       Loss from continuing operations                    $      (0.23)    $       (0.09)
       Earnings from discontinued operations                                        0.05
       Gain on sale of discontinued business                                        1.12
                                                          -------------    --------------
       Net (loss) earnings                                $      (0.23)    $        1.08
                                                          =============    ==============
   Diluted:
       Loss from continuing operations                    $      (0.23)    $       (0.09)
       Earnings from discontinued operations                                        0.05
       Gain on sale of discontinued business                                        1.12
                                                          -------------    --------------
       Net (loss) earnings                                $      (0.23)    $        1.08
                                                          =============    ==============

Weighted average number of common
      Shares outstanding                                        28,699            29,119

Adjusted weighted average number of common
      Shares outstanding                                        28,699            29,119

</TABLE>

See notes to condensed consolidated financial statements.


                                       4

<PAGE>










CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


-------------------------------------------------------------------------------------------------------------------
ShopKo Stores, Inc. and Subsidiaries                           Third Quarter as of               Fiscal Year End
-------------------------------------------------------------------------------------------------------------------
(In thousands)
                                                           November 3,       October 28,           February 3,
ASSETS                                                        2001               2000                 2001
-------------------------------------------------------------------------------------------------------------------
                                                                            (UNAUDITED)
<S>                                                    <C>                <C>                   <C>
Current assets:
  Cash and cash equivalents                               $      36,055      $     36,908         $      35,334
  Receivables, less allowance for losses of
     $2,839, $2,603 and $2,362, respectively                     50,269            64,837                57,581
  Merchandise inventories                                       784,191           926,753               713,925
  Other current assets                                           50,547            12,483                17,043
                                                          --------------     -------------        --------------
     Total current assets                                       921,062         1,040,981               823,883

Other assets and deferred charges                                14,016            16,991                14,486
Intangible assets - net                                         214,260           213,310               214,091

Property and equipment, net of accumulated
 depreciation of $633,416, $641,420 and
  $595,667; impairment reserve of $14,938,
  $0 and $57,155, respectively                                  914,700         1,009,563               976,791
                                                          --------------     -------------        --------------
     Total assets                                         $   2,064,038      $  2,280,845         $   2,029,251
                                                          ==============     =============        ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------------------------------------------------------
Current liabilities:
  Short-term debt                                         $     230,000      $    439,000         $     171,279
  Accounts payable - trade                                      345,020           396,745               278,175
  Accrued compensation and related taxes                         33,905            44,900                42,336
  Accrued other liabilities                                     145,850           122,384               125,141
  Accrued income and other taxes                                 27,062            33,132                25,682
  Current portion of long-term obligations and leases            82,457             6,409                 7,185
                                                          --------------     -------------        --------------
    Total current liabilities                                   864,294         1,042,570               649,798

Long-term obligations and leases, less current portion          509,218           486,745               660,321
Other long-term obligations                                      12,733                                  34,810
Deferred income taxes                                            22,634            42,534                22,575
Shareholders' equity:
  Common stock                                                      307               306                   306
  Additional paid-in capital                                    384,948           384,563               384,563
  Retained earnings                                             310,154           364,377               317,128
  Less treasury stock                                           (40,250)          (40,250)              (40,250)
                                                          --------------     -------------        --------------
     Total shareholders' equity                                 655,159           708,996               661,747
                                                          --------------     -------------        --------------
     Total liabilities and shareholders' equity           $   2,064,038      $  2,280,845         $   2,029,251
                                                          ==============     =============        ==============

</TABLE>

See notes to condensed consolidated financial statements.

                                       5



<PAGE>



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
ShopKo Stores, Inc. and Subsidiaries                                   Year to Date (39 weeks) Ended
------------------------------------------------------------------------------------------------------------
(In thousands)
                                                                     November 3,            October 28,
                                                                         2001                  2000
------------------------------------------------------------------------------------------------------------
                                                                                  (UNAUDITED)
<S>                                                              <C>                     <C>

Cash flows from operating activities:
 Loss from continuing operations                                  $       (6,668)        $       (2,707)
 Adjustments to reconcile loss to net
   cash provided by (used in) operating activities:
    Depreciation and amortization                                          70,035                 69,112
    Provision for losses on receivables                                       276                    343
    (Gain) loss on sale of property and equipment                           (554)                     15
    Deferred income taxes                                                  25,260               (11,643)
    Change in assets and liabilities
     Receivables                                                            7,036                (7,267)
     Merchandise inventories                                             (70,266)              (271,818)
     Other current assets                                                (37,055)                (6,751)
     Other assets and intangibles                                         (6,281)               (18,666)
     Accounts payable                                                      66,846                 67,375
     Accrued liabilities                                                  (4,057)                 15,639
------------------------------------------------------------------------------------------------------------
     Net cash provided by (used in) operating activities                   44,572              (166,368)
------------------------------------------------------------------------------------------------------------
Net cash flows from discontinued operations                                                      140,121
 Cash flows from investing activities:
 Payments for property and equipment                                     (12,078)              (151,974)
 Proceeds from the sale of property and equipment                           7,558                  2,801
 Business acquisition, net of cash acquired                                                      (2,070)
------------------------------------------------------------------------------------------------------------
     Net cash used in investing activities                                (4,520)              (151,243)
------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
 Net proceeds from debt borrowings                                        330,000                194,000
 Net payments of debt and capital lease obligations                     (369,331)                  (712)
 Change in common stock from stock options                                                         2,892
 Purchase of treasury stock                                                                     (20,222)
------------------------------------------------------------------------------------------------------------
     Net cash (used in) provided by financing activities                 (39,331)                175,958
------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                     721                (1,532)
Cash and cash equivalents at beginning of period                           35,334                 38,440
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                        $        36,055        $        36,908
============================================================================================================
Supplemental cash flow information:
  Noncash investing and financial activities -
    Capital lease obligations incurred                            $            78        $        36,938
</TABLE>

See notes to condensed consolidated financial statements.

                                       6

<PAGE>



CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS'  EQUITY
<TABLE>
<CAPTION>
                                                                                         -
------------------------------------------------------------------------------------------------------------------------------------
ShopKo Stores, Inc. and Subsidiaries                     Year To Date (39 Weeks) Ended November 3, 2001
------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                           (UNAUDITED)

                                           Common Stock                                      Treasury Stock              Total
                                       ----------------------   Additional              ---------------------- ---------------------
                                                                 Paid-in       Retained
                                       Shares        Amount      Capital       Earnings   Shares       Amount     Shares      Amount
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>       <C>             <C>        <C>           <C>       <C>            <C>      <C>

BALANCES AT FEBRUARY 3, 2001         30,603    $      306      384,563    $   317,128   (1,904)   $  (40,250)     28,699  $  661,747

Net loss                                                                      (6,668)                                        (6,668)

Issuance of restricted stock             50             1          385          (386)                                 50           0

Restricted stock expense                                                           80                                             80

                                     -----------------------------------------------------------------------------------------------
BALANCES AT NOVEMBER 3, 2001         30,653    $      307    $ 384,948    $   310,154   (1,904)   $  (40,250)     28,749  $  655,159
                                    ================================================================================================
</TABLE>






See notes to condensed consolidated financial statements.









                                       7
<PAGE>



         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Accounting Policies:

The Company's fiscal 2000 Annual Report on Form 10-K contains a summary of
significant accounting policies which includes the consolidated financial
statements and the notes to the consolidated financial statements. The same
accounting policies are followed in the preparation of interim reports. The
accompanying unaudited condensed consolidated financial statements should be
read in conjunction with the Company's consolidated financial statements and
notes thereto for the fiscal year ended February 3, 2001.

Reclassifications:

The November 3, 2001, October 28, 2000 and February 3, 2001 Condensed
Consolidated Balance Sheets reflect a change in the reporting of "Cash and cash
equivalents", as well as "Accounts payable - trade". The Company now reports in
"Cash and cash equivalents" amounts which are primarily comprised of store
depository, credit card depository, and cash concentration accounts. Previously
they were netted against "Accounts payable - trade".

Recent Accounting Pronouncements:

In June 2001, the Financial Accounting Standards Board ("FASB") issued two new
pronouncements: Statement of Financial Accounting Standards ("SFAS") No. 141,
"Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS 141 prohibits the use of the pooling-of-interest method for
business combinations initiated after June 30, 2001 and also applies to all
business combinations accounted for by the purchase method that are completed
after June 30, 2001. There are also transition provisions that apply to business
combinations completed before July 1, 2001, that were accounted for by the
purchase method. SFAS 142 is effective for fiscal years beginning after December
15, 2001 to all goodwill and other intangible assets recognized in an entity's
statement of financial position at that date, regardless of when those assets
were initially recognized. The Company is currently evaluating the provisions of
SFAS 141 and SFAS 142 and has not adopted such provisions in its November 3,
2001 financial statements. Application of the non-amortization provisions of
SFAS No. 142 is expected to result in a reduction in amortization expense of
approximately $5.2 million per year. We will perform the first of the required
impairment tests of goodwill during fiscal year 2002, to evaluate existing
goodwill for impairment upon adoption of SFAS No. 142 and will record any
transition impairment as a cumulative effect of a change in accounting principle
in the consolidated income statements. Because of the extensive effort needed to
comply with adopting SFAS No. 142, it is not possible to reasonably estimate the
impact of adopting this Statement on our financial statements at the date of
this report, including whether any transitional impairment losses will be
required to be recognized. It is possible the Company could incur substantial
impairment losses in the future as a result of adopting this Statement.



                                       8

<PAGE>


In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144),
which addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of. SFAS 144 is
effective for fiscal years beginning after December 15, 2001, with early
adoption permitted. Management is currently evaluating the provisions of SFAS
144.

New Credit Agreement:

On March 12, 2001, the Company closed on a $600.0 million senior secured
revolving credit and term loan facility (the "Secured Credit Facility"). The
Secured Credit Facility, which terminates on March 12, 2004, provides for
revolving credit loans of up to $500.0 million and a term loan of $100.0
million, and may be extended for an additional year at the Company's option,
subject to certain conditions. Amounts available under the Senior Credit
Facility are limited based on a percentage of inventory and accounts receivable.
Borrowings under the facility are secured by accounts receivable and inventory
and bear interest at rates based on prime or Eurodollar rate plus an applicable
margin based on operating performance of the Company. This credit agreement
contains various affirmative and negative covenants and precludes the Company
from paying dividends.

As a result of obtaining the financing, the Company retired all outstanding
amounts due under its various short-term financing facilities and terminated
those facilities.

Restructuring Reserve:

In the fourth quarter of fiscal 2000, the Company announced a strategic
reorganization plan to close 23 ShopKo retail stores and a related distribution
center serving those stores and to downsize its corporate workforce. The
closings took place in the first quarter of fiscal 2001, resulting in the
termination of approximately 2,500 employees, including approximately 180
employees at the ShopKo and Pamida corporate headquarters. In connection with
the reorganization plan, the Company incurred a pretax charge of $125.0 million,
including $57.2 million related to asset writedowns. Following is an analysis of
the change in the restructuring reserve (in thousands) which includes primarily
cash payments and the disposal of inventory:

<TABLE>
<CAPTION>

---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
                                                       Balance as of          Cash              Other          Balance as of
---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
                                                       Feb. 3, 2001         Payments         Adjustments       Nov. 3, 2001
                                                       ------------         --------         -----------       ------------
---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
<S>                                                  <C>                <C>                <C>               <C>

----------------------------------------------------                    ------------------ ----------------- ------------------
Lease termination and property carrying costs             45,752            (11,560)             731              34,923
---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
Inventory liquidation costs                               10,447                0              (10,447)              0
---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
Employee separation costs                                  9,262             (7,410)           (1,852)               0
---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
Other costs                                                2,416             (2,179)              0                 237
---------------------------------------------------- ------------------ ------------------ ----------------- ------------------
</TABLE>

Discontinued Operations:

On June 16, 2000, the Company completed the sale of ProVantage Health Services,
Inc. ("ProVantage"). The results of operations of ProVantage have been presented
as discontinued operations. Net sales of ProVantage for the 20 weeks ended June
17, 2000 were $420.9 million.




                                       9

<PAGE>
Business Segment Information:

The Company's reportable segments are based on the Company's strategic business
operating units, and include a ShopKo Retail segment (which includes ShopKo
stores general merchandise, retail pharmacy and retail optical operations) and a
Pamida Retail segment (which includes Pamida stores general merchandise and
retail pharmacy operations).

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies in the Company's fiscal 2000 Annual
Report on Form 10-K. The Company evaluates performance based on operating
earnings of the respective business segments.

Summarized financial information concerning the Company's reportable segments is
shown in the following table (in thousands). The ShopKo retail and total net
sales include sales of the 23 ShopKo stores closed in the first quarter of
fiscal 2001. Net sales of the ShopKo closed stores, for the 39 weeks ended
November 3, 2001 and October 28, 2000 were $56.0 million and $136.7 million,
respectively.

<TABLE>
<CAPTION>

                                        Third Quarter (13 Weeks) Ended                Year to Date (39 Weeks) Ended
                                     -------------------------------------       ----------------------------------------
                                      November 3,           October 28,            November 3,             October 28,
                                         2001                   2000                  2001                    2000
-------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                   <C>                   <C>                     <C>

Net sales
    ShopKo Retail                 $        599,665      $         627,569     $       1,769,788       $        1,835,721
    Pamida Retail                          197,875                186,622               600,757                  547,604
    Total net sales               $        797,540      $         814,191     $       2,370,545       $        2,383,325
    Total net sales excluding
    ShopKo closed stores          $        797,540      $         768,885     $       2,314,569       $        2,246,671
-------------------------------------------------------------------------------------------------------------------------
Earnings (loss) from operations
    ShopKo Retail                 $         21,221      $           8,815     $          70,837       $           56,966
    Pamida Retail                          (7,865)                  4,139              (14,432)                   12,530
    Corporate                              (5,832)                (9,058)              (16,187)                 (23,778)
-------------------------------------------------------------------------------------------------------------------------
Earnings from operations          $          7,524      $           3,896     $          40,218       $           45,718
-------------------------------------------------------------------------------------------------------------------------
</TABLE>


The Company's areas of operations are principally in the United States. No major
customer accounted for a significant amount of consolidated revenue during the
first three quarters of fiscal 2001 and fiscal 2000.

Statement of Registrant:

The data presented herein is unaudited, but in the opinion of management,
includes all adjustments (which consist only of normal recurring accruals)
necessary for a fair presentation of the consolidated financial position of the
Company and its subsidiaries at November 3, 2001 and October 28, 2000 and the
results of their operations and their cash flows for the 13 and 39 week periods
then ended. These interim results are not necessarily indicative of the results
of the fiscal years as a whole because the cash flows of the Company are highly
seasonal. The fourth fiscal quarter has historically contributed a significant
part of the Company's earnings due to the Christmas selling season.

                                       10


<PAGE>


ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


The following table sets forth items from the Company's unaudited condensed
consolidated financial statements for the third quarter and first three quarters
of fiscal 2001 and 2000 as a percentage of net sales:

<TABLE>
<CAPTION>
                                                        Third Quarter (13 Weeks)                     Year to Date (39 Weeks)
                                                        ------------------------                     -----------------------
                                                      Fiscal 2001       Fiscal 2000              Fiscal 2001           Fiscal 2000
                                                      -----------       -----------      ---------------------------   -----------
                                                                                             As            Excluding
                                                                                          Reported          Closed
                                                                                                            Stores
                                                   -------------------------------------------------------------------------------
<S>                                                <C>             <C>              <C>               <C>             <C>

Revenues
  Net sales                                               100.0    %         100.0   %      100.0    %        100.0  %    100.0  %
  Licensed department rentals and other income              0.4                0.4            0.4               0.4         0.4
                                                   -------------      -------------     ----------      ------------     -------
                                                          100.4              100.4          100.4             100.4       100.4

Cost of sales                                              77.7               76.1           77.3              76.8        74.8

Gross margin                                               22.3               23.9           22.7              23.2        25.2

  Selling, general and administrative expenses             18.9               20.5           18.4              18.9        20.5
  Special charges                                           0.0                0.3            0.0               0.0         0.3
  Depreciation and amortization expenses                    2.9                3.0            3.0               3.0         2.9
                                                   -------------      -------------     ----------      ------------     -------

Earnings from operations                                    0.9                0.5            1.7               1.7         1.9
Interest expense - net                                      2.0                2.1            2.2               2.2         2.0
                                                   -------------      -------------     ----------      ------------     -------

Loss from continuing operations
before income taxes                                       (1.1)              (1.6)          (0.5)             (0.5)        (0.1)
Provision (credit) for income taxes                       (0.4)              (0.6)          (0.2)             (0.2)         0.0
                                                   -------------      -------------     ----------      ------------     -------

Loss from continuing operations                           (0.7)    %         (1.0)   %      (0.3)    %        (0.3)   %    (0.1) %
                                                   =============      =============     ==========      ============     =======

</TABLE>


                                       11
<PAGE>
The Company has two business segments: a ShopKo Retail segment (which includes
ShopKo stores general merchandise, retail pharmacy and retail optical
operations) and a Pamida Retail segment (which includes Pamida stores general
merchandise and retail pharmacy operations).

The following tables set forth items from the Company's business segments as
percentages of net sales:

SHOPKO RETAIL

<TABLE>
<CAPTION>
                                                     Third Quarter (13 Weeks)             Year to Date (39 Weeks)
                                                   --------------------------    ----------------------------------------
                                                     Fiscal          Fiscal                Fiscal                Fiscal
                                                      2001            2000                  2001                  2000
                                                   ---------      ----------     ---------------------------   ----------
                                                                                      As          Excluding
                                                                                   Reported        Closed
                                                                                                   Stores
                                                   ---------      ----------     -----------     ----------    ----------

<S>                                               <C>            <C>             <C>            <C>            <C>
Revenues
  Net sales                                         100.0 %          100.0 %        100.0 %        100.0 %        100.0 %
  Licensed departmental rentals and other
      income                                          0.5              0.5            0.5            0.5            0.5
                                                    -----          -------        -------        -------        -------
                                                    100.5            100.5          100.5          100.5          100.5

Cost of sales                                        77.0             76.8           76.7           75.9           75.1

Gross margin                                         23.0             23.2           23.3           24.1           24.9

  Selling, general and administrative
      expenses                                       17.4             19.4           17.0           17.7           19.4
  Depreciation and amortization expenses              2.6              2.9            2.8            2.8            2.9
                                                    -----          -------        -------        -------        -------

Earnings from operations                              3.5 %            1.4 %          4.0 %          4.1 %          3.1 %
                                                    =====          =======        =======        =======        =======
</TABLE>


PAMIDA RETAIL

<TABLE>
<CAPTION>
                                                       Third Quarter (13 Weeks)               Year to Date (39 Weeks)
                                                    -----------------------------      --------------------------------------
                                                       Fiscal            Fiscal           Fiscal                     Fiscal
                                                        2001              2000             2001                       2000
                                                    -----------        ----------      ------------               -----------

<S>                                                <C>                <C>             <C>                        <C>
Revenues
  Net sales                                           100.0 %             100.0 %           100.0 %                  100.0 %
  Licensed departmental rentals and other
      income                                            0.3                 0.2               0.2                      0.2
                                                    -------             -------           -------                  -------
                                                      100.3               100.2             100.2                    100.2

Cost of sales                                          79.9                73.8              79.2                     73.8

Gross margin                                           20.1                26.2              20.8                     26.2

  Selling, general and administrative
      expenses                                         20.9                21.1              20.0                     21.3
  Depreciation and amortization expenses                3.5                 3.2               3.4                      2.8
                                                    -------             -------           -------                  -------

(Loss) earnings from operations                        (4.0) %              2.2 %            (2.4) %                   2.3 %
                                                    =======             =======           =======                  =======
</TABLE>










                                       12
<PAGE>
NET SALES:

The following table presents the Company's consolidated net sales, excluding
closed stores and layaway, for the third quarter and first three quarters of
fiscal 2001 and fiscal 2000:

<TABLE>
<CAPTION>

                                           THIRD QUARTER (13 WEEKS)               % INCREASE
                                           ------------------------               ----------
                                          FISCAL             FISCAL
                                           2001               2000              TOTAL      COMP
                                           ----               ----              -----      ----
        <S>                             <C>               <C>                 <C>        <C>
                ShopKo Retail             $599.7             $582.3              3.0        2.6
                Pamida Retail              197.8              186.6              6.0       (0.4)
                                          ------             ------             ----      -----
                Consolidated              $797.5             $768.9              3.7        1.9
                                          ======             ======             ====      =====


<CAPTION>


                                            YEAR TO DATE (39 WEEKS)             % INCREASE
                                            -----------------------             ----------
                                           FISCAL               FISCAL
                                            2001                 2000           TOTAL     COMP
                                            ----                 ----           -----     ----
        <S>                             <C>                  <C>              <C>        <C>
                ShopKo Retail             $1,713.8             $1,699.1          0.9       0.1
                Pamida Retail                600.8                547.6          9.7      (3.9)
                                          --------             --------         ----     -----
                Consolidated              $2,314.6             $2,246.7          3.0      (0.8)
                                          ========             ========         ====     =====
</TABLE>


The 2.6% increase in third quarter ShopKo retail comparable store sales is
derived from the following categories: Retail Health, 8.9%; Hardlines/Home,
1.1%; and Apparel, (0.7)%. The (0.4)% decrease in Pamida's third quarter retail
comparable store sales is derived from the following categories: Retail Health,
21.1%; Hardlines/Home, (1.9)%; and Apparel, (8.8)%. The improvement in the third
quarter consolidated sales is due to continued strong performance in Retail
Health and merchandising and marketing initiatives.

The 0.1% increase in the first three quarters ShopKo retail comparable store
sales is derived from the following categories: Retail Health, 9.0%;
Hardlines/Home, (2.8)%; and Apparel, (2.7)%. The (3.9)% decrease in Pamida's
first three quarters retail comparable store sales is derived from the following
categories: Retail Health, 18.8%; Hardlines/Home, (6.5)%; and Apparel, (8.6)%.
The change in consolidated sales for the first three quarters reflects the
Retail Health growth trend offset by the difficult economic environment,
increased competition in certain of our markets and execution problems at our
Pamida retail segment.

Changes in retail comparable store sales are based upon those stores which were
open for the entire preceding fiscal year.




                                       13
<PAGE>



The Company's store activity is summarized below:

<TABLE>
<CAPTION>


-----------------------------------------------------------------------------------------------------------------------
                                                             39 Weeks Ended                          Year Ended
-----------------------------------------------------------------------------------------------------------------------
                                               November 3, 2001          October 28, 2000         February 3, 2001
-----------------------------------------------------------------------------------------------------------------------

<S>                                          <C>                      <C>                     <C>
SHOPKO STORES
------------------------------------
Beginning number of stores                            141  *                   160                     160
------------------------------------
Openings                                                0                        4                       4
------------------------------------
Closings                                                0                        0                      23  *
------------------------------------               ------                   ------                  ------
Ending number of stores                               141                      164                     141  *
------------------------------------

-----------------------------------------------------------------------------------------------------------------------
PAMIDA STORES
------------------------------------
Beginning number of stores                            229                      157                     157
------------------------------------
Openings                                                0                       75                      76
------------------------------------
Closings                                                0                        1                       4
------------------------------------               ------                   ------                  ------
Ending number of stores                               229                      231                     229
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

*ShopKo store count reflects the 23 closings announced on January 31, 2001. The
actual closings occurred in the first quarter of fiscal 2001.

Gross Margin:

Consolidated gross margin as a percent of net sales for the third quarter was
22.3 percent compared to 23.9 percent last year. ShopKo retail gross margin as a
percent of net sales was 23.0 percent for the third quarter, compared with 23.2
percent last year. Pamida retail gross margin as a percent of net sales was 20.1
percent for the third quarter, compared with 26.2 percent last year.

Consolidated gross margin as a percent of net sales for the three quarters ended
November 3, 2001 was 22.7 percent, 23.2 percent excluding ShopKo's closed
stores, compared with 25.2 percent for the same period last year. The ShopKo
retail gross margin as a percent of net sales for the same period was 23.3
percent, 24.1 percent excluding the closed stores, compared with 24.9 percent
last year. Pamida retail gross margin as a percent of net sales was 20.8 percent
compared with 26.2 percent last year.

The decrease in consolidated gross margin for the third quarter, and for the
three quarters ended November 3, 2001, is primarily attributable to the Pamida
division's inventory management issues, including inventory shrinkage and
increased distribution costs, as well as, margin rate compression at both
divisions.

The Company uses the LIFO method for substantially all inventories. The negative
effect on gross margin due to the change in the LIFO provision for the third
quarter and the first three quarters was $0 and $0, respectively, compared to
$1.0 million and $4.0 million for the same periods last year. If the first-in,
first-out (FIFO) method had been used, the Company's inventories would have been
$19.1 million, $32.9 million, and $19.1 million higher at November 3, 2001,
October 28, 2000, and February 3, 2001, respectively.






                                       14
<PAGE>




Selling, General and Administrative Expenses:

Consolidated selling, general and administrative expenses as a percent of net
sales for the third quarter were 18.9 percent compared with 20.5 percent last
year. ShopKo retail selling, general and administrative expenses as a percent of
net sales for the quarter were 17.4 percent compared to 19.4 percent last year.
Pamida retail selling, general and administrative expenses were 20.9 percent of
net sales for the quarter compared to 21.1 percent last year.

Consolidated selling, general and administrative expenses as a percent of net
sales for the first three quarters decreased to 18.4 percent, 18.9 percent
excluding the ShopKo retail closed stores, from 20.5 percent last year. ShopKo
retail selling, general and administrative expenses as a percent of net sales
were 17.0 percent, 17.7 percent excluding the closed stores, compared to 19.4
percent last year. Pamida retail selling, general and administrative expenses as
a percent of net sales were 20.0 percent compared to 21.3 percent last year.

For the third quarter and first three quarters, the improvement in both retail
segments and on a consolidated basis is primarily due to restructuring
initiatives and appropriate expense management.

Special Charges:

During the third quarter ended October 28, 2000, the Company incurred $3.1
million in special pre-tax costs relating primarily to Pamida's conversion of
the P.M. Place Stores Company locations, which were acquired during the second
quarter of fiscal 2000. The Company incurred $7.2 million in special pre-tax
costs relating to the Pamida acquisition and Pamida's conversion of the Place's
locations during the first three quarters ended October 28, 2000.

Restructuring Reserve:

In connection with the reorganization plan announced in the fourth quarter of
fiscal 2000, the Company incurred a pretax charge of $125.0 million, including
$57.2 million related to asset writedowns. During the third quarter and first
three quarters of 2001, the Company charged approximately $6.2 million and $32.7
million, respectively, against the restructuring reserve. The charges were
primarily related to inventory liquidation, employee separation costs and
property carrying costs. The remaining balance of the restructuring reserve
represents expected future payments to be incurred for the cost of lease
terminations, and carrying costs for leased and owned stores through their
disposition. In the third quarter, the Company terminated three leases. At this
time, the Company believes it has adequately reserved for these costs, however,
sales of owned stores and lease terminations have been slower than anticipated.
Therefore, the Company is currently evaluating the adequacy of the amounts
reserved as it continues the process of disposing of the real estate and
terminating the leases.






                                       15
<PAGE>


Interest Expense - Net:

Interest expense decreased 3.9 percent over last year to $16.2 million and
increased 7.8 percent over last year to $51.3 million for the third quarter and
first three quarters, respectively. Increased borrowing costs were offset in the
third quarter by declining debt levels.

Income Taxes:

The effective tax benefit for the third quarter was 40.0 percent compared with
35.1 percent last year. The effective tax benefit for the first three quarters
was 40.0 percent compared with an effective tax provision of 41.1 percent last
year.

Liquidity and Capital Resources:

The Company's liquidity requirements are met primarily by cash generated from
its operations, with any remaining funding requirements provided by short-term
and long-term borrowings. Cash provided from continuing operations before
depreciation and amortization was $63.4 million for the first three quarters of
fiscal 2001 compared to $66.4 million for the same period last year.

As of November 3, 2001, the Company had $342.5 million of Senior Unsecured Notes
outstanding. These Senior Unsecured Notes have maturity dates ranging from March
2002 to March 2022, with approximately $242.8 million principal amount of the
Senior Unsecured Notes maturing between March 2002 and November 2004. Subject to
certain limitations set forth in the Secured Credit Facility, proceeds of the
Secured Credit Facility or funds from other sources may be used to retire or
repurchase those Senior Unsecured Notes maturing during the term of the Secured
Credit Facility.

In addition to the Senior Unsecured Notes, the Company had $330.0 million
outstanding under its credit agreements at the end of the third quarter of
fiscal 2001 compared to $439.0 million outstanding at the end of the third
quarter of fiscal 2000.

On March 12, 2001, the Company closed on a $600.0 million senior secured
revolving credit and term loan facility. The Company used proceeds from the
Secured Credit Facility to pay off the outstanding amounts under its existing
bank credit facilities, and those facilities were terminated. The Secured Credit
Facility terminates March 12, 2004 but the facility may be extended for an
additional year at the Company's option subject to certain conditions. The terms
of the Secured Credit Facility set limits as to new indebtedness, repurchases of
common stock and capital expenditures.




                                       16
<PAGE>

The Company believes that the Secured Credit Facility, together with expected
cash from operations, will provide sufficient liquidity to finance continuing
operations, including planned capital expenditures, for fiscal 2001. However, if
the Company's operating results were to deteriorate significantly for whatever
reason, or if the Company were to require significant additional capital for
unexpected events, the Company could suffer liquidity problems which would
materially adversely affect its results of operations and financial condition.
Furthermore, as described above, the Company has significant debt obligations
maturing in the period from March 2002 to November 2004. While the Company
believes it will have sufficient liquidity to retire these debt obligations as
they mature, there can be no assurance that the Company will be able to retire
or refinance these obligations. If the Company cannot retire or refinance these
obligations as they mature, the Company's results of operations and financial
condition will be materially adversely affected.

The Company spent $12.1 million on capital expenditures in the first three
quarters of fiscal 2001 compared to $152.0 million on capital expenditures for
the same period last year. The Company's total capital expenditures for the
fiscal year ending February 2, 2002 are anticipated to approximate $25.0
million, which is within the restrictions on capital expenditures in the Secured
Credit Facility. The expenditures would relate primarily to ongoing store
equipment and fixturing, information systems, and merchandise initiatives. The
Company expects to deploy a conservative capital expenditure program for the
fiscal year ending February 1, 2003 in the range of $25.0 to $35.0 million. Such
plans may be reviewed and revised from time to time in light of changing market
conditions.

Inflation:

Inflation has had and is expected to have only a minor effect on the results of
operations of the Company and its internal and external sources of liquidity.



                                       17
<PAGE>




Forward-Looking Statements:

Item 2 of this Form 10-Q, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include, without limitation,
statements regarding earnings, growth, debt-retirement and capital expenditure
plans and capital requirements. Such statements are subject to important factors
which could cause the Company's actual results to differ materially from those
anticipated by the forward-looking statements. These factors include: 1) the
duration and severity of the current economic slowdown and the continuing impact
of terrorist attacks and continued hostilities or other similar or related
events; 2) the impact of recent accounting pronouncements as described in Part I
hereof; and 3) those referenced in the Company's Annual Report on Form 10-K for
the period ended February 3, 2001 and as may be described from time to time in
the Company's subsequent SEC filings, and such factors are incorporated herein
by reference.

Item 3:  Quantitative and Qualitative Disclosures About Market Risk

For information as to the Company's Quantitative and Qualitative Disclosures
About Market Risk, please see the Company's Annual Report on Form 10-K for the
fiscal year ending February 3, 2001. There have been no material changes in the
Company's quantitative or qualitative exposure to market risk since the end of
fiscal 2000.





                                       18
<PAGE>



                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

On October 10, 2001, a purported class action was filed in the United States
District Court for the Eastern District of Wisconsin (Case No. 01-C-1034) on
behalf of Robert Farer, an alleged shareholder of the Company and other
purchasers of Company securities against the Company and William J. Podany, the
president and chief executive officer of the Company, for alleged violations of
federal securities laws. At least two additional complaints have been filed
containing substantially identical claims. The suits allege that the Company and
Mr. Podany made various misrepresentations and omissions in public disclosures
concerning the Company between March 9, 2000 and November 9, 2000. Specifically,
it is alleged that the Company failed to disclose that the Company was
experiencing significant shipping and inventory control problems at the Pamida
division Lebanon, Indiana distribution facility.

The complaints request, among other things, that the court declare that the
action is a proper class action and award compensatory monetary damages,
including reasonable attorneys' and experts' fees.

The Company believes the actions to be totally without merit and intends to
vigorously defend this matter. There can be no assurances, however, with regard
to the outcome of the actions.

Item 6.  Exhibits and Reports on Form 8-K


    (a)  Exhibits.

         12          Statements Re Computation of Ratios.


    (b)  Reports on Form 8-K.

         The Company filed no Current Reports on Form 8-K in the third quarter
of fiscal 2001.










                                       19
<PAGE>






                                   SIGNATURES


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

                                  SHOPKO STORES, INC. (Registrant)


Date: December 14, 2001      By:  /s/ Brian W. Bender
                                  -------------------
                                  Brian W. Bender
                                  Senior Vice President, Chief Financial Officer
                                  (Duly Authorized Officer of Registrant)


Date: December 14, 2001      By:  /s/ Peter J. O'Donnell
                                  -------------------------------------
                                  Peter J. O'Donnell
                                  Vice President and Controller
                                  (Chief Accounting Officer and Duly
                                  Authorized Officer of Registrant)




                                       20
<PAGE>





                                  EXHIBIT INDEX
                               SHOPKO STORES, INC.
                                   10-Q REPORT



Exhibit                                                        Sequential
Number                              Exhibit                    Page Number

 12               Statements Re Computation of Ratios.             22









                                       21