##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

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

For the quarterly period ended October 11, 2003

Commission File Number 0-1532

MARSH SUPERMARKETS, INC.

(Exact name of registrant as specified in its charter)


|                                                              |  |                                 
|------------------------------------------------------------- |  | --------------------------------
|INDIANA                                                       |  | 35-0918179                      
|(State or other
jurisdiction ofincorporation or organization) |  | (IRS EmployerIdentification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|9800 CROSSPOINT BOULEVARD               
|INDIANAPOLIS, INDIANA                    |  | 46256-3350
|(Address of principal executive offices) |  | (Zip Code)

(317) 594-2100
(Registrants telephone number, including area code)

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 twelve months
and (2) has been subject to such filing requirements for at least the past 90
days.

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes  [  ] No   [x]

Number of shares outstanding of each class of the registrants common
stock as of October 31, 2003:

|                     |  |   |  |  |           |  |       
|-------------------- |  | - |  |  | --------- |  | ------
|Class A Common Stock |  | - |  |  | 3,805,838 |  | shares
|Class B Common Stock |  | - |  |  | 4,134,396 |  | shares
|                     |  |   |  |  |           |  |       
|                     |  |   |  |  | 7,940,234 |  | shares
|                     |  |   |  |  |           |  |       





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TABLE OF CONTENTS



|                                                     |                                                                                               |  |  |  |  |  |  | 
|---------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION                        
|                                                     | Item 1. Financial Statements                                                                 
|NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                                                     | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                     | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                     | Item 4. Controls and Procedures                                                              
|PART II  OTHER INFORMATION                         
|                                                     | Item 1. Legal Proceedings                                                                    
|                                                     | Item 2. Changes in Securities and Use of Proceeds                                            
|                                                     | Item 3. Defaults upon Senior Securities                                                      
|                                                     | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                     | Item 5. Other Information                                                                    
|                                                     | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                          
|EX-4  SECOND AMENDED AND RESTATED CREDIT AGREEMENT  
|EX-31.1  SECTION 302 CEO CERTIFICATION              
|EX-31.2  SECTION 302 CFO CERTIFICATION              
|EX-32.1  SECTION 906 CEO CERTIFICATION              
|EX-32.2  SECTION 906 CFO CERTIFICATION              



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PART I FINANCIAL INFORMATION




Item 1. Financial Statements

MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------ |  | -------------- | ------- | -------------- |  | ----------- | ------- | ----------- |  | - | ------- | - |  | - | ------- | -
|                                                                                           |  | 16 Weeks Ended |         | 28 Weeks Ended
|                                                                                           |  |                |         |               
|                                                                                           |  | October 11,    |         | October 12,    |  | October 11, |         | October 12,
|                                                                                           |  | 2003           |         | 2002           |  | 2003        |         | 2002       
|                                                                                           |  |                |         |                |  |             |         |            
|Sales and other revenues                                                                   |  | $              | 508,955 |                |  | $           | 512,722 |             |  | $ | 886,965 |   |  | $ | 896,217 |  
|Gains from sales of property                                                               |  |                | 1,814   |                |  |             | 1,875   |             |  |   | 1,814   |   |  |   | 3,546   |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Total revenues                                                                             |  |                | 510,769 |                |  |             | 514,597 |             |  |   | 888,779 |   |  |   | 899,763 |  
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |                | 358,854 |                |  |             | 360,019 |             |  |   | 623,611 |   |  |   | 626,250 |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Gross profit                                                                               |  |                | 151,915 |                |  |             | 154,578 |             |  |   | 265,168 |   |  |   | 273,513 |  
|Selling, general and administrative                                                        |  |                | 138,053 |                |  |             | 138,739 |             |  |   | 240,172 |   |  |   | 241,653 |  
|Depreciation                                                                               |  |                | 7,660   |                |  |             | 7,527   |             |  |   | 13,422  |   |  |   | 13,117  |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Operating income                                                                           |  |                | 6,202   |                |  |             | 8,312   |             |  |   | 11,574  |   |  |   | 18,743  |  
|Interest                                                                                   |  |                | 5,925   |                |  |             | 7,410   |             |  |   | 10,495  |   |  |   | 12,833  |  
|Other non-operating expense (income)                                                       |  |                | (327    | )              |  |             |        |             |  |   | (961    | ) |  |   |        |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Income from continuing operations
before income taxes                                      |  |                | 604     |                |  |             | 902     |             |  |   | 2,040   |   |  |   | 5,910   |  
|Income taxes                                                                               |  |                | 229     |                |  |             | 578     |             |  |   | 852     |   |  |   | 2,425   |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Income from continuing operations                                                          |  |                | 375     |                |  |             | 324     |             |  |   | 1,188   |   |  |   | 3,485   |  
|Loss on disposal of
discontinued operation, net of tax                                     |  |                |        |                |  |             | (18     | )           |  |   |        |   |  |   | (199    | )
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Net income                                                                                 |  | $              | 375     |                |  | $           | 306     |             |  | $ | 1,188   |   |  | $ | 3,286   |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Basic earnings per common share:                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Continuing operations                                                                      |  | $              | .05     |                |  | $           | .04     |             |  | $ | .15     |   |  | $ | .44     |  
|Loss on disposal of discontinued operation                                                 |  |                |        |                |  |             |        |             |  |   |        |   |  |   | (.03    | )
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Net income                                                                                 |  | $              | .05     |                |  | $           | .04     |             |  | $ | .15     |   |  | $ | .41     |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Diluted earnings per common share:                                                         |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Continuing operations                                                                      |  | $              | .05     |                |  | $           | .04     |             |  | $ | .15     |   |  | $ | .41     |  
|Loss on disposal of discontinued operation                                                 |  |                |        |                |  |             |        |             |  |   |        |   |  |   | (.02    | )
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Net income                                                                                 |  | $              | .05     |                |  | $           | .04     |             |  | $ | .15     |   |  | $ | .39     |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  
|Dividends per share                                                                        |  | $              | .13     |                |  | $           | .11     |             |  | $ | .26     |   |  | $ | .22     |  
|                                                                                           |  |                |         |                |  |             |         |             |  |   |         |   |  |   |         |  

See notes to condensed consolidated financial statements.

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MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |         |         |  |  | 
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | ------- | ------- | ------- | ----------- | ------- | --------- | ------- | ----------- | ------- | ------- | ------- |  |  | 
|                                                         |                                             |                             |         |         |         | October 11, |         | March 29, |         | October 12,
|                                                         |                                             |                             |         |         |         | 2003        |         | 2003      |         | 2002       
|                                                         |                                             |                             |         |         |         |             |         |           |         |            
|                                                         |                                             |                             |         |         |         | (Unaudited) |         | (Note A)  |         | (Unaudited)
|Assets                                                   |                                             |                             |         |         |         |             |         |           |         |             |         |        
|Current assets:                                          |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         | Cash and equivalents                        |                             | $       | 27,368  |         |             | $       | 28,313    |         |             | $       | 33,066  |        
|                                                         | Accounts receivable, net                    |                             |         | 26,094  |         |             |         | 27,203    |         |             |         | 34,417  |        
|                                                         | Inventories                                 |                             |         | 122,807 |         |             |         | 135,855   |         |             |         | 138,081 |        
|                                                         | Prepaid expenses                            |                             |         | 4,711   |         |             |         | 5,731     |         |             |         | 6,061   |        
|                                                         | Recoverable income taxes                    |                             |         | 2,319   |         |             |         |          |         |             |         | 968     |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | Total current assets        |         |         | 183,299 |             |         |           | 197,102 |             |         |         | 212,593 | 
|Property and equipment, less allowances for depreciation |                                             |                             | 307,533 |         |         |             | 311,469 |           |         |             | 315,802 |        
|Other assets                                             |                                             |                             | 50,921  |         |         |             | 46,309  |           |         |             | 48,142  |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | $                           | 541,753 |         |         | $           | 554,880 |           |         | $           | 576,537 |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|Liabilities and Shareholders Equity                     |                                             |                             |         |         |         |             |         |           |         |             |         |        
|Current liabilities:                                     |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         | Notes payable to bank                       |                             | $       |        |         |             | $       | 1,700     |         |             | $       |        |        
|                                                         | Accounts payable                            |                             |         | 69,519  |         |             |         | 71,883    |         |             |         | 72,538  |        
|                                                         | Accrued liabilities                         |                             |         | 51,611  |         |             |         | 49,665    |         |             |         | 53,754  |        
|                                                         | Current maturities of long-term liabilities |                             |         | 3,250   |         |             |         | 3,452     |         |             |         | 3,340   |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | Total current liabilities   |         |         | 124,380 |             |         |           | 126,700 |             |         |         | 129,632 | 
|Long-term liabilities:                                   |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         | Long-term debt                              |                             |         | 183,335 |         |             |         | 198,148   |         |             |         | 217,474 |        
|                                                         | Capital lease obligations                   |                             |         | 28,482  |         |             |         | 29,009    |         |             |         | 29,437  |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | Total long-term liabilities |         |         | 211,817 |             |         |           | 227,157 |             |         |         | 246,911 | 
|Deferred items:                                          |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         | Income taxes                                |                             |         | 14,198  |         |             |         | 11,525    |         |             |         | 17,337  |        
|                                                         | Pension and post-retirement benefits        |                             |         | 43,723  |         |             |         | 40,824    |         |             |         | 22,832  |        
|                                                         | Other                                       |                             |         | 17,005  |         |             |         | 17,226    |         |             |         | 17,490  |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | Total deferred items        |         |         | 74,926  |             |         |           | 69,575  |             |         |         | 57,659  | 
|Shareholders Equity:                                    |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         | Common stock, Classes A and B               |                             |         | 26,455  |         |             |         | 26,439    |         |             |         | 26,418  |        
|                                                         | Retained earnings                           |                             |         | 134,674 |         |             |         | 135,550   |         |             |         | 137,068 |        
|                                                         | Cost of common stock in treasury            |                             |         | (15,014 | )       |             |         | (14,928   | )       |             |         | (14,713 | )      
|                                                         | Deferred cost - restricted stock            |                             |         | (25     | )       |             |         | (54       | )       |             |         | (166    | )      
|                                                         | Notes receivable - stock options            |                             |         | (76     | )       |             |         | (175      | )       |             |         | (948    | )      
|                                                         | Accumulated other comprehensive loss        |                             |         | (15,384 | )       |             |         | (15,384   | )       |             |         | (5,324  | )      
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | Total shareholders equity  |         |         | 130,630 |             |         |           | 131,448 |             |         |         | 142,335 | 
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        
|                                                         |                                             | $                           | 541,753 |         |         | $           | 554,880 |           |         | $           | 576,537 |        
|                                                         |                                             |                             |         |         |         |             |         |           |         |             |         |        

See notes to condensed consolidated financial statements.

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MARSH SUPERMARKETS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|                                                                                  |  |                                             |         |                |        |             |         |   |        |  
|--------------------------------------------------------------------------------- |  | ------------------------------------------- | ------- | -------------- | ------ | ----------- | ------- | - | ------ | -
|                                                                                  |  |                                             |         | 28 Weeks Ended
|                                                                                  |  |                                             |         |               
|                                                                                  |  |                                             |         | October 11,    |        | October 12,
|                                                                                  |  |                                             |         | 2003           |        | 2002       
|                                                                                  |  |                                             |         |                |        |            
|Operating activities                                                              |  |                                             |         |                |        |             |         |  
|Net income                                                                        |  | $                                           | 1,188   |                |        | $           | 3,286   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                             |         |                |        |             |         |  
|                                                                                  |  | Depreciation                                |         |                | 13,422 |             |         |   | 13,117 |  
|                                                                                  |  | Amortization of other assets                |         |                | 817    |             |         |   | 798    |  
|                                                                                  |  | Changes in operating assets and liabilities |         |                | 12,292 |             |         |   | 2,614  |  
|                                                                                  |  | Other operating activities                  |         |                | 633    |             |         |   | (2,509 | )
|                                                                                  |  |                                             |         |                |        |             |         |  
|Net cash provided by operating activities                                         |  |                                             | 28,352  |                |        |             | 17,306  |  
|Investing activities                                                              |  |                                             |         |                |        |             |         |  
|Net acquisition of property, equipment and land                                   |  |                                             | (8,462  | )              |        |             | (24,653 | )
|Other investing activities                                                        |  |                                             | (1,756  | )              |        |             | (768    | )
|                                                                                  |  |                                             |         |                |        |             |         |  
|Net cash used for investing activities                                            |  |                                             | (10,218 | )              |        |             | (25,421 | )
|Financing activities                                                              |  |                                             |         |                |        |             |         |  
|Repayments of short-term borrowings                                               |  |                                             | (1,700  | )              |        |             | (1,300  | )
|Proceeds of long-term borrowings                                                  |  |                                             | 20,000  |                |        |             | 15,000  |  
|Proceeds of sale/leasebacks                                                       |  |                                             | 298     |                |        |             | 27,309  |  
|Repayments of long-term debt and capital leases                                   |  |                                             | (35,542 | )              |        |             | (35,401 | )
|Cash dividends paid                                                               |  |                                             | (2,065  | )              |        |             | (1,754  | )
|Purchases of shares for treasury                                                  |  |                                             | (129    | )              |        |             | (321    | )
|Other financing activities                                                        |  |                                             | 59      |                |        |             | 132     |  
|                                                                                  |  |                                             |         |                |        |             |         |  
|Net
cash provided by (used for) financing activities                              |  |                                             | (19,079 | )              |        |             | 3,665   |  
|                                                                                  |  |                                             |         |                |        |             |         |  
|Net decrease in cash and equivalents                                              |  |                                             | (945    | )              |        |             | (4,450  | )
|Cash and equivalents at beginning of period                                       |  |                                             | 28,313  |                |        |             | 37,516  |  
|                                                                                  |  |                                             |         |                |        |             |         |  
|Cash and equivalents at end of period                                             |  | $                                           | 27,368  |                |        | $           | 33,066  |  
|                                                                                  |  |                                             |         |                |        |             |         |  

See notes to condensed consolidated financial statements.

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MARSH SUPERMARKETS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts or as otherwise noted)

October 11, 2003

Note A  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Marsh
Supermarkets, Inc. and subsidiaries were prepared in accordance with generally
accepted accounting principles for interim financial information and the
instructions to Form 10-Q. Accordingly, they do not include all the information
and footnotes necessary for a fair presentation of financial position, results
of operations, and cash flows in conformity with accounting principles
generally accepted in the United States. This report should be read in
conjunction with the Companys Consolidated Financial Statements for the year
ended March 29, 2003. The balance sheet at March 29, 2003, has been derived
from the audited financial statements at that date.

The Companys fiscal year ends on Saturday of the thirteenth week of each
calendar year. All references herein to 2004 and 2003 relate to the fiscal
years ending March 27, 2004 and March 29, 2003, respectively.

The condensed consolidated financial statements for the sixteen and
twenty-eight week periods ended October 11, 2003 and October 12, 2002,
respectively, were not audited by independent auditors. Preparation of the
financial statements requires management to make estimates that affect the
reported amounts of assets, liabilities, revenues and expenses for the
reporting periods. In the opinion of management, the statements reflect all
adjustments (consisting of normal recurring accruals) considered necessary to
present fairly, on a consolidated basis, the financial position, results of
operations and cash flows for the periods presented. Certain reclassifications
have been made to prior period amounts to conform to current presentations.

Operating results for the twenty-eight week period ended October 11, 2003, are
not necessarily indicative of the results that may be expected for the full
fiscal year ending March 27, 2004.

Note B  Discontinued Operation

In October 2001, the Company completed the sale of certain assets of its
wholesale division. The loss on disposal of discontinued operation reported in
the condensed consolidated statements of income relates primarily to
adjustments to accounts receivable and a workers compensation reserve
attributable to that division. The remaining assets and liabilities from the
discontinued operation included in the condensed consolidated balance sheet at
October 11, 2003, are not material.

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Note C  Earnings Per Share

The following table sets forth the computation of the numerators and
denominators used in the computation of basic and diluted earnings per share:

|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |       |  
|----------------------------------------------------------------------------- | ---------------------------- | - | -------------- | -- | ----------- | - | ----- | --- | -------------- | - | ----------- |  | ----------- | - | ----- | -- | - | - | ----- | ----- | -
|                                                                              |                              |   | 16 Weeks Ended |    |             |   |       |     | 28 Weeks Ended |  
|                                                                              |                              |   |                |    |             |   |       |     |                |  
|                                                                              |                              |   | October 11,    |    | October 12, |   |       |     |                |   | October 11, |  | October 12,
|                                                                              |                              |   | 2003           |    | 2002        |   |       |     |                |   | 2003        |  | 2002       
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |            
|Income from continuing operations                                             |                              | $ | 375            |    |             | $ | 324   |     |                |   |             |  |             | $ | 1,188 |    |   | $ | 3,485 |      
|Loss on disposal of discontinued operation                                    |                              |   |               |    |             |   | (18   | )   |                |   |             |  |             |   |      |    |   |   | (199  | )    
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      
|Numerator for basic earnings per share                                        |                              |   | 375            |    |             |   | 306   |     |                |   |             |  |             |   | 1,188 |    |   |   | 3,286 |      
|Effect of convertible debentures                                              |                              |   |               |    |             |   |      | (a  | )              |   |             |  |             |   |      |    |   |   | 442   |      
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      
|Numerator for diluted earnings per share
- income after assumed conversions   |                              | $ | 375            |    |             | $ | 306   |     |                |   |             |  |             | $ | 1,188 |    |   | $ | 3,728 |      
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      
|Weighted average shares outstanding                                           |                              |   | 7,950          |    |             |   | 7,970 |     |                |   |             |  |             |   | 7,950 |    |   |   | 7,973 |      
|                                                                              | Non-vested restricted shares |   |                | (3 | )           |   |       | (27 | )              |   |             |  |             |   |       | (5 | ) |   |       | (27   | )
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      
|Denominator for basic earnings per share                                      |                              |   | 7,947          |    |             |   | 7,943 |     |                |   |             |  |             |   | 7,945 |    |   |   | 7,946 |      
|Effect of dilutive securities:                                                |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      
|                                                                              | Non-vested restricted shares |   |                | 3  |             |   |       | 27  |                |   |             |  |             |   |       | 5  |   |   |       | 27    |  
|                                                                              | Stock options                |   |                | 64 |             |   |       | 123 |                |   |             |  |             |   |       | 63 |   |   |       | 220   |  
|                                                                              | Convertible debentures       |   |                |   |             |   |       |    | (a             | ) |             |  |             |   |       |   |   |   |       | 1,284 |  
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      
|Denominator for diluted earnings per share
- adjusted weighted average shares |                              |   | 8,014          |    |             |   | 8,093 |     |                |   |             |  |             |   | 8,013 |    |   |   | 9,477 |      
|                                                                              |                              |   |                |    |             |   |       |     |                |   |             |  |             |   |       |    |   |   |       |      

(a)  convertible debentures are excluded, as the effect would have been
anti-dilutive.

Note D - Stock Option Plans

The Companys stock option plans are accounted for under the intrinsic value
method of APB Opinion 25 and related interpretations. Since the exercise price
of options granted under the plans is equal to the market price of the
underlying common stock on the grant date, no stock-based compensation cost is
recognized in net income.

The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of FAS 123:

|                                                                  |         |   |                |     |                |   |             |     |             |   |       |     |  |   |       |     | 
|----------------------------------------------------------------- | ------- | - | -------------- | --- | -------------- | - | ----------- | --- | ----------- | - | ----- | --- |  | - | ----- | --- | 
|                                                                  |         |   | 16 Weeks Ended |     | 28 Weeks Ended
|                                                                  |         |   |                |     |               
|                                                                  |         |   | October 11,    |     | October 12,    |   | October 11, |     | October 12,
|                                                                  |         |   | 2003           |     | 2002           |   | 2003        |     | 2002       
|                                                                  |         |   |                |     |                |   |             |     |            
|Net income, as reported                                           |         | $ | 375            |     |                | $ | 306         |     |             | $ | 1,188 |     |  | $ | 3,286 |    
|Less compensation expense using
the fair value method, net of tax |         |   | (246           | )   |                |   | (344        | )   |             |   | (454  | )   |  |   | (589  | )  
|                                                                  |         |   |                |     |                |   |             |     |             |   |       |     |  |   |       |    
|Pro-forma net income                                              |         | $ | 129            |     |                | $ | (38         | )   |             | $ | 734   |     |  | $ | 2,697 |    
|                                                                  |         |   |                |     |                |   |             |     |             |   |       |     |  |   |       |    
|Earnings per share, as reported:                                  |         |   |                |     |                |   |             |     |             |   |       |     |  |   |       |    
|                                                                  | Basic   |   | $              | .05 |                |   | $           | .04 |             |   | $     | .15 |  |   | $     | .41 | 
|                                                                  | Diluted |   |                | .05 |                |   |             | .04 |             |   |       | .15 |  |   |       | .39 | 
|Earnings per share, pro-forma:                                    |         |   |                |     |                |   |             |     |             |   |       |     |  |   |       |    
|                                                                  | Basic   |   |                | .02 |                |   |             |    |             |   |       | .09 |  |   |       | .34 | 
|                                                                  | Diluted |   |                | .02 |                |   |             |    |             |   |       | .09 |  |   |       | .28 | 

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Note E  Long-Term Debt

During the second quarter and twenty-eight weeks ended October 11, 2003 the
Company purchased and retired $7.25 million and $16.75 million, respectively,
of its 8 7/8% senior subordinated notes at less than face value. The purchases
resulted in gains of $0.3 million and $0.9 million, respectively, for the
second quarter and twenty-eight weeks ended October 11, 2003.

During the quarter ended October 11, 2003, the Companys revolving credit
facility was amended with the effect of a) decreasing permitted borrowings to
$82.5 million from $95.0 million, b) increasing the carrying cost of land and
buildings securing the facility to $73.5 million from $49.6 million, and c)
modifying the measures of certain debt covenants.

Note F  Long-Term Debt and Guarantor Subsidiaries

Other than three minor subsidiaries, all of the Companys
subsidiaries (the Guarantors) have fully and unconditionally guaranteed on a
joint and several basis the Companys obligations under the $150.0 million of 8
7/8% senior subordinated notes. The Guarantors are 100% wholly owned
subsidiaries of the Company.

Statement of income for the 16 weeks ended October 11, 2003:

|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------ |  | ------ | ----- | ------------ |  | --------- | ------- | ------------- |  | - | ------ | - |  | - | ------- | -
|                                                                                           |  |        |       |              |  | Guarantor |         | Consolidating |  |   |        |  
|                                                                                           |  | Parent |       | subsidiaries |  | entries   |         | Total        
|                                                                                           |  |        |       |              |  |           |         |              
|Sales and other revenues                                                                   |  | $      | 1,513 |              |  | $         | 508,952 |               |  | $ | (1,510 | ) |  | $ | 508,955 |  
|Gains from sales of property                                                               |  |        |      |              |  |           | 1,814   |               |  |   |       |   |  |   | 1,814   |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Total revenues                                                                             |  |        | 1,513 |              |  |           | 510,766 |               |  |   | (1,510 | ) |  |   | 510,769 |  
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |        |      |              |  |           | 358,854 |               |  |   |       |   |  |   | 358,854 |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Gross profit                                                                               |  |        | 1,513 |              |  |           | 151,912 |               |  |   | (1,510 | ) |  |   | 151,915 |  
|Selling, general and administrative                                                        |  |        | 807   |              |  |           | 138,756 |               |  |   | (1,510 | ) |  |   | 138,053 |  
|Depreciation                                                                               |  |        | 550   |              |  |           | 7,110   |               |  |   |       |   |  |   | 7,660   |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Operating income                                                                           |  |        | 156   |              |  |           | 6,046   |               |  |   |       |   |  |   | 6,202   |  
|Interest                                                                                   |  |        | 562   |              |  |           | 5,363   |               |  |   |       |   |  |   | 5,925   |  
|Other
non-operating expense (income)                                                       |  |        | (327  | )            |  |           |        |               |  |   |       |   |  |   | (327    | )
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Income (loss) from continuing operations
before income taxes                               |  |        | (79   | )            |  |           | 683     |               |  |   |       |   |  |   | 604     |  
|Income taxes (benefit)                                                                     |  |        | (33   | )            |  |           | 262     |               |  |   |       |   |  |   | 229     |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                   |  | $      | (46   | )            |  | $         | 421     |               |  | $ |       |   |  | $ | 375     |  
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         |  

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Statement of income for the 16 weeks ended October 12, 2002:

|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|------------------------------------------------------------------------------------------ |  | ------ | ----- | ------------ |  | --------- | ------- | ------------- |  | - | ------ | - |  | - | ------- | 
|                                                                                           |  |        |       |              |  | Guarantor |         | Consolidating |  |   |        |  
|                                                                                           |  | Parent |       | subsidiaries |  | entries   |         | Total        
|                                                                                           |  |        |       |              |  |           |         |              
|Sales and other revenues                                                                   |  | $      | 1,526 |              |  | $         | 512,706 |               |  | $ | (1,510 | ) |  | $ | 512,722 | 
|Gains from sales of property                                                               |  |        |      |              |  |           | 1,875   |               |  |   |       |   |  |   | 1,875   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Total revenues                                                                             |  |        | 1,526 |              |  |           | 514,581 |               |  |   | (1,510 | ) |  |   | 514,597 | 
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |        |      |              |  |           | 360,019 |               |  |   |       |   |  |   | 360,019 | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Gross profit                                                                               |  |        | 1,526 |              |  |           | 154,562 |               |  |   | (1,510 | ) |  |   | 154,578 | 
|Selling, general and administrative                                                        |  |        | 834   |              |  |           | 139,415 |               |  |   | (1,510 | ) |  |   | 138,739 | 
|Depreciation                                                                               |  |        | 427   |              |  |           | 7,100   |               |  |   |       |   |  |   | 7,527   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Operating income                                                                           |  |        | 265   |              |  |           | 8,047   |               |  |   |       |   |  |   | 8,312   | 
|Interest                                                                                   |  |        | 690   |              |  |           | 6,720   |               |  |   |       |   |  |   | 7,410   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Income (loss) from continuing operations
before income taxes                               |  |        | (425  | )            |  |           | 1,327   |               |  |   |       |   |  |   | 902     | 
|Income taxes (benefit)                                                                     |  |        | (187  | )            |  |           | 765     |               |  |   |       |   |  |   | 578     | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Income (loss) from continuing operations                                                   |  | $      | (238  | )            |  | $         | 562     |               |  | $ |       |   |  | $ | 324     | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 

Statement of income for the 28 weeks ended October 11, 2003:

|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |   | 
|------------------------------------------------------------------------------------------ |  | - | ------ | - | ------------ | - | --------- |  | ------------- | - | ------ | - |  | - | ------- | - | 
|                                                                                           |  |   |        |   |              |   | Guarantor |  | Consolidating |   |        |   | 
|                                                                                           |  |   | Parent |   | subsidiaries |   | entries   |  | Total        
|                                                                                           |  |   |        |   |              |   |           |  |              
|Sales and other revenues                                                                   |  | $ | 2,648  |   |              | $ | 886,960   |  |               | $ | (2,643 | ) |  | $ | 886,965 |  
|Gains from sales of property                                                               |  |   |       |   |              |   | 1,814     |  |               |   |       |   |  |   | 1,814   |  
|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |  
|Total revenues                                                                             |  |   | 2,648  |   |              |   | 888,774   |  |               |   | (2,643 | ) |  |   | 888,779 |  
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |   |       |   |              |   | 623,611   |  |               |   |       |   |  |   | 623,611 |  
|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |  
|Gross profit                                                                               |  |   | 2,648  |   |              |   | 265,163   |  |               |   | (2,643 | ) |  |   | 265,168 |  
|Selling, general and administrative                                                        |  |   | 1,463  |   |              |   | 241,352   |  |               |   | (2,643 | ) |  |   | 240,172 |  
|Depreciation                                                                               |  |   | 961    |   |              |   | 12,461    |  |               |   |       |   |  |   | 13,422  |  
|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |  
|Operating income                                                                           |  |   | 224    |   |              |   | 11,350    |  |               |   |       |   |  |   | 11,574  |  
|Interest                                                                                   |  |   | 981    |   |              |   | 9,514     |  |               |   |       |   |  |   | 10,495  |  
|Other non-operating expense (income)                                                       |  |   | (961   | ) |              |   |          |  |               |   |       |   |  |   | (961    | )
|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |  
|Income from continuing operations
before income taxes                                      |  |   | 204    |   |              |   | 1,836     |  |               |   |       |   |  |   | 2,040   |  
|Income taxes                                                                               |  |   | 86     |   |              |   | 766       |  |               |   |       |   |  |   | 852     |  
|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |  
|Income from continuing operations                                                          |  | $ | 118    |   |              | $ | 1,070     |  |               | $ |       |   |  | $ | 1,188   |  
|                                                                                           |  |   |        |   |              |   |           |  |               |   |        |   |  |   |         |  

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Statement of income for the 28 weeks ended October 12, 2002:

|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|------------------------------------------------------------------------------------------ |  | ------ | ----- | ------------ |  | --------- | ------- | ------------- |  | - | ------ | - |  | - | ------- | 
|                                                                                           |  |        |       |              |  | Guarantor |         | Consolidating |  |   |        |  
|                                                                                           |  | Parent |       | subsidiaries |  | entries   |         | Total        
|                                                                                           |  |        |       |              |  |           |         |              
|Sales and other revenues                                                                   |  | $      | 2,671 |              |  | $         | 896,189 |               |  | $ | (2,643 | ) |  | $ | 896,217 | 
|Gains from sales of property                                                               |  |        |      |              |  |           | 3,546   |               |  |   |       |   |  |   | 3,546   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Total revenues                                                                             |  |        | 2,671 |              |  |           | 899,735 |               |  |   | (2,643 | ) |  |   | 899,763 | 
|Cost of merchandise sold,
including warehousing and transportation,
excluding depreciation |  |        |      |              |  |           | 626,250 |               |  |   |       |   |  |   | 626,250 | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Gross profit                                                                               |  |        | 2,671 |              |  |           | 273,485 |               |  |   | (2,643 | ) |  |   | 273,513 | 
|Selling, general and administrative                                                        |  |        | 1,484 |              |  |           | 242,812 |               |  |   | (2,643 | ) |  |   | 241,653 | 
|Depreciation                                                                               |  |        | 743   |              |  |           | 12,374  |               |  |   |       |   |  |   | 13,117  | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Operating income                                                                           |  |        | 444   |              |  |           | 18,299  |               |  |   |       |   |  |   | 18,743  | 
|Interest                                                                                   |  |        | 1,196 |              |  |           | 11,637  |               |  |   |       |   |  |   | 12,833  | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Income (loss) from continuing operations
before income taxes                               |  |        | (752  | )            |  |           | 6,662   |               |  |   |       |   |  |   | 5,910   | 
|Income taxes (benefit)                                                                     |  |        | (308  | )            |  |           | 2,733   |               |  |   |       |   |  |   | 2,425   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 
|Income (loss) from continuing operations                                                   |  | $      | (444  | )            |  | $         | 3,929   |               |  | $ |       |   |  | $ | 3,485   | 
|                                                                                           |  |        |       |              |  |           |         |               |  |   |        |   |  |   |         | 

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Balance sheet as of October 11, 2003:

|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |         |         |  |  | 
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | -------- | ------- | ------- | ------ | ------- | ------------ | ------- | --------- | ------- | ------- | ------- |  |  | 
|                                                         |                                             |                             |          |         |         |        |         |              |         | Guarantor |         |         |         | 
|                                                         |                                             |                             |          |         |         | Parent |         | subsidiaries |         | Total    
|                                                         |                                             |                             |          |         |         |        |         |              |         |          
|Assets                                                   |                                             |                             |          |         |         |        |         |              |         |           |         |        
|Current assets:                                          |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         | Cash and equivalents                        |                             | $        |        |         |        | $       | 27,368       |         |           | $       | 27,368  |        
|                                                         | Accounts receivable                         |                             |          |        |         |        |         | 26,094       |         |           |         | 26,094  |        
|                                                         | Inventories                                 |                             |          |        |         |        |         | 122,807      |         |           |         | 122,807 |        
|                                                         | Prepaid expenses                            |                             |          | 6       |         |        |         | 4,705        |         |           |         | 4,711   |        
|                                                         | Recoverable income taxes                    |                             |          |        |         |        |         | 2,319        |         |           |         | 2,319   |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | Total current assets        |          |         | 6       |        |         |              | 183,293 |           |         |         | 183,299 | 
|Property and equipment, less allowances for depreciation |                                             |                             | 33,102   |         |         |        | 274,431 |              |         |           | 307,533 |        
|Other assets                                             |                                             |                             | 4,117    |         |         |        | 46,804  |              |         |           | 50,921  |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | $                           | 37,225   |         |         | $      | 504,528 |              |         | $         | 541,753 |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|Liabilities and Shareholders Equity                     |                                             |                             |          |         |         |        |         |              |         |           |         |        
|Current liabilities:                                     |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         | Accounts payable                            |                             | $        |        |         |        | $       | 69,519       |         |           | $       | 69,519  |        
|                                                         | Accrued liabilities                         |                             |          | 3,909   |         |        |         | 47,702       |         |           |         | 51,611  |        
|                                                         | Current maturities of long-term liabilities |                             |          | 1,509   |         |        |         | 1,741        |         |           |         | 3,250   |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | Total current liabilities   |          |         | 5,418   |        |         |              | 118,962 |           |         |         | 124,380 | 
|Long-term liabilities:                                   |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         | Long-term debt                              |                             |          | 112,948 |         |        |         | 70,387       |         |           |         | 183,335 |        
|                                                         | Capital lease obligations                   |                             |          |        |         |        |         | 28,482       |         |           |         | 28,482  |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | Total long-term liabilities |          |         | 112,948 |        |         |              | 98,869  |           |         |         | 211,817 | 
|Deferred items:                                          |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         | Income taxes                                |                             |          | 14,198  |         |        |         |             |         |           |         | 14,198  |        
|                                                         | Pension and post-retirement benefits        |                             |          | 39,422  |         |        |         | 4,301        |         |           |         | 43,723  |        
|                                                         | Other                                       |                             |          | 60      |         |        |         | 16,945       |         |           |         | 17,005  |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | Total deferred items        |          |         | 53,680  |        |         |              | 21,246  |           |         |         | 74,926  | 
|Amounts due parent from subsidiaries                     |                                             |                             | (143,132 | )       |         |        | 143,132 |              |         |           |        |        
|Shareholders Equity:                                    |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         | Common stock, Classes A and B               |                             |          | 26,455  |         |        |         |             |         |           |         | 26,455  |        
|                                                         | Retained earnings                           |                             |          | 12,355  |         |        |         | 122,319      |         |           |         | 134,674 |        
|                                                         | Cost of common stock in treasury            |                             |          | (15,014 | )       |        |         |             |         |           |         | (15,014 | )      
|                                                         | Deferred cost - restricted stock            |                             |          | (25     | )       |        |         |             |         |           |         | (25     | )      
|                                                         | Notes receivable - stock options            |                             |          | (76     | )       |        |         |             |         |           |         | (76     | )      
|                                                         | Accumulated other comprehensive loss        |                             |          | (15,384 | )       |        |         |             |         |           |         | (15,384 | )      
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | Total shareholders equity  |          |         | 8,311   |        |         |              | 122,319 |           |         |         | 130,630 | 
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        
|                                                         |                                             | $                           | 37,225   |         |         | $      | 504,528 |              |         | $         | 541,753 |        
|                                                         |                                             |                             |          |         |         |        |         |              |         |           |         |        

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Balance sheet as of March 29, 2003:

|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |         | 
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | -------- | ------- | ------- | ------------ | ------- | --------- | ------- | - | ------- | ------- | ------- | 
|                                                         |                                             |                             |          |         |         |              |         | Guarantor |         |   |         |        
|                                                         |                                             |                             |          | Parent  |         | subsidiaries |         | Total    
|                                                         |                                             |                             |          |         |         |              |         |          
|Assets                                                   |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Current assets:                                          |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Cash and equivalents                        |                             | $        |        |         |              | $       | 28,313    |         |   | $       | 28,313  |        
|                                                         | Accounts receivable                         |                             |          |        |         |              |         | 27,203    |         |   |         | 27,203  |        
|                                                         | Inventories                                 |                             |          |        |         |              |         | 135,855   |         |   |         | 135,855 |        
|                                                         | Prepaid expenses                            |                             |          |        |         |              |         | 5,731     |         |   |         | 5,731   |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|Total current assets                                     |                                             |                             |         |         |         |              | 197,102 |           |         |   | 197,102 |        
|Property and equipment, less allowances for depreciation |                                             |                             | 33,777   |         |         |              | 277,692 |           |         |   | 311,469 |        
|Other assets                                             |                                             |                             | 4,484    |         |         |              | 41,825  |           |         |   | 46,309  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|                                                         |                                             | $                           | 38,261   |         |         | $            | 516,619 |           |         | $ | 554,880 |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|Liabilities and Shareholders Equity                     |                                             |                             |          |         |         |              |         |           |         |   |         |        
|Current liabilities:                                     |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Notes payable to bank                       |                             | $        |        |         |              | $       | 1,700     |         |   | $       | 1,700   |        
|                                                         | Accounts payable                            |                             |          |        |         |              |         | 71,883    |         |   |         | 71,883  |        
|                                                         | Accrued liabilities                         |                             |          | 6,317   |         |              |         | 43,348    |         |   |         | 49,665  |        
|                                                         | Current maturities of long-term liabilities |                             |          | 1,435   |         |              |         | 2,017     |         |   |         | 3,452   |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|                                                         |                                             | Total current liabilities   |          |         | 7,752   |              |         |           | 118,948 |   |         |         | 126,700 | 
|Long-term liabilities:                                   |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Long-term debt                              |                             |          | 130,367 |         |              |         | 67,781    |         |   |         | 198,148 |        
|                                                         | Capital lease obligations                   |                             |          |        |         |              |         | 29,009    |         |   |         | 29,009  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|                                                         |                                             | Total long-term liabilities |          |         | 130,367 |              |         |           | 96,790  |   |         |         | 227,157 | 
|Deferred items:                                          |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Income taxes                                |                             |          | 11,525  |         |              |         |          |         |   |         | 11,525  |        
|                                                         | Pension and post-retirement benefits        |                             |          | 36,700  |         |              |         | 4,124     |         |   |         | 40,824  |        
|                                                         | Other                                       |                             |          | 61      |         |              |         | 17,165    |         |   |         | 17,226  |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|                                                         |                                             | Total deferred items        |          |         | 48,286  |              |         |           | 21,289  |   |         |         | 69,575  | 
|Amounts due parent from subsidiaries                     |                                             |                             | (158,344 | )       |         |              | 158,344 |           |         |   |        |        
|Shareholders Equity:                                    |                                             |                             |          |         |         |              |         |           |         |   |         |        
|                                                         | Common stock, Classes A and B               |                             |          | 26,439  |         |              |         |          |         |   |         | 26,439  |        
|                                                         | Retained earnings                           |                             |          | 14,302  |         |              |         | 121,248   |         |   |         | 135,550 |        
|                                                         | Cost of common stock in treasury            |                             |          | (14,928 | )       |              |         |          |         |   |         | (14,928 | )      
|                                                         | Deferred cost - restricted stock            |                             |          | (54     | )       |              |         |          |         |   |         | (54     | )      
|                                                         | Notes receivable - stock options            |                             |          | (175    | )       |              |         |          |         |   |         | (175    | )      
|                                                         | Accumulated other comprehensive loss        |                             |          | (15,384 | )       |              |         |          |         |   |         | (15,384 | )      
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|                                                         |                                             | Total shareholders equity  |          |         | 10,200  |              |         |           | 121,248 |   |         |         | 131,448 | 
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        
|                                                         |                                             | $                           | 38,261   |         |         | $            | 516,619 |           |         | $ | 554,880 |        
|                                                         |                                             |                             |          |         |         |              |         |           |         |   |         |         |        

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Statement of cash flows for the twenty-eight weeks ended October 11, 2003:

|                                                     |  |        |         |              |  |           |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------- | ------------ |  | --------- | ------- | - |  | - | ------- | -
|                                                     |  |        |         |              |  | Guarantor |         |   |  |  
|                                                     |  | Parent |         | subsidiaries |  | Total    
|                                                     |  |        |         |              |  |          
|Net cash provided by operating activities            |  | $      | 19,321  |              |  | $         | 9,031   |   |  | $ | 28,352  |  
|Net
cash provided by (used for) investing activities |  |        | 160     |              |  |           | (10,378 | ) |  |   | (10,218 | )
|Financing activities                                 |  |        |         |              |  |           |         |   |  |   |         |  
|Repayments of short-term borrowings                  |  |        |        |              |  |           | (1,700  | ) |  |   | (1,700  | )
|Proceeds of long-term borrowings                     |  |        |        |              |  |           | 20,000  |   |  |   | 20,000  |  
|Repayments of long-term debt and capital leases      |  |        | (17,345 | )            |  |           | (18,197 | ) |  |   | (35,542 | )
|Cash dividends paid                                  |  |        | (2,065  | )            |  |           |        |   |  |   | (2,065  | )
|Other financing activities                           |  |        | (71     | )            |  |           | 299     |   |  |   | 228     |  
|                                                     |  |        |         |              |  |           |         |   |  |   |         |  
|Net
cash provided by (used for) financing activities |  |        | (19,481 | )            |  |           | 402     |   |  |   | (19,079 | )
|                                                     |  |        |         |              |  |           |         |   |  |   |         |  
|Net decrease in cash and equivalents                 |  |        |        |              |  |           | (945    | ) |  |   | (945    | )
|Cash and equivalents at beginning of period          |  |        |        |              |  |           | 28,313  |   |  |   | 28,313  |  
|                                                     |  |        |         |              |  |           |         |   |  |   |         |  
|Cash and equivalents at end of period                |  | $      |        |              |  | $         | 27,368  |   |  | $ | 27,368  |  
|                                                     |  |        |         |              |  |           |         |   |  |   |         |  

Statement of cash flows for the twenty-eight weeks ended October 12, 2002:

|                                                     |  |        |        |              |  |           |         |   |  |   |         |  
|---------------------------------------------------- |  | ------ | ------ | ------------ |  | --------- | ------- | - |  | - | ------- | -
|                                                     |  |        |        |              |  | Guarantor |         |   |  |  
|                                                     |  | Parent |        | subsidiaries |  | Total    
|                                                     |  |        |        |              |  |          
|Net cash provided by operating activities            |  | $      | 3,730  |              |  | $         | 13,576  |   |  | $ | 17,306  |  
|Net cash used for investing activities               |  |        | (1,217 | )            |  |           | (24,204 | ) |  |   | (25,421 | )
|Financing activities                                 |  |        |        |              |  |           |         |   |  |   |         |  
|Repayments of short-term borrowings                  |  |        |       |              |  |           | (1,300  | ) |  |   | (1,300  | )
|Proceeds of long-term borrowings                     |  |        |       |              |  |           | 15,000  |   |  |   | 15,000  |  
|Proceeds of sales leaseback/capital lease obligation |  |        |       |              |  |           | 27,309  |   |  |   | 27,309  |  
|Repayments of long-term debt and capital leases      |  |        | (568   | )            |  |           | (34,833 | ) |  |   | (35,401 | )
|Cash dividends paid                                  |  |        | (1,754 | )            |  |           |        |   |  |   | (1,754  | )
|Other financing activities                           |  |        | (191   | )            |  |           | 2       |   |  |   | (189    | )
|                                                     |  |        |        |              |  |           |         |   |  |   |         |  
|Net
cash provided by (used for) financing activities |  |        | (2,513 | )            |  |           | 6,178   |   |  |   | 3,665   |  
|                                                     |  |        |        |              |  |           |         |   |  |   |         |  
|Net decrease in cash and equivalents                 |  |        |       |              |  |           | (4,450  | ) |  |   | (4,450  | )
|Cash and equivalents at beginning of period          |  |        |       |              |  |           | 37,516  |   |  |   | 37,516  |  
|                                                     |  |        |        |              |  |           |         |   |  |   |         |  
|Cash and equivalents at end of period                |  | $      |       |              |  | $         | 33,066  |   |  | $ | 33,066  |  
|                                                     |  |        |        |              |  |           |         |   |  |   |         |  

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Note G  Recent Accounting Pronouncements

In April 2002, the FASB issued Statement No. 145 (FAS 145), Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical
Corrections. Certain provisions of FAS 145 were effective for the Company in
fiscal year 2003. The remaining provisions became effective for the Companys
current fiscal year and had no effect on the Companys results of operations or
financial position for the current quarter.

In 2003, the FASB issued FIN 46, Consolidation of Variable Interest Entities.
The broad-based effective date of FIN 46 is deferred for public companies until
the end of periods ending after December 15, 2003. The Company does not
believe the issuance of FIN 46 will have a material impact on its financial
position or results of operations.

In April, 2003, the FASB issued Statement No. 149 (FAS 149), Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. FAS 149 is to
be applied prospectively to contracts entered into or modified after June 30,
2003. The adoption of FAS 149 did not have a material impact on the financial
position or results of operations of the Company.

In May 2003, the FASB issued Statement No. 150 (FAS 150), Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity. FAS 150 requires that an issuer classify certain financial instruments
as a liability (or as an asset in some circumstances). FAS 150 was effective
for the Company in the current quarter and the adoption did not have a material
impact on the financial position or results of operations of the Company.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This report includes certain forward-looking statements (all statements other
than those made solely with respect to historical fact). Actual results could
differ materially and adversely from those contemplated by the forward-looking
statements due to known and unknown risks and uncertainties, many of which are
beyond the Companys control. The forward-looking statements and the Companys
future results, liquidity and capital resources are subject to risks and
uncertainties including, but not limited to, the following: the entry of new
competitive stores and their impact on the Company; softness in the local and
national economies and the general retail food industry; the level of
discounting and promotional spending by competitors; the Companys ability to
improve comparable store sales; the Companys ability to implement its
improvement initiatives; the ability of the Company to predict and respond to
changes in customer preferences and lifestyles; food price deflation;
uncertainties regarding future real estate gains due to limited real estate
holdings available for sale; stability and timing of distribution incentives
from suppliers; the Companys ability to control cost including labor, medical,
rent, credit card, and workers compensation and general liability expense; the
impact of any acquisitions and dispositions; the level of margins achievable in
the Companys operating divisions; uncertainties regarding gasoline prices and
margins; the success of the Companys new and remodeled stores, including image
and rebranding programs; the successful economic implementation of new
technology; uncertainties associated with pension and other retirement
obligations; uncertainties related to state and federal taxation and tobacco
and environmental legislation; the successful integration of acquisitions;
potential interest rate increases on variable rate debt, as well as terms,
costs and availability of capital; the timely and on budget completion of store
construction, expansion, conversion and remodeling; the ability to complete
share repurchases, and other known and unknown risks and uncertainties. The
Company undertakes no obligation to update or revise any forward-looking
statements to reflect subsequent events or circumstances.

General

At October 11, 2003, Marsh Supermarkets, Inc. (the Company or Marsh)
operated 111 supermarkets and 167 Village Pantry convenience stores in central
Indiana and western Ohio. The Company believes that Marsh supermarkets have
one of the largest market shares of supermarket chains operating in its market
area and Village Pantry has one of the largest market shares of convenience
stores in its market area. Marsh also owns and operates a food services
division, which specializes in upscale catering, office coffee, coffee
roasting, business cafeteria management, vending and concessions, and a floral
division, which operates eight upscale retail floral shops under the McNamara
banner and a business florist under the name Enflora.

Results of Operations

Results of operations for interim periods do not necessarily reflect the
results that may be expected for the fiscal year.

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The following table sets forth certain income statement components, expressed
as a percentage of sales and other revenues, and the percentage change in such
components:

|                                     |  |                     |       |                  |  |                     |       |         |  |      |       |        |  |  |       |    |  |  |       |   |  |  |       |   
|------------------------------------ |  | ------------------- | ----- | ---------------- |  | ------------------- | ----- | ------- |  | ---- | ----- | ------ |  |  | ----- | -- |  |  | ----- | - |  |  | ----- | --
|                                     |  | Second Quarter      |       | Year - to - Date
|                                     |  |                     |       |                 
|                                     |  | Percent of Revenues |       |                  |  | Percent of Revenues |       |        
|                                     |  |                     |       | Percent          |  |                     |       | Percent
|                                     |  | 2004                |       | 2003             |  | Change              |       | 2004    |  | 2003 |       | Change
|                                     |  |                     |       |                  |  |                     |       |         |  |      |       |       
|Total revenues                       |  |                     | 100.0 | %                |  |                     | 100.0 | %       |  |      | (0.7  | %)     |  |  | 100.0 | %  |  |  | 100.0 | % |  |  | (1.2  | %)
|Gross profit                         |  |                     | 29.7  | %                |  |                     | 30.0  | %       |  |      | (1.7  | %)     |  |  | 29.8  | %  |  |  | 30.4  | % |  |  | (3.1  | %)
|Selling, general and administrative  |  |                     | 27.0  | %                |  |                     | 27.0  | %       |  |      | (0.5  | %)     |  |  | 27.0  | %  |  |  | 26.9  | % |  |  | (0.6  | %)
|Depreciation                         |  |                     | 1.5   | %                |  |                     | 1.5   | %       |  |      | 1.8   | %      |  |  | 1.5   | %  |  |  | 1.5   | % |  |  | 2.3   | % 
|Operating income                     |  |                     | 1.2   | %                |  |                     | 1.6   | %       |  |      | (19.4 | %)     |  |  | 1.3   | %  |  |  | 2.1   | % |  |  | (35.6 | %)
|Interest                             |  |                     | 1.2   | %                |  |                     | 1.4   | %       |  |      | (20.0 | %)     |  |  | 1.2   | %  |  |  | 1.4   | % |  |  | (18.2 | %)
|Other non-operating expense (income) |  |                     | (0.1  | %)               |  |                     |      |         |  |      | n/a   |        |  |  | (0.1  | %) |  |  |      |   |  |  | n/a   |   
|Income taxes                         |  |                     | 0.1   | %                |  |                     | 0.1   | %       |  |      | (24.0 | %)     |  |  | 0.1   | %  |  |  | 0.3   | % |  |  | (56.2 | %)
|Income from continuing operations    |  |                     | 0.1   | %                |  |                     | 0.1   | %       |  |      | 105.2 | %      |  |  | 0.1   | %  |  |  | 0.4   | % |  |  | (57.6 | %)

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Total Revenues

In the second quarter of 2004, consolidated total revenues were $510.8 million,
compared to $514.6 million in the second quarter of 2003. Supermarket revenues
decreased $11.6 million, Village Pantry revenues increased $4.4 million and
Crystal Food Service revenues increased $1.3 million. Consolidated total
revenues, excluding fuel sales, decreased 2.0% to $472.3 million from $481.9
million. Sales in
comparable supermarkets and convenience stores decreased 1.9% from the second
quarter of 2003 to $472.1 million from $481.1 million. Sales in comparable
supermarkets and convenience stores, excluding fuel, decreased 3.3% from the
second quarter of 2003, to $434.8 million from $449.7 million. The Company excludes fuel from its analysis of revenues and comparable
store sales and believes this information provides useful information
to investors because fuel prices fluctuate widely and frequently. A store is
included in comparable stores beginning in the four-week period after the store
has been in operation for thirteen full four-week periods. Replacement stores
and format conversions are included in the comparable stores sales calculation.
Competitors new store openings and high levels of competitive promotional
activity combined with a weak economy continue to affect comparable store
sales. Consolidated total revenues for the second quarter of 2004 included
gains of $1.8 million from sales of real estate in the normal course of
business, compared to $1.9 million in 2003. Although results may vary from
period to period, future real estate gains are not expected to equal or exceed
historic levels due to the limited real estate holdings available for sale in
the normal course of business, which could materially adversely affect the
Companys results of operations.

For the twenty-eight weeks ended October 11, 2003, consolidated total revenues
decreased $11.0 million, or 1.2%, from the same twenty-eight week period of
2003 to $888.8 million. Supermarket revenues decreased $19.4 million, Village
Pantry revenues increased $4.8 million, Crystal Food Service revenues increased
$3.7 million and gains on sales of real estate decreased $1.7 million.
Consolidated total revenues, excluding fuel sales, decreased 2.2% to $824.2
million from $842.7 million. Sales in comparable supermarkets and convenience
stores decreased 1.8% to $823.6 million from $839.1 million. Sales in
comparable stores, excluding fuel, decreased 3.0% from the twenty-eight weeks
of 2003 to $761.0 million from $784.2 million. The Company excludes fuel from its analysis of revenues and comparable
store sales and believes this information provides useful information
to investors because fuel prices fluctuate widely and frequently. Increased competitive square
footage and promotions, and a weak economy contributed to the decline in same
store sales. Consolidated total revenues for the twenty-eight weeks of 2003
included gains of $1.8 million from sales of real estate, compared to $3.5
million for the year earlier period.

Gross Profit

Gross profit is calculated net of promotional expenses, and warehousing and
transportation, excluding depreciation. In the second quarter of 2004,
consolidated gross profit declined $2.7 million, or 1.7%, from the second
quarter of 2003 to $151.9 million. As a percentage of revenues, consolidated
gross profit was 29.7% in the second quarter of 2003 compared to 30.0% for the
same quarter in 2003. Increased fuel sales, which have a gross margin rate
significantly lower than non-fuel sales, accounts for the decline as a
percentage of revenues. As a percentage of revenues, gross profit increased
slightly in supermarkets, declined in convenience stores and increased slightly
in the food service division. Gross profit in the second quarter of 2003
includes a $1.2 million one-time gain resulting from an increase in cigarette
state excise taxes.

For the twenty-eight weeks ended October 11, 2003, consolidated gross profit
decreased $8.3 million, or 3.1%, from the year earlier to $265.7 million. As a
percentage of revenues, consolidated gross profit was 29.8% in the current year
compared to 30.4% for 2003. Increased fuel sales at a low margin rate accounted
for 0.3% of the decline as a percentage of revenues. As a percentage of
revenues, gross profit was unchanged in the supermarket division, declined in
convenience stores and increased slightly in the food service division.

Selling, General and Administrative

Selling, general and administrative (SG&A) expenses include store expenses,
administrative and corporate expenses, purchasing personnel costs and
advertising. In the second quarter of 2004, consolidated SG&A expenses
decreased $0.7 million, or 0.5%, from the second quarter of 2003 to $138.0
million. As a percentage of revenues, SG&A expenses were 27.0% in both the
second quarter of 2004 and 2003. Increases in building rent and other occupancy
costs, credit and debit card transaction fees, and general liability premiums
were more than offset by reductions in store wages. Wage expense in stores open
both quarters, excluding supermarket conversions to the LoBill format,
decreased 4.7% primarily reflecting the same store sales decline and continued
efforts on labor efficiency.

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For the twenty-eight weeks in 2004, SG&A expenses decreased $1.5 million, or
0.6%, from the comparable twenty-eight weeks in 2003. As a percentage of
revenues, consolidated SG&A expenses increased to 27.0% from 26.9% in 2003. In
identical stores, wage expense decreased 4.7% from the comparable twenty-eight
weeks of the prior year primarily reflecting the same store sales decline and
continued efforts on labor efficiency and scheduling.

Depreciation

Depreciation for the second quarter of
2004 was $7.7 million, compared to $7.5
million for the second quarter of 2003. As a percentage of revenues,
depreciation was 1.5% for both the second quarter of 2004 and 2003.

For the twenty-eight weeks in 2004, depreciation was $13.4 million, compared to
$13.1 million for the twenty-eight weeks in 2003. As a percentage of revenues,
depreciation expense was 1.5% for the twenty-eight weeks in both 2004
and 2003.

Operating Income

Operating income (income from continuing operations before interest and taxes)
was $6.2 million for the second quarter of 2004, compared to $8.3 million for
the second quarter of 2003 due to the decrease in gross profit and increase in
depreciation partially offset by the decrease in SG&A expenses. As a percentage
of revenues, operating income was 1.2% in 2004, compared to 1.6% for the second
quarter of 2003.

Operating income was $11.6 million for the twenty-eight weeks in 2004, compared
to $18.7 million for the year earlier period. The decrease in gross profit
combined with the increase in depreciation, slightly offset by lower SG&A
expenses accounts for the decline. As a percentage of revenues, operating
income was 1.3% for the twenty-eight weeks in 2004, compared to 2.1% for the
comparable period in 2003.

Interest

Interest for the second quarter of 2004 was $5.9 million, compared to $7.4
million for the second quarter of 2003 due primarily to Company repurchases of
senior subordinated notes subsequent to the year earlier quarter. Interest as a
percentage of sales was 1.2% in 2004 compared to 1.4% in 2003.

For the twenty-eight weeks in 2004, interest was $10.5 million, compared to
$12.8 million in 2003 due primarily to Company repurchases of senior
subordinated notes subsequent to the year earlier period. As a percentage of
revenues, interest was 1.2% for the twenty-eight weeks in 2004, compared to
1.4% for the comparable period in 2003.

Other Non-operating Income

During the second quarter and twenty-eight weeks ended October 11, 2003 the
Company purchased and retired $7.25 million and $16.75 million, respectively,
of its 8 7/8% senior subordinated notes at less than face value. The purchases
resulted in gains of $0.3 million and $0.9 million, respectively, for the
second quarter and twenty-eight weeks ended October 11, 2003.

Income Taxes

For the second quarter of 2004, the effective income tax rate was 37.9%. The
effective income tax rate was not meaningful for the second quarter of 2003 due
to the low level of income before taxes. For the twenty-eight weeks of 2004,
the effective income tax rate was 41.8%, compared to 41.0% for the comparable
weeks in 2003.

Income from Continuing Operations

Income from continuing operations for the second quarter of 2004 was $0.4
million, compared to $0.3 million for the second quarter of 2003. Decreased
operating income was more than offset by a decrease in interest plus an
increase in other non-operating income. As a percentage of revenues, income
from continuing operations was 0.1% for both the second quarter of 2004 and
2003.

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For the twenty-eight weeks of 2004, income from continuing operations was $1.2
million, compared to $3.5 million in 2003. Decreased operating income was
partially offset by decreased interest plus an increase in other non-operating
income. As a percentage of revenues, income from continuing operations was 0.1%
for the twenty-eight weeks of 2004 compared to 0.4% for the year earlier
period.

Discontinued Operation

During fiscal year 2002, the Company sold certain assets of its wholesale
division and reported a gain from the disposal. During the first two quarters
of 2003, the reported gain was decreased by $0.2 million, after tax benefit,
primarily for an increase in provision for doubtful accounts.

Deferred Pension and Post-retirement Benefits

Deferred pension and post-retirement benefit obligations increased to $43.7
million at October 11, 2003, from $40.8 million at March 29, 2003. The
liability for an unfunded supplemental executive retirement plan increased $1.6
million due to higher age and service periods of the participants. The
liability for a deferred compensation plan increased $1.1 million as a result
of plan earnings and employee contributions.

Capital Expenditures

The Companys capital requirements have traditionally been financed through
internally generated funds, long-term borrowings and lease financing, including
capital and operating leases.

During the first half of 2004, one Marsh supermarket was remodeled, one new
LoBill Foods was opened, one Marsh supermarket was converted to the LoBill
format and construction began on two new Marsh supermarkets that will open
during the second half of the year. Also, the convenience store re-imaging
project was completed. Additionally in 2004, the Company plans to remodel two
Marsh supermarkets, acquire one new LoBill Foods and open two McNamara florist
shops. The cost of these projects and other capital commitments is estimated to
be $67 million. Of this amount, the Company plans to fund $40 million through
sale/leasebacks, $13 million through equipment leasing and the remainder from
internally generated funds. For the twenty-eight weeks ended October 11, 2003,
the Company had capital spending of $24 million.

The Companys plans with respect to store construction, expansion, conversion
and remodeling are subject to known and unknown risks and uncertainties and may
be revised in light of changing conditions, such as availability and cost of
financing, competitive influences, its ability to negotiate successfully site
acquisitions or leases, zoning limitations and other governmental regulations.
The timing of projects is subject to normal construction and other delays. It
is possible that projects described above may not commence, others may be
added, a portion of planned expenditures with respect to projects commenced
during the current fiscal year may carry over to the subsequent fiscal year and
the Company may use other or different financing arrangements.

Liquidity and Capital Resources

Net cash provided by operating activities in the first half of 2004 was $28.4
million, compared to $17.3 million in the first half of 2003. The increase in
net cash provided by operating activities was due primarily to a decrease in
inventory, which was partially offset by an increase in accounts receivable.
Working capital declined $11.5 million from March 29, 2003 due primarily to a
$13.0 million decrease in inventory resulting from an inventory reduction
initiative.

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The Company has an amended revolving credit facility that permits total borrowings of up
to $82.5 million. Amounts borrowed are for terms selected by the Company at the
time of borrowing. Interest rates are based on LIBOR or floating prime rate,
and principal and interest are payable at maturity. Commitment fees of 0.5% are
paid on unused amounts and the facility matures in February 2006. The Company
had borrowings of $44.0 million under the facility at October 11, 2003. The
credit facility is secured by land and buildings having a net carrying cost of
$73.5 million at October 11, 2003 and the facility contains certain debt
covenants, including limits on future indebtedness, cash dividends, repurchases
of common stock and disposition of assets. Under the most restrictive debt
covenant, the Company would have had additional permitted borrowing of $36.5
million as of October 11, 2003.

During the quarter ended October 11, 2003, the Companys revolving credit
facility was amended with the effect of a) decreasing permitted borrowings to
$82.5 million from $95.0 million, b) increasing the carrying cost of land and
buildings securing the facility to $73.5 million from $49.6 million, and c)
modifying the measures of certain debt covenants.

During the quarter ended October 11, 2003, the Company chose not to renew a
bank commitment that had previously provided $3.0 million in additional
available borrowings.

Critical Accounting Policies

The preparation of financial statements requires management to make assumptions
and estimates that can have a material impact on the reported results of
operations. Although management applies its judgment based on assumptions
believed to be reasonable under the circumstances, actual results could vary
from those assumptions and it is possible that materially different amounts
would be reported using different assumptions.

The Company is self-insured for most healthcare claims, workers compensation
claims, and general liability and automotive liability losses. Reported claims
and related loss reserves are estimated by third party administrators. Claims
incurred but not reported are recorded based on historical experience and
industry trends, which are continually monitored, and accruals are adjusted as
warranted by changes in facts and circumstances.

Pension and other retirement benefits are evaluated with the oversight of the
Companys retirement committee. Outside actuaries are consulted to determine
appropriate assumptions and are engaged to perform the calculation of estimated
future obligations. In 1997, the Company froze benefit accruals under its
qualified defined benefit pension plan.

Long-lived assets are depreciated over estimated useful lives based on the
Companys historical experience and prevailing industry practice. Estimated
useful lives are periodically reviewed to ensure they remain appropriate.
Long-lived assets are tested for impairment whenever an event occurs that
indicates an impairment may exist.

Income tax assets and liabilities are recognized generally based upon tax
statutes, regulations and case law, but also include estimates. The estimated
amounts are reviewed periodically and adjusted based upon factual changes and
the related impact on managements judgment.

The Company receives allowances and credits from many of the vendors whose
products the Company purchases for resale. Allowances that are related to a
specific purchase quantity are recorded as a reduction of the cost of
inventory. Other allowances, such as new item introduction, item shelf
placement and temporary retail price reduction are recognized as they are
earned and are reported as a reduction of cost of goods sold.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company, as a policy, does not engage in significant speculative or
derivative transactions, nor does it hold or issue financial instruments for
trading purposes. The Company is exposed to changes in interest rates primarily
as a result of its borrowing activities. Based on interest rates at October 11,
2003, a 100 basis point change in interest rates would not have had a material
impact on the Company.




Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer carried out an
evaluation of the effectiveness of the Companys disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)) as of the end of the period covered by this report. Based on
that evaluation, these officers have concluded that as of the end of the period
covered by this report, the Companys disclosure controls and procedures were
effective and designed to ensure that material information relating to the
Company would be made known to them by others within the
Company on a timely basis.

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PART II  OTHER INFORMATION




Item 1. Legal Proceedings

Not Applicable.




Item 2. Changes in Securities and Use of Proceeds

Not Applicable.




Item 3. Defaults upon Senior Securities

Not Applicable.




Item 4. Submission of Matters to a Vote of Security Holders

On August 5, 2003, the Company held its Annual Meeting of Shareholders. At
the Annual Meeting, the shareholders of the Company elected the following
persons to serve as directors until the Annual Meeting of Shareholders in 2006
and until such time as their respective successors are duly elected and
qualified with the number of votes cast for or withheld as set forth opposite
their names:

|                 |  |       |           |           |  |          |        | 
|---------------- |  | ----- | --------- | --------- |  | -------- | ------ | 
|                 |  | Votes
|                 |  |      
|                 |  |       |           |           |  | Withheld
|Nominee          |  | For   |           | Authority
|                 |  |       |           |          
|Don E. Marsh     |  |       | 3,276,903 |           |  |          | 35,127 | 
|William L. Marsh |  |       | 3,279,233 |           |  |          | 32,797 | 
|Stephen M. Huse  |  |       | 3,295,610 |           |  |          | 15,033 | 
|John J. Heidt    |  |       | 3,295,610 |           |  |          | 16,420 | 




Item 5. Other Information

Not Applicable.




Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | The following exhibits are included herein:
| | --- |  | -------------------------------------------

| |      |                                                                                        
| | ---- | ---------------------------------------------------------------------------------------
| | 4    | Second Amendment to Second Amended and Restated Credit Agreement, dated
October 3, 2003
| |      |                                                                                        
| | 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of Don E. Marsh.                            
| |      |                                                                                        
| | 31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of Douglas W. Dougherty.                    
| |      |                                                                                        
| | 32.1 | Section 1350 Certification of Don E. Marsh.                                            
| |      |                                                                                        
| | 32.2 | Section 1350 Certification of Douglas W. Dougherty.                                    

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| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------



| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | Current Reports on Form 8-K furnished to the SEC on August 4,
2003 - Item 12 Results of Operations and Financial
Condition.



| |  |  |                                                                                                                                                                                                                
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | Notwithstanding the foregoing, information furnished under Item 12 of our
Current Report on Form 8-K, including the related exhibits, is not incorporated
by reference into this quarterly report on Form 10-Q.

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SIGNATURES

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

|                  |  |                          |                                               
|----------------- |  | ------------------------ | ----------------------------------------------
|                  |  | MARSH SUPERMARKETS, INC.
|                  |  |                          |                                               
|November 25, 2003 |  | By:                      | /s/ Douglas W. Dougherty                      
|                  |  |                          |                                               
|                  |  |                          | Douglas W. Dougherty                          
|                  |  |                          | Senior Vice President, Chief Financial Officer
|                  |  |                          | and Treasurer                                 
|                  |  |                          |                                               
|November 25, 2003 |  | By:                      | /s/ Mark A. Varner                            
|                  |  |                          |                                               
|                  |  |                          | Mark A. Varner                                
|                  |  |                          | Chief Accounting Officer                      
|                  |  |                          | Vice President  Corporate Controller         

23