<Page>

================================================================================

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

                                    FORM 10-Q


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


                   For the Quarterly Period Ended May 4, 2002

                                       OR

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

                For the Transition Period from _______ to _______

                          Commission file number 0-8858

                            THE PENN TRAFFIC COMPANY
             (Exact name of registrant as specified in its charter)


                DELAWARE                              25-0716800
        (State of incorporation)           (IRS Employer Identification No.)

1200 STATE FAIR BLVD., SYRACUSE, NEW YORK             13221-4737
(Address of principal executive offices)              (Zip Code)

                                 (315) 453-7284
                               (Telephone number)

      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 ninety (90) days.

                                 YES |X| NO |_|

      Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                 YES |X| NO |_|

 Common stock, par value $.01 per share: 20,064,264 shares outstanding as of
                                 June 7, 2002

================================================================================
<Page>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                            THE PENN TRAFFIC COMPANY
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                    UNAUDITED


<Table>
<Caption>
                                                   13 WEEKS          13 WEEKS
                                                    ENDED             ENDED
                                                    MAY 4,            MAY 5,
                                                     2002              2001
                                                 -------------     -------------
<S>                                                <C>               <C>
REVENUES                                           $ 576,372         $ 579,055

COST AND OPERATING EXPENSES:
  Cost of sales                                      416,009           422,412
  Selling and administrative expenses                149,743           146,371
  Amortization of excess reorganization value                           27,318
                                                   ---------         ---------

OPERATING INCOME (LOSS)                               10,620           (17,046)
  Interest expense                                     8,511             9,530
                                                   ---------         ---------

INCOME (LOSS) BEFORE INCOME TAXES                      2,109           (26,576)
  Provision for income taxes (Note 2)                    970               559
                                                   ---------         ---------


NET INCOME (LOSS)                                  $   1,139         $ (27,135)
                                                   =========         =========

PER SHARE (BASIC AND DILUTED):

  Net Income (Loss) (Note 3)                       $    0.06         $   (1.35)
                                                   =========         =========
</Table>

           SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


                                      -2-
<Page>

                            THE PENN TRAFFIC COMPANY
                           CONSOLIDATED BALANCE SHEET
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<Table>
<Caption>
                                                    UNAUDITED       AUDITED
                                                     MAY 4,       FEBRUARY 2,
                                                      2002           2002
                                                   ------------   ------------
<S>                                                  <C>            <C>
   ASSETS

CURRENT ASSETS:
  Cash and short-term investments                    $ 38,021       $ 39,562
  Accounts and notes receivable (less allowance for
    doubtful accounts of $2,412 and $2,107,
    respectively)                                      41,533         49,710
  Inventories                                         278,802        284,221
  Prepaid expenses and other current assets            11,224          9,697
                                                     --------       --------
                                                      369,580        383,190
                                                     --------       --------

NONCURRENT ASSETS:
  Capital leases                                       43,135         44,747
  Property, plant and equipment                       281,267        273,436
  Goodwill                                              8,990          8,990
  Beneficial leases                                    45,368         46,920
  Excess reorganization value                          42,032         42,032
  Other assets                                         19,315         16,414
                                                     --------       --------
                                                     $809,687       $815,729
                                                     ========       ========

   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current maturities of long-term debt               $  8,058       $  7,066
  Current portion of obligations under capital
    leases                                              8,107          8,329
  Trade accounts and drafts payable                   121,863        128,872
  Other accrued liabilities                            79,783         77,590
  Accrued interest expense                              5,138          2,514
  Taxes payable                                        17,622         18,179
                                                     --------       --------
                                                      240,571        242,550
                                                     --------       --------

NONCURRENT LIABILITIES:
  Long-term debt                                      241,273        245,646
  Obligations under capital leases                     65,417         67,075
  Deferred income taxes                                65,273         63,770
  Other noncurrent liabilities                         49,676         51,471

STOCKHOLDERS' EQUITY:
  Preferred stock - authorized 1,000
    shares; $.01 par value; none issued
  Common Stock - authorized 30,000 shares; $.01
    par value; 20,058 and 20,056 shares issued
    and outstanding, respectively                         201            201
  Capital in excess of par value (Note 4)             417,395        416,597
  Stock warrants                                        7,249          7,249
  Retained deficit                                   (254,572)      (255,711)
  Accumulated other comprehensive loss (Note 4)       (22,421)       (22,744)
  Treasury stock, at cost (Note 4)                       (375)          (375)
                                                     --------       --------
    TOTAL STOCKHOLDERS' EQUITY                        147,477        145,217
                                                     --------       --------
                                                     $809,687       $815,729
                                                     ========       ========
</Table>


           SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


                                      -3-
<Page>

                            THE PENN TRAFFIC COMPANY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                    UNAUDITED


<Table>
<Caption>
                                                  13 WEEKS        13 WEEKS
                                                   ENDED            ENDED
                                                   MAY 4,          MAY 5,
                                                    2002            2001
                                                -------------    ------------
<S>                                               <C>              <C>
OPERATING ACTIVITIES:
  Net income (loss)                               $  1,139         $(27,135)
  Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
      Depreciation and amortization                 10,557           10,454
      Amortization of excess reorganization
        value                                                        27,318
      Other - net                                      640              127
NET CHANGE IN ASSETS AND LIABILITIES:
  Accounts receivable and prepaid expenses           6,650            3,732
  Inventories                                        5,419           (2,189)
  Payables and accrued expenses                      1,726           10,544
  Deferred income taxes                              1,536              133
  Other assets                                      (2,590)            (844)
  Other noncurrent liabilities                      (1,614)             (34)
                                                  --------         --------

NET CASH PROVIDED BY OPERATING ACTIVITIES           23,463           22,106
                                                  --------         --------

INVESTING ACTIVITIES:
  Capital expenditures                             (15,189)          (9,116)
  Proceeds from sale of assets                         168               20
                                                  --------         --------

NET CASH USED IN INVESTING ACTIVITIES              (15,021)          (9,096)
                                                  --------         --------

FINANCING ACTIVITIES:
  Net decrease in drafts payables                   (4,722)          (2,115)
  Payments to settle long-term debt                 (1,081)          (1,076)
  Borrowing of revolving debt                       45,100           55,300
  Repayment of revolving debt                      (47,400)         (63,700)
  Reduction of capital lease obligations            (1,880)          (2,213)
                                                  --------         --------

NET CASH USED IN FINANCING ACTIVITIES               (9,983)         (13,804)
                                                  --------         --------

DECREASE IN CASH AND CASH EQUIVALENTS               (1,541)            (794)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD    39,562           42,529
                                                  --------         --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD        $ 38,021         $ 41,735
                                                  ========         ========

SUPPLEMENTAL CASH FLOW INFORMATION:

  Interest paid                                      5,667            7,234
  Income taxes paid                                  1,422               53
</Table>

          SEE NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


                                      -4-
<Page>

                            THE PENN TRAFFIC COMPANY
               Notes To Interim Consolidated Financial Statements
                                    Unaudited


NOTE 1 - BASIS OF PRESENTATION

      The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.

      The results of operations for the interim periods are not necessarily an
indication of results to be expected for the year. In the opinion of management,
all adjustments necessary for a fair statement of the results are included for
the interim periods, and all such adjustments are normal and recurring. These
unaudited interim financial statements should be read in conjunction with the
consolidated financial statements and related notes contained in the Company's
Annual Report on Form 10-K for the fiscal year ended February 2, 2002.

      All significant intercompany transactions and accounts have been
eliminated in consolidation.

      During the third quarter of the fiscal year ended February 2, 2002, the
Company implemented EITF Issue Number 00-14, "Accounting for Certain Sales
Incentives" as codified by EITF Issue Number 01-9, "Accounting for Consideration
Given by a Vendor to a Customer" and made certain other income statement
reclassifications. Accordingly, certain amounts in the Consolidated Statement of
Operations for the 13-week period ended May 5, 2001 have been reclassified for
comparability purposes.


                                      -5-
<Page>

NEW ACCOUNTING STANDARDS

      Penn Traffic adopted Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142") in the 13-week period ending
May 4, 2002 ("First Quarter Fiscal 2003"). SFAS 142 provides that intangible
assets with finite useful lives be amortized, and that goodwill and intangible
assets with indefinite useful lives not be amortized but tested at least
annually for impairment. Accordingly, the Company no longer records amortization
of excess reorganization value or goodwill in its Consolidated Statement of
Operations. In conjunction with the adoption of SFAS 142, Penn Traffic performed
a comprehensive test of the carrying value of the excess reorganization value
and goodwill assets for impairment. As a result of this review, no assets were
deemed impaired. Excess reorganization value and goodwill have a carrying value
of approximately $51 million at the date of adoption of this standard.

      In October 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS 144"). This statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
SFAS 144 supercedes 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 144 applies to all long-lived assets (including
discontinued operations) and consequently amends Accounting Principle Board
Opinion No. 30, "Reporting Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions." The Company adopted this standard in First
Quarter Fiscal 2003. The adoption of this standard did not have a material
effect on the Company's financial statements.

NOTE 2 - INCOME TAXES

      The tax provisions for First Quarter Fiscal 2003 and the 13-week period
ended May 5, 2001 ("First Quarter Fiscal 2002") are not recorded at statutory
rates due to differences between income calculations for financial reporting and
tax reporting purposes. The effective tax rate for First Quarter Fiscal 2003
reflects the recognition of tax expense based on the estimated effective annual
tax rate for the fiscal year ending February 1, 2003. The effective tax rate for
First Quarter Fiscal 2002 has not been annualized due to the net loss reported
for the fiscal year ended February 2, 2002.


                                      -6-
<Page>

NOTE 3 - NET INCOME (LOSS) PER SHARE

      The calculation of Basic Earnings Per Share utilized 20,058,264 and
20,054,112 shares for First Quarter Fiscal 2003 and First Quarter Fiscal 2002,
respectively. The calculation of Diluted Earnings Per Share utilized 20,383,567
and 20,054,112 shares for First Quarter Fiscal 2003 and First Quarter Fiscal
2002, respectively. The calculation of Diluted Earnings Per Share for First
Quarter Fiscal 2002 excludes the effect of incremental common stock equivalents
aggregating 42,191 shares, since they would have been antidilutive given the net
loss for the quarter.

NOTE 4 - STOCKHOLDERS' EQUITY

      Comprehensive income (loss) for First Quarter Fiscal 2003 and First
Quarter Fiscal 2002 consists of net income (loss), the effects of accounting for
hedges under Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities," and unrealized gains or
losses on marketable securities. Total comprehensive income for First Quarter
Fiscal 2003 was $1.5 million. Total comprehensive loss for First Quarter Fiscal
2002 was $27.4 million. Capital in excess of par value includes accumulated
compensation expense with respect to certain stock options subject to variable
accounting of $1.2 million and $0.4 million as of May 4, 2002 and February 2,
2002, respectively.

      On June 29, 2000, the Company announced that its Board of Directors had
authorized the Company to repurchase up to an aggregate value of $10 million of
Penn Traffic's common stock from time to time in the open market or privately
negotiated transactions. The timing and amounts of purchases will be governed by
prevailing market conditions and other considerations. To date, the Company has
repurchased 53,000 shares of common stock at an average price of $7.08 per
share.


                                      -7-
<Page>

NOTE 5 - SUPPLEMENTAL FINANCIAL INFORMATION


<Table>
<Caption>
                                                 13 WEEKS           13 WEEKS
                                                  ENDED              ENDED
                                                  MAY 4,             MAY 5,
                                                   2002               2001
                                               -------------      -------------
                                                  (IN THOUSANDS, EXCEPT PER
                                                         SHARE DATA)
<S>                                              <C>                <C>
EBITDA (1)                                       $ 21,677           $ 21,351

Cash interest expense                               8,291              9,311

Adjusted net income (2)                             1,139                183

Adjusted Earnings Per Share
  (Basic and Diluted) (3)                        $   0.06           $   0.01
</Table>

------------------------------
See notes below


(1)   "EBITDA" is earnings before interest, taxes, depreciation, amortization,
      amortization of excess reorganization value and LIFO provision. EBITDA
      should not be interpreted as a measure of operating results, cash flow
      provided by operating activities, a measure of liquidity or as an
      alternative to any generally accepted accounting principle measure of
      performance. The Company is reporting EBITDA because it is a widely used
      financial measure of the potential capacity of a company to incur and
      service debt. Penn Traffic's reported EBITDA may not be comparable to
      similarly titled measures used by other companies.

(2)   "Adjusted net income" for First Quarter Fiscal 2003 is net income and for
      First Quarter Fiscal 2002 is net loss excluding amortization of excess
      reorganization value of $27.3 million.

(3)   The calculation of Basic Adjusted Earnings Per Share utilized 20,058,264
      and 20,054,112 shares for First Quarter Fiscal 2003 and First Quarter
      Fiscal 2002, respectively. The calculation of Diluted Adjusted Earnings
      Per Share utilized 20,383,567 and 20,096,303 shares for First Quarter
      Fiscal 2003 and First Quarter Fiscal 2002, respectively.


                                      -8-
<Page>

NOTE 6 - AMORTIZATION OF EXCESS REORGANIZATION VALUE AND GOODWILL


      Penn Traffic's adoption of SFAS 142 eliminates the amortization of excess
reorganization value and goodwill beginning in First Quarter Fiscal 2003. The
following table presents a comparison of First Quarter Fiscal 2003 net income to
the reported net loss for First Quarter Fiscal 2002 adjusted to exclude the
amortization of excess reorganization value and goodwill ("Pro forma net
income"):

<Table>
<Caption>
                                               13 WEEKS           13 WEEKS
                                                 ENDED             ENDED
                                                MAY 4,             MAY 5,
                                                 2002               2001
                                              -----------       -------------
                                                (IN THOUSANDS, EXCEPT PER
                                                       SHARE DATA)
<S>                                             <C>               <C>
Reported net income (loss)                      $  1,139          $(27,135)
  Amortization of excess reorganization value                       27,318
  Goodwill amortization, net of tax                                     35
                                                --------          --------
    Pro forma net income                        $  1,139          $    218
                                                ========          ========

Basic and diluted earnings per share
  Reported net income (loss)                    $   0.06          $  (1.35)
  Amortization of excess reorganization value                         1.36
  Goodwill amortization, net of tax
                                                --------          --------
    Pro forma net income                        $   0.06          $   0.01
                                                ========          ========
</Table>


                                      -9-
<Page>

NOTE 7 - SEGMENT INFORMATION

      The table below presents Revenues and EBITDA by reportable segment:


<Table>
<Caption>
                                                   WHOLESALE
                                     RETAIL           FOOD
                                      FOOD        DISTRIBUTION       TOTAL
                                  -------------   -------------   --------------
                                                 (IN THOUSANDS)
<S>                                 <C>             <C>             <C>
FIRST QUARTER FISCAL 2003
  Revenues                          $506,905        $ 64,739        $571,644
  EBITDA                              32,257           4,481          36,738


FIRST QUARTER FISCAL 2002
  Revenues                          $508,736        $ 66,351        $575,087
  EBITDA                              32,527           4,115          36,642
</Table>

      The table below reconciles (a) Total segment revenues to Consolidated
revenues and (b) Total EBITDA for reportable segments to Income (loss) before
income taxes:

<Table>
<Caption>
                                                 13 WEEKS           13 WEEKS
                                                  ENDED              ENDED
                                                  MAY 4,             MAY 5,
                                                   2002               2001
                                               -------------      -------------
                                                       (IN THOUSANDS)
<S>                                              <C>                <C>
REVENUES:
  Total segment revenues                         $571,644           $575,087
  Other revenues                                    4,728              3,968
                                                 --------           --------

    Consolidated revenues                        $576,372           $579,055
                                                 ========           ========

EBITDA (1):
  Total EBITDA for reportable segments           $ 36,738           $ 36,642
  Unallocated expenses/income                     (15,061)           (15,291)
  Depreciation and amortization                   (10,557)           (10,454)
  Amortization of excess reorganization value                        (27,318)
  LIFO provision                                     (500)              (625)
  Interest expense                                 (8,511)            (9,530)
                                                 --------           --------

    Income (loss) before income taxes            $  2,109           $(26,576)
                                                 ========           ========
</Table>

------------------------------
See notes below

(1)   EBITDA is earnings before interest, taxes, depreciation, amortization,
      amortization of excess reorganization value and LIFO provision.


                                      -10-
<Page>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS


      Certain statements included in this Part I, Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
elsewhere in this Quarterly Report on Form 10-Q which are not statements of
historical fact are intended to be, and are hereby identified as,
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended. Without limiting the foregoing, the
words "anticipate," "believe," "estimate," "expect," "intend," "plan," "project"
and other similar expressions are intended to identify forward-looking
statements. The Company cautions readers that forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievement expressed or
implied by such forward-looking statements. Such factors include, among other
things, the success or failure of the Company in implementing its current
business and operational strategies; general economic and business conditions;
competition; availability, location and terms of sites for store development;
the successful implementation of the Company's capital expenditure program
(including store remodeling and investments in the Company's technology
infrastructure including point-of-sale systems); labor relations; labor and
employee benefit costs including increases in health care and pension costs; the
impact of the Company's loyalty card program on its results of operations;
availability and terms of and access to capital; the Company's liquidity and
other financial considerations; the ability of the Company to repurchase its
common stock in open market purchases and the prices at which it repurchases its
common stock; restrictions on the Company's ability to repurchase its shares
under its debt instruments; and the outcome of pending or yet-to-be instituted
legal proceedings. Penn Traffic cautions that the foregoing list of important
factors is not exhaustive.


                                      -11-
<Page>

RESULTS OF OPERATIONS


THIRTEEN WEEKS ENDED MAY 4, 2002 ("FIRST QUARTER FISCAL 2003") COMPARED TO
THIRTEEN WEEKS ENDED MAY 5, 2001 ("FIRST QUARTER FISCAL 2002")

      The following table sets forth Consolidated Statement of Operations
components expressed as percentages of revenues for First Quarter Fiscal 2003
and First Quarter Fiscal 2002:

<Table>
<Caption>
                                               FIRST QUARTER ENDED
                                              MAY 4,         MAY 5,
                                               2002           2001
                                           -------------  -------------
<S>                                           <C>            <C>
Revenues                                      100.0%         100.0%

Gross profit (1)                               27.8           27.1

Selling and administrative expenses            26.0           25.3

Amortization of excess reorganization value                    4.7

Operating income (loss)                         1.8           (2.9)

Adjusted operating income (2)                   1.8            1.8

Interest expense                                1.5            1.6

Net income (loss)                               0.2           (4.7)

Adjusted net income (3)                         0.2            0.0
</Table>

------------------------------
See notes below


(1)   Revenues less cost of sales.

(2)   Operating income for First Quarter Fiscal 2003. Operating loss for First
      Quarter Fiscal 2002 excluding amortization of excess reorganization value
      of $27.3 million.

(3)   Net income for First Quarter Fiscal 2003. Net loss for First Quarter
      Fiscal 2002 excluding amortization of excess reorganization value of $27.3
      million.


                                      -12-
<Page>

RESULTS OF OPERATIONS (CONTINUED)


REVENUES

      Total revenues for First Quarter Fiscal 2003 were $576.4 million, a
decrease of 0.5% from $579.1 million in First Quarter Fiscal 2002. The decrease
in revenues in First Quarter Fiscal 2003 is primarily attributable to (1) the
reduction in the number of stores the Company operated in First Quarter Fiscal
2003 as compared to First Quarter Fiscal 2002 and (2) a decline in wholesale
food distribution revenues. These decreases were partially offset by an increase
in same store sales.

      Same store sales for First Quarter Fiscal 2003 increased 0.6% from the
comparable prior year period. Wholesale food distribution revenues were $64.7
million in First Quarter Fiscal 2003 compared to $66.4 million in First Quarter
Fiscal 2002.


GROSS PROFIT

      Gross profit for First Quarter Fiscal 2003 was 27.8% of revenues compared
to 27.1% of revenues in First Quarter Fiscal 2002. The Company's ability to more
effectively promote its offerings with its new loyalty card, an increase in
private label sales, a reduction in inventory shrink expense and a reduction in
the LIFO provision from the prior year contributed to the improvement in gross
profit as a percentage of revenues in First Quarter Fiscal 2003.


SELLING AND ADMINISTRATIVE EXPENSES

      Selling and administrative expenses for First Quarter Fiscal 2003 were
26.0% of revenues compared to 25.3% of revenues in First Quarter Fiscal 2002.
The increase in selling and administrative expenses as a percentage of revenues
for First Quarter Fiscal 2003 is primarily due to increases in wage, pension and
health insurance costs during a period of little or no food inflation. These
increases were partially offset by the benefit of the Company's cost reduction
initiatives.


                                      -13-
<Page>

RESULTS OF OPERATIONS (CONTINUED)


DEPRECIATION AND AMORTIZATION

      Depreciation and amortization expense was $10.6 million in First Quarter
Fiscal 2003 and $10.5 million in First Quarter Fiscal 2002, representing 1.8% of
revenues for both periods.

      Amortization of excess reorganization value for First Quarter Fiscal 2002
was $27.3 million. The excess reorganization value asset, which was established
in June 1999 in connection with the implementation of fresh-start reporting, was
being amortized on a straight-line basis over a three-year period. The Company
is no longer amortizing the excess reorganization value asset in accordance with
SFAS 142 (see "Impact of New Accounting Standards" below).


OPERATING INCOME (LOSS); ADJUSTED OPERATING INCOME

      Operating income for First Quarter Fiscal 2003 was $10.6 million or 1.8%
of revenues compared to an operating loss of $17.0 million or 2.9% of revenues
in First Quarter Fiscal 2002. Adjusted operating income for First Quarter Fiscal
2003 was $10.6 million or 1.8% of revenues compared to $10.3 million or 1.8% of
revenues in First Quarter Fiscal 2002.


INTEREST EXPENSE

      Interest expense for First Quarter Fiscal 2003 was $8.5 million compared
to $9.5 million in First Quarter Fiscal 2002. The decrease in interest expense
in First Quarter Fiscal 2003 is due to a decrease in the interest rate on the
Company's variable rate debt from the prior year.


                                      -14-
<Page>

RESULTS OF OPERATIONS (CONTINUED)


INCOME TAXES

      Income tax provision was $1.0 million for First Quarter Fiscal 2003
compared to $0.6 million in First Quarter Fiscal 2002. The tax provisions for
the First Quarter Fiscal 2003 and First Quarter Fiscal 2002 are not recorded at
statutory rates due to differences between income calculations for financial
reporting and tax reporting purposes. The effective tax rate for First Quarter
Fiscal 2003 reflects the recognition of tax expense based on the estimated
effective annual tax rate for the fiscal year ending February 1, 2003. The
effective tax rate for First Quarter Fiscal 2002 has not been annualized due to
the net loss reported for Fiscal 2002.


NET INCOME (LOSS); ADJUSTED NET INCOME

      Net income for First Quarter Fiscal 2003 was $1.1 million compared to a
net loss of $27.1 million for First Quarter Fiscal 2002. Adjusted net income for
First Quarter Fiscal 2003 was $1.1 million compared to $0.2 million in First
Quarter Fiscal 2002.


CRITICAL ACCOUNTING POLICIES

      Critical accounting policies are those accounting policies that are very
important to the portrayal of the Company's financial condition and results
which require management's most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effect of matters that
are inherently uncertain. The Company believes that estimates for reserve for
store closures, impairment of long-lived assets, liabilities for employee
benefit plans and self-insurance liabilities are critical accounting policies.
Materially different amounts could be reported under different conditions or
using different assumptions for these items. These estimates and assumptions are
evaluated on an ongoing basis, based on historical experience and on various
other factors that are believed to be reasonable. There are no significant
changes to these estimates and assumptions since the issuance of the Company's
Form 10-K for the fiscal year ended February 2, 2002.


                                      -15-
<Page>

LIQUIDITY AND CAPITAL RESOURCES


      The Company's debt (excluding capital leases) consists primarily of $100
million of 11% Senior Notes due June 29, 2009 (the "Senior Notes") and amounts
outstanding under a $320 million secured credit facility (the "Credit Facility")
as shown below.

<Table>
<Caption>
                                               MAY 4,          FEBRUARY 2,
                                                2002              2002
                                            --------------    --------------
                                                    (IN THOUSANDS)
<S>                                           <C>               <C>
Secured Term Loan                             $ 107,250         $ 108,250
Secured Revolving Credit Facility                29,800            32,100
Other Secured Debt                               12,281            12,362
11% Senior Notes due June 29, 2009              100,000           100,000
                                              ---------         ---------

Total Debt                                    $ 249,331         $ 252,712
Less: Current maturities of long-term debt       (8,058)           (7,066)
                                              ---------         ---------

Total Long-Term Debt                          $ 241,273         $ 245,646
                                              =========         =========
</Table>

      The Credit Facility includes (1) a $205 million revolving credit facility
(the "Revolving Credit Facility") and (2) a $115 million term loan (the "Term
Loan"). The lenders under the Credit Facility have a first priority perfected
security interest in substantially all of the Company's assets. The Credit
Facility contains a variety of operational and financial covenants intended to
restrict the Company's operations. These include, among other things,
restrictions on the Company's ability to incur debt, make capital expenditures
and restricted payments, as well as, requirements that the Company achieve
required levels for Consolidated EBITDA, interest coverage, fixed charge
coverage and funded debt ratio (all as defined in the Credit Facility).

      Availability under the Revolving Credit Facility is calculated based on a
specified percentage of eligible inventory and accounts receivable of the
Company. The Revolving Credit Facility will mature on June 30, 2005.
Availability under the Revolving Credit Facility was approximately $126 million
as of May 4, 2002.


                                      -16-
<Page>

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)


      The Term Loan will mature on June 30, 2006. Amounts of the Term Loan
maturing in each fiscal year are outlined in the following table (in thousands):

<Table>
<Caption>
            FISCAL YEAR ENDING                        AMOUNT MATURING
            ------------------                        ---------------
<S>                                                      <C>
            February 1, 2003                             $   6,750
            January 31, 2004                                 9,750
            January 29, 2005                                12,750
            January 28, 2006                                 7,750
            February 3, 2007                                71,250
                                                         ---------

                                                         $ 108,250
                                                         =========
</Table>

      The indenture for the Senior Notes contains certain negative covenants
that, among other things, restrict the Company's ability to incur additional
indebtedness, permit additional liens and make certain restricted payments.

      Cash flows used to meet the Company's operating requirements during First
Quarter Fiscal 2003 are reported in the Consolidated Statement of Cash Flows.
During First Quarter Fiscal 2003, the Company's net cash used in investing
activities was $15.0 million and net cash used in financing activities was $10.0
million. This amount was financed by net cash provided by operating activities
of $23.5 million and a reduction in cash and cash equivalents of $1.5 million.

      During First Quarter Fiscal 2003, the Company's internally generated funds
from operations and amounts available under the Revolving Credit Facility
provided sufficient liquidity to meet the Company's operating, capital
expenditure and debt service needs. For the next year, the Company expects to
utilize internally generated funds from operations, amounts available under the
Revolving Credit Facility and new mortgages and capital leases to satisfy its
operating, capital expenditure and debt service needs and to fund any repurchase
of shares of its common stock under its stock repurchase program.


                                      -17-
<Page>

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

      The Company competes with several supermarket chains, independent grocery
stores, supercenters (combination supermarket and general merchandise stores)
and other retailers, many of which have greater resources than Penn Traffic. The
number of competitors and the degree of competition encountered by the Company's
supermarkets vary by location. Any significant change in the number of the
Company's competitors, the number or size of competitors' stores, or in the
pricing and promotion practices of the Company's competitors could have an
impact on the Company's results of operations.

      Penn Traffic will incur significant increases in employee benefit costs in
the 52-week period ended February 1, 2003 ("Fiscal 2003"). These are comprised
of (1) increases in health care costs which the Company believes are, on a
percentage basis, generally consistent with overall increasing costs in the
health care industry and (2) an increase in pension expense that the Company
will record in Fiscal 2003 as a result of the declining returns in the equity
markets over the past two years. Penn Traffic competes against some companies
which do not provide the same levels of employee benefits as the Company. It is
not certain what portion of these cost increases Penn Traffic will be able to
offset through its cost reduction programs, merchandising enhancements or market
pricing adjustments.

      During 2000, the Company entered into interest rate swap agreements, which
expire in April 2005, that effectively convert $50 million of its variable rate
borrowings into fixed rate obligations. Under the terms of these agreements, the
Company makes payments at a weighted average fixed interest rate of 7.08% per
annum and receives payments at variable interest rates based on the London
InterBank Offered Rate.

      During Fiscal 2003, Penn Traffic expects to invest approximately $65
million in capital expenditures (including capital leases). Capital expenditures
will be principally for new stores, store remodels and investments in the
Company's distribution system and technology infrastructure (including new
point-of-sale systems in several of the Company's stores). The Company expects
to finance such expenditures through cash generated from operations, amounts
available under the Revolving Credit Facility and new mortgages and capital
leases.

      On June 29, 2000, the Company announced that its Board of Directors has
authorized the Company to repurchase up to an aggregate value of $10 million of
Penn Traffic's common stock from time to time in the open market or privately
negotiated transactions. The timing and amounts of purchases will be governed by
prevailing market conditions and other considerations. To date, the Company has
repurchased 53,000 shares of common stock at an average price of $7.08 per
share.


                                      -18-
<Page>

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

      During First Quarter Fiscal 2003, the Company did not have any
relationships with unconsolidated entities or financial partnerships, such as
entities often referred to as structured finance or special purpose entities,
which would have been established for the purpose of facilitating off-balance
sheet arrangements or other contractually narrow or limited purposes. In
addition, the Company does not engage in trading activities involving
non-exchange traded contracts. As such, the Company is not materially exposed to
any financing, liquidity, market or credit risk that could arise if the Company
had engaged in such relationships. Penn Traffic does not have relationships or
transactions with persons or entities that derive benefits from their
non-independent relationship with the Company or its related parties other than
what is disclosed in Note 15 to the Consolidated Financial Statements in the
Company's Annual Report on Form 10-K for the year ended February 2, 2002.


                                      -19-
<Page>

IMPACT OF NEW ACCOUNTING STANDARDS

      The Company's Consolidated Statement of Operations and same store sales
results for the First Quarter Fiscal 2003 reflect the Company's implementation
of EITF Issue Number 00-14, "Accounting for Certain Sales Incentives" as
codified by EITF Issue Number 01-9, "Accounting for Consideration Given by
Vendors to a Customer" ("EITF 00-14") and certain other income statement
classifications the Company made during the fiscal year ended February 2, 2002.
The Consolidated Statement of Operations for First Quarter Fiscal 2002 has been
reclassified for comparability purposes. The implementation of EITF 00-14 and
these other reclassifications do not have any effect on Penn Traffic's reported
Operating Income (Loss), EBITDA or Net Income (Loss).

      Penn Traffic adopted Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142") in First Quarter Fiscal
2003. SFAS 142 provides that intangible assets with finite useful lives be
amortized, and that goodwill and intangible assets with indefinite useful lives
not be amortized but tested at least annually for impairment. The Company no
longer records amortization of excess reorganization value or goodwill in its
Consolidated Statement of Operations. In conjunction with the adoption of SFAS
142, Penn Traffic performed a comprehensive test of the carrying value of the
excess reorganization value and goodwill assets for impairment. As a result of
this review, no assets were deemed impaired. Excess reorganization value and
goodwill have a carrying value of approximately $51 million at the date of
adoption of this standard.

      In October 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144"). This statement
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. SFAS 144 supercedes 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 144 applies to all long-lived assets
(including discontinued operations) and consequently amends Accounting Principle
Board Opinion No. 30, "Reporting Results of Operations - Reporting the Effects
of Disposal of a Segment of a Business and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions." The Company adopted this
standard in First Quarter Fiscal 2003. The adoption of this standard did not
have a material effect on the Company's financial statements.


                                      -20-
<Page>

PART II.  OTHER INFORMATION

      All items which are not applicable or to which the answer is negative have
been omitted from this report.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      No reports on Form 8-K were filed during the fiscal quarter ended May 4,
2002.


                                      -21-
<Page>

                                   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.


                                       THE PENN TRAFFIC COMPANY


            June 18, 2002               /s/  Joseph V. Fisher
                                        --------------------------------------
                                        By:   Joseph V. Fisher
                                              President, Chief Executive
                                              Officer and Director


            June 18, 2002               /s/  Martin A. Fox
                                        --------------------------------------
                                        By:   Martin A. Fox
                                              Executive Vice President,
                                              Chief Financial Officer and
                                              Director


                                      -22-