SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A-1

(X)      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996)

         FOR FISCAL YEAR ENDED MARCH 2, 1997

( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
         For the transition period from                   to         
                                        -----------------    ---------------

Commission File No. 1-7013

                           SLOAN'S SUPERMARKETS, INC.
             (Exact name of registrant as specified in its charter)

                      Delaware                              13-1829183
           (State or other jurisdiction of               (I.R.S. Employer
           incorporation or organization)              Identification No.)

          823 Eleventh Avenue, New York, NY                 10019-3535
      (Address of principal executive offices)              (Zip code)

                                 (212) 541-5534
              (Registrant's telephone number, including area code)


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

         Title of each class           Name of each exchange on which registered
    Common Stock, $0.02 par value                American Stock Exchange

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

                                      None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Section  13,  or 15(d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
                                       Yes [X]   No [ ]

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

As of May 22, 1997, 3,132,289 shares of the registrant's common stock, $0.02 par
value, were outstanding.  The aggregate market value of the common stock held by
nonaffiliates  of the  registrant  (i.e.,  excluding  shares  held by  executive
officers,  directors,  and control  persons as defined in Rule 405) on that date
was $4,374,371 computed at the closing price on that date.

Documents Incorporated by Reference:  None



<PAGE>



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

COMPANY BACKGROUND

The fiscal year ended February 26, 1995  consisted of 52 weeks.  The fiscal year
ended March 3, 1996  consisted of 53 weeks.  The fiscal year ended March 2, 1997
consisted of 52 weeks.

RESULTS OF OPERATIONS (1997 COMPARED TO 1996)

Net income was $1,159,678 for the fiscal year ended March 2, 1997 as compared to
$1,742,266 for the fiscal year ended March 3, 1996.  The 1996 income  included a
gain of $1,001,397 on the sale of the  leasehold of one  supermarket  during the
year.

Sales for the 1997 fiscal year were  $51,792,539 as compared to $50,279,245  for
fiscal year 1996. The increase in sales was primarily due to the fact that three
stores  acquired  during 1996 were open for the entire 1997 year, as well as the
opening of two additional stores at the beginning of the 1997 year. The increase
in sales  generated by the  additional  stores was partially  offset by the fact
that the prior year  consisted of 53 weeks as compared  with 52 weeks in 1997 as
well as a decline in same store sales of $3,949,350  (after  adjusting 1996 same
store sales  downward to reflect a comparable 52 week period).  Same store sales
declined due to (a) management's decision to seek higher margins over sales, (b)
a decrease in the selling price of cereals (which constitute  approximately 7.5%
of the Company's grocery sales) as a result of manufacturers  lowering wholesale
prices of cereals by  approximately  20% in April  1996 and (c) a  reduction  in
beverage  sales during the summer  months of 1997 as compared to the same period
in 1996. Beverage sales, which ordinarily represent  approximately 17% of summer
sales,  were negatively  impacted by the abnormally cool weather in the New York
area. The Company  anticipates that until completion of its planned  remodelling
program,  same store  sales will  remain  constant  as a result of  management's
intention to maintain current margin levels. Management believes that same store
sales will increase as the remodelling and refurbishment of stores is completed.

Gross  profit  was  $20,608,413  (39.79%  of  sales)  in  1997  as  compared  to
$19,243,125 (38.27% of sales) in 1996. The improvement in the 1997 period mainly
reflects  the   implementation  of  the  better  buying  program  utilizing  the
distribution center of an affiliate to make bulk purchases, on a direct basis at
better  prices,  as well as the  expansion of the sales of  value-added,  higher
margin products.  Additionally,  prices were selectively increased.  During 1997
the Company  recognized as income  approximately  $1,340,000 of advertising  and
volume  achievement  allowances as compared to approximately  $1,141,000  during
1996.

Store operating,  general and  administrative  expenses were $17,739,680 in 1997
(34.25% of sales) as  compared  to  $16,811,184  (33.44% of sales) in 1996.  The
primary  reasons  for  the  increase  were  the  expenses  associated  with  the
additional  stores  operating in the 1997 year and the extra costs incurred with
the start-up of the new stores.

Nonstore operating expense decreased to $287,966 in 1997 as compared to $414,165
in 1996,  mainly as a result  of lower  legal  expense.  The  decrease  in legal
expenses  was a result of the  Company's  reduced  need  during the year for the
services of outside legal counsel in connection with litigation, real estate and
general corporate matters.


                                       -2-

<PAGE>


Interest  expense was $709,454 in 1997 as compared  with  $551,631 in 1996.  The
increase is  attributable  to the additional  borrowing  incurred to finance the
purchase of the three stores acquired during fiscal 1996.

RESULTS OF OPERATIONS (1996 COMPARED TO 1995)

Net income was  $1,742,266 for the year ended March 3, 1996 compared to $362,088
for the year  ended  February  26,  1995.  The 1996  income  includes  a gain of
$1,001,397  on the sale of the leasehold of one of its  supermarkets  during the
year.

Sales in 1996 were $50,279,245  compared to $48,366,513 in 1995. The increase in
sales is primarily due to 1996 having 53 weeks  compared to 52 weeks in 1995 and
the fact that three additional stores were operated for part of 1996.

Gross profit was $19,243,125  (38.27%) in 1996 compared to $17,447,668  (36.07%)
in 1995.  Gross profit has  continued  to increase as a result of improved  cost
controls,  more  efficient  inventory  purchasing  and  a  better  product  mix.
Advertising and volume  achievement  allowances  from vendors  continued to be a
significant  portion of gross  profit.  During 1996,  the Company  recognized as
income  approximately  $1,141,000 of these  allowances from vendors  compared to
approximately  $1,350,000  during 1995. This decrease is primarily the result of
fewer new products being introduced by vendors during fiscal 1996 as compared to
fiscal 1995. The deferred  portion of the advertising  income was  approximately
$172,000 at March 3, 1996  compared to  approximately  $354,000 at February  26,
1995.

Store operating, general and administrative expenses increased to $16,811,184 in
1996 from  $15,623,576  in 1995. As a percentage of sales,  these  expenses were
33.4% and 32.3% for 1996 and 1995,  respectively.  The increase is primarily due
to additional  depreciation  and  amortization  applicable  to the  Supermarkets
acquired,  the  additional  costs  incurred in opening the new  Supermarket  and
additional payroll costs associated with a new union contract, which took effect
during fiscal 1996.

Nonstore  operating  expenses increased to $414,165 in 1996 compared to $395,400
in 1995. As a percentage of sales,  nonstore  operating expenses remained fairly
constant.  Interest  expense  increased to $551,631 in 1996 from  $406,193.  The
increase is primarily the result of the additional bank loan for the purchase of
the three Supermarkets.

LIQUIDITY AND CAPITAL RESOURCES

During the fiscal  year ended  March 2, 1997,  the  Company  reduced its working
capital deficiency by approximately $1,373,000 and reduced its long-term debt by
$1,200,000.

Sales and gross  profits  have  increased  in each of the last  three  years and
management  anticipates that this trend will continue,  along with the continued
generation of significant cash flows from operations.

The Company has received  commitment letters from European American Bank ("EAB")
and  certain  participating  lenders  with  respect to a secured  bank  facility
comprised of a $12,000,000 five year term loan to refinance  existing bank debt,
fund the payment of $4,000,000 of liabilities to affiliates of John Catsimatidis
which are owed by certain companies the Company



                                       -3-
<PAGE>


may acquire by merger from Mr. Catsimatidis or companies  controlled by him (the
"Food Group") and provide working capital;  an $8,000,000 five year term loan to
finance the remodelling of existing stores (including stores to be acquired from
the  Food  Group)  and  the  installation  of  a  point-of-sale  and  management
information  system;  and a $5,000,000  revolving  line of credit for additional
working  capital  which  line of  credit  shall  be for a two year  period.  The
foregoing commitments are subject to the negotiation and execution of definitive
documentation  satisfactory to EAB and the  participating  lenders.  The Company
believes  that  such  facility,  together  with  cash  flow  generated  from the
Company's  operations,  will be  sufficient  to sustain  the  operations  of the
Company for at least two years after the proposed merger.

INFLATION

The  Company  does not  believe  that  inflation  has had,  or will  have in the
foreseeable future, a material impact upon the Company's operating results.









                                       -4-

<PAGE>



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



                                                                  Page No.
                                                                  --------

Report of independent certified public accountants                    F-1

Consolidated financial statements:
   Balance sheets                                               F-2 - F-3
   Statements of operations                                           F-4
   Statements of stockholders' equity                                 F-5
   Statements of cash flows                                           F-6
   Notes to consolidated financial statements                  F-7 - F-25




                                       -5-

<PAGE>



REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Stockholders of
    Sloan's Supermarkets, Inc.
New York, New York

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Sloan's
Supermarkets,  Inc. and  subsidiaries as of March 2, 1997 and March 3, 1996, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash flows for each of the three years in the period ended March 2, 1997.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,   in  all  material   respects,   the  financial   position  of  Sloan's
Supermarkets,  Inc. and  subsidiaries as of March 2, 1997 and March 3, 1996, and
the results of their operations and their cash flows for each of the three years
in the period  ended  March 2,  1997,  in  conformity  with  generally  accepted
accounting principles.





May 30, 1997



                                       F-1

<PAGE>

<TABLE>
<CAPTION>

                           Sloan's Supermarkets, Inc.
                                and Subsidiaries

                           Consolidated Balance Sheets



                                                                                                 March 2, 1997         March 3, 1996
                                                                                                   -----------           -----------
<S>                                                                                               <C>                   <C>         
ASSETS

Current:
   Cash ................................................................................          $     70,237          $     71,242
   Accounts receivable - net of allowance for doubtful accounts of
      $30,000 in both years ............................................................               501,916               282,182
   Inventory ...........................................................................             5,873,991             5,461,283
   Prepaid expenses and other current assets ...........................................               299,887               167,512
   Due from related parties ............................................................             1,830,127               527,694
                                                                                                   -----------           -----------
        Total current assets ...........................................................             8,576,158             6,509,913

Property and equipment:
   Furniture, fixtures and equipment ...................................................             5,466,456             5,461,146
   Leasehold interests and improvements ................................................            11,704,425            11,657,126
                                                                                                   -----------           -----------
                                                                                                    17,170,881            17,118,272
   Less:  Accumulated depreciation and amortization ....................................             4,527,506             2,947,116
                                                                                                   -----------           -----------
        Net property and equipment .....................................................            12,643,375            14,171,156

Due from affiliates ....................................................................               337,304               318,005

Deposits and other assets ..............................................................               313,585               301,230

Deferred costs .........................................................................               115,489               115,358

Noncompete agreement - net of accumulated amortization of
   $311,567 and $232,535, respectively .................................................               478,749               557,781

Deferred finance costs - net of accumulated amortization of
   $35,048 and $9,190, respectively ....................................................               350,801               120,105
                                                                                                   -----------           -----------
                                                                                                   $22,815,461           $22,093,548
                                                                                                   ===========           ===========

See accompanying notes to consolidated financial statements.

</TABLE>


                                       F-2

<PAGE>


<TABLE>
<CAPTION>

                           Sloan's Supermarkets, Inc.
                                and Subsidiaries

                           Consolidated Balance Sheets



                                                                                              March 2, 1997           March 3, 1996
                                                                                               ------------            ------------

<S>                                                                                            <C>                     <C>         
LIABILITIES AND STOCKHOLDERS' EQUITY

Current:
   Accounts payable, trade .........................................................           $  6,593,412            $  5,591,948
   Accrued payroll, vacation and withholdings ......................................                491,857                 703,785
   Accrued expenses and other current liabilities ..................................                377,431                 473,506
   Revolving credit facility .......................................................              1,000,000               1,000,000
   Current portion of long-term debt ...............................................              1,200,000               1,200,000
                                                                                               ------------            ------------
        Total current liabilities ..................................................              9,662,700               8,969,239
Long-term debt .....................................................................              4,200,000               5,400,000
Deferred credits ...................................................................                   --                   172,442
Deferred rent ......................................................................                794,645                 553,429
                                                                                               ------------            ------------
        Total liabilities ..........................................................             14,657,345              15,095,110

Commitments and contingencies
Stockholders' equity:
   Preferred stock, $50 par - shares authorized 500,000; none issued ...............                   --                      --
   Common stock, $0.02 par - shares authorized 10,000,000;
      outstanding 3,132,289 ........................................................                 62,646                  62,646
   Additional paid-in capital ......................................................             18,248,286              18,248,286
   Accumulated deficit .............................................................            (10,152,816)            (11,312,494)
                                                                                               ------------            ------------
        Total stockholders' equity .................................................              8,158,116               6,998,438
                                                                                               ============            ============


See accompanying notes to consolidated financial statements.

</TABLE>


                                       F-3

<PAGE>

<TABLE>
<CAPTION>

                           Sloan's Supermarkets, Inc.
                                and Subsidiaries

                      Consolidated Statements of Operations



                                                                              March 2,               March 3,          February 26,
Year ended                                                                       1997                   1996                  1995
                                                                           ------------          ------------          ------------
<S>                                                                        <C>                   <C>                   <C>         
Sales ............................................................         $ 51,792,539          $ 50,279,245          $ 48,366,513
Cost of sales ....................................................           31,184,126            31,036,120            30,918,845
                                                                           ------------          ------------          ------------
        Gross profit .............................................           20,608,413            19,243,125            17,447,668

Store operating, general and administrative
   expenses ......................................................           17,739,680            16,811,184            15,623,576
Management fee ...................................................              644,811               628,491               604,582
                                                                           ------------          ------------          ------------
                                                                              2,223,922             1,803,450             1,219,510

Nonstore operating expense .......................................              287,966               414,165               395,400
                                                                           ------------          ------------          ------------
        Operating profit .........................................            1,935,956             1,389,285               824,110

Other income (expense):
   Interest income ...............................................               22,581                36,671                34,364
   Other income (expenses) - net .................................              (41,072)               17,218                 7,365
   Interest expense ..............................................             (709,454)             (551,631)             (406,193)
   Gain on sale of leasehold interests ...........................                 --               1,001,397                  --
                                                                           ------------          ------------          ------------
                                                                               (727,945)              503,655              (364,464)

        Earnings before provision for income
           taxes, discontinued operations and
           extraordinary item ....................................            1,208,011             1,892,940               459,646
Provision for income taxes .......................................               48,333                62,000                80,059
                                                                           ------------          ------------          ------------
        Earnings before discontinued operations
           and extraordinary item ................................            1,159,678             1,830,940               379,587
Loss from discontinued operations ................................                 --                    --                 (17,499)
Extraordinary loss on early extinguishment of
   long-term debt ................................................                 --                 (88,674)                 --
                                                                           ------------          ------------          ------------
Net income .......................................................         $  1,159,678          $  1,742,266          $    362,088
                                                                           ------------          ------------          ------------
Income (loss) per share of common stock:
   Earnings before discontinued operations and ...................         $        .37          $        .58          $        .13
      extraordinary item
   Discontinued operations .......................................                   --                    --                  (.01)
   Extraordinary item ............................................                   --                  (.03)                   --
                                                                           ------------          ------------          ------------
                                                                           $        .37          $        .55          $        .12

Weighted average common shares outstanding .......................            3,132,000             3,171,000             2,919,000



See accompanying notes to consolidated financial statements.

</TABLE>

                                       F-4

<PAGE>

<TABLE>
<CAPTION>

                           Sloan's Supermarkets, Inc.
                                and Subsidiaries

                 Consolidated Statements of Stockholders' Equity



Years ended March 2, 1997, March 3, 1996 and February 26, 1995


                                                     Common stock
                                           -------------------------------         Additional                                  Total
                                              Number of                               paid-in        Accumulated       stockholders'
                                                 shares             Amount            capital            deficit              equity
                                           ------------       ------------       ------------       ------------        ------------
<S>                                           <C>             <C>                <C>                <C>                 <C>         
Balance, February 27, 1994 .........          2,397,605       $     47,952       $ 15,850,610       $(11,779,478)       $  4,119,084
Exercise of stock options ..........            450,000              9,000            766,000               --               775,000
Declaration of 10% stock dividend ..            284,684              5,694          1,631,676         (1,637,370)               --
Net income .........................               --                 --                 --              362,088             362,088
                                           ------------       ------------       ------------       ------------        ------------
Balance, February 26, 1995 .........          3,132,289             62,646         18,248,286        (13,054,760)          5,256,172
Net income .........................               --                 --                 --            1,742,266           1,742,266
                                           ------------       ------------       ------------       ------------        ------------
Balance, March 3, 1996 .............          3,132,289             62,646         18,248,286        (11,312,494)          6,998,438
Net income .........................               --                 --                 --            1,159,678           1,159,678
                                           ------------       ------------       ------------       ------------        ------------
Balance, March 2, 1997 .............          3,132,289       $     62,646       $ 18,248,286       $(10,152,816)       $  8,158,116
                                           ============       ============       ============       ============        ============


See accompanying notes to consolidated financial statements.


</TABLE>

                                       F-5

<PAGE>

<TABLE>
<CAPTION>

                           Sloan's Supermarkets, Inc.
                                and Subsidiaries

                      Consolidated Statements of Cash Flows



Year ended                                                                 March 2, 1997    March 3, 1996   February 26, 1995
                                                                              ----------       ----------       ----------
<S>                                                                          <C>              <C>              <C>        
Cash flows from operating activities:
   Net income ..........................................................     $ 1,159,678      $ 1,742,266      $   362,088
   Adjustments to reconcile net income to net cash provided by
      operating activities:
        Gain on sale of leasehold interests ............................            --         (1,001,397)            --
        Depreciation and amortization ..................................       1,699,677        1,279,604          976,505
        Extraordinary loss on early extinguishment of long-term debt ...            --             88,674             --
        Changes in operating assets and liabilities, net of effect
           from acquisition of supermarkets:
              Restricted cash ..........................................            --             26,952            6,323
              Accounts receivable - net ................................        (219,734)          (5,334)         262,758
              Inventory ................................................        (412,708)        (826,866)        (318,607)
              Prepaid expenses and other current assets ................        (132,375)          60,553           94,640
              Due from related parties - net ...........................      (1,302,433)        (313,874)         237,485
              Receivable from officer ..................................         (19,299)         (20,788)         (17,906)
              Other assets .............................................         (12,355)         (34,084)         (73,119)
              Deferred credits .........................................            --             (5,605)         121,677
              Accounts payable, trade ..................................       1,001,464         (269,174)         277,935
              Accrued payroll, vacation and withholdings ...............        (211,928)         112,836         (163,920)
              Accrued expenses and other current liabilities ...........         (96,075)         278,296         (268,061)
              Accrued rent leveling ....................................         241,216          215,471           28,678
              Other credits ............................................        (172,442)        (181,213)        (148,447)
                                                                              ----------       ----------       ----------
                Net cash provided by operating activities ..............       1,522,686        1,146,317        1,378,029

Cash flows from investing activities:
   Proceeds from sale of leaseholds - net ..............................            --          1,708,293             --
   Acquisition of new stores ...........................................            --         (5,781,000)            --
   Capital expenditures - net ..........................................         (52,609)        (763,527)        (393,563)
                                                                              ----------       ----------       ----------
                Net cash used in investing activities ..................         (52,609)      (4,836,234)        (393,563)

Cash flows from financing activities:
   Deferred financing costs ............................................        (271,082)        (118,730)            --
   Repayments of bank loan .............................................      (1,200,000)      (4,195,614)      (1,089,912)
   Proceeds from bank loan .............................................            --          8,000,000             --
                                                                              ----------       ----------       ----------
                Net cash provided by (used in) financing activities ....      (1,471,082)       3,685,656       (1,089,912)

Net decrease in cash ...................................................          (1,005)          (4,261)        (105,446)
Cash, beginning of year ................................................          71,242           75,503          180,949
                                                                              ----------       ----------       ----------
Cash, end of year ......................................................     $    70,237      $    71,242      $    75,503

Supplemental disclosures of cash flow information:
   Cash paid for interest ..............................................     $   709,727      $   551,608      $   405,797
   Cash paid for taxes .................................................          52,971           46,080          155,499

Noncash transactions:
   Exercise of cash options ............................................     $      --        $      --        $   775,000



See accompanying notes to consolidated financial statements.

</TABLE>



                                       F-6

<PAGE>

                           Sloan's Supermarkets, Inc.
                                and Subsidiaries

                   Notes to Consolidated Financial Statements




1.   BUSINESS

     The operations of Sloan's Supermarkets, Inc. and subsidiaries ("Sloan's" or
     the  "Company")  have  historically  consisted of the  manufacture  of cast
     component parts for the fine jewelry industry. The Company changed its name
     from Designcraft Industries, Inc. to its present name in 1993.

     As a result of the sale of the assets of its remaining jewelry  businesses,
     the Company no longer operates in the fine jewelry manufacturing  business.
     On March 19, 1993, Namdor Inc. ("Namdor"), a wholly-owned subsidiary of the
     Company,  purchased  certain assets  relating to 11 supermarkets in the New
     York metropolitan  area (the  "Supermarkets")  from CKMR  Corporation.  The
     purchased  assets included  machinery and equipment,  furniture,  fixtures,
     leasehold  improvements,  inventory of supplies and merchandise  located at
     the Supermarkets and a noncompete  agreement  (amortized on a straight-line
     basis  over 10 years - the life of the  agreement).  The net cash price for
     the assets and the noncompete  agreement was approximately $8.8 million. In
     addition,  at the time of the purchase,  Namdor  assumed  certain  accounts
     payable of the business's prior owners in an amount of $5,000,000.

     The  acquisition of the  Supermarkets by the Company has been accounted for
     as a purchase  transaction in accordance with Accounting  Principles  Board
     Opinion No. 16,  "Business  Combinations".  As such, the purchase price has
     been allocated to assets  acquired and  liabilities  assumed based on their
     estimated fair values. The excess of the fair value of assets acquired less
     liabilities assumed over cost has been allocated to reduce  proportionately
     the values assigned to noncurrent assets in determining their fair values.

     On  October  13,  1995,  the  Company  purchased  three  supermarket  store
     locations  including  furniture and fixtures,  leasehold  improvements  and
     inventory  from a company owned by the Chairman of the Board.  The purchase
     price of $5,000,000 was based on a fair market  evaluation  performed by an
     independent third party. Such acquisition was financed with a term loan. In
     addition,  the Company  purchased  inventory at the  locations at a cost of
     $781,000.


                                       F-7

<PAGE>


     On August 29, 1995,  the Company sold one store  leasehold to a third party
     for  approximately  $1.7  million.  The  sale  resulted  in a net  gain  of
     approximately  $1.0  million.   The  store's   supermarket   equipment  was
     transferred to a new store location which was opened during  February 1996.
     In  addition,  the  Company  opened  its first  health and beauty aid store
     during March 1996. As of the date of this report,  the Company  operates 14
     supermarkets and one health and beauty aid store.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

     The  consolidated  financial  statements  include  the  accounts of Sloan's
     Supermarkets,   Inc.  and  its  wholly-owned  subsidiaries.   All  material
     intercompany   accounts   and   transactions   have  been   eliminated   in
     consolidation.

     Fiscal Year

     The  Company's  fiscal year is  comprised  of 52 or 53 weeks  ending on the
     Sunday  closest to the last day of February.  The 1997 year consisted of 52
     weeks, 1996 of 53 weeks and 1995 of 52 weeks.

     Inventories

     Store  inventories  are valued  principally  at the lower of cost or market
     with cost determined under the retail method.

     Property and Equipment

     Depreciation  of  furniture,  fixtures  and  equipment  is  computed by the
     straight-line  method over the estimated  useful lives of the assets,  with
     lives ranging from seven to ten years. Leasehold improvements are amortized
     over the shorter of their  estimated  useful lives or the lease term by the
     straight-line method.


                                       F-8

<PAGE>

     Leases

     The Company charges the cost of noncancelable  operating lease payments and
     beneficial leaseholds to operations on a straight-line basis over the lives
     of the leases.

     Included in income for the fiscal year ended February 26, 1995 are benefits
     of $143,000, related to charges taken in the prior fiscal year for deferred
     rents.

     Deferred Advertising

     Advertising  rebates  and space  allocation  allowances  are  deferred  and
     recognized over the period of the agreement which  historically have ranged
     from one to three years. Advertising costs are expensed as incurred.

     Deferred  advertising  included  in the balance  sheet was $0 and  $72,442,
     respectively, for the years March 2, 1997 and March 3, 1996.

     Advertising expense included in the income statement was $144,539, $105,129
     and $114,009, respectively, for the year ended March 2, 1997, March 3, 1996
     and February 26, 1995.

     Income Per Share

     Per share data are based on the weighted average number of shares of common
     stock and common stock  equivalents  outstanding  during each year.  Income
     (loss) per share is  computed by the  treasury  stock  method;  primary and
     fully diluted  income (loss) per share are the same. The 10% stock dividend
     in fiscal 1995 has been retroactively applied to all periods presented.

     Income Taxes

     The Company follows  Statement of Financial  Accounting  Standards No. 109,
     "Accounting  for Income  Taxes" ("SFAS  109"),  which  requires a liability
     method of accounting for income taxes. Under the liability method, deferred
     income  taxes  are  recognized  for  the  tax  consequences  of  "temporary
     differences"  by applying  applicable  statutory  tax rates to  differences
     between  the  financial  statement  carrying  amounts  and the tax bases of
     existing assets and liabilities.


                                       F-9

<PAGE>

     The Company files a  consolidated  Federal  income tax return that includes
     the accounts of its  subsidiaries.  The Company and its  subsidiaries  file
     separate state and local income tax returns.




                                      F-10

<PAGE>

     Fair Value of Financial Instruments

     The  carrying  values of financial  instruments  including  cash,  accounts
     receivable,  accounts payable and due from related parties approximate fair
     value at March 2, 1997 and  March 3, 1996  because  of the  relative  short
     maturities of these instruments.

     The aggregate fair value of the bank debt  approximates its carrying amount
     because of its recent and frequent repricing based upon market conditions.

     Reclassifications

     Certain  reclassifications  have been made to the  presentations for fiscal
     1996 and 1995 to conform to the presentation for fiscal 1997.

     Estimates

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

     Long-lived Assets

     During  1995,   Statement  of  Financial   Accounting  Standards  No.  121,
     "Accounting  for the  Impairment of  Long-lived  Assets and for Long- lived
     Assets to Be Disposed Of" ("SFAS 121"),  was issued.  SFAS 121 requires the
     Company to review long-lived assets and certain identifiable assets related
     to those assets for impairment whenever circumstances and situations change
     such that  there is an  indication  that the  carrying  amounts  may not be
     recoverable.  If the  undiscounted  future cash flows of the enterprise are
     less than their carrying  amounts,  their  carrying  amounts are reduced to
     fair value and an  impairment  loss is  recognized.  The  adoption  of this
     pronouncement  in  fiscal  1997 did not have a  significant  impact  on the
     Company's financial statements.


                                      F-11

<PAGE>

     Stock Options

     The Company  accounts for all  transactions  under which employees  receive
     shares of stock or other equity  instruments  in the Company or the Company
     incurs  liabilities to employees in amounts based on the price of its stock
     in accordance  with the provisions of Accounting  Principles  Board Opinion
     No. 25,  "Accounting  for Stock Issued to  Employees".  The Company has not
     adopted the fair value method  encouraged  but not required by Statement of
     Financial   Accounting  Standards  No.  123,  "Accounting  for  Stock-Based
     Compensation".  Appropriate  pro  forma  and  other  information  has  been
     included herein.



3.   RELATED PARTY TRANSACTIONS

     The Company has advanced  funds to  companies  owned by the Chairman of the
     Board who is also the principal  stockholder of the Company. As of March 2,
     1997 and March 3, 1996,  the  Company is owed  approximately  $337,000  and
     $318,000,   including   $133,304   and   $114,005   of  accrued   interest,
     respectively.  Such  advances  bear  interest at prime plus 1.25% per annum
     (9.50% at March 2, 1997 and 9.50% at March 3, 1996).





                                      F-12

<PAGE>


     Red Apple  Group,  Inc.  ("Red  Apple"),  a  corporation  wholly  owned and
     controlled  by  the  Company's  Chairman  of  the  Board,   supervises  all
     operations of the Supermarkets  pursuant to a management  agreement entered
     into in March 1993 (the "Management  Agreement").  The Management Agreement
     is  terminable  by  either  party  after  March 19,  1998.  The term of the
     agreement shall  automatically be extended for additional  one-year periods
     unless either party has given the other notice of termination no later than
     90 days  prior  to the end of the  previous  term.  As of the  date of this
     report,  no such notice has been given. The Management  Agreement  requires
     the Company to pay to Red Apple a quarterly fee equal to 1.25% of all sales
     made in or from the  Supermarkets.  The  quarterly  fee  payable  under the
     Management  Agreement does not necessarily equal the costs which would have
     been or may be incurred by the Company on a stand-alone basis.

     The Company has various amounts receivable from supermarket companies owned
     by  the  Chairman  of  the  Board  related  to the  allocation  of  volume,
     advertising and other rebates to the Company. Rebates, whether allocated or
     directly  attributed to the Company,  are recorded as reductions to cost of
     sales  or  advertising  expense  over the  life of the  related  agreement.
     Rebates recorded as reductions to expenses approximated $1.7, $1.1 and $1.4
     million during fiscal 1997, 1996 and 1995, respectively.

     Red Apple also provides  maintenance services for the Company which are not
     covered by the  Management  Agreement.  Such services  include  supermarket
     refrigeration,  electrical and equipment maintenance. During the 1997, 1996
     and 1995 fiscal years, the Company incurred  approximately  $-0-,  $123,000
     and $90,000, respectively.




                                      F-13

<PAGE>

     City Produce Distributors,  Inc., a corporation indirectly wholly owned and
     controlled by the Chairman of the Board,  sells produce and certain grocery
     items to the Company at prices consistent with other third parties.  During
     the  1997,   1996  and  1995  fiscal  years,   such  purchases   aggregated
     approximately $5,263,000, $3,618,000 and $2,900,000, respectively.

     Newspaper  advertising  for the  Supermarkets  is  frequently  pooled  with
     advertising for other  supermarkets  which are not owned by the Company but
     which are operated by Red Apple or its  affiliates  under the Sloan's name.
     In such cases,  the Company pays a proportionate  share of such advertising
     expenses   based   upon  its   number  of   Supermarkets   covered  in  the
     advertisements.   Such  amounts  allocated  to  the  Company   approximated
     $115,000,  $136,000  and  $139,000  during  fiscal  1997,  1996  and  1995,
     respectively.

     At March 2, 1997 and March 3, 1996, the net amount due from related parties
     resulting from the above transactions  amounted to $1,830,127 and $527,694,
     respectively.

     Lowenthal, Landau, Fischer & Bring, P.C., a law firm of which a director of
     the Company is a member,  was paid $219,000,  $213,000 and $117,000 in fees
     for rendering  legal  services to the Company during the fiscal years ended
     March 2, 1997, March 3, 1996 and February 26, 1995, respectively.


4.   COMMITMENTS AND CONTINGENCIES

     The Company operates  primarily in leased facilities,  under  noncancelable
     operating  leases  expiring at various dates through 2018.  Certain  leases
     provide for contingent  rents (based upon store sales exceeding  stipulated
     amounts or on the Consumer  Price  Index),  escalation  clauses and renewal
     options ranging from five to fifteen years.  The Company is obligated under
     all  leases  to pay  for  taxes,  insurance  and  common  area  maintenance
     expenses.





                                      F-14

<PAGE>


     Rent expense under  noncancelable  operating leases,  including leases with
     related parties for the fiscal years ended March 2, 1997, March 3, 1996 and
     February 26, 1995, respectively, is as follows:


                                        March 2,        March 3,    February 26,
     Year ended                             1997            1996            1995
                                      ----------      ----------      ----------
     Base rents .................     $2,781,602      $2,350,162      $1,972,164
     Contingent rents ...........         30,000          30,000          30,000
                                      ----------      ----------      ----------
     Rent expense ...............     $2,811,602      $2,380,162      $2,002,164



     Future minimum lease commitments under noncancelable  leases as of March 2,
     1997 are:


     Fiscal year ending:

     1998 ...............................      $  2,215,556
     1999 ...............................         2,036,400
     2000 ...............................         1,962,441
     2001 ...............................         2,009,949
     2002 ...............................         1,946,376
     Thereafter .........................        20,559,901
                                               ------------   
                                               $ 30,730,623


     The  Company  may  also  expand  its  operations  through  acquisitions  of
     supermarkets  and/or businesses which the Company believes would complement
     its core  supermarket  business.  The Company is  continuing  to pursue the
     possibility  of purchasing  additional  supermarkets  from other  companies
     owned by John Catsimatidis.



                                      F-15

<PAGE>


5.   INCOME TAXES

     The Company adopted,  effective March 1, 1993, SFAS 109 which,  among other
     things,  requires a change from the deferred method to the liability method
     of  accounting  for income  taxes and allows  recognition  of deferred  tax
     assets based on the  likelihood of  realization  of a tax benefit in future
     years.  Pursuant to the  adoption of SFAS 109,  deferred  income  taxes are
     provided for the temporary  differences between the tax basis and financial
     accounting reporting basis of the Company's net assets and liabilities. The
     effect of adopting  SFAS 109 had no impact on the results of  operations or
     financial position of the Company.

     Deferred  tax expense or benefit is the change in the computed tax asset or
     liability  balance.  As of March 2, 1997 and March 3, 1996, the Company had
     total  deferred  tax  assets  of  approximately  $790,000  and  $1,020,000,
     respectively,  of which  approximately  $680,000 and $980,000 is related to
     net  operating  loss  carryforwards  which are  available to offset  income
     earned in future years, and approximately $230,000 and $140,000 in deferred
     tax  liabilities  related  to excess  tax  depreciation.  However,  the net
     deferred  tax  assets  were  offset by a  valuation  allowance  of an equal
     amount.  Accordingly,  for the year ended March 2, 1997, no deferred income
     tax benefit was recognized.

     The Company utilized approximately  $1,200,000,  $1,700,000 and $-0- of net
     operating   loss   carryforwards   during  fiscal  1997,   1996  and  1995,
     respectively, the benefit of which offsets current income taxes payable. As
     of March 2, 1997,  the Company had  available  Federal net  operating  loss
     carryforwards  of  approximately  $2,000,000,  of which the tax benefits of
     $1,000,000  when and if realized,  will be credited  directly to additional
     paid-in capital.

     The income tax expense amounts in the consolidated statements of operations
     consist of state income taxes and Federal alternative minimum taxes.






                                      F-16

<PAGE>

6.   DEBT

     Credit Facility and Term Loan Agreement

     On October 13, 1995, the Company entered into a five-year  credit agreement
     with European  American Bank which replaced its previous credit  agreement.
     The new  agreement  includes a  $1,000,000  revolving  credit  facility and
     $7,000,000 term loan. The new agreement,  which permits borrowings based on
     the prime rate plus 1.25%,  contains covenants,  representations and events
     of  default  typical of credit  facility  agreements,  including  financial
     covenants  which  require the Company to meet,  among  other  things,  debt
     service  coverage  ratios and fixed charge  coverage ratios and which limit
     advances to affiliates.  Similar to the Company's prior credit  agreements,
     the new  revolving  credit  facility and term loan is secured by equipment,
     general intangibles and accounts receivable.


     Long-term debt consists of the following:



                                                     March 2,          March 3,
                                                        1997              1996
                                                  -----------      ------------
Loan payable to bank at prime plus 1.25% per
   annum (9.5% at March 2, 1997), interest
   payable monthly in arrears, principal
   payable in monthly installments of $100,000
   beginning November 13, 1995
   (collateralized by certain assets of the
   Company, including store equipment and
   leases) .....................................   $ 5,400,000     $  6,600,000

Less: Current portion ..........................    (1,200,000)      (1,200,000)
                                                   -----------     ------------
                                                   $ 4,200,000     $  5,400,000
                                                   ===========     ============



     Deferred  financing  costs  related  to the loan  payable to bank are being
     amortized over the life of the related debt. As a result of the refinancing
     of the credit  agreement,  the Company wrote off deferred  financing  costs
     which pertained to the previous credit agreement.  The write-off of $88,674
     is reflected in the consolidated  financial  statements as an extraordinary
     item.





                                      F-17

<PAGE>

     Principal maturities of long-term debt follow:


     1998 ............................   $1,200,000

     1999 ............................    1,200,000

     2000 ............................    1,200,000

     2001 ............................    1,800,000
                                         ----------
                                         $5,400,000



7.   STOCKHOLDERS' EQUITY

     On November 16, 1994, the Company  declared a 10% stock dividend payable on
     January 20, 1995 to stockholders of record on December 20, 1994.

     Earnings  per share  and  weighted  average  shares  outstanding  have been
     restated to reflect the 10% stock dividend.


8.   RETIREMENT PLANS

     The Company  participates in various defined  contribution  multi- employer
     union pension plans which are administered  jointly by management and union
     representatives  and which  sponsor most  full-time  and certain  part-time
     union employees. The pension expense for these plans approximated $630,000,
     $800,000  and  $702,000 in fiscal 1997,  1996 and 1995,  respectively.  The
     Company could, under certain  circumstances,  be liable for unfunded vested
     benefits or other expenses of jointly administered union/management plans.




                                      F-18

<PAGE>

9.   STOCK OPTION PLANS

     During  fiscal 1990,  the Company  granted to the Chairman of the Board and
     principal  stockholder  of the  Company  a  nonqualified  stock  option  to
     purchase an aggregate of 200,000 shares of common stock at a price of $5.00
     per share. During fiscal 1993, the exercise price of these options had been
     reduced to $2.00 per share (the fair market value at that date) by approval
     of the Company's stockholders.  During fiscal 1991, the Company granted the
     Chairman a  nonqualified  stock  option to purchase an aggregate of 250,000
     shares of common stock at a price of $1.50 per share.  On October 20, 1994,
     the options were  exercised  by the  Chairman.  The purchase  price for the
     options  exercised were paid for by offsetting loans previously made to the
     Company by the Chairman or by companies controlled by the Chairman.

     On October 7, 1994,  the Company  granted  the  Chairman  an  aggregate  of
     250,000  shares  of common  stock at a price of $4.12  per share  (the fair
     market value at that date).

     The Company currently has one incentive grant and four nonqualified  grants
     under which stock  options may be granted to  officers,  directors  and key
     employees  of the Company - the 1994  Employee  Incentive  Grant (the "1994
     Grant"),  the 1994  Nonqualified  Grant  (the  "1994 NQ  Grant"),  the 1995
     Chairman's   Nonqualified   Options  (the  "Chairman's  Grant"),  the  1994
     Director's  Nonqualified  Grant  (the  "Directors'  Grant"),  and the  1994
     Nonqualified  Recruitment Grant (the "1994 Recruitment Grant"). The options
     to purchase common shares  generally are issued at fair market value on the
     date of the grant,  begin vesting on the date of the grant,  and expire ten
     years from issuance and are conditioned  upon continual  employment  during
     the vesting period.

     Under the 1994 Grant and the 1994 NQ Grant,  the Company granted options to
     purchase up to 100,000 and 35,000 shares of common stock, respectively.

     In  addition to the one  incentive  grant,  the  Company has granted  stock
     options to certain key  executives  and  directors.  The vesting  terms and
     contractual  lives of these  grants are  similar  to that of the  incentive
     grant.




                                      F-19

<PAGE>


     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
     for Stock Issued to Employees," and related  interpretations  for its stock
     option grants. Generally,  compensation expense is not recognized for stock
     option grants.

     In accordance  with  Statement of Financial  Accounting  Standards No. 123,
     "Accounting for Stock-Based Compensation" (SFAS 123), the Company discloses
     the pro forma  impact  of  recording  compensation  expense  utilizing  the
     Black-Scholes model. The Black-Scholes option valuation model was developed
     for use in  estimating  the fair  value of  traded  options  which  have no
     vesting  restrictions  and are  fully  transferable.  In  addition,  option
     valuation  models  require  the  input  of  highly  subjective  assumptions
     including the expected stock price volatility.  Because the Company's stock
     options have characteristics  significantly  different from those of traded
     options,  and  because  changes in the  subjective  input  assumptions  can
     materially  affect the fair value estimate,  in management's  opinion,  the
     Black-Scholes  model does not necessarily provide a reliable measure of the
     fair value of its stock options.

     Since no stock  options  were  granted in the past two years,  no pro forma
     calculations pursuant to SFAS 123 have been presented.




                                      F-20

<PAGE>

     A summary of the status of the Company's stock options is presented below:

                                                                Weighted Average
                                                   Shares         Exercise Price
                                                ---------            --------
     Balance, February 27, 1994 ........             -               $    -
          Granted ......................          473,000               4.29
          Exercised ....................             -                    -
          Forfeited ....................             -                    -

     Balance, February 26, 1995 ........          473,000               4.29
          Granted ......................             -                    -
          Exercised ....................             -                    -
          Forfeited ....................           (9,000)              5.63

     Balance, March 3, 1996 ............          464,000               4.27
          Granted ......................             -                    -
          Exercised ....................             -                    -
          Forfeited ....................           (8,000)              5.63

     Balance March 2, 1997 .............          456,000              $4.24


     Options  exercisable  as of March 2, 1997,  March 3, 1996 and  February 26,
     1995 were 442,800, 444,200 and 446,600, respectively.




                                      F-21

<PAGE>


     The following table  summarizes  information as of March 2, 1997 concerning
     outstanding and exercisable options:


                        Options Outstanding                 Options Exercisable
                  ---------------------------------        ---------------------
                                Weighted
                                 Average    Weighted                    Weighted
  Range of                     Remaining     Average                     Average
  Exercise           Number  Contractual    Exercise         Number     Exercise
    Prices      Outstanding         Life       Price    Exercisable        Price
  --------        --------     --------    --------        --------     --------
     $3.75         275,000         6.69       $3.75         275,000        $3.75

      5.63          33,000         6.81        5.63          33,000         5.63

      5.63          85,000         6.81        5.63          85,000         5.63

      3.81          30,000         7.69        3.81          30,000         3.81

      3.81          33,000         2.69        3.81          19,800         3.81

$3.75-5.63         456,000         6.50        4.24         442,800         4.24



10.  LITIGATION

     In June 1994,  the United  States  Federal  Trade  Commission  (the  "FTC")
     commenced an action  alleging  that the mergers by John  Catsimatidis,  the
     Company  and  three  other   entities   controlled   by  Mr.   Catsimatidis
     (collectively, the "companies") of 32 Sloan's Supermarkets between 1991 and
     1993  violated  Federal  antitrust  laws  because the effect of the mergers
     might be substantially to lessen competition among supermarkets within four
     Manhattan residential  neighborhoods.  The complaint indicated that the FTC
     could seek divestiture of up to ten supermarkets owned by the companies.



                                      F-22

<PAGE>


     In order to avoid the costs of  protracted  litigation  in the  matter  and
     without  admitting  that any  antitrust  law was violated as alleged in the
     complaint,  on November 21, 1994,  the companies  entered into a settlement
     agreement with the Acting  Director of the Bureau of Competition of the FTC
     regarding  the  claims  made  by the  FTC  against  them  (the  "Settlement
     Agreement").  The companies agreed in the Settlement  Agreement that within
     twelve months from the date of a final order in the  proceeding  they would
     divest themselves of an aggregate of six supermarkets in Manhattan,  chosen
     by them from a list of sixteen supermarkets  specifically designated in the
     Settlement  Agreement  (none of which are owned by the Company) and certain
     alternate  supermarkets  referenced in the  Settlement  Agreement  (five of
     which were then owned by the Company).  Nothing in the Settlement Agreement
     required  the  Company  to divest  itself of any of its  supermarkets,  but
     divestiture  of  supermarkets  owned by the  Company  would  count  towards
     satisfaction of the divestiture obligations.

     An order  embodying the Settlement  Agreement was made  effective  March 6,
     1995 (the "Order").  Pursuant to that Order,  for a period of 10 years from
     March 6, 1995, the companies  cannot,  without prior FTC approval,  acquire
     any interest in any existing  supermarket  in a designated  area. The order
     does not restrict the companies from acquiring an interest in a supermarket
     by leasing or purchasing a new location that at the time of merger (and for
     six months prior to the merger) is not being operated as a supermarket.

     In March 1996, an application  (the  "Application")  was made to modify the
     Order so as to lift the divestiture requirements other than with respect to
     one store on the Upper  West Side which was not owned by the  Company.  The
     FTC  approved  the  divestiture  of  that  store  and its  divestiture  was
     completed on May 9, 1996. On April 29, 1996, the  Application  was revised;
     and it was  further  revised in August and  September  so as to seek relief
     solely with respect to the  requirements of divestiture of any supermarkets
     in the Chelsea section of Manhattan.





                                      F-23

<PAGE>


     On September 13, 1996,  the FTC granted the  Application  as modified,  and
     deleted the requirements of divestiture in Chelsea. Simultaneously, the FTC
     appointed a trustee to divest four  supermarkets  pursuant to the Order, as
     modified. The trustee was not granted any authority to divest until the FTC
     approved a trustee  agreement  between the trustee  and the  companies.  An
     agreement was entered into with the trustee which would have been effective
     upon approval by the FTC.

     Subsequent to the modification of the Order,  Supermarket Acquisition Corp.
     ("SAC"), Red Apple Supermarket,  Inc. ("RAS") and Gristede's  Supermarkets,
     Inc. ("Gristede's") sold an aggregate of four stores in compliance with the
     divestiture  provisions  of the Order,  as  modified.  Based  thereon,  the
     trustee agreement will not become effective.

     A settlement of FTC claims  relating to the  divestiture  provisions of the
     Order has been agreed to pursuant  to which  $600,000  has been paid to the
     FTC. No portion of such amount was borne by the companies.

     On August 8, 1994, a lawsuit against the Company and Mr.  Catsimatidis  was
     instituted in the United States District Court for the Southern District of
     New York by RMED International,  Inc. ("RMED"), a former stockholder of the
     Company.




                                      F-24

<PAGE>


     The complaint alleges,  among other things, that RMED and a purported class
     consisting of persons who purchased the Company's  common stock on or after
     March 19, 1993 were damaged by alleged  nondisclosures  in certain  filings
     made by the Company with the  Securities  and Exchange  Commission  between
     January  1993 and June 1994  relating to an  investigation  by the FTC. The
     complaint  alleges  that  such  nondisclosures  constituted  violations  of
     Federal and New York State securities laws, as well as common law fraud and
     seeks  damages  (including  punitive  damages)  in  an  unspecified  amount
     (although in discovery proceedings the named plaintiff has claimed that its
     damages were approximately $800,000), as well as costs and disbursements of
     the action.  On June 2, 1994,  the  Company  issued a press  release  which
     disclosed the FTC action.

     On September 30, 1994, the defendants filed a motion to dismiss for failure
     to state a cause of action and for lack of subject matter jurisdiction over
     the state claims.  The motion was denied. In June 1995, RMED filed a motion
     for  class  certification,  and  discovery  was  held in  abeyance  pending
     disposition  of that  motion.  The  motion  was  granted  in March 1996 and
     discovery  is now  proceeding.  Management  believes  that the  lawsuit  is
     without  merit and intends to defend the action  vigorously;  however,  the
     outcome cannot be determined.





                                      F-25

<PAGE>




                                    SIGNATURE

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


                                       SLOAN'S SUPERMARKETS, INC.


                                       By: /s/John Catsimatidis
                                           --------------------
                                           John A. Catsimatidis
                                           Chairman of the Board


Dated:  September 30, 1997