UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                                FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
    For the fiscal year ended December 30, 2000

                                   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 1-8140

                         FLEMING COMPANIES, INC.
         (Exact name of registrant as specified in its charter)

         Oklahoma                                            48-0222760
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

   1945 Lakepointe Drive, Box 299013
       Lewisville, Texas                                      75029
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code         (972) 906-8000

Securities registered pursuant to Section 12(b) of the Act:

                                              NAME OF EACH EXCHANGE ON
            TITLE OF EACH CLASS                   WHICH REGISTERED
      Common Stock, $2.50 Par Value           New York Stock Exchange
                                              Pacific Stock Exchange
                                              Chicago Stock Exchange

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 shorter  period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. [X] Yes [ ] 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 the
Form 10-K. [X]

The aggregate market value of the common shares (based upon the closing price on
March 9,  2001 of  these  shares  on the New York  Stock  Exchange)  of  Fleming
Companies, Inc. held by nonaffiliates was approximately $930 million.

As of March 9, 2001, 39,753,000 common shares were outstanding.

                   Documents Incorporated by Reference

A portion of Part III has been  incorporated by reference from the  registrant's
proxy statement in connection with its annual meeting of shareholders to be held
on May 15, 2001.

                                 PART I

ITEM 1.  BUSINESS

Fleming is an industry leader in the distribution of consumable  goods, and also
has a growing  presence in operating  "price impact"  supermarkets.  Through our
distribution   segment,   we  distribute  products  to  customers  that  operate
approximately  3,000  supermarkets,  3,000  convenience  stores and nearly 1,000
supercenters, discount stores, limited assortment stores, drug stores, specialty
stores and other stores across the U.S. We expect to substantially  increase our
distribution  volume in  connection  with,  among  other  things,  our  recently
announced  ten-year,  $4.5 billion per year strategic  alliance with our largest
customer, Kmart Corporation.  In addition, our retail segment currently operates
94 supermarkets.  In the fiscal year ended December 30, 2000, we generated total
net sales of $14.4 billion.

Our distribution  segment net sales were $11.2 billion for 2000, a 5.8% increase
over the prior year,  and  represented  approximately  77% of total net sales in
2000. To supply our customers, we have a network of 31 distribution centers that
have a total of  approximately  19 million  square feet of warehouse  space.  To
support  our  new  business  from  Kmart,  we  expect  to  add up to  three  new
distribution  centers over the next several months.  Once that infrastructure is
in place,  we believe that we will be the only  distributor of consumable  goods
serving customers in all 50 states. In addition to product storage, handling and
distribution  functions,  we also  provide  our  customers  with an  offering of
advertising,  store  development,  accounting,  pricing  and  retail  technology
services.

Our retail  segment  net sales were $3.3  billion  for 2000,  which  represented
approximately  23% of  total  net  sales.  Of  that  amount,  $1.9  billion  was
attributable  to continuing  chains,  which  represents a 4.8% increase over the
prior year. Our continuing chains currently include 30 price impact supermarkets
under the Food 4 Less banner and ten additional  supermarkets which we intend to
convert  to  the  price  impact   format.   Price  impact   supermarkets   offer
deep-discount,  everyday low prices in a  warehouse-style  format.  These stores
typically   cost  less  to  build,   maintain  and  operate  than   conventional
supermarkets. We also operate 44 supermarkets that are adopting certain elements
of the price impact format under the Rainbow Foods banner. In addition,  we also
operate  ten  limited  assortment  stores  under the  Yes!Less  banner.  Limited
assortment stores offer a narrow selection of low-price,  private label food and
other consumable goods, as well as general merchandise.

In recent years,  consumers have been shifting their purchases of food and other
consumable  goods away from  conventional  full-service  grocery  stores towards
other retail  channels,  such as price  impact  supermarkets,  discount  stores,
supercenters,  convenience  stores,  drug stores and ethnic food  stores.  Since
1998, we have repositioned our distribution segment to become a highly-efficient
supplier to these retail channels, and as a result, our distribution segment has
experienced  renewed  sales  growth.  In  addition,  we believe  price-sensitive
consumers are underserved in the retail grocery market,  so we have repositioned
our retail segment to expand our presence in the price impact format.

Repositioning of Fleming

In late 1998,  Mark Hansen  joined  Fleming as our Chairman and Chief  Executive
Officer.  Together with other new members of senior  management,  he established
the following strategic initiatives in order to reposition us for growth:

-   lower  the  cost  of  goods  sold and the  cost  of  our  distribution
    services in order to increase sales to existing customers and attract
    new customers;

-   diversify  our  customer  base by appealing to  retailers  beyond  our
    traditional conventional supermarket customers; and

-   reposition  our  retail  segment by selling or  closing  most  of  our
    conventional format supermarkets and opening additional price  impact
    supermarkets.

In the course of implementing  our strategic  initiatives,  since 1998, we have,
among other accomplishments:

-   closed  or consolidated 12 of our distribution centers, which resulted
    in:

    - increased average sales per full-line distribution center by more
      than 40% from $390 million in 1998 to $550 million in 2000, and

    - increased average sales per full-line distribution segment employee
      by more than 12% from 1998 to 2000;

-   centralized the majority of our purchasing operations in our customer
    support center near Dallas, Texas;

-   centralized  our  accounting, human resources, information technology
    and  other support services in our shared services center in Oklahoma
    City, Oklahoma;

-   sold  or closed 152 conventional supermarkets, with 86 more to be sold
    or closed;

-   opened 14 additional price impact supermarkets; and

-   instituted a "culture of thrift" among our employees, in part through
    our Low Cost Pursuit Program.

We believe  these  initiatives  have  lowered our cost  structure,  improved the
economics we can offer our traditional  retail  customers and  strengthened  our
appeal to new channel retailers. We believe these improvements have been the key
to our  ability  to  increase  distribution  segment  sales  for the  last  five
consecutive   quarters   (year-over-year   comparisons).   In  2000,   we  added
approximately $1.2 billion in gross annual distribution  segment sales from both
new channel retailers and our traditional supermarket customers.

Competitive Strengths

Low-Cost,  High-Volume  National  Distribution  System: We have consolidated our
smaller  distribution  centers  into  high-volume   distribution   centers.  Our
distribution  centers produce average annual sales that are among the highest in
the  consumable  goods  distribution  industry.  Our  procurement  and logistics
capabilities, combined with the scale of our distribution centers, have enhanced
our ability to provide  customers with lower-cost  merchandise and services that
improve  customer   acquisition  and  retention.   Our  larger,   super-regional
distribution  centers are able to conduct  profitable  operations at an extended
range, thereby increasing our potential market reach.

Efficient  Centralized  Purchasing:  Category  management  decisions  and vendor
negotiations  for more than 60% of our merchandise  procurement are conducted in
one  location.  Our  customer  support  center is one of the  largest  buyers of
consumable goods in the U.S. Centralized purchasing generates economies of scale
because it enables us in one  location to  purchase  goods more  efficiently  by
eliminating redundancy involved in purchasing through multiple locations,  which
we believe increases our leverage with vendors.  We believe that our centralized
purchasing capabilities are valuable to national retailers such as Kmart as well
as the smaller, independent retailers that make up our traditional customer base
because we offer greater convenience and lower cost.

Diverse  Distribution  Customer  Base:  We  distribute  to  approximately  2,500
companies that operate almost 7,000 retail store  locations under a wide variety
of formats across the U.S. Other than Kmart, no customer accounted for more than
2% of our fiscal 2000 net sales.

Successful  Price Impact  Retail  Format:  Our price impact  supermarkets  offer
name-brand and private label consumable goods at significantly lower prices than
conventional format supermarkets.  We keep prices low by leveraging our existing
distribution and procurement capabilities and maintaining a lower cost structure
associated  with  operating  these stores.  We believe this format is profitable
because we offer a reduced number of product selections,  focus on high-turnover
products and product categories,  employ flow-through distribution methods which
reduce product storage and handling expense,  and minimize store operating costs
through a warehouse-style operation.

Business Strategy

Our business  strategy is to use our competitive  strengths to achieve sales and
earnings  growth  in both  our  distribution  segment  and  retail  segment.  As
principal elements of our strategy, we intend to:

Grow Sales to New Channel  Retailers:  We are rapidly moving beyond our historic
market  position  and have  targeted  three key growth  sectors.  First,  we are
focusing on broad assortment/destination  retailers,  including supercenters and
discount stores, and have demonstrated significant penetration in this market as
evidenced by our distribution  arrangements with Kmart and Target,  Inc. Second,
we are  concentrating  on precision  assortment/neighborhood  retailers  such as
convenience  stores,  drug stores and ethnic food stores.  Our recent efforts in
these markets include distribution agreements with significant customers such as
Clark   Retail   Enterprises.   Finally,   we  intend  to  focus  on   precision
assortment/destination   retailers  typified  by  large-store  formats  such  as
cash-and-carries and price impact stores.

Grow Sales to  Traditional  Format  Customers:  Despite being the second largest
distributor  in the $110  billion  wholesale  grocery  industry,  we account for
approximately 10% of this traditional core market, representing substantial room
for additional growth. Our repositioned distribution segment has already enabled
us to increase sales to existing and new customers,  and we expect to be able to
continue this trend.  We routinely  conduct  detailed market studies to identify
potential new customers in areas  contiguous to existing  customers,  as we have
capacity  in our  high-volume  distribution  centers to serve  additional  local
independent stores or chains.  Many potential  customers are currently served by
local or regional wholesalers that do not have the efficiencies  associated with
our procurement  scale and do not provide the full scope of retail services that
we provide.

Expand Price Impact Format: We believe we have a substantial opportunity to grow
our retail segment's price impact supermarket  operations.  Because price impact
stores cost less to build, maintain and operate than conventional  supermarkets,
we expect  to be able to grow our  price  impact  supermarket  operations  while
incurring  fewer capital  expenditures  than  operators of  conventional  retail
stores. We currently own and operate 30 price impact supermarkets, and we intend
to add up to 25 price  impact  supermarkets  in 2001  through a  combination  of
construction of new stores, conversion of existing stores and acquisitions.

Leverage  Efficiencies Created by Our Kmart Distribution  Agreement:  We believe
our new distribution agreement with Kmart and the resulting substantial increase
in  our  distribution  volume  will  provide  us  with  increased  economic  and
purchasing  leverage  that will benefit all of our existing  and  potential  new
customers. We have established a "best practices" team with Kmart based in Troy,
Michigan that focuses on reducing costs and achieving  greater  efficiencies  in
our product supply chain. In addition,  we believe that the increased  volume of
candy and tobacco that we will distribute as a result of the Kmart  distribution
agreement  will enable us to compete  more  effectively  for  convenience  store
distribution business.

Continue to Improve  Working  Capital  Management and Reduce Costs: We intend to
improve our working capital management  primarily by improving  inventory turns.
To do this, we will continue to improve vendor inventory  management  practices,
further develop our central procurement operations,  improve ad forecasting with
our customers,  effectively manage  alternative  channels of product delivery to
retail locations and invest in systems enhancements.  In addition, to strengthen
our  position  as  a  low-cost  supplier  to  our  customers  and  increase  our
profitability,  we have instituted a "culture of thrift" among our employees and
developed  initiatives  to reduce  our  expenses  through  our Low Cost  Pursuit
Program.

Financial results

We generated  net sales of $14.4  billion,  $14.3  billion and $14.7 billion for
2000, 1999 and 1998, respectively. The net loss for fiscal 2000 was $122 million
which was largely due to a $309 million  pre-tax charge related to the strategic
plan.  We generated  net  earnings  before  strategic  plan charges and one-time
adjustments  of $62 million,  $43 million and $32 million for fiscal 2000,  1999
and  1998,  respectively.   Additionally,  we  generated  net  cash  flows  from
operations of $245 million,  $175 million and $151 million for the same periods,
respectively,  before  payments  related to the  strategic  plan.  The  combined
businesses  generated  $456  million,  $411 million and $431 million of adjusted
EBITDA  for  fiscal  2000,  1999 and 1998,  respectively.  "Adjusted  EBITDA" is
earnings  before   extraordinary   items,   interest   expense,   income  taxes,
depreciation and  amortization,  equity investment  results,  LIFO provision and
one-time  adjustments  (e.g.,  strategic  plan  charges and other  non-recurring
expense  or income  items).  Adjusted  EBITDA  should  not be  considered  as an
alternative  measure  of our net  income,  operating  performance,  cash flow or
liquidity.  It is provided as additional  information  related to our ability to
service debt;  however,  conditions may require  conservation of funds for other
uses.  Although we believe adjusted EBITDA enhances a reader's  understanding of
our  financial  condition,  this  measure,  when  viewed  individually,  is  not
necessarily  a better  indicator  of any  trend as  compared  to  conventionally
computed  measures  (e.g.,  net sales,  net  earnings,  net cash  flows,  etc.).
Finally,  amounts presented may not be comparable to similar measures  disclosed
by other  companies.  The following table sets forth the calculation of adjusted
EBITDA (in millions):

                                         2000      1999     1998
                                         ----      ----     ----

   Net loss                             $(122)     $ (45)   $ (511)
   Add back:
     Taxes on loss                        (79)       (18)      (88)
     Depreciation/amortization            169        158       180
     Interest expense                     175        165       162
     Equity investment results              8         10        12
     LIFO provision                         3         11         8
       EBITDA                             154        281      (237)
                                          ---        ---      ----
     Add back non-cash strategic plan
      charges and one-time items          129         92       594
                                          ---        ---      ----
        EBITDA excluding non-cash
         strategic plan charges           283        373       357
     Add back strategic plan charges and
      one-time items ultimately requiring
      requiring cash                      173         38        74
                                          ---        ---      ----
        Adjusted EBITDA                 $ 456      $ 411     $ 431
                                        =====      =====     =====

Depreciation  and  amortization  for 2000 includes $7 million of strategic  plan
charges.  The  adjusted  EBITDA  amount  represents  cash flow  from  operations
excluding  unusual or infrequent  items. In our opinion,  adjusted EBITDA is the
best starting point when evaluating our ability to service debt. In addition, we
believe  it is  important  to  identify  the cash flows  relating  to unusual or
infrequent  charges and strategic plan charges,  which should also be considered
in evaluating our ability to service debt.

Recent Developments

New Kmart Strategic Alliance

On February 7, 2001, we announced a ten-year  strategic  alliance under which we
will supply to Kmart  substantially  all of the food and consumable  products in
all current and future  Kmart and Kmart  supercenter  stores in the U.S. and the
Caribbean,  estimated at $4.5 billion annual sales. This new supply  arrangement
includes  grocery,   frozen,   dairy,   packaged  meat  and  seafood,   produce,
bakery/deli,  fresh meat, cigarettes, tobacco and candy. This strategic alliance
may be further  expanded to include an agreement  on health and beauty  products
and related  categories.  It is planned that certain aspects of our price impact
retail format could be incorporated into Kmart's merchandising  programs,  which
could extend our combined procurement leverage. In addition, Kmart will offer us
access to its strengths in general  merchandise and seasonal  goods.  Kmart will
adopt our  "BestYet"  private  label  program  and pay fees to us based on brand
management.

Yucaipa Investment

On February 7, 2001,  we announced a $50 million  investment in our common stock
by an affiliate of The Yucaipa Companies,  an investment group controlled by Ron
Burkle. Through this investment,  Yucaipa will acquire approximately 3.8 million
new shares,  representing  approximately  8.7% of our outstanding  common stock.
Yucaipa has substantial  experience in the retailing and  distribution  sectors,
including past  investments in such food retailers as Food 4 Less  Supermarkets,
Inc.,  Ralph's  Grocery  Company,  Dominick's  Finer Foods and Fred Meyer,  Inc.
Yucaipa has also acquired a 12-month  option to invest an additional $50 million
in our common  stock at the  then-current  average  market  price.  The  Yucaipa
investment closed on March 22, 2001.

Our Distribution Segment

Our  distribution  segment  sells food and  non-food  products to  supermarkets,
convenience stores,  supercenters,  discount stores,  limited assortment stores,
drug stores,  specialty  stores and other stores across the U.S. We also offer a
variety of retail  support  services to  independently-owned  and  company-owned
retail  stores.  Net sales for our  distribution  segment were $11.2 billion for
fiscal 2000,  excluding sales to our own retail stores.  Sales to our own retail
stores totaled $1.8 billion during fiscal 2000.

In the course of implementing  our strategic plan,  since 1998 we have closed or
consolidated 12 of our distribution centers,  which has increased volumes at our
remaining 31 distribution  centers.  As a result,  we now have four distribution
divisions with net sales for 2001 expected to be over $1 billion each. We have a
total  of  26  distribution   divisions,   some  of  which  encompass   multiple
distribution centers that have common management.

Customers Served: During 2000, our distribution segment served a wide variety of
retail operations located in 41 states.  The segment serves customers  operating
as conventional supermarkets (averaging approximately 23,000 total square feet),
superstores  (supermarkets  of  30,000  square  feet or more),  supercenters  (a
combination of discount store and supermarket  encompassing  110,000 square feet
or more),  warehouse  stores  ("no-frills"  operations  of various large sizes),
combination  stores  (which have a high  percentage of non-food  offerings)  and
convenience  stores  (generally  under  4,000  square feet and  offering  only a
limited assortment of products).

Our top ten  customers  accounted for  approximately  17% of our total net sales
during 2000. Kmart Corporation, our largest customer,  represented approximately
10% of our  total  net  sales  in 2000,  which we  project  will  increase  to a
significantly greater percentage of our total net sales in 2001. No other single
customer represented more than 2% of our fiscal 2000 net sales.

Pricing.  The  distribution  segment uses market research and cost analyses as a
basis for pricing its products and  services.  In all  operating  units,  retail
services  are  individually  and  competitively  priced.  We  have  three  basic
marketing  programs  for  our  distribution  business:   FlexMate,  FlexPro  and
FlexStar.

The  FlexMate  marketing  program  prices  product to customers at a quoted sell
price,  a  selling  price  established  by us that may  include a  mark-up.  The
FlexMate  marketing program is available as an option in all operating units for
grocery,  frozen and dairy products. In all operating units, a quoted sell price
method is used for meat, produce, bakery goods,  delicatessen products,  tobacco
supplies,   general   merchandise  and  health  and  beauty  care  products.   A
distribution  fee is  usually  added to the  quoted  sell  price  based upon the
product category. Under some marketing programs,  freight charges are also added
to offset in whole or in part our cost of delivery services  provided.  Any cash
discounts,  certain  allowances  and service  income  earned from vendors may be
retained by the distribution segment. This has generally been referred to as the
"traditional pricing" method.

Under  FlexPro,  grocery,  frozen  and dairy  products  are  priced at their net
acquisition  value which is generally  comparable  to the net cash price paid by
the  distribution  segment.  Vendor  allowances  and  service  income are passed
through to the customer. Service charges are established using the principles of
activity-based  pricing  modified by  marketing  considerations.  Activity-based
pricing  attempts  to  identify  our  cost  of  providing  certain  services  in
connection  with  the  sale of  products  such as  transportation,  storage  and
handling.  Based on these identified costs, and with a view to market responses,
we  establish  charges  for these  activities  designed  to recover our cost and
provide us with a  reasonable  profit.  These  charges are then added to the net
product  price.  We also charge a fee for  administrative  services  provided to
arrange and manage certain  allowances and service income offered by vendors and
earned by the distribution segment and its customers.

FlexStar uses the same product  pricing as FlexPro,  but  generally  uses a less
complex  presentation for distribution  service charges.  FlexStar  averages the
charges  across items and orders and  provides  the  customer a more  consistent
percentage base charge by department.

Kmart product pricing for grocery, frozen, dairy, produce, packaged meat, bakery
and deli products will follow the FlexPro/FlexStar  pricing methodology,  priced
at their net acquisition  value, with vendor  allowances passed through.  Random
weight meat and deli products will be priced at our last received cost.  Certain
other items will be priced at net  acquisition  value plus a negotiated  fee. In
addition,  Kmart will pay us a logistics  fee equal to a percentage of purchases
based on volume, and a negotiated fixed annual procurement fee.

Fleming  Brands.   Fleming  Brands  are  Fleming-owned   brands  that  we  offer
exclusively to our customers.  Fleming Brands,  which include BestYet,  Nature's
Finest,  SuperTru,  Marquee,  Rainbow and Exceptional  Value,  are positioned to
compete with national  brand products and value brand  products.  As part of our
recent Kmart strategic  alliance,  Kmart has agreed to adopt our BestYet private
label program in its Kmart and Kmart supercenter stores.

Controlled  labels are offered only in stores  operating under specific  banners
(which may or may not be  controlled by us).  Controlled  labels are products to
which we have  exclusive  distribution  rights to a particular  customer or in a
specific region. We offer two controlled  labels,  IGA and Piggly Wiggly brands,
which are national quality brands.

Procurement.  We have  centralized the majority of our merchandise  procurement.
This  makes  more  efficient  use  of our  procurement  staff,  improves  buying
efficiency  and  reduces the cost of goods.  Our  customer  support  center near
Dallas is one of the largest buying locations of consumable goods in the U.S. We
believe that our centralized  purchasing  capabilities  are valuable to national
retailers such as Kmart as well as the smaller,  independent retailers that make
up our traditional customer base.

Retail Services.  Retail services are marketed,  priced and delivered separately
from other  distribution  operations.  Our retail  services  marketing and sales
personnel look for  opportunities  to cross-sell  additional  retail services as
well as other  distribution  segment  products to their  customers.  Through our
recently  established  retail  account  executive,  or RAE,  programs,  we offer
consulting,  strategic  planning,   administrative  and  information  technology
services to customers to assist them in improving store  performance.  Incentive
compensation  for our RAEs is based on the  performance  of the  customers  they
serve.

Facilities  and  Transportation.  At the end of 2000  our  distribution  segment
operated  22  full-line  distribution  centers  which  are  responsible  for the
distribution of national brands and Fleming Brands,  including groceries,  meat,
dairy and  delicatessen  products,  frozen  foods,  produce,  bakery goods and a
variety  of  related  food and  non-food  items.  Six  general  merchandise  and
specialty food operating units distribute health and beauty care items and other
items of general  merchandise and specialty  foods.  Three warehouse  facilities
serve  convenience  stores.  All  facilities  are equipped with modern  material
handling  equipment  for  receiving,  storing and shipping  large  quantities of
merchandise.  Our distribution centers comprise  approximately 19 million square
feet of warehouse  space.  Additionally,  the  distribution  segment rents, on a
short-term  basis,  approximately  432,000  square  feet of  off-site  temporary
storage space.

Transportation  arrangements and operations vary by distribution  center and may
vary by customer.  Some customers prefer to handle product delivery  themselves,
others  prefer us to deliver  products,  and still  others ask us to  coordinate
delivery  with a third  party.  Accordingly,  many of our  distribution  centers
maintain a truck  fleet to deliver  products  to  customers,  and several of our
distribution   centers  also  engage  dedicated  contract  carriers  to  deliver
products.  We  increase  the  utilization  of our  truck  fleet by  back-hauling
products from suppliers and others,  thereby  reducing the number of empty miles
traveled.  To further  increase  our fleet  utilization,  we have made our truck
fleet available to other firms on a for-hire carriage basis.

Capital Invested in Customers.  As part of our services to retailers, we provide
capital to certain  customers by extending  credit for inventory  purchases,  by
becoming  primarily or secondarily liable for store leases, by leasing equipment
to  retailers,  by making  secured  loans and by making  equity  investments  in
customers:

-   Extension of Credit for Inventory Purchases.  Customary trade  credit
    terms  are usually the day following statement date for customers  on
    FlexPro  or  FlexStar and up to seven days for other  marketing  plan
    customers.

-   Store and Equipment Leases.  We lease stores for sublease to  certain
    customers.  At  year-end  2000,  we  were  the  primary   lessee   of
    approximately 600 retail store locations subleased to and operated by
    customers.  We  also  lease  a substantial  amount  of  equipment  to
    retailers.   Our  lease  terms generally  provide  for  a  reasonable
    profit.

-   Secured Loans  and  Lease  Guarantees.  We make  loans  to  customers
    primarily  for  store  expansions or improvements.  These  loans  are
    typically  secured by inventory and store fixtures, bear interest  at
    rates  above  the prime rate, and are for terms of up to  ten  years.
    Loans  are  approved by our business development committee  following
    written  approval  standards. We believe our loans to  customers  are
    illiquid  and  would not be investment grade if rated. From  time  to
    time,  we  also  guarantee the lease obligations of  certain  of  our
    customers.

In making credit and investment decisions,  we consider many factors,  including
estimated return on capital,  assumed risks and benefits  (including our ability
to secure long-term supply contracts with these customers).

At year-end 2000, we had loans  outstanding  to customers  totaling $110 million
($2  million  of  which  were  to  retailers  in  which  we also  had an  equity
investment).  We also have  investments in customers  through  direct  financing
leases of real property and equipment,  lease  guarantees,  operating  leases or
credit extensions for inventory purchases. The present values of our obligations
under such direct  financing  leases and lease  guarantees were $182 million and
$14  million,  respectively,  at year- end 2000.  Our credit loss  expense  from
receivables  as well as from  investments  in customers was $29 million in 2000,
which is comparable to prior years.

Franchising.  We also  license or grant  franchises  to retailers to use certain
registered trade names such as Piggly Wiggly,  Food 4 Less (a registered service
mark and  trademark  that we are  authorized  to use  pursuant  to a  restricted
license granted by Ralph's Grocery Company, a subsidiary of Kroger Co.), Sentry,
Super 1 Foods, Festival Foods, Jubilee Foods, Jamboree Foods,  MEGAMARKET,  Shop
`N Kart,  American Family,  Big Star, Big T, Buy for Less, County Pride Markets,
Red Fox, Shop N Bag, Super Duper, Super Foods, Super Thrift, Thriftway and Value
King.

We encourage  independents  and small  chains to join one of the Fleming  Banner
Groups  to  receive  many of the same  marketing  and  procurement  efficiencies
available  to larger  chains.  The  Fleming  Banner  Groups  are  retail  stores
operating under one of a number of banners representing either a conventional or
price impact retail format.

Cost-Reduction Initiatives. To strengthen our position as a low-cost supplier to
our retail customers and increase our profitability, we instituted a "culture of
thrift" among our employees  and  developed  initiatives  to reduce our expenses
through  our Low Cost  Pursuit  Program.  This  program  focuses on five  areas:
merchandising and procurement,  logistics and distribution,  shared services and
finance,  retail operations,  and customer  relations.  In the merchandising and
procurement functions, we have lowered cost of goods and administrative costs by
centralizing  most  of  our  procurement  functions,  which  were  conducted  in
individual  distribution  centers,  into one  national  procurement  center near
Dallas,  which is now one of the largest  procurement  locations in the U.S. The
logistics  and  distribution   functions  have  removed  costs  associated  with
back-haul,  in-bound  transportation and other logistics functions. In addition,
we  established  a new shared  services  center in  Oklahoma  City where we have
centralized  the  management of our  accounting,  human  resources,  information
technology and other support  services.  Retail operations have implemented best
demonstrated  practices to reduce labor costs and reduce store operating  costs,
and  certain  administrative  functions  have also been  centralized  for retail
operations.  Finally,  customer  relations  has  established  a single  point of
contact for each customer to eliminate  many  paper-based  processes and improve
customer communications.

Our Retail Segment

Our retail  segment  operates 94  supermarkets  under a variety of formats.  Our
continuing  chains  include 30 price impact  supermarkets  under the Food 4 Less
banner, and ten additional  supermarkets which we intend to convert to the price
impact  format  in 2001 and  2002.  We also  operate  44  supermarkets  that are
adopting  certain  elements of the price impact  format under the Rainbow  Foods
banner. Price impact supermarkets offer deep-discount,  everyday low prices in a
warehouse-style  format. In addition,  we operate ten limited  assortment stores
under  the  Yes!Less  banner,  four of which we  opened  in  2001.  Our  limited
assortment stores offer a narrow selection of low-price,  private label food and
other consumable goods, as well as general merchandise.

Price Impact  Supermarkets.  Our retail segment owns and operates 30 Food 4 Less
price impact supermarkets,  of which 19 are located in Northern California,  six
in the Salt Lake City, Utah area,  four in the Phoenix,  Arizona area and one in
Wisconsin. Of these 30 stores, 14 have opened since the beginning of 1999. These
stores offer  deep-discount,  everyday low prices  well-below  those  offered by
conventional  supermarkets  and carry prices for grocery products which are also
generally lower than supercenters.  Our price impact supermarkets are also known
for their quality meat and produce offerings.  These supermarkets average 55,000
square feet in size, generate average weekly sales of more than $450,000.

Our price impact supermarkets serve price-sensitive middle-income consumers that
may have larger-than-average families. These stores have a wider trade area than
conventional  supermarkets  yet are  generally  more  convenient  to  shop  than
supercenters.

Our price impact  supermarkets  offer  name-brand  food and consumable  goods at
significantly  lower prices than  conventional  format  retail  store  operators
because of the many low-cost  features of our stores.  These  features  include:
offering a reduced number of product selections, focusing on popular, name-brand
products and product categories;  employing  flow-through  distribution  methods
which  reduce  product  storage  and  handling  expense;  and  minimizing  store
operating costs by presenting a warehouse-style operation.

These  stores  do not  cost as much as  conventional  stores  to  construct  and
maintain,  as price impact stores typically feature cement floors,  cinder block
walls,  exposed  ceilings  and walk-in  freezers and coolers  which  combine the
typically  separate storage and display areas. In addition,  price impact stores
produce lower  operating  expenses,  primarily as a result of less labor content
due to pallet or case-loading  display racks,  fewer product  categories offered
due to focusing on the more popular  items,  self bagging,  and  elimination  of
on-site service departments such as a bakery or butcher shop.

We believe  price-sensitive  consumers are underserved on a nationwide basis. We
believe we have a substantial  opportunity  to grow our retail  segment's  price
impact supermarket operations. Our national distribution presence can adequately
support the  continued  growth of our price impact  retail  operations.  Because
price  impact  stores  cost  less  to  build  and  maintain  than   conventional
supermarkets,  we  expect  to be able  to  grow  our  price  impact  supermarket
operations while incurring fewer capital expenditures.  The success of our price
impact  stores  is  based on an  underserved  trade  area  and does not  require
significant market share.  Consequently,  we believe the typical advertising and
marketing expenditure requirements do not apply.

In 2001,  we intend to convert  seven of our  conventional  format  supermarkets
located in the greater Milwaukee, Wisconsin area to the price impact format, and
an  additional  three in early 2002. We also plan to open an additional 18 price
impact stores in 2001 through new store construction and acquisitions. New price
impact  stores  that our retail  segment  opens may be opened  under trade names
other than Food 4 Less.

Conventional Supermarkets with Price Impact Elements. We also operate 44 Rainbow
Foods  supermarkets,  with 42  stores in  Minnesota  and two in  Wisconsin.  Our
Rainbow Foods stores are  conventional  supermarkets  which we are beginning the
process of retrofitting with an increasing  degree of price impact elements.  As
part of this repositioning process, labor-intensive  service departments will be
reduced or  eliminated,  and some of the  merchandising  strategies of our price
impact format will be implemented. Purchasing decisions will be coordinated with
our price impact stores,  which should also help to increase  operating margins.
We expect that the  repositioning of the Rainbow Foods chain will be complete by
the end of 2002.

Limited  Assortment  Stores. In 2000, we began to develop our limited assortment
retail  concept  operating  under the  Yes!Less  trade  name,  operating  stores
averaging 12,000 to 15,000 square feet of selling space. Our Yes!Less concept is
designed to appeal to a needs-based  consumer,  primarily with low price private
label  food  and  other  consumables  and an  attractive  selection  of  general
merchandise  products at opening price points.  With four stores opened in 2001,
there are  currently ten Yes!Less  retail stores open,  nine in Texas and one in
Louisiana.   We  are  currently  evaluating  the  concept  with  a  view  toward
appropriate expansion.

Divestiture  of  Conventional  Format  Supermarkets.   In  addition  to  the  94
supermarkets  described  above, we also own and operate 86  conventional  format
supermarkets.  As part of our  strategic  repositioning,  we  decided to sell or
close these 86 conventional  format  supermarkets in order to focus resources on
growing our price impact stores and improving financial results.

Since 1998, we have  divested 152  conventional  supermarkets  and we are in the
process of selling or closing the remaining 86 stores. These conventional format
supermarkets  are operating  under the Baker's,  ABCO Desert Market,  Sentry and
other trade names, and are in various stages of divestiture.

In February  2001, we sold the assets of 11 ABCO Desert Market stores located in
Arizona to Safeway, Inc. In addition, we currently have an agreement to sell the
assets  of a  16-store  chain of  Baker's  Supermarkets  located  in the  Omaha,
Nebraska area to Kroger Co. This agreement is subject to customary conditions to
closing. Of the remaining 70 stores to be divested,  we are in various stages of
discussions  with  numerous  parties with respect to the sale of the majority of
these  stores,  and we currently  expect that all of these stores will either be
sold or closed by the end of 2001.  We expect to retain a  substantial  level of
the distribution business for the majority of stores that are sold.

Products

We  supply  a full  line  of  national  brands  and  Fleming  Brands,  including
groceries,  meat, dairy and delicatessen products, frozen foods, produce, bakery
goods and a variety of  general  merchandise,  health and beauty  care and other
related items.  During 2000, the average number of stock keeping units, or SKUs,
carried in full-line  distribution  centers was  approximately  15,000.  General
merchandise   and  specialty  food   operating   units  carried  an  average  of
approximately   17,500  SKUs.   Product  sales  account  for  over  97%  of  our
consolidated  sales.  During 2000,  our product mix as a  percentage  of product
sales  was  approximately   54%  groceries,   39%  perishables  and  7%  general
merchandise.

Suppliers

We purchase our products from numerous vendors and growers. As a large customer,
we are able to  secure  favorable  terms  and  volume  discounts  on many of our
purchases,  leading to lower unit  costs.  We purchase  products  from a diverse
group  of  suppliers  and  believe  we  have  adequate  sources  of  supply  for
substantially all of our products.

Competition

The  distribution   segment  operates  in  a  competitive  market.  Our  primary
competitors  are regional  and local food  distributors,  national  chains which
perform their own  distribution  and national food  distributors.  The principal
factors on which we compete  include  price,  quality and  assortment of product
lines,  schedules  and  reliability  of  delivery  and the range and  quality of
customer services.

The primary  competitors of our retail  segment  supermarkets  and  distribution
segment  customers are national,  regional and local grocery chains,  as well as
supercenters,   independent  supermarkets,   convenience  stores,  drug  stores,
restaurants and fast food outlets.  Principal competitive factors include price,
quality  and   assortment,   store  location  and  format,   sales   promotions,
advertising, availability of parking, hours of operation and store appeal.

Intellectual Property

We or our subsidiaries have many trade names registered at either the federal or
state level or a combination  of both,  such as Piggly Wiggly,  Sentry,  Super 1
Foods, Festival Foods, Jubilee Foods, Jamboree Foods, MEGAMARKET,  Shop `N Kart,
American Family,  Big Star, Big T, Buy for Less, County Pride Markets,  Red Fox,
Shop N Bag, Super Duper, Super Foods, Super Thrift, Thriftway and Value King. We
have applied for trademark registration for the name Fresh 4 Less.

We license  the Food 4 Less  service  mark and trade name from  Ralph's  Grocery
Company,  a subsidiary  of Kroger Co., and have the  exclusive  right to use and
sublicense the name in certain areas of  California.  We also have the exclusive
license to use and  sublicense the name in all other states,  excluding  certain
areas  of  Southern  California  and  certain  areas  in  various  other  states
previously  licensed  to others by  Ralph's or its  predecessors.  Additionally,
should  the  rights  to such a  previously  licensed  area  terminate,  we would
automatically  obtain  the  exclusive  license  for that  area.  The Food 4 Less
license  agreement  generally  provides for protected trade area status for five
years after the date that we, our  franchisees  or Ralph's  commit to entering a
new market area under the Food 4 Less banner.  However, we are not prohibited by
the licensing  agreement from opening stores under a different trade name in any
of these areas.

Employees

At December 30, 2000,  we had 29,567  full-time and  part-time  employees,  with
9,667  employed by the  distribution  segment,  17,829 by the retail segment and
2,071 employed in shared services, customer support and other functions.

Approximately  half  of our  employees  are  covered  by  collective  bargaining
agreements  with  the  International   Brotherhood  of  Teamsters;   Chauffeurs,
Warehousemen and Helpers of America; the United Food and Commercial Workers; the
International Longshoremen's and Warehousemen's Union; the Retail, Wholesale and
Department Store Union; and the International Union of Operating Engineers. Most
of these  agreements  expire at various times throughout the next five years. We
consider our employee relations in general to be satisfactory.


RISK FACTORS

All statements other than statements of historical facts included in this report
including,  without  limitation,  statements  under the captions "Risk Factors,"
"Management's  Discussion and Analysis" and "Business,"  regarding our financial
position,  business  strategy and plans and  objectives  of our  management  for
future operations,  constitute  forward-looking statements.  Although we believe
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  we can give no assurance that such  expectations will prove to have
been correct.  Cautionary  statements  describing  important  factors that could
cause actual results to differ  materially from our  expectations  are disclosed
hereunder  and  elsewhere  in this  report.  All  subsequent  written  and  oral
forward-looking  statements  attributable  to Fleming  or persons  acting on its
behalf are expressly qualified in their entirety by such cautionary statements.

WE HAVE A SUBSTANTIAL AMOUNT OF DEBT AND DEBT SERVICE  OBLIGATIONS,  WHICH COULD
ADVERSELY AFFECT OUR FINANCIAL HEALTH.

We have a substantial amount of debt outstanding which could:


-   make it more difficult to satisfy our long-term debt obligations;

-   require us  to  dedicate a substantial portion of our  cash  flow  to
    payments on our debt;

-   increase our  vulnerability to general adverse economic and  industry
    conditions;


-   limit  our   ability   to  fund  future  working   capital,   capital
    expenditures and other general corporate requirements;

-   limit our flexibility in planning for, or reacting to, changes in our
    business and the industry in which we operate; and

-   limit,  along with the financial and other restrictive  covenants  in
    our debt, among other things, our ability to borrow additional funds.
    If  we  fail  to comply with those covenants, it could result  in  an
    event of default which, if not cured or waived, could have a material
    adverse effect on our financial condition.

We and our subsidiaries may be able to incur substantial  additional debt in the
future,  including  secured debt. The terms of our existing  indebtedness do not
fully prohibit us or our subsidiaries from doing so. If new debt is added to our
and our  subsidiaries'  current debt levels,  the related risks that we and they
now face could intensify.

Our  ability to make  payments on and to  refinance  our debt will depend on our
financial and operating  performance,  which may  fluctuate  significantly  from
quarter to  quarter  and is subject to  prevailing  economic  conditions  and to
financial, business and other factors beyond our control.

We cannot assure you that our business will generate  sufficient  cash flow from
operations  or that future  borrowings  will be available to us under our credit
facility  in an  amount  sufficient  to enable us to pay our debt or to fund our
other liquidity  needs. We may need to refinance all or a portion of our debt on
or before  maturity.  We cannot assure you that we will be able to refinance any
of our debt on commercially reasonable terms or at all.

WE NOW  DEPEND ON KMART FOR A  SUBSTANTIAL  PORTION OF OUR  BUSINESS.  IF WE ARE
UNABLE TO REALIZE  ANTICIPATED COST SAVINGS RESULTING FROM THE ADDITIONAL VOLUME
REPRESENTED  BY OUR AGREEMENT,  IT COULD HARM OUR FINANCIAL  CONDITION AND COULD
JEOPARDIZE OUR ABILITY TO FULFILL OUR LONG- TERM DEBT OBLIGATIONS.

Kmart  is  our  largest  customer,  accounting  for  approximately  10%  of  our
consolidated  net sales in 2000.  On February 7, 2001,  we announced a ten- year
agreement  with  Kmart  Corporation,  pursuant  to which  we  agreed  to  supply
substantially all of the food and consumable  products in all current and future
Kmart and Kmart supercenter stores in the U.S. and the Caribbean. As a result of
this  agreement,   we  currently  anticipate  that  Kmart  will  account  for  a
significantly greater percentage of our net sales in 2001.  Accordingly,  we now
depend on Kmart for a substantial portion of our business.

We will be required to commit  substantial  capital and management  resources in
order to perform our obligations  under the Kmart agreement.  If we or Kmart are
unable to successfully  fulfill our respective  obligations under the agreement,
it will harm our financial condition and could jeopardize our ability to fulfill
our  long-term  debt  obligations.  More  specifically,  the  benefits  that  we
anticipate  receiving from the Kmart agreement depend on Kmart's  achievement of
certain sales projections.  If Kmart fails to meet these sales projections,  the
benefits that we will receive as a result of the agreement will decrease.  Kmart
can  also  elect  to  terminate  the  agreement  if  we  materially  breach  our
obligations  under the agreement,  if we experience  certain types of changes of
control or if the volume of Kmart's  purchases  under the agreement  declines by
certain amounts.  Finally,  if we are unable to capture anticipated cost savings
resulting from our increased  purchasing  power due to the Kmart  agreement,  it
could adversely affect our results of operations and financial condition.

OUR  SENIOR  NOTES,  OUR CREDIT  FACILITY  AND OUR OTHER  EXISTING  INDEBTEDNESS
CONTAIN PROVISIONS THAT COULD MATERIALLY RESTRICT OUR BUSINESS.

Our  senior  notes,  our credit  facility  and our other  existing  indebtedness
contain a number of significant covenants that, among other things, restrict our
ability to:

-   dispose of assets;

-   incur additional debt;

-   guarantee third-party obligations;

-   repay other debt or amend other debt instruments;

-   create liens on assets;

-   enter into capital leases;

-   make investments, loans or advances;

-   make acquisitions or engage in mergers or consolidations;

-   make capital expenditures; and

-   engage in certain transactions with our subsidiaries and affiliates.

In  addition,  under our credit  facility,  we are  required to meet a number of
financial ratios and tests.

Our ability to comply with these  covenants may be affected by events beyond our
control. If we breach any of these covenants or restrictions, it could result in
an event of default  under our credit  facility or the  documents  governing our
other  existing  indebtedness,  which  would  permit our  lenders to declare all
amounts  borrowed  thereunder  to be due and payable,  together with accrued and
unpaid  interest,  and our senior lenders could terminate  their  commitments to
make further  extensions of credit under our credit facility.  If we were unable
to repay debt to our secured lenders,  they could proceed against the collateral
securing the debt.

IF THE  CUSTOMERS  TO WHOM WE LEND MONEY OR FOR WHOM WE  GUARANTEE  STORE  LEASE
OBLIGATIONS FAIL TO REPAY US, IT COULD HARM OUR FINANCIAL CONDITION.

We provide subleases, extend loans to and make investments in many of our retail
store customers, often in conjunction with the establishment of long-term supply
contracts.  Our loans to our customers are generally not  investment  grade and,
along with our equity investments in our customers, are highly illiquid. We also
make  investments  in our  customers  through  direct  financing  leases,  lease
guarantees,  operating leases, credit extensions for inventory purchases and the
recourse  portion of notes sold  evidencing  such loans.  We also invest in real
estate to assure  market  access or to secure  supply  points.  Although we have
strict  credit  policies  and apply  cost/benefit  analyses to these  investment
decisions,  we face  the  risk  that  credit  losses  from  existing  or  future
investments or commitments could adversely affect our financial condition.

VARIOUS CHANGES IN THE  DISTRIBUTION AND RETAIL MARKETS IN WHICH WE OPERATE HAVE
LED  AND  MAY  CONTINUE  TO  LEAD  TO  REDUCED   SALES  AND  MARGINS  AND  LOWER
PROFITABILITY FOR OUR CUSTOMERS AND, CONSEQUENTLY, FOR US.

The  distribution  and  retail  markets  in  which  we  operate  are  undergoing
accelerated change as distributors and retailers seek to lower costs and provide
additional services in an increasingly  competitive  environment.  An example of
this is the growing trend of large  self-distributing  chains  consolidating  to
reduce costs and gain efficiencies. Eating away from home and alternative format
food stores, such as warehouse stores and supercenters,  have taken market share
from traditional  supermarket operators,  including independent grocers, many of
whom  are  our  customers.  Vendors,  seeking  to  ensure  that  more  of  their
promotional  fees and allowances are used by retailers to increase sales volume,
increasingly  direct promotional dollars to large  self-distributing  chains. We
believe that these changes have led to reduced sales,  reduced margins and lower
profitability  among many of our  customers  and,  consequently,  for us. If the
strategies we have developed in response to these changing market conditions are
not successful, it could harm our financial condition and business prospects.

CONSUMABLE  GOODS  DISTRIBUTION  IS A  LOW-MARGIN  BUSINESS  AND IS SENSITIVE TO
ECONOMIC CONDITIONS.

We derive most of our revenues from the consumable goods distribution  industry.
This industry is  characterized  by a high volume of sales with  relatively  low
profit margins. A significant  portion of our sales are at prices that are based
on  product  cost  plus  a  percentage  markup.  Consequently,  our  results  of
operations  may be negatively  impacted  when the price of  consumable  goods go
down,  even though our  percentage  markup may remain  constant.  The consumable
goods industry is also sensitive to national and regional  economic  conditions,
and the demand for our consumable goods has been adversely affected from time to
time by economic downturns. Additionally, our distribution business is sensitive
to increases in fuel and other transportation-related costs.

WE FACE COMPETITION IN BOTH OUR  DISTRIBUTION AND RETAIL MARKETS,  AND IF WE ARE
UNABLE TO COMPETE EFFECTIVELY IN THESE MARKETS, IT COULD HARM OUR BUSINESS.

Our distribution  segment operates in a competitive  market. We face competition
from local,  regional  and  national  food  distributors  on the basis of price,
quality and  assortment,  schedules and  reliability of deliveries and the range
and quality of services provided. We also compete with retail supermarket chains
that self-distribute, purchasing directly from vendors and distributing products
to   their   supermarkets   for   sale  to  the   consumer.   Consolidation   of
self-distributing   chains  may  produce  even  stronger   competition  for  our
distribution segment.

Our retail  segment  competes  with  other  food  outlets on the basis of price,
quality  and   assortment,   store  location  and  format,   sales   promotions,
advertising,  availability  of parking,  hours of  operation  and store  appeal.
Traditional mass  merchandisers have gained a growing foothold in food marketing
and distribution  with alternative  store formats,  such as warehouse stores and
supercenters,   which   depend  on   concentrated   buying  power  and  low-cost
distribution  technology.  We expect that stores with  alternative  formats will
continue to increase their market share in the future. Retail consolidations not
only produce stronger competition for our retail segment, but may also result in
declining  sales in our  distribution  segment  if our  existing  customers  are
acquired by self-distributing chains.

Some of our competitors  have greater  financial and other resources than we do.
In addition,  consolidation in the industry,  heightened  competition  among our
vendors,  new  entrants  and trends  toward  vertical  integration  could create
additional  competitive  pressures that reduce our margins and adversely  affect
our business.  If we fail to successfully respond to these competitive pressures
or to implement our  strategies  effectively,  it could have a material  adverse
effect on our financial condition and prospects.

BECAUSE WE OWN AND OPERATE  REAL  ESTATE,  WE FACE THE RISK OF BEING HELD LIABLE
FOR ENVIRONMENTAL DAMAGES THAT MAY OCCUR ON OUR PROPERTIES.

Our  facilities  and  operations  are subject to various laws,  regulations  and
judicial and administrative  orders concerning protection of the environment and
human  health,  including  provisions  regarding  the  transportation,  storage,
distribution,  disposal or discharge of certain  materials.  In conformity  with
these  provisions,  we  have  a  comprehensive  program  for  testing,  removal,
replacement  or  repair  of our  underground  fuel  storage  tanks  and for site
remediation  where  necessary.  Although we have  established  reserves  that we
believe  will be  sufficient  to  satisfy  the  anticipated  costs of all  known
remediation  requirements,  we cannot  assure  you that these  reserves  will be
sufficient.

We and others have been designated by the U.S.  Environmental  Protection Agency
and by similar  state  agencies as  potentially  responsible  parties  under the
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
or similar state laws, as applicable,  with respect to EPA-designated  Superfund
sites.  While liability under CERCLA for remediation at these sites is generally
joint and several with other responsible parties, we believe that, to the extent
we are ultimately  determined to be liable for the expense of remediation at any
site,  such  liability  will not  result  in a  material  adverse  effect on our
consolidated  financial  position or results of operations.  We are committed to
maintaining the environment  and protecting  natural  resources and human health
and to achieving full  compliance  with all  applicable  laws,  regulations  and
orders.

WE ARE CURRENTLY SUBJECT TO A NUMBER OF MATERIAL LITIGATION PROCEEDINGS.  IF ANY
OF THESE  PROCEEDINGS  IS  RESOLVED  AGAINST  US,  IT COULD  HARM OUR  FINANCIAL
CONDITION AND BUSINESS PROSPECTS.

We are currently  subject to a number of material  litigation  proceedings,  the
costs and other effects of which are  impossible to predict with any  certainty.
An unfavorable  outcome in any one of these cases could have a material  adverse
effect on our financial condition and prospects.  From time to time, we are also
party to or threatened  with  litigation in which claims against us are made, or
are  threatened  to be made,  by present  and  former  customers,  sometimes  in
situations involving financially troubled or failed customers. We are a party to
various other litigation and contingent loss situations  arising in the ordinary
course of our business including:

-   disputes with customers and former customers;

-   disputes  with  owners  and former owners of financially  troubled  or
    failed customers;

-   disputes   with   employees  and  former  employees  regarding   labor
    conditions,   wages,  workers'  compensation  matters   and   alleged
    discriminatory practices;

-   disputes with insurance carriers;

-   tax assessments; and

-   other matters,

some  of  which  are  for  substantial  amounts.  The  current  environment  for
litigation involving food distributors may increase the risk of litigation being
commenced  against us. We would incur the costs of defending any such litigation
whether or not any claim had merit.  For more  information  regarding  the legal
proceedings to which we are currently subject, see Item 3. Legal Proceedings.

BECAUSE WE SELL FOOD AND OTHER  PRODUCTS,  WE ARE  SUBJECT TO PRODUCT  LIABILITY
CLAIMS.

Like any other seller of food and other  products,  we face the risk of exposure
to product  liability  claims in the event that people who purchase  products we
sell become injured or experience  illness as a result.  We believe that we have
sufficient primary and excess umbrella liability insurance to protect us against
any product  liability  claims that may arise.  However,  this insurance may not
continue to be available at a reasonable  cost, or, even if it is available,  it
may not be adequate to cover our  liabilities.  We  generally  seek  contractual
indemnification and insurance coverage from parties supplying our products,  but
this indemnification or insurance coverage is limited, as a practical matter, to
the  creditworthiness  of the  indemnifying  party and the policy  limits of any
insurance  provided  by  suppliers.  If we do not  have  adequate  insurance  or
contractual  indemnification to cover our liabilities,  product liability claims
relating  to  defective  food and other  products  could  materially  reduce our
earnings.

WE CANNOT ASSURE YOU THAT WE WILL BE SUCCESSFUL IN INTEGRATING  NEWLY-  ACQUIRED
STORES AND  DISTRIBUTION  CENTERS.  IF WE DO NOT ACHIEVE THE  BENEFITS WE EXPECT
FROM ANY OF  THESE  ACQUISITIONS,  IT COULD  HARM  OUR  BUSINESS  AND  FINANCIAL
CONDITION.

Part of our growth strategy for our retail segment involves selective  strategic
acquisitions of stores operated by others. In addition, our distribution segment
intends  to seek  strategic  acquisitions  of other  distribution  centers  on a
limited basis.  Achieving the benefits of these acquisitions will depend in part
on our ability to integrate  those  businesses with our business in an efficient
manner.  We cannot assure you that this will happen or that it will happen in an
efficient manner.  Our consolidation of operations  following these acquisitions
may  require  substantial  attention  from  our  management.  The  diversion  of
management  attention and any  difficulties  encountered  in the  transition and
integration  process  could have a  material  adverse  effect on our  ability to
achieve  expected net sales,  operating  expenses and operating  results for the
acquired  business.  We  cannot  assure  you  that  we will  realize  any of the
anticipated  benefits  of any  acquisition,  and if we  fail  to  realize  these
anticipated benefits, our operating performance could suffer.

WE OPERATE IN A COMPETITIVE LABOR MARKET, AND THE MAJORITY OF OUR EMPLOYEES ARE
COVERED BY COLLECTIVE BARGAINING AGREEMENTS.

Our continued success will depend on our ability to attract and retain qualified
personnel in both our distribution  and retail  segments.  We compete with other
businesses  in our markets with respect to attracting  and  retaining  qualified
employees.  The labor  market is  currently  tight and we expect the tight labor
market to  continue.  A shortage  of  qualified  employees  would  require us to
enhance our wage and benefits  packages in order to compete  effectively  in the
hiring and retention of qualified  employees or to hire more expensive temporary
employees.  In addition,  about half of our  employees are covered by collective
bargaining agreements,  most of which expire at various times over the course of
the next  five  years.  We cannot  assure  you that we will be able to renew our
collective bargaining agreements,  that our labor costs will not increase,  that
we will be able to recover any increases  through  increased  prices  charged to
customers  or that we will not  suffer  business  interruptions  as a result  of
strikes or other work  stoppages.  If we fail to  attract  and retain  qualified
employees,  to control our labor costs,  or to recover any increased labor costs
through increased prices charged to our customers, it could harm our business.

OUR STOCK PRICE HAS BEEN AND IS LIKELY TO CONTINUE TO BE VOLATILE.

The  trading  price of our  common  stock  has been and is  likely  to be highly
volatile. Our stock price could be subject to wide fluctuations in response to a
variety of factors, including the following:

-   actual or anticipated variations in quarterly operating results;

-   announcements of technological innovations;

-   new products or services offered by us or our competitors;

-   changes in financial estimates by securities analysts;

-   conditions or trends in the distribution and retail industries;

-   our   announcement   of  significant  acquisitions,   strategic
    partnerships, joint ventures or capital commitments;

-   adverse or unfavorable publicity regarding us or our services;

-   additions or departures of key personnel; and

-   sales of common stock;

In addition,  the stock  markets in general have  experienced  extreme price and
volume volatility and a cumulative decline in recent months. Such volatility and
decline have affected many companies  irrespective of or  disproportionately  to
the operating  performance of these  companies.  These broad market and industry
factors may  materially  and  adversely  further  affect the market price of our
common stock, regardless of our actual operating performance.


ITEM 2.  PROPERTIES

The  following  table  sets forth  facilities  information  with  respect to our
distribution segment:

                                     Approximate
        Location                     Square Feet       Owned or Leased
        --------                     -----------       ---------------
                                    (in thousands)

 Full-line Distribution Centers:
 Ewa Beach, HI                              361        Leased
 Fresno, CA                                 828        Owned/Leased
 Garland, TX                              1,190        Owned
 Geneva, AL                                 643        Leased
 Kansas City, KS                          1,136        Leased
 La Crosse, WI                              907        Owned
 Lafayette, LA                              437        Owned
 Lincoln, NE                                515        Leased
 Lubbock, TX                                763        Owned/Leased
 Massillon, OH                              874        Owned
 Memphis, TN                              1,071        Owned/Leased
 Miami, FL                                  764        Owned
 Milwaukee, WI                              600        Owned
 Minneapolis, MN                            480        Owned
 Nashville, TN                              941        Leased
 North East, MD                             591        Owned/Leased
 Oklahoma City, OK                          529        Leased
 Phoenix, AZ                              1,642        Owned/Leased
 Sacramento, CA                             787        Owned/Leased
 Salt Lake City, UT                         555        Owned/Leased
 Superior, WI                               371        Owned
 Warsaw, NC                                 672        Owned/Leased
                                         ------
           Total                         16,657

 General Merchandise Distribution Centers:
 Dallas, TX                                 262        Owned/Leased
 King of Prussia, PA                        377        Leased
 La Crosse, WI                              163        Owned
 Memphis, TN                                495        Owned/Leased
 Sacramento, CA                             438        Leased
 Topeka, KS                                 223        Leased
                                         ------
           Total                          1,958

 Convenience Store Distribution Centers:
 Altoona, PA                                172        Owned
 Marshfield, WI                             157        Owned
 Romeoville, IL                             124        Leased
                                         ------
           Total                            453

 Temporary Storage:
 Outside storage facilities - typically
 rented on a short-term basis               432
                                         ------
           Total for distribution        19,500
                                         ======

In addition to the above, we have ten closed facilities in various states and we
are actively marketing them.

Our  retail  segment  operates  94  supermarkets  in a  variety  of  formats  in
California,  Utah,  Arizona,  Wisconsin,  Minnesota,  Texas and  Louisiana.  Our
continuing chains include 30 price impact  supermarkets,  ten supermarkets to be
converted  to the price  impact  format,  ten limited  assortment  stores and 44
conventional  supermarkets  which are  adopting  certain  elements  of the price
impact  format.  In  addition,  we are in the  process  of selling or closing an
additional  86  conventional  supermarkets  that  our  retail  segment  owns and
operates in  Nebraska,  Arizona and  Wisconsin.  For more  information,  see the
subsection "Our Retail Segment."

Our shared  service  center office is located in Oklahoma  City,  Oklahoma.  The
shared  service  center  occupies  leased  office space  totaling  approximately
232,000  square feet. Our customer  support  center near Dallas,  Texas occupies
leased office space totaling approximately 136,000 square feet.

We own and lease other  significant  assets,  such as inventories,  fixtures and
equipment and capital leases.


ITEM 3.  LEGAL PROCEEDINGS

The  following  describes  various  pending  legal  proceedings  to which we are
subject. For additional information see "Litigation Charges" and "Contingencies"
in the notes to the consolidated financial statements which are included in Item
8 of this report.

(1) Class  Action  Suits.  In 1996,  we and  certain of our  present  and former
officers and directors were named as defendants in nine  purported  class action
suits filed by certain stockholders and one purported class action suit filed by
two  noteholders.  All cases were filed in the United States  District Court for
the  Western  District  of  Oklahoma.   In  1997,  the  court  consolidated  the
stockholder  cases;  the  noteholder  case was also  consolidated,  but only for
pre-trial purposes. The plaintiffs in the consolidated cases sought undetermined
but  significant  damages,  and asserted  liability  for our alleged  "deceptive
business  practices,"  and our  alleged  failure  to  properly  account  for and
disclose  the  contingent   liability   created  by  the  David's   Supermarkets
litigation,  a lawsuit we settled  in April  1997 in which  David's  sued us for
allegedly  overcharging for products.  The plaintiffs claimed that these alleged
practices  led to  the  David's  litigation  and to  other  material  contingent
liabilities,  caused us to change our manner of doing business at great cost and
loss of profit and materially inflated the trading price of our common stock.

During 1998 the complaint in the noteholder case was dismissed,  and during 1999
the complaint in the  consolidated  stockholder  case was also  dismissed,  each
without  prejudice.  The court gave the  plaintiffs  the  opportunity to restate
their claims in each case, and they did so in amended complaints. We again filed
motions to dismiss  all claims in both cases.  On  February  4, 2000,  the court
dismissed the amended  complaint in the  stockholder  case with  prejudice.  The
stockholder  plaintiffs  filed a notice of appeal on March 3, 2000, and briefing
is presently under way in the Court of Appeals for the Tenth Circuit.  On August
1, 2000,  the court  dismissed the claims in the noteholder  complaint  alleging
violations of the Securities Exchange Act of 1934, but the court determined that
the noteholder plaintiffs have stated a claim under Section 11 of the Securities
Act of 1933.  On  September  15,  2000,  defendants  filed a motion  to allow an
immediate  appeal of the court's  denial of their motion to dismiss  plaintiffs'
claim under Section 11. That motion was denied on January 8, 2001.  The case was
set for a status and  scheduling  conference on January 30, 2001.  The court has
entered an order setting this case for trial in October 2001.

Based upon some  preliminary  assumptions,  plaintiffs'  economic experts in the
noteholder  case have  estimated  "baseline"  damages  to be  approximately  $10
million and pre-judgment interest of approximately $3 million.

In 1997, we won a declaratory judgment against certain of our insurance carriers
regarding  policies  issued to us for the benefit of our officers and directors.
On motion for summary judgment, the court ruled that our exposure, if any, under
the class  action  suits is covered  by D&O  policies  written by the  insurance
carriers,  aggregating $60 million in coverage,  and that the "larger settlement
rule" will apply to the case.  According  to the trial  court,  under the larger
settlement  rule,  a D&O  insurer is liable for the  entire  amount of  coverage
available under a policy even if there is some overlap in the liability  created
by the insured  individuals  and the uninsured  corporation.  If a corporation's
liability  is  increased  by  uninsured  parties  beyond  that  of  the  insured
individuals,  then that portion of the  liability is the sole  obligation of the
corporation.  The court  also  held  that  allocation  is not  available  to the
insurance carriers as an affirmative  defense.  The insurance carriers appealed.
In 1999,  the appellate  court affirmed the decision that the class actions were
covered by D&O  policies  aggregating  $60 million in coverage  but reversed the
trial court's decision as to allocation as being premature.

We intend to  vigorously  defend  against the claims in these class action suits
and pursue the issue of insurance  discussed  above,  but we cannot  predict the
outcome of the  cases.  An  unfavorable  outcome  could have a material  adverse
effect on our financial condition and prospects.

(2) Don's United Super (and related cases). We and two of our retired executives
have been named in a suit filed in 1998 in the United States  District Court for
the Western  District of Missouri by several current and former customers of the
company  (Don's United  Super,  et al. v.  Fleming,  et al.).  The 18 plaintiffs
operate  retail  grocery  stores in the St. Joseph and Kansas City  metropolitan
areas.  The  plaintiffs  in this  suit  allege  product  overcharges,  breach of
contract,   breach  of  fiduciary  duty,   misrepresentation,   fraud  and  RICO
violations, and they are seeking actual, punitive and treble damages, as well as
a  declaration  that  certain  contracts  are  voidable  at  the  option  of the
plaintiffs.

During the fourth quarter of 1999,  plaintiffs  produced reports of their expert
witnesses  calculating  alleged  actual damages of  approximately  $112 million.
During the first quarter of 2000,  plaintiffs  revised a portion of these damage
calculations,  and  although it is not clear what the precise  damage claim will
be, it appears that plaintiffs will claim approximately $120 million,  exclusive
of any punitive or treble damages.

On May 2, 2000, the court granted  partial  summary  judgment to the defendants,
holding that  plaintiffs'  breach of contract  claims that relate to events that
occurred more than four years before the filing of the  litigation are barred by
limitations,  and that plaintiffs' fraud claims based upon fraudulent inducement
that occurred  more than 15 years before the filing of the lawsuit  likewise are
barred.  It is unclear what impact, if any, these rulings may have on the damage
calculations of the plaintiffs' expert witnesses.

The court has set August 13,  2001 as the date on which  trial of the Don's case
will commence.

In October  1998,  we and the same two retired  executives  were named in a suit
filed  by  another  group of  retailers  in the same  court  as the  Don's  suit
(Coddington  Enterprises,  Inc.,  et al.  v.  Fleming,  et al.).  Currently,  16
plaintiffs  are asserting  claims in the  Coddington  suit, all but one of which
have  arbitration  agreements  with us. The plaintiffs  assert claims  virtually
identical to those set forth in the Don's suit, and although plaintiffs have not
yet quantified the damages in their pleadings,  it is anticipated that they will
claim actual damages approximating the damages claimed in the Don's suit.

In July 1999, the court ordered two of the plaintiffs in the Coddington  case to
arbitration, and otherwise denied arbitration as to the remaining plaintiffs. We
have appealed the district  court's  denial of arbitration to the Eighth Circuit
Court of Appeals.  The two plaintiffs who were ordered to arbitration have filed
motions asking the district court to reconsider the arbitration ruling.

Two other cases had been filed before the Don's case in the same district  court
(R&D Foods, Inc., et al. v. Fleming, et al.; and Robandee United Super, Inc., et
al. v. Fleming, et al.) by 10 customers, some of whom are also plaintiffs in the
Don's case. The earlier two cases,  which  principally seek an accounting of our
expenditure of certain joint  advertising  funds,  have been  consolidated.  All
proceedings  in these cases have been  stayed  pending  the  arbitration  of the
claims of those plaintiffs who have arbitration agreements with us.

In March  2000,  we and one former  executive  were named in a suit filed in the
United States District Court for the Eastern District of Missouri by current and
former  customers  that operated five retail grocery stores in and around Kansas
City,  Missouri,  and four retail grocery stores in and around Phoenix,  Arizona
(J&A Foods,  Inc.,  et al. v. Dean  Werries and Fleming  Companies,  Inc.).  The
plaintiffs  have  alleged  product  overcharges,  fraudulent  misrepresentation,
fraudulent nondisclosure and concealment,  breach of contract, breach of duty of
good faith and fair dealing and RICO  violations,  and they are seeking  actual,
punitive and treble damages,  as well as other relief. The damages have not been
quantified by the plaintiffs;  however,  we anticipate that substantial  damages
will be claimed.

On August 8, 2000, the Judicial Panel on  Multidistrict  Litigation  granted our
motion and ordered the related  Missouri  cases (Don's United Super,  Coddington
Enterprises,  Inc.,  and J&A  Foods,  Inc.)  and  the  Storehouse  Markets  case
(described   below)   transferred  to  the  Western  District  of  Missouri  for
coordinated or consolidated pre-trial proceedings.

We intend to vigorously  defend against the claims in these related cases but we
are currently unable to predict the outcome of the cases. An unfavorable outcome
could have a material adverse effect on our financial condition and prospects.

On March 2, 2001,  the court  ordered the  parties in the  Missouri  cases,  the
Storehouse  Markets  cases and the Welsh case to mediate the  dispute  within 45
days of the order.

(3) Storehouse Markets. In 1998, we and one of our former division officers were
named in a suit filed in the United  States  District  Court for the District of
Utah by several current and former customers of the company (Storehouse Markets,
Inc., et al. v. Fleming  Companies,  Inc., et al.). The plaintiffs  have alleged
product overcharges, fraudulent misrepresentation,  fraudulent nondisclosure and
concealment,  breach of contract,  breach of duty of good faith and fair dealing
and RICO violations,  and they are seeking actual,  punitive and treble damages.
The  plaintiffs  have  made  these  claims  on  behalf  of a  class  that  would
purportedly  include current and former customers of our Salt Lake City division
covering a  four-state  region.  On June 12,  2000,  the court  entered an order
certifying the case as a class action. On July 11, 2000, the United States Court
of Appeals for the Tenth  Circuit  granted our request for  permission to appeal
the class  certification  order, and we are pursuing that appeal on an expedited
basis.

On August 8, 2000, the Judicial Panel on  Multidistrict  Litigation  granted our
motion and ordered  the  Storehouse  Markets  case and  related  Missouri  cases
(described   above)   transferred  to  the  Western  District  of  Missouri  for
coordinated or consolidated pre-trial proceedings.

Damages have not been quantified by the plaintiffs;  however, we anticipate that
substantial  damages will be claimed.  We intend to  vigorously  defend  against
these  claims but we cannot  predict  the  outcome of the case.  An  unfavorable
outcome  could have a material  adverse  effect on our  financial  condition and
prospects.

On March 2, 2001,  the court  ordered the  parties in the  Missouri  cases,  the
Storehouse  Markets  cases and the Welsh case to mediate the  dispute  within 45
days of the order.

(4) Welsh.  In April 2000,  the operators of two grocery  stores in Van Horn and
Marfa,  Texas filed an amended complaint in the United States District Court for
the Western District of Texas,  Pecos Division (Welsh v. Fleming Foods of Texas,
L.P.). The amended  complaint alleges product  overcharges,  breach of contract,
fraud,  conversion,  breach of fiduciary duty, negligent  misrepresentation  and
breach of the Texas Deceptive  Trade Practices Act. The amended  complaint seeks
unspecified actual damages,  punitive damages,  attorneys' fees and pre-judgment
and  post-judgment  interest.  Pursuant  to the order of the  Judicial  Panel on
Multidistrict  Litigation,  the Welsh case has been  transferred  to the Western
District of Missouri for  pre-trial  proceedings.  No trial date has been set in
this case.

On March 2, 2001,  the court  ordered the  parties in the  Missouri  cases,  the
Storehouse  Markets  cases and the Welsh case to mediate the  dispute  within 45
days of the order.

(5)  Other.   Our  facilities  and  operations  are  subject  to  various  laws,
regulations and judicial and administrative  orders concerning protection of the
environment and human health, including provisions regarding the transportation,
storage, distribution, disposal or discharge of certain materials. In conformity
with these  provisions,  we have a comprehensive  program for testing,  removal,
replacement  or  repair  of our  underground  fuel  storage  tanks  and for site
remediation where necessary.  We have established  reserves that we believe will
be  sufficient  to  satisfy  the  anticipated  costs  of all  known  remediation
requirements.

We and others have been designated by the U.S.  Environmental  Protection Agency
and by similar  state  agencies as  potentially  responsible  parties  under the
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
or similar state laws, as applicable,  with respect to EPA-designated  Superfund
sites.  While liability under CERCLA for remediation at these sites is generally
joint and several with other responsible parties, we believe that, to the extent
we are ultimately  determined to be liable for the expense of remediation at any
site,  such  liability  will not  result  in a  material  adverse  effect on our
consolidated  financial  position or results of operations.  We are committed to
maintaining the environment  and protecting  natural  resources and human health
and to achieving full  compliance  with all  applicable  laws,  regulations  and
orders.

We are a party to or threatened  with various other  litigation  and  contingent
loss  situations  arising  in the  ordinary  course of our  business  including:
disputes with  customers and former  customers;  disputes with owners and former
owners of financially troubled or failed customers;  disputes with landlords and
former landlords;  disputes with employees and former employees  regarding labor
conditions,  wages,  workers'  compensation  matters and alleged  discriminatory
practices;  disputes with insurance carriers; tax assessments and other matters,
some of which are for  substantial  amounts.  Except as noted herein,  we do not
believe that any such claim will have a material adverse effect on us.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.


EXECUTIVE OFFICERS OF THE REGISTRANT

The  following  table  sets  forth  certain  information  concerning  the
executive officers as of March 1, 2001:

                                                         Year
                                                     First Became
Name (age)               Present Position             An Officer
----------               ----------------             ----------

Mark S. Hansen (46)      Chairman and                   1998
                           Chief Executive Officer

E. Stephen Davis (60)    Executive Vice President and   1981
                           President, Wholesale

Dennis C. Lucas (53)     Executive Vice President and   1999
                           President, Retail

William H. Marquard (41) Executive Vice President,      1999
                           Business Development and
                           Chief Knowledge Officer

Scott M. Northcutt (39)  Executive Vice President,      1999
                           Human Resources

Neal J. Rider (39)       Executive Vice President       2000
                           and Chief Financial Officer

Ronald C. Anderson (58)  Senior Vice President,         2000
                           Central Operations

John F. Baldi (48)       Senior Vice President,         2000
                           Convenience Store and
                           E-Commerce Fulfillment

Mark K. Batenic (52)     Senior Vice President,         1994
                           Northern Operations

Michael J. Carey (54)    Senior Vice President,         2000
                           Western Operations

Charles L. Hall (50)     Senior Vice President,         1999
                           Real Estate and Store
                           Development

Carlos M. Hernandez (46) Senior Vice President,         2001
                           General Counsel and Secretary

Leonard Kaye (62)        Senior Vice President,         2000
                           Eastern Operations


No family relationship exists among any of the executive officers listed above.

Executive  officers are elected by the Board of Directors for a term of one year
beginning with the annual meeting of  shareholders  held in April or May of each
year.

Mark S. Hansen  joined us as Chairman  and Chief  Executive  Officer in November
1998.  Prior to joining us, Mr. Hansen  served as President and Chief  Executive
Officer of SAM'S Club, a division of Wal-Mart  Stores,  Inc.,  from 1997 through
1998.  Prior to joining  Wal-Mart,  Mr. Hansen served in multiple  capacities at
PETsMart  Inc.,  a retailer of pet food,  pet  supplies  and  related  products,
including as President and Chief Executive  Officer from 1989 to 1997.  Prior to
1989,  Mr. Hansen  served in various  management  capacities in the  supermarket
industry.  He serves as an  executive  advisory  board  member of  Swander  Pace
Capital and is a director of Applebee's Restaurants.

E.  Stephen  Davis  joined  us in 1960  and has  served  as our  Executive  Vice
President and President, Wholesale since February 2000. Prior to that, Mr. Davis
has served us in various  positions,  including  Executive Vice President,  Food
Distribution  from 1998 to February 2000,  Executive Vice President,  Operations
from 1997 to 1998,  Executive Vice President,  Food Operations from 1996 to 1997
and Executive Vice President, Distribution from 1995 to 1996.

Dennis C. Lucas joined us as Executive Vice  President and President,  Retail in
July 1999.  From 1992 until joining us, Mr. Lucas served in multiple  capacities
at Albertson's, including Regional President from 1998 to July 1999, Senior Vice
President  and Regional  Manager from 1996 to 1998,  and various Vice  President
positions from 1992 to 1996.

William H. Marquard joined us as Executive Vice President,  Business Development
and Chief  Knowledge  Officer in June  1999.  From 1991  until  joining  us, Mr.
Marquard was a partner in the consulting practice of Ernst & Young.

Scott M.  Northcutt  joined us as Senior  Vice  President,  Human  Resources  in
January 1999 and he became Executive Vice President, Human Resources in February
2000. From 1997 until joining us, Mr. Northcutt was Vice President-People  Group
at SAM's Club, a division of Wal-Mart Stores,  Inc. From 1988 to 1995, he served
as Vice  President-Human  Resources  and from  1995 to 1996,  he  served as Vice
President-Store Operations at Dollar General Corporation.

Neal J. Rider joined us as Executive Vice President and Chief Financial  Officer
in January  2000.  From 1999 until  joining  us, Mr.  Rider was  Executive  Vice
President and Chief Financial Officer at Regal Cinemas,  Inc. From 1980 to 1999,
Mr. Rider served in multiple  capacities at American Stores  Company,  including
Treasurer  and  Controller  responsibilities  from 1994 to 1997 before  becoming
Chief Financial Officer in 1998.

Ronald  C.  Anderson  joined  us in  1995  and has  served  as our  Senior  Vice
President,  Central  Operations  since June 2000.  Prior to that,  Mr.  Anderson
served as our Senior Vice President, Operating Group President from 1998 to June
2000, and our Senior Vice President, General Merchandise from 1995 to 1998.

John F.  Baldi  joined us as  Senior  Vice  President,  Convenience  Stores  and
E-Commerce  Fulfillment in August 2000. From February 1996 until joining us, Mr.
Baldi was Division President at Alliant Foodservice.

Mark  K.  Batenic  joined  us in 1973  and  has  served  as our as  Senior  Vice
President,  Northern  Operations since December 2000. Prior to that, Mr. Batenic
has served us in various Senior Vice President  positions since 1994,  including
Senior Vice President, Sales and Business Development Food Distribution,  Senior
Vice President, Customer Management, and Senior Vice President, Operations.

Michael J. Carey joined us in 1983 and has served as our Senior Vice  President,
Western  Operations  since June 2000.  Prior to that,  Mr.  Carey  served as our
Operating  Group  President  from 1998 to June  2000,  our  President,  LaCrosse
Division from 1996 to 1998, and our Director of IGA Marketing from 1994 to 1996.

Charles  L. Hall  joined us as Senior  Vice  President,  Real  Estate  and Store
Development  in June  1999.  From 1998  until  joining  us, he was  Senior  Vice
President-Real  Estate and Store Development at Eagle Hardware and Garden,  Inc.
From 1992 to 1998,  he served as Vice  President of Real Estate  Development  at
PETsMART, Inc.

Carlos M.  Hernandez  joined us in March 2000 as Associate  General  Counsel and
Assistant Secretary and has served as our Senior Vice President, General Counsel
and  Secretary  since  February  2001.  Prior to joining us, Mr.  Hernandez  was
employed in various  capacities at Armco Inc. from 1981 to 1999,  and then as an
attorney at AK Steel Holding Corporation from October to December 1999.

Leonard  Kaye  joined us in 1963 and has  served as our Senior  Vice  President,
Eastern Operations since June 2000. Prior to that, Mr. Kaye served us in various
positions, including Operating Group President,  President, Memphis Division and
Operations Manager.


                                 PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Fleming  common  stock is traded  on the New York,  Chicago  and  Pacific  stock
exchanges.  The  ticker  symbol  is "FLM".  As of March 9,  2001,  39.8  million
outstanding shares were owned by 14,900 shareholders of record and approximately
8,000 beneficial  owners whose shares are held in street name by brokerage firms
and financial  institutions.  According to the New York Stock Exchange Composite
Transactions tables, the high and low prices of Fleming common stock during each
quarter of the past two years are shown  below.

                            2000               1999
                            ----               ----
Quarter                 High    Low       High     Low
-------                 ----    ---       ----     ---
First               $  16.25  $  8.69  $  11.88  $  7.19
Second                 16.56    12.75     12.00     8.50
Third                  17.63    12.38     12.50     9.81
Fourth                 15.06    10.31     13.44     9.25

Cash dividends on Fleming common stock have been paid for 84 consecutive  years
Dividends  are  generally  declared on a quarterly  basis with holders as of the
record date being  entitled to receive  the cash  dividend on the payment  date.
Record and payment dates for 2001 are as shown below:

       Record Dates:           Payment Dates:
       -------------           --------------
       February 20             March 9
       May 18                  June 8
       August 20               September 10
       November 20             December 10

Cash  dividends  of $.02 per share  were paid on or near each of the above  four
payment dates in 2000 and 1999.

ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                              2000 (a)    1999 (b)    1998 (c)    1997 (d)   1996 (e)
                              --------    --------    --------    --------   --------
                                       (In millions, except per share amounts)
<S>                          <C>         <C>         <C>         <C>        <C>

Net sales                    $ 14,444    $ 14,272    $ 14,678    $ 14,966   $ 16,051
Earnings (loss) before
  extraordinary charge           (122)        (45)       (511)         39         27
Net earnings (loss)              (122)        (45)       (511)         25         27
Diluted net earnings (loss)
 per common share before
 extraordinary charge           (3.15)      (1.17)     (13.48)       1.02        .71
Diluted net earnings (loss)
 per share                      (3.15)      (1.17)     (13.48)        .67        .71
Total assets                    3,403       3,573       3,491       3,924      4,055
Long-term debt and
 capital leases                 1,610       1,602       1,503       1,494      1,453
Cash dividends declared
 per common share                 .08         .08         .08         .08        .36
</TABLE>

See Item 3. Legal  Proceedings,  notes to consolidated  financial  statements in
Item 8., and the financial review included in Item 7.

(a)  The  results in 2000  reflected  an  impairment/restructuring  charge  with
     related costs  totaling $309 million ($183 million  after-tax)  relating to
     the strategic plan. 2000 also reflected  one-time items ($10 million charge
     related  primarily  to asset  impairment  on  retail  stores,  income of $2
     million  relating to litigation  settlements,  and $9 million in gains from
     the sale of  distribution  facilities)  netting  to less than $1 million of
     income ($1 million loss after-tax).

(b)  The results in 1999 reflect an impairment/restructuring charge with related
     costs  totaling  $137  million  ($92  million  after-tax)  related  to  the
     strategic plan.  1999 also reflected  one-time items ($31 million charge to
     close  10   conventional   retail  stores,   income  of  $22  million  from
     extinguishing  a  portion  of  the   self-insured   workers'   compensation
     liability,  interest  income of $9  million  related  to refunds in federal
     income  taxes  from prior  years,  and $6 million in gains from the sale of
     distribution  facilities)  netting  to $6  million  of income  ($3  million
     after-tax).

(c)  The results in 1998 reflect an impairment/restructuring charge with related
     costs  totaling  $668  million  ($543  million  after-tax)  related  to the
     strategic plan.

(d)  The results in 1997 reflect a charge of $19 million ($9 million  after-tax)
     related to the settlement of a lawsuit against Fleming. 1997 also reflected
     an extraordinary  charge of $22 million ($13 million after- tax) related to
     the recapitalization program.

(e)  Results in 1996 include a charge of $20 million  ($10  million  after- tax)
     related to the settlement of two related lawsuits against Fleming.


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

GENERAL

In December 1998, we announced the  implementation  of a strategic plan designed
to  improve  the  competitiveness  of the  retailers  we serve and  improve  our
performance by building  stronger  operations that can better support  long-term
growth.

The strategic plan consisted of the following four major initiatives:

-    Consolidate distribution operations.  The strategic plan initially included
     closing eleven  operating units (El Paso, TX;  Portland,  OR; Houston,  TX;
     Huntingdon,  PA; Laurens, IA; Johnson City, TN; Sikeston,  MO; San Antonio,
     TX; Buffalo,  NY; and two other operating units scheduled for closure,  but
     not closed due to increased  cash flows).  Of the nine closings  announced,
     all were  completed  by the end of 2000.  Three  additional  closings  were
     announced which were not originally part of the strategic plan bringing the
     total operating units closed to twelve.  The closing of Peoria was added to
     the plan in the first quarter of 1999 when costs associated with continuing
     to service  customers  during a strike  coupled with costs of reopening the
     operating  unit made  closing  the  operating  unit an  economically  sound
     decision.  During  the first  quarter  of 2000,  the  closings  of York and
     Philadelphia  were  announced as part of an effort to grow in the northeast
     by  consolidating   distribution  operations  and  expanding  the  Maryland
     facility.  The York and Philadelphia  closings are complete.  The last full
     year of operations for the 12 operating units closed was in 1998 with sales
     totaling approximately $3.1 billion. Most of these sales have been retained
     by  transferring  customer  business to our higher volume,  better utilized
     facilities.  We  believe  that this  consolidation  process  is  benefiting
     customers with improved buying  opportunities.  We have also benefited with
     better  coverage of fixed  expenses.  The closings have resulted in savings
     due to reduced depreciation,  payroll, lease and other operating costs, and
     we began to recognize these savings  immediately upon closure.  The capital
     returned from the divestitures and closings was reinvested in the business.

-    Grow  distribution  sales.  Higher  volume,   better-utilized  distribution
     operations   represent  an  opportunity  for  sales  growth.  The  improved
     efficiency  and  effectiveness  of the  remaining  distribution  operations
     enhances  their   competitiveness,   and  we  have   capitalized  on  these
     improvements by adding $1.2 billion in annualized sales in 2000.

-    Improve retail performance.  This not only required  divestiture or closing
     of  under-performing   company-owned   retail  chains,  but  also  required
     increased investments in the retail concepts on which we are focused. As of
     year-end 1999,  the strategic  plan included the  divestiture or closing of
     seven retail  chains  (Hyde Park,  Consumers,  Boogaarts,  New York Retail,
     Pennsylvania  Retail,   Baker's(TRADEMARK)   Oklahoma,  and  Thompson  Food
     Basket(REGISTERED MARK). The sale of Baker's(TRADEMARK) Oklahoma as well as
     the  divestiture  or closing of Thompson Food  Basket(REGISTERED  MARK) was
     added to the  strategic  plan  because  their format no longer fit into our
     business strategy.  The last full year of operations for these seven chains
     was in 1998 with sales  totaling  approximately  $844 million.  The sale or
     closing of these chains is substantially complete.

     In  April  2000, we  announced  the  evaluation of  strategic  alternatives
     for the  remaining  conventional  retail chains  (Rainbow  Foods(REGISTERED
     MARK), Baker's(TRADEMARK) Nebraska, Sentry(REGISTERED MARK) Foods, and ABCO
     Foods(TRADEMARK).  The evaluation was completed by the end of 2000 with the
     decision to  reposition  certain  retail  operations  into our price impact
     format.  The Rainbow  Foods(REGISTERED  MARK) chain  reflected  significant
     improvements  in sales and  earnings and  consequently  was  retained.  The
     Minneapolis  distribution  center has been  dedicated to supply the Rainbow
     Foods(REGISTERED   MARK)   operation,   with  the  supply  of  Minneapolis'
     independent  retailers  moved to the LaCrosse and  Superior  divisions.  We
     recently sold 11 of the ABCO  Foods(TRADEMARK)  stores to Safeway, Inc. and
     we currently  have an agreement to sell the assets of the 16-store  Baker's
     chain  to  Kroger   Co.  We  also  plan  to   convert   ten   company-owned
     Sentry(REGISTERED  MARK) Foods stores to the value retail  format and steps
     are  being  taken  to  sell  the  remaining  stores  to  existing  and  new
     distribution  customers.   The  last  full  year  of  operations  for  ABCO
     Foods(TRADEMARK),  Baker's(TRADEMARK)  Nebraska and Sentry(REGISTERED MARK)
     Foods was in 1999 with sales  totaling  approximately  $1,415  million.  We
     expect to retain a substantial level of the distribution business for these
     operations and expect to receive a total of  approximately  $200 million in
     net proceeds from the sale of these stores.

-    Reduce overhead and operating expenses. We reduced overhead through our low
     cost pursuit program which includes  organization and process changes, such
     as  reducing   workforce,   centralizing   administrative  and  procurement
     functions,  and  reducing  the number of  management  layers.  The low cost
     pursuit  program also includes other  initiatives  to reduce  complexity in
     business systems and remove non-value-added costs from operations,  such as
     reducing  the  number of SKU's,  creating a single  point of  contact  with
     customers,  reducing  the number of decision  points  within  Fleming,  and
     centralizing  vendor  negotiations.  These  initiatives  have reduced costs
     which ultimately improves profitability and competitiveness.

The plan,  as  expected,  took two years to  implement.  Additional  charges  of
approximately  $20 million will be incurred in 2001 due to the time  involved to
finish  selling  and  closing  certain  retail  stores.  The  remaining  charges
represent  severance  related  expenses,  inventory  markdowns for clearance for
closed  operations and other exit costs that cannot be expensed until  incurred.
Charges after 2001 are expected to be minimal.

The total pre-tax  charge for the strategic plan through 2000 was $1,114 million
($313 million cash and $801 million non-cash).  The plan originally announced in
December 1998 had an estimated pre-tax charge totaling $782 million.  The result
was an increase in the  strategic  plan of $332 million  ($164  million cash and
$168 million non-cash). The net increase is due primarily to closing the Peoria,
York and Philadelphia  divisions ($104 million);  updating impairment amounts on
the five retail chains in the original plan ($18  million);  the  divestiture or
closing of the two chains not in the  original  plan ($44  million);  decreasing
costs related to a scheduled closing no longer planned ($18 million); impairment
amounts relating to the recent evaluation of conventional retail ($125 million);
and other costs  including  those  related to our low cost  pursuit  program and
centralization   of  administrative   functions  ($59  million).   Updating  the
impairment  amounts  was  necessary  as  decisions  to sell,  close  or  convert
additional  operating  units  were  made.  There  were  changes  in the  list of
operating  units to be  divested  or closed  since  they no longer  fit into the
current  business  strategy.  Also, the cost of severance,  relocation and other
periodic expenses related to our low cost pursuit program and  centralization of
administrative functions has been accrued as incurred.

The pre-tax  charge for 2000 was $309  million.  After tax, the expense for 2000
was $183 million or $4.72 per share. Of the $309 million pre-tax charge in 2000,
$181  million is expected  to require  cash  expenditures.  The  remaining  $128
million  consisted  of  non-cash  items.  The charge for 2000  consisted  of the
following components:

-    Impairment  of assets of $91 million.  The  impairment  components  were $3
     million for goodwill and $88 million for other  long-lived  assets relating
     to planned  disposals and closures.  All of the goodwill charge was related
     to a three store retail acquisition.

-    Restructuring  charges of $122 million. The restructuring charges consisted
     partly of severance  related  expenses  and  estimated  pension  withdrawal
     liabilities for the closings of York and Philadelphia  which were announced
     during  the  first  quarter  of 2000 as  part of an  effort  to grow in the
     northeast  by  consolidating  distribution  operations  and  expanding  the
     Maryland  facility.  The charge included  severance related expenses due to
     the consolidation of certain  administrative  departments  announced during
     the second quarter of 2000.  Additionally,  the charge  included  severance
     related expenses,  estimated pension  withdrawal  liabilities and operating
     lease  liabilities for the divestiture and closing of certain  conventional
     retail stores  evaluated  during the second and third quarters of 2000. The
     restructuring  charges also consisted of professional fees incurred related
     to the restructuring process.

-    Other  disposition and related costs of $96 million.  These costs consisted
     primarily of  inventory  markdowns  for  clearance  for closed  operations,
     additional  depreciation  and  amortization on assets to be disposed of but
     not yet held for sale,  disposition  related costs recognized on a periodic
     basis and other costs.

The charge for 2000  related to our  business  segments as follows:  $99 million
relates  to the  distribution  segment  and $164  million  relates to the retail
segment with the balance relating to support services expenses.

The pre-tax  charge for 1999 was $137  million.  After tax, the expense for 1999
was $92 million or $2.39 per share.  Of the $137 million pre-tax charge in 2000,
$58 million required cash  expenditures.  The remaining $79 million consisted of
non-cash items. The 1999 charge consisted of the following components:

-    Impairment of assets of $62 million.  The  impairment  components  were $36
     million for goodwill and $26 million for other  long-lived  assets relating
     to planned  disposals and closures.  Of the goodwill charge of $36 million,
     $22 million related to the 1994 "Scrivner"  acquisition  with the remaining
     amount related to two retail acquisitions.

-    Restructuring  charges of $41 million. The restructuring  charges consisted
     primarily of severance  related expenses and estimated  pension  withdrawal
     liabilities for the divested or closed  operating  units  announced  during
     1999.  The   restructuring   charges  also  consisted  of  operating  lease
     liabilities and  professional  fees incurred  related to the  restructuring
     process.

-    Other  disposition and related costs of $34 million.  These costs consisted
     primarily of  inventory  markdowns  for  clearance  for closed  operations,
     impairment of an  investment,  disposition  related  costs  recognized on a
     periodic basis and other costs.

The 1999 charge relates to our business segments as follows: $48 million relates
to the  distribution  segment and $70 million relates to the retail segment with
the balance relating to support services expenses.

The pre-tax  charge for 1998 was $668  million.  After tax, the expense was $543
million in 1998 or $14.33 per share. Of the $668 million pre-tax charge in 2000,
$74 million required cash expenditures.  The remaining $594 million consisted of
non-cash items. The 1998 charge consisted of the following components:

-    Impairment of assets of $590 million.  The impairment  components were $372
     million for goodwill and $218 million for other long-lived  assets.  Of the
     goodwill  charge of $372  million,  approximately  87%  related to the 1989
     "Malone  & Hyde"  acquisition  and the  1994  "Scrivner"  acquisition.  The
     remaining 13% related to various other  smaller  acquisitions,  both retail
     and wholesale.

-    Restructuring  charges of $63 million. The restructuring  charges consisted
     of severance  related expenses and pension  withdrawal  liabilities for the
     operating   units  and  the  retail  chain   announced   during  1998.  The
     restructuring charges also consisted of operating lease liabilities for the
     distribution  operating  units and the retail chain  announced  during 1998
     plus the additional planned closings at that time.

-    Other  disposition  and related  costs of $15 million.  These costs consist
     primarily of professional fees,  inventory valuation  adjustments and other
     costs.

The 1998  charge  relates to our  business  segments as  follows:  $491  million
relates to the distribution  segment and $153 million relates to the retail food
segment with the balance relating to support services expenses.

In addition to the strategic plan related  charges  mentioned  above,  2000 also
included  one-time  adjustments ($10 million charge related to retail stores ($8
million  impairment  and $2  million  lease  settlement),  income of $2  million
relating  to  litigation  settlements,  and $9 million in gains from the sale of
distribution  facilities)  netting to less than $1 million of income ($1 million
loss  after-tax).  The net effect of the  strategic  plan  charges and  one-time
adjustments was a $309 million pre-tax charge or $4.71 per share.

1999 included  one-time  adjustments ($31 million charge to close certain retail
stores ($14 million impairment and $17 million lease settlement),  income of $22
million from extinguishing a portion of the self-insured  workers'  compensation
liability,  interest  income of $9 million  related to refunds of federal income
taxes  from  prior  years,  and  income of $6  million in gains from the sale of
distribution facilities) netting to $6 million of income ($3 million after-tax).
The net effect of the strategic plan charges and one-time adjustments was a $131
million pre-tax charge or $2.29 per share.

1998 did not have any one-time adjustments.

We anticipate net earnings after excluding  strategic plan charges and one- time
adjustments  for 2001  through  2003 to be $1.90,  $2.50,  and $3.30 per  share,
respectively.


RESULTS OF OPERATIONS

Set forth in the  following  table is  information  regarding  our net sales and
certain  components  of  earnings  expressed  as a  percent  of sales  which are
referred to in the accompanying discussion:

                                       2000         1999         1998
                                       ----         ----         ----

Net sales                             100.00%      100.00%      100.00%

Gross margin                            9.33        10.07         9.88

Less:
  Selling and administrative            8.21         8.84         8.52
  Interest expense                      1.21         1.16         1.10
  Interest income                       (.23)        (.28)        (.25)
  Equity investment results              .06          .07          .08
  Litigation charges                       -            -          .05
  Impairment/restructuring charge       1.47          .72         4.45
                                        ----          ---         ----

Total expenses                         10.72        10.51        13.95
                                       -----        -----        -----

Loss before taxes                      (1.39)        (.44)       (4.07)

Taxes on loss                           (.54)        (.13)        (.59)
                                        ----         ----         ----

Net loss                                (.31)%      (3.48)%       (.85)%
                                        ====        =====         ====

2000 and 1999

Net Sales.

Our net sales for 2000 increased by 1% to $14.44 billion from $14.27 billion for
1999. 2000 was a 53-week year; 1999 was a 52-week year.

Net sales for the  distribution  segment were $11.2  billion in 2000 compared to
$10.6 billion in 1999, an increase of 5.8%. The sales increase was primarily due
to new  business  added  from  independent  retailers,  convenience  stores,  e-
tailers,  and  supercenter  customers,  including such customers as Clark Retail
Enterprises, Inc and additional Super Target stores. This increase was partially
offset by a loss of  previously  announced  sales from  Randall's  (in 1999) and
United (in 2000).  Sales have also been  impacted  by the  planned  closing  and
consolidation  of  certain  distribution  operating  units.  In  1999,  sales to
Randall's  and  United  accounted  for  less  than 4% of our  total  sales.  The
distribution  segment had strategic plan charges and one-time items (e.g.,  gain
on sale of  facilities)  that affected  sales for both years with no significant
effect on total distribution sales.  Recently,  we announced a 10-year agreement
to  become  the  sole  supplier  of  food  and  consumable   products  to  Kmart
Corporation's more that 2,100 stores and supercenters. We expect annual sales to
Kmart to increase from  approximately $1.4 billion in 2000 to approximately $2.6
billion in 2001 and approximately $4.5 billion in 2002.

Retail segment sales were $3.3 billion in 2000 compared to $3.7 billion in 1999.
The decrease in sales was due primarily to the  divestiture of  under-performing
and non-strategic stores.  Decreases in same-store sales also contributed to the
sales decline. The decrease was offset partially by sales from new stores opened
during  1999 and 2000.  As  additional  conventional  retail  stores are sold or
closed, sales will continue to decrease in the retail segment.

Food price inflation for our product mix was not significant in 2000 or 1999.

Gross Margin.

Gross margin for 2000  decreased to $1.35  billion from $1.44  billion for 1999,
and  decreased  as a  percentage  of net sales to 9.33% in 2000 from  10.07% for
1999.  After  excluding  the strategic  plan charges and one- time items,  gross
margin  dollars in 2000  decreased to $1.40  billion from $1.45 billion for 1999
and gross  margin as a percentage  of net sales  decreased to 9.68% in 2000 from
10.16% in 1999.  The decrease in dollars was due partly to the sales decrease in
the retail  segment,  but was offset by positive  results  from  leveraging  our
buying power and cutting costs.  The decrease in percentage of net sales was due
to a change in mix between the distribution  and retail  segments.  The sales of
the  distribution  segment  represent a larger portion of total company sales in
2000  compared  to 1999 and the  distribution  segment  has lower  margins  as a
percentage of sales versus the retail segment.

For the distribution segment, gross margin as a percentage of gross distribution
sales was down in 2000  compared to 1999.  This was due to  competitive  pricing
actions and increased  transportation  costs which were partially  offset by the
benefits of asset rationalization and the centralization of procurement.

For the  retail  segment,  gross  margin as a  percentage  of net  retail  sales
improved  for  2000  compared  to  1999  due  to the  divesting  or  closing  of
under-performing stores. The strategic plan charges and one-time items increased
in 2000  compared  to the same  periods  in 1999.  The  increased  charges  were
primarily  due to  inventory  markdowns  for  clearance  for closed  operations,
additional depreciation and amortization of assets to be disposed of but not yet
held for sale,  and periodic  costs  recorded as incurred such as recruiting and
training.

Selling and Administrative Expenses.

Selling and  administrative  expenses for 2000  decreased by 6% to $1.19 billion
from $1.26 billion for 1999, and decreased as a percentage of net sales to 8.21%
for 2000 from 8.84% for 1999.  Excluding the strategic plan charges and one-time
items,  selling and  administrative  expenses for 2000  decreased by 8% to $1.14
billion  from  $1.24  billion  for  1999.   The  decreases  were  due  to  asset
rationalization,  our low cost pursuit program, and centralizing  administrative
functions,  but also due to a reduction in the volume of the retail segment. The
sales of the  distribution  segment  represent a larger portion of total company
sales in 2000  compared to 1999 and the  distribution  segment has lower selling
and administrative expenses as a percentage of sales versus the retail segment.

The strategic plan charges and one-time items were significantly  higher in 2000
compared to 1999.  The strategic  charges were  primarily  made up of moving and
training costs incurred in connection with the  consolidation  of the accounting
and human resource  functions.  The  one-time items in both years included costs
relating to the closing of certain retail stores. An additional one-time item in
2000 was income from net  litigation  settlements.  An additional  one-time item
recorded in 1999 was income  from  extinguishing  a portion of our  self-insured
workers' compensation liability.

For the distribution  segment on an adjusted basis,  selling and  administrative
expenses as a percentage of net sales  improved for 2000 compared to 1999 due to
asset  rationalization and the centralization of administrative  functions.  For
the retail segment on an adjusted basis selling and administrative expenses as a
percentage  of  retail  sales  improved  for  2000  compared  to 1999 due to the
divestiture  or  closing  of  under-performing  stores,  the  centralization  of
administrative  functions,  and operating  cost  reductions.  This was offset by
costs associated with closing certain retail stores.

We have extended  credit to certain  customers  through various  methods.  These
methods include customary and extended credit terms for inventory  purchases and
equity  investments  in and secured and  unsecured  loans to certain  customers.
Secured  loans  generally  have  terms up to 10 years.  Credit  loss  expense is
included in selling and  administrative  expenses and for 2000  increased to $29
million from $25 million for 1999.

Operating Earnings.

Operating earnings for 2000 decreased to $162 million from $176 million in 1999.
Excluding  the strategic  plan charges and one-time  items,  operating  earnings
increased by 22% to $257 million from $212 million in 1999. We measure operating
earnings  for  segment  reporting  as sales less cost of sales less  selling and
administrative expenses.

Operating  earnings for the  distribution  segment  increased to $297 million in
2000 from $290 million for 1999.  Excluding the costs  relating to the strategic
plan and one-time  items,  operating  earnings  increased by  approximately  $44
million,  or 14%, to $346  million in 2000 from $302 million for the same period
of  1999.   Operating  earnings  improved  primarily  due  to  the  benefits  of
consolidating distribution operating units, reducing costs, centralizing certain
procurement  and  administrative  functions in support  services  and  improving
sales. The strategic plan charges were primarily due to inventory  markdowns for
clearance for closed  operations,  moving and training costs associated with the
consolidation  of the accounting and human  resource  functions,  and additional
depreciation  and  amortization on assets to be disposed of but not yet held for
sale. The one-time items were gains on sales of facilities in both years.

Operating earnings for the retail segment increased by approximately $64 million
to an  income  of $62  million  in 2000  from a loss  of $2  million  for  1999.
Excluding the costs relating to the strategic plan and one-time items, operating
earnings  increased  by $47 million to $89 million from $42 million for the same
period of 1999.  The increase  was due to divesting or closing  under-performing
chains and centralizing  certain  administrative  functions in support services.
The  strategic  charges  were  primarily  made  up of  inventory  markdowns  for
clearance  for closed  operations  and moving costs in both years.  The one-time
items in both years  included  costs  relating to the closing of certain  retail
stores.

Support services  increased in 2000 to $197 million compared to $113 million for
1999.  Excluding the costs  relating to the strategic  plan and one-time  items,
support services  increased in 2000 to $177 million compared to $133 million for
1999. The increase was due primarily to  centralizing  certain  procurement  and
administrative  functions from the distribution  and retail segments.  Strategic
plan charges were higher in 2000 due to moving and training expenses  associated
with  the  centralization  of  the  procurement  and  administrative  functions.
One-time  items  included  income from net  litigation  settlements  in 2000 and
income from  extinguishing a portion of our self-insured  workers'  compensation
liability in 1999.

Interest Expense.

Interest  expense of $175  million in 2000 was $9 million  higher  than 1999 due
primarily to higher  average debt  balances for revolver  loans and  capitalized
lease  obligations,  and higher  average  interest  rates for  revolver and term
loans.

For 2000,  interest  rate  hedge  agreements  contributed  $0.9  million  of net
interest expense compared to $4.8 million in 1999. The decrease occurred because
the hedge agreements  matured by mid-year 2000 and were not renewed or replaced.
These  derivative  agreements  consisted  of  simple   "floating-to-fixed  rate"
interest rate swaps. In these transactions,  we paid to the hedge counterparty a
cash flow stream  equal to a  designated  fixed  interest  rate times a notional
principal  amount as a proxy for a portion  of our debt which  carries  variable
interest rates. In exchange,  the hedge  counterparty paid us a cash flow stream
equal to a variable or floating interest rate times the same notional  principal
amount.  These kind of interest rate swap transactions are designed to provide a
hedge against variable interest rates.

Interest Income.

Interest  income of $33 million for 2000 was $8 million lower than 1999 due to a
one-time  item in 1999  related to interest on refunds of federal  income  taxes
from prior years.  This was partially  offset by lower average  balances for our
investment in direct financing leases with customers.

Equity Investment Results.

Our portion of net operating  losses from equity  investments for 2000 decreased
by $2 million to $8 million from $10 million for 1999.  The  reduction in losses
is due to improved  results of  operations in certain of the  underlying  equity
investments.

Impairment/Restructuring Charge.

The pre-tax charge for our strategic plan totaled $309 million for 2000 and $137
million for 1999. Of these totals,  $213 million and $103 million were reflected
in the  Impairment/  restructuring  charge  line with the balance of the charges
reflected in other financial statement lines.

Taxes on Income.

The  effective  tax  rates  used  for  2000  and  1999  were  39.2%  and  28.5%,
respectively,  both  representing a tax benefit.  These are blended rates taking
into  account  operations  activity,  strategic  plan  activity,  write-offs  of
non-deductible goodwill and the timing of these transactions during the year.

Certain Accounting Matters.

The Financial  Accounting  Standards  Board issued SFAS No. 133 - Accounting for
Derivative  Instruments  and  Hedging  Activities.   SFAS  No.  133  establishes
accounting  and  reporting  standards  for  derivative  instruments  and  became
effective  on January,  01,  2001.  We revised our  written  policies  regarding
financial  derivatives,  as needed,  prior to the effective  date.  There was no
significant impact on our financial statements upon adopting the new standard.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  No.  101 - Revenue  Recognition.  SAB No.  101  provides  guidance  on
recognition,  presentation and disclosure of revenue in financial statements. In
July 2000, the Financial  Accounting  Standards Board Emerging Issues Task Force
issued EITF 99-19 -  Reporting  Revenue  Gross as a  Principal  versus Net as an
Agent. EITF 99-19 provides further guidance on reflecting  revenue gross or net.
We  adopted  SAB No.  101 and EITF  99-19 in the  fourth  quarter  of 2000.  The
implementation  had an impact on the  classification of previously  reported net
sales  and cost of goods  sold  (ranging  annually  from  $350  million  to $400
million),  but had no impact on earnings.  Net sales and cost of goods sold have
been restated for all prior periods presented.

The Financial  Accounting  Standards Board has recently issued an exposure draft
for Business  Combinations and Intangible  Assets. One of the provisions of this
exposure draft is to require use of a  non-amortization  approach to account for
purchased  goodwill.  Under that  approach,  goodwill  would not be amortized to
earnings over a period of time. Instead, it would be reviewed for impairment and
expensed  against  earnings  only in the periods in which the recorded  value of
goodwill is more that its implied fair value.  Goodwill  amortization  increased
the  basic and  diluted  net loss per share by $0.47 and $0.54 in 2000 and 1999,
respectively.  This  exposure  draft is not final and may change  before any new
accounting standard is adopted.

Other.

Costs relating to the strategic plan have negatively  affected earnings for some
time, but are expected to drastically  decrease in the near future. We currently
estimate  pre-tax  strategic  plan charges for 2001 and 2002 at $20 million ($15
million cash and $5 million  non-cash) and $4 million (all cash),  respectively.
These charges represent future severance related expenses, anticipated inventory
markdowns and other exit costs related to the  divestiture  of our  conventional
retail stores.


1999 and 1998

Net Sales.

Our net sales for 1999 decreased by 3% to $14.27 billion from $14.68 billion for
1998.

Net sales for the  distribution  segment were $10.6  billion in 1999 compared to
$11.1 billion in 1998.  The sales  decrease was primarily due to the  previously
announced  loss of sales to Furr's  (in 1998)  and  Randall's  (in 1999) and the
disposition  of the  Portland  division  (in  1999).  These  sales  losses  were
partially  offset by the  increase in sales to Kmart  Corporation.  Sales during
1999 were also  impacted by the planned  closing  and  consolidation  of certain
distribution  operating  units.  These  sales  losses  plus the loss of sales to
United  in 2000  were  partially  offset  by the  increase  in  sales  to  Kmart
Corporation.  In 1999 and 1998, sales to Furr's,  Randall's and United accounted
for approximately 4% and 8%, respectively, of our total sales.

Retail segment sales were $3.7 billion in 1999 compared to $3.6 billion in 1998.
The increase in sales was due  primarily  to new stores added in 1999.  This was
offset  partially  by  a  decrease  in  same-store  sales  and  the  closing  of
non-performing stores.

We  measure  inflation  using data  derived  from the  average  cost of a ton of
product we sell. For 1999,  food price  inflation was 1.0%,  compared to 2.1% in
1998.

Gross Margin.

Gross margin for 1999  decreased by 1% to $1.44  billion from $1.45  billion for
1998,  and increased as a percentage of net sales to 10.07% from 9.88% for 1998.
After  excluding the  strategic  plan charges and one-time  items,  gross margin
dollars still decreased  compared to the same period in 1998 and gross margin as
a percentage of net sales still  increased  compared to the same period in 1998.
The decrease in dollars was due primarily to the overall sales decrease, but was
partly offset by positive  results from  leveraging our buying power and cutting
costs.  The  increase  in  percentage  of net sales was due to the impact of the
growing retail segment compared to the distribution  segment. The retail segment
has the higher  margins of the two segments.  This increase was partly offset by
lower margins in the retail segment due to competitive  pricing at company-owned
new stores.

Selling and Administrative Expenses.

Selling and  administrative  expenses for 1999  increased by 1% to $1.26 billion
from $1.25 billion for 1998, and increased as a percentage of net sales to 8.84%
for 1999 from 8.52% for 1998. The increase in both dollars and percentage of net
sales was  primarily due to one-time  items  recorded in 1999: a charge to close
conventional   retail  stores  which  was   partially   offset  by  income  from
extinguishing a portion of our self-insured workers' compensation liability at a
discount.  The  increase in  percentage  to net sales was also partly due to the
impact of the growing retail segment compared to the distribution  segment - the
retail segment has higher  operating  expenses as a percent to sales compared to
the distribution segment.

We have extended a  significant  amount of credit to certain  customers  through
various methods.  These methods include  customary and extended credit terms for
inventory purchases and equity investments in and secured and unsecured loans to
certain  customers.  Secured loans  generally have terms up to 10 years.  Credit
loss  expense is included in selling and  administrative  expenses  and for 1999
increased to $25 million from $23 million for 1998.

Operating Earnings.

Operating earnings for 1999 decreased to $176 million from $199 million in 1998.
Excluding  the strategic  plan charges and one-time  items,  operating  earnings
decreased to $212 million from $214 million in 1998.

Operating earnings for the distribution segment increased by 12% to $290 million
from $259 million for 1998,  and increased as a percentage of  distribution  net
sales to 2.75% for 1999 from 2.34% for 1998. Excluding the costs relating to the
strategic plan and one-time  items,  operating  earnings still  increased by $29
million to $302 million from $273 million for the same period of 1998. Operating
earnings  improved  primarily  due  to the  benefits  of  the  consolidation  of
distribution operating units and cost reduction.

Operating  earnings for the retail segment decreased by $64 million to a loss of
$2 million from earnings of $62 million for 1998.  Excluding the costs  relating
to  the  strategic  plan  and  one-time  items  (primarily  a  charge  to  close
conventional  retail stores),  operating earnings still decreased by $20 million
to $42 million  from $62 million for the same period of 1998.  The  decrease was
due to the impact of new store  start-up  expenses plus expenses  related to the
divestiture  and closing of stores.  Operating  earnings for the retail  segment
were also adversely affected by a 1.9% decrease in same-store sales.

Support services  decreased in 1999 to $112 million compared to $122 million for
1998.  Excluding  the costs  relating to the strategic  plan and one-time  items
(primarily  income from  extinguishing  a portion of our self- insured  workers'
compensation  liability at a discount),  support  services  increased in 1999 to
$132 million  compared to $121 million for 1998.  The increase was due primarily
to an increase in lease  termination  and real estate  disposition  expenses and
higher incentive compensation.

Interest Expense.

Interest expense in 1999 was $4 million higher than 1998 due primarily to 1998's
low  interest  expense  as  a  consequence  of a  favorable  settlement  of  tax
assessments.  The  higher  1999  expense  was also due to  higher  average  debt
balances.

Our derivative agreements consisted of simple  "floating-to-fixed rate" interest
rate swaps. For 1999, interest rate hedge agreements contributed $4.8 million of
net interest  expense  compared to $4.3 million in 1998, or $0.5 million higher.
This was due to slightly higher average net interest rates  underlying the hedge
agreements.

Interest Income.

Interest income for 1999 was $4 million higher than 1998 due to a one- time item
related to interest on refunds of federal  income taxes from prior  years.  This
was  partially  offset by lower  average  balances for our  investment in direct
financing leases.

Equity Investment Results.

Our portion of net operating  losses from equity  investments for 1999 decreased
by  approximately  $2 million to $10  million  from $12  million  for 1998.  The
reduction in losses is due to improved  results of  operations in certain of the
underlying equity investments.

Litigation Charges.

In  October  1997,  we  began  paying  Furr's  $800,000  per  month as part of a
settlement  agreement  which ceased in October 1998.  Payments to Furr's totaled
$7.8 million in 1998.

Impairment/Restructuring Charge.

The pre-tax charge for our strategic plan totaled $137 million for 1999 and $668
million for 1998. Of these totals,  $103 million and $653 million were reflected
in the  Impairment/  restructuring  charge  line with the balance of the charges
reflected in other financial statement lines.

Taxes on Income.

The  effective  tax  rates  used  for  1999  and  1998  were  28.5%  and  14.6%,
respectively,  both  representing a tax benefit.  These are blended rates taking
into  account  operations  activity,  strategic  plan  activity,  write- offs of
non-deductible goodwill and the timing of these transactions during the year.


LIQUIDITY AND CAPITAL RESOURCES

In the fiscal year ended December 30, 2000,  our principal  sources of cash were
cash  flows  from  operating   activities,   the  sale  of  certain  assets  and
investments,  and  borrowings  under our credit  facility.  During  this  period
sources of  long-term  capital,  excluding  shareholders'  equity,  were  credit
facility  lenders and lessors.  On December 30, 2000, we had $30 million of cash
and cash equivalents,  $257 million available under the revolving portion of our
credit  facility and $391 million of net working  capital  (current assets minus
current liabilities).

Net cash provided by operating activities.

Operating activities generated $127 million of net cash flows for the year ended
December  30,  2000,  compared  to $118  million  for the same  period  in 1999.
Included in 2000 net operating  cash flows were $312 million in gross cash flows
from  operations,  which were  reduced by a $67 million  increase  primarily  in
working  capital and $118 million in payments for  strategic  plan-related  cash
expenditures.  For fiscal  2001,  incremental  net working  capital  required to
support  the  expected  new  business  with Kmart is  expected  to be up to $150
million.

Cash  expenditures  required to implement and help  complete the strategic  plan
were $118  million in 2000 (on a pre-tax  basis).  We estimate  expenditures  to
complete the strategic plan initiatives will be about $56 million in fiscal 2001
and $27 million in fiscal 2002.  Management believes working capital reductions,
proceeds from the sale of assets,  and increased  after-tax  earnings related to
the  successful  implementation  of the  strategic  plan are expected to provide
adequate cash flows to cover the remaining expenditures.

Net cash used in investing activities.

Net cash used in  investing  activities  totaled  $48  million  in  fiscal  2000
compared to $213 million for 1999. Included in 2000 net investment  expenditures
were $151 million for capital  expenditures  and $7 million for  acquisitions of
retail stores.  Offsetting  these  expenditures in part were sales of assets and
investments  totaling  $100  million.  Cash  spent  to  make  loans  and  equity
investments in our customers was financed essentially by collections on customer
loans made in the past.

For fiscal 2001,  capital  expenditures  are expected to be  approximately  $225
million to  maintain  our  distribution  system,  grow our price  impact  retail
operations,   expand  our   distribution   operations  to  supply  the  expected
incremental  Kmart  business,  and further  upgrade our  information  technology
systems. We plan to increase our investment in price impact retail operations by
making investments in our existing stores and by adding new stores through store
construction  or  acquisitions.  In  addition,  distribution  operations  may be
acquired  to  increase  our  ability  to  supply  convenience  stores  and other
customers.   Acquisitions  of  supermarket  groups  or  chains  or  distribution
operations  will  be  made  only on a  selective  basis.  The  focus  of  retail
investment has shifted toward our price impact format retail stores.

On April 25, 2000, we announced the evaluation of strategic alternatives for the
remaining  conventional  retail chains we own. This evaluation covered our ABCO,
Baker's,  Rainbow and Sentry supermarkets.  We sold 11 of our ABCO Desert Market
stores to Safeway in late  February,  2001, and we agreed to sell our 16 Baker's
stores to Kroger, a transaction which is expected to close in late March,  2001.
We plan to convert 10 of our Sentry  supermarkets  to a price impact format.  We
plan to sell or close the remaining 70 conventional  retail supermarkets we own.
We expect to retain a substantial level of the distribution supply business to a
large  portion of these  stores,  and to receive a total of $200 million for the
sale of all  conventional  supermarkets  we sell this year ($175 million in cash
and a $25 million reduction in capitalized lease  obligations).  We will use the
net  cash  proceeds  from the sale of these  stores  to  reduce  debt or to help
finance business investment.

Net cash provided by (used in) financing activities.

For fiscal 2000, net cash used in financing  activities was $55 million compared
to 1999 when our  financing  activities  resulted in a $96 million net source of
cash. Included in 2000 net cash used in financing  activities was a net decrease
in long-term  debt of $35 million  since the end of 1999.  In addition,  capital
lease  obligations  increased by $10 million even though $21 million in payments
were made to the lessors.  This means $31 million in total  capital was provided
by lessors. At the end of fiscal 2000, borrowings under the revolving portion of
our credit facility  totaled $300 million,  $154 million in term loans,  and $43
million of letters of credit had been issued.

On   February   7,  2001,   we   announced:  (a)  the new  long-term,  exclusive
strategic alliance and supply agreement with Kmart, which we expect will require
up to $150  million in net working  capital  requirements,  and (b) an agreement
with an affiliate of Yucaipa to sell $50 million of new issue common stock.  The
Yucaipa investment closed on March 22, 2001.

We believe  successful  access to the credit and capital markets is dependent in
part on maintaining  credit ratings  acceptable to institutional  and individual
investors. On February 28, 2001, Standard & Poor's ratings group (S&P) announced
it was  upgrading  its credit  rating  outlook  for  Fleming  from  "stable"  to
"positive".  On  March 5,  2001,  Moody's  Investors  Service  announced  it was
upgrading  its credit  ratings  for  Fleming.  Listed  below is a summary of our
credit ratings.

                                       Moody's       Standard & Poor's
                                       -------       -----------------
                                   From:     To:       From:     To:
                                   -----     ---       -----     ---
        Credit agreement loans      Ba3      Ba2        BB       BB
        Senior implied debt          B1      Ba3        BB-      BB-
        Senior unsecured debt        B1      Ba3        B+       B+
        Senior subordinated notes    B3      B2         B        B
        Outlook                  Positive  Stable     Stable  Positive

Our $300  million 10 5/8% senior  notes were  scheduled to be repaid on December
15, 2001, unless otherwise redeemed.  On March 15, 2001, we sold $355 million of
new 10 1/8% senior notes due 2008.  Most of the net proceeds were deposited with
the trustee for the 10 5/8% senior  notes on March 15, 2001 to redeem all of the
10 5/8% senior  notes,  including  an amount to cover  accrued  interest and the
redemption  premium,  on April 16, 2001 and to defease our obligations under the
indenture governing these notes. The balance of the net proceeds was used to pay
down our revolver loans.  At the time the redemption is final, an  extraordinary
after-tax  charge of  approximately  $3 million will be  recorded.  On March 15,
2001,  we also sold $150 million of new 5.25%  convertible  senior  subordinated
notes due 2009 with a  conversion  price of $30.27 per share.  The net  proceeds
were used to pay down our revolver loans. On March 15, 2001,  outstanding  loans
and letters of credit  under the credit  facility  totaled  $154 million of term
loans,  $270 million of revolver loans, and $43 million of letters of credit. On
that date, we could have borrowed an additional $287 million under the revolver.

For fiscal 2001, our principal  sources of liquidity and capital are expected to
be cash flows  from  operating  activities,  asset  sale cash  proceeds  of $175
million,  net cash  proceeds  from the $355  million of 10 1/8% senior notes due
2008,  net cash  proceeds  from the $150  million  of 5.25%  convertible  senior
subordinated  notes,  net cash  proceeds  from the sale of $50 million of common
stock to Yucaipa,  and our ability to borrow under the revolving  portion of our
credit  facility.  In addition,  lease  financing may be employed for new retail
stores, distribution facilities and certain equipment. We currently expect total
debt at fiscal  year-end 2001 could be up to $85 million  higher than the fiscal
2000  year-end  balance  of $1.669  billion.  Management  believes  the  sources
mentioned will be adequate to meet working capital needs, capital  expenditures,
expenditures  for  acquisitions  (if any),  strategic plan completion  costs and
other capital needs for the remainder of fiscal 2001.


CONTINGENCIES

From  time to time  we face  litigation  or  other  contingent  loss  situations
resulting  from owning and  operating  our assets,  conducting  our  business or
complying (or allegedly  failing to comply) with federal,  state and local laws,
rules and regulations which may subject us to material  contingent  liabilities.
In accordance with  applicable  accounting  standards,  we record as a liability
amounts reflecting such exposure when a material loss is deemed by management to
be  both  "probable"  and  either  "quantifiable"  or  "reasonably   estimable."
Furthermore,  we  disclose  material  loss  contingencies  in the  notes  to our
financial  statements when the likelihood of a material loss has been determined
to be greater than "remote" but less than  "probable."  Such contingent  matters
are discussed in the notes to consolidated financial statements included herein.
An adverse outcome experienced in one or more of such matters, or an increase in
the likelihood of such an outcome,  could have a material  adverse effect on our
financial condition or prospects.


FORWARD-LOOKING INFORMATION

This report  includes  statements  that (a) predict or forecast future events or
results,  (b)  depend  on  future  events  for  their  accuracy,  or (c)  embody
projections and assumptions  which may prove to have been inaccurate,  including
expectations for years 2001 and beyond, our ability to successfully  sustain the
goals of our strategic  plan and continue to reverse sales  declines,  cut costs
and improve  earnings;  our  assessment of the  probability  and  materiality of
losses associated with litigation and other contingent liabilities;  our ability
to expand portions of our business or enter new facets of our business;  and our
expectations regarding the proceeds from asset sales and adequacy of capital and
liquidity. We have prepared the financial projections and other forward- looking
statements  included  in  this  Form  10-K  on  a  reasonable  basis,  and  such
projections  and statements  reflect the best estimates and judgments  currently
available and present,  to the best of our  knowledge  and belief,  the expected
course of action and the  expected  future  financial  performance  of  Fleming.
However,  this  information  is not  fact  and  should  not be  relied  upon  as
necessarily  indicative  of future  results,  and  readers of this Form 10-K are
cautioned not to place undue reliance on the projected financial  information or
other forward-looking information. The projections were not prepared with a view
to  compliance  with the  guidelines  established  by the American  Institute of
Certified  Public   Accountants   regarding   projections.   These  projections,
forward-looking  statements  and our  business  and  prospects  are subject to a
number of  factors  which  could  cause  actual  results  to  differ  materially
including  the ability to achieve the expected  synergies and  anticipated  cost
savings from the Kmart  alliance;  unanticipated  transition  and start-up costs
associated with the Kmart alliance;  unanticipated  problems in the supply chain
due to the increased volumes  resulting from the Kmart alliance;  the ability to
successfully  generate new business;  the risks  associated  with the successful
execution of our strategic  business plan; adverse effects of labor disruptions;
adverse effects of the changing industry environment and increased  competition;
continuing  sales declines and loss of customers;  adverse results in pending or
threatened  litigation and legal  proceedings,  and exposure to other contingent
losses;  failure to achieve necessary cost savings;  and the negative effects of
our  substantial   indebtedness  and  the  limitations  imposed  by  restrictive
covenants  contained  in our debt  instruments.  These  and  other  factors  are
described  in this report  under Item 1.  Business -- Risk  Factors and in other
periodic reports available from the Securities and Exchange Commission.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to pricing  risk in the  financial  markets  consists of changes in
interest  rates related to our  investment in notes  receivable,  the balance of
debt  obligations  outstanding,  and  derivatives  employed from time to time to
hedge  interest  rate  changes  on  variable  rate debt.  We do not use  foreign
currency exchange rate forward contracts or commodity  contracts and do not have
any material foreign currency exposure.  We do not use financial  instruments or
derivatives  for any  trading  purposes.  From  time  to time we may use  simple
derivative   transactions,   such  as   floating-to-fixed   interest  rate  swap
transactions,  to hedge our exposure to changing interest rates for our variable
interest rate debt  obligations.  At fiscal  year-end  2000,  there were no such
interest rate hedge agreements in place.

In the normal course of business  Fleming  carries notes  receivable  because we
make long-term  loans to certain retail  customers (see  "Investments  and Notes
Receivable" in the notes to the consolidated financial statements). A portion of
the notes receivable carries a variable interest rate, which is based on a prime
rate index  published in a major financial  publication and is reset  quarterly.
The remaining  portion carries fixed interest rates  negotiated with each retail
customer.  No  derivatives  have been employed to hedge our exposure to variable
interest rates on notes receivable  primarily because these notes are considered
to be a partial hedge for debt with variable interest rates.

In order to help maintain  liquidity and finance  business  operations,  Fleming
obtains   long-term   credit   commitments   from  banks  and  other   financial
institutional  lenders under which term loans and revolving loans are made. Such
loans  carry  variable  interest  rates  based on the London  interbank  offered
interest rate ("LIBOR") plus a borrowing margin for different  interest periods,
such as one week,  one month,  and other  periods  up to one year.  To assist in
managing its debt maturities and diversify its sources of debt capital,  Fleming
also uses long-term debt which carries fixed interest rates.

Fleming  management  maintains  a written  policy  statement  which  governs its
financial risk management activities including the use of financial derivatives.
The policy  statement  says that we will engage in a financial  risk  management
process to manage our defined  exposures to uncertain future changes in interest
rates and foreign exchange rates which impact net earnings.  The primary purpose
of this process is to control and limit the volatility of net earnings according
to  pre-established  targets for exposure to such changes in a manner which does
not result in  unreasonable  or unmanageable  additional  risks or expense.  The
financial  risk  management  process  works  under  the  oversight  of a special
management  group  to  ensure  certain  policy  objectives  are  achieved.  Such
objectives include, but are not limited to, the following:  to act in accordance
with  authority  granted  by  resolution  of  the  Board  of  Directors,   which
specifically  permits the use of  derivatives  to hedge interest rate or foreign
exchange rate risks and which  prohibits the use of derivatives  for the purpose
of  speculation;  to define and  measure our  financial  risks  associated  with
interest and foreign exchange rates as well as with derivative instruments to be
used for hedging;  and to establish  exposure targets and to manage  performance
against those targets.

Changes in interest rates in the credit and capital  markets may have a material
impact on Fleming's interest expense and interest income, as well as on the fair
values for our investment in notes receivable,  our outstanding debt obligations
and any financial  derivatives  used.  The table below presents a summary of the
categories  of Fleming's  financial  instruments  according to their  respective
interest  rate  profiles.  For notes  receivable,  the table shows the principal
amount  of cash we expect  to  collect  each  year  according  to the  scheduled
maturities, as well as the average interest rates applicable to such maturities.
For debt obligations,  the table shows the principal amount of cash we expect to
pay each year  according  to the  scheduled  maturities,  as well as the average
interest rates applicable to such maturities.  For derivatives,  the table shows
when the notional principal contracts terminate.

SUMMARY OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>

                                                                      Maturities of Principal by Fiscal Year
                                                                      --------------------------------------
                                                  Fair     Fair
                                                 Value at Value at
(In millions, except rates)                      12/25/99 12/30/00  2001   2002    2003    2004    2005  Thereafter
---------------------------                      -------- --------  ----   ----    ----    ----    ----  ----------
<S>                                               <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Notes Receivable with Variable Interest Rates
  Principal receivable                            $ 93    $ 97    $ 18    $ 15    $ 15    $ 10    $  9    $ 30
  Average variable rate receivable                  11.0%   12.1%   Based on the referenced Prime Rate plus a margin

Notes Receivable with Fixed Interest Rates
  Principal receivable                            $ 28    $ 19    $  2    $  4    $  1    $  1    $  1    $ 10
  Average fixed rate receivable                      6.0%    2.3%    3.7     1.3%    3.1%    4.4%    3.9%    2.0%

Debt with Variable Interest Rates
  Principal payable                               $428    $427    $ 36    $ 40    $342    $ 37    $  -    $  -
  Average variable rate payable                      7.1%    8.1%   Based on LIBOR plus a margin

Debt with Fixed Interest Rates
  Principal payable                               $808    $668    $303    $ 10    $  5    $250    $  -    $250
  Average fixed rate payable                        10.4%   10.6%   10.6%    8.7%    8.8%   10.5     -      10.6%


Variable-To-Fixed Rate Swaps
  Amount payable                                  $  3    None
  Average fixed rate                                 7.2% None
    payable
  Average variable rate receivable                   6.2% None
                                                          Based on LIBOR
</TABLE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Part IV, Item 14(a) 1. Financial Statements.


ITEM 9.  CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.


                                PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated  herein by reference to our proxy  statement in connection with its
annual  meeting  of  shareholders  to be  held  on  May  15,  2001.  Information
concerning  Executive  Officers of Fleming is included in Part I herein which is
incorporated in this Part III by reference.


ITEM 11.  EXECUTIVE COMPENSATION

Incorporated  herein by reference to our proxy  statement in connection with its
annual meeting of shareholders to be held on May 15, 2001.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated  herein by reference to our proxy  statement in connection with its
annual meeting of shareholders to be held on May 15, 2001.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated  herein by reference to our proxy  statement in connection with its
annual meeting of shareholders to be held on May 15, 2001.


                                 PART IV

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

(a)    1.  Financial Statements:

       - Consolidated  Statements  of  Operations -
         For the years ended December 30, 2000,
         December 25, 1999, and December 26, 1998

       - Consolidated Balance Sheets -
         At December 30, 2000 and December 25, 1999

       - Consolidated Statements of Cash Flows -
         For the years ended December 30, 2000,
         December 25, 1999, and December 26, 1998

       - Consolidated Statements of Shareholders' Equity -
         For the years ended December 30, 2000,
         December 25, 1999, and December 26, 1998

       - Notes to Consolidated Financial Statements -
         For the years ended December 30, 2000,
         December 25, 1999, and December 26, 1998

         Independent Auditors' Report

         Quarterly Financial Information (Unaudited)


<TABLE>
                  CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 30, 2000, December 25, 1999 and December 26, 1998
                (In thousands, except per share amounts)
<CAPTION>
                                        2000            1999            1998
                                        ----            ----            ----
<S>                                   <C>            <C>            <C>

Net sales                             $14,443,815    $14,272,036    $14,677,904
Costs and expenses (income):
 Cost of sales                         13,096,915     12,834,869     13,227,530
 Selling and administrative             1,185,003      1,261,631      1,251,592
 Interest expense                         174,569        165,180        161,581
 Interest income                          (32,662)       (40,318)       (36,736)
 Equity investment results                  8,034         10,243         11,622
 Litigation charges                            -              -           7,780
 Impairment/restructuring charge          212,845        103,012        652,737
                                          -------        -------        -------

      Total costs and expenses         14,644,704     14,334,617     15,276,106
                                       ----------     ----------     ----------

Loss before taxes                        (200,889)       (62,581)      (598,202)
Taxes on loss                             (78,747)       (17,853)       (87,607)
                                          -------        -------        -------

Net loss                              $  (122,142)   $   (44,728)   $  (510,595)
                                      ===========    ===========    ===========

Basic and diluted net loss per share       $(3.15)        $(1.17)       $(13.48)
                                           ======         ======        =======

Basic and diluted weighted
average shares outstanding                 38,716         38,305         37,887
                                           ======         ======         ======
</TABLE>

See notes to consolidated financial statements.


<TABLE>
                       CONSOLIDATED BALANCE SHEETS
               At December 30, 2000 and December 25, 1999
                             (In Thousands)
<CAPTION>
                  ASSETS                                2000           1999
                                                        ----           ----
<S>                                                 <C>             <C>
Current assets:
  Cash and cash equivalents                         $    30,380     $     6,683
  Receivables, net                                      509,045         496,159
  Inventories                                           831,265         997,805
  Assets held for sale                                  165,800          68,615
  Other current assets                                   86,583         159,488
      Total current assets                            1,623,073       1,728,750
                                                      ---------       ---------
Investments and notes receivable, net                   104,467         108,895
Investment in direct financing leases                   102,011         126,309
Property and equipment:
  Land                                                   40,242          45,507
  Buildings                                             356,376         389,651
  Fixtures and equipment                                565,472         636,501
  Leasehold improvements                                210,970         236,570
  Leased assets under capital leases                    197,370         231,236
                                                        -------         -------
                                                      1,370,430       1,539,465
Less accumulated depreciation and amortization         (653,973)       (701,289)
                                                       --------        --------
      Net property and equipment                        716,457         838,176
Deferred income taxes                                   139,852          54,754
Other assets                                            172,632         150,214
Goodwill, net                                           544,319         566,120
                                                        -------         -------

TOTAL ASSETS                                        $ 3,402,811     $ 3,573,218
                                                    ===========     ===========

   LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                  $   943,279     $   981,219
  Current maturities of long-term debt                   38,171          70,905
  Current obligations under capital leases               21,666          21,375
  Other current liabilities                             229,272         210,220
                                                        -------         -------
      Total current liabilities                       1,232,388       1,283,719
Long-term debt                                        1,232,400       1,234,185
Long-term obligations under capital leases              377,239         367,960
Other liabilities                                       133,592         126,652
Commitments and contingencies
Shareholders' equity:
  Common stock, $2.50 par value, authorized
   100,000 shares, issued and outstanding -
   39,618 and 38,856 shares                              99,044          97,141
  Capital in excess of par value                        513,645         511,447
  Reinvested earnings (deficit)                        (144,468)        (22,326)
  Accumulated other comprehensive income -
    additional minimum pension liability                (41,029)        (25,560)
                                                        -------         -------
      Total shareholders' equity                        427,192         560,702
                                                        -------         -------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $ 3,402,811     $ 3,573,218
                                                    ===========     ===========
</TABLE>


See notes to consolidated financial statements.

<TABLE>
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 30, 2000, December 25, 1999, and December 26, 1998
<CAPTION>
                             (In thousands)
                                                  2000        1999        1998
                                                  ----        ----        ----
<S>                                          <C>         <C>         <C>
Cash flows from operating activities:
 Net loss                                    $ (122,142) $  (44,728) $ (510,595)
 Adjustments to reconcile net loss to net
  cash provided by operating activities:
   Depreciation and amortization                174,107     162,379     185,368
   Credit losses                                 28,872      25,394      23,498
   Deferred income taxes                        (65,538)      3,357    (117,239)
   Equity investment results                      8,034      10,243      11,622
   Impairment/restructuring and
    related charges
                                                288,408     135,346     668,028
   Cash payments on impairment/
    restructuring and related charges          (118,190)    (57,340)    (10,408)
   Consolidation and restructuring
    reserve activity                                  -         423      (1,008)
   Change in assets and liabilities,
    excluding effect of acquisitions:
     Receivables                                (26,005)    (55,692)   (156,822)
     Inventories                                 65,639     (22,049)      6,922
     Accounts payable                           (49,121)     35,744     114,136
     Other assets and liabilities               (63,198)    (70,112)    (68,058)
   Other adjustments, net                         5,779      (5,348)     (4,365)
                                                  -----      ------      ------
Net cash provided by operating activities       126,645     117,617     141,079
                                                -------     -------     -------

Cash flows from investing activities:
 Collections on notes receivable                 32,943      34,798      38,076
 Notes receivable funded                        (35,841)    (43,859)    (28,946)
 Businesses acquired                             (7,320)    (78,440)    (30,225)
 Proceeds from sale of businesses                45,693       7,042      32,277
 Purchase of property and equipment            (150,837)   (166,339)   (200,211)
 Proceeds from sale of property
  and equipment                                  50,957      35,487      17,056
 Investments in customers                             -      (8,115)     (1,009)
 Proceeds from sale of investments                3,552       2,745       3,529
 Other investing activities                      12,949       3,337       6,141
                                                 ------       -----       -----
Net cash used in investing activities           (47,904)   (213,344)   (163,312)
                                                -------    --------    --------

Cash flows from financing activities:
 Proceeds from long-term borrowings             185,000     191,000     170,000
 Principal payments on long-term debt          (219,519)    (71,178)   (159,651)
 Principal payments on capital
  lease obligations                             (20,888)    (21,533)    (13,356)
 Sale of common stock under incentive
  stock and stock ownership plans                 4,051       1,267       4,830
 Dividends paid                                  (3,117)     (3,082)     (3,048)
 Other financing activities                        (571)        (31)       (891)
                                                   ----         ---        ----
Net cash provided by (used in) financing
 activities                                     (55,044)     96,443      (2,116)
                                                -------      ------      ------
Net increase (decrease) in cash
 and cash equivalents                            23,697         716     (24,349)
Cash and cash equivalents,
 beginning of year                                6,683       5,967      30,316
                                                  -----       -----      ------

Cash and cash equivalents, end of year       $   30,380  $    6,683  $    5,967
                                             ==========  ==========  ==========
</TABLE>

See notes to consolidated financial statements.

<TABLE>
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 For the Years Ended December 30, 2000, December 25, 1999 and December 26, 1998
                    (In thousands, except per share amounts)
<CAPTION>
                                                                                                          Accumulated
                                                                     Capital    Reinvested                   Other
                                                  Common Stock      in excess    Earnings  Comprehensive Comprehensive    ESOP
                                    Total      Shares     Amount   of par value  (Deficit)     Income       Income        Note
                                    ------------------------------------------------------------------------------------------
<S>                              <C>           <C>       <C>        <C>         <C>          <C>          <C>          <C>
Balance at December 27, 1997     $1,089,672    38,264    $95,660    $504,451    $ 536,792                 $(42,637)    $(4,594)
Comprehensive income
 Net loss                          (510,595)                                     (510,595)   $(510,595)
 Other comprehensive income,
  net of tax
   Currency translation
    adjustment (net of $0 taxes)      4,922                                                      4,922       4,922
   Minimum pension liability
    adjustment (net of $12,914
    of taxes)                       (19,418)                                                   (19,418)    (19,418)
                                                                                               -------
 Comprehensive income                                                                        $(525,091)
                                                                                             =========

Incentive stock and stock
 ownership plans                      5,847       278        696       5,151
Cash dividends, $0.08 per share      (3,042)                                       (3,042)
ESOP note payments                    2,545                                                                              2,545
                                      -----       ---        ---       -----       ------                  -------       -----

Balance at December 26, 1998        569,931    38,542     96,356     509,602       23,155                  (57,133)     (2,049)
Comprehensive income
 Net loss                           (44,728)                                      (44,728)   $ (44,728)
 Other comprehensive income,
  net of tax
   Minimum pension liability
    adjustment (net of $21,049
    of taxes)                        31,573                                                     31,573      31,573
                                                                                                ------
 Comprehensive income                                                                         $(13,155)
                                                                                              ========

Incentive stock and stock
 ownership plans                      4,955       314        785       4,170
Cash dividends, $0.08 per share      (3,078)                          (2,325)        (753)
ESOP note payments                    2,049                                                                              2,049
                                      -----       ---        ---       -----          ---                  -------       -----

Balance at December 25, 1999        560,702    38,856     97,141     511,447      (22,326)                 (25,560)          -
Comprehensive income
 Net loss                          (122,142)                                     (122,142)   $(122,142)
 Other comprehensive income,
  net of tax
   Minimum pension liability
    adjustment (net of $10,312
    of taxes)                       (15,469)                                                   (15,469)    (15,469)
                                                                                               -------
 Comprehensive income                                                                        $(137,611)
                                                                                             =========

Incentive stock and stock
 ownership plans                      7,210       762      1,903       5,307
Cash dividends, $0.08 per share      (3,109)                          (3,109)
                                     ------       ---      -----      ------    ---------                 --------     -------
Balance at December 30, 2000     $  427,192    39,618    $99,044    $513,645    $(144,468)                $(41,029)    $     -
                                 ==========    ======    =======    ========    =========                 ========     =======
</TABLE>

See notes to consolidated financial statements.


              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 30, 2000, December 25, 1999, and December 26, 1998


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of  Operations:  Fleming is an  industry  leader in the  distribution  of
consumable  goods,  and also has a growing  presence in operating "price impact"
supermarkets.  Our activities  encompass two major businesses:  distribution and
retail  operations.  Food and  food-related  product  sales  account for over 97
percent  of  our  consolidated   sales.   Our  largest  customer   accounts  for
approximately  10  percent  of our  consolidated  sales  with the  next  largest
representing less than 2 percent.

Fiscal Year: Our fiscal year ends on the last Saturday in December.  Fiscal 2000
was 53 weeks;  1999 and 1998 were 52 weeks. The impact of the additional week in
2000 is not material to the results of operations or financial position.

Basis of Presentation:  The preparation of the consolidated financial statements
in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses  during the  reporting  period.  Actual  results  could
differ from those estimates.

Principles of Consolidation:  The consolidated  financial statements include all
subsidiaries.  Material  intercompany  items  have been  eliminated.  The equity
method of  accounting  is usually used for  investments  in certain  entities in
which we have an  investment  in  common  stock of  between  20% and 50% or such
investment is  temporary.  Under the equity  method,  original  investments  are
recorded  at cost and  adjusted  by our  share of  earnings  or  losses of these
entities and for declines in estimated realizable values deemed to be other than
temporary.

Reclassifications:  Certain  reclassifications  have  been  made to  prior  year
amounts to conform to current year classifications.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  No.  101 - Revenue  Recognition.  SAB No.  101  provides  guidance  on
recognition,  presentation and disclosure of revenue in financial statements. In
July 2000, the Financial  Accounting  Standards Board Emerging Issues Task Force
issued EITF 99-19 -  Reporting  Revenue  Gross as a  Principal  versus Net as an
Agent. EITF 99-19 provides further guidance on reflecting  revenue gross or net.
We  adopted  SAB No.  101 and EITF  99-19 in the  fourth  quarter  of 2000.  The
implementation  had an impact on the  classification of previously  reported net
sales  and cost of goods  sold  (ranging  annually  from  $350  million  to $400
million),  but had no impact on earnings.  Net sales and cost of goods sold have
been restated for all periods presented.

Basic and Diluted Net Loss Per Share:  Both basic and diluted per share  amounts
are computed based on net loss divided by weighted average shares as appropriate
for each calculation subject to anti-dilution limitations.

Taxes on Income:  Deferred income taxes arise from temporary differences between
financial and tax bases of certain assets and liabilities.

Cash and Cash  Equivalents:  Cash  equivalents  consist  of  liquid  investments
readily  convertible to cash with an original  maturity of three months or less.
The carrying amount for cash equivalents is a reasonable estimate of fair value.

Receivables:   Receivables   include  the  current  portion  of  customer  notes
receivable of $27 million in 2000 and $25 million in 1999. Receivables are shown
net of allowance for doubtful accounts of $34 million in 2000 and $32 million in
1999.  We extend credit to our retail  customers  which are located over a broad
geographic base.  Regional  concentrations of credit risk are limited.  Interest
income on impaired loans is recognized only when payments are received.

Inventories:  Inventories are valued at the lower of cost or market. Grocery and
certain  perishable   inventories,   aggregating   approximately  70%  of  total
inventories in 2000 and 1999 are valued on a last-in,  first-out  (LIFO) method.
The cost for the remaining inventories is determined by the first-in,  first-out
(FIFO) method. Current replacement cost of LIFO inventories was greater than the
carrying amounts by  approximately  $58 million at year-end 2000 ($13 million of
which is recorded in assets held for sale in current  assets) and $54 million at
year-end  1999 ($4  million  of which is  recorded  in  assets  held for sale in
current  assets).  In 2000 and 1999,  the  liquidation  of certain  LIFO  layers
related to business closings decreased cost of products sold by approximately $7
million and $2 million, respectively.

Property  and  Equipment:  Property and  equipment  are recorded at cost or, for
leased  assets  under  capital  leases,  at the present  value of minimum  lease
payments.  Depreciation, as well as amortization of assets under capital leases,
is based on the estimated useful asset lives using the straight-line method. The
estimated  useful lives used in computing  depreciation  and  amortization  are:
buildings and major improvements - 20 to 40 years; warehouse, transportation and
other equipment - 3 to 10 years; and data processing  equipment and software - 3
to 7 years.

Goodwill:  The  excess of  purchase  price  over the fair value of net assets of
businesses  acquired is amortized on the  straight-line  method over periods not
exceeding 40 years.  Goodwill is shown net of accumulated  amortization  of $193
million and $184 million in 2000 and 1999, respectively.

Impairment:  Asset  impairments  are recorded when the carrying amount of assets
are not  recoverable.  Impairment  is assessed and  measured,  by asset type, as
follows:  notes  receivable - fair value of the collateral  for each note;  and,
long-lived assets,  goodwill and other intangibles - estimate of the future cash
flows expected to result from the use of the asset and its eventual  disposition
aggregated  to the  operating  unit level for  distribution  and store level for
retail.

Financial  Instruments:  Interest rate hedge  transactions  and other  financial
instruments have been utilized to manage interest rate exposure. The methods and
assumptions used to estimate the fair value of significant financial instruments
are discussed in the  "Investments  and Notes  Receivable" and "Long-term  Debt"
notes.

Stock-Based  Compensation:  We apply APB Opinion No. 25 -  Accounting  for Stock
Issued to Employees and related Interpretations in accounting for our plans.

Comprehensive  Income:  Comprehensive  income is reflected  in the  Consolidated
Statements of Shareholders'  Equity.  Other comprehensive income is comprised of
foreign  currency   translation   adjustments  and  minimum  pension   liability
adjustments. The cumulative effect of other comprehensive income is reflected in
the Shareholders' Equity section of the Consolidated Balance Sheets.


IMPAIRMENT/RESTRUCTURING CHARGE AND RELATED COSTS

In December 1998, we announced the  implementation  of a strategic plan designed
to  improve  the  competitiveness  of the  retailers  we serve and  improve  our
performance by building  stronger  operations that can better support  long-term
growth.

The strategic plan consisted of the following four major initiatives:

-    Consolidate distribution operations.  The strategic plan initially included
     closing eleven  operating units (El Paso, TX;  Portland,  OR; Houston,  TX;
     Huntingdon,  PA; Laurens, IA; Johnson City, TN; Sikeston,  MO; San Antonio,
     TX; Buffalo,  NY; and two other operating units scheduled for closure,  but
     not closed due to increased  cash flows).  Of the nine closings  announced,
     all were  completed  by the end of 2000.  Three  additional  closings  were
     announced which were not originally part of the strategic plan bringing the
     total operating units closed to twelve.  The closing of Peoria was added to
     the plan in the first quarter of 1999 when costs associated with continuing
     to service  customers  during a strike  coupled with costs of reopening the
     operating  unit made  closing  the  operating  unit an  economically  sound
     decision.  During  the first  quarter  of 2000,  the  closings  of York and
     Philadelphia  were  announced as part of an effort to grow in the northeast
     by  consolidating   distribution  operations  and  expanding  the  Maryland
     facility.  The York and Philadelphia  closings are complete.  The last full
     year of operations for the 12 operating units closed was in 1998 with sales
     totaling approximately $3.1 billion. Most of these sales have been retained
     by  transferring  customer  business to our higher volume,  better utilized
     facilities.  We  believe  that this  consolidation  process  is  benefiting
     customers with improved buying  opportunities.  We have also benefited with
     better  coverage of fixed  expenses.  The closings have resulted in savings
     due to reduced depreciation,  payroll, lease and other operating costs, and
     we began to recognize these savings  immediately upon closure.  The capital
     returned from the divestitures and closings was reinvested in the business.

-    Grow  distribution  sales.  Higher  volume,   better-utilized  distribution
     operations   represent  an  opportunity  for  sales  growth.  The  improved
     efficiency  and  effectiveness  of the  remaining  distribution  operations
     enhances  their   competitiveness,   and  we  have   capitalized  on  these
     improvements by adding $1.2 billion in annualized sales in 2000.

-    Improve retail performance.  This not only required  divestiture or closing
     of  under-performing   company-owned   retail  chains,  but  also  required
     increased investments in the retail concepts on which we are focused. As of
     year-end 1999,  the strategic  plan included the  divestiture or closing of
     seven retail  chains  (Hyde Park,  Consumers,  Boogaarts,  New York Retail,
     Pennsylvania  Retail,   Baker's(TRADEMARK)   Oklahoma,  and  Thompson  Food
     Basket(REGISTERED  MARK)). The sale of Baker's(TRADEMARK)  Oklahoma as well
     as the divestiture or closing of Thompson Food Basket(REGISTERED  MARK) was
     added to the  strategic  plan  because  their format no longer fit into our
     business strategy.  The last full year of operations for these seven chains
     was in 1998 with sales  totaling  approximately  $844 million.  The sale or
     closing of these chains is substantially complete.

     In April 2000, we announced the  evaluation of strategic  alternatives  for
     the remaining conventional retail chains (Rainbow  Foods(REGISTERED  MARK),
     Baker's(TRADEMARK)  Nebraska,   Sentry(REGISTERED  MARK)  Foods,  and  ABCO
     Foods(TRADEMARK).  The evaluation was completed by the end of 2000 with the
     decision to  reposition  certain  retail  operations  into our price impact
     format.  The Rainbow  Foods(REGISTERED  MARK) chain  reflected  significant
     improvements  in sales and earnings and  consequently,  was  retained.  The
     Minneapolis  distribution  center has been  dedicated to supply the Rainbow
     Foods(REGISTERED  MARK)  operation,  with  the  supply  of  the  division's
     independent  retailers  moved to the LaCrosse and  Superior  divisions.  We
     recently sold 11 of the ABCO  Foods(TRADEMARK)  stores to Safeway, Inc. and
     we currently  have an agreement to sell the assets of the 16-store  Baker's
     chain  to  Kroger   Co.  We  also  plan  to   convert   ten   company-owned
     Sentry(REGISTERED  MARK) Foods stores to the value retail  format and steps
     are  being  taken  to  sell  the  remaining  stores  to  existing  and  new
     distribution  customers.   The  last  full  year  of  operations  for  ABCO
     Foods(TRADEMARK),  Baker's(TRADEMARK)  Nebraska and Sentry(REGISTERED MARK)
     Foods was in 1999 with sales  totaling  approximately  $1,415  million.  We
     expect to retain a substantial level of the distribution business for these
     operations and expect to receive a total of  approximately  $200 million in
     net proceeds from the sale of these stores.

-    Reduce overhead and operating expenses. We reduced overhead through our low
     cost pursuit program which includes  organization and process changes, such
     as  reducing   workforce,   centralizing   administrative  and  procurement
     functions,  and  reducing  the number of  management  layers.  The low cost
     pursuit  program also includes other  initiatives  to reduce  complexity in
     business systems and remove non-value-added costs from operations, such as
     reducing  the  number of SKU's,  creating a single  point of  contact  with
     customers,  reducing  the number of decision  points  within  Fleming,  and
     centralizing  vendor  negotiations.  These  initiatives  have reduced costs
     which ultimately improves profitability and competitiveness.

The plan,  as  expected,  took two years to  implement.  Additional  charges  of
approximately  $20 million will be incurred in 2001 due to the time  involved to
finish  selling  and  closing  certain  retail  stores.  The  remaining  charges
represent  severance  related  expenses,  inventory  markdowns for clearance for
closed  operations and other exit costs that cannot be expensed until  incurred.
Charges after 2001 will be minimal exit costs.

The total pre-tax  charge for the strategic plan through 2000 was $1,114 million
($313 million cash and $801 million non-cash).  The plan originally announced in
December 1998 had an estimated pre-tax charge totaling $782 million.  The result
was an increase in the  estimate of the  strategic  plan of $332  million  ($164
million cash and $168 million  non-cash).  The net increase is due  primarily to
closing the Peoria,  York and  Philadelphia  divisions ($104 million);  updating
impairment amounts on the five retail chains in the original plan ($18 million);
the  divestiture  or closing of the two  chains  not in the  original  plan ($44
million); decreasing costs related to a scheduled closing no longer planned ($18
million);  impairment  amounts relating to the recent evaluation of conventional
retail ($125  million);  and other costs including those related to our low cost
pursuit program and  centralization of  administrative  functions ($59 million).
Updating the  impairment  amounts was  necessary as decisions to sell,  close or
convert additional  operating units were made. There were changes in the list of
operating  units to be  divested  or closed  since  they no longer  fit into the
current  business  strategy.  Also, the cost of severance,  relocation and other
periodic expenses related to our low cost pursuit program and  centralization of
administrative functions has been accrued as incurred.

The pre-tax  charge for 2000 was $309  million.  After tax, the expense for 2000
was $183  million  or $4.71  per  share.  The $309  million  charge  in 2000 was
included  on several  lines of the  Consolidated  Statements  of  Operations  as
follows:  $2 million was included in net sales related  primarily to rent income
impairment due to division  closings;  $57 million was included in cost of sales
and was  primarily  related  to  inventory  valuation  adjustments,  moving  and
training costs  relating to procurement  and product  handling  associates,  and
additional depreciation and amortization on assets to be disposed of but not yet
held for sale;  $37 million was included in selling and  administrative  expense
and equity  investment  results as  disposition  related  costs  recognized on a
periodic basis (such as moving and training  costs related to the  consolidation
of  certain  administrative  functions);  and the  remaining  $213  million  was
included  in the  Impairment/restructuring  charge  line.  The  charge  for 2000
consisted of the following components:

-    Impairment  of assets of $91 million.  The  impairment  components  were $3
     million for goodwill and $88 million for other  long-lived  assets relating
     to planned  disposals and closures.  All of the goodwill charge was related
     to a three store retail acquisition.

-    Restructuring  charges of $122 million. The restructuring charges consisted
     partly of severance  related  expenses  and  estimated  pension  withdrawal
     liabilities for the closings of York and Philadelphia  which were announced
     during  the  first  quarter  of 2000 as  part of an  effort  to grow in the
     northeast  by  consolidating  distribution  operations  and  expanding  the
     Maryland  facility.  The charge included  severance related expenses due to
     the consolidation of certain  administrative  departments  announced during
     the second quarter of 2000.  Additionally,  the charge  included  severance
     related expenses,  estimated pension  withdrawal  liabilities and operating
     lease  liabilities for the divestiture and closing of certain  conventional
     retail stores  evaluated  during the second and third quarters of 2000. The
     restructuring  charges also consisted of professional fees incurred related
     to the restructuring process.

-    Other  disposition and related costs of $96 million.  These costs consisted
     primarily of  inventory  markdowns  for  clearance  for closed  operations,
     additional  depreciation  and  amortization on assets to be disposed of but
     not yet held for sale,  disposition  related costs recognized on a periodic
     basis and other costs.

The charge for 2000  related to our  business  segments as follows:  $99 million
relates  to the  distribution  segment  and $164  million  relates to the retail
segment with the balance relating to support services expenses.

The pre-tax  charge for 1999 was $137  million.  After tax, the expense for 1999
was $92 million or $2.39 per share. The $137 million charge in 1999 was included
on several lines of the  Consolidated  Statements of Operations as follows:  $18
million was  included in cost of sales and was  primarily  related to  inventory
valuation  adjustments;  $16 million was included in selling and  administrative
expense and equity investment results as disposition related costs recognized on
a  periodic  basis;   and  the  remaining  $103  million  was  included  in  the
Impairment/restructuring charge line. The 1999 charge consisted of the following
components:

-    Impairment of assets of $62 million.  The  impairment  components  were $36
     million for goodwill and $26 million for other  long-lived  assets relating
     to planned  disposals and closures.  Of the goodwill charge of $36 million,
     $22 million related to the 1994 "Scrivner"  acquisition  with the remaining
     amount related to two retail acquisitions.

-    Restructuring  charges of $41 million. The restructuring  charges consisted
     primarily of severance  related expenses and estimated  pension  withdrawal
     liabilities for the divested or closed  operating  units  announced  during
     1999.  The   restructuring   charges  also  consisted  of  operating  lease
     liabilities and  professional  fees incurred  related to the  restructuring
     process.

-    Other  disposition and related costs of $34 million.  These costs consisted
     primarily of  inventory  markdowns  for  clearance  for closed  operations,
     impairment of an  investment,  disposition  related  costs  recognized on a
     periodic basis and other costs.

The 1999 charge relates to our business segments as follows: $48 million relates
to the  distribution  segment and $70 million relates to the retail segment with
the balance relating to support services expenses.

The pre-tax  charge for 1998 was $668  million.  After tax, the expense was $543
million in 1998 or $14.33 per share.  The $668  million  charge was  included on
several  lines of the  Consolidated  Statements  of  Operations  as follows:  $9
million was  included in cost of sales and was  primarily  related to  inventory
valuation  adjustments;  $6 million was  included in selling and  administrative
expense as disposition  related costs  recognized on a periodic  basis;  and the
remaining $653 million was included in the Impairment/restructuring charge line.
The 1998 charge consisted of the following components:

-    Impairment of assets of $590 million.  The impairment  components were $372
     million for goodwill and $218 million for other long-lived  assets.  Of the
     goodwill  charge of $372  million,  approximately  87%  related to the 1989
     "Malone  & Hyde"  acquisition  and the  1994  "Scrivner"  acquisition.  The
     remaining 13% related to various other  smaller  acquisitions,  both retail
     and wholesale.

-    Restructuring  charges of $63 million. The restructuring  charges consisted
     of severance  related expenses and pension  withdrawal  liabilities for the
     operating   units  and  the  retail  chain   announced   during  1998.  The
     restructuring charges also consisted of operating lease liabilities for the
     distribution  operating  units and the retail chain  announced  during 1998
     plus the additional planned closings at that time.

-    Other  disposition  and related  costs of $15 million.  These costs consist
     primarily of professional fees,  inventory valuation  adjustments and other
     costs.

The 1998  charge  relates to our  business  segments as  follows:  $491  million
relates to the distribution  segment and $153 million relates to the retail food
segment with the balance relating to support services expenses.

The charges related to workforce reductions are as follows:

($'s in thousands)                                   Amount            Headcount
------------------                                   ------            ---------
1998 Activity:
  Charge                                           $ 25,441               1,430
  Terminations                                       (3,458)               (170)
                                                     ------                ----
  Ending Liability                                   21,983               1,260

1999 Activity:
  Charge                                             12,029               1,350
  Terminations                                      (24,410)             (1,950)
                                                    -------              ------
  Ending Liability                                    9,602                 660

2000 Activity:
  Charge                                             53,906               5,610
  Terminations                                      (26,180)             (1,860)
                                                    -------              ------
  Ending Liability                                 $ 37,328               4,410
                                                   ========               =====

The ending liability of approximately $37 million represents  payments over time
to associates already severed as well as union pension  withdrawal  liabilities.
The breakdown of the 5,610 headcount  reduction recorded for 2000 is: 1,290 from
the  distribution  segment;  4,260 from the retail segment;  and 60 from support
services.

Additionally,  the strategic plan includes charges related to lease  obligations
which will be utilized as operating units or retail stores close, but ultimately
reduced over remaining  lease terms ranging from 1 to 20 years.  The charges and
utilization have been recorded to-date as follows:

     ($'s in thousands)              Amount
     ------------------              ------
     1998 Activity:
       Charge                    $ 28,101
       Utilized                      (385)
                                     ----
       Ending Liability            27,716

     1999 Activity:
       Charge                      15,074
       Utilized                   (10,281)
                                  -------
       Ending Liability            32,509

     2000 Activity:
       Charge                      37,149
       Utilized                   (48,880)
                                  -------
       Ending Liability          $ 20,778
                                 ========

Asset  impairments  were recognized in accordance with SFAS No. 121 - Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of, and such assets were  written down to their  estimated  fair values based on
estimated  proceeds  of  operating  units  to be sold or  discounted  cash  flow
projections.  The  operating  costs of operating  units to be sold or closed are
treated as normal  operations  during the period they  remain in use.  Salaries,
wages  and  benefits  of  employees  at these  operating  units are  charged  to
operations  during the time such employees are actively  employed.  Depreciation
expense is continued for assets that we are unable to remove from operations.

Assets held for sale,  reflected on the balance sheet,  consisted of $22 million
of distribution operating units and $144 million of retail stores as of year-end
2000 and $8 million of  distribution  operating  units and $61 million of retail
stores as of year-end  1999.  Gains on the sale of facilities  for 2000 and 1999
totaled approximately $9 million and $6 million, respectively, and were included
in net sales.  Also during 2000 and 1999, we recorded  charges of  approximately
$10 million  and $31  million,  respectively,  related to the closing of certain
retail stores which were included in selling and administrative expense.


LITIGATION CHARGES

Furr's Supermarkets filed suit against us in 1997 claiming they were overcharged
for products.  During 1997,  Fleming and Furr's reached an agreement  dismissing
all litigation between them. Pursuant to the settlement, Furr's purchased our El
Paso  product  supply  center  in 1998,  together  with  related  inventory  and
equipment.  As part of the  settlement,  we paid Furr's $1.7 million in 1997 and
$7.8 million in 1998 as a refund of fees and charges.


PER SHARE RESULTS

We did not reflect  1,220,000  weighted  average  potential  shares for the 2000
diluted  calculation or 364,000 weighted  average  potential shares for the 1999
diluted  calculation  because  they would be  antidilutive.  Other  options with
exercise prices  exceeding market prices consisted of 4.4 million shares in 2000
and 3.8 million  shares in 1999 of common stock at a weighted  average  exercise
price of $12.94 and $14.19 per share,  respectively,  that were not  included in
the  computation  of diluted  earnings  per share  because  the effect  would be
antidilutive.


SEGMENT INFORMATION

Considering  the  customer  types and the  processes  for  meeting  the needs of
customers,  senior management  manages the business as two reportable  segments:
distribution and retail operations.

The distribution  segment sells food and non-food products (e.g.,  food, general
merchandise,  health and  beauty  care,  and  Fleming  Brands) to  supermarkets,
convenience stores,  supercenters,  discount stores,  limited assortment stores,
drug stores,  specialty  stores and other stores across the U.S. We also offer a
variety of retail  support  services to  independently-owned  and  company-owned
retail stores.  The  aggregation is based  primarily on the common customer base
and the interdependent marketing and distribution efforts.

Our senior  management  utilizes more than one measurement and multiple views of
data to assess segment  performance  and to allocate  resources to the segments.
However,  the  dominant   measurements  are  consistent  with  our  consolidated
financial  statements and,  accordingly,  are reported on the same basis herein.
Interest expense, interest income, equity investments, LIFO adjustments, support
services expenses, other unusual charges and income taxes are managed separately
by senior management and those items are not allocated to the business segments.
Intersegment transactions are reflected at cost.

The  following  table  sets forth the  composition  of the  segments'  and total
company's net sales, operating earnings, depreciation and amortization,  capital
expenditures and identifiable assets.

<TABLE>
<CAPTION>

(In millions)                                   2000         1999         1998
-------------                                   ----         ----         ----
<S>                                          <C>           <C>          <C>
Net Sales
 Distribution                                $ 12,926      $ 12,718     $ 13,120
 Intersegment elimination                      (1,757)       (2,165)      (2,031)
                                             --------      --------     --------
 Net distribution                              11,169        10,553       11,089
 Retail                                         3,275         3,719        3,589
                                             --------      --------     --------
Total                                        $ 14,444      $ 14,272     $ 14,678
                                             ========      ========     ========

Operating Earnings
 Distribution                                $    297      $    290     $    259
 Retail                                            62            (2)          62
 Support services                                (197)         (112)        (122)
                                             --------      --------     --------
 Total operating earnings                         162           176          199

 Interest expense                                (175)         (165)        (161)
 Interest income                                   33            40           37
 Equity investment results                         (8)          (10)         (12)
 Litigation charges                                 -             -           (8)
 Impairment/restructuring charge                 (213)         (103)        (653)
                                             --------      --------     --------
Loss before taxes                            $   (201)     $    (62)    $   (598)
                                             ========      ========     ========

Depreciation and Amortization
 Distribution                                $    105      $     88     $    107
 Retail                                            57            64           61
 Support Services                                  12            10           17
                                             --------      --------     --------
Total                                        $    174      $    162     $    185
                                             ========      ========     ========

Capital Expenditures
 Distribution                                $     99      $     53     $     81
 Retail
                                                   45           112          118
 Support Services                                   7             1            1
                                             --------      --------     --------
Total                                        $    151      $    166     $    200
                                             ========      ========     ========

Identifiable Assets
 Distribution                                $  2,499      $  2,546     $  2,524
 Retail                                           681           848          697
 Support Services                                 223           179          270
                                             --------      --------     --------
Total                                        $  3,403      $  3,573     $  3,491
                                             ========      ========     ========
</TABLE>


INCOME TAXES

Components of taxes on loss are as follows:

(In thousands)                        2000        1999        1998
--------------                        ----        ----        ----

Current:
 Federal                            $ (23,291)  $ (17,287)   $  23,896
 State                                 10,082      (3,924)       5,737
                                    ---------   ---------    ---------
Total current                         (13,209)    (21,211)      29,633
                                    ---------   ---------    ---------
Deferred:
 Federal                              (41,123)      2,552      (94,254)
 State                                (24,415)        806      (22,986)
                                    ---------   ---------     ---------
Total deferred                        (65,538)      3,358     (117,240)
                                    ---------   ---------     ---------
Taxes on loss                       $ (78,747)  $ (17,853)   $ (87,607)
                                    =========   =========    =========


Deferred tax expense (benefit)  relating to temporary  differences  includes the
following components:

(In thousands)                        2000        1999          1998
--------------                        ----        ----          ----

Depreciation and amortization      $ (39,106)   $  (9,603)   $ (64,132)
Inventory                              4,313        7,019       (6,839)
Capital losses                           452       (4,825)         251
Asset valuations and reserves         29,495      (18,114)       9,302
Equity investment results              8,837         (172)        (403)
Credit losses                          1,924       (4,527)      (7,825)
Lease transactions                    (4,887)       7,996      (34,718)
Associate benefits                    (7,187)      31,700        3,200
Note sales                               (41)        (139)        (217)
Net operating loss carryforwards     (62,951)           -            -
Other                                  3,613       (5,977)     (15,859)
                                       -----       ------      -------

Deferred tax expense (benefit)     $ (65,538)   $   3,358    $(117,240)
                                   =========    =========    =========


Temporary  differences  that give rise to deferred tax assets and liabilities as
of year-end 2000 and 1999 are as follows:

(In thousands)                                     2000            1999
--------------                                     ----            ----

Deferred tax assets:
 Depreciation and amortization                  $  57,740       $  23,002
 Asset valuations and reserve activities           21,772          48,559
 Associate benefits                                67,258          54,457
 Credit losses                                     24,927          28,263
 Equity investment results                          2,522           9,983
 Lease transactions                                45,208          40,325
 Inventory                                         26,918          26,342
 Acquired loss carryforwards                            0              67
 Capital losses                                     8,152           9,372
 Net operating loss carryforwards                  62,951               0
 Other                                             25,999          30,847
                                                  -------         -------
Total deferred tax assets                         343,447         271,217
                                                  -------         -------

Deferred tax liabilities:
 Depreciation and amortization                     47,734          52,103
 Equity investment results                          4,857           3,482
 Lease transactions                                 1,528           1,532
 Inventory                                         61,757          56,867
 Associate benefits                                24,725          29,424
 Asset valuations and reserve activities            5,480           2,772
 Note sales                                         2,253           3,387
 Prepaid expenses                                   3,277           3,874
 Capital losses                                       320           1,088
 Other                                             27,203          28,225
                                                  -------         -------
Total deferred tax liabilities                    179,134         182,754
                                                  -------         -------
Net deferred tax asset                          $ 164,313       $  88,463
                                                =========       =========

The  change in net  deferred  tax asset  from  1999 to 2000 is  allocated  $65.5
million  to  deferred   income  tax  benefit  and  $10.3   million   benefit  to
stockholders' equity.

We have federal net operating loss  carryforwards of approximately  $122 million
and state net operating loss  carryforwards of  approximately  $342 million that
are due to  expire  at  various  times  through  the  year  2021.  We also  have
charitable  contribution  carryforwards  of  approximately  $2 million that will
begin to expire in 2005.  We believe it is more  likely than not that all of our
deferred tax assets will be realized.

The effective  income tax rates are different from the statutory  federal income
tax rates for the following reasons:

                                      2000       1999     1998
                                      ----       ----     ----

Statutory rate                       35.0%      35.0%    35.0%
State income taxes, net of
 federal tax benefit                  5.4        5.1      6.8
Acquisition-related differences       (.5)       0.0     12.3
Other                                 2.5       (3.1)     (.4)
                                      ---       ----      ---

Effective rate on operations         42.4%      37.0%    53.7%

Impairment/restructuring and
 related charges                     (3.2)      (8.5)   (39.1)
                                     ----       ----    -----

Effective rate after impairment/
 restructuring and related           39.2%      28.5%    14.6%
                                     ====       ====     ====

During 1999,  we recorded  interest  income of $9 million  related to refunds in
federal income taxes from prior years.


INVESTMENTS AND NOTES RECEIVABLE

Investments and notes receivable consist of the following:

(In thousands)                               2000        1999
--------------                               ----        ----

Investments in and advances to customers   $  7,452   $ 14,136
Notes receivable from customers              85,521     83,354
Other investments and receivables            11,493     11,405
                                             ------     ------

Investments and notes receivable           $104,466   $108,895
                                           ========   ========

Investments  and notes  receivable  are shown net of reserves of $26 million and
$23 million in 2000 and 1999,  respectively.  Sales to customers  accounted  for
under the equity method were approximately  $0.2 billion,  $0.3 billion and $0.6
billion in 2000, 1999 and 1998, respectively. Receivables include $4 million and
$8 million in 2000 and 1999,  respectively,  due from  customers  accounted  for
under the equity method.

We extend  long-term  credit to certain  retail  customers.  Loans are primarily
collateralized  by inventory and fixtures.  Interest  rates are above prime with
terms up to 10 years.

Impaired notes receivable (including current portion) are as follows:

(In thousands)                                       2000        1999
--------------                                       ----        ----

Impaired notes with related allowances             $ 45,711    $ 57,657
Credit loss allowance on impaired notes             (20,101)    (25,811)
Impaired notes with no related allowances             4,793       4,613
                                                      -----       -----

Net impaired notes receivable                      $ 30,403    $ 36,459
                                                   ========    ========

Average  investments  in  impaired  notes  were as  follows:  2000-$52  million;
1999-$65 million; and 1998-$59 million.



Activity in the allowance for credit losses is as follows:

(In thousands)                        2000        1999        1998
--------------                        ----        ----        ----

Balance, beginning of year          $ 55,528    $ 47,232    $ 43,848
Charged to costs and expenses         28,872      25,394      23,498
Uncollectible accounts written off,
 net of recoveries                   (24,682)    (17,098)    (20,114)
                                     -------     -------     -------

Balance, end of year                $ 59,718    $ 55,528    $ 47,232
                                    ========    ========    ========

We sold certain notes  receivable  at face value with limited  recourse in years
prior to 1998. The outstanding  balance at year-end 2000 on all notes sold is $5
million, of which we are contingently liable for $3 million should all the notes
become uncollectible.


LONG-TERM DEBT

Long-term debt consists of the following:

(In thousands)                                     2000        1999
--------------                                     ----        ----

10 5/8% senior notes due 2001                   $  300,000  $  300,000
10 1/2% senior subordinated notes due 2004         250,000     250,000
10 5/8% senior subordinated notes due 2007         250,000     250,000
Revolving credit, average interest rates of
 7.7% for 2000 and 6.5% for 1999, due 2003         300,000     255,000
Term loans, due 2001 to 2004, average interest
 rate of 7.8% for 2000 and 7.3% for 1999           154,421     197,594
Other debt                                          16,150      52,496

                                                 1,270,571   1,305,090
Less current maturities                            (38,171)    (70,905)
                                                   -------     -------

Long-term debt                                  $1,232,400  $1,234,185
                                                ==========  ==========

Five-year  Maturities:  Aggregate maturities of long-term debt for the next five
years are as follows:  2001-$38 million;  2002-$50 million;  2003-$347  million;
2004-$287 million; and 2005-$0.

The 10 5/8% $300 million  senior  notes were issued in 1994 and mature  December
15, 2001. The senior notes are unsecured senior obligations, ranking the same as
all other existing and future senior indebtedness and senior in right of payment
to the  subordinated  notes.  The senior notes are  effectively  subordinated to
secured senior  indebtedness with respect to assets securing such  indebtedness,
including loans under our senior secured credit facility.

On March 15,  2001,  $355 million of 10 1/8% senior notes were issued and mature
on March 15, 2008.  Most of the net proceeds were deposited with the trustee for
the 10 5/8%  senior  notes on March 15, 2001 to redeem all of the 10 5/8% senior
notes due 2001, including an amount to cover accrued interest and the redemption
premium,  on April 16, 2001 and to defease our  obligations  under the indenture
governing these notes.  The balance of the net proceeds was used to pay down our
revolver loans. The new senior notes are unsecured senior  obligations,  ranking
the same as all other  existing  and future  senior  indebtedness  and senior in
right of payment to the  subordinated  notes.  The senior notes are  effectively
subordinated to secured senior indebtedness with respect to assets securing such
indebtedness, including loans under our senior secured credit facility. Both the
10  5/8%  and  10  1/8%  senior  notes  are  guaranteed  by  substantially   all
subsidiaries (see -Subsidiary Guarantee of Senior Notes below).

The senior  subordinated  notes  consist of two issues:  $250 million of 10 1/2%
Notes due  December 1, 2004 and $250 million of 10 5/8% Notes due July 31, 2007.
The subordinated notes are general unsecured obligations,  subordinated in right
of payment to all existing and future senior  indebtedness,  and senior to or of
equal rank with all of our existing and future subordinated indebtedness.

On March 15, 2001, $150 million of 5.25% convertible  senior  subordinated notes
were issued and mature on March 15, 2009 and have a  conversion  price of $30.27
per share. The net proceeds were used to pay down the revolving credit facility.
The  convertible  notes are  callable  after  2004,  and are  general  unsecured
obligations,  subordinated in right of payment to all existing and future senior
indebtedness,  and rank senior to or of equal rank with all of our  existing and
future subordinated indebtedness.

In July, 1997, we developed a senior secured credit facility which consists of a
$600 million revolving credit facility,  with a final maturity of July 25, 2003,
and an amortizing  term loan with a maturity of July 25, 2004. The term loan was
originally  $250  million  but has been  paid down to $154  million.  Up to $300
million of the  revolver may be used for issuing  letters of credit.  Borrowings
and  letters  of credit  issued  under the new credit  facility  may be used for
general corporate purposes and are secured by a first priority security interest
in the accounts  receivable and inventories of Fleming and our  subsidiaries and
in the capital stock or other equity  interests we own in our  subsidiaries.  In
addition,  this credit facility is guaranteed by substantially all subsidiaries.
The stated interest rate on borrowings  under the credit agreement is equal to a
referenced index interest rate,  normally the London interbank  offered interest
rate  ("LIBOR"),  plus a margin.  The level of the margin is dependent on credit
ratings on our senior secured bank debt.

The credit  agreement and the indentures under which other debt instruments were
issued contain  customary  covenants  associated  with similar  facilities.  The
credit agreement  currently  contains the following more  significant  financial
covenants:  maintenance  of a fixed charge  coverage ratio of at least 1.7 to 1,
based on adjusted earnings, as defined, before interest, taxes, depreciation and
amortization    and   net   rent   expense;    maintenance   of   a   ratio   of
inventory-plus-accounts  receivable  to funded bank debt  (including  letters of
credit) of at least 1.4 to 1; and a limitation on restricted payments, including
dividends,  up to $71 million at year-end  2000,  based on a formula tied to net
earnings and equity issuances. Under the credit agreement, new issues of certain
kinds of debt must have a maturity  after January 2005.  Covenants  contained in
our indentures under which other debt instruments were issued are generally less
restrictive  than those of the credit  agreement.  We are in compliance with all
financial covenants under the credit agreement and its indentures.

The  credit  facility  may be  terminated  in the event of a  defined  change of
control. Under the indentures, noteholders may require us to repurchase notes in
the event of a defined  change of  control  coupled  with a defined  decline  in
credit ratings.

At year-end 2000,  borrowings  under the credit facility totaled $154 million in
term loans and $300 million of revolver  borrowings,  and $43 million of letters
of credit had been issued.  Letters of credit are needed primarily for insurance
reserves  associated with our normal risk management  activities.  To the extent
that any of these letters of credit would be drawn,  payments  would be financed
by borrowings under the credit agreement.

At  year-end  2000,  we would  have been  allowed to borrow an  additional  $257
million under the revolving  credit facility  contained in the credit  agreement
based on the actual borrowings and letters of credit outstanding.

Medium-term  Notes:  Medium-term  notes are  included in other debt in the above
table.  Between 1990 and 1993, we registered  $565 million in medium-term  notes
with a total of $275 million issued.  The balances due at year-end 2000 and 1999
were $17 million and $53 million,  respectively,  with average interest rates of
7.8% for 2000 and 7.2% for 1999. The notes mature from 2001 to 2003.

Credit  Ratings:  On  March  5,  2001,  Moody's  Investors  Service  ("Moody's")
announced it had upgraded its ratings for our various  issues of  long-term debt
essentially  by one notch,  and that it had changed its outlook from positive to
stable.  On February 28, 2001,  Standard & Poor's rating group ("S&P") announced
it had  revised its outlook  for its  ratings  from stable to  positive.  Giving
effect to these changes, the table below summarizes our credit ratings:

                                        Moody's         S&P
                                        -------         ---
Credit agreement loan                   Ba2             BB
Senior implied debt                     Ba3             BB-
Senior unsecured debt                   Ba3             B+
Senior subordinated notes               B2              B
Outlook                                 Stable          Positive

Average  Interest  Rates:  The average  interest rate for total debt  (including
capital  lease  obligations)  before the effect of interest rate hedges was 9.5%
for 2000,  versus 10.2% for 1999.  Including the effect of interest rate hedges,
the average  interest  rate for total debt was 9.5% and 10.5% for 2000 and 1999,
respectively.

Interest Expense:  Components of interest expense are as follows:

(In thousands)                        2000        1999       1998
--------------                        ----        ----       ----

Interest costs incurred:
 Long-term debt                     $135,474   $127,271    $123,054
 Capital lease obligations            39,609     36,768      37,542
 Other                                 1,537      2,258       1,589
                                       -----      -----       -----

 Total incurred                      176,620    166,297     162,185
Less interest capitalized             (2,051)    (1,117)       (604)
                                      ------     ------        ----

Interest expense                    $174,569   $165,180    $161,581
                                    ========   ========    ========

Derivatives:  From time to time we may use interest rate hedge  agreements  with
the  objective  of managing  interest  costs and  exposure to changing  interest
rates.  The  classes of  derivative  financial  instruments  used have  included
interest rate swap and cap agreements.  The  counterparties  to these agreements
have been  major U.S.  and  international  financial  institutions  with  credit
ratings  higher than ours.  Our policy  regarding  derivatives is to engage in a
financial risk management  process to manage our defined  exposures to uncertain
future changes in interest rates which impact net earnings.  At fiscal  year-end
2000, there were no interest rate hedge agreements outstanding.

The Financial  Accounting  Standards  Board issued SFAS No. 133 - Accounting for
Derivative  Instruments  and  Hedging  Activities.   SFAS  No.  133  establishes
accounting  and  reporting  standards  for  derivative  instruments  and  became
effective  on  January  1,  2001.  We revised  our  written  policies  regarding
financial  derivatives,  as needed,  prior to the effective  date.  There was no
significant impact on our financial statements upon adopting the new standard.

Fair  Value of  Financial  Instruments:  The fair  value of  long-term  debt was
determined using valuation techniques that considered market prices for actively
traded debt, and cash flows  discounted at current market rates for management's
best estimate for  instruments  without quoted market prices.  At year-end 2000,
the carrying value of total debt (excluding  capital leases) was higher than the
fair value by $175 million, or 13.8% of the carrying value. Fair value was lower
than the carrying value at year-end 2000 primarily  because our credit agreement
revolver and term loans were priced at borrowing  margins set in 1997 which were
significantly  below  market  prices  in  2000.  The fair  value  of our  senior
subordinated notes was substantially  below carrying value primarily because the
interest rates on this debt,  which were set in 1997, were  significantly  below
market  levels at year-end  2000. On March 7, 2001,  the carrying  value for our
debt was only 2.1% higher than fair value primarily because our credit agreement
borrowing  margins  have  been  increased  and  our  perceived  creditworthiness
improved  due to the $50 million  equity  investment  by an affiliate of Yucaipa
plus the  anticipated  economic  benefits  relating  to the new Kmart  strategic
alliance.  At year-end 1999, the carrying value of debt was higher than the fair
value by $69 million, or 5.3% of the carrying value.

The fair value of notes  receivable is comparable to the carrying  value because
of the  variable  interest  rates  charged on certain  notes and  because of the
allowance for credit losses.

Subsidiary  Guarantee of Senior Notes: The senior notes are guaranteed by all of
Fleming's direct and indirect  subsidiaries (except for certain  inconsequential
subsidiaries),  all of which  are  wholly-owned.  The  guarantees  are joint and
several,  full, complete and unconditional.  There are currently no restrictions
on the ability of the  subsidiary  guarantors to transfer  funds to Fleming (the
parent) in the form of cash dividends, loans or advances.

The following condensed consolidating financial information depicts, in separate
columns,  the parent company,  those  subsidiaries  which are guarantors,  those
subsidiaries  which  are   non-guarantors,   elimination   adjustments  and  the
consolidated total. The financial  information may not necessarily be indicative
of the results of operations  or financial  position had the  subsidiaries  been
operated as independent entities.


CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION

<TABLE>
<CAPTION>
                                                                December 30, 2000
                                   ---------------------------------------------------------------------
                                     Parent                      Non-
                                    Company     Guarantors    Guarantors    Eliminations    Consolidated
                                   ---------    ----------    ----------    ------------    ------------
                                                                (In thousands)
<S>                               <C>           <C>           <C>            <C>            <C>
            ASSETS

     Current assets:
      Cash and cash equivalents   $    22,487   $     6,753   $     1,140    $         -    $    30,380
      Receivables, net                406,203       101,884           958              -        509,045
      Inventories                     635,227       192,499         3,539              -        831,265
      Other current assets            247,400         4,943            40              -        252,383
                                  -----------    -----------  -----------    -----------    -----------
           Total current assets     1,311,317       306,079         5,677              -      1,623,073
     Investment in subsidiaries        53,381             -             -        (53,381)             -
     Intercompany receivables         384,450             -             -       (384,450)             -
     Property and equipment, net      424,321       285,117         7,019              -        716,457
     Goodwill, net                    411,094       129,440         3,785              -        544,319
     Other assets                     463,008        42,918        13,036              -        518,962
                                  -----------   -----------   -----------    -----------    -----------
                                  $ 3,047,571   $   763,554   $    29,517    $  (437,831)   $ 3,402,811
                                  ===========   ===========   ===========    ===========    ===========

      LIABILITIES AND EQUITY (DEFICIT)

     Current liabilities:
      Accounts payable            $   821,407   $   120,145   $     1,727    $         -    $   943,279
      Intercompany payables                 -       342,627        41,823       (384,450)             -
      Other current liabilities       244,524        43,275         1,310              -        289,109
                                  -----------   -----------   -----------    -----------    -----------
          Total current liabilities 1,065,931       506,047        44,860       (384,450)     1,232,388
     Obligations under capital leases 214,611       162,628             -              -        377,239
     Long-term debt and other
        liabilities                 1,339,837        26,096            59              -      1,365,992
     Equity (deficit)                 427,192        68,783       (15,402)       (53,381)       427,192
                                  -----------   -----------   -----------    -----------    -----------
                                  $ 3,047,571   $   763,554   $    29,517    $  (437,831)   $ 3,402,811
                                  ===========   ===========   ===========    ===========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                December 25, 1999
                                   ---------------------------------------------------------------------
                                     Parent                      Non-
                                    Company     Guarantors    Guarantors    Eliminations    Consolidated
                                   ---------    ----------    ----------    ------------    ------------
                                                                (In thousands)
<S>                               <C>           <C>           <C>            <C>            <C>
            ASSETS
     Current assets:
      Cash and cash equivalents   $   (54,803)  $    61,307   $       179    $         -    $     6,683
      Receivables, net                405,076        90,128           955              -        496,159
      Inventories                     795,899       198,769         3,137              -        997,805
      Other current assets            222,461         5,624            18              -        228,103
                                  -----------   -----------   -----------    -----------    -----------
           Total current assets     1,368,633       355,828         4,289              -      1,728,750
     Investment in subsidiaries        53,381             -             -        (53,381)             -
     Intercompany receivables         463,191             -             -       (463,191)             -
     Property and equipment, net      559,424       273,137         5,615              -        838,176
     Goodwill, net                    428,667       133,368         4,085              -        566,120
     Other assets                     369,500        70,646            26              -        440,172
                                  -----------   -----------   -----------    -----------    -----------
                                  $ 3,242,796   $   832,979   $    14,015    $  (516,572)   $ 3,573,218
                                  ===========   ===========   ===========    ===========    ===========

      LIABILITIES AND EQUITY (DEFICIT)

     Current liabilities:
      Accounts payable            $   859,694   $   120,538   $       987    $         -    $   981,219
      Intercompany payables                 -       435,028        28,163       (463,191)             -
      Other current liabilities       246,010        56,258           232              -        302,500
                                  -----------   -----------   -----------    -----------    -----------
          Total current liabilities 1,105,704       611,824        29,382       (463,191)     1,283,719
     Obligations under capital leases 230,983       136,977             -              -        367,960
     Long-term debt and other
        liabilities                 1,345,407        15,395            35              -      1,360,837
     Equity (deficit)                 560,702        68,783       (15,402)       (53,381)       560,702
                                  -----------   -----------   -----------    -----------    -----------
                                  $ 3,242,796   $   832,979   $    14,015    $  (516,572)   $ 3,573,218
                                  ===========   ===========   ===========    ===========    ===========
</TABLE>


CONDENSED CONSOLIDATING OPERATING STATEMENT INFORMATION
<TABLE>
<CAPTION>
                                                      53 Weeks Ended December 30, 2000
                                   ---------------------------------------------------------------------
                                     Parent                      Non-
                                    Company     Guarantors    Guarantors    Eliminations    Consolidated
                                   ---------    ----------    ----------    ------------    ------------
                                                                (In thousands)
<S>                               <C>           <C>           <C>             <C>             <C>
     Net sales                    $ 12,013,293  $ 3,768,333   $     70,022    $ (1,407,833)   $ 14,443,815
     Costs and expenses:
      Cost of sales                 11,349,595    3,102,660         52,493      (1,407,833)     13,096,915
      Selling and administrative       575,408      591,144         18,451               -       1,185,003
      Other                            100,721       46,796          2,424               -         149,941
      Impairment/restructuring charge  155,813       56,971             61               -         212,845
      Equity loss from subsidiaries     20,108            -              -         (20,108)              -
                                  ------------  -----------   ------------    ------------    ------------
         Total costs and expenses   12,201,645    3,797,571         73,429      (1,427,941)     14,644,704
                                  ------------  -----------   ------------    ------------    ------------
     Income (loss) before taxes       (188,352)     (29,238)        (3,407)         20,108        (200,889)
     Taxes on income (loss)            (66,210)     (11,095)        (1,442)              -         (78,747)
                                  ------------  ------------  ------------    ------------    ------------
     Net income (loss)            $   (122,142) $   (18,143)  $     (1,965)   $     20,108    $   (122,142)
                                  ============  ============  ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                                           52 Weeks Ended December 25, 1999
                                   ---------------------------------------------------------------------
                                     Parent                      Non-
                                    Company     Guarantors    Guarantors    Eliminations    Consolidated
                                   ---------    ----------    ----------    ------------    ------------
                                                                (In thousands)
<S>                               <C>           <C>            <C>             <C>             <C>
     Net sales                    $ 13,624,272  $  1,043,109   $    141,700    $   (537,045)   $ 14,272,036
     Costs and expenses:
      Cost of sales                 12,434,048       821,782        116,084        (537,045)     12,834,869
      Selling and administrative     1,012,393       224,572         24,666               -       1,261,631
      Other                            112,593        19,400          3,112               -         135,105
      Impairment/restructuring charge  101,058         1,954              -               -         103,012
      Equity loss from subsidiaries     16,896             -              -         (16,896)              -
                                  ------------  ------------   ------------    ------------    ------------
         Total costs and expenses   13,676,988     1,067,708        143,862        (553,941)     14,334,617
                                  ------------  ------------   ------------    ------------    ------------
     Income (loss) before taxes        (52,716)      (24,599)        (2,162)         16,896         (62,581)
     Taxes on income (loss)             (7,988)       (8,949)          (916)              -         (17,853)
                                  ------------  ------------   ------------    ------------    ------------
     Net income (loss)            $    (44,728) $    (15,650)  $     (1,246)   $     16,896    $    (44,728)
                                  ============  ============   ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                                        52 Weeks Ended December 26, 1998
                                   ---------------------------------------------------------------------
                                     Parent                      Non-
                                    Company     Guarantors    Guarantors    Eliminations    Consolidated
                                   ---------    ----------    ----------    ------------    ------------
                                                                (In thousands)
<S>                               <C>           <C>            <C>              <C>            <C>
     Net sales                    $ 14,299,725  $    377,970   $    203,861    $   (203,652)   $ 14,677,904
     Costs and expenses:
      Cost of sales                 12,957,205       307,666        166,311        (203,652)     13,227,530
      Selling and administrative     1,143,656        71,250         36,686               -       1,251,592
      Other                            139,033         1,881          3,333               -         144,247
      Impairment/restructuring charge  608,378        26,495         17,864               -         652,737
      Equity loss from subsidiaries     38,503             -              -         (38,503)              -
                                  ------------  ------------   ------------    ------------    ------------
         Total costs and expenses   14,886,775       407,292        224,194        (242,155)     15,276,106
                                  ------------  ------------   ------------    ------------    ------------
     Income (loss) before taxes       (587,050)      (29,322)       (20,333)         38,503        (598,202)
     Taxes on income (loss)            (76,455)       (6,480)        (4,672)              -         (87,607)
                                  ------------  ------------   ------------    ------------    ------------
     Net income (loss)            $   (510,595) $    (22,842)  $    (15,661)   $     38,503    $   (510,595)
                                  ============  ============   ============    ============    ============
</TABLE>


CONDENSED CONSOLIDATING CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                        53 Weeks Ended December 30, 2000
                                            -----------------------------------------------------------------
                                              Parent                    Non-
                                             Company     Guarantors  Guarantors    Eliminations  Consolidated
                                            ---------    ----------  ----------    ------------  ------------
                                                                (In thousands)
<S>                                         <C>          <C>         <C>           <C>          <C>
 Net cash provided by operating activities   $  40,039    $  86,008  $     598     $        -   $ 126,645
                                             ---------    ---------  ---------     ----------   ---------
Cash flows from investing activities:
  Purchases of property and equipment          (75,354)     (60,221)   (15,262)             -    (150,837)
  Other                                        101,247        1,686          -              -     102,933
                                             ---------    ---------  ---------     ----------   ---------
 Net cash provided by (used in) investing
  activities                                    25,893      (58,535)   (15,262)             -     (47,904)
                                             ---------    ---------  ---------     ----------   ---------
 Cash flows from financing activities:
  Repayments on capital lease obligations      (15,398)      (5,490)         -              -     (20,888)
  Advances (to) from parent                     60,912      (76,537)    15,625              -           -
  Other                                        (34,156)           -          -              -     (34,156)
                                             ---------    ---------  ---------     ----------   ---------
 Net cash provided by (used in) financing
  activities                                    11,358      (82,027)    15,625              -     (55,044)
                                             ---------    ---------  ---------     ----------   ---------
 Net increase (decrease) in cash and cash
  equivalents                                   77,290      (54,554)       961              -      23,697
 Cash and cash equivalents at beginning
  of year                                      (54,803)      61,307        179              -       6,683
                                             ---------    ---------  ---------     ----------   ---------
 Cash and cash equivalents at end
   of year                                   $  22,487    $   6,753  $   1,140     $        -   $  30,380
                                             =========    =========  =========     ==========   =========
</TABLE>

<TABLE>
<CAPTION>
                                                        52 Weeks Ended December 25, 1999
                                            -----------------------------------------------------------------
                                              Parent                    Non-
                                             Company     Guarantors  Guarantors    Eliminations  Consolidated
                                            ---------    ----------  ----------    ------------  ------------
                                                                (In thousands)
<S>                                         <C>          <C>         <C>           <C>           <C>
Net cash provided by (used in) operating
 activities                                $  86,780     $  25,659   $   5,178     $         -   $ 117,617
                                           ---------     ---------   ---------     -----------   ---------
Cash flows from investing activities:
 Purchases of property and equipment        (121,414)      (42,482)     (2,443)              -    (166,339)
 Other                                       (51,214)        4,209           -               -     (47,005)
                                           ---------     ---------   ---------     -----------   ---------
Net cash used in investing activities       (172,628)      (38,273)     (2,443)              -    (213,344)
                                           ---------     ---------   ---------     -----------   ---------
Cash flows from financing activities:
 Repayments on capital lease obligations     (18,101)       (3,112)       (320)              -     (21,533)
 Advances (to) from parent                   (76,668)       78,853      (2,185)              -           -
 Other                                       117,976             -           -               -     117,976
                                           ---------     ---------   ---------     -----------   ---------
Net cash provided by (used in) financing
 activities                                   23,207        75,741      (2,505)              -      96,443
                                           ---------     ---------   ---------     -----------   ---------
Net increase (decrease) in cash and cash
 equivalents                                 (62,641)       63,127         230               -         716
Cash and cash equivalents at beginning
 of year                                       7,838        (1,820)        (51)              -       5,967
                                           ---------     ---------   ---------     -----------   ---------
Cash and cash equivalents at end of year   $ (54,803)    $  61,307   $     179     $         -   $   6,683
                                           =========     =========   =========     ===========   =========
</TABLE>

<TABLE>
<CAPTION>
                                                        52 Weeks Ended December 26, 1998
                                            -----------------------------------------------------------------
                                              Parent                    Non-
                                             Company     Guarantors  Guarantors    Eliminations  Consolidated
                                            ---------    ----------  ----------    ------------  ------------
                                                                (In thousands)
<S>                                         <C>          <C>         <C>           <C>          <C>
Net cash provided by (used in) operating
 activities                                 $ 148,865    $   7,789   $ (15,575)     $        -   $ 141,079
                                            ---------    ---------   ---------      ----------   ---------
Cash flows from investing activities:
 Purchases of property and equipment         (191,357)      (5,571)     (3,283)              -    (200,211)
 Other                                         35,551        1,348           -               -      36,899
                                            ---------    ---------   ---------      ----------   ---------
Net cash used in investing activities        (155,806)      (4,223)     (3,283)              -    (163,312)
                                            ---------    ---------   ---------      ----------   ---------
Cash flows from financing activities:
 Repayments on capital lease obligations      (12,470)        (589)       (297)              -     (13,356)
 Advances (to) from parent                    (10,046)      (8,181)     18,227               -           -
 Other                                         11,240            -           -               -      11,240
                                            ---------    ---------   ---------      ----------   ---------
Net cash provided by (used in) financing
 activities                                   (11,276)      (8,770)     17,930               -      (2,116)
                                            ---------    ---------   ---------      ----------   ---------
Net decrease in cash and cash equivalents     (18,217)      (5,204)       (928)              -     (24,349)
Cash and cash equivalents at beginning
 of year                                       26,054        3,385         877               -      30,316
                                            ---------    ---------   ---------      ----------   ---------
Cash and cash equivalents at end of year    $   7,837    $  (1,819)  $     (51)     $        -   $   5,967
                                            =========    =========   =========      ==========   =========
</TABLE>


LEASE AGREEMENTS

Capital And Operating  Leases:  We lease certain  distribution  facilities  with
terms  generally  ranging  from 20 to 35  years,  while  lease  terms  for other
operating  facilities  range from 1 to 15 years. The leases normally provide for
minimum annual rentals plus executory costs and usually  include  provisions for
one to five renewal options of five years each.

We lease  company-owned store facilities with terms generally ranging from 15 to
20 years.  These  agreements  normally  provide for contingent  rentals based on
sales  performance in excess of specified  minimums.  The leases usually include
provisions  for one to four renewal  options of two to five years each.  Certain
equipment  is leased  under  agreements  ranging from two to eight years with no
renewal options.

Accumulated  amortization  related to leased assets under capital leases was $59
million and $38 million at year-end 1999 and 2000, respectively.

Future minimum lease payment  obligations for leased assets under capital leases
as of year-end 2000 are set forth below:

(In thousands)                                   Lease
Years                                          Obligations
-----                                          -----------

2001                                            $ 37,889
2002                                              36,995
2003                                              37,187
2004                                              37,066
2005                                              37,628
Later                                            140,308
                                                 -------

Total minimum lease payments                     327,073
Less estimated executory costs                   (50,042)
                                                 -------

Net minimum lease payments                       277,031
Less interest                                   (60,237)
                                                 -------

Present value of net minimum lease payments      216,794
Less current obligations                          (9,194)
                                                 -------
Long-term obligations                           $207,600
                                                ========

Future minimum lease payments  required at year-end 2000 under operating  leases
that have initial  noncancelable lease terms exceeding one year are presented in
the following table:

(In thousands)
              Facility   Facilities  Equipment     Net
Years         Rentals    Subleased    Rentals     Rentals
-----         -------    ---------    -------     -------

2001         $ 150,123  $  (69,768)  $  13,453   $  93,808
2002           137,987     (60,986)      9,575      86,576
2003           126,293     (53,469)      4,273      77,097
2004            70,382     113,833     (45,035)      1,584
2005            99,759     (40,878)        314      59,195
Later          296,983    (116,352)          -     180,631
               -------    --------     -------     -------

Total lease
 payments    $ 924,978   $(386,488)  $  29,199   $ 567,689
             =========   =========   =========   =========


The following  table shows the  composition  of annual net rental  expense under
noncancelable  operating  leases and subleases with initial terms of one year or
greater:

(In thousands)                        2000        1999        1998
--------------                        ----        ----        ----
Operating activity:
  Rental expense                    $ 76,118   $ 95,760    $100,238
  Contingent rentals                     902      1,329       1,971
  Less sublease income                (9,014)    (9,868)     (7,349)
                                      ------     ------      ------
                                      68,006     87,221      94,860
                                      ------     ------      ------
Financing activity:
  Rental expense                      68,747     64,107      70,914
  Less sublease income               (66,757)   (68,442)    (63,920)
                                     -------    -------     -------
                                       1,990     (4,335)      6,994
                                       -----     ------       -----

Net rental expense                  $ 69,996   $ 82,886    $101,854
                                    ========   ========    ========


We reflect net financing activity, as shown above, as a component of net sales.

Direct Financing  Leases:  We lease retail store facilities with terms generally
ranging from 15 to 20 years which are subsequently subleased to customers.  Most
leases provide for a percentage  rental based on sales  performance in excess of
specified minimum rentals. The leases usually contain provisions for one to four
renewal options of five years each. The sublease to the customer is normally for
an initial five-year term with automatic  five-year  renewals at our discretion,
which corresponds to the length of the initial term of the prime lease.

The following  table shows the future minimum  rentals  receivable  under direct
financing  leases and future  minimum  lease payment  obligations  under capital
leases in effect at year-end 2000:

(In thousands)                               Lease Rentals    Lease
Years                                          Receivable  Obligations
-----                                          ----------  -----------

2001                                           $ 32,714    $ 30,004
2002                                             26,181      29,877
2003                                             22,420      28,757
2004                                             19,532      27,938
2005                                             17,300      27,231
Later                                            55,123      92,109
                                                 ------      ------

Total minimum lease payments                    173,270     235,916
Less estimated executory costs                  (14,353)    (20,888)
                                                -------     -------

Net minimum lease payments                      158,917     215,028
Less interest                                   (43,420)    (32,917)
                                                -------     -------

Present value of net minimum lease payments     115,497     182,111
Less current portion                            (13,486)    (12,472)
                                                -------     -------

Long-term portion                              $102,011    $169,639
                                               ========    ========

Contingent rental income and contingent rental expense are not material.


SHAREHOLDERS' EQUITY

Fleming  offers a Dividend  Reinvestment  and Stock Purchase Plan which provides
shareholders the opportunity to automatically reinvest their dividends in common
stock at a 5% discount from market value.  Shareholders also may purchase shares
at market value by making cash payments up to $5,000 per calendar quarter.  Such
programs  resulted  in  issuing  31,000  and 54,000 new shares in 2000 and 1999,
respectively.

Our  employee   stock   ownership   plan  (ESOP)   established  in  1990  allows
substantially  all associates to  participate.  In 1990, the ESOP entered into a
note with a bank to finance the purchase of the shares. In 1994, we paid off the
note and received a note from the ESOP. The ESOP completed  payments of the loan
balance to us in 1999.

We made  contributions  to the ESOP based on fixed debt service  requirements of
the ESOP note. Such  contributions  were  approximately $2 million in 1999, $2.5
million  in 1998,  and $2  million  in 1997.  The ESOP note was paid off in 1999
therefore there were no  contributions  in 2000.  Dividends used by the ESOP for
debt service and interest and compensation expense were not material.

We issue shares of restricted stock to key employees under plans approved by the
stockholders.  Periods of restriction  and/or  performance goals are established
for each award.

The fair value of the  restricted  stock at the time of the grant is recorded as
unearned  compensation  - restricted  stock which is netted  against  capital in
excess of par within shareholders' equity.  Compensation is amortized to expense
when earned. At year-end 2000, 363,546 shares remained available for award under
all plans.

Information regarding restricted stock balances is as follows (in thousands):

                                                  2000       1999
                                                  ----       ----

Awarded restricted shares outstanding              746        441
                                                   ===        ===

Unearned compensation - restricted stock        $1,232     $3,503
                                                ======     ======

We may  grant  stock  options  to key  employees  through  stock  option  plans,
providing  for the grant of  incentive  stock  options and  non-qualified  stock
options.  The stock options have a maximum term of 10 years and have time and/or
performance   based  vesting   requirements.   At  year-end  2000,   there  were
approximately  1,848,000 shares available for grant under the unrestricted stock
option plans.  Subsequent to year end,  approximately  61,500 stock options were
granted.

Stock  option  transactions  for the three years ended  December 30, 2000 are as
follows:

                                       Weighted Average
(Shares in thousands)        Shares     Exercise Price     Price Range
---------------------        ------     --------------     -----------

Outstanding, year-end 1997    2,266    $   22.65        $16.38 - 38.38
 Granted                        550        10.18        $ 9.72 - 18.19
 Exercised                       (3)       16.38        $16.38 - 16.38
 Canceled and forfeited        (403)       25.40        $16.38 - 37.06
                               ----        -----        ------   -----

Outstanding, year-end 1998    2,410    $   19.35        $ 9.72 - 38.38
 Granted                      2,339         9.80        $ 7.53 - 12.25
 Canceled and forfeited        (968)       16.53        $ 7.53 - 38.38
                               ----        -----        ------   -----

Outstanding, year-end 1999    3,781    $   14.19        $ 7.53 - 38.38
 Granted                      1,586        12.79        $ 8.94 - 17.22
 Exercised                      (59)        9.69        $ 7.53 - 11.72
 Canceled and forfeited        (897)       18.13        $ 7.53 - 37.06
                               ----        -----        ------   -----

Outstanding, year-end 2000    4,411    $   12.94        $ 7.53 - 38.38
                              =====    =========        ======   =====


Information regarding options outstanding at year-end 2000 is as follows:

                                                  All       Options
                                              Outstanding  Currently
(Shares in thousands)                           Options   Exercisable
---------------------                           -------   -----------

Option price $28.38 - $37.06:
 Number of options                                  3            1
 Weighted average exercise price                28.38        28.38
 Weighted average remaining life in years           4            -

Option price $19.75 - $26.44:
 Number of options                                413          193
 Weighted average exercise price                24.76        24.54
 Weighted average remaining life in years           3            -

Option price $7.53 - $17.50:
 Number of options                              3,987        1,142
 Weighted average exercise price                11.63        12.38
 Weighted average remaining life in years           8            -

In the event of a change of control, the vesting of all awards will accelerate.

We apply APB Opinion No. 25 -  Accounting  for Stock  Issued to  Employees,  and
related  Interpretations  in accounting for our plans.  Total  compensation cost
recognized  in  income  for  stock  based  employee   compensation   awards  was
$3,159,000,  $1,388,000 and $3,160,000 for 2000, 1999 and 1998, respectively. If
compensation  cost had been  recognized for the stock-based  compensation  plans
based on fair values of the awards at the grant dates consistent with the method
of SFAS No. 123 - Accounting for Stock-Based Compensation, reported net earnings
(loss) and  earnings  (loss)  per share  would have been  $(124.7)  million  and
$(3.22) for 2000, $(46.6) million and $(1.22) for 1999, and $(511.7) million and
$(13.48) for 1998, respectively.  The weighted average fair value on the date of
grant of the individual options granted during 2000, 1999 and 1998 was estimated
at $7.90, $5.08 and $4.82, respectively.

Significant  assumptions  used to estimate  the fair values of awards  using the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions  for 2000,  1999 and 1998 are:  risk-free  interest  rate - 4.50% to
7.00%;  expected lives of options - 10 years;  expected volatility - 30% to 50%;
and expected dividend yield of 0.5% to 0.9%.


ASSOCIATE RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

Fleming sponsors pension and postretirement  benefit plans for substantially all
non-union and some union associates.

Benefit  calculations  for our defined  benefit  pension  plans are  primarily a
function  of  years  of  service  and  final  average  earnings  at the  time of
retirement.  Final average earnings are the average of the highest five years of
compensation  during the last 10 years of  employment.  We fund  these  plans by
contributing the actuarially  computed  amounts that meet funding  requirements.
Substantially  all  the  plans'  assets  are  invested  in  listed   securities,
short-term investments, bonds and real estate.

We also have unfunded  nonqualified  supplemental  retirement plans for selected
associates.

We offer a comprehensive  major medical plan to eligible retired  associates who
meet  certain  age and years of  service  requirements.  This  unfunded  defined
benefit plan  generally  provides  medical  benefits  until  Medicare  insurance
commences.

The following  table  provides a  reconciliation  of benefit  obligations,  plan
assets and funded status of the plans mentioned above.
<TABLE>
<CAPTION>
                                                                         Other
(In thousands)                            Pension Benefits        Postretirement Benefits
--------------                            ----------------        -----------------------
                                          2000         1999         2000         1999
                                          ----         ----         ----         ----
<S>                                   <C>          <C>          <C>          <C>
Change in benefit obligation:
Balance at beginning of year          $ 375,603    $ 418,604    $  15,213    $  16,503
Service cost                              9,940       14,163          124          177
Interest cost                            28,924       26,511          964        1,020
Plan participants' contributions              -            -          773          837
Actuarial gain/loss                      20,118      (53,098)         604        2,006
Benefits paid                           (29,181)     (30,577)      (4,585)      (5,330)
                                      ---------    ---------    ---------    ---------
Balance at end of year                $ 405,404    $ 375,603    $  13,093    $  15,213
                                      =========    =========    =========    =========
Change in plan assets:
Fair value at beginning of year       $ 331,862    $ 316,539    $       -    $       -
Actual return on assets                 (10,968)      39,608            -            -
Employer contribution                    28,535        6,292        4,585        5,330
Benefits paid                           (29,181)     (30,577)      (4,585)      (5,330)
                                      ---------    ---------    ---------    ---------
Fair value at end of year             $ 320,248    $ 331,862    $       -    $       -
                                      =========    =========    =========    =========

Funded status                         $ (85,156)   $ (43,741)   $ (13,093)   $ (15,213)
Unrecognized actuarial loss 109,585      53,401        5,937        5,564
Unrecognized prior service  cost            899        1,190            -            -
Unrecognized net transition asset           (53)        (320)           -            -
                                      ---------    ---------    ---------    ---------
Net amount recognized                 $  25,275    $  10,530    $  (7,156)   $  (9,649)
                                      =========    =========    =========    =========
Amounts recognized in the
 consolidated balance sheet:
Prepaid benefit cost                  $   8,302    $  26,314    $       -    $       -
Accrued benefit liability               (52,181)     (33,028)      (7,156)      (9,649)
Intangible asset                            773          958            -            -
Accumulated other
 comprehensive income                    68,381       16,286            -            -
                                      ---------    ---------    ---------    ---------
Net amount recognized                 $  25,275    $  10,530    $  (7,156)   $  (9,649)
                                      =========    =========    =========    =========
</TABLE>


The following assumptions were used for the plans mentioned above.

                                                              Other
                              Pension Benefits        Postretirement Benefits
                              ----------------        -----------------------
                                  2000       1999         2000       1999
                                  ----       ----         ----       ----

Discount rate                     7.50%     7.50%        7.50%      7.50%

Expected return on plan assets    9.00%     9.50%           -          -
assets

Rate of compensation increase     4.50%     4.00%           -          -
increase


Net  periodic  pension  and  other  postretirement  benefit  costs  include  the
following components:
<TABLE>
<CAPTION>
                                                                             Other
                                  Pension Benefits                  Postretirement Benefits
                                  ----------------                  -----------------------
(In thousands)             2000        1999          1998         2000       1999       1998
--------------             ----        ----          ----         ----       ----       ----
<S>                     <C>         <C>            <C>         <C>        <C>        <C>

Service cost            $  9,940    $ 14,163       $ 12,981    $    124   $    177   $    139
Interest cost             28,924      26,511         25,334         964      1,020      1,052
Expected return
 on plan assets          (29,527)    (29,257)       (25,234)          -          -          -
Amortization of
 actuarial loss            4,429      11,134          9,105         231        222          -
Amortization of
 prior service cost          292         291            354           -          -          -
Amortization of
 net transition asset       (268)       (268)          (268)          -          -          -
                            ----        ----           ----         ---        ---        ---

Net periodic
 benefit cost           $ 13,790    $ 22,574       $ 22,272    $  1,319   $  1,419   $  1,191
                        ========    ========       ========    ========   ========   ========
</TABLE>

The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for the pension plans with  accumulated  benefit  obligations  in
excess of plan  assets  were  $405  million,  $370  million,  and $320  million,
respectively,  as of December 30, 2000, and $376 million, $341 million, and $332
million, respectively, as of December 25, 1999.

For measurement purposes in 2000 and 1999, a 9.0% annual rate of increase in the
per capita cost of covered  medical  care  benefits  was  assumed.  The rate was
assumed to remain  constant for both the  measurement  year and following  year,
then grade down by 0.5% per year  until  reaching  5.0%,  then  remain  constant
thereafter. For the 2000 and 1999 measurement years, the ultimate trend rate was
realized at the year 2009 and 2008, respectively.

The effect of a  one-percentage  point  increase in assumed  medical  cost trend
rates would have increased the accumulated  postretirement benefit obligation as
of December 31, 2000 from $13.0 to $13.8 million, and increased the total of the
service cost and interest  cost  components  of the net periodic cost from $1.09
million to $1.14  million.  The effect of a  one-percentage  point  decrease  in
assumed   medical  cost  trend  rates  would  have  decreased  the   accumulated
postretirement  benefit  obligation  as of December 31, 2000 from $13.0 to $12.5
million,  and  decreased  the  total  of the  service  cost  and  interest  cost
components of the net periodic cost from $1.09 million to $1.04 million.

In some  of the  retail  operations,  contributory  profit  sharing  plans  were
maintained  for  associates  who meet certain types of employment  and length of
service  requirements.  These plans were  discontinued at the beginning of 2000.
Contributions under these defined contribution plans were made at the discretion
of the Board of Directors and totaled $3 million in both 1999 and 1998.

Beginning in 2000, we changed our benefit plans to offer a matching  401(k) plan
to associates in addition to the pension plan  previously  offered.  The pension
plan was continued,  but with a reduced benefit  formula.  The new plan was also
offered to an increased number of associates. Under the plan, we annually commit
to a minimum funding into the plan, match 100% of the first 2% of the employee's
contribution,  and match 25% of the next 4% of the employee's contribution for a
maximum match contribution of 3% of the employee's base salary.

Certain  associates  have  pension  and  health  care  benefits  provided  under
collectively bargained  multi-employer  agreements.  Expenses for these benefits
were $76  million,  $77  million  and $80  million  for  2000,  1999  and  1998,
respectively.


SUPPLEMENTAL CASH FLOWS INFORMATION

(In thousands)                              2000        1999        1998
--------------                              ----        ----        ----

Acquisitions:
 Fair value of assets acquired          $  18,529    $  78,607   $  32,080
 Less:
 Liabilities assumed or created            11,181            -       1,792
 Cash acquired                                 28          167          63
                                               --          ---          --

  Cash paid, net of cash acquired       $   7,320    $  78,440   $  30,225
                                        =========    =========   =========

Cash paid during the year for:
 Interest, net of amounts capitalized   $ 175,246    $ 165,676   $ 182,449
                                        =========    =========   =========
 Income taxes, net of refunds           $ (71,529)   $  14,863   $  23,822
                                        =========    =========   =========
Direct financing leases and
 related obligations                    $  47,195    $  45,645   $   9,349
                                        =========    =========   =========
Property and equipment
 additions by capital leases            $  32,660    $  45,220   $  70,684
                                        =========    =========   =========



CONTINGENCIES

In  accordance  with  applicable  accounting  standards,   we  record  a  charge
reflecting  contingent  liabilities  (including those associated with litigation
matters)  when we  determine  that a  material  loss is  "probable"  and  either
"quantifiable"  or "reasonably  estimable."  Additionally,  we disclose material
loss  contingencies  when the  likelihood  of a  material  loss is  deemed to be
greater than "remote" but less than  "probable."  Set forth below is information
regarding certain material loss contingencies:

Class Action Suits.  In 1996, we and certain of our present and former  officers
and  directors  were named as defendants  in nine  purported  class action suits
filed by certain  stockholders  and one purported class action suit filed by two
noteholders.  All cases were filed in the United States  District  Court for the
Western  District of Oklahoma.  In 1997, the court  consolidated the stockholder
cases;  the  noteholder  case was  also  consolidated,  but  only for  pre-trial
purposes.  The  plaintiffs in the  consolidated  cases sought  undetermined  but
significant  damages, and asserted liability for our alleged "deceptive business
practices,"  and our alleged  failure to properly  account for and  disclose the
contingent liability created by the David's Supermarkets  litigation,  a lawsuit
we settled in April 1997 in which David's sued us for allegedly overcharging for
products. The plaintiffs claimed that these alleged practices led to the David's
litigation and to other material contingent liabilities, caused us to change our
manner  of doing  business  at great  cost and  loss of  profit  and  materially
inflated the trading price of our common stock.

During 1998 the complaint in the noteholder case was dismissed,  and during 1999
the complaint in the  consolidated  stockholder  case was also  dismissed,  each
without  prejudice.  The court gave the  plaintiffs  the  opportunity to restate
their claims in each case, and they did so in amended complaints. We again filed
motions to dismiss  all claims in both cases.  On  February  4, 2000,  the court
dismissed the amended  complaint in the  stockholder  case with  prejudice.  The
stockholder  plaintiffs  filed a notice of appeal on March 3, 2000, and briefing
is presently under way in the Court of Appeals for the Tenth Circuit.  On August
1, 2000,  the court  dismissed the claims in the noteholder  complaint  alleging
violations of the Securities Exchange Act of 1934, but the court determined that
the noteholder plaintiffs have stated a claim under Section 11 of the Securities
Act of 1933.  On  September  15,  2000,  defendants  filed a motion  to allow an
immediate  appeal of the court's  denial of their motion to dismiss  plaintiffs'
claim under Section 11. That motion was denied on January 8, 2001.  The case was
set for a status and  scheduling  conference on January 30, 2001.  The court has
entered an order setting this case for trial in October 2001.

Based upon some  preliminary  assumptions,  plaintiffs'  economic experts in the
noteholder  case have  estimated  "baseline"  damages  to be  approximately  $10
million and pre-judgment interest of approximately $3 million.

In 1997, we won a declaratory judgment against certain of our insurance carriers
regarding  policies  issued to us for the benefit of our officers and directors.
On motion for summary judgment, the court ruled that our exposure, if any, under
the class  action  suits is covered  by D&O  policies  written by the  insurance
carriers,  aggregating $60 million in coverage,  and that the "larger settlement
rule" will apply to the case.  According  to the trial  court,  under the larger
settlement  rule,  a D&O  insurer is liable for the  entire  amount of  coverage
available under a policy even if there is some overlap in the liability  created
by the insured  individuals  and the uninsured  corporation.  If a corporation's
liability  is  increased  by  uninsured  parties  beyond  that  of  the  insured
individuals,  then that portion of the  liability is the sole  obligation of the
corporation.  The court  also  held  that  allocation  is not  available  to the
insurance carriers as an affirmative  defense.  The insurance carriers appealed.
In 1999,  the appellate  court affirmed the decision that the class actions were
covered by D&O  policies  aggregating  $60 million in coverage  but reversed the
trial court's decision as to allocation as being premature.

We intend to  vigorously  defend  against the claims in these class action suits
and pursue the issue of insurance  discussed  above,  but we cannot  predict the
outcome of the  cases.  An  unfavorable  outcome  could have a material  adverse
effect on our financial condition and prospects.

Don's  United Super (and related  cases).  We and two of our retired  executives
have been named in a suit filed in 1998 in the United States  District Court for
the Western  District of Missouri by several current and former customers of the
company  (Don's United  Super,  et al. v.  Fleming,  et al.).  The 18 plaintiffs
operate  retail  grocery  stores in the St. Joseph and Kansas City  metropolitan
areas.  The  plaintiffs  in this  suit  allege  product  overcharges,  breach of
contract,   breach  of  fiduciary  duty,   misrepresentation,   fraud  and  RICO
violations, and they are seeking actual, punitive and treble damages, as well as
a  declaration  that  certain  contracts  are  voidable  at  the  option  of the
plaintiffs.

During the fourth quarter of 1999,  plaintiffs  produced reports of their expert
witnesses  calculating  alleged  actual damages of  approximately  $112 million.
During the first quarter of 2000,  plaintiffs  revised a portion of these damage
calculations,  and  although it is not clear what the precise  damage claim will
be, it appears that plaintiffs will claim approximately $120 million,  exclusive
of any punitive or treble damages.

On May 2, 2000, the court granted  partial  summary  judgment to the defendants,
holding that  plaintiffs'  breach of contract  claims that relate to events that
occurred more than four years before the filing of the  litigation are barred by
limitations,  and that plaintiffs' fraud claims based upon fraudulent inducement
that occurred  more than 15 years before the filing of the lawsuit  likewise are
barred.  It is unclear what impact, if any, these rulings may have on the damage
calculations of the plaintiffs' expert witnesses.

The court has set August 13,  2001 as the date on which  trial of the Don's case
will commence.

In October  1998,  we and the same two retired  executives  were named in a suit
filed  by  another  group of  retailers  in the same  court  as the  Don's  suit
(Coddington  Enterprises,  Inc.,  et al.  v.  Fleming,  et al.).  Currently,  16
plaintiffs  are asserting  claims in the  Coddington  suit, all but one of which
have  arbitration  agreements  with us. The plaintiffs  assert claims  virtually
identical to those set forth in the Don's suit, and although plaintiffs have not
yet quantified the damages in their pleadings,  it is anticipated that they will
claim actual damages approximating the damages claimed in the Don's suit.

In July 1999, the court ordered two of the plaintiffs in the Coddington  case to
arbitration, and otherwise denied arbitration as to the remaining plaintiffs. We
have appealed the district  court's  denial of arbitration to the Eighth Circuit
Court of Appeals.  The two plaintiffs who were ordered to arbitration have filed
motions asking the district court to reconsider the arbitration ruling.

Two other cases had been filed before the Don's case in the same district  court
(R&D Foods, Inc., et al. v. Fleming, et al.; and Robandee United Super, Inc., et
al. v. Fleming, et al.) by 10 customers, some of whom are also plaintiffs in the
Don's case. The earlier two cases,  which  principally seek an accounting of our
expenditure of certain joint  advertising  funds,  have been  consolidated.  All
proceedings  in these cases have been  stayed  pending  the  arbitration  of the
claims of those plaintiffs who have arbitration agreements with us.

In March  2000,  we and one former  executive  were named in a suit filed in the
United States District Court for the Eastern District of Missouri by current and
former  customers  that operated five retail grocery stores in and around Kansas
City,  Missouri,  and four retail grocery stores in and around Phoenix,  Arizona
(J&A Foods,  Inc.,  et al. v. Dean  Werries and Fleming  Companies,  Inc.).  The
plaintiffs  have  alleged  product  overcharges,  fraudulent  misrepresentation,
fraudulent nondisclosure and concealment,  breach of contract, breach of duty of
good faith and fair dealing and RICO  violations,  and they are seeking  actual,
punitive and treble damages,  as well as other relief. The damages have not been
quantified by the plaintiffs;  however,  we anticipate that substantial  damages
will be claimed.

On August 8, 2000, the Judicial Panel on  Multidistrict  Litigation  granted our
motion and ordered the related  Missouri  cases (Don's United Super,  Coddington
Enterprises,  Inc.,  and J&A  Foods,  Inc.)  and  the  Storehouse  Markets  case
(described   below)   transferred  to  the  Western  District  of  Missouri  for
coordinated or consolidated pre-trial proceedings.

We intend to vigorously  defend against the claims in these related cases but we
are currently unable to predict the outcome of the cases. An unfavorable outcome
could have a material adverse effect on our financial condition and prospects.

On March 2, 2001,  the court  ordered the  parties in the  Missouri  cases,  the
Storehouse  Markets  cases and the Welsh case to mediate the  dispute  within 45
days of the order.

Storehouse  Markets.  In 1998, we and one of our former  division  officers were
named in a suit filed in the United  States  District  Court for the District of
Utah by several current and former customers of the company (Storehouse Markets,
Inc., et al. v. Fleming  Companies,  Inc., et al.). The plaintiffs  have alleged
product overcharges, fraudulent misrepresentation,  fraudulent nondisclosure and
concealment,  breach of contract,  breach of duty of good faith and fair dealing
and RICO violations,  and they are seeking actual,  punitive and treble damages.
The  plaintiffs  have  made  these  claims  on  behalf  of a  class  that  would
purportedly  include current and former customers of our Salt Lake City division
covering a  four-state  region.  On June 12,  2000,  the court  entered an order
certifying the case as a class action. On July 11, 2000, the United States Court
of Appeals for the Tenth  Circuit  granted our request for  permission to appeal
the class  certification  order, and we are pursuing that appeal on an expedited
basis. Oral argument of the appeal is set for March 14, 2001.

On August 8, 2000, the Judicial Panel on  Multidistrict  Litigation  granted our
motion and ordered the  Storehouse  Markets case and the related  Missouri cases
(described   above)   transferred  to  the  Western  District  of  Missouri  for
coordinated or consolidated pre-trial proceedings.

Damages have not been quantified by the plaintiffs;  however, we anticipate that
substantial  damages will be claimed.  We intend to  vigorously  defend  against
these  claims but we cannot  predict  the  outcome of the case.  An  unfavorable
outcome  could have a material  adverse  effect on our  financial  condition and
prospects.

On March 2, 2001,  the court  ordered the  parties in the  Missouri  cases,  the
Storehouse  Markets  cases and the Welsh case to mediate the  dispute  within 45
days of the order.

Welsh. In April 2000, the operators of two grocery stores in Van Horn and Marfa,
Texas filed an amended  complaint in the United  States  District  Court for the
Western  District of Texas,  Pecos  Division  (Welsh v. Fleming  Foods of Texas,
L.P.). The amended  complaint alleges product  overcharges,  breach of contract,
fraud,  conversion,  breach of fiduciary duty, negligent  misrepresentation  and
breach of the Texas Deceptive  Trade Practices Act. The amended  complaint seeks
unspecified actual damages,  punitive damages,  attorneys' fees and pre-judgment
and post-  judgment  interest.  Pursuant to the order of the  Judicial  Panel on
Multidistrict  Litigation,  the Welsh case has been  transferred  to the Western
District of Missouri for  pre-trial  proceedings.  No trial date has been set in
this case.

On March 2, 2001,  the court  ordered the  parties in the  Missouri  cases,  the
Storehouse  Markets  cases and the Welsh case to mediate the  dispute  within 45
days of the order.

Other.  Our facilities  and operations are subject to various laws,  regulations
and judicial and administrative  orders concerning protection of the environment
and human health,  including provisions  regarding the transportation,  storage,
distribution,  disposal or discharge of certain  materials.  In conformity  with
these  provisions,  we  have  a  comprehensive  program  for  testing,  removal,
replacement  or  repair  of our  underground  fuel  storage  tanks  and for site
remediation where necessary.  We have established  reserves that we believe will
be  sufficient  to  satisfy  the  anticipated  costs  of all  known  remediation
requirements.

We and others have been designated by the U.S.  Environmental  Protection Agency
and by similar  state  agencies as  potentially  responsible  parties  under the
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
or similar state laws, as applicable,  with respect to EPA-designated  Superfund
sites.  While liability under CERCLA for remediation at these sites is generally
joint and several with other responsible parties, we believe that, to the extent
we are ultimately  determined to be liable for the expense of remediation at any
site,  such  liability  will not  result  in a  material  adverse  effect on our
consolidated  financial  position or results of operations.  We are committed to
maintaining the environment  and protecting  natural  resources and human health
and to achieving full  compliance  with all  applicable  laws,  regulations  and
orders.

We are a party to or threatened  with various other  litigation  and  contingent
loss  situations  arising  in the  ordinary  course of our  business  including:
disputes with  customers and former  customers;  disputes with owners and former
owners of financially troubled or failed customers;  disputes with landlords and
former landlords;  disputes with employees and former employees  regarding labor
conditions,  wages,  workers'  compensation  matters and alleged  discriminatory
practices;  disputes with insurance carriers; tax assessments and other matters,
some of which are for  substantial  amounts.  Except as noted herein,  we do not
believe that any such claim will have a material adverse effect on us.


                         INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Fleming Companies, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Fleming
Companies,  Inc. and subsidiaries as of December 30, 2000 and December 25, 1999,
and  the  related  consolidated  statements  of  operations,   cash  flows,  and
shareholders'  equity for each of the three years in the period  ended  December
30, 2000. Our audits also included the financial  statement  schedule  listed in
the  index  at item 14.  These  financial  statements  and  financial  statement
schedule are the responsibility of the company's management.  Our responsibility
is to express an opinion on these financial  statements and financial  statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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,  such consolidated  financial  statements present fairly, in all
material  respects,  the consolidated  financial  position of Fleming Companies,
Inc.  and  subsidiaries  at December 30,  2000,  and December 25, 1999,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 30, 2000, in conformity  with  accounting  principles
generally  accepted in the United  States of America.  Also, in our opinion such
financial  statement  schedule,   when  considered  in  relation  to  the  basic
consolidated  financial  statements  taken as a whole,  presents  fairly  in all
material respects the information set forth therein.


DELOITTE & TOUCHE LLP

Oklahoma City, Oklahoma

February  14,  2001  (except  for  the  information  under  long-term  debt  and
contingencies  included in the notes to consolidated  financial statements as to
which the date is March 22, 2001)

<TABLE>
                                                QUARTERLY FINANCIAL INFORMATION
                                          (In thousands, except per share amounts)
                                                        (Unaudited)
<CAPTION>
2000                            First         Second           Third          Fourth           Year
----                            -----         ------           -----          ------           ----
<S>                       <C>             <C>             <C>             <C>             <C>
Net sales                 $  4,331,498    $  3,289,878    $  3,197,655    $  3,624,784    $ 14,443,815

Costs and expenses  (income):
  Cost of sales              3,914,824       2,998,624       2,894,341       3,289,126      13,096,915
  Selling and
   administrative              372,307         261,374         258,103         293,219       1,185,003
  Interest expense
                                53,101          38,447          40,111          42,910         174,569
  Interest income               (9,505)         (9,340)         (6,322)         (7,495)        (32,662)
  Equity investment
   results                       1,891           1,694           2,097           2,352           8,034
  Impairment/
   restructuring charge         42,145          21,013          83,356          66,331         212,845
                          ------------    ------------    ------------    ------------    ------------
Total costs and expenses     4,374,763       3,311,812       3,271,686       3,686,443      14,644,704
                          ------------    ------------    ------------    ------------    ------------
Loss before taxes              (43,265)        (21,934)        (74,031)        (61,659)       (200,889)
Taxes on loss                  (17,392)         (8,585)        (28,472)        (24,298)        (78,747)
                          ------------    ------------    ------------    ------------    ------------
Net loss                  $    (25,873)   $    (13,349)   $    (45,559)   $    (37,361)   $   (122,142)
                          ============    ============    ============    ============    ============
Basic and diluted net
 loss per share           $       (.67)   $       (.35)   $      (1.17)   $       (.96)   $      (3.15)
                          ============    ============    ============    ============    ============
Dividends paid
 per share                $        .02    $        .02    $        .02    $        .02    $        .08
                          ============    ============    ============    ============    ============
Weighted average
 shares outstanding:
  Basic                         38,515          38,576          38,902          38,934          38,716
                          ============    ============    ============    ============    ============
  Diluted                       38,515          38,576          38,902          38,934          38,716
                          ============    ============    ============    ============    ============

1999                            First          Second           Third          Fourth          Year
----                            -----          ------           -----          ------          ----

Net sales                 $  4,348,689    $  3,259,368    $  3,160,642    $  3,503,337    $ 14,272,036
Costs and expenses (income):
  Cost of sales              3,920,311       2,932,160       2,824,199       3,158,199      12,834,869
  Selling and
   administrative              376,995         286,565         291,990         306,081       1,261,631
  Interest expense              51,606          38,647          36,987          37,940         165,180
  Interest income               (9,350)         (6,894)         (7,075)        (16,999)        (40,318)
  Equity investment results      3,556           2,415           2,431           1,841          10,243
  Impairment/
   restructuring charge         37,036           6,169          36,151          23,656         103,012
                          ------------    ------------    ------------    ------------    ------------
Total costs and expenses     4,380,154       3,259,062       3,184,683       3,510,718      14,334,617
                          ------------    ------------    ------------    ------------    ------------
Earnings (loss)
 before taxes                  (31,465)            306         (24,041)         (7,381)        (62,581)
Taxes on income (loss)          (7,224)          2,644          (9,695)         (3,578)        (17,853)
                          ------------    ------------    ------------    ------------    ------------
Net loss                  $    (24,241)   $     (2,338)   $    (14,346)   $     (3,803)   $    (44,728)
                          ============    ============    ============    ============    ============

Basic and diluted net
 loss per share           $       (.64)   $       (.06)   $       (.37)   $       (.10)   $      (1.17)
                          ============    ============    ============    ============    ============

Dividends paid
 per share                $        .02    $        .02    $        .02    $        .02    $        .08
                          ============    ============    ============    ============    ============

Weighted average
 shares outstanding:
  Basic                         38,143          38,204          38,459          38,470          38,305
                          ============    ============    ============    ============    ============
  Diluted                       38,143          38,204          38,459          38,470          38,305
                          ============    ============    ============    ============    ============
</TABLE>


Sales and cost of sales have been restated for the first three  quarters of 2000
due to the adoption of SAB No. 101 and EITF 99-19  during the fourth  quarter of
2000:  quarter  1 - $113  million,  quarter  2 - $96  million,  quarter  3 - $91
million. There was no impact on earnings.  Each quarter of 2000 included charges
related to our  strategic  plan:  quarter 1 - $64 million  pre-tax,  $38 million
after-tax,  $.98  per  share;  quarter  2 - $46  million  pre-tax,  $27  million
after-tax,  $.71 per  share;  quarter  3 - $101  million  pre-tax,  $60  million
after-tax,  $1.53  per  share;  quarter 4 - $98  million  pre-tax,  $58  million
after-tax,  $1.49 per share;  full year - $309  million  pre-tax,  $183  million
after-tax,  $4.72 per share. The third quarter also included one-time items ($10
million charge related primarily to asset impairment on retail stores, income of
$2 million relating to litigation settlements,  and $9 million in gains from the
sale of distribution  facilities)  netting to less than $1 million of income ($1
million after-tax or $.04 per share). The full year impact of the strategic plan
charge and one-time  items is $309 million  pre-tax,  $184 million  after-tax or
$4.71 per share  (includes a $.05 per share impact due to converting  from basic
to diluted weighted average shares).

Sales and cost of sales have been  restated  for each quarter of 1999 due to the
adoption  of SAB No.  101 and EITF  99-19  during  the  fourth  quarter of 2000:
quarter 1 - $117  million,  quarter 2 - $90  million,  quarter 3 - $82  million,
quarter  4 - $85  million,  full  year - $374  million.  There  was no impact on
earnings.  Each quarter of 1999 included  charges related to our strategic plan:
quarter 1 - $46 million pre-tax, $32 million after-tax,  $.84 per share; quarter
2 - $16 million pre-tax, $12 million after-tax,  $.31 per share; quarter 3 - $45
million pre-tax, $28 million after-tax,  $.73 per share; quarter 4 - $30 million
pre-tax,  $20  million  after-tax,  $.50 per  share;  full  year - $137  million
pre-tax, $92 million after-tax, $2.39 per share. The third quarter also included
a one-time item for gains on the sale of facilities of  approximately $6 million
pre-tax ($3 million  after-tax or $.09 per share).  The fourth quarter  included
one-time  items ($31  million  charge to close 10  conventional  retail  stores,
income of $22 million from extinguishing a portion of the self-insured  workers'
compensation liability,  and interest income of $9 million related to refunds in
federal income taxes from prior years) netting to less than $1 million of income
(less than $1 million after-tax with no impact per share).  The full year impact
of the strategic  plan charge and one-time  items is $131 million  pre-tax,  $88
million  after-tax  or $2.29 per share  (includes a $.01 per share impact due to
converting from basic to diluted weighted average shares).

During the fourth  quarter of 2000 we adopted EITF 99-19 and restated  sales and
cost of sales for all prior periods. The adoption had no effect on gross margins
or earnings.  The first  quarter of both years  consists of 16 weeks;  all other
quarters are 12 weeks, except for quarter 4, 2000 which is 13 weeks.


(a)    2.          Financial Statement Schedule:

       Schedule II - Valuation and Qualifying Accounts     Filed here within

(a)    3.          Exhibits:

                                                          Page Number or
        Exhibit                                           Incorporation by
        Number                                            Reference to
        ------                                            ------------

        3.1       Certificate of Incorporation             Exhibit 3.1 to
                                                           Form 10-Q for
                                                           quarter ended
                                                           April 17, 1999

        3.2       By-Laws                                  Exhibit 3.2 to
                                                           Form
                                                           10-Q for quarter
                                                           ended April 17,
                                                           1999

        4.0       Credit Agreement, dated as of            Exhibit 4.16 to
                  July 25, 1997, among Fleming             Form 10-Q for
                  Companies, Inc., the Lenders             quarter ended
                  party thereto, BancAmerica               July 12, 1997
                  Securities, Inc., as syndication
                  agent, Societe Generale, as
                  documentation agent and The Chase
                  Manhattan Bank, as administrative
                  agent

        4.1       Security Agreement dated as of           Exhibit 4.17 to
                  July 25, 1997, between Fleming           Form 10-Q for
                  Companies, Inc., the company             quarter ended
                  subsidiaries party thereto and           July 12, 1997
                  The Chase Manhattan Bank, as
                  collateral agent

        4.2       Pledge Agreement, dated as of            Exhibit 4.18 to
                  July 25, 1997, among Fleming             Form 10-Q for
                  Companies, Inc., the company             quarter ended
                  subsidiaries party thereto and           July 12, 1997
                  The Chase Manhattan Bank, as
                  collateral agent

        4.3       Guarantee Agreement among the            Exhibit 4.19 to
                  company subsidiaries party               Form 10-Q for
                  thereto and The Chase Manhattan          quarter ended
                  Bank, as collateral agent                July 12, 1997

        4.4       Indenture dated as of                    Exhibit 4.5 to
                  December 15, 1994, among Fleming,        Registration
                  the Subsidiary Guarantors named          Statement No. 33-
                  therein and Texas Commerce Bank          55369
                  National Association, as Trustee,
                  regarding $300 million of 10-5/8%
                  Senior Notes

        4.5       Indenture, dated as of July 25,          Exhibit 4.20 to
                  1997, among Fleming Companies,           Form 10-Q for
                  Inc., the Subsidiary Guarantors          quarter ended
                  named therein and Manufacturers          July 12, 1997
                  and Traders Trust Company, as
                  Trustee, regarding 10-5/8% Senior
                  Subordinated Notes due 2007

        4.6       Indenture, dated as of July 25,          Exhibit 4.21 to
                  1997, among Fleming Companies,           Form 10-Q for
                  Inc., the Subsidiary Guarantors          quarter ended
                  named therein and Manufacturers          July 12, 1997
                  and Traders Trust Company
                  regarding 10-1/2% Senior
                  Subordinated Notes due 2004

        4.7       First Amendment, dated as of             Exhibit 4.8 to
                  October 5, 1998, to Credit               Form 10-Q for
                  Agreement dated July 25, 1997            quarter ended
                                                           October 3, 1998

        4.8       Second Amendment dated as of             Exhibit 4.9 to
                  December                                 Form
                  21, 1999 to Credit Agreement             10-Q for quarter
                  dated                                    ended April 15,
                  July 25, 1997                            2000

        4.9       Agreement to furnish copies of           **
                  other long-term debt instruments

        10.0      Dividend Reinvestment and Stock          Exhibit 28.1 to
                  Purchase Plan, as amended                Registration
                                                           Statement No. 33-
                                                           26648 and
                                                           Exhibit 28.3 to
                                                           Registration
                                                           Statement No. 33-
                                                           45190

        10.1*     1990 Stock Option Plan                   Exhibit 28.2 to
                                                           Registration
                                                           Statement No. 33-
                                                           36586

        10.2*     Form of Option Agreement for 1990        Exhibit 10.2 to
                  Stock Option Plan                        Form 10-K for
                                                           year ended
                                                           December 25,
                                                           1999

        10.3*     Form of Restricted Stock Award           Exhibit 10.5 to
                  Agreement for 1990 Stock Option          Form 10-K for
                  Plan (1997)                              year ended
                                                           December 27,
                                                           1997

        10.4*     Fleming Management Incentive             Exhibit  10.4  to
                  Compensation Plan                        Registration
                                                           Statement No. 33-
                                                           51312

        10.5*     Form of Amended and Restated             Exhibit 10.5 to
                  Severance Agreement between the          Form 10-K for
                  Registrant and certain of its            year ended
                  officers                                 December 25,
                                                           1999

        10.6*     Fleming Companies, Inc. 1996             Exhibit A to
                  Stock Incentive Plan dated               Proxy Statement
                  February 27, 1996                        for year ended
                                                           December 30,
                                                           1995

        10.7*     Form of Restricted Award                 Exhibit 10.12 to
                  Agreement for 1996 Stock                 Form 10-K for
                  Incentive Plan (1997)                    year ended
                                                           December 27,
                                                           1997

        10.8*     Phase III of Fleming Companies,          Exhibit 10.8 to
                  Inc. Stock Incentive Plan                Form 10-K for
                                                           year ended
                                                           December 25,
                                                           1999

        10.9*     Amendment No. 1 to the Fleming           Exhibit 10.9 to
                  Companies, Inc. 1996 Stock               Form 10-K for
                  Incentive Plan                           year ended
                                                           December 28,
                                                           1996

        10.10*    Supplemental Income Trust                Exhibit 10.10 to
                                                           Form 10-K for
                                                           year ended
                                                           December 25,
                                                           1999

        10.11*    First Amendment to Fleming               Exhibit 10.19 to
                  Companies, Inc. Supplemental             Form 10-K for
                  Income Trust                             year ended
                                                           December 28,
                                                           1996

        10.12*    Form of Change of Control                Exhibit 10.12 to
                  Employment Agreement between             Form 10-K for
                  Registrant and certain of the            year ended
                  employees                                December 25,
                                                           1999

        10.13*    Economic Value Added Incentive           Exhibit A to
                  Bonus Plan                               Proxy Statement
                                                           for year ended
                                                           December 31,
                                                           1994

        10.14*    Agreement between the Registrant         Exhibit 10.24 to
                  and William J. Dowd                      Form 10-K for
                                                           year ended
                                                           December 30,
                                                           1995

        10.15*    Amended and Restated Supplemental        Exhibit 10.23 to
                  Retirement Income Agreement for          Form 10-K for
                  Robert E. Stauth                         year ended
                                                           December 28,
                                                           1996

        10.16*    Executive Past Service Benefit           Exhibit 10.23 to
                  Plan (November 1997)                     Form 10-K for
                                                           year ended
                                                           December 27,
                                                           1997

        10.17*    Form of Agreement for Executive          Exhibit 10.24 to
                  Past Service Benefit Plan                Form 10-K for
                  (November 1997)                          year ended
                                                           December 27,
                                                           1997

        10.18*    Executive Deferred Compensation          Exhibit 10.25 to
                  Plan (November 1997)                     Form 10-K for
                                                           year ended
                                                           December 27,
                                                           1997

        10.19*    Executive Deferred Compensation          Exhibit 10.26 to
                  Trust (November 1997)                    Form 10-K for
                                                           year ended
                                                           December 17,
                                                           1997

        10.20*    Form of Agreement for Executive          Exhibit 10.27 to
                  Deferred Compensation Plan               Form 10-K for
                  (November 1997)                          year ended
                                                           December 27,
                                                           1997

        10.21*    Fleming Companies, Inc. Associate        Exhibit 10.28 to
                  Stock Purchase Plan                      Form 10-K for
                                                           year ended
                                                           December 27,
                                                           1997

        10.22*    Settlement Agreement between             Exhibit 10.25 to
                  Fleming Companies, Inc. and              Form 10-Q for
                  Furr's Supermarkets, Inc. dated          quarter ended
                  October 23, 1997                         October 4, 1997

        10.23*    Form of Amended and Restated             Exhibit 10.30 to
                  Agreement for Fleming Companies,         Form 10-Q for
                  Inc. Executive Past Service              quarter ended
                  Benefit Plan                             October 3, 1998

        10.24*    Form of Amended and Restated             Exhibit 10.31 to
                  Agreement for Fleming Companies,         Form 10-Q for
                  Inc. Executive Deferred                  quarter ended
                  Compensation Plan                        October 3, 1998

        10.25*    Amended and Restated Supplemental        Exhibit 10.32 to
                  Retirement Income Agreement              Form 10-Q for
                  between William J. Dowd and              quarter ended
                  Fleming Companies, Inc. dated            October 3, 1998
                  August 18, 1998

        10.26*    Form of Amended and Restated             Exhibit 10.33 to
                  Restricted Stock Award Agreement         Form 10-Q for
                  under Fleming Companies, Inc.            quarter ended
                  1996 Stock Incentive Plan                October 3, 1998

        10.27*    Form of Amended and Restated Non-        Exhibit 10.34 to
                  Qualified Stock Option Agreement         Form 10-Q for
                  under the Fleming Companies, Inc.        quarter ended
                  1996 Stock Incentive Plan                October 3, 1998

        10.28*    First Amendment to Economic Value        Exhibit 10.36 to
                  Added Incentive Bonus Plan for           Form 10-Q for
                  Fleming Companies, Inc.                  quarter ended
                                                           October 3, 1998

        10.29*    Amendment No. 2 to Economic Value        Exhibit 10.37 to
                  Added Incentive Bonus Plan for           Form 10-Q for
                  Fleming Companies, Inc.                  quarter ended
                                                           October 3, 1998

        10.30*    Form of Amendment to Certain             Exhibit 10.38 to
                  Employment Agreements                    Form 10-Q for
                                                           quarter ended
                                                           October 3, 1998

        10.31*    Form of First Amendment to               Exhibit 10.39 to
                  Restricted Stock Award Agreement         Form 10-Q for
                  for Fleming Companies, Inc. 1996         quarter ended
                  Stock Incentive Plan                     October 3, 1998

        10.32*    Settlement and Severance                 Exhibit 10.40 to
                  Agreement by and between Fleming         Form 10-Q for
                  Companies, Inc. and Robert E.            quarter ended
                  Stauth dated August 28, 1998             October 3, 1998

        10.33*    1999 Stock Incentive Plan                Exhibit 10.38 to
                                                           Form 10-K for
                                                           year ended
                                                           December 26,
                                                           1998

        10.34*    Form of Non-Qualified Stock              Exhibit 10.39 to
                  Option Agreement for 1999 Stock          Form 10-K for
                  Incentive Plan                           year ended
                                                           December 26,
                                                           1998

        10.35*    Corporate Officer Incentive Plan         Exhibit 10.40 to
                                                           Form 10-K for
                                                           year ended
                                                           December 26,
                                                           1998

        10.36*    Employment Agreement for Mark            Exhibit 10.41 to
                  Hansen dated as of November 30,          Form 10-K for
                  1998                                     year ended
                                                           December 26,
                                                           1998

        10.37*    Restricted Stock Agreement under         Exhibit 10.42 to
                  1990 Stock Incentive Plan for            Form 10-K for
                  Mark Hansen dated as of November         year ended
                  30, 1998                                 December 26,
                                                           1998

        10.38*    Form of Amendment to Employment          Exhibit 10.43 to
                  Agreement between Registrant and         Form 10-K for
                  certain executives dated as of           year ended
                  March 2, 1999                            December 26,
                                                           1998

        10.39*    Amendment No. One to 1990 Stock          Exhibit 10.44 to
                  Option Plan                              Form 10-K for
                                                           year ended
                                                           December 26,
                                                           1998

        10.40*    Fleming Companies, Inc. 1990             Exhibit 10.45 to
                  Stock Incentive Plan (as amended)        Form 10-K for
                                                           year ended
                                                           December 26,
                                                           1998

        10.41*    Fleming Companies, Inc. Amended          Exhibit 10.46 to
                  and Restated Directors'                  Form 10-K for
                  Compensation and Stock Equivalent        year ended
                  Unit Plan                                December 26,
                                                           1998

        10.42*    Severance Agreement for Thomas L.        Exhibit 10.47 to
                  Zaricki dated January 29, 1999           Form 10-K for
                                                           year ended
                                                           December 26,
                                                           1998

        10.43*    Severance Agreement for Harry L.         Exhibit 10.48 to
                  Winn, Jr. dated February 22, 1999        Form 10-K for
                                                           year ended
                                                           December 26,
                                                           1998

        10.44*    Amendment to Fleming Companies,          Exhibit 10.49 to
                  Inc. 1990 Stock Incentive Plan           Form 10-Q for
                                                           quarter ended
                                                           April 17, 1999

        10.45*    Employment Agreement for John T.         Exhibit 10.50 to
                  Standley dated as of May 17, 1999        Form 10-Q for
                                                           quarter ended
                                                           April 17, 1999

        10.46*    Restricted Stock Agreement for           Exhibit 10.51 to
                  John T. Standley dated as of May         Form 10-Q for
                  17, 1999                                 quarter ended
                                                           April 17, 1999

        10.47*    Letter Agreement for William H.          Exhibit 10.52 to
                  Marquard dated as of May 26, 1999        Form 10-Q for
                                                           quarter ended
                                                           April 17, 1999

        10.48*    Severance Agreement with William         Exhibit 10.53 to
                  J. Dowd effective as of June 17,         Form 10-Q for
                  1999                                     quarter ended
                                                           July 10, 1999

        10.49*    Employment Agreement for William         Exhibit 10.54 to
                  H. Marquard dated as of June 1,          Form 10-Q for
                  1999                                     quarter ended
                                                           July 10, 1999

        10.50*    Restricted Stock Agreement for           Exhibit 10.55 to
                  William H. Marquard dated as of          Form 10-Q for
                  June 1, 1999                             quarter ended
                                                           July 10, 1999

        10.51*    Employment Agreement for Dennis          Exhibit 10.56 to
                  C. Lucas dated as of July 28,            Form 10-Q for
                  1999                                     quarter ended
                                                           July 10, 1999

        10.52*    Restricted Stock Agreement for           Exhibit 10.57 to
                  Dennis C. Lucas dated as of July         Form 10-Q for
                  28, 1999                                 quarter ended
                                                           July 10, 1999

        10.53*    Restricted Stock Agreement for E.        Exhibit 10.58 to
                  Stephen Davis dated as of July           Form 10-Q for
                  20, 1999                                 quarter ended
                                                           July 10, 1999

        10.54*    Form of Loan Agreement Pursuant          Exhibit 10.59 to
                  to Executive Stock Ownership             Form 10-Q for
                  Program                                  quarter ended
                                                           July 10, 1999

        10.55*    Restricted Stock Award Agreement         Exhibit 10.55 to
                  for William H. Marquard dated as         Form 10-K for
                  of December 21, 1999                     year ended
                                                           December 25,
                                                           1999

        10.56*    Restricted Stock Award Agreement         Exhibit 10.56 to
                  for John M. Thompson dated as of         Form 10-K for
                  December 21, 1999, as amended            year ended
                                                           December 25,
                                                           1999

        10.57*    Form of Non-qualified Stock              Exhibit 10.57 to
                  Option Agreement for 1999 Stock          Form 10-K for
                  Option Plan - Corporate                  year ended
                                                           December 25,
                                                           1999

        10.58*    Form of Non-qualified Stock              Exhibit 10.58 to
                  Option Agreement for 1999 Stock          Form 10-K for
                  Option Plan - Distribution               year ended
                                                           December 25,
                                                           1999

        10.59*    Form of Non-qualified Stock              Exhibit 10.59 to
                  Option Agreement for 1999 Stock          Form 10-K for
                  Option Plan - Retail                     year ended
                                                           December 25,
                                                           1999

        10.60*    Amended and Restated Employment          Exhibit 10.60 to
                  Agreement for Scott M. Northcutt         Form 10-K for
                  effective as of January 26, 1999         year ended
                                                           December 25,
                                                           1999

        10.61*    Employment Agreement for Lenore T.       Exhibit 10.61 to
                  Graham dated as of January 18,           Form 10-Q for
                  2000                                     quarter ended
                                                           April 15, 2000

        10.62*    Employment Agreement for Neal J.         Exhibit 10.62 to
                  Rider dated as of January 18, 2000       Form 10-Q for
                                                           quarter ended
                                                           April 15, 2000

        10.63*    Restricted Stock Award Agreement         Exhibit 10.63 to
                  for Lenore T. Graham dated as of         Form 10-Q for
                  Lenore T. Graham dated as of             quarter ended
                  January 18, 2000                         April 15, 2000

        10.64*    Restricted Stock Award Agreement for     Exhibit 10.64 to
                  Neal J. Rider dated as of January 18,    Form 10-Q for
                  2000                                     quarter ended
                                                           April 15, 2000

        10.65*    Restricted Stock Award Agreement for     Exhibit 10.65 to
                  Mark S. Hansen dated as of               Form 10-Q for
                  February 29, 2000                        quarter ended April
                                                           15, 2000

        10.66*    Restricted Stock Award Agreement for     Exhibit 10.66 to
                  David R. Almond dated as of              Form 10-Q for
                  February 29, 2000                        quarter ended
                                                           April 15, 2000

        10.67*    Amendment to the Amended and Restated    Exhibit 10.67 to
                  Restricted Award Agreement for David     Form 10-Q for
                  R. Almond dated as of February 29, 2000  quarter ended
                                                           April 15, 2000

        10.68*    Amendment to Nonqualified Stock Option   Exhibit 10.68 to
                  Agreement for David R. Almond            Form 10-Q for
                  dated as of February 29, 2000            quarter ended
                                                           April 15, 2000

        10.69*    Amendment to Restricted Stock Award      Exhibit 10.69 to
                  Agreement for E. Stephen Davis dated     Form 10-Q for
                  as of February 29, 2000                  quarter ended
                                                           April 15, 2000

        10.70*    2000 Stock Incentive Plan for Fleming    Exhibit 10.70 to
                  Companies, Inc. is incorporated          Form 10-Q for
                  herein by reference to Exhibit A to      quarter ended
                  the company's Proxy Statement dated      April 15, 2000
                  March 27, 2000

        10.71*    Form of Nonqualified Stock Option        Exhibit 10.71 to
                  Agreement between eMAR.net, Inc. and     Form 10-Q for
                  each director of the registrant (4,000   quarter ended
                  shares each) except for Mark S. Hansen   April 15, 2000
                  dated as of January 18, 2000

        10.72*    Form of Stock Option Agreement           Exhibit 10.72 to
                  between eMAR.net, Inc. and               Form 10-Q for
                  Mark S. Hansen (150,000 shares),         quarter ended
                  William H. Marquard (100,000 shares),    April 15, 2000
                  John M. Thompson (75,000 shares) and
                  the other executive officers of the
                  registrant (25,000 shares each) dated
                  as of January  18, 2000

        10.73*    Amendment to the Associate Stock         Exhibit 10.73 to
                  Purchase Plan                            Form 10-Q for
                                                           quarter ended
                                                           July 8, 2000

        10.74*    Form of Indemnification  Agreement       Exhibit 10.74 to
                  for Directors                            Form 10-Q for
                                                           quarter ended
                                                           September 30,
                                                           2000

        10.75*    Form of Indemnification  Agreement       Exhibit 10.75 to
                  for Executive Officers                   Form 10-Q for
                                                           quarter ended
                                                           September 30,
                                                           2000

        12        Computation of ratio of earnings         **
                  to fixed charges

        21        Subsidiaries of the Registrant           **

        23        Consent of Deloitte & Touche LLP         **

        24        Power of Attorney                        **

*    Management contract, compensatory plan or arrangement.
**   Filed here within.


(b)  Reports on Form 8-K:

On October 18, 2000,  pursuant to Item 5, we announced  our net earnings for the
third  quarter  2000,  which  included a strategic  plan pre-tax  charge of $101
million,  primarily related to the completion of the strategic evaluation of the
conventional retail stores.
<PAGE>
                                 SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  Fleming  has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on the 23rd day of March, 2001.

                                        FLEMING COMPANIES, INC.


                                             MARK S. HANSEN

                                        By:  Mark S. Hansen
                                             Chairman and Chief
                                             Executive Officer
                                             (Principal executive
                                             officer)


                                             NEAL RIDER

                                        By:  Neal Rider
                                             Executive Vice President
                                             and Chief Financial Officer
                                             (Principal financial and
                                             accounting officer)



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 indicated on the 23rd day of March, 2001.

MARK S. HANSEN            NEAL RIDER              HERBERT M. BAUM *
Mark S. Hansen            Neal Rider              Herbert M. Baum
(Chairman of the          (Chief Financial        (Director)
Board)                    Officer)

ARCHIE R. DYKES *         CAROL B. HALLETT *      ROBERT HAMADA *
Archie R. Dykes           Carol B. Hallett        Robert Hamada
(Director)                (Director)              (Director)

EDWARD C. JOULLIAN III *  GUY A. OSBORN *         ALICE M. PETERSON *
Edward C. Joullian III    Guy A. Osborn           Alice M. Peterson
(Director)                (Director)              (Director)


*A Power of Attorney  authorizing  Neal Rider to sign the Annual  Report on Form
10-K on behalf of each of the indicated directors of Fleming Companies, Inc. has
been filed herein as Exhibit 24.
<PAGE>
                                 EXHIBIT INDEX

        Exhibit
        No.       Description                        Method of Filing
        -------   -----------                        ----------------

        3.1       Certificate of Incorporation       Incorporated herein by
                                                     reference

        3.2       By-Laws                            Incorporated herein by
                                                     reference

        4.0       Credit Agreement, dated as of      Incorporated herein by
                  July 25, 1997, among Fleming       reference
                  Companies, Inc., the Lenders
                  party thereto, BancAmerica
                  Securities, Inc., as syndication
                  agent, Societe Generale, as
                  documentation agent and The Chase
                  Manhattan Bank, as administrative
                  agent

        4.1       Security Agreement dated as of    Incorporated herein by
                  July 25, 1997, between Fleming    reference
                  Companies, Inc., the company
                  subsidiaries party thereto and
                  The Chase Manhattan Bank, as
                  collateral agent

        4.2       Pledge Agreement, dated as of     Incorporated herein by
                  July 25, 1997, among Fleming      reference
                  Companies, Inc., the company
                  subsidiaries party thereto and
                  The Chase Manhattan Bank, as
                  collateral agent

        4.3       Guarantee Agreement among the     Incorporated herein by
                  company subsidiaries party        reference
                  thereto and The Chase Manhattan
                  Bank, as collateral agent

        4.4       Indenture dated as of             Incorporated herein by
                  December 15, 1994, among Fleming, reference
                  the Subsidiary Guarantors named
                  therein and Texas Commerce Bank
                  National Association, as Trustee,
                  regarding $300 million of 10-5/8%
                  Senior Notes

        4.5       Indenture, dated as of July 25,   Incorporated herein by
                  1997, among Fleming Companies,    reference
                  Inc., the Subsidiary Guarantors
                  named therein and Manufacturers
                  and Traders Trust Company, as
                  Trustee, regarding 10-5/8% Senior
                  Subordinated Notes due 2007

        4.6       Indenture, dated as of July 25,   Incorporated herein by
                  1997, among Fleming Companies,    reference
                  Inc., the Subsidiary Guarantors
                  named therein and Manufacturers
                  and Traders Trust Company
                  regarding 10-1/2% Senior
                  Subordinated Notes due 2004

        4.7       First Amendment, dated as of      Incorporated herein by
                  October 5, 1998, to Credit        reference
                  Agreement dated July 25, 1997


        4.8       Second Amendment dated as of      Incorporated herein by
                  December 21, 1999 to Credit       reference
                  Agreement dated
                  July 25, 1997

        4.9       Agreement to furnish copies of    Filed herewith
                  other long-term debt instruments  electronically

        10.0      Dividend Reinvestment and Stock   Incorporated herein by
                  Purchase Plan, as amended         reference

        10.1*     1990 Stock Option Plan            Incorporated herein by
                                                    reference

        10.2*     Form of Option Agreement for 1990 Incorporated herein by
                  Stock Option Plan                 reference

        10.3*     Form of Restricted Stock Award    Incorporated herein by
                  Agreement for 1990 Stock Option   reference
                  Plan (1997)

        10.4*     Fleming Management Incentive      Incorporated herein by
                  Compensation Plan                 reference

        10.5*     Form of Amended and Restated      Incorporated herein by
                  Severance Agreement between the   reference
                  Registrant and certain of its
                  officers

        10.6*     Fleming Companies, Inc. 1996      Incorporated herein by
                  Stock Incentive Plan dated        reference
                  February 27, 1996

        10.7*     Form of Restricted Award          Incorporated herein by
                  Agreement for 1996 Stock          reference
                  Incentive Plan (1997)

        10.8*     Phase III of Fleming Companies,   Incorporated herein by
                  Inc. Stock Incentive Plan         reference

        10.9*     Amendment No. 1 to the Fleming    Incorporated herein by
                  Companies, Inc. 1996 Stock        reference
                  Incentive Plan

        10.10*    Supplemental Income Trust         Incorporated herein by
                                                    reference

        10.11*    First Amendment to Fleming        Incorporated herein by
                  Companies, Inc. Supplemental      reference
                  Income Trust

        10.12*    Form of Change of Control         Incorporated herein by
                  Employment Agreement between      reference
                  Registrant and certain of the
                  employees

        10.13*    Economic Value Added Incentive    Incorporated herein by
                  Bonus Plan                        reference

        10.14*    Agreement between the Registrant  Incorporated herein by
                  and William J. Dowd               reference

        10.15*    Amended and Restated Supplemental Incorporated herein by
                  Retirement Income Agreement for   reference
                  Robert E. Stauth

        10.16*    Executive Past Service Benefit    Incorporated herein by
                  Plan (November 1997)              reference

        10.17*    Form of Agreement for Executive   Incorporated herein by
                  Past Service Benefit Plan         reference
                  (November 1997)

        10.18*    Executive Deferred Compensation   Incorporated herein by
                  Plan (November 1997)              reference

        10.19*    Executive Deferred Compensation   Incorporated herein by
                  Trust (November 1997)             reference

        10.20*    Form of Agreement for Executive   Incorporated herein by
                  Deferred Compensation Plan        reference
                  (November 1997)

        10.21*    Fleming Companies, Inc. Associate Incorporated herein by
                  Stock Purchase Plan               reference

        10.22*    Settlement Agreement between      Incorporated herein by
                  Fleming Companies, Inc. and       reference
                  Furr's Supermarkets, Inc. dated
                  October 23, 1997

        10.23*    Form of Amended and Restated      Incorporated herein by
                  Agreement for Fleming Companies,  reference
                  Inc. Executive Past Service
                  Benefit Plan

        10.24*    Form of Amended and Restated      Incorporated herein by
                  Agreement for Fleming Companies,  reference
                  Inc. Executive Deferred
                  Compensation Plan

        10.25*    Amended and Restated Supplemental Incorporated herein by
                  Retirement Income Agreement       reference
                  between William J. Dowd and
                  Fleming Companies, Inc. dated
                  August 18, 1998

        10.26*    Form of Amended and Restated      Incorporated herein by
                  Restricted Stock Award Agreement  reference
                  under Fleming Companies, Inc.
                  1996 Stock Incentive Plan

        10.27*    Form of Amended and Restated Non- Incorporated herein by
                  Qualified Stock Option Agreement  reference
                  under the Fleming Companies, Inc.
                  1996 Stock Incentive Plan

        10.28*    First Amendment to Economic Value Incorporated herein by
                  Added Incentive Bonus Plan for    reference
                  Fleming Companies, Inc.

        10.29*    Amendment No. 2 to Economic Value Incorporated herein by
                  Added Incentive Bonus Plan for    reference
                  Fleming Companies, Inc.

        10.30*    Form of Amendment to Certain      Incorporated herein by
                  Employment Agreements             reference

        10.31*    Form of First Amendment to        Incorporated herein by
                  Restricted Stock Award Agreement  reference
                  for Fleming Companies, Inc. 1996
                  Stock Incentive Plan

        10.32*    Settlement and Severance          Incorporated herein by
                  Agreement by and between Fleming  reference
                  Companies, Inc. and Robert E.
                  Stauth dated August 28, 1998

        10.33*    1999 Stock Incentive Plan         Incorporated herein by
                                                    reference

        10.34*    Form of Non-Qualified Stock       Incorporated herein by
                  Option Agreement for 1999 Stock   reference
                  Incentive Plan

        10.35*    Corporate Officer Incentive Plan  Incorporated herein by
                                                    reference

        10.36*    Employment Agreement for Mark     Incorporated herein by
                  Hansen dated as of November 30,   reference
                  1998

        10.37*    Restricted Stock Agreement under  Incorporated herein by
                  1990 Stock Incentive Plan for     reference
                  Mark Hansen dated as of November
                  30, 1998

        10.38*    Form of Amendment to Employment   Incorporated herein by
                  Agreement between Registrant and  reference
                  certain executives dated as of
                  March 2, 1999

        10.39*    Amendment No. One to 1990 Stock   Incorporated herein by
                  Option Plan                       reference

        10.40*    Fleming Companies, Inc. 1990
                  Stock Incentive Plan (as amended) Incorporated herein by
                                                    reference

        10.41*    Fleming Companies, Inc. Amended   Incorporated herein by
                  and Restated Directors'           reference
                  Compensation and Stock Equivalent
                  Unit Plan

        10.42*    Severance Agreement for Thomas L. Incorporated herein by
                  Zaricki dated January 29, 1999    reference

        10.43*    Severance Agreement for Harry L.  Incorporated herein by
                  Winn, Jr. dated February 22, 1999 reference

        10.44*    Amendment to Fleming Companies,   Incorporated herein by
                  Inc. 1990 Stock Incentive Plan    reference

        10.45*    Employment Agreement for John T.  Incorporated herein by
                  Standley dated as of May 17, 1999 reference

        10.46*    Restricted Stock Agreement for    Incorporated herein by
                  John T. Standley dated as of May  reference
                  17, 1999

        10.47*    Letter Agreement for William H.   Incorporated herein by
                  Marquard dated as of May 26, 1999 reference

        10.48*    Severance Agreement with William  Incorporated herein by
                  J. Dowd effective as of June 17,  reference
                  1999

        10.49*    Employment Agreement for William  Incorporated herein by
                  H. Marquard dated as of June 1,   reference
                  1999

        10.50*    Restricted Stock Agreement for    Incorporated herein by
                  William H. Marquard dated as of   reference
                  June 1, 1999

        10.51*    Employment Agreement for Dennis   Incorporated herein by
                  C. Lucas dated as of July 28,     reference
                  1999

        10.52*    Restricted Stock Agreement for    Incorporated herein by
                  Dennis C. Lucas dated as of July  reference
                  28, 1999

        10.53*    Restricted Stock Agreement for E. Incorporated herein by
                  Stephen Davis dated as of July    reference
                  20, 1999

        10.54*    Form of Loan Agreement Pursuant   Incorporated herein by
                  to Executive Stock Ownership      reference
                  Program

        10.55*    Restricted Stock Award Agreement  Incorporated herein by
                  for William H. Marquard dated as  reference
                  of December 21, 1999

        10.56*    Restricted Stock Award Agreement  Incorporated herein by
                  for John M. Thompson dated as of  reference
                  December 21, 1999, as amended

        10.57*    Form of Non-qualified Stock       Incorporated herein by
                  Option Agreement for 1999 Stock   reference
                  Option Plan - Corporate

        10.58*    Form of Non-qualified Stock       Incorporated herein by
                  Option Agreement for 1999 Stock   reference
                  Option Plan - Distribution

        10.59*    Form of Non-qualified Stock       Incorporated herein by
                  Option Agreement for 1999 Stock   reference
                  Option Plan - Retail

        10.60*    Amended and Restated Employment   Incorporated herein by
                  Agreement for Scott M. Northcutt  reference
                  effective as of January 26, 1999

        10.61*    Employment Agreement for Lenore T.Incorporated herein by
                  Graham dated as of January 18,    reference
                  2000

        10.62*    Employment Agreement for Neal J.    Incorporated herein by
                  Rider dated as of January 18, 2000  reference

        10.63*    Restricted Stock Award Agreement    Incorporated herein by
                  for Lenore T. Graham dated as of    reference
                  Lenore T. Graham dated as of
                  January 18, 2000

        10.64*    Restricted Stock Award Agreement for  Incorporated herein by
                  Neal J. Rider dated as of January 18, reference
                  2000

        10.65*    Restricted Stock Award Agreement for  Incorporated herein by
                  Mark S. Hansen dated as of            reference
                  February 29, 2000

        10.66*    Restricted Stock Award Agreement for  Incorporated herein by
                  David R. Almond dated as of           reference
                  February 29, 2000

        10.67*    Amendment to the Amended and Restated Incorporated herein by
                  Restricted Award Agreement for David  reference
                  R. Almond dated as of February 29,
                  2000

        10.68*    Amendment to Nonqualified Stock Option Incorporated herein by
                  Agreement for David R. Almond          reference
                  dated as of February 29, 2000

        10.69*    Amendment to Restricted Stock Award    Incorporated herein by
                  Agreement for E. Stephen Davis dated   reference
                  as of February 29, 2000

        10.70*    2000 Stock Incentive Plan for Fleming  Incorporated herein by
                  Companies, Inc. is incorporated        reference
                  herein by reference to Exhibit A to
                  the company's Proxy Statement dated
                  March 27, 2000

        10.71*    Form of Nonqualified Stock Option      Incorporated herein by
                  Agreement between eMAR.net, Inc. and   reference
                  each director of the registrant (4,000
                  shares each) except for Mark S. Hansen
                  dated as of January 18, 2000

        10.72*    Form of Stock Option Agreement         Incorporated herein by
                  between eMAR.net, Inc. and             reference
                  Mark S. Hansen (150,000 shares),
                  William H. Marquard (100,000 shares),
                  John M. Thompson (75,000 shares) and
                  the other executive officers of the
                  registrant (25,000 shares each) dated
                  as of January  18, 2000

        10.73*    Amendment to the Associate Stock       Incorporated herein by
                  Purchase Plan                          reference

        10.74*    Form of Indemnification  Agreement     Incorporated herein by
                  for Directors                          reference

        10.75*    Form of Indemnification  Agreement     Incorporated herein by
                  for Executive Officers                 reference

        12        Computation of ratio of earnings       Filed herewith
                  to fixed charges                       electronically

        21        Subsidiaries of the Registrant         Filed herewith
                                                         electronicallky

        23        Consent of Deloitte & Touche LLP       Filed herewith
                                                         electronically

        24        Power of Attorney                      Filed herewith
                                                         electronically
<PAGE>
                                  SCHEDULE II

                            FLEMING COMPANIES, INC.
                         AND CONSOLIDATED SUBSIDIARIES

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                         YEARS ENDED DECEMBER 30, 2000
                    DECEMBER 25, 1999 AND DECEMBER 26, 1998
                                 (in thousands)

                                Allowance
                                   for
                               Credit Losses    Current       Noncurrent

BALANCE, December 27, 1997      $43,848         $19,012         $24,836

Charged to cost and expenses     23,498           9,979          13,519

Uncollectible accounts written-
  off, less recoveries          (20,114)         (9,012)        (11,102)

BALANCE, December 26, 1998      $47,232         $19,979         $27,253

Charged to cost and expenses     25,394          21,024           4,370

Uncollectible accounts written-
  off, less recoveries          (17,098)         (8,802)         (8,296)

BALANCE, December 25, 1999      $55,528         $32,201         $23,327

Charged to cost and expenses     28,872          15,454          13,418

Uncollectible accounts written-
  off, less recoveries          (24,682)        (13,729)        (10,953)

BALANCE, December 30, 2000      $59,718         $33,926         $25,792