EXHIBIT 13










                               RUDDICK CORPORATION

                       1999 ANNUAL REPORT TO SHAREHOLDERS:

                        CONSOLIDATED FINANCIAL STATEMENTS






<PAGE>
                                                                      Exhibit 13

                    Ruddick Corporation Financial Highlights


(Dollars in thousands, except per share data)        1999         1998

Net Sales                                         $2,624,774   $2,487,370
Total Operating Profit                               104,055       94,196
Earnings Before Interest, Taxes, Depreciation and
    Amortization (EBITDA)                            166,699      152,851
Net Income                                            50,714       46,772
Net Income Per Share
         Basic                                          1.09         1.00
         Diluted                                        1.08         1.00
Dividend Per Share                                       .33          .32
Total Assets                                         970,114      931,618
Shareholders' Equity                                 443,683      410,725
Book Value Per Share                                    9.55         8.82


(Dollars in thousands, except per share data)         1997          1996
Net Sales                                          $2,300,089    $2,142,501
Total Operating Profit                                 94,836        83,143
Earnings Before Interest, Taxes, Depreciation and
    Amortization (EBITDA)                             144,583       125,390
Net Income                                             47,731        42,802
Net Income Per Share
         Basic                                           1.02           .92
         Diluted                                         1.02           .92
Dividend Per Share                                        .32           .26
Total Assets                                          885,243       801,702
Shareholders' Equity                                  380,507       346,856
Book Value Per Share                                     8.17          7.47

(Dollars in thousands, except per share data)        1995
Net Sales                                         $2,009,776
Total Operating Profit                                76,728
Earnings Before Interest, Taxes, Depreciation and
    Amortization (EBITDA)                            114,385
Net Income                                            39,267
Net Income Per Share
         Basic                                           .84
         Diluted                                         .84
Dividend Per Share                                       .25
Total Assets                                         715,318
Shareholders' Equity                                 316,236
Book Value Per Share                                    6.82

<PAGE>

Management's Discussion and Analysis of Financial Condition and Results of
 Operations

Results of Operations - Fiscal 1999 Compared to Fiscal 1998
         For the 53-week fiscal year ended October 3, 1999, consolidated sales
of $2.6 billion increased 5.5% over the $2.5 billion reported in the 52-week
1998 fiscal year. Consolidated fiscal 1999 net income of $50.7 million increased
8% from the $46.8 million reported last year. Basic and diluted earnings per
share were $1.09 and $1.08, respectively, in fiscal 1999 compared to $1.00 for
both in fiscal 1998. The adoption during the first quarter of fiscal 1998 of
Statement of Financial Accounting Standards No. 128, "Earnings per Share," had
no effect on the net income per share for the respective periods. The increase
in net income for fiscal 1999 resulted primarily from increased operating profit
at both Harris Teeter, the Company's retail grocery subsidiary, and American &
Efird (A&E), the industrial thread subsidiary, partially offset by a higher
effective income tax rate for the Company. The Company's effective income tax
rate rose to 37.7% (33.8% in 1998), driven by reduced tax benefits from
Company-owned life insurance (COLI). As a result of 1996 federal tax
legislation, certain policy loan interest which had been partially deductible
for income taxes during a three-year phaseout period was no longer deductible
effective January 1, 1999.

Harris Teeter, Inc. Sales grew by 7% for the 53-week fiscal 1999 to $2.3 billion
from $2.1 billion in the 52-week fiscal 1998. The sales increase was primarily
due to a 5% expansion in store square footage during the fiscal year, as well as
the promotional, advertising and customer service activities for new and
existing stores in the intensely competitive market environment in the
southeastern United States. Further, the rate of food inflation continued to be
modest. Harris Teeter sales for stores in operation during both fiscal years
increased by .9% in fiscal 1999, compared to 4.8% in fiscal 1998. Overall,
chain-wide grocery sales of the current fiscal year grew by 7% and accounted for
51% of the sales increase. Dairy, meat, produce and frozen products had sales
increases ranging from 5% to 10% and accounted for 41% of the sales increase.
The overall sales

<PAGE>

growth was achieved despite a disruption of net sales in certain stores during a
period of transition associated with the third quarter exchange of 11 western
Virginia stores for 10 Kroger stores in the Greensboro and Winston-Salem, North
Carolina market areas. This market realignment afforded the potential to achieve
enhanced distribution efficiency and better utilization of advertising costs.
Harris Teeter closed its 11 Virginia stores in May and opened eight of the newly
acquired Kroger stores during June and July of the fiscal year. Sales lost
during this transition period were partially offset by an increase in sales at
existing Harris Teeter stores in the region.

         Gross profit increased by 7% to $621.3 million in fiscal 1999 from
$581.2 million in fiscal 1998. Operating profit expanded by 6%, to $55.5 million
in fiscal 1999 from $52.1 million in fiscal 1998. These results were primarily
due to higher net sales and improved expense controls, the benefits of which
were partially offset by non-recurring expenses associated with the closings of
the western Virginia stores and the opening of the new stores. The pre-tax cost
of the exchange of stores was not materially different from the $5.5 million
estimate reported by the Company at the time of the transaction. For both fiscal
1999 and 1998, the operating margin on sales remained flat at approximately
2.44%.
         At the end of fiscal 1999, 147 stores were in operation, compared to
144 a year ago. Sixteen new stores were opened during the year, including eight
former Kroger stores in the Greensboro and Winston-Salem, North Carolina area,
and 13 stores were closed, including 11 in western Virginia which were acquired
by Kroger. Harris Teeter expanded its market boundaries this year by opening its
first two stores in the Jacksonville, Florida area.

American & Efird, Inc. In the 53-week fiscal 1999, A&E's sales of $351.6 million
fell 1% from $355.1 million in 52-week fiscal 1998, reflecting the approximately
$3.8 million of prior year sales of A&E's Korean operations, which were closed
in June of 1998. In 1999, the sales decline was primarily in industrial sewing
thread, although consumer thread and notions sales also decreased slightly.
Sales of A&E's industrial thread in the U.S. in both years declined as the
result of the shift of its customers' production to Mexico and the Caribbean
Basin countries, the growth of low-priced apparel imports and a change in
consumer buying trends to more designer apparel, resulting in fewer units sold
at retail. In fiscal 1999, weak demand for industrial thread in the U.S.
resulted in decreased sales during the first and second quarters, although
overall business conditions improved in the second half of the year. In A&E's
foreign operations, while business conditions were somewhat soft in Europe,
sales increases were achieved in the majority of its international markets. In
addition to the anticipated continuation of growth in international markets, A&E
expects that its ability to meet the increasing demands of its customers for top
quality, high performance industrial thread in the apparel, home furnishings and
other markets will provide an opportunity for future growth in sales.

         Gross profit increased by 5% to $106.1 million in fiscal 1999 from
$101.0 million in the prior year, primarily as a result of the additional
operating week in the 1999 fiscal year and increased productivity in
manufacturing operations. Operating profit improved by 16% to $48.6 million in
fiscal 1999 compared to $42.1 million in the prior year, reflecting primarily
the negative impact of $5.4 million in operating losses in Korea in

<PAGE>

fiscal 1998. A&E's productivity improved during fiscal 1999 due to continued
modernization and due to the consolidation of a Charlotte, North Carolina
distribution center and the company's Salisbury, North Carolina dyehouse into
existing facilities in Gastonia, North Carolina.

         Sales by foreign operations in fiscal 1999 increased by 13% over fiscal
1998. Foreign operations contributed 30% of A&E's total sales and 16% of its
operating profits in fiscal 1999. During the fourth quarter of fiscal 1999, A&E
withdrew from its attempt to acquire Hicking Pentecost PLC, a United
Kingdom-based industrial thread manufacturer. While foreign sales and profits
were still not material to the Company's consolidated results of operations,
growth in international sales continued during fiscal 1999. With the exception
of Europe, all major foreign operations improved profitability in fiscal 1999,
with NAFTA continuing to drive strong performances in Canada and Mexico. Export
sales also expanded during fiscal 1999.

Results of Operations - Fiscal 1998 Compared to Fiscal 1997
         For fiscal 1998, consolidated sales of $2.5 billion increased 8% over
the $2.3 billion reported in fiscal 1997. Consolidated net income of $46.8
million fell 2% from the $47.7 million reported for fiscal 1997. Basic and
diluted earnings per share were $1.00 in fiscal 1998 compared to $1.02 in fiscal
1997. The adoption during the first quarter of fiscal 1998 of Statement of
Financial Accounting Standards No. 128, "Earnings per Share," had no effect on
the net income per share for the respective periods. The decrease in net income
for fiscal 1998 was primarily due to lower operating profits at A&E, which
related largely to its Korean operations, not fully offset by the increased
operating profit of Harris Teeter. Further, in fiscal 1998, the Company's
effective income tax rate rose to 33.8% (33.0% in 1997), driven by reduced tax
benefits from Company-owned life insurance (COLI). Federal tax legislation in
1996 restricted the deductibility of certain interest on policy loans to 90% of
the total in 1997 and 80% in 1998.

Harris Teeter, Inc. Sales advanced by 10% in fiscal 1998 to $2.1 billion.
Despite the highly competitive environment for the supermarket industry in
general, Harris Teeter sales for stores in operation in both periods increased
by 4.8% in fiscal 1998, compared to .1% in fiscal 1997. Sales increases were due
to the 7% expansion in store square footage over the course of the year and the
favorable comparable store sales growth which was primarily attributable to
successful promotional and merchandising activities related to the Very
Important Customer (VIC) loyalty card program. Grocery sales grew by 10% and
accounted for 49% of the sales increase. Dairy, meat, produce and frozen
products had sales increases ranging from 8% to 14% and accounted for 39% of the
sales increase. Gross profit increased by 11% to $581.2 million in fiscal 1998
from $525.4 million in the prior year. Operating profit expanded by 14%, to
$52.1 million in fiscal 1998 from $45.7 million in fiscal 1997. These results
were primarily due to the very specific productivity enhancement and cost
management initiatives put in place during 1997 and 1998, and the higher sales
level in fiscal 1998.

         At the end of fiscal 1998, 144 stores were in operation, compared to
138 at the end of fiscal 1997. During fiscal 1998, ten new stores were opened,
one of which was a replacement, and four less profitable stores were closed.

<PAGE>

American & Efird, Inc. For fiscal 1998, sales fell by 4% from fiscal 1997 to
$355.2 million. The sales decline was primarily in industrial sewing thread,
while consumer thread and notions sales increased. The decrease was due to a
relative softness in demand for thread in U.S. markets and a reduction in
exports, offset in part by strong growth in A&E's foreign sales. During fiscal
1997, sales growth had been driven by good market conditions in most major
industries served by A&E, while in fiscal 1998 U.S. sales were impacted by the
shift of business to Mexico and the Caribbean Basin countries, the growth of
low-priced Asian imports and a shift in consumer buying trends to more designer
apparel, resulting in fewer units sold. In A&E's foreign operations, fiscal 1998
sales increases were achieved in all markets except Korea and Hong Kong, and
were especially strong in Mexico and Central America.

         Gross profit in fiscal 1998 declined by 5% to $101.0 million from
$106.8 million in fiscal 1997 as a result of lower sales and the pressure on
margins in the very competitive environment. Operating profit fell by 14% to
$42.1 million in fiscal 1998 compared to $49.1 million in the prior year and was
negatively impacted by the decrease in volume, the deterioration of business
conditions in Korea and costs associated with the withdrawal from that country.
In total, Korean operations and withdrawal reduced operating profit for the
fiscal year 1998 by $5.4 million, or $3.8 million after tax. In addition to the
$3.1 million pre-tax charge for the costs of withdrawal, Korean losses were
affected by currency translation, bad debt write-offs and inventory adjustments.
A&E Korea's sales were $3.8 million in the nine months of operation in 1998 and
$5.8 million in 1997. Further, A&E's profitability declined as improved
manufacturing productivity from the completion of the integration of Threads USA
was more than offset by the unfavorable effects of reduced manufacturing
schedules. A new customer support center, which opened in late 1998,
consolidated all customer interface functions, including sales support and
administration, customer service, credit and marketing, and enhanced efficiency
and lowered costs.

         Excluding Korea, sales by foreign operations made up 25% of A&E's total
sales and 8% of its operating profit in fiscal 1998. While foreign sales and
profits were still not material to the Company's consolidated results of
operations, international sales continued to build significantly. NAFTA
continued to drive strong performances in Canada and Mexico, and apparel
manufacturing continued to increase in Latin America. The A&E majority-owned
joint venture in China also evidenced growth.

Capital Resources and Liquidity
         Ruddick Corporation is a holding company which, through its wholly
owned subsidiaries, Harris Teeter, Inc. and American & Efird, Inc., is engaged
in the primary businesses of regional supermarket operations and industrial
sewing thread manufacture and distribution, respectively. Ruddick has no
material independent operations, nor material assets, other than the investments
in its operating subsidiaries. Ruddick provides a variety of services to its
subsidiaries and is dependent upon income and upstream dividends from its
subsidiaries. There exist no restrictions on such dividends, which are
determined as a percentage of net income of each subsidiary.

         The Company strives to achieve a goal of earning at least a 15% return
on beginning shareholders' equity. The return on beginning equity was 12.3% in
both 1999 and 1998. At the same time, the Company seeks to limit long-term debt
such that it

<PAGE>

constitutes no more than 40% of capital employed, which includes long-term debt,
minority interest and shareholders' equity. As of the end of fiscal 1999, this
percentage was 30.7%, a decrease from last year's 31.6%.

         The Company's principal source of liquidity has been revenue from
operations. The Company also has the ability to borrow up to an aggregate of
$100 million under established revolving lines of credit with three banks. The
maximum amount outstanding under these credit facilities during fiscal 1999 was
$82.8 million, and $40.8 million was outstanding at year end. The majority of
the borrowings under Ruddick's revolving credit facilities were used for capital
expenditures. Borrowings and repayments under these revolving credit facilities
are of the same nature as short-term credit lines; however, due to the nature
and terms of the agreements allowing up to five years for repayment, all
borrowings under these facilities are classified as long-term debt.

         Working capital as of the fiscal years ended 1999, 1998 and 1997 was
$120.0 million, $87.3 million and $88.9 million, respectively. The increase of
$32.7 million in fiscal 1999 was primarily the result of an increase in
inventories and other current assets, and a decrease in accrued liabilities. The
current ratio was 1.5 at October 3, 1999 and 1.4 at September 27, 1998.

         Covenants in certain of the Company's long-term debt agreements limit
the total indebtedness that the Company may incur. The Company remains well
within such covenants. Management believes that the limit on indebtedness does
not significantly restrict the Company's liquidity and that such liquidity is
adequate to meet foreseeable requirements.

         In fiscal 1999, capital expenditures were $96.9 million. In fiscal
2000, capital expenditures are expected to be not more than $130 million. For
further modernization and expansion, American & Efird expects to spend about $30
million. In the very competitive southeast U.S. grocery market, Harris Teeter
has capital expenditure plans totaling about $100 million. The Harris Teeter
estimates include the fiscal year 2000 opening of 12 new stores. New store
locations include two in North Carolina, three in Virginia, one in Maryland,
five in Georgia and one in Tennessee. Management expects that internally
generated funds, supplemented by available borrowing capacity, will be adequate
to finance such expenditures.

Other Matters
Year 2000 Compliance The Company has substantially completed the process of the
modification or conversion of all mission-critical Company computer (IT)
systems, as well as all mission-critical non-IT systems which have embedded
technology such as microcontrollers, to provide for proper functioning beyond
calendar year 1999. During the fiscal year ended September 28, 1997, the Company
had instituted plans and initiated its Year 2000 remediation programs by which
it would complete such remediation by the end of April 1999 in the U.S. and June
1999 in its foreign operations, including final testing in all operations
worldwide by September 1999. Such remediation plans have been modified as the
project progressed, and routine periodic reports have displayed that the project
activities are on schedule with the requirements of the latest Year 2000
remediation and testing plans. At both Harris Teeter and A&E, the assessment,
technical plan development and remediation phases have been fully completed.
Management believes that, on a worldwide basis, all mission-critical systems and
programs have been

<PAGE>

remediated and are fully compliant. Date simulation testing, which has been
ongoing throughout the Year 2000 conversion, is complete on all mission-critical
systems and programs. Additional compliance testing will continue throughout
calendar year 1999 as an added safeguard and in response to any ongoing code
changes or upgrades by software suppliers. The combined companies have spent
$2.8 million cumulatively for Year 2000 compliance since project inception and
expect to spend $300,000 more during the remainder of calendar year 1999 in
order to complete the project. Maintenance and modification costs are expensed
as incurred, while the costs of new software are capitalized and amortized over
the software's useful life. The Company has formal correspondence programs with
its major suppliers and its major thread customers, of which no single customer
exceeds 9% of A&E sales, for inquiry, monitoring and assessing their Year 2000
remediation plans and efforts. All costs of their remediation will be borne by
the suppliers and customers. Management expects that the costs of the Company's
Year 2000 remediation will have no material impact on its results of operations,
liquidity and capital resources and further, that resources are available to
complete the modification and conversion as planned. It must be recognized,
however, that failure to do so could have a material adverse effect on the
Company's future results of operations. The Company has developed contingency
plans to address the potential worst-case scenarios which could conceivably
evolve in mission-critical systems, presumably as a result of the lack of
readiness of outside parties. These plans include temporary and manual
procedures to follow in the event of a system or subsystem failure. In reference
to the supply of goods and services by vendors, the contingency plans will
largely take into account the vendors' progress to adequately address the Year
2000 issue.

         At both A&E and Harris Teeter, the contingency plans were developed to
mitigate the potential impacts of system, equipment or supplier disruptions.
These plans include temporary, manual procedures for each function in the
procurement, production, warehousing, distribution and revenue cycles of the
businesses. Further, alternate sources to supply materials and product have been
determined, and appropriate levels of increased inventories are expected to be
maintained. These plans have been completed and fully documented in worldwide
operations. Additionally, at Harris Teeter, contingency plans further
encompassed the specific potential adversities that could effect the retail
store operations, such as the potential of disruptions in point of sale register
systems, retail price management, cash management, debit and credit card
operations and store inventory replenishment. To a large extent, the contingency
plans engage temporary, manual solutions to each potential random disruption.
While the companies will have remediated and tested all mission-critical
systems, the possibility still exists for random equipment failures, power
outages or system failures of vendors and suppliers. Although the contingency
plans of the Company have been thoroughly and prudently developed, it must be
recognized that disruptions caused by third parties which may be more than
random occurrences or may be catastrophically extensive, could have a material
adverse effect on the Company's results of operations.

Income Taxes As a result of federal legislation which phased out, effective
January 1, 1999, interest deductions on certain insurance policy loans and
thereby significantly diminished the favorable tax attributes of COLI, the
Company's effective income tax rate, in comparison to the prior fiscal year, has
risen to a level slightly below statutory

<PAGE>

rates domestically. The Company has recorded income tax reductions of
approximately $25 million cumulatively as the result of COLI interest deductions
from October 1993 through December 27, 1998. The Internal Revenue Service (IRS),
on a comprehensive national level, is pursuing an adverse position regarding the
deductibility of COLI policy loan interest for years prior to January 1, 1999.
The IRS issued Technical Advice Memoranda regarding the COLI deductibility to
taxpayers unrelated to the Company. Further, on October 19, 1999, the Tax Court
ruled, in a single judge's decision, that Winn-Dixie Stores, Inc., was not
entitled to deduct interest on policy loans from its COLI program, finding that
the program lacked economic substance. Management understands that the adverse
position taken by the IRS will be subjected to extensive further challenges in
the courts, not only by Winn-Dixie but also by many other large corporations
with similar life insurance programs. On June 17, 1999, the IRS issued a notice
of assessment of tax to the Company for the amounts of COLI loan interest
deducted in fiscal years 1994 and 1995. If the IRS were to prevail, the income
tax payable (including federal and state amounts) would total approximately $7.4
million, for 1994 and 1995, and for all years a total of $29.2 million,
including interest thereon. The Company strongly disagrees with the position of
the IRS, has begun the appeal of the assessment and intends to vigorously pursue
justice through the taxpayer appeals process and, if necessary, the judicial
system. In the event that the IRS prevails, this outcome would result in a
material impact upon the Company's future income taxes and results of
operations.

Regarding Forward-Looking Statements
         The foregoing discussion contains some forward-looking statements about
the Company's financial condition and results of operations, which are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's judgment only as of the date hereof. The Company undertakes
no obligation to publicly revise these forward-looking statements to reflect
events and circumstances that arise after the date hereof.

         Factors that might cause the Company's actual results to differ
materially from those anticipated in forward-looking statements include the
following:
o generally adverse economic and industry conditions, including a decline in
consumer demand for apparel products or significant changes in consumer food
preferences or eating habits,
o changes in the competitive environment, including increased competition in the
Company's primary geographic markets, the entry of new competitors and
consolidation in the supermarket industry,
o economic or political changes in the countries in which the Company operates
or adverse trade regulations,
o the passage of future tax legislation, or any regulatory or judicial position
which prevails, if any, that could have an adverse impact on the tax benefits of
COLI,
o management's ability to accurately predict the adequacy of the Company's
present liquidity to meet future requirements,

<PAGE>

o changes in the Company's capital expenditures, new store openings and store
closings, and
o non-availability of resources for the Company, or its suppliers and customers,
to complete their respective Year 2000 compliance effectively.

                          Consolidated Balance Sheets

                                                  October 3         September 27
(Dollars in thousands)                               1999               1998

ASSETS
Current Assets
Cash and Cash Equivalents                         $  14,467         $  16,668
Accounts Receivable, Less Allowance For Doubtful
         Accounts: 1999, $3,233; 1998, $2,046        76,827            76,948
Inventories                                         223,694           211,404
Other Current Assets                                 43,886            27,733
                                                  ---------         ---------
         Total Current Assets                       358,874           332,753
                                                  ---------         ---------
Property
Land and Buildings                                  179,837           166,334
Machinery and Equipment                             613,252           568,078
Leasehold Improvements                              176,074           146,926
Assets Under Capital Leases                           1,920             1,920
                                                  ---------         ---------
         Total, at Cost                             971,083           883,258
Accumulated Depreciation and Amortization           431,526           369,470
                                                  ---------         ---------
         Property, Net                              539,557           513,788
                                                  ---------         ---------
Investments and Other Assets
Investments                                          16,511            17,675
Other Assets                                         55,172            67,402
                                                  ---------         ---------
         Total Assets                            $  970,114        $  931,618
                                                  =========         =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes Payable                                    $      177        $    2,411
Current Portion of Long-term Debt                       429               571
Dividends Payable                                         -             3,726
Accounts Payable                                    143,095           146,149
Federal and State Income Taxes                       14,986             5,456
Accrued Compensation                                 28,179            28,033

<PAGE>

Accrued Interest                                      4,208            19,602
Other Accrued Liabilities                            47,794            39,472
                                                   --------          --------
         Total Current Liabilities                  238,868           245,420
                                                   --------          --------
Non-Current Liabilities
Long-term Debt                                      198,532           191,360
Deferred Income Taxes                                59,774            55,906
Other Liabilities                                    24,531            23,694
Minority Interest                                     4,726             4,513
                                                   --------          --------
Commitments and Contingencies
Shareholders' Equity
Common Stock - Shares Outstanding:
         1999 - 46,451,240;
         1998 - 46,554,591                           52,137            54,686
Retained Earnings                                   393,699           358,328
Cumulative Translation Adjustments                   (2,153)           (2,289)
                                                   --------          --------
         Shareholders' Equity                       443,683           410,725
                                                   --------          --------
         Total Liabilities and
         Shareholders' Equity                    $  970,114        $  931,618
                                                   ========          ========

The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.


            Statements of Consolidated Income and Retained Earnings



                                                   For the Fiscal Years Ended,
                                                 October 3        September 27
(Dollars in thousands except per share data)       1999               1998

Net Sales                                        $2,624,774       $  2,487,370
                                                 ----------       ------------
Cost of Sales                                     1,897,397          1,805,088
Selling, General and Administrative Expenses        623,322            588,086
                                                 ----------       ------------
Operating Profit                                    104,055             94,196
                                                 ----------       ------------
Net Interest Expense                                 14,686             15,973
Other Administrative Expense, Net                     7,980              7,529
                                                 ----------       ------------
Income Before Taxes                                  81,389             70,694
Taxes                                                30,675             23,922
                                                 ----------       ------------
Net Income                                           50,714             46,772
Retained Earnings at Beginning of Fiscal Year       358,328            326,488



                                                 For the Fiscal Years Ended,
                                                        September 28
(Dollars in thousands except per share data)                1997

Net Sales                                               $  2,300,089
                                                        ------------
Cost of Sales                                              1,667,858
Selling, General and Administrative Expenses                 537,395
                                                        ------------
Operating Profit                                              94,836
                                                        ------------
Net Interest Expense                                          14,558
Other Administrative Expense, Net                              8,976
                                                        ------------
Income Before Taxes                                           71,302
Taxes                                                         23,571
                                                        ------------
Net Income                                                    47,731
Retained Earnings at Beginning of Fiscal Year                293,654


Common Dividend - 1999: $.33 a share;
         1998 and 1997: $.32  a share          15,343      14,932     14,897
                                            ---------   ---------  ---------

<PAGE>

Retained Earnings at End of Fiscal Year     $ 393,699   $ 358,328  $ 326,488
                                            =========   =========  =========
Net Income Per Share - Basic                $    1.09   $    1.00  $    1.02
Net Income Per Share - Diluted              $    1.08   $    1.00  $    1.02
                                            =========   =========  =========

The accompanying notes to consolidated financial statements are an integral part
of these statements.

          Statements of Consolidated Total Non-Owner Changes in Equity

                                                     For the Fiscal Years Ended,
                                                     October 3      September 27
(Dollars in thousands)                                 1999             1998

Net Income                                           $  50,714        $  46,772
Other Non-Owner Changes in Equity, Net of Tax:
         Foreign Currency Translation Adjustment           136             (917)
                                                     ---------        ---------
Total Non-Owner Changes in Equity                    $  50,850        $  45,855
                                                     =========        =========


                                                     For the Fiscal Years Ended,
                                                            September 28
(Dollars in thousands)                                          1997

Net Income                                                    $  47,731
Other Non-Owner Changes in Equity, Net of Tax:
         Foreign Currency Translation Adjustment                   (363)
                                                              ---------
Total Non-Owner Changes in Equity                             $  47,368
                                                              =========

The accompanying notes to consolidated financial statements are an integral part
of these statements.

                     Statements of Consolidated Cash Flows

                                                     For the Fiscal Years Ended,
                                           October 3  September 27  September 28
(Dollars in thousands)                        1999       1998          1997

Cash Flow from Operating Activities

Net Income                                  $  50,714  $  46,772    $  47,731
Non-cash Items Included in Net Income
         Depreciation and Amortization         70,624     66,184       58,723
         Deferred Taxes                         1,433      3,064        6,133
         Restructuring Charge                       -       (846)      (1,298)
         Other, Net                            (3,980)     6,668        4,459
Decrease (Increase) in Accounts Receivable        121        904       (7,043)
Decrease (Increase) in Inventories            (12,290)   (15,356)     (12,400)
Decrease (Increase) in Other Current Assets   (13,718)     4,911       (6,965)
Increase (Decrease) in Current Liabilities     (6,410)    11,018        5,742
                                              -------    -------       ------
Net Cash Provided by Operating Activities      86,494    123,319       95,082
                                              -------    -------       ------

<PAGE>

Net Cash Provided by Discontinued
Activities                                          -          -          413
                                              -------    -------     --------
Investing Activities
Capital Expenditures                          (96,937)   (95,473)    (115,299)
Cash Proceeds from Sale of Property             2,931      1,719        1,038
COLI, Net                                      11,084     (1,405)      (2,883)
Other, Net                                      3,419    (13,860)       5,492
                                              -------    -------     --------
Net Cash Used in Investing Activities         (79,503)  (109,019)    (111,652)
                                              -------    -------     --------
Financing Activities
Proceeds from Long-term Borrowings              7,837      2,100       87,650
Payments of Principal on Long-term Debt          (735)      (508)     (61,493)
Dividends Paid                                (15,343)   (14,932)     (14,897)
Other, Net                                       (951)    (1,442)       1,014
                                              -------    -------     --------
Net Cash Provided by (Used in) Financing
Activities                                     (9,192)   (14,782)      12,274
                                              -------    -------     --------
Decrease in Cash and Cash Equivalents          (2,201)      (482)      (3,883)
Cash and Cash Equivalents at Beginning of
Year                                           16,668     17,150       21,033
                                              -------    -------     --------
Cash and Cash Equivalents at End of Year    $  14,467  $  16,668    $  17,150
                                              =======    =======     ========
Supplemental Disclosures of Cash Flow
Information
Cash Paid During the Year for:
Interest                                    $  15,953  $  16,516    $  13,937
Income Taxes                                $  26,439  $  20,201    $  13,725
                                              -------    -------     --------



The accompanying notes to consolidated financial statements are an integral part
of these statements.

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies

Principles of Consolidation
         The accompanying consolidated financial statements include the accounts
of Ruddick Corporation and its wholly owned operating companies, Harris Teeter,
Inc. and American & Efird, Inc., collectively referred to herein as the Company.
All material intercompany amounts have been eliminated. To the extent that
non-affiliated parties held minority equity investments in joint ventures of the
Company, such investments are classified as minority interest.

Cash Equivalents
         For purposes of the statements of consolidated cash flows, the Company
considers all highly liquid cash investments purchased with a maturity of three
Months or less to be cash equivalents.

Inventories

<PAGE>

         Inventories are valued at the lower of cost or market with the cost of
substantially all domestic U.S. inventories being determined using the last-in,
first-out (LIFO) method. The LIFO cost of such inventories was $21,589,000 and
$21,036,000 less than the first-in, first-out (FIFO) cost method at October 3,
1999 and September 27, 1998, respectively. Foreign inventories and limited
categories of domestic inventories, totaling $36,129,000 for fiscal 1999 and
$35,186,000 for fiscal 1998, are valued on the weighted average and on the FIFO
cost methods.

Property and Depreciation
         Property is at cost and is depreciated, using principally the
straight-line method, over the following useful lives:

         Land improvements                                    10-40    years
         Buildings                                            10-50    years
         Machinery and equipment                               3-15    years

         Leasehold improvements are depreciated over the lesser of the estimated
useful life or the remaining term of the lease. Assets under capital leases are
amortized on a straight-line basis over the lesser of 20 years or the lease
term. Maintenance and repairs are charged against income when incurred.
Expenditures for major renewals, replacements and betterments are added to
property. The cost and the related accumulated depreciation of assets retired
are eliminated from the accounts; gains or losses on disposal are added to or
deducted from income. Property categories include $12,512,000 and $28,854,000
undepreciated construction in progress at October 3, 1999 and September 27,
1998, respectively.

Investments
         The Company holds a financial position in certain shopping centers in
which Harris Teeter, Inc., is an anchor tenant. Additionally it makes loans to
and equity investments in a number of emerging growth companies, primarily
through investments in certain venture capital funds. Real estate and financial
investments are carried at the lower of cost or market. In management's opinion,
the net aggregate carrying value of financial instruments of $6,662,000 and
$7,924,000 held for investment approximated their aggregate fair values at
October 3, 1999 and September 27, 1998, respectively.

Other Assets
         Other assets include cash surrender value of Company-owned life
insurance (COLI), investment in unconsolidated foreign subsidiaries and various
acquisition costs. The cash surrender value of life insurance is recorded net of
policy loans. The net life insurance expense, including interest expense of
$9,005,000 in 1999; $16,831,000 in 1998, and $18,490,000 in 1997 is included in
other administrative expense in the statements of consolidated income and
retained earnings. Acquisition costs allocated to other assets, including
favorable lease rights and goodwill, are being amortized over 10-15 years.

Fair Value Disclosures
         The carrying amounts for certain of the Company's financial
instruments, including cash and cash equivalents, accounts and notes receivable,
accounts payable and other accrued liabilities approximate fair value because of
their short maturities. The recorded amount of fixed rate obligations
approximates their fair value based on borrowing rates currently available to
the Company for loans with similar terms and maturities. The Company reviews the
carrying value of property and equipment

<PAGE>

whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. Measurement of any impairment would include a comparison of
estimated future operating cash flows anticipated to be generated during the
remaining life to the net carrying value of the asset. At October 3, 1999, the
carrying value of the Company's long-lived assets and intangibles, including
Goodwill, was recoverable in all material respects.

Advertising
         Costs incurred to produce media advertising are expensed in the period
in which the advertising first takes place. All other advertising costs are also
expensed when incurred. Cooperative advertising income from vendors is recorded
in the period in which the related expense is incurred. Net advertising expenses
of $22,696,000, $20,721,000, and $15,555,000 were included in the Company's
results of operations for fiscal 1999, 1998 and 1997, respectively.

Income Taxes
         Ruddick and its subsidiaries file a consolidated federal income tax
return. Tax credits are recorded as a reduction of federal income taxes in the
years in which they are utilized. Deferred tax liabilities or assets at the end
of each period are determined using the tax rate expected to be in effect when
taxes are actually paid or recovered. Accordingly, income tax expense will
increase or decrease in the same period in which a change in tax rates is
enacted.

Per Share Amounts
         The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings per Share," effective with the beginning of its first fiscal
quarter of 1998 and, accordingly, basic and diluted net income per share amounts
were determined based on the weighted average number of shares of common stock
and common stock equivalents (non-cumulative, voting $.56 convertible preference
stock and stock options) outstanding. The weighted average basic shares
outstanding were 46,511,523 in 1999, 46,667,416 in 1998, and 46,542,505 in 1997.
As the result of outstanding stock options, the weighted average diluted shares
outstanding were 46,746,650 in 1999, 46,964,423 in 1998 and 46,825,469 in 1997.
Common stock equivalents reduced earnings per share by $.01 in 1999, and had no
effect on the per share amounts in 1998 and 1997.

Stock options
         As permitted by SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company continues to record compensation cost for stock
option plans in accordance with Accounting Principles Board Opinion No. 25.
Accordingly, compensation cost of stock options is measured as the excess, if
any, of the market price of the Company's stock at the date of the grant over
the option exercise price and is charged to operations over the vesting period.
Income tax benefits attributable to stock options exercised are credited to
capital stock.

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 amounts could differ from those estimates.

Reclassifications

<PAGE>

         To conform with classifications adopted in the current year, the
financial statements for prior years reflect certain reclassifications, which
have no effect on net income.

New Accounting Standards
         Derivative Instruments and Hedging: SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," will be effective for the
Company's fiscal year 2001. The Statement established accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met, and requires that a
company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting. The Company has not yet quantified
the impacts of adopting SFAS No. 133 on its consolidated financial statements
and has not determined the timing of or method of adoption. Management does not
expect the impact of adoption of this statement on the Company's financial
position and results of operations to be material.

Leases
         The Company leases certain equipment under agreements expiring during
the next four years. Harris Teeter leases most of its stores under leases that
expire during the next 23 years. It is expected that such leases will be renewed
by exercising options or replaced by leases of other properties. Most store
leases provide for additional rentals based on sales, and certain store
facilities are sublet under leases expiring during the next eight years. Rent
expenses were as follows:

(In thousands)             1999             1998              1997

Operating Leases:
Minimum                 $  65,791        $  59,720         $  52,327
Contingent                  1,218            1,157               941
                        ---------        ---------         ---------
Total                   $  67,009        $  60,877         $  53,268
                        ---------        ---------         ---------
         Future minimum lease commitments at October 3, 1999 (excluding leases
assigned or expected to be assigned - see below) were as follows:

(In thousands)                           Capital Leases    Operating Leases

2000                                           $  183            $  67,854
2001                                              183               60,957
2002                                              183               56,640
2003                                              115               54,507
2004                                                6               53,342
Later years                                         -              499,768
                                               ------            ---------
Total minimum lease payments                   $  670            $ 793,068
Less amount representing interest              ------            ---------
         (Store premises, 6.75%-10.25%,

<PAGE>



         store equipment, 8%-15%)                 114
                                               ------
Present value of minimum lease obligations        556
Less current portion                              136
                                               ------
Long-term capital lease obligations            $  420
                                               ------
Net book value of assets under capital leases  $  249
                                               ------
Total minimum sublease rentals to be received
        under noncancelable subleases                            $ 18,809
                                                                 --------


         In connection with the closing of certain store locations, Harris
Teeter has assigned leases to other merchants with recourse. These leases expire
over the next 19 years and the future minimum lease payments of $42,080,000 over
this period have been assumed by these merchants. In addition, Harris Teeter
leases certain store locations which are not currently in use but are expected
to be assigned to other merchants. These leases expire over the next 18 years
and the future minimum lease payments related to these locations total
$23,261,000 (approximating $2,047,000 per year for each of the next five years).

LONG-TERM DEBT
         Long-term debt at October 3, 1999 and September 27, 1998 was as
follows:

(In thousands)                                                    1999

6.48% Senior Note due $7,143 annually
         March, 2005 through 2011                              $  50,000
7.72% Senior Note due April, 2017                                 50,000
7.55% Senior Note due July, 2017                                  50,000
Revolving line of credit, variable rate, due February 2004        40,800
Industrial revenue bond, variable rate, due November 2000          2,500
Obligations under capital leases and other                         5,661
                                                              ----------
         Total                                                   198,961
         Less current portion                                        429
                                                              ----------
         Total long-term debt                                 $  198,532
                                                              ----------




(In thousands)                                                    1998

6.48% Senior Note due $7,143 annually
         March, 2005 through 2011                              $  50,000
7.72% Senior Note due April, 2017                                 50,000
7.55% Senior Note due July, 2017                                  50,000
Revolving line of credit, variable rate, due February 2004        36,000
Industrial revenue bond, variable rate, due November 2000          2,500
Obligations under capital leases and other                         3,431
                                                               ---------
         Total                                                   191,931
         Less current portion                                        571
                                                               ---------
         Total long-term debt                                  $ 191,360
                                                               ---------

         Long-term debt maturities, excluding obligations under capital leases,
in each of the next five fiscal years are as follows: 2000 - $293,000; 2001 -
$2,810,000; 2002 - $266,000; 2003 - $281,000; 2004 - $299,000. Additionally in
fiscal 2004, the revolving line of credit ($40,800,000 as of October 3, 1999)
would mature; however, management expects to obtain the one-year extension of
term upon receipt of the mutual consent of lenders under the evergreen
provisions of the loan agreement.

         During 1999 and 1998 the maximum outstanding borrowing under the
revolving line of credit was $82,800,000 and $86,700,000, respectively, and the
average outstanding for the fiscal years was $57,669,000 and $63,272,000,
respectively. The daily weighted average interest rate (a variable rate related
to the current published CD rate) was 5.6% and a commitment fee of .15% of the
unused line was charged during 1999 and

<PAGE>

1998. As of October 3, 1999, the Company had available $59,200,000 of committed
capacity under its revolving credit facility.

         Various loan agreements provide, among other things, for maintenance of
minimum levels of consolidated shareholders' equity or tangible net worth. At
October 3, 1999, consolidated tangible net worth exceeded by $102,847,000 the
balance which, under the most restrictive provisions, must be maintained through
October 1, 2000. The requirement shall increase annually by 40% of consolidated
net income for such year. Total interest expense on long-term debt was
$14,997,000, $16,596,000, and $14,615,000 in 1999, 1998 and 1997, respectively.

CAPITAL STOCK
         The capital stock of the Company authorized at October 3, 1999 was
1,000,000 shares of Additional Preferred, 4,000,000 shares of
Preference-noncumulative $.56 convertible, voting ($10 liquidation value), and
75,000,000 shares of Common.

         Changes in shares issued and outstanding and in shareholders' equity
accounts other than retained earnings are summarized as follows:

                                                       Common
(In thousands except share amounts)                    Shares         Amount

Balance at September 29, 1996                        46,461,290     $   55,599
                                                     ----------     ----------
         Shares issued under exercised stock options    138,011          1,008
         Tax effect of disqualifying option stocks            -            106
         Other                                                -             66
                                                     ----------     ----------
Balance at September 28, 1997                        46,599,301     $   56,779
                                                     ----------     ----------
         Shares issued under exercised stock options    223,710          2,107
         Shares purchased and retired                  (268,420)        (4,676)
         Tax effect of disqualifying option stocks            -            381
         Other                                                -             95
                                                     ----------     ----------
Balance at September 27, 1998                        46,554,591     $   54,686
                                                     ----------     ----------
         Shares issued under exercised stock options    135,149          1,359
         Shares purchased and retired                  (238,500)        (4,233)
         Tax effect of disqualifying option stocks            -            282
         Other                                                -             43
                                                     ----------     ----------
Balance at October 3, 1999                           46,451,240     $   52,137
                                                     ----------     ----------

         One preferred share purchase right is attached to each outstanding
share of common stock, which rights expire on November 15, 2000. Each right
entitles the holder to purchase one four-hundredth of a share of a new Series A
Junior Participating Additional Preferred Stock at $26.25. The rights will
become exercisable only under certain circumstances related to a person or group
acquiring or offering to acquire a

<PAGE>

substantial portion of the Company's common stock. If certain additional events
then occur, each right would entitle the rightholder to acquire common stock of
the Company, or in some cases of an acquiring entity, having a value equal to
twice the exercise price. Under certain circumstances the Board of Directors may
exchange all or part of the outstanding rights at an exchange ratio per right of
one share of common stock, or one four-hundredth of a share of Series A Junior
Participating Additional Preferred Stock, or may redeem each right at a price of
$.0025. There are 200,000 shares of Series A Junior Participating Additional
Preferred Stock reserved for issuance upon exercise of the rights.

Stock Options
         At October 3, 1999, the Company has 1988, 1993, 1995 and 1997 stock
option plans which authorized options for 3,100,000 shares of common stock.
Under the plans, the Company may grant to officers and management personnel
incentive stock options which become exercisable in installments of 20% per year
at each of the first through fifth anniversaries from grant date and which
expire seven years from grant date. Additionally, under the 1995 plan, the
Company grants a single, one-time nonqualified stock option of 10,000 shares,
generally vested immediately, to each of its outside directors. Further, under
the 1997 plan the Company may grant performance shares, stock awards, restricted
stock and nonqualified stock options to employees and outside directors as well
as incentive stock options to employees. Under each of the plans, the exercise
price of each option shall be no less than the market price of the Company's
stock on the date of grant and an option's maximum term is ten years. At the
discretion of the Company, under certain plans a stock appreciation right may be
granted and exercised in lieu of the exercise of the related option (which is
then forfeited). Under the plans, as of October 3, 1999, the Company may grant
additional options for the purchase of 695,800 shares.

          A summary of the status of the Company's stock option plans as of
October 3, 1999, September 27, 1998 and September 28, 1997, changes during the
years ending on those dates and related weighted average exercise price is
presented below:


                                           1999                  1998
(Shares in thousands)               Shares      Price      Shares     Price

Outstanding at beginning of year     1,343     $ 14.85      1,011   $  10.99
Granted                                387       19.85        610      19.29
Exercised                             (140)      10.36       (235)      9.89
Forfeited                             (102)      17.79        (43)     14.10
                                     ------     -------      -----   --------
Outstanding at end of year           1,488       16.36      1,343      14.85
                                     ------     -------      -----   --------
Options exercisable at year-end        519     $ 13.59        399   $  11.50
                                     ------     -------      -----   --------


                                           1997
(Shares in thousands)                Shares     Price

Outstanding at beginning of year     1,116     $ 10.40
Granted                                120       13.45
Exercised                             (181)       9.05
Forfeited                              (44)      10.64
                                      -----     -------
Outstanding at end of year           1,011       10.99
                                      -----     -------
Options exercisable at year-end        422     $ 10.29
                                      -----     -------
<PAGE>


The following table summarizes options outstanding and options exercisable as of
October 3, 1999, and the related weighted average remaining contractual life
(years) and weighted average exercise price (shares in thousands):

 Options Outstanding        Options Exercisable        Shares Remaining   Shares
Option Price per Share     Outstanding   Life     Price    Exercisable     Price

$  9.16 to $ 13.38             578        3.1    $ 11.49       362       $ 11.33
    14.38 to 18.47              40        8.4      16.98        40         16.98
    19.31 to 20.28             870        5.7      19.57       117         19.39
                            ------     -------     -----     -----       -------
$  9.16 to $ 20.28           1,488        4.8    $ 16.36       519       $ 13.59
                            ------     -------     -----     -----       -------
         The weighted average fair value at date of grant for options granted
during fiscal 1999, 1998 and 1997 was $5.12, $5.44 and $3.82 per option,
respectively. The fair value of options at date of grant was estimated using the
Black-Scholes model with the following weighted average assumptions:

                                     1999             1998              1997

Expected life (years)                 4.8              5.1               4.9
Risk-free interest rate              4.67%            5.80%             5.91%
Volatility                          28.66%           28.44%            28.65%
Dividend yield                       2.10%            2.20%             2.10%

         The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." Accordingly, no compensation cost has
been recognized for the stock options granted in fiscal 1999, 1998 or 1997. Had
compensation cost been determined based on the fair value at the grant date
consistent with the provisions of this statement, the Company's pro forma net
income and basic and diluted net income per share would have been as follows:

(In thousands, except per share data)       1999           1998          1997

Net income - as reported                 $  50,714     $   46,772     $   47,731
           - pro forma                      49,727         45,846         47,381
Net income per share:
     Basic - as reported                 $    1.09     $     1.00     $     1.02
           - pro forma                        1.07            .98           1.01
  Diluted  - as reported                 $    1.08     $     1.00     $     1.02
           - pro forma                        1.06            .98           1.01
<PAGE>

         The pro forma effect on net income for fiscal 1999, 1998 and 1997 is
not representative of the pro forma effect on net income in future years because
it does not take into consideration pro forma compensation expense related to
grants made prior to fiscal year 1996.

INCOME TAXES
         The provision for income taxes consisted of the following:

(In thousands)                  1999             1998           1997

CURRENT
         Federal             $  24,320        $  15,903      $   12,803
         State and other         4,921            4,955           4,687
                             ---------        ---------      ----------
                                29,241           20,858          17,490
                             ---------        ---------      ----------
DEFERRED
         Federal                 1,129            3,004           5,034
         State and other           305               60           1,047
                             ---------        ---------      ----------
                                 1,434            3,064           6,081
                             ---------        ---------      ----------
Provision for income taxes   $  30,675        $  23,922      $   23,571
                             ---------        ---------      ----------

         Income from foreign operations before income taxes in fiscal 1999, 1998
and 1997 was $1,249,000, $1,402,000 and $4,520,000, respectively.

         Income tax expense differed from an amount computed by applying the
statutory tax rates to pre-tax income as follows:


(In thousands)                                    1999         1998        1997

Income tax on pre-tax income at
        the statutory federal rate of 35%   $  28,486     $  24,743   $  24,956
Increase (decrease) attributable to:
         State and other income taxes,
         net of federal income tax benefit      4,331         3,748       3,265
         COLI                                  (1,066)       (3,528)     (3,528)
         Other items, net                      (1,076)       (1,041)     (1,122)
                                             ---------     ---------  ----------
Income tax expense                          $  30,675    $   23,922   $  23,571
                                             ---------     ---------  ----------


         The tax effects of temporary differences giving rise to the Company's
consolidated deferred tax liability at October 3, 1999 and September 27, 1998
are as follows:

(In thousands)                                      1999            1998

Deferred Tax Assets
Employee benefits                                 $  6,963        $  6,483

<PAGE>

Reserves not currently deductible                    9,091           7,344
Other                                                6,081           4,501
                                                  --------        --------
Total deferred tax assets                         $ 22,135        $ 18,328
                                                  --------        --------
Deferred Tax Liabilities
Property, plant and equipment                     $(60,479)       $(55,607)
Other capitalized costs                             (4,579)         (4,337)
Undistributed profit on foreign subsidiaries        (5,049)         (3,479)
Other                                               (4,354)         (5,797)
                                                  --------        --------
Total deferred tax liabilities                    $(74,461)       $(69,220)
                                                  --------        --------
INDUSTRY SEGMENT INFORMATION
         The Company operates primarily in two businesses: industrial thread
(textile primarily) - American & Efird, and retail grocery (including the real
estate and store development activities of the Company) - Harris Teeter.
American & Efird manufactures sewing thread for the apparel and other markets.
Harris Teeter operates a regional chain of supermarkets.
         Summarized information for fiscal 1999, 1998 and 1997 is as follows:


                              Industrial       Retail    Corporate
(In millions)                   Thread         Grocery      (1)     Consolidated

1999

Net Sales                       $  351.6     $  2,273.2              $  2,624.8
                                --------     ----------              ----------
Gross Profit                       106.1          621.3                   727.4
                                --------     ----------              ----------
Operating Profit                    48.6           55.5                   104.1
                                --------     ----------              ----------
Assets Employed at Year End     $  284.4     $    614.3  $ 71.4      $    970.1
Depreciation and Amortization       17.3           52.2     1.1            70.6
Capital Expenditures                15.6           77.5     3.8            96.9
1998
Net Sales                       $  355.2     $  2,132.2              $  2,487.4
                                --------     ----------              ----------
Gross Profit                       101.0          581.3                   682.3
                                --------     ----------              ----------
Operating Profit                    42.1           52.1                    94.2
                                --------     ----------              ----------
Assets Employed at Year End     $  285.7     $    578.9  $ 67.0      $    931.6
Depreciation and Amortization       16.6           48.6     1.0            66.2
Capital Expenditures                20.2           75.1     0.2            95.5
1997
Net Sales                       $  368.9     $  1,931.2              $  2,300.1
                                --------     ----------              ----------
Gross Profit                       106.8          525.4                   632.2
                                --------     ----------              ----------
Operating Profit                    49.1           45.7                    94.8
                                --------     ----------              ----------
Assets Employed at Year End     $  299.7     $    521.7  $ 63.8      $    885.2
Depreciation and Amortization       15.4           42.5     0.8            58.7
Capital Expenditures                28.9           86.2     0.2           115.3

<PAGE>

(1) Corporate Assets Employed include investment assets and net cash surrender
value of Company-owned life insurance.

         Geographic information as required by SFAS No. 131 is as follows: Net
revenue received from domestic United States customers was $2,520,502,000 in
fiscal 1999 ($2,394,821,000 in 1998), and net revenue received from customers in
foreign countries was $104,272,000 for fiscal 1999 ($92,549,000 in 1998). Net
long-lived assets located in the domestic United States were $524,200,000 at
fiscal year end 1999 ($497,700,000 in 1998), and net long-lived assets located
in other foreign countries were $20,600,000 and $20,300,000 at fiscal year end
1999 and 1998, respectively.

COMMITMENTS AND CONTINGENCIES
         Substantially all domestic full-time employees of the Company and its
subsidiaries participate in non-contributory defined benefit pension plans.
Employees in foreign subsidiaries participate to varying degrees in local
pension plans, which, in the aggregate, are not significant. Employee retirement
benefits are a function of both the years of service and compensation for a
specified period of time before retirement. The Company's current funding policy
is to contribute annually the minimum amount required by regulatory authorities.

         The following table sets forth the change in benefit obligation and
plans' assets, as well as the defined benefit plans' funded status and amounts
recognized in the Company's consolidated balance sheets at October 3, 1999 and
September 27, 1998:


(In thousands)                                            1999           1998

Change in benefit obligation:
         Benefit obligation at the beginning of year   $   128,922   $  110,191
         Service cost                                        6,446        5,592
         Interest cost                                       9,013        8,531
         Actuarial loss (gain)                             (13,221)       9,799
         Benefits paid                                      (5,851)      (5,191)
                                                        ----------   ----------
Pension benefit obligation at end of year                  125,309      128,922
                                                        ==========   ==========
Change in plan assets:
         Fair value of assets at the beginning of year      98,412       92,611
         Actual return on plan assets                        5,610        4,366
         Employer contribution                               8,387        6,626
         Benefits paid                                      (5,850)      (5,191)
                                                        ----------   ----------
Fair value of assets at end of year                        106,559       98,412
                                                        ==========   ==========
         Funded status                                     (18,750)     (30,510)
         Unrecognized net actuarial loss                    13,596       24,701
         Unrecognized prior service cost                     1,657        2,060

<PAGE>

         Unrecognized transition asset                        (753)      (1,147)
                                                        ----------   ----------
Accrued benefit cost                                    $   (4,250)  $   (4,896)
                                                        ==========   ==========
Amounts recognized in the statement of
financial position consist of:
         Accrued benefit liability                      $   (4,250)  $   (4,896)
                                                        ==========   ==========

         The plans' assets consist primarily of U. S. government securities,
corporate bonds, cash equivalents and domestic equities, managed primarily by
two banks. The contribution payable at October 3, 1999 and September 27, 1998,
required to be paid by due date of the federal income tax return, was $1,686,000
and $2,501,000, respectively.

         In 1999 (1998), a 7.5% (6.8%) weighted average discount rate and 4.5%
(4.5%) rate of increase in future payroll costs were used in determining the
actuarial present value of the projected benefit obligations. The expected
long-term rate of return on assets was 8.75% for 1999 and 1998.
         Net periodic pension expense for defined benefit plans for fiscal 1999,
1998, and 1997 included the following components:


(In thousands)                            1999          1998           1997

Service cost                           $   6,446      $   5,592      $  4,464
Interest cost                              9,013          8,531         7,789
Expected return on plan assets            (8,750)        (7,907)       (6,213)
Amortization of transition asset            (394)          (394)         (394)
Amortization of prior service cost           403            403           403
Recognized net actuarial loss              1,024            390             -
                                       ---------      ---------     ---------
Net periodic benefit cost              $   7,742      $   6,615     $   6,049
                                       ---------      ---------     ---------

         The Company also has an Employee Stock Ownership Plan (ESOP), a
profit-sharing plan and certain other plans. Expenses under these plans were as
follows:

 (In thousands)               1999         1998          1997

ESOP                       $  7,540     $   8,043     $   8,733
                           --------     ---------     ---------
Profit-sharing                2,292         1,609         3,098
                           --------     ---------     ---------
Other                         2,717         2,525         2,517
                           --------     ---------     ---------
         The Company is involved in various lawsuits and environmental and
patent matters arising in the normal course of business. Management believes
that such matters will not have a material effect on the financial condition or
results of operations of the Company.

         As a result of federal legislation which phased out, effective January
1, 1999, interest deductions on certain insurance policy loans and thereby
significantly diminished the favorable tax attributes of COLI, the Company's
effective income tax rate, in comparison to the prior fiscal year, has risen to
a level slightly below statutory rates domestically. The Company has recorded
income tax reductions of approximately $25

<PAGE>

million cumulatively as the result of COLI interest deductions from October 1993
through December 27, 1998. The Internal Revenue Service, on a comprehensive
national level, is pursuing an adverse position regarding the deductibility of
COLI policy loan interest for years prior to January 1, 1999. The IRS issued
Technical Advice Memoranda regarding COLI deductibility to taxpayers unrelated
to the Company. Further, on October 19, 1999, the Tax Court ruled, in a single
judge's decision, that Winn-Dixie Stores, Inc., was not entitled to deduct
interest on policy loans from its COLI program, finding that the program lacked
economic substance. Management understands that the adverse position taken by
the IRS will be subjected to extensive further challenges in the courts, not
only by Winn-Dixie but also by many other large corporations with similar life
insurance programs. On June 17, 1999, the IRS issued a notice of assessment of
tax to the Company for the amounts of COLI loan interest deducted in fiscal
years 1994 and 1995. If the IRS were to prevail, the income tax payable
(including federal and state amounts) would total approximately $7.4 million,
for 1994 and 1995, and for all years a total of $29.2 million, including
interest thereon. The Company strongly disagrees with the position of the IRS,
has begun the appeal of the assessment and intends to vigorously pursue justice
through the taxpayer appeals process and, if necessary, the judicial system. In
the event that the IRS prevails, this outcome would result in a material impact
upon the Company's future income taxes and results of operations.

         See Leases for additional commitments and contingencies.
Quarterly Information (Unaudited)
         The following table sets forth certain financial information, the high
and low sales prices and dividends declared for the common stock for the periods
indicated. The Company's common stock is listed and traded on the New York Stock
Exchange. As of October 3, 1999, there were 5,895 holders of record of common
stock.

                                             First        Second
(In millions, except per share data)        Quarter       Quarter

1999 Operating Results

Net Sales                                  $  652.1      $  645.7
Net Income                                     12.6          12.7
Net Income Per Share                            .27           .27
Dividend Per Share                              .08           .08
Market Price Per Share
         High                                    22            23
         Low                                     15 5/8        16 1/2

1998 Operating Results
Net Sales                                  $  617.6      $  616.3    $
Net Income                                     12.0          11.4
Net Income Per Share                            .26           .24
Dividend Per Share                              .08           .08

                                              Third      Fourth
(In millions, except per share data)         Quarter     Quarter

1999 Operating Results

Net Sales                                    $  636.6    $  690.4
Net Income                                       12.3        13.1
Net Income Per Share                              .26         .28
Dividend Per Share                                .08         .09
Market Price Per Share
         High                                      19 5/8      20
         Low                                       16 1/8      15 1/4

1998 Operating Results
Net Sales                                       620.5    $  633.0
Net Income                                       10.3        13.1
Net Income Per Share                              .22         .28
Dividend Per Share                                .08         .08

<PAGE>


Market Price Per Share
         High        21 3/8        19 7/8       19 1/16     18 5/16
         Low         14 5/8        15 7/8       17          15

Report of Independent Public Accountants

To the Board of Directors of Ruddick Corporation:
         We have audited the accompanying consolidated balance sheets of Ruddick
Corporation (a North Carolina corporation) and subsidiaries as of October 3,
1999 and September 27, 1998, and the related statements of consolidated income
and retained earnings and consolidated cash flows for each of the three years in
the period ended October 3, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Ruddick
Corporation and subsidiaries as of October 3, 1999 and September 27, 1998, and
the results of their operations and their cash flows for each of three years in
the period ended October 3, 1999 in conformity with generally accepted
accounting principles.

                                                          /s/Arthur Andersen LLP

Charlotte, North Carolina
October 28, 1999

Eleven-Year Financial and Operating Summary

(Dollars in thousands, except per share data)


                          1999(1)    1998        1997      1996       1995

Net Sales
   American & Efird   $   351,618  $ 355,147  $ 368,877  $ 309,459  $ 297,963
   Harris Teeter        2,273,156  2,132,223  1,931,212  1,833,042  1,711,813
                      ----------- ---------- ----------  --------- ----------
      Total Net Sales $ 2,624,774 $2,487,370 $2,300,089  2,142,501 $2,009,776
                      ----------- ---------- ----------  --------- ----------
Operating Profit
   American & Efird   $    48,617 $   42,070  $  49,165  $  34,684 $   34,614
   Harris Teeter           55,438     52,126     45,671     48,459     42,114
                      ----------- ---------- ----------  --------- ----------
      Total Operating
        Profit        $   104,055 $   94,196   $ 94,836  $  83,143 $   76,728
                      ----------- ---------- ----------  --------- ----------
Net Income            $    50,714 $   46,772   $ 47,731  $  42,802 $   39,267
Net Income Per Share
         - Diluted           1.08       1.00       1.02        .92        .84
Common Dividend               .33        .32        .32        .26        .25
                      ----------- ---------- ----------  --------- ----------
Earnings Before
 Interest, Taxes,
Depreciation and
 Amortization         $   166,699 $  152,851  $ 144,583  $ 125,390 $  114,385
                      ----------- ---------- ----------  --------- ----------
Shareholders' Equity  $   443,683 $  410,725  $ 380,507  $ 346,856 $  316,236
Percent Return on
    Beginning Equity         12.3%      12.3%      13.8%      13.5%      13.5%
Book Value Per Share  $      9.55 $     8.82  $    8.17  $    7.47 $     6.82
                      ----------- ---------- ----------  --------- ----------
Capital Expenditures
  American & Efird    $    15,658 $   20,246  $  28,878  $  35,605(2)$ 16,359
    Harris Teeter          77,513     75,082     86,237     83,204     81,447



                         1994      1993(1)     1992        1991

Net Sales
   American & Efird   $  277,016  $ 264,814   $243,324  $ 208,649
   Harris Teeter       1,578,880  1,412,315  1,270,430  1,213,127
                      ---------- ---------- ---------- ----------
      Total Net Sales $1,855,896 $1,677,129 $1,513,754 $1,421,776
                      ---------- ---------- ---------- ----------
Operating Profit
   American & Efird   $   26,916   $ 30,551 $   28,510 $   22,589
   Harris Teeter          37,032     29,845     31,067     34,329
                      ---------- ---------- ---------- ----------
      Total Operating
        Profit        $   63,948   $ 60,396 $   59,577 $   56,918
                      ---------- ---------- ---------- ----------
Net Income              $ 31,811   $ 33,873 $   30,789 $   26,786
Net Income Per Share
         - Diluted           .67        .71        .65        .59
Common Dividend              .22        .21        .20        .19
                      ---------- ---------- ---------- ----------
Earnings Before
 Interest, Taxes,
Depreciation and
 Amortization         $   99,166   $ 97,490  $  96,047  $  89,025
                      ---------- ---------- ---------- ----------
Shareholders' Equity  $  291,209   $274,740  $ 255,403  $ 233,566
Percent Return on
    Beginning Equity        11.6%      13.3%      13.2%      14.5%
Book Value Per Share  $     6.28   $   5.87  $    5.44  $    4.98
                      ---------- ---------- ---------- ----------
Capital Expenditures
  American & Efird    $   20,416   $ 19,433  $  16,399  $  11,417
    Harris Teeter         46,349     33,683     25,910     30,903


                                        1990        1989
Net Sales
   American & Efird                $   199,115   $  190,004
   Harris Teeter                     1,164,445    1,053,467
                                   -----------   ----------
      Total Net Sales              $ 1,363,560   $1,243,471
                                   -----------   ----------

Operating Profit
   American & Efird                     18,403   $   17,732
   Harris Teeter                        32,212       27,444
                                   -----------   ----------
      Total Operating
        Profit                     $    50,615   $   45,176
                                   -----------   ----------
Net Income                              24,031   $   20,190
Net Income Per Share
         - Diluted                         .55          .47
Common Dividend                            .18          .16
                                   -----------   ----------
Earnings Before
 Interest, Taxes,
Depreciation and
 Amortization                       $   80,389   $   71,927
                                   -----------   ----------
Shareholders' Equity                $  184,371   $  158,921
Percent Return on
    Beginning Equity                      15.1%        14.0%
Book Value Per Share                $     4.54   $     4.07
                                   -----------   ----------
Capital Expenditures
  American & Efird                  $   15,923   $   14,742
    Harris Teeter                       27,376       31,611

<PAGE>


                                      1999(1)    1998        1997      1996

Corporate                               3,766       145         184      4,471
                                     --------  --------   ---------  ---------
  Total Capital Expenditures         $ 96,937  $ 95,473   $ 115,299  $ 123,280
                                     --------  --------   ---------  ---------
Working Capital                      $120,006  $ 87,333   $  88,893  $  65,134
Total Assets                         $970,114  $931,618   $ 885,243  $ 801,702
Long-Term Debt - Including
   Current Portion                   $198,961  $191,931   $ 190,494  $ 164,435
Long-Term Debt as a Percent
   of Capital Employed     %             30.7%     31.6%       33.1%      32.2
Number of Employees                    19,800    20,700      19,700     20,100
Number of Beneficial
  Shareholders Including
  Employee/Owners                      21,000    21,000      19,100     16,700
Common Shares Outstanding          46,451,240 46,554,591 46,599,301 46,461,290
                                   ========== ========== ========== ==========


                                      1995       1994      1993(1)       1992

Corporate                                 399         35         27       4,039
                                    ---------  ---------  ---------   ---------
  Total Capital Expenditures        $  98,205  $  66,800  $  53,143   $  46,348
                                    ---------  ---------  ---------   ---------
Working Capital                     $  73,741     93,387  $ 103,191   $ 105,527
Total Assets                        $ 715,318  $ 634,599  $ 580,807   $ 535,407
Long-Term Debt - Including
   Current Portion                  $ 128,952  $ 109,567  $ 104,173   $  97,280
Long-Term Debt as a Percent
   of Capital Employed                   29.0%      27.3%      27.5%       27.6%
Number of Employees                    19,850     18,610     17,120      13,720
Number of Beneficial
  Shareholders Including
  Employee/Owners                      14,500     14,100     14,600      12,900
Common Shares Outstanding          46,373,666 46,352,214 46,036,146  46,124,798
                                   ========== ========== ==========  ==========


                                        1991     1990        1989

Corporate                                  60       2,323      2,975
                                     --------   ---------   --------
  Total Capital Expenditures         $ 42,380   $  45,622   $ 49,328
                                     --------   ---------   --------
Working Capital                      $ 79,640   $  74,688   $ 60,724
Total Assets                         $498,458   $ 468,295   $439,104
Long-Term Debt - Including
   Current Portion                   $ 83,850   $ 115,266   $115,757
Long-Term Debt as a Percent
   of Capital Employed                   26.4%       38.5%      42.1%
Number of Employees                    13,500      13,185     13,100
Number of Beneficial
  Shareholders Including
  Employee/Owners                      11,400      11,100     11,000
Common Shares Outstanding          46,002,708  39,321,300 37,551,972
                                   ==========  ========== ==========

(1) 53-week year
(2) Includes purchase of assets of Threads USA