SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                                    FORM 10-K
                     Annual Report Pursuant to Section 13 or
                  15(d) of the Securities Exchange Act of 1934

                   For the fiscal year ended February 1, 1998
                         Commission File Number 1-10619

                          PAMIDA HOLDINGS CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                      Delaware                        47-0696125
          -------------------------------    ----------------------------
          (State or other jurisdiction of    (IRS Employer Identification
            incorporation or organization)         Number)

                 8800 "F" Street, Omaha, Nebraska        68127
           ---------------------------------------      ---------
           (Address of principal executive offices)     (Zip Code)

       Registrant's telephone number, including area code: (402) 339-2400

           Securities Registered Pursuant to Section 12(b) of the Act:

                  Title of              Each Name of Each Exchange
                    Class                   on Which Registered
                 ------------           --------------------------
                 Common Stock            American 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 such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

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

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant  as of March 24, 1998,  was  $24,938,602  based upon the closing
price for such stock on the American Stock Exchange on such date.

     Indicate  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest practicable date:

                                                     Outstanding at
             CLASS OF STOCK                          March 24, 1998
          ----------------------                    ----------------
              Common Stock                          5,970,439 shares
          Nonvoting Common Stock                    3,050,473 shares


     DOCUMENTS  INCORPORATED BY REFERENCE:  Portions of the  registrant's  proxy
statement  dated  March 25,  1998,  for the annual  meeting of the  registrant's
stockholders to be held on May 21, 1998, are incorporated by reference into Part
III.



                                     PART I

ITEM 1. BUSINESS.

     FORWARD-LOOKING STATEMENTS

     This 10-K contains certain forward-looking statements within the meaning of
the Private  Securities  Litigation  Reform Act of 1995 (the "1995  Act").  Such
statements  are made in good faith by the Company  pursuant  to the  safe-harbor
provisions of the 1995 Act. In  connection  with these  safe-harbor  provisions,
this 10-K contains certain forward-looking statements which reflect management's
current  views  and  estimates  of  future  economic   circumstances,   industry
conditions,  Company performance and financial results. The statements are based
on many  assumptions  and  factors  including  sales  results,  expense  levels,
competition and interest rates as well as other risks and uncertainties inherent
in the Company's business, capital structure and the retail industry in general.
Any changes in these factors could result in  significantly  different  results.
The Company  further  cautions that the  forward-looking  information  contained
herein is not exhaustive or exclusive.  The Company does not undertake to update
any  forward-looking  statements  which  may be made  from time to time by or on
behalf of the Company.

     GENERAL.

     Pamida  Holdings   Corporation  conducts  its  general  merchandise  retail
business  through  its  wholly-owned   subsidiary,   Pamida,  Inc.,  a  Delaware
corporation.  Unless the context  indicates  otherwise,  the terms  "Pamida" and
"Company"  refer  collectively to Pamida  Holdings  Corporation,  its direct and
indirect  subsidiaries  and their  predecessors,  and "Holdings"  refers only to
Pamida Holdings Corporation.

     Holdings is a Delaware  corporation  incorporated in 1986 to acquire all of
the capital  stock of Pamida,  Inc.,  which,  directly  since 1981 and through a
predecessor  prior to 1981, had been engaged in the general  merchandise  retail
business since 1963. The capital stock of Pamida,  Inc. is the only  significant
asset of Holdings, and Holdings has no material operations of its own.

     On January 19, 1996, the Company announced its intention to close 40 stores
located in unprofitable or highly competitive markets. Store closing sales began
on January 29, 1996, and the Company completed all of such store closings during
the second quarter of the fiscal year ended February 2, 1997. References in this
Form 10-K to the "40 Closed Stores" mean such 40 stores.

     STORES.

     At February 1, 1998, Pamida operated 148 general  merchandise retail stores
located in 148 small towns (having an average population of approximately 5,500)
in 15 Midwestern,  North Central and Rocky Mountain states.  Pamida's  strategic
objective is to be the dominant general merchandise  retailer in the communities
it serves.  The Company  believes that it holds the leading  market  position in
over 77% of the communities in which its stores are located.

     Pamida stores generally are located in small towns,  normally county seats,
where  there  often is little  or no  competition  from  another  major  general
merchandise  retailer and which the Company  considers to be either too small to
support more than one major general  merchandise  retailer  (thereby  creating a
potential  barrier  to  entry by a major  competitor)  or too  small to  attract
competitors whose stores generally are designed to serve larger populations.  At
February  1,  1998,  115 of the  Company's  148  stores  faced no  direct  local
competition from other major general merchandise retailers.

     The Company's stores average approximately 30,000 square feet of sales area
and range in size from approximately  6,000 to 51,000 square feet of sales area.
At  February  1,  1998,   Pamida's   stores  had  an  aggregate  sales  area  of
approximately 4,408,000 square feet.


     The  following  table  indicates the states in which  Pamida's  stores were
located as of February 1, 1998:


     State                                                No. of
     -----                                                Stores         Percent
                                                          ------         -------
     Minnesota............................................  29             19.6%
     Iowa.................................................  25             16.9
     Nebraska.............................................  15             10.1
     Wisconsin............................................  14              9.5
     Michigan............................................   12              8.1
     Ohio................................................   10              6.8
     Wyoming..............................................   9              6.1
     North Dakota.........................................   7              4.7
     South Dakota.........................................   7              4.7
     Montana..............................................   7              4.7
     Indiana..............................................   4              2.7
     Kansas...............................................   3              2.0
     Illinois.............................................   3              2.0
     Kentucky ............................................   2              1.4
     Missouri ............................................   1              0.7
                                                            ---           -----
                                                            148           100.0%
                                                            ===           =====

     The  following  tables  show the number of the  Company's  store  openings,
relocations  and closings and the aggregate  year-end store sales area by fiscal
year since fiscal 1994:

                                                      Fiscal Year Ended
                                               --------------------------------
                                               1998   1997   1996   1995   1994
                                               ----   ----   ----   ----   ----
     Beginning of year                          148    144    184    173    178
       Stores opened in new markets               1      6      7     17      8
       Stores relocated in 
         existing markets                         2      2      3     --     --
       Stores closed (includes 
         relocated stores)                       (3)    (4)   (10)    (6)   (13)
                                               ----   ----   ----   ----   ----
       End of year                              148    148    184    184    173
                                               ====   ====          ====   ====
       Less 40 Closed Stores                                  (40)
                                                             ----
                                                              144
                                                             ====

                                                      Fiscal Year Ended
                                               --------------------------------
                                               1998   1997   1996   1995   1994
                                               ----   ----   ----   ----   ----
       Square feet of store sales 
         area at year-end (in millions)        4.41   4.35   5.22   5.09   4.68
       Less 40 Closed Stores                                (1.09)
                                                             ----
                                                             4.13
                                                             ====


     Pamida  regularly  evaluates all of its stores and from time to time closes
stores which no longer meet its standards for sales, profitability, selling area
or other applicable criteria.

     STORE EXPANSION PROGRAM.

     Pamida's  store  expansion  program is subject to the Company's  ability to
negotiate satisfactory leases, to the ability of prospective landlords to obtain
financing  for new store  buildings  and to various  zoning,  site  acquisition,
environmental,  traffic, construction and other contingencies. Eight new stores,
two of which are replacement  stores,  are expected to commence  operations this
year.

     Pamida has identified  numerous  communities  which are potential sites for
the  Company's  prototype  stores and in which Pamida  believes it can achieve a
leading  market  position,  although there is no assurance that Pamida will open
stores in such communities or on any particular time schedule.

     The Company  began  operations  in a new 200,000  square foot  distribution
center in Lebanon,  Indiana,  during the second  quarter of fiscal 1998.  Pamida
believes that its existing distribution facilities (including the new expandable
Lebanon,  Indiana  facility),  senior  and  middle  management  staff as well as
corporate infrastructure should allow the Company to accommodate its anticipated
growth.

     The Company typically invests  approximately  $1,450,000 to $1,700,000 in a
new  prototype  store.  Such  expenditures  consist  primarily of  approximately
$1,000,000 to $1,200,000 for the initial store inventory,  a portion of which is
financed by vendor  trade  credit,  and  approximately  $450,000 to $500,000 for
store  fixtures  and  equipment.  In most  cases,  building  and  land  costs of
approximately  $1,450,000 to $1,750,000  per store are financed by  unaffiliated
developers  who lease the real estate to Pamida.  To expedite  the  construction
process,  Pamida  occasionally  may construct stores on sites which it acquires,
with  the  expectation  that it  subsequently  will  enter  into  sale-leaseback
transactions with respect to such stores with unaffiliated investors.

     SALES AND MERCHANDISING.

     Pamida's  merchandising  policy is to provide  customers  with reliable and
convenient  family  shopping  and to feature  nationally  advertised  brand-name
products as well as some private-label  merchandise at attractive prices. Pamida
operates its stores on a self-service,  primarily  cash-and-carry basis and runs
weekly advertised  promotions throughout the year. All of Pamida's stores accept
bank credit  cards,  which  accounted  for 14.8% of total store sales during the
fiscal year ended February 1, 1998.

     Pamida's typical customers are  price-conscious  families across the income
spectrum.  To effectively  serve such customers,  the Company's  stores are open
seven days a week for an average of at least 75 hours per week.

     Pamida's two basic merchandise  divisions are softlines and hardlines.  The
softlines  division includes mens',  womens',  childrens' and infants' clothing,
footwear,  accessories and jewelry.  The hardlines division includes  categories
such as health and beauty aids,  automotive  accessories,  housewares,  cleaning
supplies,  hardware,  paint, sporting goods, toys, stationery,  small appliances
and electronic items, videos, compact discs and tapes, lawn and garden supplies,
linens and other domestics, cameras and accessories,  pet supplies,  consumables
and candy items.

     The Company  currently  owns and  operates  pharmacies  in 44 of its larger
stores,  and eight of Pamida's  other  stores  contain  prescription  pharmacies
leased to and operated by independent pharmacists. The pharmacies have proved to
be effective  in building  customer  loyalty and  attracting  customers  who are
likely to  purchase  other  items in  addition  to  prescription  drugs.  Pamida
intends,  subject to  regulatory  and personnel  considerations  and where space
permits,  to include a pharmacy in each of its new  prototype  stores and to add
pharmacies to existing stores.

     During the fiscal  year ended  February  1, 1998,  the  hardlines  division
accounted  for  approximately  72% of Pamida's  total  sales,  while the apparel
division and the pharmacies accounted for 22% and 6%, respectively,  of Pamida's
total sales.

     Among the methods that the Company  employs to build  customer  loyalty and
satisfaction are weekly  advertised  specials,  competitive  pricing,  clean and
orderly stores,  friendly well-trained  personnel, a liberal return policy and a
wide variety of special  customer  services (such as wheelchairs for the elderly
and  handicapped,  restroom  facilities and water  fountains,  seating  benches,
speedy  check-out  lanes and  expedited  check cashing and raincheck and layaway
processing)  offered  under various  customer-oriented  themes such as "Hometown
Values",  "We Care" and "We're  Listening".  Pamida places  special  emphasis on
maintaining  a  strong  in-stock   position  in  all   merchandise   categories,
particularly with respect to advertised items.

     Pamida's business,  like that of most other general merchandise  retailers,
is seasonal.  First quarter sales (February  through April) are lower than sales
during the other three fiscal  quarters,  while fourth  quarter sales  (November
through January) in recent years have increased to approximately 29% of the full
year's  sales  and  normally  involve  a greater  proportion  of  higher  margin
merchandise.


     ADVERTISING AND PROMOTION.

     The Company's  extensive  advertising  primarily  utilizes  colorful weekly
circulars  developed  by  a  centralized   advertising  department  at  Pamida's
headquarters.  Such  circulars  advertise  brand-name  and other  merchandise at
significant  price  reductions and are inserted into local  newspapers or mailed
directly to customers.  Pamida also uses local shoppers  publications and coupon
books.  During  fiscal 1998,  Pamida  spent  approximately  $10,468,000  (net of
promotional  allowances  provided by vendors) on advertising,  which represented
approximately 1.6% of fiscal 1998 sales.

     PURCHASING AND DISTRIBUTION.

     Pamida  maintains a centralized  purchasing and store planning staff at its
executive offices. The merchandising department includes two general merchandise
managers,  five  hardlines  divisional  merchandise  managers and three  apparel
divisional  merchandise  managers.  Each of the divisional  merchandise managers
supervises  from five to seven  buyers.  Members  of the  Company's  experienced
buying  staff  regularly  attend  major trade  shows,  visit both  domestic  and
overseas  markets  and  meet  with  vendor   representatives  at  the  Company's
headquarters.

     The  merchandise  in the  Company's  stores is  purchased  from over  3,000
primary  manufacturers  and suppliers and numerous  other  vendors.  Centralized
purchasing  enables Pamida to more  effectively  control the cost of merchandise
and to take advantage of promotional  programs and volume  discounts  offered by
certain vendors.  The Company  continuously seeks to optimize merchandise costs,
including  promotional  allowances  offered by its  suppliers.  Pamida  also has
centralized the management of returned merchandise, which enables the Company to
most  effectively  secure  vendor  credits  and  refunds  with  respect  to such
merchandise.

     The Company's  point-of-sale  data capture  equipment located in its stores
provides  current  information  to  Pamida's  buyers to assist  them in managing
inventories,   effecting   prompt   reorders  of  popular   items,   eliminating
slow-selling merchandise and reducing markdowns.

     Seaway  Importing  Company,  a  wholly-owned  subsidiary  of Pamida,  Inc.,
imports a wide variety of merchandise,  including  sporting goods, pet supplies,
toys, electronic items, apparel, hair care items, painting supplies,  automotive
items and hardware, for sale in Pamida's stores.

     During  fiscal  1998,   approximately  79%  of  Pamida's   merchandise  was
distributed to the stores through Pamida's own distribution  centers,  while the
remaining  merchandise was supplied  directly to the stores by  manufacturers or
distributors.

     COMPETITION.

     The  general  merchandise  retail  business  is  highly  competitive.   The
Company's stores  generally  compete with other general  merchandise  retailers,
supermarkets,  drug and specialty stores,  mail order and catalog merchants and,
in some communities, department stores.. Competitors consist both of independent
stores and of regional and  national  chains,  some of which have  substantially
greater  resources than the Company.  The type and degree of competition and the
number of competitors which Pamida's stores face vary significantly by market.

     Pamida  believes that the  principal  areas of  competition  in the general
merchandise retail industry are store location,  price,  merchandise  selection,
quality and customer  service,  although  numerous other factors also affect the
competitive position of any particular store. Among the methods that the Company
employs  to build  customer  loyalty  and  satisfaction  are  weekly  advertised
specials,  reliable in-stocks,  competitive  pricing,  clean and orderly stores,
friendly well-trained  personnel,  a liberal return policy and a wide variety of
special customer  services offered under themes such as "Hometown  Values",  "We
Care" and "We're Listening".

     Pamida stores generally are located in small towns,  normally county seats,
where  there  is  no  direct  local   competition  from  another  major  general
merchandise  retailer and which may be either too small to support more than one
major general  merchandise  retailer  (thereby  creating a potential  barrier to
entry by a major  competitor) or too small to attract  competitors  whose stores
generally are designed to serve larger  populations.  The Company believes that,
in terms of sales, it is the leading general merchandise retailer in over 77% of
the communities in which its stores are located.

     At February 1, 1998, 115 of Pamida's 148 stores were located in communities
in which  there  was no  direct  local  competition  from  other  major  general
merchandise retailers. As of that date, Kmart, Alco, Wal-Mart, Target and ShopKo
had stores in 16, 11, 10, 2 and 1 communities, respectively, where Pamida stores
are located;  however,  because some of these  communities have more than one of
such competitors,  only 33 Pamida stores face direct local competition from such
retail chains. In recent years the Company's business strategy has been to focus
its store expansion  program on communities with less likelihood of the entry of
a new major  competitor,  but there can be no assurance that in the future major
competitors will not open additional stores in the Company's markets.

     Merchandise  prices  generally are  established on a zone basis at Pamida's
executive offices, although store managers are given discretion to adjust prices
of key items to meet local  competition  and to match a competitor's  advertised
prices.  Zone pricing allows the Company to establish prices at different levels
in different trade territories, based primarily on competitive conditions within
such territories,  rather than having a uniform pricing structure throughout the
entire  chain.   Pamida  conducts  a  continuous  program  of  competitor  price
comparisons that enables the Company to make merchandise price adjustments, when
necessary, to assure that the Company maintains a competitive position.

     EMPLOYEES.

     As of February 1, 1998, Pamida had approximately  5,600 employees,  of whom
approximately  2,700  were  full-time  and 2,900 were  part-time.  The number of
employees varies on a seasonal basis.  Pamida's employees are not represented by
a labor union,  and the Company  believes that its relations  with its employees
are good.

     At  February  1, 1998,  the  average  length of  service  of the  Company's
management staff was as follows:


                                                                    Average
                                                                     Years
                                                        Number     of Service
                                                        ------     ----------
            Top Management                                 2          16.2
            Senior Vice Presidents and Vice Presidents    18           7.1
            District Managers                             12          20.5
            Pharmacy District Supervisors                  4           5.3
            Store Managers                               148          11.4
            Pharmacy Managers                             44           3.4


     Pamida's human resources  department is responsible for company-wide salary
and wage administration, as well as all benefits. The human resources department
works closely with store  operations in the  development and  administration  of
Pamida's  store-level  employee training  programs.  In addition,  Pamida has an
ongoing program for the development of management personnel to fill positions in
all facets of the Company's  operations and makes a concerted effort to identify
and train potential successors for all of its key middle and senior managers.

ITEM 2.  PROPERTIES.

     At February 1, 1998, the Company owned 19 of its 148 store buildings, while
its remaining 129 stores operated in leased premises.  A substantial majority of
the Company's leases have renewal options,  with approximately 53% of the leases
having  unexpired  current  terms of five  years or more.  The  following  table
provides  information  relating to the  remaining  lease terms for the Company's
leased stores at February 1, 1998:

            Leases the Fiscal             Number of Leased Stores
           Year Ending During(1)                  2/01/98
           ---------------------          -----------------------
                   1999                             13
                   2000                             24
                   2001                              5
                   2002                              8
                   2003                              6
                Thereafter                          73
                                                   ---
                   Total                           129
                                                   ===

(1) Includes renewal options.

     Pamida's  management  believes that the physical condition of the Company's
stores  generally is very good.  All of the  Company's  stores are  continuously
updated to conform to Pamida's operating and merchandising standards.

     The Company's general offices and one of its three distribution centers are
located in a 215,000  square  foot  building  in Omaha,  Nebraska,  owned by the
Company.  This facility contains  approximately 135,000 square feet of warehouse
space and approximately 80,000 square feet of office space.

     Pamida's   primary   distribution   center   is  a  336,000   square   foot
"flow-through"   facility   situated  on  a  22-acre  tract  of  land  in  Omaha
approximately  one mile  from the  distribution  center  described  above.  This
facility,  which is owned by Pamida, serves primarily as a redistribution center
for bulk  shipments  and  promotional  merchandise  on which cost savings can be
realized through  quantity  purchasing.  Pamida also owns an additional  10-acre
tract of land  adjacent to such  distribution  center  which  would  permit that
facility to be further expanded by almost 60%.

     In July 1997,  the Company began  operations  in a new 200,000  square foot
distribution center in Lebanon,  Indiana. The facility,  which is leased through
April 2007,  redistributes bulk shipments and promotional  merchandise to stores
in the Company's  eastern sales  districts.  Future expansion of the facility is
being  considered.  This  distribution  facility  replaced a 100,000 square foot
warehouse  facility  previously  operated  by  the  Company  in  the  Milwaukee,
Wisconsin area.

     Pamida also has a warehouse facility in Omaha which contains  approximately
41,000 square feet of space and is located immediately adjacent to the Company's
general  offices.  This  warehouse,  which is owned by  Pamida,  is used for the
processing  of  merchandise  to be returned  to vendors  and by the  advertising
department in connection with its printing operations.

     In  addition  to its retail  stores,  distribution  centers  and  warehouse
facility,  Pamida's  tangible  assets include  inventories,  warehouse and store
fixtures  and  equipment,   merchandise  handling  equipment,  office  and  data
processing equipment, motor vehicles and an airplane.

ITEM 3.  LEGAL PROCEEDINGS.

     Pamida is a party to a number of lawsuits  incidental to its business,  the
outcome of which,  both  individually  and in the aggregate,  is not expected to
have  a  material  adverse  effect  on the  Company's  operations  or  financial
condition.

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

         (a)     A special  meeting  of stockholders  (the "Special Meeting") of
                 Holdings was held on November 14, 1997.

         (b)     The meeting did not involve the election of directors.

         (c)(1)  Votes were cast at the Special Meeting with respect to approval
                 of the Note Amendment  Agreement No.3 between  Holdings and 399
                 Venture  Partners,  Inc.  and  the  transactions   contemplated
                 thereby as follows:

                         For:   3,792,221

                         Against:  12,832

                         Abstain:   3,700

                 There were broker nonvotes as to 858,928 shares on this matter.
                 This matter received sufficient votes to pass.

         (2)     Votes were cast at the Special Meeting with respect to approval
                 of an amendment to the Restated Certificate of Incorporation of
                 Holdings to change and reclassify all of the outstanding shares
                 of Preferred  Stock of Holdings  into shares of Common Stock of
                 Holdings as follows:

                         For:   4,447,649

                         Against: 217,032

                         Abstain:   2,500

                 There were  broker  nonvotes  as to 500 shares on this  matter.
                 This matter received sufficient votes to pass.

         (3)     Votes were cast at the Annual  Meeting with respect to approval
                 of an amendment to the Restated Certificate of Incorporation of
                 Holdings to increase the number of authorized  shares of Common
                 Stock of Holdings and  correspondingly  adjust the total number
                 of shares of stock  which  Holdings is  authorized  to issue as
                 follows:

                         For:   4,444,149

                         Against: 222,832

                         Abstain:     200

                 There were  broker  nonvotes  as to 500 shares on this  matter.
                 This matter received sufficient votes to pass.

         (4)     Votes were cast at the Special Meeting with respect to approval
                 of an amendment to the Restated Certificate of Incorporation of
                 Holdings  to  increase  the  number  of  authorized  shares  of
                 Nonvoting Common Stock of Holdings and  correspondingly  adjust
                 the  total  number  of  shares  of  stock  which   Holdings  is
                 authorized to issue as follows:

                         For:   4,431,349

                         Against: 234,832

                         Abstain:   1,200

                 There were  broker  nonvotes  as to 300 shares on this  matter.
                 This matter received sufficient votes to pass.

         (5)     Votes were cast at the Special Meeting with respect to approval
                 of an amendment to the Restated Certificate of Incorporation of
                 Holdings to amend the conversion  terms of the Nonvoting Common
                 Stock of Holdings and delete  certain  obsolete  provisions  as
                 follows:

                         For:   3,792,021

                         Against:  15,332

                         Abstain:   1,200

                 There were broker nonvotes as to 859,128 shares on this matter.
                  This matter received sufficient votes to pass.

         (6)     Votes  were  cast  at the  Special   Meeting  with   respect to
                 approval  of   amendments  to  the  Restated   Certificate   of
                 Incorporation  of Holdings  to reduce the number of  authorized
                 shares  of  Junior  Cumulative  Preferred  Stock  of  Holdings,
                 correspondingly  decrease  the total  number of shares of stock
                 which  Holdings  is  authorized  to issue,  and delete  certain
                 obsolete provisions as follows:

                         For:   3,797,320

                         Against:  11,233

                         Abstain:       0

                 There were broker nonvotes as to 859,128 shares on this matter.
                 This matter received sufficient votes to pass.

         (7)     Votes were cast at the Special Meeting with respect to approval
                 of the  issuance  of shares of Common  Stock of Holdings to 399
                 Venture  Partners,   Inc.  or  its  assignee  upon  the  future
                 conversion  of shares of  Nonvoting  Common  Stock of  Holdings
                 issued to 399 Venture Partners, Inc. as follows:

                         For:   3,778,861

                         Against:  17,772

                         Abstain:   1,200

                 There were broker nonvotes as to 869,848 shares on this matter.
                 This matter received sufficient votes to pass.

     (d)         Not Applicable.

                                      * * *

     EXECUTIVE OFFICERS OF THE REGISTRANT.

     The present executive  officers of Holdings are Steven S. Fishman (Chairman
of the  Board,  President  and  Chief  Executive  Officer),  Frank  A.  Washburn
(Executive Vice President, Chief Operating Officer and Secretary), and George R.
Mihalko (Senior Vice President, Chief Financial Officer, Treasurer and Assistant
Secretary).  Information  concerning  such  executive  officers  appears  in the
following paragraphs:

     Mr. Fishman, age 47, has served as President and Chief Executive Officer of
Holdings  and  Pamida,  Inc.  since  April 1993 and as  Chairman of the Board of
Holdings  and Pamida,  Inc.  since  August  1993.  From 1988 to March 1993,  Mr.
Fishman was  employed  by Caldor,  Inc.  as Senior  Vice  President  and General
Merchandise Manager-Homelines. Mr. Fishman has been a director of Holdings since
1993 and also is a director of Pamida, Inc.

     Mr. Washburn, age 49, has served as Chief Operating Officer of Holdings and
Pamida,  Inc.  since March 1997,  Executive  Vice  President  of Holdings  since
September 1995 and Executive Vice President of Pamida, Inc. since February 1995.
Mr.  Washburn  previously  served as Senior Vice President - Human  Resources of
Pamida,  Inc.  from  1993 to 1995 and as Vice  President  - Human  Resources  of
Pamida,  Inc.  from 1987 to 1993.  Mr.  Washburn  also  serves as  Secretary  of
Holdings and Pamida, Inc. Mr. Washburn joined Pamida's  predecessor in 1965. Mr.
Washburn  has been a director of  Holdings  since 1995 and also is a director of
Pamida, Inc.

     Mr. Mihalko,  age 43, has served as Senior Vice President,  Chief Financial
Officer,  Treasurer and Assistant  Secretary of Holdings and Pamida,  Inc. since
September 1995.  From February 1993 to September 1995,  Mr. Mihalko was employed
by Pier 1 Imports,  Inc.  as Vice  President  and  Treasurer.  From July 1990 to
February  1993,  Mr.  Mihalko was employed by  Burlington  Northern  Railroad as
Assistant Treasurer.

     The  executive  officers of Holdings may be removed  from their  respective
positions  as such  officers at any time by the Board of  Directors of Holdings,
subject to any rights which they may have under  employment  agreements with the
Company.

                                     PART II

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

     The Common  Stock of  Holdings is listed and traded on the  American  Stock
Exchange.

     The high and low sales  prices  for the  Common  Stock of  Holdings  on the
American Stock Exchange for fiscal 1998 and fiscal 1997 are as follows:

               Fiscal 1998:                  High           Low
               ------------                  ----           ---
               4th Quarter                  6  1/8         4 1/4
               3rd Quarter                  6  7/16        4 1/8
               2nd Quarter                  4  1/8         2 3/4
               1st Quarter                  3  1/2         2


               Fiscal 1997:                  High           Low
               ------------                  ----           ---
               4th Quarter                  2  5/16        1 1/2
               3rd Quarter                  2  3/8         1 5/8
               2nd Quarter                  3  1/4         2 1/8
               1st Quarter                  3  1/4         2 1/8

     As of March 23, 1998 there were 281 record  holders of the Common  Stock of
Holdings.

     There is no market for the Nonvoting Common Stock of Holdings, all of which
presently  is owned by 399 Venture  Partners,  Inc.,  an  indirect  wholly-owned
subsidiary of Citicorp.

     Holdings has never  declared or paid any cash dividends on its Common Stock
or Nonvoting  Common Stock and does not intend to pay any such  dividends in the
foreseeable  future.  The  obligations  of  Pamida,  Inc.  under  certain of its
financing  arrangements are guaranteed by Holdings.  Such financing arrangements
presently  prohibit  the payment of dividends by Holdings on its Common Stock or
Nonvoting  Common Stock and also  significantly  restrict the ability of Pamida,
Inc. to pay dividends or make other distributions to Holdings.


ITEM 6.  SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
                      SELECTED CONSOLIDATED FINANCIAL DATA
   (AMOUNTS IN THOUSANDS - EXCEPT PER SHARE, NUMBER OF SHARES AND OTHER DATA)


                                                                                Fiscal Year Ended
                                                        -----------------------------------------------------------
<S>                                                     <C>             <C>             <C>             <C>             <C>        
                                                         February 1,    February 2,     January 28,     January 29,     January 30,
                                                             1998          1997 (1)         1996            1995            1994
                                                        -----------     -----------     -----------     -----------     -----------
INCOME STATEMENT DATA:
Sales ..............................................    $   657,017     $   633,189     $   736,315     $   711,019     $   656,910

Gross profit .......................................        161,935         154,090         177,688         177,367         158,906
Selling, general and
  administrative expenses ..........................        129,031         125,105         151,096         143,585         133,921
                                                        -----------     -----------     -----------     -----------     -----------
Operating income ...................................         32,904          28,985          26,592          33,782          24,985
Interest expense ...................................         29,618          29,781          29,526          27,367          26,588
Long-lived asset write-off .........................              -               -          78,551               -               -
Store closing costs ................................              -               -          21,397               -               -

Income (loss) before provision for income
  taxes and extraordinary item .....................          3,286            (796)       (102,882)          6,415          (1,603)
Income tax (benefit) provision .....................              -               -          (7,863)          3,500             427
                                                        -----------     -----------     -----------     -----------     -----------

Income (loss) before extraordinary item ............          3,286            (796)        (95,019)          2,915          (2,030)
Extraordinary item .................................          1,735               -             371               -          (4,943)
                                                        -----------     -----------     -----------     -----------     -----------

Net income (loss) ..................................          5,021            (796)        (94,648)          2,915          (6,973)
Effect of preferred stock reclassification .........            756               -               -               -               -
Less preferred dividends
  and discount amortization ........................           (407)           (391)           (362)           (361)           (359)
                                                        -----------     -----------     -----------     -----------     -----------

Net income (loss) available
  for common shares ................................    $     5,370     $    (1,187)    $   (95,010)    $     2,554     $    (7,332)
                                                        ===========     ===========     ===========     ===========     ===========

Weighted average number of basic shares
  outstanding ......................................      5,843,441       5,004,942       5,002,853       4,999,984       4,999,984
Weighted average number of diluted shares
  outstanding ......................................      5,875,463       5,004,942       5,002,853       5,039,684       4,999,984

  Basic net income (loss) per share:
    Income (loss) before extraordinary item..           $       .62     $      (.24)    $    (19.07)    $       .51     $      (.48)
    Extraordinary item ......................                   .30               -             .08               -            (.99)
                                                        -----------     -----------     -----------     -----------     -----------
    Basic income (loss).......................          $       .92     $      (.24)    $    (18.99)    $       .51     $     (1.47)
                                                        ===========     ===========     ===========     ===========     ===========
  Diluted net income (loss) per share:
    Income (loss) before extraordinary item....         $       .62     $      (.24)    $    (19.07)    $       .51     $      (.48)
    Extraordinary item.........................                 .29               -             .08               -            (.99)
                                                        -----------     -----------     -----------     -----------     -----------
    Diluted income (loss)......................         $       .91     $      (.24)    $    (18.99)    $       .51     $     (1.47)
                                                        ===========     ===========     ===========     ===========     ===========
BALANCE SHEET DATA:
  Working capital..............................         $    37,421     $    28,673     $    34,082     $    46,725     $    41,323
  Total assets.................................             260,081         269,188         258,525         354,367         314,621
  Long-term debt...............................             140,289         168,000         163,746         162,505         160,315
  Obligations under capital leases.............              32,156          33,999          36,559          43,050          35,618
  Redeemable preferred stock....................                  -           1,875           1,826           1,779           1,734
  Common shareholders' (deficit) equity.........            (52,275)        (87,303)        (86,116)          8,876           6,322

OTHER DATA:
  Team members..................................              5,600           5,700           7,200           7,200           6,100
  Number of stores..............................                148             148             184             184             173
  Retail square feet (in millions)..............               4.41            4.35            5.22            5.09            4.68

(1)  Represents a 53-week year.
</TABLE>

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

                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                          (DOLLAR AMOUNTS IN THOUSANDS)


YEAR ENDED FEBRUARY 1, 1998 COMPARED TO YEAR ENDED FEBRUARY 2, 1997

     SALES - Total sales  during the 52-week  fiscal  1998 period  increased  by
$23,828, or 3.8%, from the 53-week fiscal 1997 period. On a 52 to 52-week basis,
total net sales  increased  by 5.2%.  During  fiscal 1998,  sales in  comparable
stores increased by $24,135, or 4.0%.

     During fiscal 1998,  the Company  opened three new stores,  of which one is
located in a new market and two were  relocations;  the Company  also closed one
store  (which  will be  replaced  during  fiscal 1999 by a new store in the same
market),  resulting  in a net increase in selling area during the fiscal year of
approximately  61,000 square feet to a total of  approximately  4,408,000 square
feet.

     The Company  experienced  sales  increases in most  merchandise  categories
during  fiscal  1998.  The  most  significant  increases  occurred  in  pharmacy
prescriptions,  housewares,  toys, athletic shoes and team sports apparel. Other
categories experiencing gains were stationery, sporting goods, appliances, paper
and  cleaning  supplies and pets.  The Company  experienced  sales  decreases in
several categories.  The largest dollar decreases were in the automotive,  mens'
fashion apparel, jewelry and watches and juniors' apparel categories.

     GROSS PROFIT - Gross profit for the 52-week fiscal 1998 period increased by
$7,845, or 5.1%,  compared to the 53-week fiscal 1997 period. As a percentage of
sales,  gross profit  improved to 24.6% from 24.3%.  The  Company's  merchandise
gross  margin as a  percentage  of sales  decreased to 27.6% in fiscal 1998 from
27.8% in fiscal 1997. The decrease in merchandise  gross margin percent of sales
was offset by substantial  expense  reductions in the warehouse and distribution
areas  made  possible  by  operating  efficiencies  gained  largely  from  a new
warehouse  management  system  implemented  during fiscal 1997. During the prior
fiscal year, the Company incurred higher than normal labor cost in the warehouse
and  distribution  areas due to  implementation  issues related to the warehouse
management  system.  Total warehouse and distribution  costs amounted to 2.8% of
sales compared to 3.3% last year.

     SELLING,  GENERAL AND  ADMINISTRATIVE  (SG&A) expense  increased $3,926, or
3.1%,  to $129,031 in fiscal 1998 from  $125,105 in fiscal 1997. As a percentage
of sales,  SG&A  expense  decreased  to 19.6% from 19.8% last year.  Most of the
total net  increase  in SG&A  expense  for the year was  attributable  to higher
corporate  general and  administrative  expenses,  primarily  involving  planned
increases in payroll and incentive compensation expenses.  Store occupancy costs
increased by $1,030,  but remained at 3.9% as a percentage of net sales for both
fiscal 1998 and 1997.  Store payroll costs and  controllable  costs decreased by
$391 and $163,  respectively,  during fiscal 1998 as compared to last year. As a
percentage of net sales,  store payroll costs and  controllable  costs decreased
from 8.0% to 7.7% and 3.0% to 2.9% for the fiscal  periods  ended 1998 and 1997,
respectively.

     INTEREST  expense  decreased by $163, or 0.5%,  for fiscal 1998 compared to
fiscal 1997. As described in Note B to the financial statements, the decrease in
interest  expense  for fiscal  1998 was  attributable  to the payment of certain
promissory  notes of the Company  with common  stock in November  1997,  thereby
relieving the Company of the quarterly compounding interest obligation which had
previously been paid-in-kind. That decrease was offset in part by an increase in
interest expense of approximately $900 related to higher outstanding balances on
the  revolving  line of  credit  resulting  from  higher  investments  in  basic
inventory  during the year as well as the  funding  of certain of the  Company's
information systems initiatives.

     INCOME TAX PROVISION - The Company's loss  carryforwards from store closing
charges  recorded in fiscal 1996 were utilized  during fiscal 1998 to completely
offset  income  taxes from  normal  operating  activities  of the Company and to
reduce  income  taxes  related  to  the  Note  repayment  and  preferred   stock
reclassification  transactions  which are  described in Note B to the  financial
statements.  The Company expects that operations in future periods will be taxed
at a normal  tax rate.  No income tax  benefit  on losses  for  fiscal  1997 was
recorded as the Company could not establish,  as of fiscal year end 1997, with a
reasonable degree of certainty, the potential utilization of loss carryforwards.

YEAR ENDED FEBRUARY 2, 1997 COMPARED TO YEAR ENDED JANUARY 28, 1996

     SALES - As discussed  in Note Q to the  financial  statements,  the Company
closed  forty  stores  at the end of  fiscal  1996  in  unprofitable  or  highly
competitive  markets  which did not fit the  Company's  niche  market  strategy.
Consequently,  the  Company  experienced  a planned  decrease in total sales for
fiscal 1997 of $103,126 or 14.0%  compared to fiscal 1996 due  primarily  to the
reduced  number of stores.  During  fiscal  1997 the  Company  opened  eight new
prototype  stores,  of  which  six are  located  in new  markets  and  two  were
relocations;  the Company also closed two stores, resulting in a net increase in
selling area during the fiscal year of  approximately  216,000  square feet (not
including  changes  relating  to the forty  stores  closed as of fiscal year end
1996) to a total of 4,348,000 square feet. As of February 2, 1997, the Company's
store base  included 35 of the  Company's  most recent  store  prototype,  which
represented 28.7% of the Company's total selling square feet.

     Comparable  store sales during the 53-week fiscal 1997 period  decreased by
$8,893 or 1.5% from the 52-week fiscal 1996 period.  Comparable store sales on a
53-week to 53-week basis  decreased by 2.6%.  Sales were  affected  primarily by
slowed warehouse  distributions to stores as a result of the implementation of a
new  warehouse  inventory  management  system  initiated in the first quarter of
fiscal 1997.  The slowed  distributions  caused a  deterioration  of merchandise
in-stock  positions in most of the  Company's  stores,  resulting in lost sales.
While  implementation  of the warehouse  system was largely  completed by August
1996, and in-stock positions at the stores improved  thereafter,  sales remained
below management  expectations due to reduced customer traffic continuing in the
third and fourth  quarters.  Comparable  sales also were affected during much of
the year by low-margin  clearance  sales in fiscal 1996 which were not necessary
at the  same  level in  fiscal  1997.  However,  beginning  late in the  holiday
shopping  season and  continuing  through fiscal year end, sales improved as the
Company  demonstrated to customers its improved in-stock position in all product
categories.

     The Company  experienced  substantial  comparable  store sales increases in
fiscal 1997 in several merchandise  categories,  the most dramatic of which were
in the pharmacy prescription,  junior apparel,  grocery and ready-to-wear areas.
Comparable  store sales gains also were  generated in the hosiery,  team sports,
camera,  stationery,  health aids and bath categories.  The Company  experienced
comparable  store sales  decreases  in several  categories.  The largest  dollar
decreases  on a  comparable  store  basis were in the  electronics,  automotive,
misses bottoms, men's shoes, electrical and appliance areas. Management believes
that subtle  adjustments made to the Company's  softlines strategy at the end of
fiscal 1996 to meet customer demand for a deeper  selection of basic apparel had
a positive impact on sales and margins in softlines during fiscal 1997.

     GROSS PROFIT - Gross profit  dollars were affected by the reduced number of
stores in operation during fiscal 1997 as compared to fiscal 1996. The Company's
merchandise  gross profit as a percentage  of sales  improved to 27.8% in fiscal
1997 from  26.8% in fiscal  1996.  However,  this  improvement  was  diluted  by
additional costs related to the  implementation  of the new warehouse  inventory
management  system  discussed  above.  Warehouse costs increased to $13,457 from
$11,066 the previous  year and increased as a percent of sales to 2.1% from 1.5%
the previous year. Delivery costs decreased to $7,637 in fiscal 1997 from $8,845
the  previous  year and  amounted to 1.2% of sales in both  years.  Accordingly,
gross  profit  decreased by $23,598,  or 13.3%,  to $154,090 in fiscal 1997 from
$177,688 in fiscal 1996 but, as a  percentage  of sales,  increased  to 24.3% in
fiscal 1997 from 24.1% in fiscal 1996.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSE Decreased $25,991, or 17.2%, to
$125,105 in fiscal 1997 from  $151,096 in fiscal 1996. As a percentage of sales,
selling,  general and administrative  expense decreased to 19.8% from 20.5% last
year.  This  reduction  was largely  attributable  to  reductions in store level
expenses. Store payroll, controllable and occupancy expenses accounted for 64.2%
of the total  decrease  in  selling,  general  and  administrative  expense  and
decreased  by  14.5%,  17.5%  and  13.9%,  respectively.  Selling,  general  and
administrative  expense  also was  positively  impacted by a 28.9%  reduction in
advertising  costs which  accounted for 18.2% of the gross  decrease in selling,
general and administrative  expense. All of these areas of expense were impacted
by the  elimination of costs related to the forty stores which were closed as of
the end of fiscal 1996.  Selling,  general and  administrative  expense also was
impacted by an 11.0%  decrease in  corporate  general and  administrative  costs
which  accounted  for 11.3% of the  gross  decreases  in  selling,  general  and
administrative  expense. The major components of this decrease were decreases in
the net costs of insurance,  professional  fees,  management bonuses and related
fringe benefits.

     Selling, general and administrative expense also was positively impacted by
the elimination of amortization  of goodwill and favorable  leasehold  interests
resulting  from the  write-off  of these  items in the fourth  quarter of fiscal
1996. The decreases in selling,  general and administrative  expense were offset
by a $1,246 reduction in other income which was attributable largely to one-time
gains realized in fiscal 1996,  primarily  from the sale of idle  transportation
company assets.

     INTEREST  expense  increased  marginally  by $255 or 0.9% for  fiscal  1997
compared to fiscal 1996.  The  increase in interest  expense for fiscal 1997 was
attributable  primarily to higher usage of the  revolving  line of credit and to
the  outstanding  promissory  notes  of  the  Company  which  require  quarterly
compounding  interest payments to be paid-in-kind.  These increases were largely
offset by decreased  interest related to lower average  outstanding  capitalized
lease obligations in fiscal 1997 compared to fiscal 1996.

     INCOME TAX PROVISION - No income tax benefit on losses for fiscal 1997 were
recorded  since the Company  could not  establish  with a  reasonable  degree of
certainty  the  potential  utilization  of certain tax loss carry  forwards from
prior year store closing charges. The effective tax rate in fiscal 1996 was 7.6%
and was impacted by the  non-deductible  amortization  and write-off of goodwill
and the reserves recorded to offset the deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company's  business is seasonal  with first  quarter  sales  (February
through  April)  being lower than sales during the other three  quarters,  while
fourth quarter sales (November  through January) have represented  approximately
29% of the full  year's  retail  sales in recent  years and  normally  involve a
greater proportion of higher margin sales.

     The Company has satisfied  its seasonal  liquidity  requirements  primarily
through a combination  of funds  provided from  operations  and from a revolving
credit  facility.  Funds  provided by operating  activities  totaled  $17,640 in
fiscal 1998, and funds used by operating  activities  totaled  $11,577 in fiscal
1997. Funds provided from operations totaled $4,967 in fiscal 1996. The positive
change in cash flow from  operating  activities  from fiscal 1997 to fiscal 1998
was  primarily  the result of  improved  operating  results,  a net  decrease in
inventory  and increases in operating  and tax  liabilities.  The change in cash
flow from operating activities from fiscal 1996 to fiscal 1997 was primarily the
result of planned net  increases in  inventory  and other  operating  assets and
decreases in accounts payable and other operating  liabilities.  These decreases
in cash flow were offset in part by changes in deferred income taxes.

     Effective  March 17, 1997, the term of Pamida,  Inc.'s  (Pamida)  committed
Loan and Security  Agreement (the  Agreement) was extended to March 2000 and the
maximum  borrowing  limit of the facility was increased to $95,000 from $70,000,
which had been the  limit  throughout  fiscal  1997.  Prior to March  17,  1997,
borrowings  under the Agreement bore interest at a rate which was .75% per annum
greater than the applicable  prime rate.  Effective  March 17, 1997,  borrowings
under the  Agreement  bear interest at a rate which is tied to prime rate or the
London Interbank  Offered Rate (LIBOR),  generally at Pamida's  discretion.  The
amounts Pamida is permitted to borrow are determined by a formula based upon the
amount of Pamida's  eligible  inventory from time to time.  Such  borrowings are
secured by security interests in all of the current assets (including inventory)
of Pamida and by liens on certain real estate  interests  and other  property of
Pamida.  The Company and two  subsidiaries of Pamida have guaranteed the payment
and performance of Pamida's  obligations  under the Loan and Security  Agreement
and have pledged some or all of their respective assets,  including the stock of
Pamida owned by the Company, to secure such guarantees.

     The  Agreement  contains   provisions   imposing  operating  and  financial
restrictions  on the Company.  Certain  provisions of the Agreement  require the
maintenance of specified  amounts of tangible net worth (as defined) and working
capital  and the  achievement  of  specified  minimum  amounts  of cash flow (as
defined).  Other  restrictions  in the  Agreement and those  provided  under the
Indenture  relating to the Senior  Subordinated  Notes will affect,  among other
things, the ability of Pamida to incur additional  indebtedness,  pay dividends,
repay  indebtedness  prior to its  stated  maturity,  create  liens,  enter into
leases,  sell  assets  or  engage  in  mergers  or  acquisitions,  make  capital
expenditures  and make  investments.  These covenants  currently have not had an
impact on the Company's  ability to fully utilize the revolving credit facility.
However,  certain of the covenants,  such as those which restrict the ability of
the Company to incur  indebtedness  or  encumber  its  property or which  impose
restrictions  on  or  otherwise  limit  the  Company's   ability  to  engage  in
sale-lease-back  transactions,  may at some future time prevent the Company from
pursuing its store expansion program at the rate that the Company desires.

     Obligations  under the  Agreement  were  $45,194  at  February  1, 1998 and
$57,115 at February 2, 1997.  As noted  above,  this  facility  expires in March
2000, and the Company intends to refinance any outstanding balance by such date.
Borrowings  under the Agreement are senior to the Senior  Subordinated  Notes of
the Company. The Company had long-term debt and obligations under capital leases
of $172,445 at February 1, 1998 and $201,999 at February 2, 1997.  The Company's
ability  to  satisfy  scheduled  principal  and  interest  payments  under  such
obligations in the ordinary  course of business is dependent  primarily upon the
sufficiency  of the  Company's  operating  cash flow.  At February 1, 1998,  the
Company was in compliance with all covenants  contained in its various financing
agreements.

     On December  18,  1992,  the  promissory  notes of the Company were amended
effective  as of  December 1, 1992 to provide  that,  until the  obligations  of
Pamida and the Company  under  certain of Pamida's  credit  agreements  had been
repaid,  the quarterly  interest payments on the promissory notes of the Company
were to be paid-in-kind. As discussed in Note B to the financial statements, the
Company repaid all of the  promissory  notes with common stock of the Company on
November 18, 1997.

     As  described  in  Note  B  to  the  financial   statements,   the  Company
reclassified all preferred stock into common stock effective  November 18, 1997.
Accordingly,  the Company has no remaining  obligations related to the preferred
stock as of the end of fiscal 1998.  Pamida paid the Company $315 in fiscal 1996
under a tax-sharing  agreement to enable the Company to pay quarterly  dividends
to its preferred  stockholders.  During fiscal 1996,  the Company  received $967
from Pamida under a  tax-sharing  agreement as a  reimbursement  for certain tax
benefits derived by Pamida. Such remittance, along with $18 from the exercise of
certain stock options, was used by the Company to redeem Subordinated Promissory
Notes as described in Note N to the financial statements,  to repay intercompany
balances totaling $29, and to pay quarterly  dividends on preferred stock. Since
the Company  conducts no operations  of its own,  prior to the November 18, 1997
reclassification  of the  preferred  stock,  the only  cash  requirement  of the
Company related to preferred  stock dividends in the aggregate  annual amount of
approximately $316; and Pamida was expressly permitted under its existing credit
facilities  to pay  dividends  to the  Company  to  fund  such  preferred  stock
dividends.  However, the General Corporation Law of the State of Delaware, under
which the Company and Pamida are  incorporated,  allows a corporation to declare
or pay a dividend  only from its surplus or from the current or the prior year's
earnings.  Due to the  retained  deficit  resulting  primarily  from  the  store
closings and the write-off of goodwill and other long-lived assets recognized in
the fourth quarter of fiscal 1996, the Company and Pamida did not declare or pay
any cash dividends in fiscal 1997.

     The Company made capital  expenditures of $6,654 in fiscal 1998 compared to
$4,947  during  fiscal 1997.  The Company also made  expenditures  of $3,848 and
$3,680 in fiscal 1998 and 1997,  respectively,  related to  information  systems
software.  The  Company  plans to open eight new stores in fiscal  1999 and will
consider additional opportunities for new store locations as they arise. Capital
expenditures  and  information  systems  software  costs are  expected  to total
approximately  $13,000  in  fiscal  1999.  The  Company  expects  to fund  these
expenditures from cash flow from its operations. The costs of buildings and land
for new store  locations  are  expected to be financed by  operating  or capital
leases with unaffiliated  landlords.  The Company's  expansion program also will
require  inventory of approximately  $1,000 to $1,200 for each new market store,
which the Company expects to finance through trade credit,  borrowings under the
Agreement and cash flow from operations.

     The 1997 changes to the Agreement,  along with expected improvements in the
Company's cash flow from operations,  should provide adequate  resources to meet
the  Company's  near term  liquidity  requirements.  On a long-term  basis,  the
Company's  expansion  will require  continued  investments  in store  locations,
distribution and  infrastructure  enhancements and working capital.  The Company
expects to continue to finance  some of these  investments  through  leases from
unaffiliated  landlords,  trade credit,  borrowings under the Agreement and cash
flow from operations but ultimately will need to explore  additional  sources of
funds which may include additional capital structure changes.  Currently,  it is
not possible for the Company to predict with any certainty  either the timing or
the availability of such additional financing.

YEAR 2000 COMPLIANCE

     The Company has  developed a  comprehensive  plan to mitigate the Company's
exposure to potential  problems  with its systems'  ability to properly  process
data beyond the calendar year 1999,  which is commonly  referred to as Year 2000
compliance.  The Company has completed implementation of several new systems and
is at various stages of  implementation  of others which replace legacy systems.
The Company plans to complete  installation of current  releases or upgrades for
all of these systems no later than July,  1999 to help ensure that these systems
will be Year 2000 compliant.  All of these systems have  substantially  improved
functionality  over the  Company's  legacy  systems which they replace and will,
therefore,  be capitalized.  Failure to implement such releases or upgrades,  or
the failure of the vendors of the aforementioned software to have eliminated the
potential Year 2000 issues within the software,  could  materially and adversely
affect the  Company's  operations  and financial  results.  The cost of directly
addressing  Year 2000  compliance for legacy systems which are not planned to be
replaced  by new  systems is being  charged to  expense as  incurred  and is not
expected to be material.

INFLATION

     The Company  uses the LIFO method of inventory  valuation in its  financial
statements;  as a result,  the cost of  merchandise  sold  approximates  current
costs.  The Company's  rental expense is generally  fixed and,  except for small
amounts of percentage  rents and rentals  adjusted by  cost-of-living  increases
tied to the Consumer  Price Index or interest  rates,  has not been  affected by
inflation.

FORWARD-LOOKING STATEMENTS

     This management's  discussion and analysis contains certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "1995  Act").  Such  statements  are made in good faith by the Company
pursuant to the safe-harbor provisions of the 1995 Act. In connection with these
safe-harbor  provisions,  this  management's  discussion  and analysis  contains
certain forward-looking  statements which reflect management's current views and
estimates  of  future  economic  circumstances,   industry  conditions,  company
performance,  Year 2000  compliance  and financial  results.  The statements are
based on many assumptions and factors  including sales results,  expense levels,
competition and interest rates as well as other risks and uncertainties inherent
in the Company's business, capital structure and the retail industry in general.
Any changes in these factors could result in  significantly  different  results.
The Company  further  cautions that the  forward-looking  information  contained
herein is not exhaustive or exclusive.  The Company does not undertake to update
any  forward-looking  statements  which  may be made  from time to time by or on
behalf of the Company.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
                          INDEPENDENT AUDITORS' REPORT



INDEPENDENT AUDITORS' REPORT

Board of Directors
Pamida Holdings Corporation
Omaha, Nebraska



     We have  audited the  accompanying  consolidated  balance  sheets of Pamida
Holdings Corporation and subsidiary as of February 1, 1998 and February 2, 1997,
and the related  consolidated  statements of  operations,  common  stockholders'
equity  and cash  flows  for  each of the  years  then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.  The  consolidated  statements of operations,  common  stockholders'
equity and cash flows of Pamida Holdings Corporation and subsidiary for the year
ended January 28, 1996,  were audited by other  auditors,  whose  report,  dated
March 26,  1996,  expressed  an  unqualified  opinion  on those  statements  and
included an  explanatory  paragraph  that described the adoption of Statement of
Financial  Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

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

     In our opinion,  such 1998 and 1997 financial statements present fairly, in
all material respects, the financial position of Pamida Holdings Corporation and
subsidiary as of February 1, 1998 and February 2, 1997, and the results of their
operations  and their cash flows for the years  then  ended in  conformity  with
generally accepted accounting principles.




/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Omaha, Nebraska
March 5, 1998


                        REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors
Pamida Holdings Corporation
Omaha, Nebraska

We have audited the accompanying  consolidated statements of operations,  common
stockholders'   equity  and  cash  flows  of  Pamida  Holdings  Corporation  and
Subsidiary for the year ended January 28, 1996.  These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the results of operations and cash flows of
Pamida Holdings  Corporation and Subsidiary for the year ended January 28, 1996,
in conformity with generally accepted accounting principles.

As discussed in Note P to the  consolidated  financial  statements,  the Company
adopted Statement of Financial  Accounting Standards No 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed of."


/s/ Coopers & Lybrand L.L.P.

Chicago, Illinois
March 26, 1996


<TABLE>
<CAPTION>
                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
              (DOLLAR AMOUNTS IN THOUSANDS - EXCEPT PER SHARE DATA)


                                                                            Fiscal Year Ended
                                                                   -------------------------------------
<S>                                                                <C>          <C>          <C>      
                                                                   February 1,  February 2,  January 28,
                                                                     1998         1997         1996
                                                                   (52 Weeks)   (53 Weeks)   (52 Weeks)
                                                                   ---------    ---------    ---------
Sales ..........................................................   $ 657,017    $ 633,189    $ 736,315
Cost of goods sold .............................................     495,082      479,099      558,627
                                                                   ---------    ---------    ---------
Gross profit ...................................................     161,935      154,090      177,688
                                                                   ---------    ---------    ---------
Expenses:
    Selling, general and administrative ........................     129,031      125,105      151,096
    Interest ...................................................      29,618       29,781       29,526
    Long-lived asset write-off .................................           -            -       78,551
    Store closing costs ........................................           -            -       21,397
                                                                   ---------    ---------    ---------
                                                                     158,649      154,886      280,570
                                                                   ---------    ---------    ---------
Income (loss) before provision for income
    taxes and extraordinary item ...............................       3,286         (796)    (102,882)
Income tax benefit .............................................           -            -       (7,863)
                                                                   ---------    ---------    ---------
Income (loss) before extraordinary item ........................       3,286         (796)     (95,019)
Extraordinary item .............................................       1,735            -          371
                                                                   ---------    ---------    ---------
Net income (loss) ..............................................       5,021         (796)     (94,648)
Effect of preferred stock reclassification .....................         756            -            -
Less provision for preferred dividends and discount amortization        (407)        (391)        (362)
                                                                   ---------    ---------    ---------
Net income (loss) available for common shares ..................   $   5,370    $  (1,187)   $ (95,010)
                                                                   =========    =========    =========

Basic income (loss) per share:
    Income (loss) before extraordinary item.....................   $     .62    $    (.24)   $   19.07)
    Extraordinary item..........................................         .30            -          .08
                                                                   ---------    ---------    ---------
    Basic income (loss).........................................   $     .92    $    (.24)   $  (18.99)
                                                                   =========    =========    =========

Diluted income (loss) per share:
    Income (loss) before extraordinary item.....................   $     .62    $    (.24)   $  (19.07)
    Extraordinary item..........................................         .29            -          .08
                                                                   ---------    ---------    ----------
    Diluted income (loss).......................................   $     .91    $    (.24)   $  (18.99)
                                                                   =========    =========    =========

See notes to consolidated financial statements.
</TABLE>

<TABLE>
<CAPTION>

                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
              (DOLLAR AMOUNTS IN THOUSANDS - EXCEPT PER SHARE DATA)
<S>                                                                                        <C>             <C>        
                                                                                           February 1,      February 2,
                                        ASSETS                                                1998             1997
                                                                                           -----------      -----------
Current assets:
    Cash................................................................................   $     6,816     $     6,973
    Accounts receivable, less allowance for doubtful accounts of $50 in both years......         8,384           6,919
    Merchandise inventories.............................................................       152,927         157,490
    Prepaid expenses....................................................................         2,838           2,993
    Property held for sale..............................................................             -           1,748
                                                                                           -----------     -----------
       Total current assets.............................................................       170,965         176,123
Property, buildings and equipment, net..................................................        40,812          42,403
Leased property under capital leases, less accumulated
    amortization of $15,387 and $14,604, respectively...................................        25,181          27,713
Deferred financing costs................................................................         2,755           3,176
Other assets............................................................................        20,368          19,773
                                                                                           -----------     -----------
                                                                                           $   260,081     $   269,188
                                                                                           ===========     ===========

                   LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
    Accounts payable....................................................................   $    47,687     $    54,245
    Loan and security agreement.........................................................        45,194          57,115
    Accrued compensation................................................................         5,768           3,860
    Accrued interest....................................................................         6,668           7,668
    Store closing reserve...............................................................         1,564           4,521
    Other accrued expenses..............................................................        12,227          10,112
    Income taxes - deferred and current payable.........................................        12,546           8,101
    Current maturities of long-term debt................................................            47              47
    Current obligations under capital leases............................................         1,843           1,781
                                                                                           -----------     -----------
       Total current liabilities........................................................       133,544         147,450
Long-term debt, less current maturities.................................................       140,289         168,000
Obligations under capital leases, less current obligations..............................        32,156          33,999
Reserve for dividends...................................................................             -             342
Other long-term liabilities.............................................................         6,367           4,825
Commitments and contingencies (Note O)..................................................             -               -
Preferred stock subject to mandatory redemption:
    16-1/4% senior cumulative preferred stock, $1 par value;
       514 shares authorized; 0 and 514 shares issued and outstanding...................             -             514
    14-1/4% junior cumulative preferred stock, $1 par value;
       1,627 and 6,986 shares authorized; 0 and 1,627 shares issued and outstanding;
       redemption amount of $0 and $1,627, less unamortized discount....................             -           1,361
Common stockholders' equity:
    Common stock, $.01 par value; 25,000,000 and 10,000,000 shares authorized; 5,970,439
       and 5,004,942 shares issued and outstanding......................................            60              50
    Nonvoting common stock, $.01 par value; 4,000,000 and 2,000,000 shares authorized;
       3,050,473 and 0 shares issued and outstanding....................................            30               -
    Additional paid-in capital..........................................................        30,586             968
    Accumulated deficit.................................................................       (82,951)        (88,321)
                                                                                           -----------     -----------
       Total common stockholders' deficit...............................................       (52,275)        (87,303)
                                                                                           -----------     -----------
                                                                                           $   260,081     $   269,188
                                                                                           ===========     ===========

See notes to consolidated financial statements.
</TABLE>

<TABLE>
<CAPTION>

                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
             CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
                          (DOLLAR AMOUNTS IN THOUSANDS)
<S>                                                        <C>           <C>          <C>           <C>      
                                                                                                     Retained
                                                                        Nonvoting     Additional     Earnings
                                                            Common       Common        Paid-in     (Accumulated
                                                            Stock        Stock         Capital       Deficit)
                                                          ---------     ---------     ---------     ---------
Balance at January 29, 1995.............................  $      50     $       -     $     950     $   7,876

  Net loss..............................................          -             -             -       (94,648)
  Amortization of discount on 14-1/4% 
     junior cumulative preferred........................          -             -             -           (47)
  Cash dividends to preferred stockholders..............          -             -             -          (315)
  Stock sold under incentive stock option plan..........          -             -            18             -
                                                          ---------     ---------     ---------     ---------
Balance at January 28, 1996.............................         50             -           968       (87,134)

  Net loss..............................................          -             -             -          (796)
  Amortization of discount on 14-1/4%
     junior cumulative preferred........................          -             -             -           (49)
  Accrued dividends for preferred stockholders                    -             -                        (342)
                                                          ---------     ---------     ---------     ---------
Balance at February 2, 1997.............................         50             -           968       (88,321)

  Net income............................................          -             -             _         5,021
  Amortization of discount on 14-1/4%
        junior cumulative preferred.....................          -             -             -           (38)
  Accrued dividends for preferred stockholders..........          -             -             -          (369)
  Reclassification of preferred stock into common stock.          3             -         1,811           756
  Payment of notes with common stock....................          7            30        20,236             -
  Gain on payment of notes held by Venture (net of tax).          -             -         7,571             -
                                                          ---------     ---------     ---------     ---------
Balance at February 1, 1998.............................  $      60     $      30     $  30,586     $ (82,951)
                                                          =========     =========     =========     =========

    See notes to consolidated financial statements.
</TABLE>

<TABLE>
<CAPTION>
                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (DOLLAR AMOUNTS IN THOUSANDS)

                                                                                Fiscal Year Ended
                                                                    -------------------------------------------
<S>                                                                      <C>             <C>             <C>   
                                                                    February 1,     February 2,     January 28,
                                                                       1998            1997            1996
                                                                    (52 Weeks)      (53 Weeks)      (52 Weeks)
                                                                    -----------     -----------     -----------
Cash flows from operating activities:
  Net income (loss)                                                 $     5,021     $      (796)    $   (94,648)
                                                                    -----------     -----------     -----------
    Adjustments to reconcile net income (loss) to net cash from
      operating activities:
      Depreciation and amortization...............................       12,593          11,658          15,345
      Provision (credit) for LIFO inventory valuation.............          606             874            (585)
      Provision (credit) for deferred income taxes................       (3,297)          3,305          (6,647)
      Noncash interest expense....................................        3,974           4,473           3,910
      Gain on disposal of assets..................................         (150)            (56)           (982)
      Deferred retirement benefits................................         (142)           (125)             13
      Extraordinary item..........................................       (1,735)              -            (371)
      Long-lived assets write-off.................................            -               -          78,551
      Store closing costs.........................................       (3,457)         (3,726)         21,397
      Decrease (increase) in merchandise inventories..............        3,957          (7,527)          4,532
      Increase in other operating assets..........................       (4,730)         (5,622)         (3,847)
      Decrease in accounts payable................................       (6,558)         (8,842)         (6,749)
      Increase (decrease) in income taxes payable.................        3,537          (3,250)         (4,607)
      Increase (decrease) in other operating liabilities..........        8,021          (1,943)           (345)
                                                                    -----------     -----------     -----------
    Total adjustments.............................................       12,619         (10,781)         99,615
                                                                    -----------     -----------     -----------
    Net cash from operating activities............................       17,640         (11,577)          4,967
                                                                    -----------     -----------     -----------
Cash flows from investing activities:
  Capital expenditures............................................       (6,654)         (4,947)         (9,265)
  Proceeds from disposal of assets................................        1,701             917           1,163
  Principal payments received on notes receivable.................           18              16              15
  Assets acquired for sale........................................            -            (391)              -
  Changes in constructed stores to be refinanced through lease
     financing....................................................        1,790          (5,845)         (4,412)
                                                                    -----------     -----------     -----------
    Net cash from investing activities............................       (3,145)        (10,250)        (12,499)
                                                                    -----------     -----------     -----------
Cash flows from financing activities:
  Borrowings (payments) under loan and security agreement, net....      (11,921)         25,527          10,986
  Principal payments on other long-term debt......................          (75)         (1,335)           (193)
  Dividends paid on preferred stock...............................            -               -            (315)
  Principal payments on promissory notes..........................            -               -            (641)
  Payments for deferred finance costs.............................         (225)            (54)            (13)
  Principal payments on capital lease obligations.................       (1,781)         (2,636)         (2,071)
  Fees related to payment of debt and reclasification 
    of preferred stock............................................         (650)              -                         -
  Proceeds from sale of stock.....................................            -               -              18
                                                                    -----------     -----------     -----------
    Net cash from financing activities............................      (14,652)         21,502           7,771
                                                                    -----------     -----------     -----------
  Net (decrease) increase in cash.................................         (157)           (325)            239
  Cash at beginning of year.......................................        6,973           7,298           7,059
                                                                    -----------     -----------     -----------
  Cash at end of year.............................................  $     6,816     $     6,973     $     7,298
                                                                    ===========     ===========     ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid (received) during the year for:
    Interest......................................................  $    25,834      $   24,804     $    25,691
    Income taxes:
      Payments to taxing authorities..............................          112             386           3,622
      Refunds received from taxing authorities....................       (3,952)           (442)           (231)
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
  Capital lease obligations incurred when the Company entered
     into lease agreements for new store facilities and equipment.  $         -     $        11     $       620
  Capital lease obligations terminated............................            -               -             154
  Amortization of discount on junior cumulative preferred stock
     recorded as a direct charge to retained earnings.............           38              49              47
  Payment of interest in kind by increasing the
     principal amount of the notes................................        3,561           4,141           3,702
  Provision for dividends payable.................................          369             342               -
  Common stock issued in payment of notes
     and reclassification of preferred stock......................        8,690               -               -
  Nonvoting common stock issued in payment of notes...............       27,454               -               -
  Notes paid with, and preferred stock reclassified into,
     common stock.................................................      (36,144)              -               -

See notes to consolidated financial statements.
</TABLE>

                   PAMIDA HOLDINGS CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLDIATED FINANCIAL STATEMENTS
             (DOLLAR AMOUNTS IN THOUSANDS - EXCEPT PER SHARE DATA)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Pamida Holdings Corporation (the "Company") was formed for the sole purpose
of acquiring  Pamida,  Inc.  ("Pamida")  through a merger in a leveraged buy-out
transaction which was consummated on July 29, 1986.

     CONSOLIDATION - The consolidated  financial  statements include the results
of  operations,  account  balances  and  cash  flows  of  the  Company  and  its
wholly-owned subsidiary,  Pamida, and of Seaway Importing Company ("Seaway") and
Pamida Transportation Company, wholly-owned subsidiaries of Pamida. All material
intercompany accounts and transactions have been eliminated in consolidation.

     FISCAL YEAR - All references in these financial  statements to fiscal years
are to the calendar year in which the fiscal year ends.

     LINE OF BUSINESS - Through Pamida,  the Company is engaged in the operation
of  general  merchandise  retail  stores in a  fifteen-state  Midwestern,  North
Central and Rocky Mountain area. Seaway imports primarily  seasonal  merchandise
for sale to Pamida. Pamida Transportation Company operated as a contract carrier
for Pamida until July 1995, at which time  independent  contractors were engaged
to provide all transportation needs of the Company. Because of the similarity in
nature of the Company's businesses,  the Company considers itself to be a single
business segment.

     REVENUE  RECOGNITION  -  Pamida  operates  its  stores  on a  self-service,
primarily  cash-and-carry basis. Because of the insignificance of sales returns,
revenue is recognized at the point-of-sale without allowance for returns.

     CASH FLOW  REPORTING - For  purposes of the  statement  of cash flows,  the
Company  considers all temporary cash  investments  purchased with a maturity of
three months or less to be cash equivalents. There were no temporary investments
at February 1, 1998 and February 2, 1997.

     MERCHANDISE  INVENTORIES - Substantially all of the Company's  inventory is
stated at the lower of cost (last-in, first-out) or market.

     PROPERTY,  BUILDINGS AND EQUIPMENT - Property,  buildings and equipment are
stated at cost and  depreciated on the  straight-line  method over the estimated
useful lives. Buildings and building improvements are generally depreciated over
8-40 years, while store,  warehouse and office equipment,  vehicles and aircraft
equipment are generally depreciated over 3-10 years.  Leasehold improvements are
depreciated  over the  life of the  lease or the  estimated  life of the  asset,
whichever is shorter.

     LEASED PROPERTY UNDER CAPITAL LEASES - Noncancellable  financing leases are
capitalized  at the  estimated  fair  value of the  leasehold  interest  and are
amortized on the straight-line method over the terms of the leases.

     LONG-LIVED  ASSETS  -  When  facts  and  circumstances  indicate  potential
impairment,  the Company evaluates the  recoverability of asset carrying values,
including  associated  goodwill,  using  estimates  of future  cash  flows  over
remaining  asset lives.  When  impairment is indicated,  any impairment  loss is
measured by the excess of carrying values over fair values.

     DEFERRED  FINANCING  COSTS AND  ORIGINAL  ISSUE  DEBT  DISCOUNT  - Deferred
financing  costs are being  amortized  using the  straight-line  method over the
terms of the issues which approximates the effective  interest method.  Original
issue debt discount is being amortized using the effective  interest method over
the terms of the issues.

     ADVERTISING  COSTS - Advertising costs are expensed as incurred and totaled
$10,468, $11,653 and $16,381 for fiscal years 1998, 1997 and 1996, respectively.

     PRE-OPENING  EXPENSES - Costs related to opening new stores are expensed as
incurred.

     STOCK-BASED  COMPENSATION  -  The  Company  accounts  for  its  stock-based
compensation  under the  provisions of Accounting  Principles  Board Opinion 25,
Accounting for Stock Issued to Employees (APB 25).

     EARNINGS PER SHARE - In February 1997, the Financial  Accounting  Standards
Board ("FASB") adopted Statement of Financial  Accounting Standards ("SFAS") No.
128,  "Earnings  per Share." SFAS 128 requires  dual  presentation  of basic and
diluted  earnings  per share for all  periods for which an income  statement  is
presented.  Basic  income  per  common  share is based on the  weighted  average
outstanding common shares during the respective period. Diluted income per share
is based on the weighted average outstanding common shares and the effect of all
dilutive  potential  common shares,  including  stock options.  All prior period
income per share data has been restated in accordance with SFAS 128.

     USE OF ESTIMATES - The  preparation  of financial  statements in conformity
with  generally  accepted  accounting  principles  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.

     NEW  ACCOUNTING  PRONOUNCEMENTS  - In June 1997,  the FASB adopted SFAS No.
130, "Reporting  Comprehensive Income", and No. 131, "Disclosures about Segments
of an Enterprise and Related  Information".  SFAS 130 establishes  standards for
reporting and display of  comprehensive  income and its components in a full set
of general  purpose  financial  statements.  This statement is effective for the
Company's fiscal 1999 financial  statements.  SFAS 131, also effective in fiscal
1999, redefines how operating segments are determined and requires disclosure of
certain  financial  and  descriptive  information  about a  company's  operating
segments.  The Company currently complies with most provisions of the statements
and any incremental disclosure required is expected to be minimal.

     RECLASSIFICATIONS  -  Certain  reclassifications  have  been  made to prior
years' financial statements to conform to the current year presentation.

B.  EXCHANGE  OF  DEBT  AND   PREFERRED   STOCK  FOR  COMMON  STOCK  AND RELATED
    EXTRAORDINARY ITEM

     On November 14, 1997,  the  stockholders  of the Company  approved  various
proposals  necessary to effect the payment of all of the  Company's  outstanding
Senior Promissory Notes,  Subordinated  Promissory Notes and Junior Subordinated
Promissory Notes (collectively, the "Notes") with common stock and to change and
reclassify all of the Company's outstanding preferred stock into common stock.

     In connection with these  transactions,  which became effective on November
18, 1997, the Company issued 965,497 shares of Common Stock and 3,050,473 shares
of Nonvoting  Common Stock.  The  Nonvoting  Common Stock was issued only to 399
Venture Partners, Inc. ("Venture"), an affiliate of Citicorp, and is convertible
into Common Stock on a  share-for-share  basis upon certain  conditions.  Common
Stock was issued to all other  holders of Notes and to all holders of  Preferred
Stock.

     The aggregate redemption value of the Preferred Stock at the effective date
of the transactions was $2,968, comprised of $1,000 per share stated liquidation
value plus  accrued  dividends.  The  aggregate  principal  amount  and  accrued
interest on the Notes at the  effective  date of the  transactions  was $33,175.
Based upon a value of $9 per share for purposes of the transactions, (i) 329,815
shares of Common Stock were issued to the holders of Preferred  Stock  resulting
in a net gain to the Company of $756,  credited  directly to retained  earnings,
(ii)  635,682  shares of Common  Stock were  issued to Note  holders  other than
Venture  resulting  in a net gain to the  Company  of  $1,735,  reflected  as an
extraordinary  item in the  consolidated  statement  of  operations,  and  (iii)
3,050,473 shares of Nonvoting Common Stock were issued to Venture resulting in a
net gain to the Company of $7,571,  credited directly to paid-in capital.  These
net gains  represent the excess of the value of the Common Stock for purposes of
the transactions over the value of the stock as determined by the closing market
price  of  the  Common  Stock  as of the  transaction  date,  net of  applicable
transaction costs, unamortized discounts, and income taxes.

C.  NET INCOME PER COMMON SHARE

     The following  table  provides a  reconciliation  between basic and diluted
income per share (income and shares in thousands):

<TABLE>
<CAPTION>
                                               1998                          1997                             1996
                                 ---------------------------     ---------------------------     ---------------------------
<S>                              <C>                             <C>                             <C>      
                                                   Per-Share                       Per-Share                       Per-Share
                                 Income   Shares    Amount       Income   Shares    Amount       Income   Shares     Amount
                                 ---------------------------     ---------------------------     ---------------------------
Income (loss) before
  extraordinary item             $3,286                          $ (796)                         $(95,019)
Less provision for
  preferred dividends and
  discount amortization            (407)                           (391)                             (362)
Effect of preferred stock
  reclassification                  756                               -                                -
                                 ------                          ------                          --------
Basic income (loss)  per share
  before extraordinary item       3,635   5,843    $     .62     (1,187)  5,005    $   (. 24)     (95,381)  5,003  $  (19.07)

Effect of dilutive stock options      -      32                       -       -                         -       -
                                 ---------------------------     ---------------------------     ---------------------------

Diluted income (loss)  per share
  before extraordinary item      $3,635   5,875    $     .62     $(1,187) 5,005    $    (.24)    $(95,381)  5,003  $  (19.07)
                                 ===========================     ===========================     ============================
</TABLE>

D.   MERCHANDISE INVENTORIES

     Total  inventories  would have been higher at February 1, 1998 and February
2, 1997 by $7,180 and $6,574, respectively,  had the FIFO (first-in,  first-out)
method been used to determine the cost of all inventories.  On a FIFO basis, net
income  (loss)  before  extraordinary  item  would  have  been  $3,892,  $78 and
$(95,604),  respectively,  for fiscal years 1998, 1997, and 1996.  During fiscal
years 1998, 1997, and 1996, certain inventory  quantities were reduced resulting
in a liquidation  of certain LIFO layers  carried at costs which were lower than
the cost of current purchases, the effect of which increased net income by $263,
$116, and $125, respectively.

E.   PROPERTY, BUILDINGS AND EQUIPMENT

     Property, buildings and equipment consists of:

                                                        Feb. 1,       Feb. 2,
                                                         1998          1997
                                                       ---------     ---------
     Land and land improvements.....................   $   4,030     $   4,013
     Buildings and building improvements............      22,183        22,076
     Store, warehouse and office equipment..........      59,842        59,668
     Vehicles and aircraft equipment................       1,551         1,513
     Leasehold improvements.........................      16,944        16,497
                                                       ---------     ---------
                                                         104,550       103,767
     Less accumulated depreciation and amortization.      63,738        61,364
                                                       ---------     ---------
                                                       $  40,812     $  42,403
                                                       =========     =========

F.   OTHER ASSETS

     Other assets consist of:
                                                        Feb. 1,       Feb. 2,
                                                         1998          1997
                                                       ---------     ---------
     Constructed stores to be refinanced through
       lease financing..............................   $   7,969     $  10,257
     Unamortized software costs, net................      10,435         7,541
     Other..........................................       1,964         1,975
                                                       ---------     ---------
                                                       $  20,368     $  19,773
                                                       =========     =========

     The Company contracted for the construction of two and five store locations
during the periods  ended  January 28, 1996 and February 2, 1997,  respectively.
The construction costs capitalized are recorded as other long-term assets during
the  period  of  construction  and  for  the  period  following   completion  of
construction  to the  date  of sale of such  stores  through  a lease  financing
arrangement.  The  construction  costs for five stores remain in Other Assets at
February  1,  1998.  The cost of  construction  has been  financed  through  the
Company's working capital and cash flow from operations.  The Company expects to
obtain lease financing under favorable terms for each of the constructed  stores
in the near future.

G.  FINANCING AGREEMENTS

     Effective March 17, 1997, the term of Pamida's  committed Loan and Security
Agreement (the Agreement) was extended to March 2000, and the maximum  borrowing
limit of the facility was increased to $95,000 from $70,000,  which had been the
limit  throughout  fiscal 1997.  Prior to March 17, 1997,  borrowings  under the
Agreement  bore  interest at a rate which was 0.75% per annum  greater  than the
applicable prime rate. Effective March 17, 1997,  borrowings under the Agreement
bear interest at a rate which is tied to the applicable prime rate or the London
Interbank Offered Rate (LIBOR),  generally at Pamida's  discretion.  The amounts
Pamida is permitted to borrow under the  Agreement  are  determined by a formula
based upon the amount of Pamida's eligible inventory from time to time.

     Borrowings of Pamida under the Agreement are secured by security  interests
in substantially all of the current assets  (including  inventory) of Pamida and
by liens on certain  real estate  interests  and other  property of Pamida.  The
Company and two  subsidiaries of Pamida have guaranteed  payment and performance
of Pamida's  obligations  under the  Agreement  and have  pledged some or all of
their respective assets,  including the stock of Pamida owned by the Company, to
secure such guarantees.

     The  Agreement  contains   provisions   imposing  operating  and  financial
restrictions  on the Company.  Certain  provisions of the Agreement  require the
maintenance of specified  amounts of tangible net worth (as defined) and working
capital (as defined) and the  achievement of specified  minimum  amounts of cash
flow (as defined).  Other restrictions in the Agreement and those provided under
the Indenture relating to the Senior Subordinated Notes will affect, among other
things, the ability of Pamida to incur additional  indebtedness,  pay dividends,
repay  indebtedness  prior to its  stated  maturity,  create  liens,  enter into
leases,  sell  assets  or  engage  in  mergers  or  acquisitions,  make  capital
expenditures and make investments.

     The maximum amount of borrowings under the Agreement during fiscal 1998 and
1997 was $66,461 and  $69,256,  respectively.  The weighted  average  amounts of
borrowings  under  the  Agreement  for  fiscal  1998 and 1997 were  $52,869  and
$43,002,  respectively;  and the weighted  average  interest rates were 9.8% and
10.0%, respectively.

     Long-term debt consists of:
                                                              Feb. 1,    Feb. 2,
                                                               1998       1997
                                                             --------   --------
     Senior Subordinated Notes, 11.75%, due March 2003 ..    $140,000   $140,000
     Industrial development bond, 5.5%, due in monthly
       installments through 2005.........................         336        411
     Senior promissory notes, 15.5%, interest paid
       in kind quarterly.................................           -      4,926
     Subordinated promissory notes,  16%, interest paid
       in kind quarterly.................................           -     13,454
     Junior subordinated promissory notes, 16.25%, net of
       unamortized discount of $0 and $878, interest paid
       in kind quarterly.................................           -      9,256
                                                             --------   --------
                                                              140,336    168,047
     Less current maturities.............................          47         47
                                                             --------   --------
                                                             $140,289   $168,000
                                                             ========   ========

     As of  February  1, 1998,  the fair value of  long-term  debt was  $144,489
compared to its recorded value of $140,289. The fair value of long-term debt was
estimated based on quoted market values for the notes. The aggregate  maturities
of long-term debt totals $47 in each of the next five fiscal years.

     The Senior Subordinated Notes are unsecured and are subordinate  borrowings
under the Agreement.  Presently,  under the most restrictive debt covenants, the
Company is not permitted to pay dividends on its common stock.

     The senior,  subordinated and junior  subordinated  promissory notes of the
Company were amended to provide that,  until the  obligations of the Company and
Pamida  under  certain  loan  agreements  had been paid in full,  the  quarterly
interest  payments  on the  notes  were to be  paid-in-kind  by  increasing  the
principal  amount of each note on the applicable  quarterly  payment date by the
amount of  accrued  interest  then  being  paid-in-kind.  Interest  on the notes
paid-in-kind  accrued at a rate which,  in each case, was two percentage  points
higher  than the  applicable  cash  interest  rate.  See Note B  describing  the
transaction  effecting the payment of these notes with shares of common stock of
the Company which was effective November 18, 1997.

H.   INCOME TAXES

     Components of the income tax provision (benefit) from continuing operations
are as follows:

                                                           Year Ended
                                                   ----------------------------
                                                   Feb. 1,   Feb. 2,   Jan. 28,
                                                    1998      1997       1996
                                                   -------   -------   -------
Current:
  Federal.....................................     $   491   $(3,155)  $  (993)
  State.......................................         311      (150)     (223)
                                                   -------   -------   -------
                                                       802    (3,305)   (1,216)
                                                   -------   -------   -------
Deferred:
  Federal.....................................      (1,616)    3,189    (5,865)
  State.......................................        (330)      116      (782)
Utilization of tax benefit carryforward.......       2,718         -         -
Change in beginning of year
  valuation allowance.........................      (1,574)        -         -
                                                   -------   -------   -------
                                                      (802)    3,305    (6,647)
                                                   -------   -------   -------
Total benefit from continuing operations......     $     -   $     -   $(7,863)
                                                   =======   =======   =======

     The  differences  between  the  U.S.  Federal  statutory  tax  rate and the
Company's effective tax rate are as follows:

                                                           Year Ended
                                                   ----------------------------
                                                   Feb. 1,   Feb. 2,   Jan. 28,
                                                    1998      1997      1996
                                                   -------   -------   -------
Statutory rate................................        34.0%    (34.0)%   (34.0)%
State income tax effect.......................         4.6      (2.8)%    (1.3)%
Amortization of the excess of cost over
  net assets acquired.........................           -         -      23.9
Valuation allowance...........................       (40.9)     25.1       3.6
Accretion of discount on junior
  subordinated debt...........................         1.3       6.8       0.1
Other.........................................         1.0       4.9       0.1
                                                   -------   -------   -------
                                                         -         -      (7.6)%
                                                   =======   =======   =======

     In fiscal 1998, income tax expense allocated to the extraordinary  item was
$379 and income tax expense charged directly to stockholders' equity was $1,821.
These amounts are net of a change in the beginning of year  valuation  allowance
of $2,495.

     Significant  temporary differences between reported and taxable income that
give rise to deferred tax assets and liabilities were as follows:

                                                   Feb. 1,   Feb. 2,
                                                    1998      1997
                                                   -------   -------
Net current deferred tax liabilities:
  Inventories.................................     $13,910   $15,302
  Prepaid insurance...........................         172       210
  Other.......................................         423       412
  Post employment health costs................        (135)     (189)
  Accrued expenses............................      (2,192)     (941)
  Store closing costs.........................      (1,246)   (2,570)
                                                   -------   -------
    Net current deferred tax liabilities......      10,932    12,224
                                                   -------   -------

Net long-term deferred tax liabilities:
  Property, buildings and equipment...........       2,096     2,862
  Other.......................................       1,836     1,436
  Valuation allowance.........................           -     4,069
  Capital leases..............................      (3,377)   (3,089)
  Tax benefit carryforward....................        (800)   (3,518)
                                                   -------   -------
Net long-term deferred tax (asset) liabilities        (245)    1,760
                                                   -------   -------
Net total deferred tax liabilities............     $10,687   $13,984
                                                   =======   =======

     Net long-term  deferred tax (asset)  liabilities  are classified with other
assets or other long-term  liabilities in the consolidated balance sheets of the
Company.  As of February 1, 1998 the Company had alternative  minimum tax credit
carryforwards totaling $800, which do not expire.

I.  LEASES

     The majority of store  facilities  are leased under  noncancelable  leases.
Substantially  all of the leases are net leases  which  require  the  payment of
property taxes,  insurance and maintenance costs in addition to rental payments.
Certain leases provide for additional rentals based on a percentage of sales and
have renewal options for one or more periods totaling from one to twenty years.

     At February 1, 1998 the future  minimum  lease  payments  under capital and
operating leases with rental terms of more than one year amounted to:


     Fiscal Year Ending                             Capital   Operating
                                                    Leases     Leases
                                                   --------   --------
     1999.......................................   $  5,659   $ 10,996
     2000.......................................      5,442      8,867
     2001.......................................      5,352      7,554
     2002.......................................      5,267      6,788
     2003.......................................      5,255      6,076
     Later years................................     36,129     61,356
                                                   --------   --------
     Total minimum obligations..................     63,104   $101,637
                                                   --------   ========
     Less amount representing interest..........     29,105
                                                   --------
     Present value of net minimum lease payments     33,999
     Less current portion.......................      1,843
                                                   --------
     Long-term obligations......................   $ 32,156
                                                   ========

     The minimum rentals under operating leases have not been reduced by minimum
sublease rentals of $157 due in the future under noncancelable subleases.

     Total rental expense related to all operating leases  (including those with
terms less than one year) is as follows:

                                                           Year Ended
                                                   ---------------------------
                                                   Feb. 1,   Feb. 2,   Jan. 28,
                                                    1998      1997       1996
                                                   -------   -------   -------
     Minimum rentals............................   $11,669   $10,938   $11,715
     Contingent rentals.........................       272       258       399
     Less sublease rental income................      (705)     (735)     (852)
                                                   -------   -------   -------
                                                   $11,236   $10,461   $11,262
                                                   =======   =======   =======

J. SAVINGS AND OTHER POSTEMPLOYMENT BENEFITS PLANS

     Pamida has adopted a 401(k) plan that covers all employees who are 21 years
of age with one or more years of service. Participants can contribute from 1% to
15% of their pre-tax compensation.  Pamida has currently elected to match 50% of
the participant's  contribution up to 5% of compensation.  Pamida's savings plan
contribution  expenses for fiscal years 1998, 1997 and 1996, were $765, 770, and
$749, respectively.

     Prior to  December  1993,  the  Company  had agreed to  continue to provide
health  insurance  coverage and pay a portion of the health  insurance  premiums
until age 65 for  individuals  who  retire if the  individual  was  eligible  to
participate  in the  plan,  had  attained  age  55,  had  completed  ten or more
consecutive  years of service and elected to continue on the Company  plan.  The
plan is  unfunded,  and the Company had the right to modify or  terminate  these
benefits.  In December  1993,  the Company  amended the Plan to no longer  offer
postretirement health benefits for employees retiring after February 1, 1994.

     The components of periodic  expense for  postretirement  benefits in fiscal
1998, 1997 and 1996 were as follows:

                                                      Feb. 1,  Feb. 2,  Jan. 28,
                                                       1998     1997     1996
                                                      ------   ------   ------
     Annual postretirement benefit expense:
       Interest cost...............................   $   11   $   16   $   32
       Amortization of unrecognized net obligations      (73)     (44)      (6)
                                                      ------   ------   ------
     Annual postretirement benefit (income) expense   $  (62)  $  (28)  $   26
                                                      ======   ======   ======

     The accumulated postretirement benefit obligation consists of:

                                                      Feb. 1,  Feb. 2,
                                                       1998     1997
                                                      ------   ------
     Accumulated postretirement
       benefit obligation..........................   $  163   $  194
     Unrecognized gain.............................      189      299
                                                      ------   ------
     Accrued expense...............................   $  352   $  493
                                                      ======   ======

     A 5% increase in the cost of covered  health care  benefits was assumed for
both  fiscal  1998 and 1997.  The rate of 5% is  assumed to remain  level  after
fiscal  1998.  Assuming a 1% increase in the health care trend rate,  the annual
postretirement  benefit  expense  would remain the same for both fiscal 1998 and
1997,  and the unfunded  accumulated  postretirement  benefit  obligation  would
increase  by $2 and $4 for  fiscal  1998 and 1997,  respectively.  The  weighted
average discount rate used in determining the accumulated postretirement benefit
obligation was 7.0% for both fiscal 1998 and 1997.

K. PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION

     See Note B  describing  the change and  reclassification  of all  preferred
stock into common stock of the Company,  effective  November 18, 1997.  Prior to
the reclassification, the Company was obligated to redeem all outstanding shares
of senior cumulative and junior cumulative preferred stock on December 31, 2001,
at a price not to exceed the  liquidation  value which was $1,000 per share plus
any accrued dividends. Subject to certain loan restrictions,  the Company could,
at any time, have redeemed all or any portion of the preferred stock outstanding
at a price of $1,000 per share plus any accrued dividends.

     Each share of senior  cumulative  and  junior  cumulative  preferred  stock
entitled  its holder to receive a  quarterly  dividend  of 16.25% and 14.25% per
annum,  respectively,  of the liquidation  value from the date of issuance until
redeemed.  Both  series  of  preferred  stock  were  nonvoting,  and any  unpaid
dividends were added to the liquidation value until paid.

     The  General  Corporation  Law of the State of  Delaware,  under  which the
Company and Pamida are  incorporated,  allows a corporation  to declare or pay a
dividend only from its surplus or from the current or the prior year's earnings.
Due to the accumulated  deficit resulting  primarily from the store closings and
the write-off of goodwill and other long-lived  assets  recognized in the fourth
quarter of fiscal  1996,  the Company and Pamida did not declare or pay any cash
dividends in fiscal 1998 or 1997 and could pay cash  dividends in ensuing  years
only to the  extent  that  the  Company  and  Pamida  satisfied  the  applicable
statutory  standards which included the Company's having a net worth equal to at
least the  aggregate par value of the  preferred  stock which  amounted to $2. A
provision for preferred stock dividends has been recorded in the fiscal 1998 and
1997 financial  statements.  The cumulative dividend rate on the preferred stock
increased by 0.5% per quarter (with a maximum aggregate  increase of 5%) on each
quarterly  dividend payment date on which the preferred stock dividends were not
paid currently on a cumulative basis. As a result of the reclassification of the
preferred  stock  into  common  stock,  the  Company's  obligation  for  further
preferred stock dividend payments or accrual has been eliminated.

     The difference  between the fair value of the junior  cumulative  preferred
stock at  issuance  and the  mandatory  redemption  value was  recorded  through
periodic  accretions,  using the effective interest method with a related charge
to retained earnings.

L. STOCK OPTIONS

     On November  24, 1992,  the Board of  Directors of the Company  adopted the
Pamida  Holdings  Corporation  1992 Stock  Option Plan (the  "Plan"),  which was
approved by the Company's stockholders in May 1993. The Plan,  administered by a
Committee of the Board of Directors, provides for the granting of options to key
employees of the Company and its  subsidiaries to purchase up to an aggregate of
350,000  shares of Common Stock of the Company.  Options  granted under the Plan
may be either incentive stock options,  within the meaning of Section 422 of the
Internal Revenue Code, or non-qualified options.  Options granted under the Plan
will be  exercisable  during the period fixed by the  Committee for each option;
however,  in general,  no option will be exercisable earlier than one year after
the date of its grant,  and no incentive  stock option will be exercisable  more
than ten years after the date of its grant. The option exercise price must be at
least  100% of the  fair  market  value of the  Common  Stock on the date of the
option  grant.  No  compensation  expense  related to stock options was recorded
during fiscal 1998, 1997 or 1996.

     On March 5, 1998, the Board of Directors of the Company  adopted the Pamida
Holdings  Corporation  1998 Stock  Incentive  Plan (the "1998  Plan") which will
require  approval  by the  stockholders  to  become  effective.  The  1998  Plan
authorizes  500,000  shares of Common Stock for option grants or other awards to
eligible officers and other key employees of the Corporation. No grants or other
awards have been made under the 1998 Plan.

     The Company accounts for its stock-based  compensation under the provisions
of Accounting  Principles  Board Opinion No. 25,  Accounting for Stock Issued to
Employees (APB Opinion No. 25), which utilizes the intrinsic value method.

     A summary of the Company's  stock-based  compensation  activity  related to
stock options for the last three fiscal years is as follows:

<TABLE>
<CAPTION>
                                      Feb. 1, 1998           Feb. 2, 1997           Jan. 28, 1996
                                   ------------------     ------------------     ------------------
<S>                                <C>       <C>          <C>       <C>          <C>       <C>     
                                             Weighted               Weighted               Weighted
                                             Average                Average                Average
                                             Exercise               Exercise               Exercise
                                   Number     Price       Number     Price       Number     Price
                                   -------   --------     -------   --------     -------   --------
Outstanding - beginning of year    302,816   $   4.39     296,546   $   5.05     227,545   $   4.33

Granted                             40,700       3.06      86,800       2.37     122,205       6.80

Expired/terminated                  21,083       4.93      80,530       4.66      48,246       6.22

Exercised                                -          -           -          -       4,958       3.63
                                   -------   --------     -------   --------     -------   --------
Outstanding - end of year          322,433   $   4.19     302,816   $   4.39     296,546   $   5.05
                                   =======   ========     =======   ========     =======   ========
</TABLE>

     There were 161,093,  123,616 and 85,474 options  exercisable at February 1,
1998, February 2, 1997 and January 28, 1996, respectively.

     The following table summarizes  information about stock options outstanding
as of February 1, 1998:

                    Options Outstanding                    Options Exercisable
-------------------------------------------------------   ----------------------
                                  Weighted
                                  Average      Weighted                 Weighted
                                 Remaining     Average                  Average
   Range of         Number      Contractual    Exercise     Number      Exercise
Exercise Prices   Outstanding      Life          Price    Exercisable     Price
---------------   -----------   ------------   --------   -----------   --------
$  1.94 - $2.78        77,300      8.5 Years   $   2.36        15,460   $   2.36
   3.06                39,200      9.1 Years       3.06             -       0.00
   3.63 -  5.75       167,933      6.2 Years       4.61       130,433       4.37
   7.19                38,000      7.1 Years       7.19        15,200       7.19
---------------   -----------   ------------   --------   -----------   --------
$  1.94 - $7.19       322,433      7.2 Years   $   4.19       161,093   $   4.45
===============   ===========   ============   ========   ===========   =======-

     If compensation  cost for the Company's Plan had been  determined  based on
the fair value at the grant dates for awards under the Plan  consistent with the
method of SFAS No. 123, Accounting for Stock-Based  Compensation,  the Company's
net income and net  income  per share  would have been  reduced to the pro forma
amounts indicated below:

                                                  Feb. 1,   Feb. 2,    Jan. 28,
                                                   1998      1997        1996
                                                  ------    -------    --------
Net income (loss)                 As reported     $5,370    $(1,187)   $(95,010)
                                  Pro forma        5,326     (1,235)    (95,046)

Basic income (loss) per share     As reported        .92       (.24)     (18.99)
                                  Pro forma          .91       (.25)     (19.00)

Diluted income (loss) per share   As reported        .91       (.24)     (18.99)
                                  Pro forma          .91       (.25)     (19.00)


     The  weighted  average  fair value of options  granted  during the year was
$1.43, $0.70 and $2.86 per option for fiscal 1998, 1997 and 1996,  respectively.
The fair value of options  granted  under the Plan was  estimated at the date of
grant using a binomial options pricing model with the following assumptions:

                                              Feb. 1,    Feb. 2,     Jan. 28,
                                               1998       1997        1996
                                              ------     ------      -------
Risk-free interest rate                         6.5%       6.0%        7.0%
Dividend yield                                  0.0%       0.0%        0.0%
Expected volatility                             8.4%       8.1%        8.1 %
Expected life (years)                           6.0 years  6.6 years   6.7 years

M.  CAPITAL STOCK

     As described in Note B, the Company issued an additional  965,497 shares of
Common Stock and 3,050,473  shares of Nonvoting Common Stock during fiscal 1998.
Accordingly,  the Company had  5,970,439  shares of Common  Stock and  3,050,473
shares of Nonvoting Common Stock  outstanding at February 1, 1998. The Nonvoting
Common Stock is held entirely by 399 Venture  Partners,  Inc.  which is also the
Company's  largest  holder  of  Common  Stock.  The  Nonvoting  Common  Stock is
convertible  into  Common  Stock  on  a   share-for-share   basis  upon  certain
conditions.  The Company had  5,004,942  shares of Common Stock and no shares of
Nonvoting Common Stock outstanding at February 2, 1997.

N. EXTRAORDINARY ITEMS

     As  described in Note B, on November  18, 1997 the Company  issued  635,682
shares  of  common  stock to  certain  holders  of Notes  which  resulted  in an
extraordinary  gain. On July 31, 1995, the Company made an offer to purchase for
cash 39.5% of the aggregate  outstanding  principal  amount of 14%  Subordinated
Promissory  Notes (Notes) of Pamida Holdings  Corporation.  The offered purchase
price was 50% of the principal  amount to be purchased.  In the third quarter of
fiscal 1996,  the Company  redeemed  Notes  tendered in the aggregate  principal
amount of $1,281 and made cash payments of $641,  resulting in an after-tax gain
of $371.

O.  COMMITMENTS AND CONTINGENCIES

     Pamida has employment  agreements  with three key executive  officers which
expire in 2000 and 2001. In addition to a base salary,  the  agreements  provide
for a bonus to be paid if certain Company performance goals are achieved.  Also,
in  March  1997,  the  Board  of  Directors   approved  a  long-term   incentive
compensation  program in order to enhance  retention  of certain  key members of
management. Payout under such program is tied to continued employment and future
Company common stock price appreciation.

     During   fiscal  1996,   the  Company   received  $967  from  Pamida  as  a
reimbursement for certain tax benefits derived by Pamida. Such remittance, along
with $18 from the exercise of certain stock options,  was used by the Company to
redeem Subordinated  Promissory Notes as described in Note N, to repay to Pamida
intercompany  balances totaling $29, and to pay quarterly dividends on preferred
stock totaling $315.

     On February 1, 1998, the Company had standby letters of credit  outstanding
totaling  $2,379  related to the  Company's  self-insured  retention of worker's
compensation  liabilities and future rental payments on a warehouse.  Additional
letters of credit  outstanding  totaling  $5,017 were committed for purchases of
merchandise inventory.

P. IMPAIRMENT OF LONG-LIVED ASSETS RECORDED IN FISCAL 1996

     During  fiscal  1996,  weak  trends in the retail  industry  combined  with
increasing competition lowered the operating results of the Company.  Therefore,
during the fourth quarter of fiscal 1996,  management  reviewed its expectations
for near- and  long-term  performance  of the  Company  and  revised  its income
projections   to  reflect   developing  and  projected   trends,   primarily  in
comparable-store-sales  growth,  gross margins,  operating expenses and interest
expenses.  Consequently,  the recoverability of the Company's  long-lived assets
was also reassessed.

     In the fourth  quarter of fiscal  1996,  the Company  adopted  Statement of
Financial  Accounting  Standards  No.  121  Accounting  For  the  Impairment  of
Long-Lived  Assets and  Long-Lived  Assets to Be Disposed  Of (SFAS  121).  This
financial accounting standard requires the Company to perform an analysis of the
recoverability of the net book value of long-lived  assets. The Company analyzed
cash flows on an individual store basis to assess  recoverability of store level
long-lived assets including allocated goodwill.

     As a result of this analysis,  impairment was indicated at certain  stores,
and a noncash pre-tax charge was recorded as illustrated in the table below. The
impairment  losses  were  based  on fair  value  which  was  determined  through
discounted cash flows for the particular  stores  utilizing a rate  commensurate
with the associated  risks. The effect of this accounting change was to increase
the net loss for the year by $24,693, or $4.94 per basic and diluted share.

     The Company also analyzed the value of its remaining goodwill and favorable
leasehold  interests not impaired under the store-level  SFAS 121 analysis using
its historical method under Accounting  Principles Board Opinion No. 17 (APB 17)
and determined that such remaining amounts also were impaired. For this analysis
the value of the goodwill and favorable  leasehold  interests was  determined by
projecting  aggregate net income and adjusting it by adding back amortization of
intangible  assets.  With  respect  to the  projections  of net  income  used to
evaluate  intangible assets impairment,  management made several  assumptions in
projecting  their  best  estimate  of the  results of future  operations  of the
Company.  The most significant  assumptions  were an estimated  remaining useful
life of goodwill of fifteen years,  modest annual comparable store sales growth,
gross margin rates  consistent with those  experienced over the past fiscal year
in the stores not being closed,  an annual expense  escalation  consistent  with
recent  inflation  trends and the ability to refinance  debt  maturities as they
come due.

     These assumptions  resulted in aggregate  undiscounted  adjusted net income
for the  fifteen-year  forecast period of approximately  $5,186,  which reflects
aggregate pre-tax interest expense of approximately $398,000 payable in cash and
$86,000 payable "in kind" (PIK). The $5,186 of aggregate adjusted net income for
the fifteen-year  forecast period also reflected  projected  adjusted net losses
for fiscal 1997 of $4,522,  which included cash interest  expense of $26,242 and
PIK  interest of $4,453,  and for fiscal  1998 of $2,863,  which  included  cash
interest  expense of $26,581 and PIK interest of $5,121.  For fiscal  1999,  the
Company projected adjusted net income of approximately $967, which included cash
interest expense of approximately $26,581 and PIK interest of $5,889. Due to the
uncertainty  of projections  beyond 1999,  this level of adjusted net income was
assumed to continue for each of the  remaining  fiscal  years in the  projection
period. As a result of this evaluation in fiscal 1996, management concluded that
the remaining goodwill and favorable leasehold interests were fully impaired.

     Pre-Tax  Components  of  Long-Lived  Asset  Write-Off  As  Reflected in the
Statement of Operations for the year ended January 28, 1996:

                                            SFAS        APB
                                             121        17        Total
                                           -------    -------    -------
      Goodwill..........................   $20,607    $49,406    $70,013
     Favorable leasehold interests.....      4,245      1,917      6,162
     Property, buildings and equipment.      2,376          -      2,376
                                           -------    -------    -------
     Total.............................    $27,228    $51,323    $78,551
                                           =======    =======    =======

     The  goodwill  was  originally  recorded in July 1986 when Pamida  Holdings
Corporation  acquired Pamida,  Inc. through a leveraged  buy-out and represented
the excess of the purchase price over the fair value of the net assets acquired.
Goodwill had been amortized on a  straight-line  basis over a forty-year  period
but, due to the trends  cited above,  its  estimated  remaining  useful life was
adjusted to fifteen years during the fourth quarter of fiscal 1996.

Q.  STORE CLOSINGS IN FISCAL 1996

     As discussed in Note P above, the Company's  operating  performance  during
fiscal  1996  was  below  plan.  Management's  analysis  of  individual  stores'
operations and cash flows resulted in the  identification of forty  unprofitable
or  competitive  market  stores  which did not fit the  Company's  niche  market
strategy.  Consequently,  a charge was recorded at January 28, 1996 as indicated
below to cover the costs necessary to close these stores.  The Company  received
positive  net cash flow from closing the stores due to cash  generated  from the
disposition  of related  inventories.  The amounts the Company  will  ultimately
realize from the disposal of assets or pay on the resolution of liabilities  may
differ from the estimated  amounts  utilized in arriving at the income statement
effect.

     Pre-Tax Components of fiscal 1996 Store Closing Costs:
                                                           Income
                                                          Statement
                                                           Effect
                                                           --------
     Real estate exit costs and write-off of property,
      buildings, and equipment........................    $ 11,455
     Inventory liquidation............................       9,080
     Professional charges.............................         314
     Severance and other costs and fees...............         548
                                                           --------
     Total............................................     $ 21,397
                                                           ========

     The store closing reserve  balance as of January 28, 1996 included  amounts
related to real estate, inventory, severance,  professional fees and other costs
of closing the forty stores. The liquidation of the closing stores inventory was
completed in the second quarter of fiscal 1997. All known ancillary costs of the
store closings have been paid except those related to the remaining real estate.
During  fiscal  years  1997 and 1998,  the  Company  negotiated  settlements  on
twenty-five closed store properties which had been leased,  three which had been
subleased,  and sold eight closed store  properties  which had been owned. As of
February 1, 1998,  the Company  remains  liable for lease  obligations  on seven
closed store properties.  The Company  anticipates that final disposition of the
remaining  obligations  will be completed in fiscal 1999 and 2000. There were no
adjustments  made during fiscal 1998 and 1997 to the store closing reserve other
than cash inflows and outflows related to the store closings.

     The store closing reserve is presented in the balance sheets as follows:

                                                            Feb. 1,    Feb. 2,
                                                             1998       1997
                                                           --------   --------
     Store closing reserve (short-term)...............     $  1,564   $  4,521
     Amount included in other
       long-term liabilities..........................        1,690      2,190
                                                           --------   --------
     Total............................................     $  3,254   $  6,711
                                                           ========   ========

R.   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

     The following is a summary of the quarterly  results of operations  for the
years ended February 1, 1998 and February 2, 1997:

<TABLE>
<CAPTION>
<S>                                 <C>            <C>            <C>            <C>            <C>        
                                       May 4,        August 3,    November 2,    February 1,
        Fiscal 1998                     1997           1997           1997           1998           Year
--------------------------------    -----------    -----------    -----------    -----------    -----------
Sales ..........................    $   144,564    $   163,217    $   158,749    $   190,487    $   657,017
Gross profit....................         33,268         41,502         37,854         49,311        161,935

(Loss) income before
  extraordinary item............         (5,459)           563            340          7,842          3,286

Extraordinary item..............              -              -              -          1,735          1,735

Net (loss) income                        (5,459)           563            340          9,577          5,021
Effect of preferred stock
  reclassification..............              -              -              -            756            756
Less provision for preferred
  dividends and discount
  amortization..................           (105)          (165)          (137)             -           (407)
                                    -----------    -----------    -----------    -----------    -----------
Net (loss) income available
  for common shares                 $    (5,564)   $       398    $       203    $    10,333    $     5,370
                                    ===========    ===========    ===========    ===========    ===========

Basic (loss) income per share:
  (Loss) income before
    extraordinary item..........    $     (1.11)   $       .08    $       .04    $      1.03    $       .62
  Extraordinary item............              -              -              -            .21            .30
                                    -----------    -----------    -----------    -----------    -----------
  Basic (loss) income...........    $     (1.11)   $       .08    $       .04    $      1.24    $       .92
                                    ===========    ===========    ===========    ===========    ===========
Diluted (loss) income per share:
  (Loss) income before
    extraordinary item..........    $     (1.11)   $       .08    $       .04    $      1.02    $       .62
  Extraordinary item............              -              -              -            .21            .29
                                    -----------    -----------    -----------    -----------    -----------
  Diluted (loss) income.........    $     (1.11)   $       .08    $       .04    $      1.23    $       .91
                                    ===========    ===========    ===========    ===========    ===========


                                     April 28,      July 28,      October 27,    February 2,
        Fiscal 1997                    1996           1996           1996           1997           Year
--------------------------------    -----------    -----------    -----------    -----------    -----------
Sales...........................    $   131,786    $   155,817    $   151,980    $   193,606    $   633,189
Gross profit....................         31,575         37,096         36,446         48,973        154,090
Net (loss) income...............         (4,742)        (1,294)           189          5,051           (796)

Less provision for preferred
  dividends and discount
  amortization..................            (93)           (97)           (99)          (102)          (391)
                                    -----------    -----------    -----------    -----------    -----------
Net (loss) income available for
  common shares.................    $    (4,835)   $    (1,391)   $        90    $     4,949    $    (1,187)
                                    ===========    ===========    ===========    ===========    ===========

Basic and diluted (loss)
  income per share..............    $      (.97)   $      (.28)   $       .02    $       .99    $      (.24)
                                    ===========    ===========    ===========    ===========    ===========
</TABLE>


INDEPENDENT AUDITORS' REPORT

Board of Directors
Pamida Holdings Corporation
Omaha, Nebraska



     We  have  audited  the  consolidated  balance  sheets  of  Pamida  Holdings
Corporation  and subsidiary as of February 1, 1998 and February 2, 1997, and the
related  consolidated  statements of operations,  stockholders'  equity and cash
flows for each of the years then ended and have issued our report  thereon dated
March 5, 1998; such financial  statements and report are included in this Annual
Report on Form 10-K. Our audits also included the financial  statement  schedule
of  Pamida  Holdings  Corporation  and  subsidiary  as of  February  1, 1998 and
February 2, 1997,  and for each of the years then ended  listed in Item  14(a)2.
This  financial  statement  schedule  is the  responsibility  of  the  Company's
management.  Our responsibility is to express an opinion based on our audits. In
our opinion,  such financial statement schedule,  when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.


/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Omaha, Nebraska
March 5, 1998


                        REPORT OF INDEPENDENT ACCOUNTANTS


Our  report  on  the  consolidated   financial  statements  of  Pamida  Holdings
Corporation  and  Subsidiary  for fiscal 1996 is included in this Form 1O-K.  In
connection with our audit of such financial statements, we have also audited the
related  financial  statement  Schedule I  Condensed  Financial  Information  of
Registrant for such year included in this Form l0-K.

In our  opinion,  the  financial  statement  schedule  referred  to above,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents  fairly,  in all  material  respects,  the  information  required to he
included therein.


/s/ Coopers & Lybrand L.L.P.

Chicago, Illinois
March 26, 1996



PAMIDA HOLDINGS CORPORATION
(Parent Company Only)
(Dollar amounts in thousands)


SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS - FEBRUARY 1, 1998 AND FEBRUARY 2, 1997
--------------------------------------------------------------------------------


ASSETS                                                      1998         1997
                                                          --------     --------
Current assets:
  Refundable income taxes due from subsidiary             $  2,335     $    855
  Investment in subsidiary                                 (50,898)     (57,531)
  Deferred financing costs                                       -           52
                                                          --------     --------
                                                          $(48,563)    $(56,624)
                                                          ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accrued interest                                        $      -     $    811
  Other accrued expense                                        160            -
  Payable to Pamida, Inc.                                      516           15
                                                          --------     --------
     Total current liabilities                                 676          826

Long-term debt                                                   -       27,636
Dividends payable                                                -          342
Other long-term liabilities                                  3,036            -
Preferred stock subject to mandatory redemption:
  16-1/4% senior cumulative preferred stock, $1
    par value; 514 shares authorized, 0 and 514
    issued and outstanding                                       -          514
  14-1/4% junior cumulative preferred stock, $1 par value;
    1,627 and 6,986 shares  authorized; 0 and 1,627 shares
    issued and outstanding; redemption amount of $0 and 
    $1,627 less unamortized discount                             -        1,361

Common stockholders' equity:
  Common stock, $.01 par value; 25,000,000 and
    10,000,000 shares authorized; 5,970,439 and 5,004,942
    shares issued and 0 shares issued and outstanding           60           50
Nonvoting common stock, $.01 par value; 4,000,000
    and 2,000,000 shares authorized; 3,050,473 and
    0 shares issued and outstanding                             30            -
  Additional paid-in capital                                29,895          968
  Accumulated deficit                                      (82,260)     (88,321)
                                                          --------     --------
           Total common stockholders' deficit              (52,275)     (87,303)
                                                          --------     --------
                                                          $(48,563)    $(56,624)
                                                          ========     ========

See notes to Parent Company Only financial statements.
<TABLE>
<CAPTION>

PAMIDA HOLDINGS CORPORATION
(Parent Company Only) 
(Dollar amounts in thousands)

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------

<S>                                                              <C>        <C>        <C>           <C>         
                                                                                                       Retained
                                                                           Nonvoting   Additional      Earnings
                                                                 Common     Common      Paid-in      (Accumulated
                                                                 Stock      Stock       Capital        Deficit)
                                                                -------     ------     ---------     ------------
 Balance at January 29, 1995.............................        $   50     $    -     $     950     $      7,876

  Net loss..............................................              -          -             -          (94,648)
  Amortization of discount on 14-1/4%
    junior cumulative preferred.........................              -          -             -              (47)
  Cash dividends to preferred stockholders..............              -          -             -             (315)
  Stock sold under incentive stock option plan..........              -          -            18                -
                                                                -------     ------     ---------     ------------
Balance at January 28, 1996.............................             50          -           968          (87,134)

  Net loss..............................................              -          -             -             (796)
  Amortization of discount on 14-1/4%
    junior cumulative preferred.........................              -          -             -              (49)
  Accrued dividends for preferred stockholders                        -          -             -             (342)
                                                                -------     ------     ---------     ------------
Balance at February 2, 1997.............................             50          -           968          (88,321)

  Net income............................................              -          -             -            5,712
  Amortization of discount on 14-1/4%
    junior cumulative preferred.........................              -          -             -              (38)
  Accrued dividends for preferred stockholders..........              -          -             -             (369)
  Reclassification of preferred stock into common stock.              3          -         1,811              756
  Payment of notes with common stock....................              7         30        20,236                -
  Gain on payment of notes held by Venture (net of tax).              -          -         6,880                - 
                                                                -------     ------     ---------     ------------
Balance at February 1, 1998.............................        $    60     $   30     $  29,895     $    (82,260)
                                                                =======     ======     =========     ============

See notes to Parent Company Only financial statements.
</TABLE>


PAMIDA HOLDINGS CORPORATION
(Parent Company Only)
(Dollar amount in thousands except for per share data)

SCHEDULE  I -  CONDENSED  FINANCIAL  INFORMATION  OF  REGISTRANT  STATEMENTS  OF
OPERATIONS  AND  RETAINED  (DEFICIT)  EARNINGS  YEARS  ENDED  FEBRUARY  1, 1998,
FEBRUARY 2, 1997 AND JANUARY 28, 1996
--------------------------------------------------------------------------------

                                                  1998       1997       1996
                                                --------   --------   --------
Equity in income (loss) of subsidiary           $  6,633   $  3,696   $(92,527)

Expenses:
  General and administrative                          17         19         33
  Interest                                         3,974      4,473      3,910
                                                --------   --------   --------
                                                   3,991      4,492      3,943
                                                --------   --------   --------

Income (loss) before provision for income
  taxes and extraordinary item                     2,642       (796)   (96,470)
Income tax benefit                                (1,480)         -     (1,451)
                                                --------   --------   --------

Income (loss) before extraordinary item            4,122       (796)   (95,019)
Extraordinary item                                 1,590          -        371
                                                --------   --------   --------

Net income (loss)                                  5,712       (796)   (94,648)
Effect of preferred stock reclassification           756          -          -

Amortization of discount on 14-1/4%
  junior cumulative preferred                        (38)       (49)       (47)
Cash dividends paid to preferred
  stockholders                                         -          -       (315)

Accrued dividends for
   preferred stockholders                           (369)      (342)         -
                                                --------   --------   --------
Net income (loss) available for common shares   $  6,061   $ (1,187)  $(95,010)
                                                ========   ========   ========

Basic income (loss) per share:
   Income (loss) before extraordinary item      $    .77   $   (.24)  $ (19.07)
   Extraordinary item                                .27          -        .08
                                                --------   --------   --------
   Basic income (loss)                          $   1.04   $   (.24)  $ (18.99)
                                                ========   ========   ========

Diluted income (loss) per share
   Income (loss) before extraordinary item      $    .76   $   (.24)  $ (19.07)
   Extraordinary item                                .27          -        .08
                                                --------   --------   --------
   Diluted income (loss)                        $   1.03   $   (.24)  $ (18.99)
                                                ========   ========   ========

See notes to Parent Company Only financial statements.
<TABLE>
<CAPTION>

PAMIDA HOLDINGS CORPORATION
(Parent Company Only)
(Dollar amounts in thousands)

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
YEARS ENDED FEBRUARY 1, 1998, FEBRUARY 2, 1997 AND JANUARY 28, 1996
--------------------------------------------------------------------------------

<S>                                                       <C>        <C>        <C>      
                                                            1998       1997       1996
Cash flows from operating activities:                     --------   --------   --------
  Net income (loss) .................................     $  5,712   $   (796)  $(94,648)
                                                          --------   --------   --------
Adjustments to reconcile net income (loss) to 
   net cash from operating activities:
     Equity in (income) loss of subsidiary ..........       (6,633)    (3,696)    92,527
     Noncash interest expense .......................        3,850      4,313      3,756
     Accretion of original issue debt discount ......          124        160        154
     Amortization of intangible assets ..............            8         11         10
     Extraordinary item related to retirement of debt       (1,590)         -       (371)
     (Increase) decrease in refundable income tax ...       (1,480)         -       (483)
     Increase (decrease) in operating liabilities ...          659          8         (7)
                                                          --------   --------   --------
        Total adjustments ...........................       (5,062)       796     95,586
                                                          --------   --------   --------
        Net cash from operating activities ..........          650          -        938
                                                          --------   --------   --------

Cash flows from investing activities:
  Dividends received from subsidiary ................            -          -          -

Cash flows from financing activities:
  Fees related to payment of debt and
   reclassification of preferred stock ..............         (650)         -          -
  Proceeds from sale of stock .......................            -          -         18
  Principal payments on promissory notes ............            -          -          -
  Payments to redeem subordinated notes .............            -          -       (641)
  Dividends paid to preferred stockholders ..........            -          -       (315)
                                                          --------   --------   --------
        Net cash from financing activities ..........         (650)         -       (938)
                                                          --------   --------   --------

Net change in cash ..................................            -          -          -

Cash at beginning of year ...........................            -          -          -
                                                          --------   --------   --------

Cash at end of year .................................     $      -   $      -   $      -
                                                          ========   ========   ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
    Cash paid during the year for interest                $      -   $      -   $      -

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING
  ACTIVITY:
    Amortization of discount on junior
     cumulative preferred stock recorded
     as a direct charge to retained earnings              $     38   $     49   $     47


    Payment of interest in kind by increasing
     the principal amount of the notes                       3,561      4,141      3,702

See notes to Parent Company Only financial statements.
</TABLE>

PAMIDA HOLDINGS CORPORATION
(Parent Company Only)
(Dollar Amounts In Thousands)

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO FINANCIAL STATEMENTS


A.   The Condensed Financial  Statements include the Registrant only and reflect
     the equity  method of  accounting  for its  benefically   wned  subsidiary,
     Pamida, Inc.

B.   The registrant  files a consolidated  U.S.  federal tax return with Pamida,
     Inc.  The  Company has a tax  sharing  agreement  with  Pamida,  Inc.  that
     provides that taxes will be allocated  among the  companies  based upon the
     tax expense or benefit that was derived on a  consolidated  basis from each
     entity's  operations.  Income  tax  effects  included  in  these  financial
     statements  are  calculated  on a  stand-alone  basis for  Pamida  Holdings
     Corporation. Related to the Company's payment of debt with common stock and
     reclassification  of preferred  stock into common stock which was effective
     November 18, 1997, income tax expense  allocated to the extraordinary  item
     totaled  $524 and income tax expense  charged to  stockholders'  equity was
     $2,512.  These  amounts  are  net of a  change  in the  beginning  of  year
     valuation allowance of $1,659.

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

     The information  required by this item has been previously  reported in the
Form 8-K Current Report of the registrant dated October 16, 1996.

                                    PART III

     The information required by this Part III is incorporated by reference from
the  registrant's  definitive proxy statement for the 1998 annual meeting of the
registrant's  stockholders  to be held  on May  21,  1998,  which  involves  the
election of directors.  Such  definitive  proxy statement will be filed with the
Securities and Exchange  Commission not later than 120 days after the end of the
fiscal  year  covered by this Form 10-K.  However,  information  concerning  the
registrant's executive officers will be omitted from such proxy statement and is
furnished in a separate item captioned  "Executive  Officers of the  Registrant"
included in Part I of this Form 10-K.

                                     PART IV

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

     (a) The following documents are filed as a part of this report in Item 8 of
Part II:

     1.  Financial Statements.

     Pamida Holdings Corporation and Subsidiary

         -  Independent Auditors' Report

         -  Consolidated  Statements of Operations  for the Years Ended February
            1, 1998, January 2, 1997 and January 28, 1996

         -  Consolidated  Balance  Sheets at  February  1, 1998 and February  2,
            1997

         -  Consolidated Statements of Common Stockholders' Equity for the Years
            Ended February 1, 1998, February 2, 1997 and January 28, 1996

         -  Consolidated  Statements of Cash Flows for the Years Ended  February
            1, 1998, February 2, 1997 and January 28, 1996

         -  Notes to  Consolidated  Financial  Statements  for the  Years  Ended
            February 1, 1998, February 2, 1997 and January 28, 1996

     2.  Financial Statement Schedules.

         -  Independent Auditors' Report on Schedule I

         -  Schedule I - Condensed Financial Information of Registrant

All  other  schedules  of the  registrant  for  which  provision  is made in the
applicable accounting  regulations of the Securities and Exchange Commission are
not  required  under the related  instructions,  are  inapplicable  or have been
disclosed in the Notes to Consolidated Financial Statements and, therefore, have
been omitted.

     3.  Exhibits.

     3.1  -  Restated   Certificate   of   Incorporation   of   Pamida  Holdings
             Corporation (March 12, 1998).

(2)  3.2  -  Revised By-Laws of Pamida Holdings Corporation.

(2)  4.1  -  Form of  certificate  representing  shares of  the Common  Stock of
             Pamida Holdings Corporation.

(6)  4.2  -  Indenture  dated  as  of March 15,  1993,  among  Pamida,   Inc. as
             Issuer,  Pamida   Holdings  Corporation   as  Guarantor,  and State
             Street  Bank  and  Trust  Company  as Trustee  relating  to 11 3/4%
             Senior Subordinated Notes due 2003 of Pamida, Inc.

(6)  4.3  -  Specimen  form  of 11 3/4%  Senior  Subordinated  Note due  2003 of
             Pamida, Inc.

(3)  10.1 -  Stock  and Note  Purchase   Agreement  dated  as of  July 29, 1986,
             among Pamida Holdings  Corporation, Citicorp Venture Capital, Ltd.,
             Citicorp Capital Investors,  Ltd., and  the  individual  purchasers
             who are parties thereto.

(1)  10.2 -  Amendment to Stock and Note Purchase Agreement, dated July 31, 1990
             (amends Exhibit 10.1).

(1)  10.3 -  Second  Amendment  to Stock  and  Note  Purchase   Agreement, dated
             August 10, 1990 (amends Exhibit 10.1).

(1)  10.4 -  Third Amendment to  Stock  and  Note  Purchase   Agreement,   dated
             September 13, 1990 (amends Exhibit 10.1).

(1)  10.5 -  Exchange Agreement dated  August 10, 1990,  among  Pamida  Holdings
             Corporation,  Citicorp  Venture  Capital,  Ltd.  and  Court  Square
             Capital Limited.

(1)  10.6 -  Agreement  dated   September   13, 1990,  among   Pamida   Holdings
             Corporation,   Citicorp  Venture  Capital,   Ltd.  and Court Square
             Capital Limited.

(2)  10.7 -  Agreement   dated   September 20,   1990,  among  Pamida   Holdings
             Corporation,   Citicorp  Venture  Capital,  Ltd. and  Court  Square
             Capital Limited.

(4)  10.8 -  Exchange  Agreement  dated as of  December 1,  1990 between  Pamida
             Holdings Corporation,  Citicorp  Venture  Capital,  Ltd. and  Court
             Square Capital Limited.

(4)  10.9 -  Form  of 14.25%  Junior   Subordinated  Promissory   Note of Pamida
             Holdings Corporation.

(4)  10.10-  Form of   Indemnification   Agreement   between   Pamida   Holdings
             Corporation and its officers and directors.

(5)  10.11-  Note  Amendment  Agreement  dated as of December  18, 1992, between
             Pamida  Holdings Corporation  and  Court  Square  Capital  Limited.

(5)  10.12-  Note  Amendment  Agreement No. 2 dated as of March 1, 1993, between
             Pamida Holdings Corporation and Citicorp Investments Inc.

(13) 10.13-  Note  Amendment  Agreement  No.  3  dated  July  22,  1997, between
             Pamida Holdings Corporation and 399 Venture Partners, Inc.

(5)  10.14-  Tax-Sharing  Agreement dated as of February 2, 1992,  among  Pamida
             Holdings Corporation,   Pamida,   Inc., Seaway  Importing  Company,
             and Pamida Transportation Company.

(6)  10.15-  Loan and Security  Agreement  dated  March 30, 1993,  by and  among
             Congress Financial Corporation (Southwest)  and BA Business Credit,
             Inc. as  Lenders,  Congress   Financial Corporation  (Southwest) as
             Agent for  the  Lenders,  and  Pamida,  Inc.  and Seaway  Importing
             Company as Borrowers.

(9)  10.16-  Amendment  No.  1 to Loan and Security Agreement, dated January 23,
             1995,   among  Pamida,  Inc.  and  Seaway   Importing   Company  as
             Borrowers,   Congress   Financial  Corporation   (Southwest)  as  a
             Lender and Agent, and BA Business Credit  Inc. as a Lender  (amends
             Exhibit 10.15).

(10) 10.17-  Amendment No. 2 to Loan and Security  Agreement, dated  January 28,
             1996,  among  Pamida,   Inc.  and   Seaway   Importing  Company  as
             Borrowers,   Congress   Financial  Corporation   (Southwest)  as  a
             Lender  and  Agent,  and  BankAmerica Business Credit  as a  Lender
             (amends Exhibit 10.15).

(11) 10.18-  Amendment  No.  3 to  Loan  and  Security  Agreement  among Pamida,
             Inc. and   Seaway  Importing   Company,   as  Borrowers,   Congress
             Financial Corporation (Southwest) and BankAmerica  Business Credit,
             Inc., as Lenders, and Congress  Financial Corporation  (Southwest),
             as Agent, dated September 16, 1996 (amends Exhibit 10.15).

(12) 10.19-  Amendment  No.  4 to  Loan  and  Security  Agreement  among Pamida,
             Inc. and   Seaway  Importing   Company,   as  Borrowers,   Congress
             Financial Corporation (Southwest) and BankAmerica  Business Credit,
             Inc., as Lenders, and Congress Financial  Corporation  (Southwest),
             as Agent, dated January 31, 1997 (amends Exhibit 10.15).

(12) 10.20-  Amendment  No.  5 to  Loan  and  Security  Agreement  among Pamida,
             Inc.  and   Seaway  Importing   Company,   as  Borrowers,  Congress
             Financial Corporation (Southwest) and BankAmerica  Business Credit,
             Inc., as Lenders, and Congress Financial  Corporation  (Southwest),
             as Agent, dated March 17, 1997 (amends Exhibit 10.15).

(14) 10.21-  Amendment  No.  6 to  Loan  and  Security  Agreement  among Pamida,
             Inc. and Seaway Importing Company, as Borrowers, Congress Financial
             Corporation (Southwest) and BankAmerica  Business Credit,  Inc., as
             Lenders, and Congress Financial  Corporation (Southwest), as Agent,
             dated May 8, 1997 (amends Exhibit 10.15).

(7)  10.22-  Pamida Holdings Corporation 1992 Stock Option Plan.

(9)  10.23-  Employment  Agreement  dated  September  22,  1995,   among  Pamida
             Holdings Corporation, Pamida, Inc. and Steven S. Fishman.

(11) 10.24-  Amendment  No.  1  to  Employment  Agreement  among Pamida Holdings
             Corporation, Pamida, Inc., and Steven S. Fishman  dated  August 29,
             1996 (amends Exhibit 10.23).

(12) 10.25-  Amendment  No.  2  to  Employment  Agreement  among Pamida Holdings
             Corporation,  Pamida, Inc.,  and  Steven S. Fishman  dated March 6,
             1997 (amends Exhibit 10.23).

     10.26-  Amendment  No.  3  to  Employment  Agreement  among Pamida Holdings
             Corporation,  Pamida, Inc., and   Steven S.  Fishman  dated May 22,
             1997 (amends Exhibit 10.23).

     10.27-  Amendment  No. 4  to Employment  Agreement  among  Pamida  Holdings
             Corporation, Pamida Inc., and Steven S. Fishman dated March 5, 1998
             (amends Exhibit 10.23).

(8)  10.28-  Pamida, Inc. 1995 Deferred Compensation Plan.

(12) 10.29-  Employment  Agreement  dated  as of  March 6,  1997,  among  Pamida
             Holdings Corporation, Pamida, Inc., and Frank A. Washburn.

     10.30-  Amendment  No. 1 to  employment  Agreement  among  Pamida  Holdings
             Corporation, Pamida, Inc., and  Frank A. Washburn  dated  March  5,
             1998 (amends Exhibit 10.29).

(12) 10.31-  Employment  Agreement dated  as  of  March  6, 1997,  among  Pamida
             Holdings Corporation, Pamida, Inc., and George R. Mihalko.

     10.32-  Amendment No. 1 to  Employment  Agreement  among   Pamida  Holdings
             Corporation, Pamida, Inc., and   George R.  Mihalko  dated March 5,
             1998 (amends Exhibit 10.31).

(12) 10.33-  Long-Term  Incentive  Award  Agreement  dated  as of March 6, 1997,
             between Pamida, Inc., and Steven S. Fishman.

(12) 10.34-  Long-Term  Incentive  Award  Agreement dated  as  of March 6, 1997,
             between Pamida, Inc., and Frank A. Washburn.

(12) 10.35-  Long-Term  Incentive  Award  Agreement dated  as of  March 6, 1997,
             between Pamida, Inc., and George R. Mihalko.

(1)  22.1 -  Subsidiaries of Pamida Holdings Corporation.

     23.1 -  Consent of Deloitte & Touche LLP.

     23.2 -  Consent of Coopers & Lybrand L.L.P.

     24.1 -  Powers of Attorney

     27.1 -  Financial Data Schedule (EDGAR filing only)

     27.2 -  Restated Financial Data  Schedule  - fiscal years ended January 28,
             1996 and February 2, 1997  and the three, six and nine months ended
             April  28,  1996, July 28, 1996 and October 27, 1996, respectively.
             (EDGAR filing only)

     27.3 - Restated Financial Data Schedule - three, six and nine  months ended
            May 4, 1997, August 3, 1997 and November 2, 1997.
            (EDGAR filing only)
-------------------------

(1)  Previously filed as an exhibit to Registration Statement of Pamida Holdings
     Corporation on Form S-1 (Registration No. 33-35324) and incorporated herein
     by this reference.

(2)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings   Corporation   for  the  period  ended  October  28,  1990,   and
     incorporated herein by this reference.

(3)  Previously filed as an exhibit to Registration Statement of Pamida, Inc. on
     Form S-l  (Registration  No.  33-10980)  and  incorporated  herein  by this
     reference.

(4)  Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year  ended  February  3, 1991,  and
     incorporated herein by this reference.

(5)  Previously  filed as an exhibit to Registration  Statement of Pamida,  Inc.
     and Pamida Holdings Corporation on Form S-1 (Registration No. 33-57990) and
     incorporated herein by this reference.

(6)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings  Corporation  for the period ended May 2, 1993,  and  incorporated
     herein by this reference.

(7)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings  Corporation for the period ended August 1, 1993, and incorporated
     herein by this reference.

(8)  Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year ended  January  29,  1995,  and
     incorporated herein by this reference.

(9)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings   Corporation   for  the  period  ended  October  29,  1995,   and
     incorporated herein by this reference.

(10) Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year ended  January  28,  1996,  and
     incorporated herein by this reference.

(11) Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings   Corporation   for  the  period  ended  October  27,  1996,   and
     incorporated herein by this reference.

(12) Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year  ended  February  2, 1997,  and
     incorporated herein by this reference.

(13) Previously  filed  as an  exhibit  to Form 8-K  Current  Report  of  Pamida
     Holdings  Corporation  (Date of  Report:  July 22,  1997) and  incorporated
     herein by this reference.

(14) Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings  Corporation  for the period ended May 4, 1997,  and  incorporated
     herein by this reference.

                                      * * *

     (b)  A report on Form 8-K was filed  during the last  quarter of the period
          covered by this  report.  Such report had a Date of Report of November
          18, 1997, and related to Item 5, Other Events. No financial statements
          were filed with such report.

                                   SIGNATURES

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

Date:  April 20, 1998                   PAMIDA HOLDINGS CORPORATION

                                    By: /s/ Steven S. Fishman
                                        Steven S. Fishman, Chairman
                                        of the Board, President, and
                                        Chief Executive 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 and on the dates indicated.


/s/ Steven S. Fishman                   April 20, 1998
----------------------                  
Steven S. Fishman                       Chairman of the Board, 
                                        President, Chief Executive
                                        Officer and Director


/s/ George R. Mihalko                   April 20, 1998
----------------------                  
George R. Mihalko                       Senior Vice President, 
                                        Chief Financial Officer
                                        and Treasurer


 /s/ Todd D. Weyhrich                   April 20, 1998
----------------------                  
Todd D. Weyhrich                        Vice President,
                                        Controller and Principal
                                        Accounting Officer


 /s/ Frank A. Washburn                  April 20, 1998
----------------------
Frank A. Washburn                       Director


        *                               April 20, 1998
----------------------                  
L. David Callaway, III                  Director


        *                               April 20, 1998
----------------------                  
Stuyvesant P. Comfort                   Director


        *                               April 20, 1998
----------------------                  
M. Saleem Muqaddam                      Director


        *                               April 20, 1998
----------------------                  
Peter J. Sodini                         Director


* By:/s/ George R. Mihalko
      George R. Mihalko,
      Attorney-in-Fact


                           PAMIDA HOLDINGS CORPORATION
                          FORM 10-K -- FEBRUARY 2, 1997
                                 EXHIBIT INDEX


   Exhibit #                        Description
------------------==============================================================
                  Restated   Certificate  of   Incorporation   of  Pamida
          3.1     Holdings Corporation, as amended.
------------------==============================================================
(2)       3.2     Revised By-Laws of Pamida Holdings Corporation.
------------------==============================================================
(2)       4.1     Form of certificate  representing  shares of the Common
                  Stock of Pamida Holdings Corporation.
------------------==============================================================
(6)       4.2     Indenture  dated as of March 15,  1993,  among  Pamida,
                  Inc.  as  Issuer,   Pamida   Holdings   Corporation  as
                  Guarantor,  and State Street Bank and Trust  Company as
                  Trustee relating to 11 3/4% Senior  Subordinated  Notes
                  due 2003 of Pamida, Inc.
------------------==============================================================
(6)       4.3     Specimen form of 11 3/4% Senior  Subordinated  Note due
                  2003 of Pamida, Inc.
------------------==============================================================
(3)      10.1     Stock and Note Purchase  Agreement dated as of July 29,
                  1986,  among  Pamida  Holdings  Corporation,   Citicorp
                  Venture  Capital,  Ltd.,  Citicorp  Capital  Investors,
                  Ltd.,  and the  individual  purchasers  who are parties
                  thereto.
------------------==============================================================
(1)      10.2     Amendment to Stock and Note Purchase  Agreement,  dated
                  July 31, 1990 (amends Exhibit 10.1).
------------------==============================================================
(1)      10.3     Second Amendment to Stock and Note Purchase  Agreement,
                  dated August 10, 1990 (amends Exhibit 10.1).
------------------==============================================================
(1)      10.4     Third  Amendment to Stock and Note Purchase  Agreement,
                  dated September 13, 1990 (amends Exhibit 10.1).
------------------==============================================================
(1)      10.5     Exchange  Agreement dated August 10, 1990, among Pamida
                  Holdings  Corporation,  Citicorp Venture Capital,  Ltd.
                  and Court Square Capital Limited.
------------------==============================================================
(1)      10.6     Agreement  dated  September  13,  1990,   among  Pamida
                  Holdings  Corporation,  Citicorp Venture Capital,  Ltd.
                  and Court Square Capital Limited.
------------------==============================================================
(2)      10.7     Agreement  dated   September 20,   1990,  among  Pamida
                  Holdings  Corporation,  Citicorp Venture Capital,  Ltd.
                  and Court Square Capital Limited.
------------------==============================================================
(4)      10.8     Exchange   Agreement  dated  as  of  December 1,   1990
                  between Pamida Holdings  Corporation,  Citicorp Venture
                  Capital, Ltd. and Court Square Capital Limited.
------------------==============================================================
(4)      10.9     Form of 14.25% Junior  Subordinated  Promissory Note of
                  Pamida Holdings Corporation.
------------------==============================================================
(4)      10.10    Form  of   Indemnification   Agreement  between  Pamida
                  Holdings Corporation and its officers and directors.
------------------==============================================================
(5)      10.11    Note  Amendment  Agreement  dated  as of  December  18,
                  1992,  between Pamida  Holdings  Corporation  and Court
                  Square Capital Limited.
------------------==============================================================
(5)      10.12    Note  Amendment  Agreement  No.  2 dated as of March 1,
                  1993, between Pamida Holdings  Corporation and Citicorp
                  Investments Inc.
------------------==============================================================
(13)     10.13    Note Amendment Agreement No. 3 dated July 22, 1997,
                  between Pamida Holdings Corporation and 399 Venture
                  Partners, Inc.
------------------==============================================================
(5)      10.14    Tax-Sharing Agreement dated as of February 2, 1992,
                  among Pamida Holdings Corporation, Pamida, Inc.,
                  Seaway Importing company, and Pamida Transportation
                  Company.
------------------==============================================================
(6)      10.15    Loan and Security Agreement dated March 30, 1993, by
                  and among Congress Financial Corporation (Southwest)
                  and BA Business Credit, Inc. as Lenders, Congress
                  Financial Corporation (Southwest) as Agent for the
                  Lenders, and Pamida, Inc. and Seaway Importing Company
                  as Borrowers.
------------------==============================================================
(9)      10.16    Amendment No. 1 to Loan and Security Agreement, dated
                  January 23, 1995, among Pamida, Inc. and Seaway
                  Importing Company as Borrowers, Congress Financial
                  Corporation (Southwest) as a Lender and Agent, and BA
                  Business Credit Inc. as a Lender (amends Exhibit 10.15).
------------------==============================================================
(10)     10.17    Amendment No. 2 to Loan and Security Agreement, dated
                  January 28, 1996, among Pamida, Inc. and Seaway
                  Importing Company as Borrowers, Congress Financial
                  Corporation (Southwest) as a Lender and Agent, and
                  BankAmerica Business Credit as a Lender (amends
                  Exhibit 10.15).
------------------==============================================================
(11)     10.18    Amendment No. 3 to Loan and Security Agreement among
                  Pamida, Inc. and Seaway Importing Company, as
                  Borrowers, Congress Financial Corporation (Southwest)
                  and BankAmerica Business Credit, Inc., as Lenders, and
                  Congress Financial Corporation (Southwest), as Agent,
                  dated September 16, 1996 (amends Exhibit 10.15).
------------------==============================================================
(12)     10.19    Amendment No. 4 to Loan and Security Agreement among
                  Pamida, Inc. and Seaway Importing Company, as
                  Borrowers, Congress Financial Corporation (Southwest)
                  and BankAmerica Business Credit, Inc., as Lenders, and
                  Congress Financial Corporation (Southwest), as Agent,
                  dated January 31, 1997 (amends Exhibit 10.15).
------------------==============================================================
(12)     10.20    Amendment No. 5 to Loan and Security Agreement among
                  Pamida, Inc. and Seaway Importing Company, as
                  Borrowers, Congress Financial Corporation (Southwest)
                  and BankAmerica Business Credit, Inc., as Lenders, and
                  Congress Financial Corporation (Southwest), as Agent,
                  dated March 17, 1997 (amends Exhibit 10.15).
------------------==============================================================
(14)     10.21    Amendment No. 6 to Loan and Security Agreement among
                  Pamida, Inc. and Seaway Importing Company, as
                  Borrowers, Congress Financial Corporation (Southwest)
                  and BankAmerica Business Credit, Inc., as Lenders, and
                  Congress Financial Corporation (Southwest) as Agent,
                  dated May 8, 1997 (amends Exhibit 10.15).
------------------==============================================================
(7)      10.22    Pamida Holdings Corporation 1992 Stock Option Plan.
------------------==============================================================
(9)      10.23    Employment Agreement dated September 22, 1995, among
                  Pamida Holdings Corporation, Pamida, Inc. and
                  Steven S. Fishman.
------------------==============================================================
(11)     10.24    Amendment No. 1 to Employment Agreement among Pamida
                  Holdings Corporation, Pamida, Inc., and Steven S.
                  Fishman dated August 29, 1996 (amends Exhibit 10.23).
------------------==============================================================
(12)     10.25    Amendment No. 2 to Employment Agreement among Pamida
                  Holdings Corporation, Pamida, Inc., and Steven S.
                  Fishman dated March 6, 1997 (amends Exhibit 10.23).
------------------==============================================================
         10.26    Amendment No. 3 to Employment Agreement among Pamida
                  Holdings Corporation, Pamida, Inc., and Steven S.
                  Fishman dated May 22, 1997 (amends Exhibit 10.23).
------------------==============================================================
         10.27    Amendment No. 4 to Employment Agreement amount Pamida
                  Holdings Corporation, Pamida Inc., and Steven S.
                  Fishman dated March 5, 1998 (amends Exhibit 10.23).
------------------==============================================================
(8)      10.28    Pamida, Inc., 1995 Deferred Compensation Plan.
------------------==============================================================
(12)     10.29    Employment Agreement dated as of March 6, 1997, among
                  Pamida Holdings Corporation, Pamida, Inc., and Frank
                  A. Washburn.
------------------==============================================================
         10.30    Amendment No. 1 to Employment Agreement among Pamida
                  Holdings Corporation, Pamida, Inc., and Frank A.
                  Washburn dated March 5, 1998 (amends Exhibit 10.29)
------------------==============================================================
(12)     10.31    Employment Agreement dated as of March 6, 1997, among
                  Pamida Holdings Corporation, Pamida, Inc., and George
                  R. Mihalko.
------------------==============================================================
         10.32    Amendment No. 1 to Employment Agreement among Pamida
                  Holdings Corporation, Pamida, Inc., and George R.
                  Mihalko dated March 5, 1998 (amends Exhibit 10.31).
------------------==============================================================
(12)     10.33    Long-Term Incentive Award Agreement dated as of March
                  6, 1997, between Pamida, Inc. and, Steven S. Fishman.
------------------==============================================================
(12)     10.34    Long-Term Incentive Award Agreement dated as of March
                  6, 1997, between Pamida, Inc., and Frank A. Washburn.
------------------==============================================================
(12)     10.35    Long-Term Incentive Award Agreement dated as of March
                  6, 1997, between Pamida, Inc., and George R. Mihalko.
------------------==============================================================
(1)      22.1     Subsidiaries of Pamida Holdings Corporation.
------------------==============================================================
         23.1     Consent of Deloitte & Touche LLP.
------------------==============================================================
         23.2     Consent of Coopers & Lybrand L.L.P.
------------------==============================================================
         24.1     Powers of Attorney
------------------==============================================================
         27.1     Financial Data Schedule (EDGAR filing only)
------------------==============================================================
         27.2     Restated   Financial  Data  Schedule  -  fiscal   years  ended
                  January 28, 1996 and February 2, 1997  and  the three, six and
                  nine   months  ended   April  28,  1996,  July  28,  1996  and
                  October 27, 1996, respectively.  (EDGAR filing only)
------------------==============================================================
         27.3     Restated Financial Data Schedule - three, six and nine  months
                  ended May 4, 1997, August 3, 1997 and November 2, 1997. 
                  (EDGAR filing only)
------------------==============================================================
-------------------------

(1)  Previously filed as an exhibit to Registration Statement of Pamida Holdings
     Corporation on Form S-1 (Registration No. 33-35324) and incorporated herein
     by this reference.

(2)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings   Corporation   for  the  period  ended  October  28,  1990,   and
     incorporated herein by this reference.

(3)  Previously filed as an exhibit to Registration Statement of Pamida, Inc. on
     Form S-l  (Registration  No.  33-10980)  and  incorporated  herein  by this
     reference.

(4)  Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year  ended  February  3, 1991,  and
     incorporated herein by this reference.

(5)  Previously  filed as an exhibit to Registration  Statement of Pamida,  Inc.
     and Pamida Holdings Corporation on Form S-1 (Registration No. 33-57990) and
     incorporated herein by this reference.

(6)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings  Corporation  for the period ended May 2, 1993,  and  incorporated
     herein by this reference.

(7)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings  Corporation for the period ended August 1, 1993, and incorporated
     herein by this reference.

(8)  Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year ended  January  29,  1995,  and
     incorporated herein by this reference.

(9)  Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings   Corporation   for  the  period  ended  October  29,  1995,   and
     incorporated herein by this reference.

(10) Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year ended  January  28,  1996,  and
     incorporated herein by this reference.

(11) Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings   Corporation   for  the  period  ended  October  27,  1996,   and
     incorporated herein by this reference.

(12) Previously  filed as an  exhibit  to Form  10-K  Annual  Report  of  Pamida
     Holdings  Corporation  for the fiscal  year  ended  February  2, 1997,  and
     incorporated herein by this reference.

(13) Previously  filed  as an  exhibit  to Form 8-K  Current  Report  of  Pamida
     Holdings  Corporation  (Date of  Report:  July 22,  1997) and  incorporated
     herein by this reference.

(14) Previously  filed as an  exhibit  to Form 10-Q  Quarterly  Report of Pamida
     Holdings  Corporation  for the period ended May 4, 1997,  and  incorporated
     herein by this reference.