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UNITED    STATESSECURITIES AND EXCHANGE    COMMISSION    Washington, D.C. 20549****

**FORM 10-K**

(Mark One)

| [X]            | ANNUAL REPORT PURSUANT                TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF 1934     |
|----------------|------------------------------------------------------------------------------------------------------------------------|
|           | For the fiscal year                ended **December 27, 2008**                                                         |
|           | 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                1-5039                                                                           |

**WEIS MARKETS,    INC.**    (Exact name of registrant as specified in its    charter)

| PENNSYLVANIA(State or                other jurisdiction of incorporation or                organization)                              |   | 24-0755415(I.R.S. Employer Identification                No.) |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|
| 1000 S. Second                Street            P. O. Box 471Sunbury, Pennsylvania(Address            of principal executive offices) |   | 17801-0471(Zip            Code)                               |

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

| Title of each                classCommon stock, no par value |   | Name of each                exchange on which registered            New York Stock Exchange |
|--------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|
|                                                         |

Indicate by check mark if the registrant is a    well-known seasoned issuer, as defined in Rule 405 of the    Securities Act. Yes    [   ]  No   [X]

Indicate by check mark if the registrant is    not required to file reports pursuant to Section 13 or Section    15(d) of the Act. Yes    [   ]  No   [X]

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    (§229.405 of this chapter) is not contained herein, and          will not be contained, to the best of registrant's          knowledge, in definitive proxy or information statements          incorporated by reference in Part III of this Form 10-K          or any amendment to this Form 10-K.  [X]

Indicateby check mark whether the          registrant is a large accelerated filer, an accelerated          filer, a non-accelerated filer, or a smaller reporting          company. See the definitions of "large accelerated          filer," "accelerated filer" and "smaller reporting          company" in Rule 12b-2 of the Exchange Act.

**Large accelerated                      filer   [   ]Accelerated                      filer   [X] Non-accelerated                      filer  [   ] (Do not                      check if a smaller reporting                      company)Smaller reporting                    company [   ]**

Indicate by check mark whether the          registrant is a shell company (as defined in Rule 12b-2          of the Act).Yes          [   ]  No   [X]

The aggregate market value of Common Stock    held by non-affiliates of the Registrant is approximately    $390,584,000 as of June 28, 2008, the last          business day of the most recently completed second          quarter.

Shares of common stock outstanding as of    March 9, 2009 - 26,948,099.

DOCUMENTS INCORPORATED BY    REFERENCE:  Selected portions of the Weis Markets,    Inc. definitive proxy statement dated March 12, 2009 are    incorporated by reference in Part III of this Form    10-K.

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**WEIS MARKETS,    INC.**

**TABLE OF    CONTENTS**

| FORM                10-K                                                   | Page                                                                                                                                                              |
|----------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Part                I                                                      |                                                                                                                                                              |
|                                                                       | Item                1. Business                                                                                                                                   | 1 |
|                                                                       |                                                                                                                                                              | Item                1a. Risk Factors | 3 |
|                                                                       |                                                                                                                                                              | Item                1b. Unresolved Staff Comments | 4 |
|                                                                       | Item 2.                Properties                                                                                                                                 | 4 |
|                                                                       | Item 3. Legal                Proceedings                                                                                                                          | 4 |
|                                                                       | Item                4. Submission of Matters to a Vote of Security                Holders                                                                         | 4 |
| Part                II                                                     |                                                                                                                                                              |
|                                                                       | Item                5. Market for Registrant's Common Equity, Related                Stockholder Matters and Issuer Purchases of Equity                Securities | 5 |
|                                                                       | Item                6. Selected Financial Data                                                                                                                    | 6 |
|                                                                       | Item                7. Management's Discussion and Analysis of                Financial Condition and Results of                Operations                        | 7 |
|                                                                       |                                                                                                                                                              | Item 7a. Quantitative                and Qualitative Disclosures about Market                Risk | 15 |
|                                                                       | Item                8. Financial Statements and Supplementary                Data                                                                                 | 16 |
|                                                                       | Item                9. Changes in and Disagreements With Accountants on                Accounting and Financial Disclosure                                        | 33 |
|                                                                       |                                                                                                                                                              | Item                9a. Controls and                  Procedures | 33 |
|                                                                       |                                                                                                                                                              | Item                9b. Other                  Information | 33 |
| Part                III                                                    |                                                                                                                                                              |
|                                                                       | Item                10. Directors, Executive Officers and Corporate                Governance                                                                     | 34 |
|                                                                       | Item                11. Executive Compensation                                                                                                                    | 34 |
|                                                                       | Item                12. Security Ownership of Certain Beneficial Owners                and Management and Related Stockholder                Matters              | 34 |
|                                                                       | Item                13. Certain Relationships and Related Transactions,                and Director Independence                                                  | 34 |
|                                                                       | Item                14. Principal Accountant Fees and                Services                                                                                     | 34 |
| Part IV                                                                    |                                                                                                                                                              |
|                                                                       | Item                15. Exhibits, Financial Statement                Schedules                                                                                    | 35 |
|                                                                       |                                                                                                                                                              | Item                15(c)(3). Schedule II -                  Valuation and Qualifying                  Accounts | 36 |
| Signatures                                                                 | 37                                                                                                                                                                |
| Exhibit 21 Subsidiaries of the                Registrant                   |                                                                                                                                                              |
| Exhibit 23 Consent of Grant Thornton                LLP                    |                                                                                                                                                              |
| Exhibit 31.1 Rule 13a-14(a) Certification -                CEO             |                                                                                                                                                              |
| Exhibit 31.2 Rule 13a-14(a) Certification -                CFO             |                                                                                                                                                              |
| Exhibit 32 Certification Pursuant to 18 U.S.C.                Section 1350 |                                                                                                                                                              |
|                                                                       |                                                                                                                                                              |   |   |   |

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Table of    Contents

**WEIS MARKETS,    INC.**

** ****PART I**

**Item    1.      Business:**

Weis Markets, Inc. is a          Pennsylvania business founded by Harry and Sigmund Weis          in 1912 and incorporated in 1924. The company is engaged          principally in the retail sale of food in Pennsylvania          and surrounding states. There was no material change in          the nature of the company's business during fiscal 2008.          The company's stock has been traded on the New York Stock          Exchange since 1965 under the symbol "WMK." The Weis          family currently owns approximately 65% of the          outstanding shares. Robert F. Weis serves as Chairman of          the Board of Directors, and Jonathan H. Weis, son of          Robert F. Weis, serves as Vice Chairman and Secretary.          Both are involved in the day-to-day operations of the          business.

The company's retail food stores          sell groceries, dairy products, frozen foods, meats,          seafood, fresh produce, floral, pharmacy services, deli          products, prepared foods, bakery products, fuel and          general merchandise items, such as health and beauty care          and household products. In addition, customer convenience          is addressed at many locations by offering services such          as third parties providing in-store banks, laundry          services and take-out restaurants. The company advertises          through various media, including circulars, newspapers,          radio and television. Printed circulars are used          extensively on a weekly basis to advertise featured          items. The company utilizes a loyalty card program, "Weis          Club Preferred Shopper," which provides shoppers with an          opportunity to receive discounts, promotions and rewards.          The company currently owns and operates 154 retail food          stores and a chain of 27 SuperPetz, LLC pet supply          stores. Since year-end, one retail food store and two pet          supply stores were closed. The company's operations are          reported as a single reportable segment.

The percentage of net sales contributed by    each class of similar products for each of the previous five    fiscal years was:

| **Year** | **Grocery** | **Meat** | **Produce** | **Pharmacy** | **Pet                Supply** | **Other** |
|----------|-------------|----------|-------------|--------------|-------------------------------|-----------|
| 2008     | 54.10       | 16.08    | 14.68       | 9.13         | 2.05                          | 3.96      |
| 2007     | 53.76       | 16.09    | 14.82       | 9.77         | 2.34                          | 3.22      |
| 2006     | 53.52       | 15.99    | 14.99       | 10.22        | 2.55                          | 2.73      |
| 2005     | 53.93       | 16.18    | 14.79       | 10.21        | 2.70                          | 2.19      |
| 2004     | 53.91       | 16.19    | 14.58       | 10.45        | 2.98                          | 1.89      |

Retail food store locations by state and by    trade name as of year-end are as follows:

|                          |      |                            | **Mr.                Z's**   | **King's**       | **Cressler's**  | **Scot's**  |           |
|-------------------------------|-----------|---------------------------------|------------------------------|------------------|-----------------|-------------|----------------|
| **State**                     | **Total** | **Weis                Markets** | **Food                Mart** | **Supermarkets** | **Marketplace** | **Lo-Cost** | **Save-A-Lot** |
| Pennsylvania                  | 125       | 102                             | 13                           | 5                | 1               | 3           | 1              |
| Maryland                      | 24        | 24                              |                         |             |            |        |           |
| New                Jersey     | 3         | 3                               |                         |             |            |        |           |
| New York                      | 1         | 1                               |                         |             |            |        |           |
| West                Virginia  | 2         | 2                               |                         |             |            |        |           |
|     Total | 155       | 132                             | 13                           | 5                | 1               | 3           | 1              |

**Page 1 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Item    1.      Business:    (continued)**

All trade names, except Scot's Lo-Cost and    Save-A-Lot, operate as conventional supermarkets. Scot's    Lo-Cost operates under a warehouse format, while Save-A-Lot's    format caters to the price motivated consumer. The retail food    stores range in size from 8,000 to 67,000 square feet, with an    average size of approximately 48,000 square feet. The following    summarizes the number of stores by size categories as of    year-end:

| **Square                feet**      | **Number of                stores** |
|-------------------------------------|-------------------------------------|
| 55,000 to                67,000     | 39                                  |
| 45,000 to                54,999     | 68                                  |
| 35,000 to                44,999     | 28                                  |
| 25,000 to                34,999     | 11                                  |
| Under                25,000         |  9                             |
|      Total | 155                                 |

The following schedule shows the changes in    the number of retail food stores, total square footage and    store additions/remodels as of year-end:

|                                                  | **2008**                                | **2007** | **2006**                                     | **2005** | **2004**                                     |   |
|-------------------------------------------------------|-----------------------------------------|----------|----------------------------------------------|----------|----------------------------------------------|--------|
| Beginning store                count                  | 155                                     |     | 156                                          |     | 158                                          |   | 157 |   | 158 |   |   |
| New                stores                             | 1                                       |     | 1                                            |     | 2                                            |   | 1 |   | 1 |   |   |
| Relocations                                           | ---                      |     | 1                                            |     | 1                                            |   | 1 |   | 2 |   |   |
| Closed                stores                          | (1                                      | )        | (2                                           | )        | (4                                           | )      | ---    |   | (2 | ) |   |
| Relocated                stores                       |    ---    |     |        (1 | )        |        (1 | )      |        (1 | ) |        (2 | ) |   |
| Ending store                count                     |     155             |     |     155                  |     |     156                  |   |     158 |   |     157 |   |   |
| Total square feet                (000's), at year-end | 7,402                                   |     | 7,301                                        |     | 7,311                                        |   | 7,280 |   | 7,183 |   |   |
| Additions/major                remodels               | 8                                       |     | 4                                            |     | 5                                            |   | 3 |   | 2 |   |   |

The company supports the retail          operations through a centrally located distribution          facility, its own transportation fleet and four          manufacturing facilities. The company is required to use          a significant amount of working capital to provide for          the necessary amount of inventory to meet demand for its          products through efficient use of buying power and          effective utilization of space in the warehouse          facilities. The manufacturing facilities consist of a          meat processing plant, an ice cream plant, an ice plant          and a milk processing plant.

At year-end, SuperPetz, LLC          operated 2 stores in Alabama, 1 store in Georgia, 1 store          in Indiana, 1 store in Maryland, 1 store in Michigan, 1          store in North Carolina, 5 stores in Ohio, 10 stores in          Pennsylvania, 5 stores in South Carolina and 2 stores in          Tennessee.

The business of the company is          highly competitive. The number of competitors and the          variety of competition experienced by the company's          stores vary by market area. National, regional and local          food chains, as well as independent food stores comprise          the company's principal competition, although the company          also faces substantial competition from convenience          stores, membership warehouse clubs, specialty retailers,          supercenters and large-scale drug and pharmaceutical          chains. The company competes based on price, quality,          location and service.

The company currently has          approximately 16,600 full-time and part-time          associates.

**Page 2 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Item    1.      Business:    (continued)**

The company maintains a web site          at *www.weismarkets.com.* The company makes          available, free of charge, on the "Corporate Info"          section of its web site, its annual reports on Form 10-K,          quarterly reports on Form 10-Q, current reports on Form          8-K and amendments to those reports filed or furnished          pursuant to Section 13(a) or 15(d) of the Exchange Act,          as soon as reasonably practicable after the company          electronically files such material or furnishes it to the          U.S. Securities and Exchange Commission          ("SEC").

Additionally, the company's annual          reports and corporate governance materials, including          governance guidelines; the charters of the Audit and          Compensation Committees, as well as the Disclosure          Committee Bylaws; and both the Code of Business Conduct          and Ethics and the Code of Ethics for the CEO and CFO,          may be found under the "Corporate Info" section of its          web site. A copy of the foregoing corporate governance          materials is available upon written request to the          company's principal executive offices.

**Item 1a.  Risk    Factors:**

In addition to risks and          uncertainties in the ordinary course of business common          to all businesses, important factors are listed below          specific to the company and its industry, which could          materially impact its future          performance.

**Competition:** The retail food industry is          intensely price competitive, and the competition the          company encounters may have a negative impact on product          retail prices. The financial results may be adversely          impacted by a competitive environment that could cause          the company to reduce retail prices without a reduction          in its product cost to maintain market share; thus          reducing sales and gross profit margins.

**Trade Area:** The company's stores are          concentrated in central and northeast Pennsylvania,          central Maryland and suburban Baltimore regions. Changes          in economic and social conditions in the company's          operating regions, including the rate of inflation,          population demographics and employment and job growth,          affect customer shopping habits. These changes may          negatively impact sales and earnings. In addition,          employment conditions specifically may affect the          company's ability to hire and train qualified associates.          Business disruptions due to weather and catastrophic          events historically have been few. The company's          geographic regions could receive an extreme variance in          the amount of annual snowfall that may materially affect          sales and expense results.

**Food Safety:**  Customers          count on the company to provide them with wholesome food          products.  Concerns regarding the safety of food          products sold in its stores could cause shoppers to avoid          purchasing certain products from the company, or to seek          alternative sources of supply for all of their food          needs, even if the basis for the concern is outside of          the company's control.  Any lost confidence on the          part of its customers would be difficult and costly to          reestablish.  As such, any issue regarding the          safety of any food items sold by the company, regardless          of the cause, could have a substantial and adverse effect          on operations.

**Execution of Expansion          Plans:** In 2009, the company expects to          invest $80.5 million for capital expenditures, which          includes all store, distribution and manufacturing          projects and equipment purchases. Over the next twelve          months, the company will continue to invest in its          existing store base with one addition and seven remodels.          Circumstances outside the company's control could          negatively impact these anticipated capital investments.          The company cannot determine with certainty whether its          new stores will be successful. The failure to expand by          successfully opening new stores as planned, or the          failure of a significant number of these stores to          perform as planned, could have a material adverse effect          on the company's business and results of its          operations.

**Data and          Technology:**  The company's business is          increasingly dependent on information technology systems          that are complex and vital to continuing          operations.  If the company was to experience          difficulties maintaining existing systems or implementing          new systems, significant losses could be incurred due to          disruptions in its operations.  Additionally, these          systems contain valuable proprietary data that, if          breached, would have an adverse effect on the          company.

**Page 3 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Item 1a.  Risk    Factors:**** (continued****)**

**Operating Costs:** Associate expenses attribute to          the majority of its operating costs and therefore, the          company's financial performance is greatly influenced by          increasing wage and benefit costs, a competitive labor          market and the risk of unionized labor disruptions of its          non-union workforce. The company's profit is particularly          sensitive to the cost of oil. Oil prices directly affect          the company's product transportation costs, as well as          its utility and petroleum-based supply costs. The company          is extremely concerned about the continuing rise in          interchange fees for accepting credit card payments at          the point of sale.

**Self-Insurance          Exposure:** The company is self-insured for a          majority of its workers' compensation, general liability,          vehicle accident and associate medical benefit claims.          The company is liable for associate health claims up to a          lifetime aggregate of $1,000,000 per member and for          workers' compensation claims up to $2,000,000 per claim.          Property and casualty insurance coverage is maintained          with outside carriers at deductible or retention levels          ranging from $100,000 to $1,000,000. Although the company          has minimized its exposure on individual claims, the          company, for the benefit of cost savings, has accepted          the risk of an unusual amount of independent multiple          material claims arising and having a significant impact          on earnings.

**Taxes:** The company's future effective tax          rate may increase from current rates due to changes in          laws and the status of pending items with various taxing          authorities.

**Item 1b.     Unresolved Staff Comments:**

There are no unresolved staff    comments.

**Item 2.       Properties:**

The company currently owns and          operates 82 of its retail food stores, and leases and          operates 72 stores under operating leases that expire at          various dates through 2028. SuperPetz leases all 27 of          its retail store locations. The company owns all trade          fixtures and equipment in its stores and several parcels          of vacant land, which are available as locations for          possible future stores or other expansion.

The company owns and operates one          distribution center in Milton, Pennsylvania of          approximately 1,110,000 square feet, and one in          Northumberland, Pennsylvania totaling approximately          76,000 square feet. The company also owns one warehouse          complex in Sunbury, Pennsylvania totaling approximately          564,000 square feet. The company operates an ice cream          plant, meat processing plant, ice plant and milk          processing plant in 259,000 square feet at its Sunbury          location.

**Item          3.      Legal          Proceedings:**

Neither the company nor any          subsidiary is presently a party to, nor is any of their          property subject to, any pending legal proceedings, other          than routine litigation incidental to the          business.

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

There were no matters submitted to          a vote of security holders during the fourth quarter of          2008.

**Page 4 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**PART          II**

**Item          5.      Market for          Registrant's Common Equity, Related Stockholder Matters          and Issuer Purchases of Equity Securities:**

The company's stock is traded on          the New York Stock Exchange (ticker symbol WMK). The          approximate number of shareholders, including individual          participants in security position listings, on December          27, 2008 as provided by the company's transfer agent was          7,679. High and low stock prices and dividends paid per          share for the last two fiscal years          were:

**  **2008** **2007**  **Stock                      Price** **Dividend** **Stock                      Price** **Dividend****Quarter** **High** **Low** **Per                      Share** **High** **Low** **Per                      Share**First$40.20$31.54$.29$45.70$39.76$.29Second 37.09 30.22 .29 45.41 40.50 .29Third 40.26 32.18 .29 47.10 38.24 .29Fourth 37.07 25.99 .29 44.34 39.50 .29**

The following line graph compares          the yearly percentage change in the cumulative total          shareholder return on the company's common stock against          the cumulative total return of the S&P Composite-500          Stock Index and the cumulative total return of a          published group index for the Retail Grocery Stores          Industry ("Peer Group"), provided by Value Line, Inc.,          for the period of five years. The graph depicts $100          invested at the close of trading on the last trading day          preceding the first day of the fifth preceding year in          Weis Markets, Inc. common stock, S&P 500, and the          Peer Group. The cumulative total return assumes          reinvestment of dividends.

**Comparative Five-Year Total          Returns**

|                        | **2003** | **2004** | **2005** | **2006** | **2007** | **2008**          |
|-----------------------------|----------|----------|----------|----------|----------|-------------------|
| Weis                Markets | 100.00   | 113.17   | 130.01   | 124.67   | 127.53   | 111.10            |
| S&P                500  | 100.00   | 108.99   | 112.26   | 127.55   | 132.06   |   81.23 |
| Peer                Group   | 100.00   | 108.10   | 132.04   | 166.89   | 196.18   | 151.81            |

**Page 5 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          6.      Selected Financial          Data:**

The following selected historical          financial information has been derived from the company's          audited consolidated financial statements. This          information should be read in connection with the          company's Consolidated Financial Statements and the Notes          thereto, as well as "Management's Discussion and Analysis          of Financial Condition and Results of Operations,"          included in Item 7.

**Five Year Review of          Operations**

|                                                                                                               |                               | **52                  Weeks**                                                      |                               | **52                  Weeks**                                                      |                               | **52                  Weeks**                                                      |                               | **53                  Weeks**                                                      |                               | **52                  Weeks**                                                      |
|--------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------------------------------------------------------------------|------------------------------------|------------------------------------------------------------------------------------|------------------------------------|------------------------------------------------------------------------------------|------------------------------------|------------------------------------------------------------------------------------|------------------------------------|------------------------------------------------------------------------------------|
| *(dollars in thousands,                  except shares, per share amounts and store                  information)* |                               | **Ended**                                                                          |                               | **Ended**                                                                          |                               | **Ended**                                                                          |                               | **Ended**                                                                          |                               | **Ended**                                                                          |
|                                                                                                               | **Dec. 27,                  2008** |                                                                               | **Dec. 29,                  2007** |                                                                               | **Dec. 30,                  2006** |                                                                               | **Dec. 31,                  2005** |                                                                               | **Dec. 25,                  2004** |
| Net sales                                                                                                          | $                                  | 2,422,361                                                                          | $                                  | 2,318,551                                                                          | $                                  | 2,244,512                                                                          | $                                  | 2,222,598                                                                          | $                                  | 2,097,712                                                                          |
| Costs and                  expenses                                                                                |                               |     2,354,923                                                  |                               |     2,243,802                                                  |                               |     2,162,908                                                  |                               |     2,126,373                                                  |                               |     2,011,331                                                  |
| Income from                  operations                                                                            |                               | 67,438                                                                             |                               | 74,749                                                                             |                               | 81,604                                                                             |                               | 96,225                                                                             |                               | 86,381                                                                             |
| Investment                  income                                                                                 |                               |            2,675            |                               |            3,010            |                               |            4,484            |                               |            3,081            |                               |            1,222            |
| Income before provision                  for income taxes                                                          |                               | 70,113                                                                             |                               | 77,759                                                                             |                               | 86,088                                                                             |                               | 99,306                                                                             |                               | 87,603                                                                             |
| Provision for income                  taxes                                                                        |                               |          23,118                       |                               |          26,769                       |                               |          30,078                       |                               |          35,885                       |                               |          30,412                       |
| Net income                                                                                                         |                               | 46,995                                                                             |                               | 50,990                                                                             |                               | 56,010                                                                             |                               | 63,421                                                                             |                               | 57,191                                                                             |
| Retained earnings,                  beginning of year                                                              |                               |        779,760                                  |                               |        760,531                                  |                               |        735,865                                  |                               |        702,714                                  |                               |        702,961                                  |
|                                                                                                               |                               | 826,755                                                                            |                               | 811,521                                                                            |                               | 791,875                                                                            |                               | 766,135                                                                            |                               | 760,152                                                                            |
| Less cumulative effect of                  change in accounting for income taxes                                   |                               | ---                                                                 |                               | 452                                                                                |                               | ---                                                                 |                               | ---                                                                 |                               | ---                                                                 |
| Cash dividends                                                                                                     |                               |          31,282                       |                               |          31,309                       |                               |          31,344                       |                               |          30,270                       |                               |          57,438                       |
| Retained earnings, end of                  year                                                                    | $                                  |        795,473                                  | $                                  |        779,760                                  | $                                  |        760,531                                  | $                                  |        735,865                                  | $                                  |        702,714                                  |
| Weighted-average shares                  outstanding, diluted                                                      |                               |   26,966,647                                                             |                               |   26,993,997                                                             |                               |   27,027,198                                                             |                               |   27,033,789                                                             |                               |   27,098,276                                                             |
| Cash dividends per                  share                                                                          | $                                  |              1.16 | $                                  |              1.16 | $                                  |              1.16 | $                                  |              1.12 | $                                  |              2.12 |
| Basic and diluted earnings                  per share                                                              | $                                  |              1.74 | $                                  |              1.89 | $                                  |              2.07 | $                                  |              2.35 | $                                  |              2.11 |
| Working                  capital                                                                                   | $                                  |        158,932                                  | $                                  |        157,385                                  | $                                  |        147,451                                  | $                                  |        170,100                                  | $                                  |        143,440                                  |
| Total assets                                                                                                       | $                                  | 848,214                                                                            | $                                  | 840,069                                                                            | $                                  | 814,062                                                                            | $                                  | 784,128                                                                            | $                                  | 745,479                                                                            |
| Shareholders'                  equity                                                                              | $                                  | 661,100                                                                            | $                                  | 648,228                                                                            | $                                  | 629,163                                                                            | $                                  | 603,857                                                                            | $                                  | 571,700                                                                            |
| Number of grocery                  stores                                                                          |                               | 155                                                                                |                               | 155                                                                                |                               | 156                                                                                |                               | 158                                                                                |                               | 157                                                                                |
| Number of pet supply                  stores                                                                       |                               | 29                                                                                 |                               | 31                                                                                 |                               | 31                                                                                 |                               | 32                                                                                 |                               | 33                                                                                 |

**Page 6 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations:**

**Overview**

The following Management's          Discussion and Analysis of Financial Condition and          Results of Operations ("MD&A") is intended to help          the reader understand Weis Markets, Inc., its operations          and its present business environment. The MD&A is          provided as a supplement to and should be read in          conjunction with the consolidated financial statements          and the accompanying notes thereto contained in "Item 8.          Financial Statements and Supplementary Data" of this          report. The following analysis should also be read in          conjunction with the Financial Statements included in the          2008 Quarterly Reports on Form 10-Q and the 2007 Annual          Report on Form 10-K filed with the U.S. Securities and          Exchange Commission, as well as the cautionary statement          captioned "Forward-Looking Statements" immediately          following this analysis. This overview summarizes the          MD&A, which includes the following          sections:

| • | Company Overview - a                  general description of the company's business,                  strategic imperatives, and challenges and                  risks.                                                                       |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                          |
| • | Results of Operations - an                  analysis of the company's consolidated results of                  operations for the three years presented in the                  company's consolidated financial                  statements. |
|   |                                                                                                                                                                                                                                          |
| • | Liquidity and Capital                  Resources - an analysis of cash flows and                  aggregate contractual obligations.                                                                                                          |
|   |                                                                                                                                                                                                                                          |
| • | Critical Accounting                  Estimates - a discussion of accounting policies                  that require critical judgments and                  estimates.                                                                         |

**Company Overview**

**General**Weis Markets, Inc. was founded in          1912 by Harry and Sigmund Weis in Sunbury, Pennsylvania.          Today, the company ranks among the top 50 food and drug          retailers in the United States in revenues generated. At          the end of 2008, the company operated 155 retail food          stores in Pennsylvania and four surrounding states:          Maryland, New Jersey, West Virginia and New York. In          addition to its retail food stores, the company operated          29 SuperPetz pet supply stores in ten states: Alabama,          Georgia, Indiana, Maryland, Michigan, North Carolina,          Ohio, Pennsylvania, South Carolina and          Tennessee.

Company revenues are generated in          its retail food stores from the sale of a wide variety of          consumer products including groceries, dairy products,          frozen foods, meats, seafood, fresh produce, floral,          pharmacy services, deli products, prepared foods, bakery          products, fuel, and general merchandise items, such as          health and beauty care and household products. The          company supports its retail operations through a          centrally located distribution facility, its own          transportation fleet, four manufacturing facilities and          its administrative offices. The company's operations are          reported as a single reportable segment.

**Strategic          Imperatives**The following strategic          imperatives will ensure the success of the company in the          coming years:

| • | Growth and Profitability                  – While the company focuses on store sales                  growth, expense control and positive cash flow,                  it will continue to identify opportunities with                  new stores, additions to existing stores,                  remodels and acquisitions. The company believes                  successfully planned growth will increase market                  share and operating profits, resulting in                  enhanced shareholder value.                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| • | Merchandising and                  Operational Differentiation – The company                  has identified product pricing, shopping                  experience and customer focus to maintain its                  differentiation versus its competitors.                  Management is committed to providing a clean,                  efficient customer shopping experience, while                  offering competitive prices on both branded and                  private label products to meet and exceed our                  customers expectations. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| • | Talent Management –                  To keep pace with the company's growth and                  profitability focus, management is committed to                  developing future leaders utilizing its                  associates to increase bench strength, ensure                  succession preparedness, and improve overall                  associate performance.                                                                                                                                                                                        |

**Page 7 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Company Overview,**** Strategic          Imperatives**** (continued)**

| • | Supply Chain –                  Management will reshape and streamline its supply                  chain by improving inventory turns, cost per                  case, in stock position and overall service                  level, thereby building store sales                  capabilities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                   |
| • | Information Technology                  Initiatives – The company will increase its                  investment in information technology to improve                  associate productivity with user friendly,                  support driven systems.                                        |

**Challenges and          Risks**As a regional grocery store chain,          the company faces unique opportunities, challenges and          risks compared to larger retail grocery chains.          Management identified certain key challenges and risks          that warrant ongoing attention:

| • | Competition - The retail                  food industry is intensely price competitive. The                  company's financial results may be adversely                  impacted by a competitive environment which could                  cause the company to reduce retail prices without                  a corresponding reduction in its product cost to                  maintain market share, resulting in lower sales                  and gross profit margins.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • | Trade Area - The company's                  stores are concentrated in central and northeast                  Pennsylvania, central Maryland and suburban                  Baltimore regions. Changes in economic and social                  conditions in the company's operating regions,                  including the rate of inflation, population                  demographics and employment and job growth,                  affect customer shopping habits. Business                  disruptions due to weather and catastrophic                  events historically have been few, but the                  company's geographic regions do receive varying                  amounts of snow annually. Such conditions could                  materially affect sales and expense                  results.                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • | Food Safety - Customers                  count on the company to provide them with                  wholesome food products.  Concerns regarding                  the safety of food products sold in its stores                  could cause shoppers to avoid purchasing certain                  products from the company, or to seek alternative                  sources of supply for all of their food needs,                  even if the basis for the concern is outside of                  the company's control.  Any lost confidence                  on the part of its customers would be difficult                  and costly to reestablish.  As such, any                  issue regarding the safety of any food items sold                  by the company, regardless of the cause, could                  have a substantial and adverse effect on                  operation.                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • | Execution of Expansion                  Plans - Circumstances outside the company's                  control could negatively impact anticipated                  capital investments. The company cannot determine                  with certainty whether its new stores will be                  successful. The failure to expand by successfully                  opening new stores as planned, or the failure of                  a significant number of these stores to perform                  as planned, could have a material adverse effect                  on the company's business and results of its                  operations.                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • | Data and Technology                  -The company's business is                  increasingly dependent on information technology                  systems that are complex and vital to continuing                  operations.  If the company was to                  experience difficulties maintaining existing                  systems or implementing new systems, significant                  losses could be incurred due to disruptions in                  its operations.  Additionally, these systems                  contain valuable proprietary data that, if                  breached, would have an adverse effect on the                  company.                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| • | Operating Costs -                  Associate expenses attribute to the majority of                  its operating costs and therefore, the company's                  financial performance is greatly influenced by                  increasing wage and benefit costs, a competitive                  labor market and the risk of unionized labor                  disruptions of its non-union workforce.                  Employment conditions specifically may affect the                  company's ability to hire and train qualified                  associates. The company's profit is particularly                  impacted by the cost of oil. Oil prices directly                  affect the company's product transportation                  costs, as well as its utility and petroleum-based                  supply costs. The company remains extremely                  concerned about the continuing rise in                  interchange fees for accepting credit card                  payments at the point of sale. |

**Page 8 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Company Overview,**** Challenges and          Risks**** (continued)**

| • | Self-Insurance Exposure -                  The company is self-insured for a majority of its                  workers' compensation, general liability, vehicle                  accident and associate medical benefit claims.                  The company is liable for associate health claims                  up to a lifetime aggregate of $1,000,000 per                  member and for workers' compensation claims up to                  $2,000,000 per claim. Property and casualty                  insurance coverage is maintained with outside                  carriers at deductible or retention levels                  ranging from $100,000 to $1,000,000. Although the                  company has minimized its exposure on individual                  claims, the company, for the benefit of cost                  savings, has accepted the risk of an unusual                  amount of independent multiple material claims                  arising and having a significant impact on                  earnings. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

See also "Item 1a. Risk Factors"          in Part I of this report for additional information about          risks and uncertainties facing the company.

**Results of          Operations**

| **Analysis of                  Consolidated Statements of Income** |   |     |   |   |     |   |   |     |                               |   |   |   |   |   |   |
|--------------------------------------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|------------------------------------|--------|--------|--------|--------|--------|--------|
| *(dollars in thousands                  except per share amounts)* |   |     |   |   |     |   |   |     |                               |   |   |   |   |   |   |
| For the Fiscal Years                Ended December 27, 2008        |   | **2008** |   |   | **2007** |   |   | **2006** | **Percent                Changes** |

| December 29, 2007                and December 30, 2006                                       |   |                                                                                          |   |   |                                                                                          |   |   |                                                                                          |   | **2008                vs**. |   |   | **2007                vs.** |   |   |
|----------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|--------|
|                                                                                         |   | **(52                weeks)**                                                                 |   |   | **(52                weeks)**                                                                 |   |   | **(52                weeks)**                                                                 |   | **2007**                    |   |   | **2006**                    |   |   |
| Net                sales                                                                     | $      | 2,422,361                                                                                     |   | $      | 2,318,551                                                                                     |   | $      | 2,244,512                                                                                     |   | 4.5                         |   | %      | 3.3                         |   | %      |
| Cost of sales,                including warehousing and distribution                expenses |   |     1,795,404                                                             |   |   |     1,716,424                                                             |   |   |     1,647,233                                                             |   | 4.6                         |   |   | 4.2                         |   |   |
|    Gross profit on                sales                                       |   | 626,957                                                                                       |   |   | 602,127                                                                                       |   |   | 597,279                                                                                       |   | 4.1                         |   |   | 0.8                         |   |   |
|    Gross profit                margin                                         |   | 25.9                                                                                          | %      |   | 26.0                                                                                          | %      |   | 26.6                                                                                          | %      |                        |   |   |                        |   |   |
| Operating, general                and administrative expenses                                |   | 559,519                                                                                       |   |   | 527,378                                                                                       |   |   | 515,675                                                                                       |   | 6.1                         |   |   | 2.3                         |   |   |
|      O, G & A,                percent of net sales              |   |              23.1            | %      |   |              22.7            | %      |   |              23.0            | %      |                        |   |   |                        |   |   |
|    Income from                operations                                      |   | 67,438                                                                                        |   |   | 74,749                                                                                        |   |   | 81,604                                                                                        |   | (9.8                        | )      |   | (8.4                        | )      |   |
|      Operating                margin                                |   | 2.8                                                                                           | %      |   | 3.2                                                                                           | %      |   | 3.6                                                                                           | %      |                        |   |   |                        |   |   |
| Investment                income                                                             |   | 2,675                                                                                         |   |   | 3,010                                                                                         |   |   | 4,484                                                                                         |   | (11.1                       | )      |   | (32.9                       | )      |   |
|    Investment income, percent of                net sales                     |   |                0.1 | %      |   |                0.1 | %      |   |                0.2 | %      |                        |   |   |                        |   |   |
|    Income before provision for                income taxes                    |   | 70,113                                                                                        |   |   | 77,759                                                                                        |   |   | 86,088                                                                                        |   | (9.8                        | )      |   | (9.7                        | )      |   |
| Provision for                income taxes                                                    |   | 23,118                                                                                        |   |   | 26,769                                                                                        |   |   | 30,078                                                                                        |   | (13.6                       | )      |   | (11.0                       | )      |   |
|    Effective tax                rate                                          |   |              33.0            | %      |   |              34.4            | %      |   |              34.9            | %      |                        |   |   |                        |   |   |
|    Net income                                                                 | $      | 46,995                                                                                        |   | $      | 50,990                                                                                        |   | $      | 56,010                                                                                        |   | (7.8                        | )      | %      | (9.0                        | )      | %      |
|    Net income, percent of net                sales                            |   | 1.9                                                                                           | %      |   | 2.2                                                                                           | %      |   | 2.5                                                                                           | %      |                        |   |   |                        |   |   |
| Basic and diluted                earnings per share                                          | $      | 1.74                                                                                          |   | $      | 1.89                                                                                          |   | $      | 2.07                                                                                          |   | (7.9                        | )      | %      | (8.7                        | )      | %      |

*Net Sales*The company's revenues are earned          and cash is generated as merchandise is sold to customers          at the point of sale. Discounts, except those provided by          a vendor, are recognized as a reduction in sales as          products are sold or over the life of a promotional          program if redeemable in the future.

Comparable store sales increased          4.3% in 2008 compared to 2007 and increased 3.5% in 2007          compared to 2006. The increase in comparable store sales          in 2008 and 2007 was primarily the result of an increase          in average sales per customer transaction, which was the          result of changes in product mix and inflation. The          number of comparable store customer visits in the year          was slightly down in 2008 compared to a year ago, which          the company believed was due to the uncertain economy and          the high cost of gasoline. While customers are more          cautious in their spending and are making fewer store          visits per week, they are spending more while in the          store. The average customer basket size in 2008 increased          4.7% compared to 2007.

**Page 9 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Results of Operations          (continued)**

When calculating the percentage          change in comparable store sales, the company defines a          new store to be comparable the week following one full          year of operation. Relocated stores and stores with          expanded square footage are included in comparable sales          since these units are located in existing markets and are          open during construction. When a store is closed, sales          generated from that unit in the prior year are subtracted          from total company sales starting the same week of          closure in the prior year and continuing from that point          forward.

With grim economic conditions,          consumer buying habits have noticeably shifted from more          expensive national brand products to Weis private label          brands. The units of Weis private label merchandise sold          in 2008 as compared to 2007 increased 3.9%. The company          believes this trend will continue as more consumers          become acquainted with the quality and value of its          private label products. While this trend is potentially          detrimental to the company's overall sales growth,          private label products have a higher gross profit margin          than name brand products.

Pharmacy sales decreased 2.3% and          1.2% for 2008 and 2007, respectively. Market forces          positively affecting prescription growth such as an aging          population base, continue to be offset by retail erosion          due to increased generic penetration, competitive          pressures and a softening economy. In addition,          prescription plan sponsors continue to offer economic          incentives to covered individuals in an effort to shift          their prescription drug purchases to mail order. In          response to market conditions and competitive pressures,          the company implemented new pricing strategies involving          generic drugs in the second half of 2008.

Management remains confident in          its ability to generate sales growth in a highly          competitive environment, but also understands some          competitors have greater financial resources and could          use these resources to take measures which could          adversely affect the company's competitive          position.

*Cost of Sales and Gross          Profit*Cost of sales consists of direct          product costs (net of discounts and allowances),          warehouse costs, transportation costs and manufacturing          facility costs.

As experienced in the final six          months of 2007, 2008 wholesale prices increased more          quickly than the retail prices paid by consumers.          According to the latest U.S. Bureau of Labor Statistics'          report, food-at-home price inflation increased 6.4% in          2008, 4.2% in 2007 and 1.7% in 2006 while wholesale food          inflation increased at a higher rate of 6.8%, 6.6% and          .6% respectively. These differences contributed          significantly to the slight, but steady decline in the          company's gross profit rate in the three years presented.          However, this trend is gradually subsiding and price          increases from manufacturers are being passed along to          customers in a more timely manner.

Throughout 2008, the company          continued its aggressive promotional activity while          keeping its overall pricing competitively low during this          period of significant wholesale food          inflation.

Because of the significant          wholesale price inflation, the company experienced an          increase in its LIFO charge. The LIFO charge in 2008,          2007, and 2006 was $11.8 million, $7.2 million and $4.2          million, respectively. Like many food retailers, the          company continues to experience product cost inflation at          levels that have not occurred for several          years.

The company realized a 21.0%          improvement in store inventory losses ("shrink") in 2008          compared to 2007 in contrast to a 64.6% increase in          losses between 2007 and 2006. Management remains          committed to controlling store inventory losses through          its ongoing shrink initiatives.

**Page 10 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Results of Operations          (continued)**

The company's profitability is          particularly impacted by the cost of oil. Cost of sales          was impacted by a 33.5% increase in the cost of diesel          fuel used by the company to deliver goods from its          distribution center to its stores as compared to 2007. In          response to the higher prices, the company has          mechanically lowered the top speed of its tractors,          implemented routing software to improve loading patterns          and reduce delivery mileage, and has started a driver          training program regarding shift patterns. With these          initiatives, management estimates a 6% reduction in fuel          usage over the next year. Fluctuating fuel prices may          continue to adversely affect the delivered cost of          product and the cost of other petroleum-based supplies          such as plastic bags.

Although the company experienced          product cost inflation for all three years presented,          management does not feel it can accurately measure the          full impact of inflation and deflation on retail pricing          due to changes in the types of merchandise sold between          periods, shifts in customer buying patterns and the          fluctuation of competitive factors.

*Operating, General and          Administrative Expenses*Business operating costs including          expenses generated from administration and purchasing          functions, are recorded in "Operating, general and          administrative expenses." Business operating costs          include items such as wages, benefits, utilities, repairs          and maintenance, advertising costs and credits, rent,          insurance, equipment depreciation, leasehold amortization          and costs for outside provided services.

Employee-related costs such as          wages, employer paid taxes, health care benefits and          retirement plans, comprise over 60% of the total          operating, general and administrative expenses.          Employee-related costs increased 5.0% in 2008 compared to          2007 and 4.3% in 2007 compared to 2006. As a percent of          sales, employee-related costs increased .1% in 2008          versus 2007.

Pennsylvania, where the majority          of the company's stores are located, increased the          minimum wage rate twice in 2007 totaling $2.00 per hour.          Although the company paid its associates more than the          minimum wage rate, the increases impacted associate rates          well above minimum wage. In addition, the company          increased associate rates in neighboring          states.

Health care benefits increased          13.8% in 2008 compared to 2007 and increased 5.8% in 2007          compared to 2006. Management expects the trend of          increasing health care benefit costs to          continue.

The company's 2008 operating,          general and administrative expenses were reduced by $1.4          million in adjustments made to the non-qualified          retirement plans (see Note 6 Retirement Plans) due to a          decline in the equity market. In 2007 and 2006, this          expense was $756,000 and $1.5 million,          respectively.

The company's interchange fees for          accepting credit and debit cards increased 12.1% to $14.3          million in 2008 compared to 2007 and 12.3% to $12.8          million in 2007 from 2006. Major credit card companies          control approximately 80% of the interchange fee network          in the United States, which allows them to unilaterally          raise their rates at will. According to an independent          study conducted by Diamond Management & Technology          Consultants in 2006, only 13% of the interchange fees          represents the actual cost to process these transactions.          The company remains extremely concerned about this          inequity and the excessive increases in interchange fees          for accepting credit and debit card transactions. It          continues to work with a wide variety of corporations and          trade associations to make credit card interchange fees          fair and bring competition to this broken market through          legislative and regulatory initiatives.

Retail store profitability is          sensitive to rising utility costs due to the amount of          electricity and gas required to operate. The company is          reacting to these increased operating costs by evaluating          technological improvements for improved utility and fuel          management. Electric supply options were explored in          certain markets with various suppliers and opportunities          were appropriately acted upon to control this          expenditure.

**Page 11 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Results of Operations          (continued)**

The company may not be able to          recover these rising utility, fuel and interchange costs          through increased prices charged to its customers. Any          delay in the company's response to unforeseen cost          increases or competitive pressures that prevent its          ability to raise prices may cause earnings to suffer.          Management does not foresee a change in these trends in          the near future.

The company incurred a pre-tax          impairment loss of $1.7 million on one closed store          facility in 2008 compared to a pre-tax gain of $8.0          million on the sale of two closed store facilities and an          undeveloped parcel of land in 2007. In 2006, the company          incurred a pre-tax impairment loss of $1.7 million on two          closed store facilities. Earnings were further impacted          in 2007 and 2006 by a $1.2 million and a $1.4 million          adjustment to liabilities for future expenses on closed          stores.

During fiscal 2008, the company          recognized approximately $1.0 million of gift card          breakage income (See Note 1(r) Revenue Recognition) as a          credit against operating, general and administrative          expenses. Fiscal 2008 was the first year in which the          company recognized gift card breakage income, and          therefore, the amount recognized includes the gift card          breakage income related to gift cards sold since the          inception of the gift card program in late 2002. The          resolution of certain legal matters associated with gift          card liabilities prompted management to initiate a change          in accounting estimate.

*Investment          Income*The company's investments consist          of short-term money market funds and marketable          securities consisting of Pennsylvania tax-free state and          municipal bonds and equity securities. The company          classifies all of its marketable securities as          available-for-sale. Due to declining yields on short-term          money market funds, the company experienced a $307,000          decrease in interest income in 2008 compared to 2007 and          an $898,000 decrease from 2006 to 2007. The company          realized a long-term gain of $431,000 on the sale of          equities from its investment portfolio in          2006.

*Provision for Income          Taxes*The effective income tax rate          differs from the federal statutory rate of 35% primarily          due to the effect of state taxes, net of permanent          differences relating to tax-free income.

Income is earned by selling          merchandise at price levels that produce revenues in          excess of cost of merchandise sold and operating and          administrative expenses. Although the company may          experience short term fluctuations in its earnings due to          unforeseen short-term operating cost increases, it          historically has been able to increase revenues and          maintain stable earnings from year to year.

**Liquidity and Capital          Resources**

Net cash provided by operating activities was    $115.3 million in 2008 compared with $85.4 million in 2007 and    $99.3 million in 2006. Working capital increased 1.0% in 2008,    increased 6.7% in 2007, and decreased 13.3% in 2006. The    considerable decline in working capital in 2006 was primarily    due to the company's increased investment in property and    equipment.

Net cash used in investing activities was    $65.8 million in 2008 compared to $39.1 million in 2007, and    $108.5 million in 2006. These funds were used primarily for    property and equipment purchases in the three years presented.    Property and equipment purchases during 2008 totaled $67.0    million compared to $64.2 million in 2007 and $100.0 million in    2006. As a percentage of sales, capital expenditures were 2.8%,    2.8% and 4.5% in 2008, 2007 and 2006, respectively.

The company's capital expansion program    includes the construction of new superstores, the expansion and    remodeling of existing units, the acquisition of sites for    future expansion, new technology purchases and the continued    upgrade of the company's processing and distribution    facilities. Company management estimates that its current    development plans will require an investment of approximately    $80.5 million in 2009.

**Page 12 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Liquidity and Capital          Resources****(continued)**

Net cash used in financing          activities during 2008 was $31.3 million compared to          $32.7 million in 2007 and $32.5 million in 2006. The          majority of the financing activities consisted of          dividend payments to shareholders. At December 27, 2008,          the company had outstanding letters of credit of $29.2          million.

Total cash dividend payments on common stock,    on a per share basis, amounted to $1.16 per year in 2008, 2007    and 2006. Treasury stock purchases amounted to $181,000 in    2008, compared to $2.7 million in 2007 and $1.4 million in    2006. The Board of Directors' 2004 resolution authorizing the    repurchase of up to one million shares of the company's common    stock has a remaining balance of 819,924 shares.

The company has no other commitment of    capital resources as of December 27, 2008, other than the lease    commitments on its store facilities under operating leases that    expire at various dates through 2028. The company anticipates    funding its working capital requirements and its $80.5 million    capital expansion program through internally generated cash    flows from operations.

The company's earnings and cash flows are    subject to fluctuations due to changes in interest rates as    they relate to available-for-sale securities and any future    long-term debt borrowings. The company's marketable securities    portfolio currently consists of Pennsylvania tax-free state and    municipal bonds, equity securities and other short-term    investments. Other short-term investments are classified as    cash equivalents on the Consolidated Balance Sheets.

The company experienced a $2.8          million unrealized holding loss net of deferred taxes in          2008, primarily due to a decline in the value of the          company's equity holdings (see Note 9 Comprehensive          Income). In 2007 and 2006, the company had unrealized          holding gains of $1.3 million and $2.0 million,          respectively. As of December 27, 2008, the company had          $7.8 million in gross unrealized holding gains in          marketable securities (see Note 2 Marketable          Securities).

By their nature, these financial instruments    inherently expose the holders to market risk. The extent of the    company's interest rate and other market risk is not    quantifiable or predictable with precision due to the    variability of future interest rates and other changes in    market conditions. However, the company believes that its    exposure in this area is not material.

Under its current policies, the          company invests primarily in high-grade marketable          securities and does not use interest rate derivative          instruments to manage exposure to interest rate          fluctuations. Historically, the company's principal          investment strategy of obtaining marketable securities          with maturity dates between one and five years helps to          minimize market risk and to maintain a balance between          risk and return. The equity securities owned by the          company consist primarily of stock held in large          capitalized companies trading on public security exchange          markets. The company's management continually monitors          the risk associated with its marketable securities. A          quantitative tabular presentation of risk exposure is          located in "Item 7a. Quantitative and Qualitative          Disclosures about Market Risk" of this report.

**Contractual          Obligations**The following table represents          scheduled maturities of the company's long-term          contractual obligations as of December 27,          2008.

|                                      |   | **Payments due by                  period** |
|-------------------------------------------|--------|---------------------------------------------|
|                                      |   |                                        |   | **Less                  than** |   |   |   |   |   | **More                  than** |
| *(dollars in                  thousands)* |   | **Total**                                   |   | **1                  year** |   | **1-3                  years** |   | **3-5                  years** |   | **5                  years** |
| Operating                  leases         | $      | 218,176                                     | $ |   28,066 | $ |   47,471 | $ |   37,527 | $ | 105,112 |
| Total                                     | $      | 218,176                                     | $ |   28,066 | $ |   47,471 | $ |   37,527 | $ | 105,112 |

**Critical Accounting          Estimates**

The company has chosen accounting          policies that it believes are appropriate to accurately          and fairly report its operating results and financial          position, and the company applies those accounting          policies in a consistent manner. The Significant          Accounting Policies are summarized in Note 1 to the          Consolidated Financial Statements.

**Page 13 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

**Critical Accounting          Estimates****(continued)**

The preparation of financial          statements in conformity with accounting principles          generally accepted in the United States of America          requires that the company makes estimates and assumptions          that affect the reported amounts of assets, liabilities,          revenues and expenses. These estimates and assumptions          are based on historical and other factors believed to be          reasonable under the circumstances. The company evaluates          these estimates and assumptions on an ongoing basis and          may retain outside consultants, lawyers and actuaries to          assist in its evaluation. The company believes the          following accounting policies are the most critical          because they involve the most significant judgments and          estimates used in preparation of its consolidated          financial statements.

**Vendor Allowances**Vendor allowances that relate to          the company's buying and merchandising activities are          recorded as a reduction of cost of sales as they are          earned, in accordance with its underlying agreement.          Off-invoice and bill-back allowances are used to reduce          direct product costs upon the receipt of goods.          Promotional rebates and credits are accounted for as a          reduction in the cost of inventory and recognized when          the related inventory is sold. Volume incentive discounts          are realized as a reduction of cost of sales at the time          it is deemed probable and reasonably estimable that the          incentive target will be reached. Long-term contract          incentives, which require an exclusive vendor          relationship, are allocated over the life of the          contract. Promotional allowance funds for specific          vendor-sponsored programs are recognized as a reduction          of cost of sales as the program occurs and the funds are          earned per the agreement. Cash discounts for prompt          payment of invoices are realized in cost of sales as          invoices are paid. Warehouse and back-haul allowances          provided by suppliers for distributing their product          through our distribution system are recorded in cost of          sales as the required performance is completed. Warehouse          rack and slotting allowances are recorded in cost of          sales when new items are initially set up in the          company's distribution system, which is when the related          expenses are incurred and performance under the agreement          is complete. Swell allowances for damaged goods are          realized in cost of sales as provided by the supplier,          helping to offset product shrink losses also recorded in          cost of sales.

**Store Closing Costs**The company provides for closed          store liabilities relating to the estimated post-closing          lease liabilities and related other exit costs associated          with the store closing commitments. The closed store          liabilities are usually paid over the lease terms          associated with the closed stores having remaining terms          ranging from two to ten years. At December 27, 2008,          closed store lease liabilities totaled $1.5 million. The          company estimates the lease liabilities, net of estimated          sublease income, using the undiscounted rent payments of          closed stores. Other exit costs include estimated real          estate taxes, common area maintenance, insurance and          utility costs to be incurred after the store closes over          the remaining lease term. Store closings are generally          completed within one year after the decision to close.          Adjustments to closed store liabilities and other exit          costs primarily relate to changes in subtenants and          actual exit costs differing from original estimates.          Adjustments are made for changes in estimates in the          period in which changes become known. Any excess store          closing liability remaining upon settlement of the          obligation is reversed to income in the period that such          settlement is determined. Inventory write-downs, if any,          in connection with store closings, are classified in cost          of sales. Costs to transfer inventory and equipment from          closed stores are expensed as incurred. Store closing          liabilities are reviewed quarterly to ensure that any          accrued amount that is no longer needed for its          originally intended purpose is reversed to income in the          proper period.

**Self-Insurance**The company is self-insured for a          majority of its workers' compensation, general liability,          vehicle accident and associate medical benefit claims.          The self-insurance liability for most of the workers'          compensation claims is determined based on historical          data and an estimate of claims incurred but not reported.          The other self-insurance liabilities are determined          actuarially, based on claims filed and an estimate of          claims incurred but not yet reported. The company is          liable for associate health claims up to a lifetime          aggregate of $1,000,000 per member and for workers          compensation claims up to $2,000,000 per claim. Property          and casualty insurance coverage is maintained with          outside carriers at deductible or retention levels          ranging from $100,000 to $1,000,000. Significant          assumptions used in the development of the actuarial          estimates include reliance on the company's historical          claims data including average monthly claims and average          lag time between incurrence and reporting of the          claim.

**Page 14 of 37 (Form          10-K)**

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**WEIS MARKETS,    INC.**

**Item          7.      Management's          Discussion and Analysis of Financial Condition and          Results of Operations: (continued)**

****Forward-Looking    Statements****

In addition to historical          information, this Annual Report may contain          forward-looking statements. Any forward-looking          statements contained herein are subject to certain risks          and uncertainties that could cause actual results to          differ materially from those projected. For example,          risks and uncertainties can arise with changes in:          general economic conditions, including their impact on          capital expenditures; business conditions in the retail          industry; the regulatory environment; rapidly changing          technology and competitive factors, including increased          competition with regional and national retailers; and          price pressures. Readers are cautioned not to place undue          reliance on forward-looking statements, which reflect          management's analysis only as of the date hereof. The          company undertakes no obligation to publicly revise or          update these forward-looking statements to reflect events          or circumstances that arise after the date hereof.          Readers should carefully review the risk factors          described in other documents the company files          periodically with the Securities and Exchange          Commission.

**Certifications**

As required under Section          303A.12(a) of the New York Stock Exchange Listed Company          Manual, the company submitted a Chief Executive Officer          Certification to the New York Stock Exchange with no          qualifications on May 15, 2008. The company filed with          the Securities and Exchange Commission the Chief          Executive Officer and Chief Financial Officer          certifications as required under Section 302 of the          Sarbanes-Oxley Act in the prior years as an Exhibit to          Form 10-K.

**Item    7a.      Quantitative and    Qualitative Disclosures about Market Risk:**

| *(dollars in                thousands)*                         |   | **Expected                Maturity Dates** |   | **Fair                Value** |
|-----------------------------------------------------------------|--------|--------------------------------------------|--------|-------------------------------|
| *December 27,                2008*                              |   | **2009**                                   |   | **2010**                      |   | **2011** |   | **2012** |   | **2013** |   | **Thereafter** |   | **Total** |   | **Dec. 27,                2008** |
| Rate sensitive                assets:                           |   |                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |
|    Fixed interest rate                securities | $      | 2,020                                      | $      | 6,135                         | $ | 2,040 | $ | ---    | $ | ---    | $ | ---    | $ | 10,195 | $ | 10,483 |
|    Average interest                rate          |   | 3.16                                       | %      | 3.48                          | % | 4.11 | % | ---    |   | ---    |   | ---    |   | 3.54 | % |   |

**Other Relevant Market        Risks**The company's equity securities at          December 27, 2008 had a cost basis of $1,934,000 and a          fair value of $9,645,000. The dividend yield realized on          these equity investments was 6.28% in 2008. Market risk,          as it relates to equities owned by the company, is          discussed within the "Liquidity and Capital Resources"          section of "Management's Discussion and Analysis of          Financial Condition and Results of Operations" contained          within this report.

**Page 15 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Item    8.      Financial Statements    and Supplementary Data:**

| **WEIS MARKETS,                INC.**                      |
|------------------------------------------------------------|
| **CONSOLIDATED                BALANCE SHEETS**             |
| *(dollars in                thousands)*                    |
| *December 27, 2008 and                  December 29, 2007* |

|                                                                                                                        |   | **2008**                                                                          |   |   | **2007**                                                                          |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|
| **Assets**                                                                                                                  |   |                                                                              |   |   |                                                                              |   |
| Current:                                                                                                                    |   |                                                                              |   |   |                                                                              |   |
|   Cashand cash                  equivalents                                                                       | $      | 59,351                                                                            |   | $      | 41,187                                                                            |   |
|   Marketable securities                                                                                           |   | 20,128                                                                            |   |   | 26,182                                                                            |   |
|   Accounts receivable,                net                                                                         |   | 45,318                                                                            |   |   | 48,460                                                                            |   |
|   Inventories                                                                                                     |   | 187,433                                                                           |   |   | 193,732                                                                           |   |
|   Prepaid expenses                                                                                                |   |        5,025                                   |   |   |        3,317                                   |   |
|   Income                taxes recoverable                                                                         |   |         ---      |   |   |         8,074                             |   |
|            **Total current assets**                                  |        |     317,255                                                   |   |   |     320,952                                                   |   |
| Property and                equipment, net                                                                                  |   | 511,113                                                                           |   |   | 499,246                                                                           |   |
| Goodwill                                                                                                                    |   | 15,722                                                                            |   |   | 15,722                                                                            |   |
| Intangibleand other assets, net                                                                                             |   |         4,124                             |   |   |         4,149                             |   |
|            **Total assets**                                          | $      |     848,214                                                   |   | $      |     840,069                                                   |   |
| **Liabilities**                                                                                                             |   |                                                                              |   |   |                                                                                   |   |
| Current:                                                                                                                    |   |                                                                              |   |   |                                                                                   |   |
|   Accounts payable                                                                                                | $      | 95,128                                                                            |   | $      | 103,712                                                                           |   |
|   Accrued expenses                                                                                                |   | 28,173                                                                            |   |   | 24,436                                                                            |   |
|   Accrued self-insurance                                                                                          |   | 23,344                                                                            |   |   | 23,442                                                                            |   |
|   Deferred revenue, net                                                                                           |   | 6,920                                                                             |   |   | 7,843                                                                             |   |
|   Income                taxes payable                                                                             |   |      738                                                 |   |   |         ---      |   |
|   Deferred income taxes                                                                                           |        |         4,020                             |        |        |         4,134                             |        |
| **           Total                current liabilities**              |   |     158,323                                                   |   |   |     163,567                                                   |   |
| Postretirement benefit                  obligations                                                                         |   |      12,454                                              |   |   |      14,027                                              |   |
| Deferred income                taxes                                                                                        |   |       16,337                                        |   |   |       14,247                                        |   |
| **           Total                liabilities**                      |        |     187,114                                                   |        |        |     191,841                                                   |        |
| **Shareholders' Equity**                                                                                                    |   |                                                                              |   |   |                                                                              |   |
| Common stock, no                par value,100,800,000 shares                authorized,                                     |        |                                                                                   |        |        |                                                                                   |        |
|      33,047,807 and                33,044,357 shares issued, respectively                          |   | 9,949                                                                             |   |   | 9,830                                                                             |   |
| Retained                earnings                                                                                            |   | 795,473                                                                           |   |   | 779,760                                                                           |   |
| Accumulated other                comprehensive income, net                                                                  |   |         4,560                             |   |   |         7,339                             |   |
|                                                                                                                   |   | 809,982                                                                           |   |   | 796,929                                                                           |   |
| Treasury stock at                cost, 6,081,908 and 6,077,311 shares,                respectively                          |   |    (148,882                                                        | )      |   |    (148,701                                                        | )      |
|           ** Total shareholders' equity**                            |   |     661,100                                                   |   |   |     648,228                                                   |   |
|           ** Total liabilities and shareholders'            equity** | $      |     848,214                                                   |   | $      |     840,069                                                   |   |
| *See                accompanying notes to consolidated financial                statements.*                                |   |                                                                              |   |   |                                                                              |   |

 

 

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| **WEIS MARKETS, INC.**                                                                          |
|-------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                STATEMENTS OF INCOME**                                            |
|                                                                                            |
| *(dollars in thousands,                  except shares and per share                  amounts)* |
| *For the Fiscal                Years Ended December 27, 2008,*                                  |

| *December 29, 2007                and December 30, 2006*                                     |   | **2008**                                                               |   | **2007**                                                               |   | **2006**                                                               |
|----------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|------------------------------------------------------------------------|
|                                                                                         |   | (**52                  Weeks)**                                        |   | (**52                  Weeks)**                                        |   | (**52                  Weeks)**                                        |
| Net                sales                                                                     | $      | 2,422,361                                                              | $      | 2,318,551                                                              | $      | 2,244,512                                                              |
| Cost of sales,                including warehousing and distribution                expenses |   |   1,795,404                                                  |   |   1,716,424                                                  |   |   1,647,233                                                  |
|     Gross profit on                sales                                 |   | 626,957                                                                |   | 602,127                                                                |   | 597,279                                                                |
| Operating, general                and administrative expenses                                |   |      559,519                                  |   |      527,378                                  |   |      515,675                                  |
|     Income from                operations                                |   | 67,438                                                                 |   | 74,749                                                                 |   | 81,604                                                                 |
| Investment                income                                                             |   |          2,675            |   |          3,010            |   |          4,484            |
|     Income before provision                for income taxes              |   | 70,113                                                                 |   | 77,759                                                                 |   | 86,088                                                                 |
| Provision for                income taxes                                                    |   |        23,118                       |   |        26,769                       |   |        30,078                       |
|     Net income                                                           | $      |        46,995                       | $      |        50,990                       | $      |        56,010                       |
|                                                                                         |   |                                                                   |   |                                                                   |   |                                                                   |
| Weighted-average                shares outstanding, basic                                    |   | 26,966,647                                                             |   | 26,987,786                                                             |   | 27,016,877                                                             |
| Weighted-average                shares outstanding, diluted                                  |   | 26,966,647                                                             |   | 26,993,997                                                             |   | 27,027,198                                                             |
|                                                                                         |   |                                                                   |   |                                                                        |   |                                                                        |
| Cash dividends per                share                                                      | $      |           1.16       | $      |           1.16       | $      |           1.16       |
| Basic and diluted                earnings per share                                          | $      |            1.74 | $      |            1.89 | $      |            2.07 |
| *See accompanying                notes to consolidated financial                statements.* |

 

 

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| **WEIS MARKETS, INC.**                                               |
|----------------------------------------------------------------------|
| **CONSOLIDATED STATEMENTS                  OF SHAREHOLDERS' EQUITY** |
|                                                                 |
| *(dollars in                thousands, except shares)*               |
| *For the Fiscal                Years Ended December 27, 2008,*       |

| *December 29, 2007                and December 30, 2006*                                                  |                                                                                              |   |                                                            |   |                                                                                  | **Accumulated**                   |                                                                                          |              |                                                                                        |       |                                                                                        |       |
|-----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|-----------------------------------|-----------------------------------------------------------------------------------------------|-------------------|---------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------|------------|
|                                                                                                      |                                                                                              |   |                                                            |   |                                                                                  |                              | **Other**                                                                                     |              |                                                                                        |       |                                                                                        | **Total**  |   |
|                                                                                                      | **Common****Stock**                                                                               |   | **Retained**                                                    |   | **Comprehensive**                                                                     | **Treasury                Stock** |                                                                                          | **Shareholders'** |                                                                                        |
|                                                                                                      | **Shares**                                                                                        |   | **Amount**                                                      |   | **Earnings**                                                                          |                              | **Income                  (Loss)**                                                            | **Shares**        |                                                                                        | **Amount** |                                                                                        | **Equity** |   |
| **Balance at December 31,                  2005**                                                         |   33,002,357                                                                            | $      |     8,371                                   | $      |    735,865                                                             | $                                 |           4,296                             |              |    5,982,461                                                                 | $          |    (144,675                                                                  | )$         |     603,857 |   |
| Net                  income                                                                               |                        ---            |   |      ---      |   | 56,010                                                                                |                              |                        ---        |              |                        ---      |       |                        ---      |       | 56,010 |   |
| Other comprehensive                  income, net of reclassification adjustments and                  tax |                        ---            |   |      ---      |   |                       ---      |                              | 1,788                                                                                         |              |                        ---      |       |                        ---      |       |         1,788 |   |
|    Comprehensive                  income                                                   |                                                                                              |   |                                                            |   |                                                                                  |                              |                                                                                          |              |                                                                                        |       |                                                                                        |       |       57,798 |   |
| Shares issued for                  options                                                                | 6,689                                                                                             |   | 224                                                             |   |                       ---      |                              |                        ---        |              |                       3,498                                   |       |                       (154                                    | )          | 70 |   |
| Treasury stock                  purchased                                                                 |                        ---            |   |      ---      |   |       ---                      |                              |                        ---        |              | 30,332                                                                                      |       | (1,218                                                                                      | )          | (1,218 | ) |
| Dividends                  paid                                                                           |                         ---      |   |      ---      |   |     (31,344                                                       | )                                 |           ---      |              |                        ---      |       |                        ---      |       |      (31,344 | ) |
| **Balance at December 30,                  2006**                                                         |   33,009,046                                                                            |   |      8,595                             |   |    760,531                                                             |                              |           6,084                             |              |     6,016,291                                                           |       |    (146,047                                                                  | )          |     629,163 |   |
| Net                  income                                                                               |                        ---            |   |      ---      |   |    50,990                                                              |                              |                        ---        |              |                        ---      |       |                        ---      |       | 50,990 |   |
| Other comprehensive                  income, net of reclassification adjustments and                  tax |                        ---            |   |      ---      |   |                       ---      |                              | 1,255                                                                                         |              |                        ---      |       |                        ---      |       |          1,255 |   |
|    Comprehensive                  income                                                   |                                                                                              |   |                                                            |   |                                                                                  |                              |                                                                                          |              |                                                                                        |       |                                                                                        |       |        52,245 |   |
| Cumulative effect                of change in accounting for income                taxes                  |     ---                                              |   |     ---            |   | (452                                                                                  | )                                 |     ---                                          |              |     ---                                        |       |     ---                                        |       | (452 | ) |
| Shares issued for                  options                                                                | 35,311                                                                                            |        | 1,235                                                           |   |                       ---      |                              |                        ---        |              |                   25,561                                                          |       |                     (1,155                                              | )          | 80 |   |
| Treasury stock                  purchased                                                                 |                        ---            |   |      ---      |   |       ---                      |                              |                        ---        |              | 35,459                                                                                      |       | (1,499                                                                                      | )          | (1,499 | ) |
| Dividends                  paid                                                                           |                         ---      |   |      ---      |   |     (31,309                                                       | )                                 |           ---      |              |                        ---      |       |                        ---      |       |      (31,309 | ) |
| **Balance at December 29,                  2007**                                                         |   33,044,357                                                                            |   |      9,830                             |   |    779,760                                                             |                              |           7,339                             |              |     6,077,311                                                           |       |    (148,701                                                                  | )          |     648,228 |   |
| Net                  income                                                                               |                        ---            |   |      ---      |   |     46,995                                                        |                              |                        ---        |              |                        ---      |       |                        ---      |       | 46,995 |   |
| Other comprehensive loss,                  net of reclassification adjustments and                  tax   |                        ---            |   |      ---      |   |                       ---      |                              | (2,779                                                                                        | )                 |                        ---      |       |                        ---      |       |        (2,779 | ) |
|    Comprehensive                  income                                                   |                                                                                              |   |                                                            |   |                                                                                  |                              |                                                                                          |              |                                                                                        |       |                                                                                        |       |       44,216 |   |
| Shares issued for                  options                                                                | 3,450                                                                                             |   | 119                                                             |   |                       ---      |                              |                        ---        |              |                   1,688                                                           |       |                     (67                                                 | )          | 52 |   |
| Treasury stock                  purchased                                                                 |                        ---            |   |      ---      |   |       ---                      |                              |                        ---        |              | 2,909                                                                                       |       | (114                                                                                        | )          | (114 | ) |
| Dividends                  paid                                                                           |                         ---      |   |      ---      |   |     (31,282                                                       | )                                 |           ---      |              |                        ---      |       |                        ---      |       |      (31,282 | ) |
| **Balance at December 27,                  2008**                                                         | 33,047,807                                                                                        | $      |      9,949                             | $      |    795,473                                                             | $                                 |           4,560                             |              |  6,081,908                                                                             | $          |    (148,882                                                                  | )$         |     661,100 |   |
| *See accompanying                notes to consolidated financial                statements.*              |

 

 

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| **WEIS MARKETS, INC.**                                         |
|----------------------------------------------------------------|
| **CONSOLIDATED STATEMENTS                  OF CASH FLOWS**     |
|                                                           |
| *(dollars in                thousands)*                        |
| *For the Fiscal                Years Ended December 27, 2008,* |

| *December 29,                2007 and December 30, 2006*                                      |   | **2008**                                                                                                     |   | **2007**                                                                                            |   | **2006**                                                                                            |   |
|-----------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|
|                                                                                          |   | (**52                  Weeks)**                                                                              |   | (**52                  Weeks)**                                                                     |   | (**52                  Weeks)**                                                                     |   |
| **Cash flows from                operating activities:**                                      |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
|  Net                income                                                               | $      | 46,995                                                                                                       | $      | 50,990                                                                                              | $      | 56,010                                                                                              |   |
|  Adjustments                to reconcile net income to                                   |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
|       net cash                provided by operating activities: |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
|    Depreciation                                                                |   | 47,053                                                                                                       |   | 47,511                                                                                              |   | 45,000                                                                                              |   |
|    Amortization                                                                |   | 7,978                                                                                                        |   | 7,331                                                                                               |   | 6,020                                                                                               |   |
|    Loss (gain) on disposition /                impairment of fixed assets      |   | 155                                                                                                          |   | (8,031                                                                                              | )      | 974                                                                                                 |   |
|    Gain on sale of marketable                securities                        |   | ---                                                                                 |   | (6                                                                                                  | )      | (431                                                                                                | )      |
|    Changes in operating assets                and liabilities:                 |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
|      Inventories                                                     |   | 6,299                                                                                                        |   | (4,264                                                                                              | )      | (10,086                                                                                             | )      |
|      Accounts                receivable and prepaid expenses         |   | 1,434                                                                                                        |   | (5,960                                                                                              | )      | (1,365                                                                                              | )      |
|       Income                taxes recoverable                   |   | 8,074                                                                                                        |   | (8,074                                                                                              | )      | ---                                                                        |   |
|      Accounts payable                and other liabilities           |   | (7,441                                                                                                       | )      | 8,169                                                                                               |   | 10,277                                                                                              |   |
|       Income                taxes payable                       |   | 738                                                                                                          |   | (1,317                                                                                              | )      | (1,155                                                                                              | )      |
|      Deferred income                taxes                            |   | 3,946                                                                                                        |   | (1,252                                                                                              | )      | (5,762                                                                                              | )      |
|      Other                                                           |   |                                95 |   |                              345   |   |              (201                  | )      |
|   Net                cash provided by operating activities                          |   |        115,326                                                            |   |          85,442                                        |   |          99,281                                        |   |
|                                                                                          |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
| **Cash flows from                investing activities:**                                      |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
|  Purchase of                property and equipment                                       |   | (66,958                                                                                                      | )      | (64,233                                                                                             | )      | (99,975                                                                                             | )      |
|  Proceeds                from the sale of property and equipment                         |   | 324                                                                                                          |   | 11,374                                                                                              |   | 2,696                                                                                               |   |
|  Purchase of                marketable securities                                        |   | ---                                                                                 |   | ---                                                                        |   | (33,020                                                                                             | )      |
|  Proceeds                from maturities of marketable                securities         |   | 1,210                                                                                                        |   | 13,780                                                                                              |   | 15,745                                                                                              |   |
|  Proceeds                from sale of marketable securities                              |   | ---                                                                                 |   | 7                                                                                                   |   | 6,010                                                                                               |   |
|   Increase in intangible and other                assets                            |   |              (394                           | )      |            ---      |   |            ---      |   |
|  Net cash                used in investing activities                                    |   |                        (65,818                                            | )      |                        (39,072                                   | )      |                      (108,544                                              | )      |
|                                                                                          |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
| **Cash flows from                financing activities:**                                      |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
|  Proceeds                from issuance of common stock                                   |   | 119                                                                                                          |   | 1,235                                                                                               |   | 224                                                                                                 |   |
|  Dividends                paid                                                           |   | (31,282                                                                                                      | )      | (31,309                                                                                             | )      | (31,344                                                                                             | )      |
|  Purchase of                treasury stock                                               |   |              (181                           | )      |           (2,654                                  | )      |           (1,372                                  | )      |
|   Net                cash used in financing activities                              |   |         (31,344                                                      | )      |         (32,728                                             | )      |         (32,492                                             | )      |
|                                                                                          |   |                                                                                                         |   |                                                                                                |   |                                                                                                |   |
| Net increase                (decrease) in cash andcash                  equivalents           |   | 18,164                                                                                                       |   | 13,642                                                                                              |   | (41,755                                                                                             | )      |
| Cash andcash equivalentsat beginning of year                                                  |   |          41,187                                                 |   |          27,545                                        |   |          69,300                                        |   |
| Cash andcash equivalentsat end of year                                                        | $      |          59,351                                                 | $      |          41,187                                        | $      |          27,545                                        |   |
| *See                accompanying notes to consolidated financial                statements.*  |        |                                                                                                         |        |                                                                                                |        |                                                                                                |        |

 

 

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**WEIS MARKETS,    INC.**

**Notes to Consolidated    Financial Statements**

**Note 1 Summary of Significant          Accounting Policies**The following is a summary of the          significant accounting policies utilized in preparing the          company's consolidated financial statements:

**(a) Description of          Business**Weis Markets, Inc. is a          Pennsylvania business corporation formed in 1924. The          company is engaged principally in the retail sale of food          in Pennsylvania and surrounding states. There was no          material change in the nature of the company's business          during fiscal 2008.

**(b) Definition of Fiscal          Year**The company's fiscal year ends on          the last Saturday in December. Fiscal 2008, 2007 and 2006          were comprised of 52 weeks.

**(c) Principles of          Consolidation**The consolidated financial          statements include the accounts of the company and its          subsidiaries. All significant intercompany accounts and          transactions have been eliminated in          consolidation.

**(d) Use of          Estimates**Management of the company has made          a number of estimates and assumptions relating to the          reporting of assets and liabilities and the disclosure of          contingent assets and liabilities to prepare these          consolidated financial statements in conformity with          accounting principles generally accepted in the United          States of America. Actual results could differ from those          estimates.

**(e)          Reclassifications**The company reclassified "Payable          to employee benefit plans" as originally reported for the          year ended December 29, 2007 in the amount of $1.4          million. The amount, which had been previously reported          as a separate line on the Consolidated Balance Sheets, is          included in "Accrued expenses." The company also          reclassified "Deferred revenue" in the amount $7.8          million for the year ended December 29, 2007. The amount,          which had been previously reported in "Accounts payable"          on the Consolidated Balance Sheets, is currently reported          as a separate line. "Deferred revenue" consists entirely          of the company's gift card liability. For further          information on the company's gift card accounting policy,          see Note 1(r).

**(f) Cash and Cash          Equivalents**The company considers investments          with an original maturity of three months or less to be          cash equivalents. Investment amounts classified as cash          equivalents as of December 27, 2008 and December 29, 2007          totaled $51.6 million and $33.0 million,          respectively.

**(g) Marketable          Securities**Marketable securities consist of          Pennsylvania tax-free state and municipal bonds and          equity securities. By policy, the company invests          primarily in high-grade marketable securities. The          company classifies all of its marketable securities as          available-for-sale.

Available-for-sale securities are          recorded at fair value as determined by quoted market          price based on national markets. Unrealized holding gains          and losses, net of the related tax effect, are excluded          from earnings and are reported as a separate component of          shareholders' equity until realized. A decline in the          fair value below cost that is deemed other than temporary          results in a charge to earnings and the establishment of          a new cost basis for the security. Dividend and interest          income is recognized when earned. Realized gains and          losses are included in earnings and are derived using the          specific identification method for determining the cost          of securities.

**(h) Accounts          Receivable**Accounts receivable are stated net          of an allowance for uncollectible accounts of $673,000          and $1.1 million as of December 27, 2008 and December 29,          2007, respectively. The reserve balance relates to          amounts due from pharmacy third party providers and          customer returned checks. The company maintains an          allowance for the amount of receivables deemed to be          uncollectible and calculates this amount based upon          historical collection activity adjusted for current          conditions. Customer electronic payments accepted at the          point of sale are classified as accounts receivable until          collected.

**Page 20 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 1 Summary of Significant Accounting    Policies (continued)**

**(i)          Inventories**Inventories are valued at the          lower of cost or market, using both the last-in,          first-out (LIFO) and average cost methods. The company          evaluates inventory shortages throughout the year based          on actual physical counts in its facilities. Allowances          for inventory shortages are recorded based on the results          of these counts and to provide for estimated shortages          from the last phyiscal count to the financial statement          date. See additional disclosures regarding inventories in          Note 3.

**(j) Property and          Equipment**Property and equipment are          recorded at cost. Depreciation is provided on the cost of          buildings and improvements and equipment principally          using accelerated methods. Leasehold improvements are          amortized using the straight line method over the terms          of the leases or the useful lives of the assets,          whichever is shorter.

Maintenance and repairs are          expensed and renewals and betterments are capitalized.          When assets are retired or otherwise disposed of, the          assets and accumulated depreciation are removed from the          respective accounts and any profit or loss on the          disposition is credited or charged to "Operating, general          and administrative expenses."

**(k) Goodwill and Intangible          Assets**The company follows Financial          Accounting Standards Board ("FASB") Statement of          Financial Accounting Standards No. 142, "Goodwill and          Other Intangible Assets" ("SFAS 142"), which establishes          that intangible assets with an indefinite useful life          shall not be amortized until their useful life is          determined to be no longer indefinite and should be          tested for impairment annually or more frequently if          events or changes in circumstances indicate that the          asset might be impaired. SFAS 142 states that goodwill          should not be amortized but tested for impairment for          each reporting unit, on an annual basis and between          annual tests in certain circumstances.

To derive the fair value of the          company's sole reporting unit, the company uses an income          approach along with an analysis of its stock value. Under          the income approach, fair value of a reporting unit is          determined based on estimated future cash flows          discounted by an estimated weighted-average cost of          capital, which reflects the overall level of inherent          risk of the company. Estimated future cash flows are          based on the company's internal projection model. The          stock value evaluation consists of measuring the average          market capitalization of the company against its total          asset value of its sole reporting unit. The company          completes its impairment test in the third quarter of          each fiscal year.

The results of the impairment test          are subject to management's estimates and assumptions of          projected cash flows and operating results. The company          believes that, based on current conditions, materially          different reported results are not likely to result from          long-lived asset impairments. However, a change in          assumptions or market conditions could result in a change          in estimated future cash flows and the likelihood of          materially different reported results.

Intangible assets with a definite          useful life are generally amortized over periods ranging          from 15 to 20 years. Estimated amortization expense for          the next five fiscal years is approximately $418,000 in          2009, $359,000 in 2010, $329,000 in 2011, $325,000 in          2012, and $321,000 in 2013. As of December 27, 2008, the          company has no intangible assets, other than goodwill,          with indefinite lives.

**(l) Impairment of Long-Lived          Assets**In accordance with FASB Statement          of Financial Accounting Standards No. 144, "Accounting          for the Impairment or Disposal of Long-Lived Assets"          ("SFAS 144"), the company periodically evaluates the          period of depreciation or amortization for long-lived          assets to determine whether current circumstances warrant          revised estimates of useful lives. The company reviews          its property and equipment for impairment whenever events          or changes in circumstances indicate the carrying value          of an asset may not be recoverable. Recoverability is          measured by a comparison of the carrying amount to the          net undiscounted cash flows expected to be generated by          the asset. An impairment loss would be recorded for the          excess of net book value over the fair value of the asset          impaired. The fair value is estimated based on expected          discounted future cash flows.

**Page 21 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 1 Summary of Significant Accounting    Policies (continued)**

**(l) Impairment of Long-Lived          Assets (continued)**With respect to owned property and          equipment associated with closed stores, the value of the          property and equipment is adjusted to reflect recoverable          values based on the company's prior history of disposing          of similar assets and current economic          conditions.

The results of impairment tests          are subject to management's estimates and assumptions of          projected cash flows and operating results. The company          believes that, based on current conditions, materially          different reported results are not likely to result from          long-lived asset impairments. However, a change in          assumptions or market conditions could result in a change          in estimated future cash flows and the likelihood of          materially different reported results.

**(m) Store Closing          Costs**In accordance with FASB Statement          of Financial Accounting Standards No. 146, "Accounting          for Costs Associated with Exit or Disposal Activities"          ("SFAS 146"), the company provides for closed store          liabilities relating to the estimated post-closing lease          liabilities and related other exit costs associated with          the store closing commitments. The closed store          liabilities are usually paid over the lease terms          associated with the closed stores having remaining terms          ranging from two to ten years. Closed store lease          liabilities totaled $1.5 million and $2.0 million at          December 27, 2008 and December 29, 2007, respectively.          The company estimates the lease liabilities, net of          estimated sublease income, using the undiscounted rent          payments of closed stores.

**(n)          Self-Insurance**The company is self-insured for a          majority of its workers' compensation, general liability,          vehicle accident and associate medical benefit claims.          Self-insurance costs are accrued based upon the aggregate          of the liability for reported claims and an estimated          liability for claims incurred but not reported. The          company is liable for associate health claims up to a          lifetime aggregate of $1,000,000 per member and for          workers' compensation claims up to $2,000,000 per claim.          Property and casualty insurance coverage is maintained          with outside carriers at deductible or retention levels          ranging from $100,000 to $1,000,000.

**(o) Stock Option          Plan**As of December 31, 2004, no awards          may be granted under the company's 1995 Stock Option          Plan. The last options granted under the Plan in 2002          will expire in 2012. See additional disclosures regarding          remaining outstanding options in Note 7.

**(p) Income          Taxes**Under the asset and liability          method of FASB Statement of Financial Accounting          Standards No. 109, "Accounting for Income Taxes" ("SFAS          109"), deferred tax assets and liabilities are recognized          for the future tax consequences attributable to          differences between the financial statement carrying          amounts of existing assets and liabilities and their          respective tax bases. Deferred tax assets and liabilities          are measured using enacted tax rates expected to apply to          taxable income in the years in which those temporary          differences are expected to be recovered or          settled.

**(q) Earnings Per          Share**Earnings per share are based on          the weighted-average number of common shares outstanding.          Diluted earnings per share are based on the          weighted-average number of common shares outstanding,          plus the incremental shares that would have been          outstanding upon the assumed exercise of all dilutive          stock options, subject to antidilution limitations. Basic          and diluted earnings per share are the same amounts for          each period presented.

**Page 22 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 1 Summary of Significant Accounting    Policies (continued)**

**(r) Revenue          Recognition**Revenue from the sale of products          to the company's customers is recognized at the point of          sale. Discounts provided to customers at the point of          sale through the Weis Club Preferred Shopper loyalty          program are recognized as a reduction in sales as          products are sold. Periodically, the company will run a          point based sales incentive program that rewards          customers with future sales discounts. The company makes          reasonable and reliable estimates of the amount of future          discounts based upon historical experience and its          customer data tracking software. Sales are reduced by          these estimates over the life of the program. Discounts          to customers at the point of sale provided by vendors,          usually in the form of paper coupons, are not recognized          as a reduction in sales provided the discounts are          redeemable at any retailer that accepts those discounts.          The company records "Deferred revenue" for the sale of          gift cards and revenue is recognized in "Net sales" at          the time of customer redemption for products. Gift card          breakage income is recognized based upon historical          redemption patterns and represents the balance of gift          cards for which the company believes the likelihood of          redemption by the customer is remote. During fiscal 2008,          the company recognized approximately $1.0 million of gift          card breakage income. Fiscal 2008 was the first year in          which the company recognized gift card breakage income,          and therefore, the amount recognized includes the gift          card breakage income related to gift cards sold since the          inception of the gift card program. The resolution of          certain legal matters associated with gift card          liabilities prompted management to initiate a change in          accounting estimate. This income is included in the          Consolidated Statements of Income as a reduction in          "Operating, general and administrative expenses."          Merchandise return activity is immaterial to          revenues.

**(s) Cost of Sales, Including          Warehousing and Distribution          Expenses**"Cost of sales, including          warehousing and distribution expenses" consists of direct          product costs (net of discounts and allowances),          warehouse costs, transportation costs and manufacturing          facility costs.

**(t) Vendor          Allowances**Vendor allowances that relate to          the company's buying and merchandising activities are          recorded as a reduction of cost of sales as they are          earned, in accordance with its underlying agreement.          Off-invoice and bill-back allowances are used to reduce          direct product costs upon the receipt of goods.          Promotional rebates and credits are accounted for as a          reduction in the cost of inventory and recognized when          the related inventory is sold. Volume incentive discounts          are realized as a reduction of cost of sales at the time          it is deemed probable and reasonably estimable that the          incentive target will be reached. Long-term contract          incentives, which require an exclusive vendor          relationship, are allocated over the life of the          contract. Promotional allowance funds for specific          vendor-sponsored programs are recognized as a reduction          of cost of sales as the program occurs and the funds are          earned per the agreement. Cash discounts for prompt          payment of invoices are realized in cost of sales as          invoices are paid. Warehouse and back-haul allowances          provided by suppliers for distributing their product          through our distribution system are recorded in cost of          sales as the required performance is completed. Warehouse          rack and slotting allowances are recorded in cost of          sales when new items are initially set up in the          company's distribution system, which is when the related          expenses are incurred and performance under the agreement          is complete. Swell allowances for damaged goods are          realized in cost of sales as provided by the supplier,          helping to offset product shrink losses also recorded in          cost of sales.

Vendor allowances recorded as          credits in cost of sales totaled $51.2 million in 2008,          $44.6 million in 2007, and $42.6 million in 2006. Vendor          paid cooperative advertising credits totaled $15.1          million in 2008, $16.7 million in 2007, and $16.5 million          in 2006. These credits were netted against advertising          costs within "Operating, general and administrative          expenses." The company had accounts receivable due from          vendors of $589,000 and $846,000 for earned advertising          credits and $5.3 million and $6.4 million for earned          promotional discounts as of December 27, 2008 and          December 29, 2007, respectively. The company had $2.4          million and $805,000 in unearned income included in          accrued liabilities for unearned vendor programs under          long-term contracts for display and shelf space          allocation as of December 27, 2008 and December 29, 2007,          respectively.

**Page 23 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 1 Summary of Significant Accounting    Policies (continued)**

**(u) Operating, General and          Administrative Expenses**Business operating costs including          expenses generated from administration and purchasing          functions, are recorded in "Operating, general and          administrative expenses" in the Consolidated Statements          of Income. Business operating costs include items such as          wages, benefits, utilities, repairs and maintenance,          advertising costs and credits, rent, insurance, equipment          depreciation, leasehold amortization and costs for          outside provided services.

**(v) Advertising          Costs**The company expenses advertising          costs as incurred. The company recorded advertising          expense, before vendor paid cooperative advertising          credits, of $25.0 million in 2008, $25.2 million in 2007,          and $26.1 million in 2006 in "Operating, general and          administrative expenses."

**(w) Rental          Income**The company leases or subleases          space to tenants in owned, vacated and open store          facilities. Rental income is recorded when earned as a          component of "Operating, general and administrative          expenses." All leases are operating leases, as disclosed          in Note 5, and do not contain upfront          considerations.

**(x) Current Relevant Accounting          Standards**In September 2006, the FASB issued          Statement of Financial Accounting Standards No. 157,          "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines          fair value, establishes a framework for measuring fair          value in generally accepted accounting principles, and          expands disclosures about fair value measurements. SFAS          157 does not require any new fair value measurements.          SFAS 157 is effective for fiscal years beginning after          November 15, 2007. The adoption of SFAS 157 did not have          a material impact on the company's financial statements.          Marketable securities represent the only item recorded on          the Company's balance sheets at fair value. Marketable          securities are all classified as available-for-sale and          values are derived solely from level 1 inputs.

In February 2008, FASB issued FASB          Staff Position No. 157-2 ("FSP 157-2") which delays the          effective date of SFAS No. 157 for non-financial assets          and non-financial liabilities, except for items that are          recognized or disclosed at fair value in the financial          statements on a recurring basis (at least annually), to          fiscal years beginning after November 15, 2008, and          interim periods within those fiscal years. The Company is          currently evaluating the provisions of FSP 157-2 to          determine the potential impact, if any, the adoption will          have on its financial statements.

In February 2007, the FASB issued          Statement of Financial Accounting Standards No. 159, "The          Fair Value Option for Financial Assets and Financial          Liabilities – Including an amendment of FASB          Statement No. 115" ("SFAS 159"). SFAS 159 permits          entities to choose to measure certain financial assets          and liabilities at fair value at specified election          dates. The fair value option may be applied instrument by          instrument (with a few exceptions), is irrevocable and is          applied only to entire instruments and not to portions of          instruments. Unrealized gains and losses on items for          which the fair value option has been elected are to be          reported in earnings at each subsequent reporting date.          SFAS 159 is effective for fiscal years beginning after          November 15, 2007. The company has chosen not to elect          the fair value option, therefore the adoption of SFAS 159          did not have an impact on the company's financial          statements.

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**WEIS MARKETS,    INC.**

**Note 2 Marketable        Securities**Marketable securities, as of          December 27, 2008 and December 29, 2007, consistedof:

|                                                                    |   |                                                  |   | **Gross**                                             |   | **Gross**                                                                        |   |                                                  |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|-------------------------------------------------------|
|                                                                    |   |                                                  |   | **Unrealized**                                        |   | **Unrealized**                                                                   |   |                                                  |
| *(dollars in                thousands)*                                 |   | **Amortized**                                         |   | **Holding**                                           |   | **Holding**                                                                      |   | **Fair**                                              |
| *December 27,                2008*                                      |   | **Cost**                                              |   | **Gains**                                             |   | **Losses**                                                                       |   | **Value**                                             |
| Available-for-sale:                                                     |   |                                                  |   |                                                  |   |                                                                             |   |                                                  |
|    Pennsylvania state and                municipal bonds | $      | 10,399                                                | $      | 101                                                   | $      | 17                                                                               | $      | 10,483                                                |
|    Equity securities                                     |   |         1,934 |   |         7,746 |   |              35 |   |         9,645 |
|                                                                    | $      |       12,333            | $      |         7,847 | $      |              52 | $      |       20,128            |

|                                                                    |   |                                                  |   | **Gross**                                  |   | **Gross**                                                                                   |   |                                       |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|--------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                                    |   |                                                  |   | **Unrealized**                             |   | **Unrealized**                                                                              |   |                                       |
| *(**dollars in                thousands)*                               |   | **Amortized**                                         |   | **Holding**                                |   | **Holding**                                                                                 |   | **Fair**                                   |
| *December 29,                2007*                                      |   | **Cost**                                              |   | **Gains**                                  |   | **Losses**                                                                                  |   | **Value**                                  |
| Available-for-sale:                                                     |   |                                                  |   |                                       |   |                                                                                        |   |                                       |
|    Pennsylvania state and                municipal bonds | $      | 11,704                                                | $      | 76                                         | $      | 6                                                                                           | $      | 11,774                                     |
|    Equity securities                                     |   |         1,934 |   |       12,483 |   |                9 |   |       14,408 |
|                                                                    | $      |       13,638            | $      |       12,559 | $      |              15            | $      |       26,182 |

Maturities of marketable securities    classified as available-for-sale at December 27, 2008, were as    follows:

|                                                                                                           |   | **Amortized**                                         |   | **Fair**                                              |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------------------------------|
| *(**dollars in                thousands)*                                                                      |   | **Cost**                                              |   | **Value**                                             |
| Available-for-sale:                                                                                            |   |                                                  |   |                                                  |
|    Due within one                year                                                           | $      | 2,068                                                 | $      | 2,074                                                 |
|    Due within one year through                five years                                        |   | 8,331                                                 |   | 8,409                                                 |
|    Equity securities                                                                            |   |         1,934 |   |         9,645 |
|                                                                                                           | $      |       12,333            | $      |       20,128            |
|                                                                                                           |   |                                                  |   |                                                  |
| See additional                disclosures regarding marketable securities in                Notes 1(g) and 11. |   |                                                  |   |                                                  |

**Note 3 Inventories**    Merchandise inventories, as of December 27, 2008 and December    29, 2007, were valued as follows:

| *(**dollars in                thousands)* |   | **2008**                                   |   | **2007**                                   |
|-------------------------------------------|--------|--------------------------------------------|--------|--------------------------------------------|
| LIFO                                      | $      | 144,826                                    | $      | 154,268                                    |
| Average                cost               |   |       42,607 |   |       39,464 |
|                                      | $      |     187,433            | $      |     193,732            |

Management believes the use of the          LIFO method for valuing certain inventories represents          the most appropriate matching of costs and revenues in          the company's circumstances. If all inventories were          valued on the average cost method, which approximates          current cost, total inventories would have been          $66,316,000 and $54,494,000 higher than as reported on          the above methods as of December 27, 2008 and December          29, 2007, respectively. During 2008, the company had          certain decrements in its LIFO pools, which had an          insignificant impact on the cost of sales.

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**WEIS MARKETS,    INC.**

 

**Note 4 Property and        Equipment**    Property and equipment, as of December 27, 2008 and December    29, 2007, consisted of:

|                                                          | **Useful                Life** |   |                      |   |                      |
|---------------------------------------------------------------|--------------------------------|--------|---------------------------|--------|---------------------------|
| *(dollars in                thousands)*                       | **(in                years)**  |   | **2008**                  |   | **2007**                  |
| Land                                                          |                           | $      | 86,003                    | $      | 85,158                    |
| Buildings and                improvements                     | 10-60                          |   | 417,954                   |   | 404,784                   |
| Equipment                                                     |   3-12               |   | 646,427                   |   | 608,458                   |
| Leasehold                improvements                         |   5-20               |   |    136,589 |   |    130,978 |
|    Total, at cost                              |                           |   | 1,286,973                 |   | 1,229,378                 |
| Less accumulated                depreciation and amortization |                           |   |    775,860 |   |    730,132 |
|                                                          |                           | $      |    511,113 | $      |    499,246 |

**Note 5 Lease Commitments**At December 27, 2008, the company          leased approximately 55% of its open store facilities          under operating leases that expire at various dates          through 2028. These leases generally provide for fixed          annual rentals; however, several provide for minimum          annual rentals plus contingent rentals as a percentage of          annual sales and a number of leases require the company          to pay for all or a portion of insurance, real estate          taxes, water and sewer rentals, and repairs, the cost of          which is charged to the related expense category rather          than being accounted for as rent expense. Most of the          leases contain multiple renewal options, under which the          company may extend the lease terms from 5 to 20 years.          Rents on operating leases, including agreements with step          rents, are charged to expense on a straight-line basis          over the minimum lease term. The company does not have          any leases that include capital improvement funding or          other lease concessions.

Rent expense and income on all leases    consisted of:

| *(dollars in                thousands)* |   | **2008**                 |   | **2007**                 |   | **2006**                 |   |
|-----------------------------------------|--------|--------------------------|--------|--------------------------|--------|--------------------------|--------|
| Minimum annual                rentals   | $      | 30,733                   | $      | 30,370                   | $      | 30,147                   |   |
| Contingent                rentals       |   | 473                      |   | 354                      |   | 333                      |   |
| Lease or sublease                income |   |    (6,206 | )      |    (6,466 | )      |    (6,757 | )      |
|                                    | $      |   25,000       | $      |   24,258       | $      |   23,723       |   |

The following is a schedule by          years of future minimum rental payments required under          operating leases and total minimum sublease and lease          rental income to be received that have initial or          remaining noncancelable lease terms in excess of one year          as of December 27, 2008.

| *(dollars in                thousands)* |   | **Leases**                |   | **Subleases**                                        |   |
|-----------------------------------------|--------|---------------------------|--------|------------------------------------------------------|--------|
| 2009                                    | $      | 28,066                    | $      | (4,244                                               | )      |
| 2010                                    |   | 25,957                    |   | (4,084                                               | )      |
| 2011                                    |   | 21,514                    |   | (2,789                                               | )      |
| 2012                                    |   | 19,077                    |   | (1,377                                               | )      |
| 2013                                    |   | 18,450                    |   | (655                                                 | )      |
| Thereafter                              |   |    105,112 |   |                      (2,116 | )      |
|                                    | $      |    218,176 | $      |     (15,265                      | )      |

The company has $897,000 accrued          as of December 27, 2008, for future minimum rental          payments due on previously closed stores, reduced by the          estimated sublease income to be received. The future          minimum rental payments required under operating leases          and estimated sublease income for these locations are          included in the above schedule.

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**WEIS MARKETS,    INC.**

**Note 6 Retirement Plans**The company has a contributory          retirement savings plan (401(k)) covering substantially          all full-time associates, a noncontributory          profit-sharing plan covering eligible associates, a          noncontributory employee stock bonus plan covering          eligible associates and three supplemental retirement          plans covering highly compensated employees of the          company. An eligible associate as defined in the Weis          Markets, Inc. Profit Sharing Plan and the Weis Markets,          Inc. Employee Stock Bonus Plan includes certain salaried          associates, store management and administrative support          personnel. The company's policy is to fund 401(k),          profit-sharing and stock bonus costs as accrued, but not          supplemental retirement costs. Contributions to the          401(k) plan, the profit-sharing plan and the stock bonus          plan are made at the sole discretion of the          company.

Retirement plan costs:

| *(dollars in                thousands)*              |   | **2008**                                                                                        |   | **2007**                                                                        |   | **2006**                                                                             |   |
|------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|
| Retirement savings                plan               | $      | 1,095                                                                                           | $      | 1,034                                                                           | $      | 1,006                                                                                |   |
| Profit-sharing                plan                   |   | 900                                                                                             |   | 922                                                                             |   | 900                                                                                  |   |
| Employee stock                bonus plan             |   |     ---                                                      |   |     ---                                      |   | 40                                                                                   |   |
| Deferred compensation                  plan          |   | 525                                                                                             |   | 435                                                                             |   | 500                                                                                  |   |
| Supplemental                retirement plan          |   | (1,976                                                                                          | )      | 396                                                                             |   | 965                                                                                  |   |
| Pharmacist                deferred compensation plan |   |                              3 |   |                           (75 | )      |                            46 |   |
|                                                 | $      |           547                                 | $      |        2,712                                 | $      |        3,457                                      |   |

The Weis Markets, Inc. Employee          Stock Bonus Plan was terminated as of December 31, 2006          and all contributions under the Weis Markets, Inc.          Employee Stock Bonus Plan ceased as of December 31,          2006.

The company maintains a          non-qualified deferred compensation plan for the payment          of specific amounts of annual retirement benefits to          certain officers or their beneficiaries over an          actuarially computed normal life expectancy. The benefits          are determined through actuarial calculations dependent          on the age of the recipient, using an assumed discount          rate. The plan is unfunded and accounted for on an          accrual basis. The projected benefit obligations are          equal to the liability for pension benefits included in          "Accrued expenses" and "Postretirement benefit          obligations" in the Consolidated Balance          Sheets.

Change in the benefit obligations:

| *(dollars in                thousands)*                                                               |   | **2008**                                                                             |   | **2007**                                                                        |   |
|-------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|
| Benefit obligations at                  beginning of year                                             | $      | 6,775                                                                                | $      | 6,571                                                                           |   |
| Interest cost                                                                                         |   | 491                                                                                  |   | 475                                                                             |   |
| Benefit                  payments                                                                     |   | (232                                                                                 | )      | (232                                                                            | )      |
| Actuarial gain                  (loss)                                                                |   |                            34 |   |                           (39 | )      |
|                                                                                                  | $      |        7,068                                      | $      |        6,775                                 |   |
|                                                                                                  |
| Weighted-average                  assumptions used to determine benefit                  obligations: |   | **2008**                                                                             |   | **2007**                                                                        |   |
| Discount rate                                                                                         |   | 7.50%                                                                                |   | 7.50%                                                                           |   |

Components of net periodic benefit          cost:

| *(dollars in                thousands)*    |   | **2008** |   | **2007** |   | **2006** |   |
|--------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Interest cost                              | $      | 491      | $      | 475      | $      | 455      |   |
| Amount of recognized                  gain |   | 198      |   | 271      |   | 187      |   |

**Page 27 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 6 Retirement Plans    (continued)**Estimated future benefit          payments:

| *(**dollars in                thousands)* |   |   |   | Benefits |   |
|-------------------------------------------|--------|--------|--------|----------|--------|
| 2009                                      |   |   | $      | 232      |   |
| 2010                                      |   |   |   | 1,291    |   |
| 2011                                      |   |   |   | 1,291    |   |
| 2012                                      |   |   |   | 1,291    |   |
| 2013                                      |   |   |   | 1,291    |   |
| 2014 -                2018                |   |   |   | 6,456    |   |

The company also maintains a          non-qualified supplemental executive retirement plan and          a non-qualified pharmacist deferred compensation plan for          certain of its associates. These plans are designed to          provide retirement benefits and salary deferral          opportunities because of limitations imposed by the          Internal Revenue Code and the Regulations implemented by          the Internal Revenue Service. These plans are unfunded          and accounted for on an accrual basis. Participants in          these plans are excluded from participation in the Profit          Sharing and Employee Stock Bonus plans. The Board of          Directors annually determines the amount of the          allocation to the plans at its sole discretion. The          allocation among the various plan participants is made in          relationship to their compensation, years of service and          job performance. Plan participants are 100% vested in          their accounts after six years of service with the          company. Benefits are distributed among participants upon          reaching the applicable retirement age. Substantial risk          of benefit forfeiture does exist for participants in          these plans. The present value of accumulated benefits          amounted to $5,617,000 and $7,484,000 at December 27,          2008 and December 29, 2007, respectively, and is included          in "Postretirement benefit obligations" in the          Consolidated Balance Sheets.

The company has no other          postretirement benefit plans.

**Note 7****Stock****Option Plan**The company has an incentive stock          option plan for officers and other key associates. Under          the terms of the plan, option exercise prices are 100% of          the "fair market value" of the shares on the date          granted. Options previously granted are immediately          exercisable and expire ten years after date of          grant.

Changes during the three years          ended December 27, 2008, in options outstanding under the          plan were as follows:

|                                      |   | **Weighted-Average**              |   | **Shares**                                             |   |
|-------------------------------------------|--------|-----------------------------------|--------|--------------------------------------------------------|--------|
|                                      |   | **Exercise                Price** |   | **Under                Option**                        |   |
| Balance, December                31, 2005 |   | $35.83                            |   | 92,150                                                 |   |
|      Exercised   |   | $33.53                            |   | (6,689                                                 | )      |
|      Expired     |   | $31.50                            |   |         (700   | )      |
| Balance, December                30, 2006 |   | $36.04                            |   |     84,761                         |   |
|      Exercised   |   | $34.97                            |   | (35,311                                                | )      |
|      Expired     |   | $32.88                            |   |         (700   | )      |
|      Forfeited   |   | $36.26                            |   |      (1,700                   | )      |
| Balance, December                29, 2007 |   | $36.88                            |   |     47,050                         |   |
|      Exercised   |        | $34.59                            |        | (3,450                                                 | )      |
|      Expired     |        | $34.31                            |        |         (1,100 | )      |
|      Forfeited   |   | $35.95                            |   |         (950   | )      |
| Balance, December                27, 2008 |        | $37.16                            |        |     41,550                         |        |

Exercise prices for options          outstanding as of December 27, 2008 ranged from $35.13 to          $37.94. The weighted-average remaining contractual life          of those options is two years. As of December 27, 2008,          all options are exercisable.

**Page 28 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 8 Income Taxes**    The provision (benefit) for income taxes consists    of:

| *(dollars in                thousands)* |   | **2008**                                   |   | **2007**                                                              |   | **2006**                                   |   |
|-----------------------------------------|--------|--------------------------------------------|--------|-----------------------------------------------------------------------|--------|--------------------------------------------|--------|
| Current:                                |   |                                       |   |                                                                  |   |                                       |   |
|    Federal               | $      | 17,017                                     | $      | 27,069                                                                | $      | 33,168                                     |   |
|    State                 |   | 2,155                                      |   | 952                                                                   |   | 2,672                                      |   |
| Deferred:                               |   |                                       |   |                                                                  |   |                                       |   |
|    Federal               |   | 6,843                                      |   | (1,218                                                                | )      | (4,758                                     | )      |
|    State                 |   |       (2,897 | )      |            (34 | )      |       (1,004 | )      |
|                                    | $      |      23,118       | $      |      26,769                                  | $      |      30,078       |   |

The reconciliation of income taxes          computed at the federal statutory rate (35% in 2008, 2007          and 2006) to the provision for income taxes          is:

| *(dollars in                thousands)*                                                                                              |   | **2008**                                                       |   | **2007**                                       |   | **2006**                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------------|--------|
| Income taxes at                federal statutory rate                                                                                | $      | 24,540                                                         | $      | 27,216                                         | $      | 30,131                                         |   |
| State income taxes,                net of federal income tax benefit                                                                 |   | (483                                                           | )      | 597                                            |   | 1,084                                          |   |
| Other                                                                                                                                |   |                        (939 | )      |                     (1,044 | )      |                     (1,137 | )      |
|    Provision for income taxes                (effective tax rate 33.0%, 34.4% and 34.9%,                respectively) | $      |     23,118                                 | $      |     26,769                 | $      |     30,078                 |   |

Cash paid for income taxes was          $42,018,000, $37,411,000 and $36,844,000 in 2008, 2007          and 2006, respectively.

The tax effects of temporary          differences that give rise to deferred tax assets and          deferred tax liabilities at December 27, 2008 and          December 29, 2007, are:

| *(dollars in                thousands)*                                           |   | **2008**                                                    |   |   | **2007**                                                                                |   |
|-----------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------|--------|
| Deferred tax                assets:                                               |   |                                                        |   |   |                                                                                    |   |
|    Accounts                receivable                              | $      | 133                                                         |   | $      | 147                                                                                     |   |
|    Compensated                absences                             |   | 484                                                         |   |   | 470                                                                                     |   |
|    Employee benefit                plans                           |   | 7,195                                                       |   |   | 7,332                                                                                   |   |
|    General liability                insurance                      |   | 1,503                                                       |   |   | 1,403                                                                                   |   |
|    Nondeductible accruals and                other                 |   |   ---                         |   |   | 92                                                                                      |   |
|    Postretirement benefit                obligations               |   |          5,195 |   |   |          5,876                             |        |
|    Net operating loss                carryforwards                 |   |          3,700 |   |   |           ---     |   |
|       Total                deferred tax assets      |   |        18,210            |   |   |        15,320                                        |   |
| Deferred tax                liabilities:                                          |   |                                                        |   |   |                                                                                    |   |
|    Inventories                                                     |   | (9,674                                                      | )      |   | (8,373                                                                                  | )      |
|    Unrealized gain on marketable                securities         |   | (3,235                                                      | )      |   | (5,205                                                                                  | )      |
|    Nondeductible accruals and                other                 |   | (426                                                        | )      |   | ---                                                                 |   |
|    Depreciation                                                    |   |       (25,232                 | )      |   |       (20,123                                             | )      |
|       Total                deferred tax liabilities |   |       (38,567                 | )      |   |       (33,701                                             | )      |
|    Net deferred tax                liability                       | $      |       (20,357                 | )      | $      |       (18,381                                             | )      |
| Current deferred                liability - net                                   | $      | (4,020                                                      | )      | $      | (4,134                                                                                  | )      |
| Noncurrent                deferred liability - net                                |   |       (16,337                 | )      |   |       (14,247                                             | )      |
|    Net deferred tax                liability                       | $      |       (20,357                 | )      | $      |       (18,381                                             | )      |

**Page 29 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 8 Income Taxes    (continued)**The company adopted FIN 48 on          December 31, 2006, the first day of the 2007 fiscal year,          and, as a result, recognized a $452,000 decrease to          opening retained earnings from the cumulative effect of          adoption. As of December 31, 2006, the total amount of          gross unrecognized tax benefits was $692,000.

The following table summarizes the          activity related to the company's unrecognized tax          benefits:

| *(dollars in                thousands)*                                                            |   | **2008**                                      |   | **2007**                                |   |
|----------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|-----------------------------------------|--------|
| Unrecognized tax                benefits at beginning of year                                      | $      | 678                                           | $      | 692                                     |   |
| Increases based on tax                  positions related to the current year                      |   | ---                                 |   | ---                           |   |
| Additions for tax                  positions of prior years                                        |   | 150                                           |   | 517                                     |   |
| Reductions for tax                  positions of prior years                                       |   | ---                                 |   | (66                                     | )      |
| Settlements                                                                                        |   | (28                                           | )      | (452                                    | )      |
| Expiration of the statute                  of limitations for assessment of                  taxes |   |      ---   |   |       (13 | )      |
| Unrecognized tax                benefits at end of year                                            | $      |      800             | $      |      678       |   |

All of the unrecognized tax          benefits, $800,000 for 2008 and $678,000 for 2007, would          impact the effective tax rate over time and if recognized          would reduce the effective tax rate. The company accrues          interest and penalties related to income tax matters as a          part of the provision for income taxes. The company had          $55,000, $40,000 and $189,000 of accrued interest and          penalties at December 27, 2008, December 29, 2007 and          December 31, 2006, respectively. Management anticipates          settlement for the majority of unrecognized tax benefits          within the next twelve months.

The IRS completed its examination          of the company's federal income tax returns for 2003 and          2004. The IRS proposed one tax deficiency to which the          company agreed. The company or one of its subsidiaries          files tax returns in various states. The tax years          subject to examination in Pennsylvania, where the          majority of the company's revenues are generated, are          2002 to 2008. Pennsylvania has informed the company that          an examination will occur in 2009 for the open tax          years.

**Note 9 Comprehensive        Income**

| *(dollars in                thousands)*                                                                                                                                                       |   | **2008**                                                                                |   | **2007**                                                                         |   | **2006**                                                   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|
| Net                income                                                                                                                                                                     | $      | 46,995                                                                                  | $      | 50,990                                                                           | $      | 56,010                                                     |   |
| Other comprehensive                income by component, net of tax:                                                                                                                           |   |                                                                                    |   |                                                                             |   |                                                       |   |
|    Unrealized holding (losses)                gains arising during period (Net of deferred taxes                of  $1,970, $892 and $1,447,                respectively) |   | (2,779                                                                                  | )      | 1,259                                                                            |   | 2,040                                                      |   |
|    Reclassification adjustment                for gains included in net income (Net of deferred                taxes of $0, $2 and $179, respectively)                         |   |                          ---     |   |              (4 | )      |          (252 | )      |
| Other                comprehensive (loss) income, net of tax                                                                                                                                  |   |       (2,779                                              | )      |        1,255                                  |   |        1,788            |        |
| Comprehensive                income, net of tax                                                                                                                                               | $      |      44,216                                                    | $      |      52,245                                             | $      |      57,798                       |   |

**Page 30 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Note 10 Summary of Quarterly Results    (Unaudited)**    Quarterly financial data for 2008 and 2007 are as    follows:

| *(dollars in                thousands,*             | **Thirteen Weeks                Ended** |
|-----------------------------------------------------|-----------------------------------------|
| *except per share                amounts)*          |                                    | **March 29,                2008** |   | **June 28,                2008** |   | **Sep. 27,                2008** |   | **Dec. 27,                2008** |
| Net                sales                            | $                                       | 595,666 | $ | 603,393 | $ | 603,894 | $ | 619,408 |
| Gross profit on                sales                |                                    | 152,722 |   | 158,084 |   | 156,362 |   | 159,789 |
| Net                income                           |                                    | 9,056 |   | 12,836 |   | 8,091 |   | 17,012 |
| Basic and diluted                earnings per share |                                    | .34 |   | .48 |   | .30 |   | .63 |

| *(dollars in                thousands,*             | **Thirteen Weeks                Ended** |
|-----------------------------------------------------|-----------------------------------------|
| *except per share                amounts)*          |                                    | **March 31,                2007** |   | **June 30,                2007** |   | **Sep. 29,                2007** |   | **Dec. 29,                2007** |
| Net                sales                            | $                                       | 571,795 | $ | 578,812 | $ | 564,966 | $ | 602,978 |
| Gross profit on                sales                |                                         | 151,541 |  | 154,211 |  | 147,694 |  | 148,681 |
| Net                income                           |                                         | 13,405 |  | 18,157 |  | 10,817 |  | 8,611 |
| Basic and diluted                earnings per share |                                         | .50 |  | .67 |  | .40 |  | .32 |

**Note 11 Fair Value          Information**The carrying amounts for cash,          accounts receivable and accounts payable approximate fair          value because of the short maturities of these          instruments. The fair values of the company's marketable          securities, as disclosed in Note 2, are based on quoted          market prices.

**Note 12          Contingencies**The company is involved in various          legal actions arising out of the normal course of          business. The company also accrues for tax contingencies          when it is probable that a liability to a taxing          authority has been incurred and the amount of the          contingency can be reasonably estimated, based on past          experience. In the opinion of management, the ultimate          disposition of these matters will not have a material          adverse effect on the company's consolidated financial          position, results of operations or liquidity.

 

******Report of Independent          Registered Public Accounting Firm**

The Board of Directors and          ShareholdersWeis Markets,          Inc.Sunbury, Pennsylvania

We have audited the accompanying          consolidated balance sheets of Weis Markets, Inc. and          subsidiaries as of December 27, 2008 and December 29,          2007, and the related consolidated statements of income,          shareholders' equity, and cash flows for the fiscal years          ended December 27, 2008, December 29, 2007 and December          30, 2006 (52 weeks, 52 weeks and 52 weeks,          respectively).  Our audits of the basic financial          statements included the financial statements schedule          listed in the index appearing under Item 15(a)(2). We          have also audited Weis Markets, Inc. and subsidiaries'          internal control over financial reporting as of December          27, 2008, based on criteria established in *Internal          Control—Integrated Framework* issued by the          Committee of Sponsoring Organizations of the Treadway          Commission (COSO).  Weis Market, Inc. and          subsidiaries' management is responsible for these          consolidated financial statements, for maintaining          effective internal control over financial reporting, and          for its assessment of the effectiveness of internal          control over financial reporting which is included in the          accompanying Management's Report on Internal Control over          Financial Reporting.  Our responsibility is to          express an opinion on these consolidated financial          statements and financial statement schedule and an          opinion on the effectiveness of Weis Markets, Inc. and          subsidiaries' internal control over financial reporting          based on our audits.

**Page 31 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Report of Independent          Registered Public Accounting Firm          (continued)**

We conducted our audits in          accordance with the standards of the Public Company          Accounting Oversight Board (United States). 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 and whether effective internal control over          financial reporting was maintained in all material          respects.  Our audits of the consolidated financial          statements included examining, on a test basis, evidence          supporting the amounts and disclosures in the          consolidated financial statements, assessing the          accounting principles used and significant estimates made          by management, and evaluating the overall consolidated          financial statement presentation. Our audit of internal          control over financial reporting included obtaining an          understanding of internal control over financial          reporting, assessing the risk that a material weakness          exists, and testing and evaluating the design and          operating effectiveness of internal control based on the          assessed risk. Our audits also included performing such          other procedures as we considered necessary in the          circumstances. We believe that our audits provide a          reasonable basis for our opinions.

A company's internal control over          financial reporting is a process designed to provide          reasonable assurance regarding the reliability of          financial reporting and the preparation of financial          statements for external purposes in accordance with          generally accepted accounting principles.  A          company's internal control over financial reporting          includes those policies and procedures that (1) pertain          to the maintenance of records that, in reasonable detail,          accurately and fairly reflect the transactions and          dispositions of the assets of the company; (2) provide          reasonable assurance that transactions are recorded as          necessary to permit preparation of financial statements          in accordance with generally accepted accounting          principles, and that receipts and expenditures of the          company are being made only in accordance with          authorizations of management and directors of the          company; and (3) provide reasonable assurance regarding          prevention or timely detection of unauthorized          acquisition, use, or disposition of the company's assets          that could have a material effect on the financial          statements.

Because of its inherent          limitations, internal control over financial reporting          may not prevent or detect misstatements.  Also,          projections of any evaluation of effectiveness to future          periods are subject to the risk that controls may become          inadequate because of changes in conditions, or that the          degree of compliance with the policies or procedures may          deteriorate.

In our opinion, the consolidated          financial statements referred to above present fairly, in          all material respects, the consolidated financial          position of Weis Markets, Inc. and subsidiaries as of          December 27, 2008 and December 29, 2007, and the          consolidated results of their operations and their cash          flows for the fiscal years ended December 27, 2008,          December 29, 2007 and December 30, 2006 (52 weeks,          52 weeks and 52 weeks, respectively) in conformity with          accounting principles generally accepted in the United          States of America.  Also, in our opinion, the          related financial statement schedule, when considered in          relation to the basic financial statements taken as a          whole, presents fairly, in all material respects, the          information set forth therein. Also, in our opinion, Weis          Markets, Inc. and subsidiaries maintained, in all          material respects, effective internal control over          financial reporting as of December 27, 2008, based on          criteria established in *Internal          Control—Integrated Framework* issued by the          Committee of Sponsoring Organizations of the Treadway          Commission.

/S/Grant Thornton          LLPPhiladelphia,          PennsylvaniaMarch 6, 2009

**Page 32 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Item    9.      Changes in and    Disagreements With Accountants on Accounting and Financial    Disclosure:**

None.

**Item 9a. Controls and    Procedures:**

**Management's Report on          Disclosure Controls and Procedures**

The Chief Executive Officer and          the Chief Financial Officer of the company (its principal          executive officer and principal financial officer,          respectively) have concluded, based on their evaluation          as of the close of the period covered by this Report,          that the company's disclosure controls and procedures are          effective to ensure that information required to be          disclosed by the company in the reports filed or          submitted by it under the Securities Exchange Act of          1934, as amended, is recorded, processed, summarized and          reported within the time periods specified in the SEC's          rules and forms, and include controls and procedures          designed to ensure that information required to be          disclosed by the company in such reports is accumulated          and communicated to the company's management, including          the Chief Executive Officer and Chief Financial Officer,          as appropriate to allow timely decisions regarding          required disclosure.

**Management's Report on Internal          Control Over Financial Reporting**

The management of the company is          responsible for establishing and maintaining adequate          internal control over financial reporting. The company's          internal control system was designed to provide          reasonable assurance to the company's management and          board of directors regarding the preparation and fair          presentation of published financial statements. In making          its assessment of internal control over financial          reporting, management used the criteria issued by the          Committee of Sponsoring Organizations of the Treadway          Commission (COSO) in Internal Control—Integrated          Framework. All internal control systems, no matter how          well designed, have inherent limitations. Therefore, even          those systems determined to be effective can provide only          reasonable assurance with respect to financial statement          preparation and presentation.

With the participation of the Chief Executive    Officer and the Chief Financial Officer, management concluded    that the company's internal control over financial reporting    was effective as of December 27, 2008.

The effectiveness of the Company's          internal control over financial reporting as of the          fiscal year end, has been audited by Grant Thornton LLP,          an independent registered public accounting firm, as          stated in their report, which can be found in Item 8 of          this Form 10-K.

**Changes in Internal Control          over Financial Reporting**

There were no changes in the          company's internal control over financial reporting          during the fiscal quarter ended December 27, 2008, that          materially affected, or are reasonably likely to          materially affect, the company's internal control over          financial reporting.

**Item    9b.     Other    Information:**

There was no information required on Form 8-K    during this quarter that was not reported.

**Page 33 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**PART    III**

**Item    10.      Directors, Executive    Officers and Corporate Governance:**

"Election of Directors" on pages 3          and 4, "Board Committees and Meeting Attendance, Audit          Committee" on pages 4 and 5, "Corporate Governance          Matters" on pages 5 and 6, "Compensation Tables" on pages          9 and 10 and "Stock Ownership, Section 16(a) Beneficial          Ownership Reporting Compliance" on page 17 of the Weis          Markets, Inc. definitive proxy statement dated March 12,          2009 are incorporated herein by          reference.

**Item    11.      Executive    Compensation:**

"Board Committees and Meeting          Attendance, Compensation Committee" on page 5, "Executive          Compensation, Compensation Discussion and Analysis" on          pages 6 through 9, "Compensation Committee Report" on          page 9, "Compensation Tables" on pages 9 through 13 and          "Other Information Concerning the Board of Directors,          Compensation Committee Interlocks and Insider          Participation" on page 14 of the Weis Markets, Inc.          definitive proxy statement dated March 12, 2009 are          incorporated herein by reference.

**Item    12.     Security Ownership of    Certain Beneficial Owners and Management and Related    Stockholder Matters:**

"Stock Ownership" on pages 15 through          17 of the Weis Markets, Inc. definitive proxy statement          dated March 12, 2009 is incorporated herein by reference.          Equity compensation plan information is included in Part          II, Item 8, "Note 7 Stock Option Plan" on page 28 of this          annual report on Form 10-K.

**Item    13.     Certain Relationships and    Related Transactions, and Director Independence:**

"Other Information Concerning the          Board of Directors, Review and Approval of Related Party          Transactions" on page 14 and "Independence of          Directors" on page 4 of the Weis Markets, Inc. definitive          proxy statement dated March 12, 2009 are incorporated          herein by reference.

**Item 14.               Principal Accountant Fees          and Services:**

"Ratification Of Appointment Of          Independent Registered Public Accounting Firm" on page 17 of the Weis Markets, Inc. definitive proxy          statement dated March 12, 2009 is incorporated herein by          reference.

**Page 34 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**PART IV**

**Item    15.     Exhibits, Financial    Statement Schedules:**

(a)(1)  The company's 2008 Consolidated          Financial Statements and the Report of Independent          Registered Public Accounting Firms are included in Item 8          of Part II.

| Financial Statements | Page                                                                   |
|----------------------|------------------------------------------------------------------------|
|                 | Consolidated Balance Sheets                                            | 16 |
|                 | Consolidated Statements of                Income                       | 17 |
|                 | Consolidated Statements of Shareholders'                Equity         | 18 |
|                 | Consolidated Statements of Cash                Flows                   | 19 |
|                 | Notes to Consolidated Financial                Statements              | 20 |
|                 | Report of Independent Registered Public                Accounting Firm | 31 |

(a)(2)  Financial statement schedules    required to be filed by Item 8 of this form, and by Item    15(c)(3) below:                    Schedule    II - Valuation and Qualifying Accounts, page 36 ofthis annual report on Form          10-K

All other schedules for which provision is    made in the applicable accounting regulation of the Securities    and Exchange Commission are not required under the related    instructions or are inapplicable and therefore have been    omitted.

(a)(3)  A listing of exhibits filed    or incorporated by reference is as follows:

| **Exhibit                No.** | **Exhibits**                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3-A                            | Articles of                Incorporation, filed as exhibit 4.1 in Form S-8 on                September 13, 2002 and incorporated herein by                reference.                                                                                                                                                                                                                                                                           |
| 3-B                            | By-Laws, filed as                exhibit under Part IV, Item 14(c) in the annual                report on Form 10-K for the fiscal year ended                December 29, 2001 and incorporated herein by                reference.                                                                                                                                                                                                            |
| 10-A                           | Profit Sharing                Plan, filed as exhibit under Part IV, Item 15(c) in                the annual report on Form 10-K for the fiscal year                ended December 28, 2002 and incorporated herein by                reference.                                                                                                                                                                                                |
| 10-B                           | Stock Bonus Plan,                filed as exhibit under Part IV, Item 15(c) in the                annual report on Form 10-K for the fiscal year                ended December 28, 2002 and incorporated herein by                reference.                                                                                                                                                                                                   |
| 10-C                           | Supplemental                Employee Retirement Plan, filed as exhibit under                Part IV, Item 14(c) in annual report on Form 10-K                for the fiscal year ended December 29, 2001 and                incorporated herein by reference.                                                                                                                                                                                  |
| 10-D                           | Executive Employment                Agreement between the Company and Norman S. Rich,                President and Chief Executive Officer, signed on                March 23, 2006, commencing on January 1, 2006 and                continuing thereafter through December 31, 2008,                filed on Form 8-K March 24, 2006 and incorporated                herein by reference.                                                    |
| 10-E                           | Executive Employment                  Agreement between the Company and William R.                  Mills, Senior Vice President, Treasurer and Chief                  Financial Officer, signed on June 27, 2007,                  commencing on January 1, 2008 and continuing                  thereafter through December 31, 2010, filed on                  Form 8-K June 29, 2007 and incorporated herein                  byreference. |
| 10-F                           | Executive Benefits                Agreement between the Company and Robert F. Weis,                Chairman of the Board, signed on March 24, 2006,                commencing immediately and continuing thereafter                through December 31, 2023, filed on Form 8-K March                24, 2006 and incorporated herein by                reference.                                                                             |
| 10-G                           | Executive                Employment Agreement between the Company and David                J. Hepfinger, President and Chief Executive                Officer, signed on March 6, 2008, commencing on                March 1, 2008 and continuing thereafter through                February 28, 2010, filed on Form 8-K March 6, 2008                and incorporated herein by reference.                                                    |
| 21                             | Subsidiaries of                the Registrant, filed with this annual                  report on Form 10-K                                                                                                                                                                                                                                                                                                                                     |
| 23                             | Consent of Grant                Thornton LLP,filed with this annual                  report on Form 10-K                                                                                                                                                                                                                                                                                                                                       |
| 31.1                           | Rule 13a-14(a)                Certification - CEO,filed with this annual                  report on Form 10-K                                                                                                                                                                                                                                                                                                                                  |
| 31.2                           | Rule 13a-14(a)                Certification - CFO,filed with this annual                  report on Form 10-K                                                                                                                                                                                                                                                                                                                                  |
| 32                             | Certification Pursuant to                  18 U.S.C. Section 1350, filed with this annual                  report on Form 10-K                                                                                                                                                                                                                                                                                                                 |

The company will provide a copy of          any exhibit upon receipt of a written request for the          particular exhibit or exhibits desired. All requests          should be addressed to the company's principal executive          offices.

(b) The company files as          exhibits to this annual report on Form 10-K, those          exhibits listed in Item 15(a)(3) above.

**Page 35 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**Item    15(c)(3). Financial Statement Schedules**

**Schedule II - Valuation and Qualifying    Accounts:**

| **SCHEDULE II -                VALUATION AND QUALIFYING ACCOUNTS**                                      |
|---------------------------------------------------------------------------------------------------------|
| **WEIS MARKETS,                INC.**                                                                   |
| *(dollars in                thousands)*                                                                 |
| COL.                A                                                                                   |   | COL.                B |   | COL.                C |   | COL.                D |   | COL.                E |
|                                                                                                    |   |   |   | **Additions** |   |   |   |   |
|                                                                                                    |   | **Balance                at** |   | **Charged                to** |   | **Charged                to** |   |   |   | **Balance                at** |
|                                                                                                    |   | **Beginning** |   | **Costs                and** |   | **Accounts** |   | **Deductions** |   | **End                of** |
| **Description**                                                                                         |   | **of                Period** |   | **Expenses** |   | **Describe** |   | **Describe                (1)** |   | **Period** |
| Year ended                December 27, 2008:                                                            |   |   |   |   |   |   |   |   |   |   |
| Deducted from asset                accounts:                                                            |   |   |   |   |   |   |   |   |   |   |
| Allowance for                uncollectible accounts                                                     | $ | 1,147 | $ | 619 | $ | ---     | $ | 1,093 | $ | 673 |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Year ended                December 29, 2007:                                                            |   |   |   |   |   |   |   |   |   |   |
| Deducted from asset                accounts:                                                            |   |   |   |   |   |   |   |   |   |   |
| Allowance for                uncollectible accounts                                                     | $ | 1,122 | $ | 1,140 | $ | ---     | $ | 1,115 | $ | 1,147 |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Year ended                December 30, 2006:                                                            |   |   |   |   |   |   |   |   |   |   |
| Deducted from asset                accounts:                                                            |   |   |   |   |   |   |   |   |   |   |
| Allowance for                uncollectible accounts                                                     | $ | 1,229 | $ | 1,047 | $ | ---     | $ | 1,154 | $ | 1,122 |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |
| (1) Deductions are                uncollectible accounts written off, net of                recoveries. |

**Page 36 of 37 (Form    10-K)**

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**WEIS MARKETS,    INC.**

**SIGNATURES**

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

|                                                                                               |   | WEIS MARKETS,                INC.                    |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                               |   | (Registrant)                                         |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/David J.                Hepfinger                 |   |
|                                                                                               |   | David J.                Hepfinger                    |   |
|                                                                                               |   | President and Chief                Executive Officer |   |
|                                                                                               |   | and                Director                          |   |
|                                                                                               |   | (principal executive                officer)         |   |

Pursuant to the requirements of the    Securities Exchange Act of 1934, this report has been signed    below by the following persons on behalf of the Registrant and    in the capacities and on the dates indicated.

 

| Date         03/12/2009      |   | /S/Robert F.                Weis                     |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                               |   | Robert F.                Weis                        |   |
|                                                                                               |   | Chairman of the Board                of Directors    |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/Jonathan H.                Weis                   |   |
|                                                                                               |   | Jonathan H.                Weis                      |   |
|                                                                                               |   | Vice Chairman and                Secretary           |   |
|                                                                                               |   | and                Director                          |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009           |   | /S/David J.                Hepfinger                 |   |
|                                                                                               |   | David J.                Hepfinger                    |   |
|                                                                                               |   | President and Chief                Executive Officer |   |
|                                                                                               |   | and                Director                          |   |
|                                                                                               |   | (principal executive                officer)         |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/William R.                Mills                   |   |
|                                                                                               |   | William R.                Mills                      |   |
|                                                                                               |   | Senior Vice President,                Treasurer      |   |
|                                                                                               |   | and Chief Financial                Officer           |   |
|                                                                                               |   | and                Director                          |   |
|                                                                                               |   | (principal financial                officer)         |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/Matthew                Nimetz                     |   |
|                                                                                               |   | Matthew                Nimetz                        |   |
|                                                                                               |   | Director                                             |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/Richard E.                Shulman                 |   |
|                                                                                               |   | Richard E.                Shulman                    |   |
|                                                                                               |   | Director                                             |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/Steven C.                Smith                    |   |
|                                                                                               |   | Steven C.                Smith                       |   |
|                                                                                               |   | Director                                             |   |
|                                                                                               |   |                                                 |   |
| Date         03/12/2009      |   | /S/Scott F.                Frost                     |   |
|                                                                                               |   | Scott F.                Frost                        |   |
|                                                                                               |   | Controller and                Assistant Treasurer    |   |
|                                                                                               |   | (principal accounting                officer)        |   |

**Page 37 of 37 (Form    10-K)**