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                                  United States
                       SECURITIES 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 June 28, 2000

                                       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 1-3657

                             WINN-DIXIE STORES, INC.
             (Exact name of registrant as specified in its charter)

         Florida                                                59-0514290
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                              Identification No.)

 5050 Edgewood Court, Jacksonville, Florida                        32254-3699
(Address of  principal executive offices)                         (Zip Code)

                            Area Code (904) 783-5000
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class                   Name of each exchange on which registered
-------------------                   ------------------------------------------
Common Stock Par Value                         New York Stock Exchange
  $1.00 Per Share

Securities registered pursuant to Section 12(g) of the Act:
                                      None
                                (Title of class)

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of 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. [ ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant,  based upon the closing  sale price of common stock on June 28,
2000,   as  reported  on  the  New  York  Stock   Exchange   was   approximately
$1,155,565,928.  Shares of  common  stock  held by each  executive  officer  and
director and by principal  shareholders  filing  Schedules 13D and 13G have been
excluded in that such persons may be deemed to be affiliates.  The determination
of affiliate  status is not  necessarily  a conclusive  determination  for other
purposes.

     As of June 28,  2000,  registrant  had  outstanding  140,830,197  shares of
common stock.

DOCUMENTS  INCORPORATED  BY  REFERENCE:   Portions  of  the  registrant's  Proxy
Statement in respect to the 2000 Annual Meeting of Shareholders are incorporated
by reference in Part III hereof, as more specifically described herein.

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                                TABLE OF CONTENTS

                                                                          Page
                                                                         Number

PART I

Business...................................................................   1

Properties.................................................................   7

Legal Proceedings..........................................................   7

Submission of Matters to a Vote of Security Holders........................   7

Executive Officers of the Registrant.......................................   8

PART II

Market for the Registrant's Common Equity and Related Shareholder Matters..   9

Selected Financial Data....................................................   9

Management's Discussion and Analysis of Financial Condition
   and Results of Operations...............................................  10

Quantitative and Qualitative Disclosure about Market Risk..................  10

Financial Statements and Supplemental Data.................................  10

Changes in and Disagreements with Accountants on Accounting
   and Financial Disclosure................................................  10

PART III

The information required by Part III is hereby incorporated by
reference to Winn-Dixie Stores, Inc.'s definitive proxy statement
to be filed on or before August 25, 2000 in connection with its
Annual Meeting of Shareholders.............................................  10

PART IV

Exhibits, Financial Statement Schedules and Reports on Form 8-K............  11

Signatures.................................................................  15

<PAGE>




PART I

ITEM 1: BUSINESS

General

         Winn-Dixie Stores,  Inc., organized in Florida on December 26, 1928, is
a major  food  retailer  with  1,079  stores in  fourteen  states and the Bahama
Islands.  According to published  reports of sales at June 28, 2000, the Company
is one of the nation's largest supermarket retailers.

         All of the Company's  subsidiaries except Bahamas  Supermarkets Limited
are  wholly-owned.  Except  where  the  context  indicates  otherwise,  the term
"Company"  includes  Winn-Dixie  Stores,  Inc.  and  all  of  its  subsidiaries,
collectively.

         On May 27,  2000,  the Company  agreed to acquire  certain  supermarket
operations of Gooding's  Supermarkets,  Inc. in the Orlando,  Florida area.  The
operations consist of 9 supermarkets averaging 47,300 square feet. Completion of
the sale is subject to  governmental  approvals  and the  satisfaction  of other
customary conditions. This acquisition fits the Company's strategic direction of
seeking prime supermarket locations that offer potential for sales growth within
its core markets.

         On June 22,  2000,  the  Company  and The  Kroger  Co.  terminated  the
agreement for Kroger's acquisition of the Company's stores in Texas and Oklahoma
after  receiving  opposition  from the Federal  Trade  Commission.  Also,  after
reevaluation,  the Company believes there is opportunity to grow in this market.
The store base is modern with most of the stores  being new or  remodeled in the
last few years.

         Based  upon   information   monitored   by  the   Company's   operating
decision-makers  to manage the  business,  the Company has  determined  that its
operations are within one reportable segment. Accordingly, financial information
on industry  segments is omitted because,  apart from the principal  business of
operating  retail  self-service  food stores,  the Company has no other industry
segments.
                                       1
<PAGE>

ITEM 1: BUSINESS, continued

Store Formats and Business Strategy

         The  business  of the  Company  is the  operation  of a chain of retail
self-service food stores, which sell groceries,  meats, seafood,  fresh produce,
deli/bakery, pharmaceuticals and general merchandise items. The Company's stores
offer broad lines of merchandise,  including  nationally  advertised and private
label brands and unbranded merchandise (principally meats, seafood and produce),
and  generally  operate  on the basis of  competitive  pricing.  Food items sold
include dry groceries,  dairy products, baked goods, meats, poultry, fish, fresh
fruit, vegetables, frozen foods and other items commonly marketed by retail food
stores.  The Company's stores also sell many general  merchandise items, such as
magazines,  soaps, paper products,  health and cosmetic  products,  hardware and
numerous small household  items.  Many locations also offer  departments such as
pharmacies, photo labs, dry cleaners as well as in-store banks that are operated
by independent third parties who rent space from the Company.  Services provided
by the Company such as check cashing,  money  transfers,  bill  payments,  money
orders and lottery tickets are incidental to the total business.

         In  addition,  the Company is in the process of piloting a liquor store
and two fuel centers.  Based on the operating  results of these test  locations,
the Company will determine  whether future  investments in these areas should be
made.

Store locations by state and by format:


                                                              City Meat
 State             Total   Winn-Dixie  Marketplace  Thriftway  Markets  Buddies
----------------  ------- ------------ ----------- ----------- -------- --------
Florida             429        66          363          -         -        -
North Carolina      114        56           58          -         -        -
Alabama             105        34           71          -         -        -
Georgia              94        14           80          -         -        -
Louisiana            75        17           58          -         -        -
Texas                69        14           54          -         -        1
South Carolina       63        25           38          -         -        -
Kentucky             40         6           29          5         -        -
Virginia             29        11           18          -         -        -
Ohio                 17         -            -         17         -        -
Mississippi          14         5            9          -         -        -
Tennessee            12         4            8          -         -        -
Bahamas              12         3            -          -         9        -
Oklahoma              5         4            1          -         -        -
Indiana               1         -            1          -         -        -
                  ------- ------------ ----------- ----------- -------- --------
                  1,079       259          788         22         9        1
                  ======= ============ =========== =========== ======== ========

                                       2
<PAGE>

ITEM 1: BUSINESS, continued

Support and Other Services

         The following  table shows the locations of the Company's  distribution
centers and its  manufacturing  and processing  plants, as well as the principal
products produced in the plants:

LOCATION                          FACILITIES
------------------------------------------------------------------------------

ALABAMA   Montgomery          Distribution center; Plants: milk bottling and
-------                       frozen pizza

FLORIDA   Jacksonville        Two distribution centers and a general merchandise
-------                       distribution center; Plant: coffee, tea and spices

          Madison             Plant: meat processing
          Miami               Distribution center;  Plant:  milk bottling
          Orlando             Distribution center
          Bartow              Plant: egg processing
          Plant City          Plants: ice cream and milk bottling
          Pompano             Distribution center
          Sarasota            Distribution center

GEORGIA   Atlanta             Distribution center
-------
          Fitzgerald          Plants: jams, jellies, mayonnaise, salad dressing,
                              peanut butter and condiments; canned and bottled
                              carbonated beverages
          Gainesville         Plants: margarine; natural cheese cutting and
                              wrapping, processed cheese and pimento cheese
          Valdosta            Plants:  crackers and cookies; and snacks

KENTUCKY  Louisville          Distribution center
--------

LOUISIANA New Orleans         Distribution center
--------- Hammond             Distribution center; Plant:  milk bottling

NORTH
CAROLINA  Charlotte           Distribution center
--------
          Raleigh             Distribution center
          High Point          Plants: milk bottling and cultured products

SOUTH
CAROLINA  Greenville          General merchandise distribution center;
--------                      Plants: ice cream and milk bottling

TEXAS     Ft. Worth           Distribution center and a general merchandise
-----                         distribution center;  Plant: milk bottling

BAHAMAS   Nassau              Distribution center
-------
                                       3

<PAGE>


ITEM 1: BUSINESS, continued

         An insignificant  portion of the products produced by the manufacturing
plants is sold to others.  The  Company  believes  that the sources of supply of
these  products and raw  materials  used in  manufacturing  are adequate for its
needs and that the  Company is not  dependent  upon a single or  relatively  few
suppliers.

         The Company has not  publicly  announced,  or  otherwise  made  public,
information  about any new product or industry  segment  that would  require the
investment of a material  amount of the assets of the Company or which otherwise
is material.

         Sources of available  raw  materials are factors that do not affect the
Company  in any  different  manner  than they  affect  other  manufacturers  and
processors of the goods identified.

         Patents  and  trademarks  owned  by the  Company  are  not of  material
importance to its operations.

         Seasonality  does not  materially  affect the  business of the Company.
However,  due to the  influx of winter  residents  to the  Sunbelt,  Florida  in
particular,  and  increased  purchases  of food items for the  Thanksgiving  and
Christmas holiday seasons,  there is a seasonal sales increase during the period
of November - April each fiscal year.

         The Company and other food  retailers have no unusual  working  capital
requirements.

         The  business  of the Company is not  dependent  upon a single or a few
customers. The Company does not sell goods or services in an amount which equals
10 percent or more of the Company's consolidated sales to any single customer or
group of customers under common control or to any affiliated group of customers.

         Backlog ordering is not a factor in the business of the Company.

         No portion of the business of the Company is subject to  renegotiations
of profits or  termination of contracts or  subcontracts  at the election of any
government.

Marketing and Competition

         In all areas in which the  Company  operates,  the  business  is highly
competitive  with  local  and  national  food  chain  stores,  as  well  as with
independent  stores  and  markets.  Many  factors  enter  into the  competition,
including price, quality of goods and services, product mix and convenience.

                                       4
<PAGE>


ITEM 1: BUSINESS, continued

         The retail food industry is extremely competitive.  Each operating area
faces somewhat different competitive  conditions.  The major competitors for our
operating  areas  are  A&P,   Albertson's,   Bi-Lo,   Bruno,   H.E.  Butt,  Cub,
Delchamp/Jitney  Jungle,  Food  Lion/Kash  N  Karry,  Hannaford,  Harris-Teeter,
Ingles,  Kroger,  Meijers,  Minyards,  Publix,   Randall's/Tom  Thumb,  Safeway,
Sedano's, Super K, Super Value, Wal-Mart Supercenter, U-Krops and U-Save.

         Additionally,  local chains and wholesaler-supported  independents are
well represented in all regions.

         Winn-Dixie is considered a major competitor in all geographic areas in
which it competes.

         In fiscal 2000,  the Company  entered into an agreement  with Priceline
Webhouse Club to offer online shopping through the Priceline.com  website.  When
customers log onto  www.priceline.com  before making a trip to their  Winn-Dixie
store, they can select their order and the price they want to pay. Once price is
accepted and confirmed,  customers pick up their grocery purchases at a time and
day convenient to them.

         The  Company  did not  spend a  material  amount  on  Company-sponsored
research and development activities relating to the development of new products,
services or techniques,  or the  improvement of existing  products,  services or
techniques during any of the years in the three-year period ended June 28, 2000.

Government Regulation

         The  Company's  compliance  with  federal,  state and local  provisions
regulating  the  discharge  of  materials  into the  environment,  or  otherwise
relating to the protection of the  environment  has not had, and is not expected
to have, a material effect on its capital expenditures,  earnings or competitive
position.

Associates

         At the end of fiscal 2000, the Company had 53,000  full-time and 67,000
part-time associates. None of the 120,000 associates are covered by a collective
bargaining agreement.

Bahamas

         All sales of the Company are to customers  within the United States and
the Bahama Islands.  The Company exports an insignificant  amount of merchandise
to its  subsidiary  in the  Bahamas,  which  operates  12 retail  food stores as
outlined above.
                                       5
<PAGE>

ITEM 1: BUSINESS, continued

Management Actions

         On April 20,  2000,  the  Company  announced a major  restructuring  to
improve the support of the retail stores and the Company's  overall  efficiency.
In addition,  the Company's competitive position should improve with its ability
to focus on future  growth.  These changes are necessary to provide an effective
infrastructure to train and support  operations  management teams,  resulting in
more  efficient  operations  and in better  serving  the needs of the  Company's
customers.  The Company believes  implementation of the restructuring  plan will
help  insure  continued  growth and  improved  performance  for the  Company and
increased value for shareholders.

         The restructuring plan includes the actions listed below that have been
or will be  implemented.  The plan  includes  certain  exit  costs and  employee
termination  benefits that will be incurred  within one year from the commitment
date.

Action                                                               Status
--------------------------------------------------------------------------------
Executive management reduction and realignment.................... Completed
Division management reduction and realignment..................... Completed
Consolidation of division offices eliminating three division
   offices - Tampa, Atlanta, and Midwest.......................... Completed
Closing of one warehouse facility- Tampa.......................... Completed
Closing of two manufacturing facilities - Detergent and Bag Plants Completed
Centralization of procurement, marketing and merchandising........ Completed
Eliminating approximately 11,000 positions........................ Completed
Closing of 116 unprofitable stores................................ Completed,
                                                                   except for 5
                                                                   stores being
                                                                   further
                                                                   evaluated
Retrofitting approximately 650 stores to improve efficiency
   and customer service........................................... In progress

         As a result of the  restructuring,  the  Company  will record a pre-tax
charge  of  approximately  $540  million  ($345  million  after tax or $2.37 per
diluted  share).  The Company has  recorded  approximately  $396  million of the
pre-tax charge ($256 million after tax or $1.76 per diluted share) in the fourth
quarter of fiscal 2000 and will record the balance in fiscal  2001.  The Company
expects a reduction  in expenses of  approximately  $400  million per year ($246
million after tax or $1.69 per diluted share)  approximately  one year following
completion of the restructuring.

         In addition to the  restructuring  charge,  an additional  $8.9 million
($5.5  million  after tax) was  charged to cost of sales due to the write off of
inventories  in stores  and  manufacturing  plants  that  closed as part of the
restructuring plan.

         On April 19, 2000, the Board of Directors authorized the repurchase, in
either open market or private  transactions,  of up to ten million shares of the
outstanding  common  stock in  addition  to the  five-million  share  repurchase
program  announced on October 6, 1999. From that date through June 28, 2000, the
Company has  repurchased  7,858,000  shares having an aggregate  value of $162.1
million or $20.62 per share.
                                        6
<PAGE>
ITEM 2: PROPERTIES

Stores

         All of the  retail  stores  operated  by the  Company  are on  premises
occupied on a rental basis.  See "Note 9 of the Notes to Consolidated  Financial
Statements," page F-25, included herein.

Support Properties

         The warehousing  and  distribution  centers,  with the exception of the
facilities in Kentucky and Texas, are rented under leases due to expire within 3
to 22 years.  All of these  contain  renewal  options,  which vary from lease to
lease.

            The expansion and  refurbishment  of the corporate  headquarters  in
Jacksonville, Florida is now complete.

         A  new   distribution   center  and  retail  support  center  is  under
construction in Jacksonville,  Florida with an expected completion in late 2000.
The existing Jacksonville  (Commonwealth)  distribution center will be converted
to a general merchandise distribution center.

         The  Company  has  completed  building a new frozen  food  freezer  and
converted  the old freezer  into a  perishable  food cooler at the  distribution
center in Charlotte, North Carolina.

         The Company's  Valdosta cracker and cookie,  and snacks bakeries;  Fort
Worth dairy plant;  Madison meat processing plant; Plant City ice cream and milk
bottling plants; Miami reclaim center; and Gainesville  oleomargarine and cheese
processing  and  packaging  plants  are owned in fee.  All  other  manufacturing
facilities are leased.

         All of the above support  properties  are considered to be in excellent
condition.

ITEM 3:         LEGAL PROCEEDINGS

         See Note 11(d) of the Notes to Consolidated Financial Statements,  page
F-28 included herein,  regarding various claims and lawsuits pending against the
Company.

ITEM 4:         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters  submitted to a vote of security  holders  during
the quarter ended June 28, 2000.

                                       7
<PAGE>


Executive Officers of the Registrant

         Set  forth  below  is  certain  information  concerning  the  executive
officers of the Company as of June 28, 2000:
<TABLE>
<CAPTION>
                                                                                   YEAR                YEAR FIRST
                          AGE IN                                                APPOINTED               EMPLOYED
                         YEARS AT                                               TO CURRENT                 BY
NAME                      06-28-00              OFFICE HELD                       POSITION             WINN-DIXIE
----                   -------------            -----------                   ---------------          ----------

<S>                         <C>         <C>                                        <C>                     <C>
A. Dano Davis               55          Chairman of the Board                      1988                    1968

A. R.  Rowland              56          President and                              1999                    1999
(elected November, 1999)                  Chief Executive Officer

D. G. Lafever               51          Senior Vice President and                  2000                    1966
                                          Director of Operations

R. P. McCook                47          Senior Vice President and                  1984                    1984
                                          Chief Financial Officer

J. R. Sheehan               42          Senior Vice President and                  2000                    2000
                                          Director of Sales and Procurement

A. B. Toscano               38          Senior Vice President and                  2000                    2000
                                          Director of Human Resources

E. E. Zahra, Jr.            53          Senior Vice President and                  1995                    1995
                                          General Counsel

D. M. Byrum                 47          Vice President, Corporate Controller       2000                    1972
                                          and Chief Accounting Officer

K. D. Ross                  31          Vice President, Strategic Planning         2000                    2000
                                          and Treasurer

Division Presidents:
J. D. Fitzgerald            50          Vice President                             1998                    1970
M. J. Istre                 49          Vice President                             1999                    1969
R. C. Lunn, Jr.             48          Vice President                             1997                    1969
D. J. Richardson            50          Vice President                             2000                    1966
M. A. Sellers               46          Vice President                             1997                    1973
H. M. Solana, Jr.           45          Vice President                             1999                    1971
D. A. Weaver                44          Vice President                             2000                    1972

The following executive officers retired at the end of the fiscal year:
D. H. Bragin                56          Treasurer                                  1985                    1961
H. E. Hess                  60          Senior Vice President                      1988                    1958
R. A. Sevin                 57          Senior Vice President                      1997                    1961
C. E. Winge                 55          Senior Vice President                      1988                    1963
L. J. Sadlowski             59          Vice President                             1983                    1961
J. A.  Schlosser            51          Vice President                             1997                    1967
J. T. White                 52          Vice President                             1999                    1968

                                       8
</TABLE>

<PAGE>
Executive Officers of the Registrant, continued

     All of the officers listed as executive  officers of the  registrant,  with
the exception of Mr. Allen Rowland, Mr. John Sheehan, Mr. August Toscano and Ms.
Kellie  Ross,  have been  employed  for the past five  years in either  the same
capacity as listed,  or in a position with the Company  which was  consistent in
occupation with the present assignment.

         Prior to becoming  President and Chief Executive  Officer,  Mr. Rowland
was  President and Chief  Operating  Officer of Smith's Food & Drug Centers from
1996 to 1997 and, prior to that, was a Senior Vice President with Albertson's.

         Senior  Vice  President  and  Director  of Sales and  Procurement,  Mr.
Sheehan was Executive Vice President of Pathmark  Stores,  Inc.,  Carteret,  New
Jersey  from 1997 to 2000.  For the 16 years  preceding  1997,  Mr.  Sheehan was
employed at  Albertson's,  most  recently as  Director of  Operations,  Southern
California Division.

Senior Vice  President  and Director of Human  Resources,  Mr.  Toscano was Vice
President, Human Resources of Burger King Corporation,  Miami, Florida from 1999
to 2000. From 1998 to 1999, Mr. Toscano was  International  Human Resources Vice
President,  Citibank, Fort Lauderdale,  Florida. Mr. Toscano was Senior Director
of Human Resources for Tricon Global Restaurants from 1994 to 1998.

Vice President,  Strategic Planning and Treasurer, Ms. Ross was Audit Manager of
Arthur Andersen LLP, Jacksonville, Florida from 1999 to 2000. From 1997 to 1999,
Ms. Ross was Corporate Controller for Armor Holding, Inc. Ms. Ross was Assistant
Controller for PSS World Medical, Inc. from 1995 to 1997.

         Officers are elected annually by the Board of Directors and serve for a
one-year period or until their successors are elected.

                                               PART II

ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
        MATTERS

         The principal  market on which the Company's  common stock is traded is
the New York  Stock  Exchange.  The number of record  holders  of the  Company's
common stock as of June 28, 2000 was 45,668.

         Information  required  by this  Item  concerning  sales  prices  of the
Company's  common stock and the frequency and amount of dividends is in "Note 14
of the  Notes to  Consolidated  Financial  Statements,"  on page  F-30  included
herein.

ITEM  6: SELECTED FINANCIAL DATA

         The information required by this Item is on page F-1 included herein.

                                       9
<PAGE>


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

         The information required by this Item is on page F-3 included herein.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The  Company  does  not have  any  material  exposure  to  market  risk
associated with activities in derivative financial instruments,  other financial
instruments and derivative commodity instruments.

ITEM  8: FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

         Financial  statements and supplemental data are set forth in the "Index
to Consolidated  Financial  Statements,  Supporting  Schedules and  Supplemental
Data" on page 17 included herein.


ITEM  9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         There have been no disagreements on accounting and financial disclosure
between  the  Company and its  auditors  within the 24 months  prior to June 28,
2000.

                                    PART III

ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11: EXECUTIVE COMPENSATION

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The  information  required  by these  Items is  incorporated  herein by
reference to the Company's  definitive proxy statement to be filed in connection
with its 2000 Annual Meeting of Shareholders.

                                       10
<PAGE>


                                     PART IV

ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)    Financial Statements and Financial Statement Schedules:

                (1)      Financial Statements:

                         See  "Index  to  Consolidated   Financial   Statements,
                         Supporting  Schedules and Supplemental Data" on page 17
                         included herein.

                (2)      Financial Statement Schedules:

                         See  "Index  to  Consolidated   Financial   Statements,
                         Supporting  Schedules and Supplemental Data" on page 17
                         included herein.

                (3)      Exhibits:

                         Certain of the following exhibits which have heretofore
                         been filed with the Securities and Exchange  Commission
                         under  the  Securities  Act of 1933  or the  Securities
                         Exchange Act of 1934 and which are  designated in prior
                         filings  as noted  below,  are hereby  incorporated  by
                         reference and made a part hereof:

                                       11
<PAGE>


ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K,
         continued
<TABLE>
<CAPTION>

Exhibit
Number                  Description of Exhibit                  Incorporated by Reference From

<S>            <C>                                              <C>
3.1            Restated  Articles  of  Incorporation  as        Previously     filed    as    Exhibit    3.1    to
               filed  with  the  Secretary  of  State of        Form 10-K for the year ended June 30, 1993,  which
               Florida.                                         Exhibit is herein incorporated by reference.

3.1.1          Amendment  adopted  October 7,  1992,  to        Previously  filed as  Exhibit  3.1.1 to Form  10-K
               Restated Articles of Incorporation.              for the year ended June 30,  1993,  which  Exhibit
                                                                is herein incorporated by reference.

3.1.2          Amendment  adopted  October 5,  1994,  to        Previously  filed as  Exhibit  3.1.2 to Form  10-Q
               Restated Articles of Incorporation.              for the quarter  ended  January 11,  1995,  which
                                                                Exhibit is herein incorporated by reference.

3.1.3          Amendment  adopted  October 1,  1997,  to        Previously  filed as  Exhibit  3.1.3 to Form  10-Q
               Restated Articles of Incorporation.              for the quarter ended  September  17, 1997,  which
                                                                Exhibit is herein incorporated by reference.

3.2            Restated  By-Laws  of the  Registrant  as
               amended through June 15, 2000.

9.1            Agreement  of   Shareholders  of  D.D.I.,        Previously  filed  as  Exhibit  9.1 to  Form  10-K
               Inc. (formerly Vadis  Investments,  Inc.)        for the year ended June 30,  1993,  which  Exhibit
               dated April 19, 1989.                            is herein incorporated by reference.

10.1           Annual  Officer  Incentive   Compensation        Previously  filed as Exhibit 10.1 to Form 10-Q for
               Plan, effective   June 15, 1998.                 the  quarter  ended  September  16,  1998,   which
                                                                Exhibit is herein incorporated by reference.
</TABLE>

                                       12

<PAGE>


ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K,
         continued
<TABLE>
<CAPTION>

Exhibit
Number                  Description of Exhibit                 Incorporated by Reference From

<S>            <C>                                             <C>
10.2           Long-term Officer Incentive  Compensation       Previously  filed as Exhibit 10.3 to Form 10-K for
               Plan as amended, effective June 27, 1991.       the year ended  June 30,  1993,  which  Exhibit is
                                                               herein incorporated by reference.

10.2.1         Restricted   Stock   Plan,   as   amended       Previously  filed as  Exhibit  10.2.1 to Form 10-Q
               effective August 2, 1999.                       for the quarter ended  September 22,  1999,  which
                                                               Exhibit is herein incorporated by reference.

10.2.2         Performance-Based  Restricted  Stock Plan       Previously  filed as  Exhibit  10.2.2 to Form 10-Q
               as amended effective August 2, 1999.            for the quarter ended  September  22, 1999,  which
                                                               Exhibit is herein incorporated by reference.

10.2.3         Amendment   to   the    Performance-Based
               Restricted  Stock Plan effective  January
               26, 2000.

10.3           Key    Employee    Stock    Option   Plan       Previously  filed as Exhibit 10.3 to Form 10-Q for
               effective  January  24,  1990 as  amended       the  quarter  ended  September  22,  1999,   which
               effective August 2, 1999.                       Exhibit is herein incorporated by reference.

10.4           Supplemental  Retirement  Plan dated July
               1, 1994,  as amended  effective  June 15,
               2000.

10.5           Management  Security  Plan as amended and       Previously  filed as Exhibit 10.5 to Form 10-K for
               restated effective June 30, 1982.               the year ended  June 26,  1996,  which  Exhibit is
                                                               herein incorporated by reference.

10.5.1         Amendment   effective  May  1,  1992,  to       Previously  filed as  Exhibit  10.5.1 to Form 10-K
               Management Security Plan.                       for the year ended June 26,  1996,  which  Exhibit
                                                               is herein incorporated by reference.

</TABLE>

                                       13

<PAGE>


ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K,
         continued
<TABLE>
<CAPTION>

Exhibit
Number                   Description of Exhibit                          Incorporated by Reference From

<S>             <C>                                            <C>
10.6            Senior  Corporate  Officer's  Management       Previously  filed as Exhibit 10.6 to Form 10-K for
                Security  Plan as amended  and  restated       the year ended  June 26,  1996,  which  Exhibit is
                effective June 30, 1982.                       herein incorporated by reference.

10.6.1          Amendment  effective  May  1,  1992,  to       Previously  filed as  Exhibit  10.6.1 to Form 10-K
                Senior  Corporate  Officer's  Management       for the year ended June 26,  1996,  which  Exhibit
                Security Plan.                                 is herein incorporated by reference.

21.1            Subsidiaries of Winn-Dixie Stores, Inc.

23.1            Consent of KPMG LLP.
</TABLE>


(b) Reports on Form 8-K:

               There  were no reports  on Form 8-K filed for the  quarter  ended
June 28, 2000.

                                       14
<PAGE>


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.


                                                        WINN-DIXIE STORES, INC.

                                             By      /S/   A. DANO DAVIS
                                                        -----------------------
                                                        A. Dano Davis, Chairman


                                             Date           August 9, 2000
                                                        ------------------------


         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.


/S/  A. DANO DAVIS            Chairman and Director              August 9, 2000
    ---------------
    (A. Dano Davis)


/S/  ALLEN R. ROWLAND         President and Director             August 9, 2000
    ------------------        (Chief Executive Officer)
    (Allen R. Rowland)


/S/  RICHARD P. MCCOOK        Senior Vice President              August 9, 2000
    -------------------       (Chief Financial Officer)
    (Richard P. McCook)

/S/  D. MICHAEL BYRUM         Corporate Controller               August 9, 2000
    ------------------        (Chief Accounting Officer)
    (D. Michael Byrum)

/S/  ROBERT D. DAVIS          Director                           August 9, 2000
    -----------------
    (Robert D. Davis)

                                      15

<PAGE>


SIGNATURES, continued


/S/ T. WAYNE DAVIS            Director                           August 9, 2000
   ----------------
   (T. Wayne Davis)


/S/ RADFORD D. LOVETT         Director                           August 9, 2000
   -------------------
   (Radford D. Lovett)


/S/ CHARLES P. STEPHENS       Director                           August 9, 2000
   ---------------------
   (Charles P. Stephens)


/S/  ARMANDO M. CODINA        Director                           August 9, 2000
    -------------------
    (Armando M. Codina)

/S/   CARLETON T. RIDER       Director                           August 9, 2000
     -------------------
     (Carleton T. Rider)


/S/    JULIA B. NORTH         Director                           August 9, 2000
      ----------------
      (Julia B. North)

                                       16


<PAGE>


                    WINN-DIXIE STORES, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS,
                   SUPPORTING SCHEDULES AND SUPPLEMENTAL DATA



Selected Financial Data                                                   F-1

Management's Discussion and Analysis of Financial Condition and Results
   of operations                                                          F-3

Consolidated Financial Statements and Supplemental Data:

         Report of Management                                             F-8

         Independent Auditors' Report                                     F-9

         Consolidated Statements of Operations, Years ended
           June 28, 2000, June 30, 1999 and June 24, 1998                F-10

         Consolidated Balance Sheets, June 28, 2000 and June 30, 1999    F-11

         Consolidated Statements of Cash Flows, Years ended
           June 28, 2000, June 30, 1999 and June 24, 1998                F-12

         Consolidated Statements of Shareholders' Equity, Years ended
           June 28, 2000, June 30, 1999 and June 24, 1998                F-13

         Notes to Consolidated Financial Statements                      F-14

Financial Statement Schedules:

         Independent Auditors' Report on Financial Statement Schedule     S-1

         II       Consolidated Valuation and Qualifying Accounts, Years
                  ended June 28, 2000, June 30, 1999 and June 24, 1998    S-2


All other  schedules  are omitted  either  because  they are not  applicable  or
because  information  required  therein is shown in the Financial  Statements or
Notes thereto.

                                       17
<PAGE>



<TABLE>
<CAPTION>


                                              SELECTED FINANCIAL DATA
                                                                   2000       1999*      1998       1997      1996
                                                                   ----       ----       ----       ----      ----
Sales                                                               Dollars in millions except per share data
<S>                                                          <C>            <C>        <C>        <C>       <C>
   Net sales...........................................      $   13,698     14,137     13,617     13,219    12,955
   Percent (decrease) increase.........................            (3.1)       3.8        3.0        2.0       9.9
   Average annual sales per store......................      $     11.6       11.9       11.7       11.3      11.0
Earnings Summary
   Gross profit........................................      $    3,640      3,801      3,624      3,316     3,093
     Percent of sales..................................            26.6       26.9       26.6       25.1      23.9
   LIFO charge (credit)................................      $       15          4        (12)         3        10
   Operating and administrative expenses...............      $    3,609      3,594      3,375      3,094     2,803
     Percent of sales..................................            26.4       25.4       24.8       23.4      21.6
   Restructuring and other non-recurring charges.......      $      396          -         18          -         -
     Percent of sales..................................             2.9          -         .1          -         -
   Company owned life insurance (COLI) tax case (after tax)  $       42          -          -          -         -
     Percent of sales..................................              .3          -          -          -         -
   Net (loss) earnings.................................      $     (229)       182        199        204       256
     Basic (loss) earnings per share...................      $    (1.57)      1.23       1.34       1.36      1.69
     Diluted (loss) earnings per share.................      $    (1.57)      1.23       1.33       1.36      1.68
     Percent of net (loss) earnings to sales...........            (1.7)       1.3        1.5        1.5       2.0
     Percent of net (loss) earnings to average equity..           (20.1)      13.1       14.7       15.3      19.9
   Net earnings excluding COLI, restructuring and
       other non-recurring charges.....................      $       75        182        210        204       256
     Basic earnings per share..........................      $      .52       1.23       1.41       1.36      1.69
     Diluted earnings per share........................      $      .52       1.23       1.41       1.36      1.68
     Percent of net earnings to sales..................              .5        1.3        1.5        1.5       2.0
     Percent of net earnings to average equity.........             6.6       13.1       15.5       15.3      19.9
EBITDA ...............................................       $      1.3      618.5      676.7      632.8     656.9
EBITDAR  .............................................       $    325.8      961.4      985.9      911.6     914.9
EBITDA excluding restructuring and
     non-recurring charges.............................      $    397.4      618.5      694.8      632.8     656.9
EBITDAR excluding restructuring and
     non-recurring charges.............................      $    721.9      961.4    1,004.0      911.6     914.9
Dividends
   Dividends paid......................................      $    149.0      151.2      150.9      144.2     134.0
   Percent of net (loss) earnings......................           (65.1)      82.9       76.0       70.5      52.4
   Per share (present rate $1.02)......................      $     1.02       1.02       1.02        .96      .885
Common Stock (WIN)
   Total shares outstanding (000,000)..................           140.8      148.6      148.5      148.9     151.7
     NYSE - Common stock price range - High............      $    41.94      52.19      59.25      42.38     38.38
                                     - Low                   $    14.25      28.63      33.69      29.88     28.06
Financial Data
   Cash flow information:
     Net cash provided by operating activities.........      $    743.3      436.4      464.5      413.9     556.9
     Net cash used in investing activities.............      $    196.1      335.1      325.9      477.7     387.9
     Net cash (used in) provided by financing activities     $   (542.3)    (100.0)    (129.2)      45.7    (167.3)
   Capital expenditures, net...........................      $    213.9      345.7      369.6      423.1     362.0
   Depreciation and amortization.......................      $    256.7      292.4      330.4      291.2     248.3
   Working capital.....................................      $     50.4      285.0      262.6      220.1     403.8
   Current ratio.......................................             1.0        1.2        1.4        1.2       1.5
   Total assets........................................      $    2,747      3,149      3,069      2,921     2,649
   Obligations under capital leases....................      $       32         38         49         54        61
   Present value of future rentals under operating leases    $    2,408      2,575      2,389      2,048     1,851
   Long-term rental obligations on closed stores.......      $      220         35         34         25        15
   Total long-term obligations (Long-term debt + leases)     $    2,660      2,648      2,472      2,127     1,927
   Long-term obligations to equity ratio...............      $      3.1        1.9        1.8        1.6       1.4
   Comprehensive (loss) income.........................      $   (232.0)     182.6      199.4      206.4         -
   Shareholders' equity................................      $      868      1,411      1,369      1,337     1,342
   Book value per share................................      $     6.16       9.50       9.22       8.98      8.85
Taxes
   Federal, state and local............................      $      123        308        302        285       288
   Per diluted share...................................      $      .85       2.07       2.03       1.90      1.89
  * 53 Weeks
</TABLE>
                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                                          SELECTED FINANCIAL DATA -continued
                                                                   2000       1999*      1998       1997      1996
                                                                   ----       ----       ----       ----      ----
                                                                    Dollars in millions except per share data

Stores
<S>                                                               <C>        <C>        <C>        <C>       <C>
   In operation at year-end............................           1,079      1,188      1,168      1,174     1,178
   Opened and acquired during year.....................              34         79         84         83        61
   Closed or sold during year..........................              32         59         90         87        58
   Closed due to restructuring.........................             111          -          -          -         -
   Enlarged or remodeled during year...................              42         64        136         79       128
   New/enlarged/remodeled in last five years...........             790        908        912        805       743
     Percent to total stores in operation..............            73.2       76.4       78.1       68.6      63.1
   Year-end retail square footage (000,000)............            48.1       52.0       49.6       47.8      45.7
   Average store size at year-end (000)................            44.6       43.7       42.4       40.7      38.8
Other Year-end Data
   Associates (000)....................................             120        132        139        136       126
   Shareholder accounts (000)..........................            45.7       48.1       52.0       55.2      56.3
   Shareholders per store..............................              42         40         45         47        48
   * 53 Weeks
</TABLE>
                                      F-2

<PAGE>


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

Results of Operations

         Sales for fiscal 2000, a 52 week year, were $13.7 billion,  compared to
fiscal 1999, $14.1 billion, a 53 week year, and fiscal 1998, $13.6 billion, a 52
week year.  This  reflects a decrease of 3.1% for fiscal 2000 and an increase of
3.8% and 3.0% in 1999 and 1998,  respectively.  Excluding  the  effect of fiscal
1999 being a 53 week year and the effect of closing stores in the fourth quarter
of fiscal 2000 as part of the Company's  restructuring plan, sales remained flat
in fiscal 2000 compared to fiscal 1999.  Average store sales  decreased 1.2% for
the  current  year  and  increased  2.1%  and  3.0% in  fiscal  1999  and  1998,
respectively. Identical store sales decreased 2.7%, 0.9% and 0.3% for 2000, 1999
and 1998, respectively.

         Sales  for the 12  week  fourth  quarter  of 2000  were  $3.1  billion,
compared to $3.5 billion for the 13 week fourth  quarter of fiscal 1999 and $3.3
billion for the 12 week fourth quarter of 1998. For the fourth quarter,  average
store sales  decreased  1.9% both in fiscal  2000 and 1999 while 1998  increased
7.0%.  Identical  store sales for the fourth  quarter  decreased  3.9% in fiscal
2000,  decreased  3.9% in 1999 and  increased  3.1% in 1998.  Comparable  stores
sales,  which include  replacement  stores,  decreased  3.5% for the quarter and
decreased 1.9% year-to-date.

         The Company  believes  that its program to retrofit  approximately  650
stores during fiscal 2001 will not only result in labor and other  efficiencies,
but will improve the stores'  customer appeal which should enhance the Company's
competitive position and, in turn, positively impact the Company's sales.

         For the 52 weeks ended June 28, 2000, the Company opened 34 new stores,
averaging  52,300 square feet,  closed 143 stores,  averaging 41,400 square feet
and enlarged or remodeled 42 store locations,  for a total of 1,079 locations in
operation  on June 28, 2000,  compared to 1,188 last year.  As of June 28, 2000,
retail space  totaled 48.1 million  square feet, a 7.5%  decrease over the prior
year.  The 143 store  closings  includes  111 stores  that closed as part of the
Company's announced restructuring plan with five additional stores to be further
evaluated  during  fiscal  2001.   Adjusted  for  the  stores  included  in  the
restructuring, retail space would have increased 1.8% over last year.

         As a percent of sales, gross profit margins were 26.6%, 26.9% and 26.6%
in fiscal 2000, 1999 and 1998, respectively.  Gross profit margins have remained
relatively  constant  over the three  years.  The  decrease in the gross  profit
dollars  for fiscal  2000 is  primarily  due to the  decrease  in sales from the
stores  that closed as part of the  restructuring  and the effect of the 53 week
year in 1999.  In  addition,  the  Company  had a  charge  to  gross  profit  of
approximately  $8.9 million related to the  restructuring.  The Company believes
its  transition to  centralized  merchandise  procurement  and shrink  reduction
initiatives  will  result in  improved  efficiencies  that will  increase  gross
margins.  Approximately  84% of the Company's  inventories  are valued under the
LIFO (last-in,  first-out) method.  The LIFO calculations  resulted in a pre-tax
decrease in gross profit of $15.1 million in 2000, a decrease of $4.4 million in
1999 and an increase of $12.1 million in 1998.

                                      F-3
<PAGE>

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

Results of Operations, continued

         Operating  and  administrative  expenses,  as a percent of sales,  were
26.4%,  25.4% and 24.8% in fiscal 2000, 1999 and 1998,  respectively.  Operating
and  administrative  expenses continue to be negatively  impacted by payroll and
occupancy  costs  related  to  the  Company's   direction  of  building  larger,
full-service  stores. The Company believes its restructuring  effort,  including
the  retrofit of 650  stores,  will result in more  efficient  operations  and a
decrease in payroll dollars.

         Cash  discounts  and other income  amounted to $110.1  million,  $118.9
million and $115.4 million in 2000, 1999 and 1998, respectively. The decrease in
cash  discounts and other income for fiscal 2000 is primarily due to a reduction
in  merchandise  purchases.  The  reduction  in  purchases  is due to the  store
closings from restructuring and an initiative to minimize excess inventory.

         Interest expense totaled $47.1 million, $29.6 million and $28.5 million
in fiscal 2000, 1999 and 1998, respectively. Interest expense primarily reflects
a  computation  of  interest  on  capital  lease   obligations   and  short-term
borrowings.  The  increase  in interest  expense  for the year  reflects a $19.7
million interest  reserve  recorded after receiving an unfavorable  opinion from
the U.S. Tax Court in October 1999 (see Note 6 - Income Taxes).

         (Loss)  earnings  before  income taxes were  $(302.4)  million,  $296.5
million and $317.8  million in fiscal  2000,  1999 and 1998,  respectively.  The
pretax  loss for  fiscal  2000 is  primarily  due to the  restructuring  charge,
increase in  operating  and  interest  expenses,  and  decrease in gross  profit
dollars as  previously  mentioned.  The effective  income tax (benefit)  expense
rates  were  (24.3)%,   38.5%  and  37.5%  for  fiscal  2000,   1999  and  1998,
respectively.  The  effective  tax rate for fiscal 2000  reflects the effects of
certain  restructuring  expenses  and  Company  Owned  Life  Insurance  ("COLI")
adjustments.

         Net (loss)  earnings  amounted  to  $(228.9)  million,  or $(1.57)  per
diluted share for 2000, $182.3 million,  or $1.23 per diluted share for 1999 and
$198.6  million,  or $1.33 per  diluted  share for 1998.  The LIFO  calculations
increased  the net loss by $9.3  million,  or $0.06 per  diluted  share in 2000,
decreased net earnings by $2.7  million,  or $0.02 per diluted share in 1999 and
increased net earnings by $7.4 million, or $0.05 per diluted share in 1998.

                                      F-4
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations -continued

Results of Operations, continued

         The  following  tables  show  the  effect  of the  company  owned  life
insurance  adjustment,  restructuring  and other  non-recurring  charges  on the
quarter and year.
<TABLE>
<CAPTION>

                                                                                 Non-recurring          Excluding
                                                                                    Charges           Non-recurring
            Quarter ending June 28, 2000                     As Reported
------------------------------------------------------     ----------------      ---------------     ----------------
<S>                                                      <C>                     <C>                 <C>
Net sales..........................................      $       3,059,996                    -            3,059,996
Cost of sales  ....................................              2,255,053                8,940            2,246,113
                                                           ----------------      ---------------     ----------------
Gross profit on sales .............................                804,943               (8,940)             813,883
Operating and administrative expenses..............                796,247                    -              796,247
Restructuring and other non-recurring
charges............................................                396,029              396,029                   -
                                                           ----------------      ---------------     ----------------
Operating (loss) income............................               (387,333)            (404,969)              17,636
Cash discounts and other income....................                 20,245                    -               20,245
Interest expense                                                    (6,784)              (2,207)              (4,577)
                                                           ----------------      ---------------     ----------------
(Loss) earnings before income tax..................               (373,872)            (407,176)              33,304
Income tax     ....................................               (131,428)            (144,250)              12,822
                                                           ----------------      ---------------     ----------------
Net (loss) earnings ...............................      $        (242,444)            (262,926)              20,482
                                                           ================      ===============     ================
Basic (loss) earnings per share....................      $           (1.70)               (1.84)                0.14
                                                           ================      ===============     ================
Diluted (loss) earnings per share..................      $           (1.70)               (1.84)                0.14
                                                           ================      ===============     ================

                                                                                 Non-recurring          Excluding
                                                                                    Charges           Non-recurring
              Year ending June 28, 2000                      As Reported
------------------------------------------------------     ----------------      ---------------     ----------------
Net sales..........................................      $      13,697,547                    -           13,697,547
Cost of sales  ....................................             10,057,700                8,940           10,048,760
                                                           ----------------      ---------------     ----------------
Gross profit on sales .............................              3,639,847               (8,940)           3,648,787
Operating and administrative expenses..............              3,609,248                    -            3,609,248
Restructuring and other non-recurring
charges............................................                396,029              396,029                   -
                                                           ----------------      ---------------     ----------------
Operating (loss) income............................               (365,430)            (404,969)              39,539
Cash discounts and other income....................                110,100                    -              110,100
Interest expense ..................................                (47,081)             (19,707)             (27,374)
                                                           ----------------      ---------------     ----------------
(Loss) earnings before income tax..................               (302,411)            (424,676)             122,265
Income tax ........................................                (73,516)            (120,588)              47,072
                                                           ----------------      ---------------     ----------------
Net (loss) earnings ...............................      $        (228,895)            (304,088)              75,193
                                                           ================      ===============     ================
Basic (loss) earnings per share....................      $           (1.57)               (2.09)                0.52
                                                           ================      ===============     ================
Diluted (loss) earnings per share..................      $           (1.57)               (2.09)                0.52
                                                           ================      ===============     ================
</TABLE>

                                      F-5
<PAGE>


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

Results of Operations, continued

         Cost of sales were negatively impacted by the write off of inventory in
the stores and  manufacturing  plants that  closed as part of the  restructuring
plan.  Restructuring  and other  non-recurring  charges reflect location closing
costs,   lease   termination   costs  and  asset  impairments  (see  Note  13  -
Restructuring and Other  Non-recurring  Charges).  Interest expense reflects the
year-to-date  amount of  accrued  interest  due to the  Company's  recent  court
decision on company owned life insurance (see Note 6 - Income Taxes).

Liquidity and Capital Resources

         Cash and cash equivalents amounted to $29.6 million,  $24.7 million and
$23.6 million at the end of fiscal years 2000, 1999 and 1998, respectively. Cash
provided by  operating  activities  amounted to $743.3  million in 2000,  $436.4
million in 1999 and $464.5  million in 1998.  The  increase  for fiscal  2000 is
primarily  due  to  the  reduction  in  merchandise   inventories  and  accounts
receivable.

         Net capital  expenditures  totaled $213.9  million,  $345.7 million and
$369.6 million in fiscal 2000, 1999 and 1998,  respectively.  These expenditures
were for new  store  locations,  store  enlargements  and  remodelings,  and the
expansion of warehouse  facilities.  Total capital  investment in Company retail
and support  facilities,  including  operating leases, is estimated to be $400.0
million in fiscal 2000 and  projected to be $450.0  million in fiscal 2001.  The
Company will be retrofitting  approximately 650 stores to improve efficiency and
customer service.  The Company estimates capital expenditures on this project to
total  approximately  $85  million in fiscal  2001.  The Company has no material
construction or purchase commitments outstanding as of June 28, 2000.

         Working capital amounted to $50.4 million and $285.0 million at the end
of fiscal years 2000 and 1999,  respectively.  Inventories on a FIFO  (first-in,
first-out) basis decreased $268.6 million in 2000 and increased $24.6 million in
1999.

         On January 4, 2000,  the Company  increased its  authorized  commercial
paper program from $500.0 million to $700.0 million. In support of this program,
or as an independent  source of funds, the Company entered into a $700.0 million
revolving credit facility,  which is syndicated to a group of 17 banks, with The
Chase Manhattan Bank as  administrative  agent. The facility was entered into on
November 17, 1999 and is renewable on an annual basis. Outstanding amounts under
the credit facility bear interest at certain  floating rates as specified by the
credit   facility.   The  credit  facility   contains   certain   financial  and
non-financial   covenants  relating  to  the  Company's  operations,   including
maintaining  certain financial ratios.  The agreement was amended effective June
27, 2000 to adjust certain financial covenants in consideration of the Company's
restructuring. In addition to the $700.0 million syndicated credit facility, the
Company also has $35.0 million available in short-term lines of credit.

         As of June 28, 2000, the Company had $235.0 million in commercial paper
and no amounts  from  short-term  lines of credit  outstanding,  as  compared to
$300.0 million in

                                      F-6
<PAGE>

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

Liquidity and Capital Resources - continued

commercial paper and $165.0 million from short-term lines of credit  outstanding
on June 30, 1999. The average interest rate on the commercial paper  outstanding
on June 28, 2000 was 7.0%,  as compared to 5.4% on June 30,  1999.  The interest
rate on the  short-term  lines of credit on June 30, 1999 was 5.5%. The carrying
amount  of  short-term  borrowings  approximates  fair  value  because  of their
short-term maturity.

         On April 19, 2000, the Board of Directors authorized the repurchase, in
either open market or private  transactions,  of up to ten million shares of the
Company's  outstanding  common  stock  in  addition  to the  five-million  share
repurchase  program  announced  on  October 6, 1999.  As of June 28,  2000,  the
Company had  repurchased  7,858,000  shares having an aggregate  value of $162.1
million or $20.62 per share.

         Excluding lease obligations,  the Company had no outstanding  long-term
debt as of June 28, 2000 or June 30,1999.

         The Company's cash flow from operations and available credit facilities
are considered  adequate to fund both the short-term and long-term capital needs
of the Company.  The Company  continually  evaluates its strategy to provide for
its short-term and long-term borrowing needs.

         The Company is a party to various  proceedings  arising under  federal,
state and local  regulations  protecting the  environment.  Management is of the
opinion that any liability that might result from any such  proceedings will not
have a material adverse effect on the Company's  financial  condition or results
of operations.

Impact of Inflation

         Winn-Dixie's  primary  costs,   inventory  and  labor,   increase  with
inflation.  Recovery  of  these  costs  has  to  come  from  improved  operating
efficiencies,  and to the extent permitted by the competition,  through improved
gross profit margins.

Cautionary Statement Regarding Forward-Looking Information and Statements

         This  Annual  Report on Form 10-K  contains  certain  information  that
constitutes  "forward-looking  statements"  within the  meaning  of the  Private
Securities Litigation Reform Act, which involves risks and uncertainties. Actual
results may differ materially from the results described in the  forward-looking
statements.  When  used in this  document,  the  words,  "estimate,"  "project,"
"intend,"  "believe,"  and  other  similar  expressions,  as they  relate to the
Company,  are  intended  to  identify  such  forward-looking   statements.  Such
statements  reflect the current  views of the Company and are subject to certain
risks  and  uncertainties  that  include,   but  are  not  limited  to,  growth,
competition,  inflation,  pricing and margin  pressures,  law and taxes.  Please
refer to  discussions of these and other factors in this Annual Report and other
Company  filings  with the  Securities  and  Exchange  Commission.  The  Company
disclaims  any intent or  obligation to update  publicly  these  forward-looking
statements, whether as a result of new information, future events or otherwise.
                                       F-7
<PAGE>
                              REPORT OF MANAGEMENT



         The  Company  is  responsible  for  the   preparation,   integrity  and
objectivity of the  consolidated  financial  statements and related  information
appearing in the Annual Report. The consolidated  financial statements have been
prepared in conformity with generally accepted accounting  principles applied on
a  consistent  basis and include  amounts  that are based on  management's  best
estimates and judgments.

         Management  is also  responsible  for  maintaining a system of internal
controls that provides reasonable assurance that the accounting records properly
reflect the  transactions  of the Company,  that assets are safeguarded and that
the consolidated  financial statements present fairly the financial position and
operating results. As part of the Company's  controls,  the internal audit staff
conducts examinations in each of the divisional operations of the Company.

         The Audit  Committee of the Board of  Directors,  composed  entirely of
outside directors, meets periodically to review the results of audit reports and
other accounting and financial reporting matters with the independent  certified
public accountants and the internal auditors.



  Allen R. Rowland                               Richard P. McCook
  President and                                   Senior Vice President
    Chief Executive Officer                          and Chief Financial Officer

                                      F-8
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


The Shareholders and the Board of Directors
Winn-Dixie Stores, Inc.:

         We  have  audited  the  accompanying  consolidated  balance  sheets  of
Winn-Dixie Stores,  Inc. and subsidiaries as of June 28, 2000 and June 30, 1999,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the  three-year  period ended June 28, 2000.
These consolidated  financial statements are the responsibility of the Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

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

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material  respects,  the financial position of Winn-Dixie
Stores,  Inc.  and  subsidiaries  at June 28,  2000 and June 30,  1999,  and the
results  of their  operations  and their cash flows for each of the years in the
three-year period ended June 28, 2000, in conformity with accounting  principles
generally accepted in the United States of America.




                                                                        KPMG LLP


Jacksonville, Florida
August 9, 2000

                                      F-9

<PAGE>


                    WINN-DIXIE STORES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           Years ended June 28, 2000, June 30, 1999 and June 24, 1998
<TABLE>
<CAPTION>


                                                                       2000             1999*             1998
                                                                  ---------------   --------------   ---------------
                                                                       Amounts in thousands except per share data
<S>                                                             <C>                    <C>               <C>
Net sales.....................................................  $     13,697,547       14,136,503        13,617,485
Cost of sales, including warehousing and delivery expense.....        10,057,700       10,335,590         9,993,568
                                                                  ---------------   --------------   ---------------
   Gross profit on sales......................................         3,639,847        3,800,913         3,623,917
Operating and administrative expenses.........................         3,609,248        3,593,651         3,374,905
Restructuring and other non-recurring charges.................           396,029                -            18,080
                                                                  ---------------   --------------   ---------------
   Operating (loss) income ...................................          (365,430)         207,262           230,932
Cash discounts and other income, net..........................           110,100          118,866           115,395
                                                                  ---------------   --------------   ---------------
                                                                        (255,330)         326,128           346,327
                                                                  ---------------   --------------   ---------------
Interest:
   Interest on capital lease obligations......................             4,458            5,152             6,528
   Other interest.............................................            42,623           24,496            22,007
                                                                  ---------------   --------------   ---------------
     Total interest...........................................            47,081           29,648            28,535
                                                                  ---------------   --------------   ---------------
(Loss) earnings before income taxes...........................          (302,411)         296,480           317,792
Income taxes..................................................           (73,516)         114,145           119,172
                                                                  ---------------   --------------   ---------------
Net (loss) earnings ..........................................  $       (228,895)         182,335           198,620
                                                                  ===============   ==============   ===============

Basic (loss) earnings per share...............................  $          (1.57)            1.23              1.34
                                                                  ===============   ==============   ===============
Diluted (loss) earnings per share.............................  $          (1.57)            1.23              1.33
                                                                  ===============   ==============   ===============
</TABLE>

*  53 Weeks
See accompanying notes to consolidated financial statements.

                                      F-10
<PAGE>
<TABLE>
<CAPTION>


                    WINN-DIXIE STORES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                         June 28, 2000 and June 30, 1999


                                                                                        2000              1999
                                                                                    --------------   ---------------
                                                                                         Amounts in thousands
<S>                                                                              <C>    <C>               <C>
Assets
Current Assets:
   Cash and cash equivalents.................................................    $         29,576            24,746
   Trade and other receivables, less allowance for doubtful items of
     $3,822,000  ($3,615,000 in 1999)........................................             107,425           188,314
   Merchandise inventories at lower of cost or market less LIFO reserve
     of $232,368,000  ($217,274,000 in 1999).................................           1,141,405         1,425,098
   Prepaid expenses..........................................................              58,739            46,963
    Deferred income taxes....................................................             134,777           112,869
                                                                                    --------------   ---------------
     Total current assets....................................................           1,471,922         1,797,990
                                                                                    --------------   ---------------

Cash surrender value of life insurance, net..................................              14,035            24,072
Net property, plant and equipment............................................           1,034,493         1,222,633
Intangible assets, net.......................................................              18,795            54,449
Non-current deferred income taxes............................................             166,449                 -
Other assets.................................................................              41,399            50,003
                                                                                    --------------   ---------------
                                                                                 $      2,747,093         3,149,147
                                                                                    ==============   ===============

Liabilities and Shareholders' Equity
------------------------------------
Current Liabilities:
   Accounts payable..........................................................    $        575,877           662,172
   Short-term borrowings.....................................................             235,000           465,000
   Reserve for insurance claims and self-insurance...........................             101,874            75,461
   Reserve for restructuring expenses........................................              52,721                 -
   Accrued wages and salaries................................................             114,883           108,826
   Accrued rent..............................................................              88,247            65,411
   Accrued expenses..........................................................             164,502           122,641
   Current obligations under capital leases..................................               2,843             2,751
   Income taxes payable......................................................              85,606            10,739
                                                                                    --------------   ---------------
     Total current liabilities...............................................           1,421,553         1,513,001
                                                                                    --------------  ---------------
Reserve for insurance claims and self-insurance..............................             141,251            92,256
Obligations under capital leases ............................................              32,239            38,493
Defined benefit plan ........................................................              45,241            41,234
Long-term restructuring expenses ............................................             143,188                 -
Other liabilities............................................................              95,786            53,084
                                                                                    --------------   ---------------
Shareholders' Equity:
   Common stock of $1 par value.  Authorized 400,000,000 shares; issued
     140,830,197 shares in 2000 and 148,576,865 shares in 1999...............             140,830           148,577
   Retained earnings.........................................................             727,005         1,259,597
   Accumulated other comprehensive income....................................                   -             3,069
    Associates' stock loans..................................................                   -              (164)
                                                                                    --------------   ---------------
     Total shareholders' equity..............................................             867,835         1,411,079
                                                                                    --------------   ---------------
Commitments and contingent liabilities (Notes 6, 9, 11 and 13)
                                                                                 $      2,747,093         3,149,147
                                                                                    ==============   ===============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-11
<PAGE>


                    WINN-DIXIE STORES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           Years ended June 28, 2000, June 30, 1999 and June 24, 1998
<TABLE>
<CAPTION>

                                                                         2000           1999*            1998
                                                                     -------------   -------------   -------------
                                                                                 Amounts in thousands

Cash flows from operating activities:
<S>                                                               <C>    <C>              <C>             <C>
   Net (loss) earnings .........................................  $      (228,895)        182,335         198,620
   Adjustments to reconcile net (loss) earnings to net cash
     provided by operating activities:
       Depreciation and amortization............................          256,671         292,414         330,408
       Deferred income taxes....................................         (189,046)         17,684         (17,040)
       Defined benefit plan.....................................            4,007           4,132           3,650
       Non-cash restructuring and other non-recurring charges...          375,346               -               -
       Reserve for insurance claims and self-insurance..........           75,408           2,424          10,291
       Stock compensation plans.................................           (1,144)          2,459          (1,398)
       Change in cash from:
         Receivables............................................           80,888         (42,148)         29,513
         Merchandise inventories................................          283,693         (20,181)       (155,702)
         Prepaid expenses.......................................          (11,776)          8,596           3,813
         Accounts payable.......................................          (87,959)         (1,191)         56,191
         Income taxes...........................................           74,867          (1,380)        (20,804)
         Other current accrued expenses.........................          111,219          (8,783)         26,952
                                                                     -------------   -------------   -------------
           Net cash provided by operating activities............          743,279         436,361         464,494
                                                                     -------------   -------------   -------------

Cash flows from investing activities:
   Purchases of property, plant and equipment, net..............         (213,874)       (345,723)       (369,636)
   Decrease in investments and other assets.....................           17,756          10,582          43,785
                                                                     -------------   -------------   -------------
           Net cash used in investing activities................         (196,118)       (335,141)       (325,851)
                                                                     -------------   -------------   -------------

Cash flows from financing activities:
   (Decrease) increase in short-term borrowings.................         (230,000)         45,000          40,000
   Payments on capital lease obligations........................           (2,612)         (2,583)         (2,653)
   Purchase of common stock.....................................         (162,272)         (1,337)        (21,055)
   Proceeds of sales under associates' stock purchase plan......              164           2,923           8,747
   Dividends paid...............................................         (148,966)       (151,231)       (150,923)
   Other........................................................            1,355           7,188          (3,309)
                                                                     -------------   -------------   -------------
           Net cash used in financing activities................         (542,331)       (100,040)       (129,193)
                                                                     -------------   -------------   -------------

Increase in cash and cash equivalents...........................            4,830           1,180           9,450
Cash and cash equivalents at the beginning of the year..........           24,746          23,566          14,116
                                                                     -------------   -------------   -------------
Cash and cash equivalents at end of the year....................  $        29,576          24,746          23,566
                                                                     =============   =============   =============

Supplemental cash flow information:
   Interest paid................................................  $        23,058          21,958          20,316
   Interest and dividends received..............................  $           808           1,072           1,449
   Income taxes paid............................................  $        40,663          94,858         152,652
                                                                     =============   =============   =============
</TABLE>

*53 Weeks
See accompanying notes to consolidated financial statements.

                                      F-12
<PAGE>


                    WINN-DIXIE STORES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
           Years ended June 28, 2000, June 30, 1999 and June 24, 1998
<TABLE>
<CAPTION>


                                                                            Accumulated
                                                                               Other           Associates'         Total
                                              Common         Retained      Comprehensive         Stock         Shareholders
                                               Stock         Earnings         Income             Loans            Equity
         (Amounts in thousands)            -------------- --------------- ----------------- ---------------  ---------------
<S>                                       <C>    <C>           <C>                  <C>            <C>      <C>   <C>
Balances at June 25, 1997                 $      148,876       1,198,488             1,964         (11,834) $     1,337,494
                                           -------------- --------------- ----------------- ---------------  ---------------
Comprehensive income:
   Net earnings..........................              -         198,620                 -               -          198,620
   Unrealized gain on securities,
      net of tax........................               -               -               796               -              796
                                           -------------- --------------- ----------------- ---------------  ---------------
   Total comprehensive income............              -         198,620               796               -          199,416
Cash dividends, $1.02 per share..........              -        (150,923)                -               -         (150,923)
Common stock issued and stock
   compensation expense..................             76          (1,212)                -               -           (1,136)
Common stock acquired....................           (501)        (20,554)                -               -          (21,055)
Stock options exercised..................             80          (4,999)                -               -           (4,919)
Associates' stock loans, payments........              -               -                 -           8,747            8,747
Other....................................              -           1,259                 -               -            1,259
                                           -------------- ---------------  ---------------- ---------------  ---------------
Balances at June 24, 1998                        148,531       1,220,679             2,760          (3,087)       1,368,883
                                           -------------- ---------------  ---------------- ---------------  ---------------

Comprehensive income:
   Net earnings..........................              -         182,335                 -               -          182,335
   Unrealized gain on securities,
      net of tax........................               -               -               309               -              309
                                           -------------- ---------------  ---------------- ---------------  ---------------
   Total comprehensive income............              -         182,335               309               -          182,644
Cash dividends, $1.02 per share..........              -        (151,231)                -               -         (151,231)
Common stock issued and stock
   compensation expense..................             33           2,189                 -               -            2,222
Common stock acquired....................            (37)         (1,300)                -               -           (1,337)
Stock options exercised..................             50           1,004                 -               -            1,054
Associates' stock loans, payments........              -               -                 -           2,923            2,923
Other....................................              -           5,921                 -               -            5,921
                                           -------------- --------------- ----------------- ---------------  ---------------
Balances at June 30, 1999                        148,577       1,259,597             3,069            (164)       1,411,079
                                           -------------- --------------- ----------------- ---------------  ---------------
Comprehensive (loss) income:
   Net (loss)............................              -        (228,895)                -               -         (228,895)
   Realized gain on securities,
      net of tax........................               -               -            (3,069)              -           (3,069)
                                           -------------- --------------- ----------------- ---------------  ---------------
   Total comprehensive income............              -        (228,895)           (3,069)              -         (231,964)
Cash dividends, $1.02 per share..........              -        (148,966)                -               -         (148,966)
Common stock issued and stock
   compensation expense..................            131            (131)                -               -                -
Common stock acquired....................         (7,878)       (154,394)                -               -         (162,272)
Stock options exercised..................              -            (187)                -               -             (187)
Associates' stock loans, payments........              -               -                 -             164              164
Other....................................              -             (19)                -               -              (19)
                                           -------------- --------------- ----------------- ---------------  ---------------
Balances at June 28, 2000                 $      140,830         727,005                 -               -  $       867,835
                                           ============== =============== ================= ===============  ===============
</TABLE>

 See accompanying notes to consolidated financial statements

                                      F-13
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Dollar amounts in thousands except per share data, unless otherwise noted

1 Summary of Significant Accounting Policies and Other Information

(a)  Fiscal Year:  The fiscal year ends on the last  Wednesday  in June.  Fiscal
     year 2000 and 1998 are comprised of 52 weeks. Fiscal year 1999 is comprised
     of 53 weeks.

(b)  Basis of Consolidation:  The consolidated  financial statements include the
     accounts of Winn-Dixie Stores, Inc. and its subsidiaries which operate as a
     major  food  retailer  in  fourteen  states  and the  Bahama  Islands.  All
     subsidiaries are wholly owned and fully  consolidated with the exception of
     Bahamas  Supermarkets  Limited,  which  is owned  approximately  78% by W-D
     Bahamas Limited.

(c)  Cash and Cash  Equivalents:  Cash  equivalents  consist  of  highly  liquid
     investments  with a maturity of three months or less when  purchased.  Cash
     and cash  equivalents  are  stated at cost  plus  accrued  interest,  which
     approximates market.

(d)  Inventories:  Inventories  are stated at the lower of cost or  market.  The
     "dollar value"  last-in,  first-out  (LIFO) method is used to determine the
     cost  of  approximately   84%  of  inventories   consisting   primarily  of
     merchandise in stores and distribution warehouses.  Manufacturing, pharmacy
     and  produce  inventories  are valued at the lower of  first-in,  first-out
     (FIFO)  cost  or  market.   Elements  of  cost  included  in  manufacturing
     inventories consist of material, direct labor and plant overhead.

(e)  Marketable  Securities:  Included  in other  assets  at June  30,  1999 was
     $32,466  which  consisted   primarily  of  marketable   equity   securities
     categorized  as  available-for-sale.  No  amounts  were on hand at June 28,
     2000.  Available-for-sale securities are recorded at fair value. Unrealized
     holding gains and losses,  net of the related tax effect, are excluded from
     earnings and reported as a separate component of shareholders' equity until
     realized.  A decline  in the fair  value of  available-for-sale  securities
     below cost that is deemed  other  than  temporary  is charged to  earnings,
     resulting  in the  establishment  of a new  cost  basis  for the  security.
     Realized  gains and losses are included in earnings  and are derived  using
     the specific  identification  method for determining the cost of securities
     sold.

(f)  Income Taxes:  Deferred tax assets and  liabilities  are recognized for the
     estimated 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 the enacted tax rates in effect for the year in which those
     temporary differences are expected to be recovered or settled.

                                      F-14
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS,
             continued Dollar amounts in thousands except per share
                          data, unless otherwise noted

1.  Summary of Significant Accounting Policies and Other Information, continued

(g)  Self-insurance:  Self-insurance reserves are established for automobile and
     general liability,  workers'  compensation and property loss costs based on
     claims  filed and claims  incurred  but not  reported,  with a maximum  per
     occurrence of $2,000 for  automobile  and general  liability and $1,000 for
     workers' compensation. Self-insurance reserves are established for property
     losses with a maximum annual  aggregate of $5,000 and a $100 per occurrence
     deductible  after the  aggregate  is  obtained.  The Company is insured for
     losses in excess of these limits.

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

(i)  Property, Plant and Equipment:  Property, plant and equipment are stated at
     historical  cost.  Depreciation is provided over the estimated useful lives
     by the straight-line method. Store equipment depreciation is based on lives
     varying  from five to eight  years.  Transportation  equipment  is based on
     lives  varying  from  three  to  ten  years.  Warehouse  and  manufacturing
     equipment is based on lives varying from five to ten years. Amortization of
     improvements   to  leased   premises   is  provided   principally   by  the
     straight-line method over the periods of the leases or the estimated useful
     lives of the improvements, whichever is less.

     The Company  reviews  its  property,  plant 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 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.

(j)  Store  Opening  and  Closing  Costs:  The costs of  opening  new stores and
     closing old stores are charged to earnings in the year incurred. An expense
     is recorded for the present  value of expected  future rent payments in the
     year that a store closes.





                                      F-15
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS,
             continued Dollar amounts in thousands except per share
                          data, unless otherwise noted

1.  Summary of Significant Accounting Policies and Other Information, continued

(k)  Earnings  Per Share:  Earnings  per common  share are based on the weighted
     average  number of common shares  outstanding.  Diluted  earnings per share
     amounts  are  based  on  the  weighted   average  number  of  common  stock
     outstanding  plus the incremental  shares that would have been  outstanding
     upon  the  assumed  exercise  of all  diluted  stock  options,  subject  to
     antidilution limitations.

     The following  weighted  average number of shares of common stock were used
     in the calculations for earnings per share.

                     2000                    1999                      1998
                   --------                -------                    -----
       Basic     145,445,416            148,309,653                148,504,349
       Diluted   145,445,416            148,680,198                148,866,167

(l)  Comprehensive Income: Comprehensive income is reflected on the Consolidated
     Statements of Shareholders' Equity.  Accumulated other comprehensive income
     is comprised of unrealized gains/losses of available for sale securities.

(m)  Stock-Based  Compensation:  The  Company  follows  Statement  of  Financial
     Accounting  Standard No. 123,  "Accounting  for  Stock-Based  Compensation"
     ("SFAS 123"), which establishes a fair value based method of accounting for
     stock-based compensation plans (see Note 8 - Stock Compensation Plans).

(n)  New  Accounting  Pronouncements:  In June 1998,  the  Financial  Accounting
     Standards Board issued Statement of Financial Accounting Standards No. 133,
     "Accounting  for  Derivative  Instruments  and Hedging  Activities"  ("SFAS
     133").  SFAS  133  establishes   accounting  and  reporting  standards  for
     derivative  instruments,  including certain derivative instruments embedded
     in other  contracts and hedging  activities.  The Company  intends to adopt
     SFAS 133 in the first  quarter of fiscal  year  2001.  The  Company  has no
     derivatives to be measured.

(o)  Business  Reporting  Segments:  Based on the  information  monitored by the
     Company's operating decision makers to manage the business, the Company has
     identified   that  its  operations  are  within  one  reportable   segment.
     Accordingly, financial information on industry segments is omitted because,
     apart from the principal  business of operating  retail  self-service  food
     stores,  the  Company  has no other  industry  segments.  All  sales of the
     Company are to customers  within the United States and the Bahama  Islands.
     All assets of the  Company  are  located  within the United  States and the
     Bahama  Islands.  Sales and  assets  related  to and  located in the Bahama
     Islands represents less than 1% of the Company's total sales and assets.

(p)  Reclassification:  Certain  prior year  amounts have been  reclassified  to
     conform to the current year's presentation.
                                      F-16
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS,continued
   Dollar amounts in thousands except per share data, unless otherwise noted

2.  Trade and Other Receivables

         Accounts receivable at year-end were as follows:
                                                        2000              1999
                                                    -----------       ----------
            Trade and other receivables.......... $     92,821           96,984
            Construction advances................       18,426           94,945
                                                    -----------       ----------
                                                       111,247          191,929
          Less: Allowance for doubtful items.....        3,822            3,615
                                                    -----------       ----------
                                                  $    107,425          188,314
                                                    ===========       ==========

3.  Merchandise Inventories

         At June 28, 2000, inventories valued by the LIFO method would have been
         $232,368 higher  ($217,274 higher at June 30, 1999) if they were stated
         at the  lower of FIFO  cost or  market.  If the FIFO  method  inventory
         valuation had been used, reported net (loss) would have been $9,283, or
         $0.06 per diluted  share lower in 2000,  net  earnings  would have been
         $2,691,  or $0.02 per diluted share higher in 1999 and $7,411, or $0.05
         per diluted share lower in 1998.

4.  Intangible Assets, net

         Intangible assets at year-end were as follows:

                                                      2000              1999
                                                  -----------      -------------
            Goodwill........................... $     25,591             70,075
            Other intangibles..................          192                  -
                                                  -----------      -------------
                                                      25,783             70,075
            Less: Accumulated amortization.....        6,988             15,626
                                                  -----------      -------------
                                                $     18,795             54,449
                                                  ===========      =============

         Intangible  assets are amortized over the estimated  useful life not to
         exceed 20 years for  goodwill and 15 years for other  intangibles.  The
         Company took a non-cash impairment charge of $32,115 for fiscal 2000 as
         part of the Company's  restructuring  (see Note 13 - Restructuring  and
         Other Non-recurring Charges).

                                      f-17

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

5.  Net Property, Plant and Equipment

            Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>

                                                                                        2000              1999
                                                                                    -------------    ---------------
<S>                                                                              <C>   <C>                <C>
         Land..............................................................      $        17,180             11,343
         Buildings.........................................................               67,246             29,134
         Furniture, fixtures, machinery and equipment......................            2,333,403          2,575,459
         Transportation equipment..........................................              135,733            140,715
         Improvements to leased premises...................................              469,552            502,256
         Construction in progress..........................................               21,188             54,878
                                                                                    -------------    ---------------
                                                                                       3,044,302          3,313,785
         Less:  Accumulated depreciation and amortization..................            2,031,101          2,117,034
                                                                                    -------------    ---------------
                                                                                       1,013,201          1,196,751
         Leased property under capital leases, less accumulated
             amortization of $32,951 ($33,291 in 1999).....................               21,292             25,882
                                                                                    -------------    ---------------
         Net property, plant and equipment.................................      $     1,034,493          1,222,633
                                                                                    =============    ===============
</TABLE>

         The Company had no non-cash  additions  to leased  property for 2000 or
         1999.  The Company  had a non-cash  impairment  charge of $147,184  for
         fiscal  2000 as  part of the  Company's  restructuring  (see  Note 13 -
         Restructuring and other non-recurring charges).

6.  Income Taxes

         Income tax expense (benefit) consists of:

                                       Current         Deferred          Total
                                     -----------      ----------     -----------
         2000
                  Federal.......... $  111,358         (182,074)       (70,716)
                  State............      4,172           (6,972)        (2,800)
                                     ----------       ----------     -----------
                                    $  115,530         (189,046)       (73,516)
                                     ==========       ==========     ===========

         1999
                  Federal.........  $   79,270           16,110         95,380
                  State...........      17,191            1,574         18,765
                                     ----------       ----------     -----------
                                    $   96,461           17,684        114,145
                                     ==========       ==========     ===========

         1998
                  Federal........  $   115,109          (15,779)        99,330
                  State..........       21,103           (1,261)        19,842
                                     ----------       -----------    -----------
                                   $   136,212          (17,040)       119,172
                                     ==========       ===========    ===========

                                      F-18
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

6.       Income Taxes, continued

         The following  reconciles the expense (benefit) on the previous page to
         the Federal statutory income tax rate:
<TABLE>
<CAPTION>

                                                                          2000            1999            1998
                                                                       ------------  --------------  --------------

<S>                                                                         <C>               <C>             <C>
         Federal statutory income tax rate....................              (35.0)%           35.0%           35.0%
         State and local income taxes, net of federal
            income tax benefits...............................               (0.6)             4.4             3.8
         Tax credits..........................................               (0.9)            (0.6)           (0.6)
         Company owned life insurance (COLI)..................                9.6              0.7            (0.2)
         Goodwill impairment..................................                2.9                -               -
         Other, net...........................................               (0.3)            (1.0)           (0.5)
                                                                       ------------  --------------  --------------
                                                                            (24.3)%           38.5%           37.5%
                                                                       ============  ==============  ==============
</TABLE>

         The  effective tax rate for fiscal 2000 reflects the effects of certain
         restructuring expenses and COLI adjustments.

         In addition to the  provision  for income taxes  presented  above,  the
         Company  recorded  deferred tax expense of $265 and $551 in fiscal 1999
         and 1998,  respectively,  related to the unrealized  gain on marketable
         securities.


                                      F-19
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
   Dollar amounts in thousands except per share data, unless otherwise noted

6.  Income Taxes, continued


         The tax effects of temporary  differences that give rise to significant
         portions of the deferred tax assets and  deferred  liabilities  at June
         28, 2000, June 30, 1999 and June 24, 1998 are presented below:
<TABLE>
<CAPTION>

                                                                               2000          1999          1998
                                                                           ------------- ------------   ------------
         Deferred tax assets:
<S>                                                                     <C>     <C>          <C>            <C>
            Reserve for insurance claims and self-insurance..........   $        79,039       62,429         61,160
            Reserve for vacant store leases..........................            38,308       20,511         20,137
            Unearned promotional allowance...........................             5,310        3,143          6,844
            Reserve for accrued vacations............................            13,463       14,225         14,172
            State net operating loss carry forwards..................            17,052       12,929          9,249
            Excess of book over tax depreciation.....................            12,032       12,196         10,985
            Excess of book over tax rent expense.....................               956        1,084          1,058
            Excess of book over tax retirement expense...............            19,452       17,009         14,757
            Uniform capitalization of inventory......................             9,718        9,684          7,796
            Restructuring costs......................................           130,587            -              -
            Other, net...............................................            52,730       43,213         38,066
                                                                           ------------- ------------  -------------
              Total gross deferred tax assets........................           378,647      196,423        184,224
              Less:  Valuation allowance.............................            16,489       12,401          9,154
                                                                           ------------- ------------  -------------
              Net deferred tax assets................................           362,158      184,022        175,070
                                                                           ------------- ------------  -------------
         Deferred tax liabilities:
            Excess of tax over book depreciation.....................           (46,308)     (31,098)       (11,958)
            Undistributed earnings of the
                              Bahamas subsidiary.....................            (4,761)     (14,347)       (12,616)
            Other comprehensive income...............................                 -       (1,921)        (1,656)
            Other, net...............................................            (9,863)     (26,397)       (20,632)
                                                                           ------------- ------------  -------------
              Total gross deferred tax liabilities...................           (60,932)     (73,763)       (46,862)
                                                                           ------------- ------------  -------------
              Net deferred tax assets................................   $       301,226      110,259        128,208
                                                                           ============= ============  =============
</TABLE>

         Noncurrent  deferred  income taxes of $689 for fiscal 1999 are included
         in other liabilities in the accompanying consolidated balance sheet.

         The Company  believes the results of historical  taxable income and the
         results of future operations will generate sufficient taxable income to
         realize the deferred tax assets.

                                      F-20
<PAGE>


              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
   Dollar amounts in thousands except per share data, unless otherwise noted

6.  Income Taxes, continued

         The Company  reserved  $30.4  million  for taxes and $19.7  million for
         interest  ($42.5  million after tax, or $0.29 per diluted  share) after
         receiving an  unfavorable  opinion in October 1999 and a  computational
         decision  on January 11,  2000 from the U.S.  Tax Court.  The Tax Court
         upheld the Internal Revenue Service's position that interest related to
         loans on broad-based, company owned life insurance policies in 1993 was
         not deductible  for income tax purposes.  Congress  passed  legislation
         phasing out such  deductions  over a  three-year  period in the fall of
         1996.  The  Company  held  such  policies  and  deducted   interest  on
         outstanding  loans from March 1993 through  December  1997.  Management
         disagrees  with the Tax Court's  decision and has  appealed.  While the
         ultimate outcome of this litigation cannot be predicted with certainty,
         in the opinion of  management,  the ultimate  resolution of this matter
         will not have any additional  material  adverse impact on the Company's
         financial condition or results of operations.

7.  Financing

         On January 4, 2000,  the Company  increased its  authorized  commercial
         paper program from $500.0 million to $700.0 million. In support of this
         program, or as an independent source of funds, the Company entered into
         a $700.0 million  revolving credit  facility,  which is syndicated to a
         group of 17 banks,  with The  Chase  Manhattan  Bank as  administrative
         agent.  The  facility  was  entered  into on  November  17, 1999 and is
         renewable  on an annual  basis.  Outstanding  amounts  under the credit
         facility  bear interest at certain  floating  rates as specified by the
         credit facility.  The credit facility  contains  certain  financial and
         non-financial covenants relating to the Company's operations, including
         maintaining   certain  financial  ratios.  The  agreement  was  amended
         effective  June 27,  2000 to  adjust  certain  financial  covenants  in
         consideration of the Company's restructuring.

         In addition  to the $700.0  million  syndicated  credit  facility,  the
         Company also has $35.0 million available in short-term lines of credit.
         As of June 28, 2000, the Company had $235.0 million in commercial paper
         and no amounts from short-term lines of credit outstanding, as compared
         to $300.0 million in commercial  paper and $165.0 from short-term lines
         of credit outstanding on June 30, 1999.

8.  Stock Compensation Plans:

         The Company has several stock  purchase and  incentive  plans to reward
         employees and key executives of the Company. Under SFAS 123, other than
         normal  purchase  discounts for the employee  stock  purchase plan, the
         fair  value  at  date  of  grant  for  the  long-term  incentive  stock
         compensation  plans and the  performance  based  stock  option plan are
         charged to compensation costs over the vesting or performance period.


                                      F-21
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

8.  Stock Compensation Plans, continued

         Compensation  costs resulted in income of $1.1 million and $1.4 million
         in fiscal  2000 and 1998,  respectively.  The  primary  reason  for the
         income  was due to the  reversal  of  compensation  expense  previously
         recognized for restricted shares that did not vest.  Compensation costs
         resulted in expense of $2.5 million in 1999.

         The per share  weighted  fair  value of the stock  options  granted  in
         fiscal 2000 and 1999 were $6.62 and $14.51, respectively. These amounts
         were estimated on the date of the grant using the Black-Scholes  option
         pricing model under the following assumptions:  risk-free interest rate
         of 6.7% and 5.4%;  dividend yield of 5.4% and 2.3%; expected lives of 7
         years; and volatility of .38 and .30, respectively.

          (a)  Stock  Purchase  Plan:  The Company has a stock  purchase plan in
               effect for associates.  Under the terms of this Plan, the Company
               may grant  options to  purchase  shares of the  Company's  common
               stock at a price  not less  than  the  lesser  of 85% of the fair
               market value at the date of grant or 85% of the fair market value
               at the  time of  exercise.  There  are  2,392,626  shares  of the
               Company's  common stock  available for the grant of options under
               the Plan.  Loans to associates  for the purchase of the Company's
               common  stock  are  reported  in the  financial  statements  as a
               reduction  of  Shareholders'  Equity,  rather  than as a  current
               asset.  No loans were  outstanding  at June 28, 2000 and $164 was
               outstanding at June 30, 1999.

          (b)  Stock  Compensation  Plans:  The Company has long-term  incentive
               stock compensation plans. Under these programs the Company issues
               restricted  shares  of the  Company's  common  stock to  eligible
               management  associates.  The following  table shows the number of
               shares issued, forfeited and outstanding.
<TABLE>
<CAPTION>

                                                  Weighted
                                                  Average                          Number of shares
                                                 Issue Price         Total        FY 2000       FY1999      FY 1998
                                             -----------------    ------------ ------------ ------------ ------------
                  1998 Plan
<S>                                         <C>   <C>                 <C>           <C>         <C>          <C>
                     Issued                 $     37.25               149,743            -            -      149,743
                     Forfeited                                        149,743       25,548        5,995      118,200
                                                                  ------------
                     Outstanding                                            -
                                                                  ------------
                  1999 Plan
                     Issued                 $     41.12               252,097            -      252,097            -
                     Forfeited                                         63,139       18,592       44,547            -
                                                                  ------------
                     Outstanding                                      188,958
                                                                  ------------
                  2000 Plan
                     Issued                 $     25.75               239,030      239,030            -            -
                     Forfeited                                         93,124       93,124            -            -
                                                                  ------------
                     Outstanding                                      145,906
                                                                  ------------
                   Shares outstanding, June 28, 2000                  334,864
                                                                  ============
</TABLE>
                                      F-22
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

8.      Stock Compensation Plans, continued

          (b)  Stock Compensation Plans, continued

               The vesting of shares  issued prior to January 2000 is contingent
               upon certain  specified  goals being  attained  over a three year
               period.  The shares  issued after such date vest  one-third  each
               year beginning with the third year from the date of grant,  based
               on continued employment.

          (c)  Stock Option Plans:  The Company has made shares of the Company's
               stock available for grant under stock plans described below.

               1.   Key Employee:  Under the Company's Key Employee Stock Option
                    Plan,  2,000,000  shares of the Company's  common stock were
                    made  available  for grant at an  exercise  price of no less
                    than the  market  value at date of  grant.  Options  granted
                    under this performance based stock option plan prior to June
                    1,  1998 are  earned  over a two  year  period  and  options
                    granted after June 1, 1998 are earned after three years,  if
                    certain performance goals are attained.

               2.   Retention and Attraction  Program:  As part of the Company's
                    retention and attraction  program,  1,200,000  shares of the
                    Company's  common  stock  were made  available  for grant to
                    various  associates  beginning  in  January  28,  2000 at an
                    exercise price equal to the Company's stock price at date of
                    grant.  Options  granted as part of the  program  are earned
                    over a five-year period, in 20% increments, if the associate
                    remains employed in their position at the end of each year.

               3.   CEO Stock  Options:  Pursuant  to an  employment  agreement,
                    500,000  shares  of the  Company's  common  stock  were made
                    available for grant at an exercise price of $27.00 per share
                    to the President and Chief Executive Officer of the Company.
                    Currently,  250,000 of the options are currently exercisable
                    and the remaining  250,000 are  exercisable  on November 23,
                    2000 or upon an earlier date if there is a change in control
                    or a termination of employment  for other than cause,  death
                    or disability or for good reason.


                                      F-23
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

8.  Stock Compensation Plans, continued

     (c)  Stock Option Plans, continued

          4.   Options Outstanding:

                        Changes in options during the years ended June 28, 2000,
                        June 30, 1999 and June 24, 1998, were as follows:
<TABLE>
<CAPTION>
                                                                                                     Weighted
                                                                                                      Average
                                                                               Number of           Option Price
                                                                                Shares               Per Share
                                                                           ------------------  ----------------------

<S>                                                                           <C>                 <C>          <C>
                        Outstanding - June 25, 1997...................           703,000          $            25.90
                        Granted.......................................                 -          $                -
                        Exercised.....................................          (361,000)         $            22.11
                        Forfeited.....................................           (10,000)         $            34.63
                                                                           --------------          ------------------
                        Outstanding - June 24, 1998...................           332,000          $            29.76
                        Granted.......................................           181,277          $            41.51
                        Exercised.....................................           (50,000)         $            21.06
                        Forfeited.....................................           (25,842)         $            35.65
                                                                           --------------          ------------------
                        Outstanding - June 30, 1999...................           437,435          $            35.27
                        Granted.......................................         1,828,306          $            23.34
                        Exercised.....................................           (50,000)         $            22.44
                        Forfeited.....................................          (886,234)         $            27.43
                                                                           --------------          ------------------
                        Outstanding - June 28, 2000...................         1,329,507          $            24.57
                                                                           ==============          ==================
                        Exercisable  - June 28, 2000..................           277,000          $            26.56
                                                                           ==============          ==================
                        Shares available for additional grant.........         1,325,493
                                                                           ==============
</TABLE>

          The  following  table  sets  forth   information   regarding   options
               outstanding at June 28, 2000.
<TABLE>
<CAPTION>


                                                                           Weighted                        Weighted
                                                         Weighted           Average                         Average
                                                          Average          Remaining        Number      Exercise Prices
                                        Number of        Exercise             Life         Currently      for Currently
                          Range          Options           Price             (Years)      Exercisable      Exercisable
                        -------------- ----------      -------------      -----------     -----------   ---------------
<S>                  <C>               <C>            <C>                     <C>            <C>                <C>
                     $  15.00 to 20.00   638,836      $     19.44             9.5                  -                -
                     $  22.44 to 27.00   527,000            26.77             8.6            277,000            26.56
                     $  34.63 to 41.51   163,671            37.52             4.6                  -                -
                                      ------------     -------------      -----------      ----------         --------
                                       1,329,507      $     24.57             8.2            277,000            26.56
                                      ============     =============      ===========      ==========         ========
</TABLE>
                                      F-24
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
   Dollar amounts in thousands except per share data, unless otherwise noted

9.       Leases

          (a)  Leasing Arrangements:  There were 1,403 leases in effect on store
               locations  and other  properties at June 28, 2000. Of these 1,403
               leases,  26  store  leases  and  3  warehouse  and  manufacturing
               facility leases are classified as capital  leases.  Substantially
               all store leases will expire during the next twenty years and the
               warehouse and  manufacturing  facility  leases will expire during
               the next  twenty-two  years.  However,  in the  normal  course of
               business,  it is  expected  that these  leases will be renewed or
               replaced by leases on other properties.

               The rental payments on  substantially  all store leases are based
               on a minimum rental plus a contingent  rental which is based on a
               percentage of the store's sales in excess of stipulated  amounts.
               Most  of  the  Company's   leases  contain  renewal  options  for
               five-year periods at fixed rentals.

          (b)  Leases:  Leased  property  under capital  leases by major classes
               are:


                                                               2000       1999
                                                               ----       ----
               Store facilities............................ $ 38,521     43,451
               Warehouses and manufacturing facilities.....   15,722     15,722
                                                             --------   --------
                                                              54,243     59,173
               Less: Accumulated amortization..............   32,951     33,291
                                                             --------   --------
                                                           $  21,292     25,882
                                                             ========   ========

                                      F-25
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

9.       Leases, continued


         The following is a schedule by year of future  minimum  lease  payments
         under capital and operating leases,  together with the present value of
         the net minimum lease payments as of June 28, 2000.
                                                        Capital       Operating
         Fiscal Year:                                  --------       ----------
            2001.....................               $    7,177          333,973
            2002.....................                    7,238          331,137
            2003.....................                    7,238          327,616
            2004.....................                    6,633          322,796
            2005.....................                    6,076          314,406
            Later years..............                   25,295        3,110,401
                                                       --------      -----------
         Total minimum lease payments........           59,657        4,740,329
                                                                     ===========

         Less: Amount representing estimated
               taxes, maintenance and insurance
               costs included in total minimum
               lease payments.................           1,127
                                                       --------
         Net minimum lease payments...........          58,530
         Less:  Amount representing interest..          23,448
                                                       --------
         Present value of net minimum lease payments..$ 35,082
                                                       ========

Rental payments and contingent  rentals under operating leases are as follows:
                                               2000         1999        1998
                                               ----         ----        ----

         Minimum rentals............... $     323,117      341,296     307,289
         Contingent rentals............         1,380        1,581       1,869
                                            ----------  ----------- -----------
                                        $     324,497      342,877     309,158
                                            ==========  =========== ===========

10.      Shareholders'  Equity:  Comprehensive  (loss)  income  for the year was
         approximately  $(232.0) million,  $182.6 million and $199.4 million for
         2000, 1999 and 1998, respectively. These amounts differ from net (loss)
         earnings due to changes in the net unrealized  holding gains and losses
         generated from available-for-sale securities.

         On April 19, 2000, the Board of Directors authorized the repurchase, in
         either open market or private transactions, of up to ten million shares
         of the outstanding  common stock in addition to the five-million  share
         repurchase program announced on October 6, 1999. From this date through
         June 28, 2000, the Company has repurchased  7,858,000  shares having an
         aggregate value of $162.1 million or $20.62 per share.

                                      F-26
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
   Dollar amounts in thousands except per share data, unless otherwise noted

11.      Commitments and Contingent Liabilities

          (a)  Associate  Benefit  Programs:  The Company  has  noncontributory,
               trusteed profit sharing  retirement  programs which are in effect
               for eligible  associates  and may be amended or terminated at any
               time.  Charges to  earnings  for  contributions  to the  programs
               amounted to $17,625,  $67,250 and $67,250 in 2000, 1999 and 1998,
               respectively.

               In addition to providing  profit  sharing  benefits,  the Company
               makes group  insurance  available to early retirees from the time
               they retire until age 65 when they qualify for Medicare/Medicaid.
               Currently,  the early  retiree group  consists of 76  associates.
               This group of retirees bears the entire cost of this plan,  which
               is maintained  totally separate from the Company's  regular group
               insurance  plan.  The Company  reserves the right to modify these
               benefits.

          (b)  Defined Benefit Plan: The Company has a Management  Security Plan
               (MSP),  which is a  non-qualified  defined benefit plan providing
               disability, death and retirement benefits to 517 qualified active
               associates of the Company and 477 former participants.  Total MSP
               cost charged to operations was $6,104, $6,132 and $5,406 in 2000,
               1999 and 1998, respectively.  The projected benefit obligation at
               June 28, 2000 was approximately  $47,626.  The effective discount
               rate used in  determining  the net periodic MSP cost was 8.0% for
               2000, 1999 and 1998.

               Life insurance  policies,  which are not considered as MSP assets
               for liability  accrual  computations,  were purchased to fund the
               MSP payments.  These insurance  policies are shown on the balance
               sheet  at  their  cash  surrender  values,  net of  policy  loans
               aggregating  $210,655  and $204,855 at June 28, 2000 and June 30,
               1999, respectively.

          (c)  Supplemental   Retirement   Plan:  The  Company  has  a  deferred
               compensation  Supplemental Retirement Plan in effect for eligible
               management  associates.  At June 28, 2000 and June 30, 1999,  the
               Company's  liability  under this  program  was $17.0  million and
               $14.1 million, respectively.



                                      F-27
<PAGE>


              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

11.    Commitments and Contingent Liabilities, continued

          (d)  Litigation:  There are pending against the Company various claims
               and lawsuits arising in the normal course of business,  including
               suits  charging  violations  of  certain  civil  rights  laws and
               various  proceedings  arising  under  federal,   state  or  local
               regulations protecting the environment.

               Among the suits charging violations of certain civil rights laws,
               there are actions  that  purport to be class  actions,  and which
               allege  sexual  harassment,  retaliation  and/or  a  pattern  and
               practice of race-based and gender-based  discriminatory treatment
               of employees and  applicants.  The plaintiffs  seek,  among other
               relief,  certification  of the  suits as  proper  class  actions,
               declaratory  judgment that the Company's  practices are unlawful,
               back pay,  front pay,  benefits and other  compensatory  damages,
               punitive   damages,   injunctive   relief  and  reimbursement  of
               attorneys'  fees and  costs.  The  Company is  committed  to full
               compliance with all applicable civil rights laws. Consistent with
               this commitment,  the Company has firm and long-standing policies
               in place prohibiting  discrimination and harassment.  The Company
               denies  the   allegations  of  the  various   complaints  and  is
               vigorously defending the actions.

               In July 1999,  the Company,  without  admitting  any  wrongdoing,
               reached   a   settlement   with  the   named   plaintiffs   in  a
               discrimination  class action  lawsuit  filed on behalf of certain
               female and  African-American  present and former associates.  The
               settlement  has  been  approved  by the U. S.  District  Court in
               Jacksonville,  Florida. Implementation of the settlement has been
               stayed  pending  an appeal of the  Court's  denial of a motion to
               intervene   by  a  third   party.   The   settlement   amount  is
               approximately  $33.0  million,  which the  Company  will pay from
               accruals over the next seven years.

               While the ultimate outcome of litigation cannot be predicted with
               certainty, in the opinion of management,  the ultimate resolution
               of these actions will not have a material  adverse  effect on the
               Company's financial condition or results of operations.

               See Note 6 - Income  Taxes with  respect  to  certain  litigation
               pending before the U.S. Tax Court.


                                      F-28
<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

12.      Related Party Transactions

         The  Company is  self-insured  for  purposes  of  employee  group life,
         medical,  accident and sickness insurance,  with American Heritage Life
         Insurance  Company (the "Insurance  Company"),  a related party through
         November 1, 1999,  providing  administrative  services and expenses for
         medical  and  accident  claims.   Total  payments  aggregating  through
         November 1, 1999 were  $17,632.  Payments for fiscal 1999 and 1998 were
         $40,341 and $29,440, respectively.

13.      Restructuring and Other Non-recurring Charges

         On April 20,  2000,  the Board of  Directors  approved  and the Company
         announced  a major  restructuring  to improve the support of the retail
         stores and the Company's overall  efficiency.  The  restructuring  plan
         includes   the  actions   listed  below  that  have  been  or  will  be
         implemented.   The  plan  includes  certain  exit  costs  and  employee
         termination  benefits  that will be  incurred  within one year from the
         commitment date.

         Action                                                     Status
         -------------------------------------------------------- --------------
         Executive management reduction and realignment..........  Completed
         Division management reduction and realignment...........  Completed
         Consolidation of division offices eliminating three
          division offices - Tampa, Atlanta, and Midwest.........  Completed
         Closing of one warehouse facility- Tampa................  Completed
         Closing of two manufacturing facilities
          - Detergent and Bag Plants.............................  Completed
         Centralization of procurement, marketing and
          merchandising..........................................  Completed
         Eliminating approximately 11,000 positions..............  Completed
         Closing of 116 unprofitable stores......................  Completed,
                                                                   except for 5
                                                                   stores being
                                                                   further
                                                                   evaluated
         Retrofitting approximately 650 stores to improve
          efficiency and customer service........................  In progress

         As a result of the  restructuring,  the  Company  will record a pre-tax
         charge of  approximately  $540 million ($345 million after tax or $2.37
         per diluted share). The Company has recorded approximately $396 million
         of the  pre-tax  charge  ($256  million  after tax or $1.76 per diluted
         share) in the fourth quarter of fiscal 2000 and will record the balance
         in  fiscal  2001.  A  summary  of the  restructuring  charges  and  the
         remaining accrual at year-end follows:
<TABLE>
<CAPTION>

                                     Employee           Lease
                                    Termination      Termination     Other Location        Asset
                                       Costs            Costs         Closing Costs      Impairment       Total
                                  --------------    ------------    ----------------    -----------    -------------
<S>                            <C>       <C>            <C>                  <C>           <C>      <C>     <C>
         Additions             $         16,713         189,295              10,722        179,299  $       396,029
         Utilization                      7,546           2,628              10,647        179,299          200,120
                                  --------------    ------------    ----------------    -----------    -------------
         Balance at 6/28/00    $          9,167         186,667                  75              -  $       195,909
                                  ==============    ============    ================    ===========    =============
</TABLE>

                                  F-29
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

13 Restructuring and Other Non-recurring Charges - continued

         In addition to the  restructuring  charge,  an additional  $8.9 million
         ($5.5  million after tax) was charged to cost of sales due to the write
         off of  inventories in stores and  manufacturing  plants that closed as
         part of the restructuring plan.

         The  following  table shows the number of people that were eligible for
         severance under the restructuring plan.
                                                         Manufacturing
                                                          and Support
                                                Retail     Facilities     Total
                                               -------- --------------- --------
         Eligible for severance.............    3,351          655        4,006
         Number paid........................      636          240          876
         Became ineligible..................    1,275           63        1,338
                                               ------- ---------------- --------
         Number eligible at June 28, 2000...    1,440          352        1,792


         As part of the Company's restructuring, all stores were evaluated based
         on current and projected profitability. As part of this evaluation, the
         Company performed an impairment review of its long-lived assets. During
         this review, the Company identified  impairment losses for assets to be
         disposed of and assets to be held and used.

         The impairment charge for assets to be disposed of related primarily to
         the carrying  value of equipment  and  leasehold  improvements  for the
         stores, division offices,  warehouse and manufacturing plants that were
         closed as part of the  restructuring  discussed  above.  The impairment
         charge was  determined  using the fair value less the cost to sell. The
         amount of the  impairment  charge for assets to be disposed of included
         in the restructuring charge table above is $77.9 million.

         The impairment  charge for assets to be held and used related primarily
         to the carrying value of equipment, leasehold improvements and goodwill
         for certain  stores that will  continue to be operated by the  Company.
         Projected future undiscounted cash flows were used to determine whether
         the assets were  impaired.  For the assets that were  determined  to be
         impaired,  the  impairment  charge was  calculated to be the difference
         between the carrying  value of the asset and the greater of  discounted
         cash flows and estimated fair value of the asset.  Goodwill  impairment
         was  measured  as the  difference  between  the  carrying  value of the
         goodwill and the discounted cash flows of the operations that gave rise
         to the goodwill.  As a result,  an impairment  charge of $101.4 million
         related  to assets  to be held and used was  recognized,  reducing  the
         carrying  value of fixed assets and goodwill by $69.3 million and $32.1
         million, respectively.

         In  1998,  the  Company  began  its  consolidation  of  the  accounting
         departments  to  corporate   headquarters.   The  opening  of  the  new
         distribution  facility  in  Raleigh,  North  Carolina,  resulted in the
         closing and the sale of the older Raleigh distribution facility and the
         reorganization  of the Raleigh  and  Charlotte  divisions.  The Company
         experienced a nonrecurring administrative charge totaling $18.1 million
         (after  tax,  $11.0  million or $0.07 per  diluted  share) due to these
         activities.


                                  F-30
<PAGE>
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

14.      Quarterly Results of Operations (Unaudited)

         The  following  is a summary  of the  unaudited  quarterly  results  of
         operations for the years ended June 28, 2000 and June 30, 1999:
<TABLE>
<CAPTION>
                                                                            Quarters Ended

                                                         Sept. 22        Jan. 12          April 5          June 28
                         2000                           (12 Weeks)     (16 Weeks)       (12 Weeks)      (12 Weeks)
                         ----                           ----------     ----------       ----------      ----------
<S>                                                 <C>  <C>             <C>             <C>              <C>
         Net sales...............................   $    3,162,171       4,276,024       3,199,356        3,059,996
         Gross profit on sales...................   $      846,647       1,142,309         845,948          804,943
         Net earnings (loss).....................   $       22,069         (18,793)         10,273         (242,444)
         Basic earnings (loss) per share.........   $         0.15          (0.13)            0.07            (1.70)
         Diluted earnings (loss) per share.......   $         0.15          (0.13)            0.07            (1.70)
         Net LIFO charge.........................   $        1,833           2,444           1,833            3,173
         Net LIFO charge per diluted share.......   $         0.01            0.02            0.01             0.02
         Dividends per share.....................   $        0.170           0.340           0.255            0.255
         Market price range......................   $  41.94-31.31     33.00-22.31     24.00-14.38      21.31-14.25

                                                                          Quarters Ended

                                                         Sept. 16        Jan. 6          March 31         June 30
                         1999                           (12 Weeks)     (16 Weeks)       (12 Weeks)      (13 Weeks)
                         ----                           ----------     ----------       ----------      ----------
         Net sales...............................   $    3,190,755       4,264,207      3,203,524         3,478,017
         Gross profit on sales...................   $      841,275       1,156,000        872,659           930,979
         Net earnings............................   $       14,550          52,359         58,818            56,608
         Basic earnings per share................   $         0.10            0.35           0.40              0.38
         Diluted earnings per share..............   $         0.10            0.35           0.40              0.38
         Net LIFO charge (credit)................   $        2,444           2,444          1,833            (4,030)
         Net LIFO charge (credit) per diluted
           share.................................   $         0.01            0.02           0.01             (0.02)
         Dividends per share.....................   $        0.170           0.340          0.255             0.255
         Market price range......................   $  52.19-36.25     46.50-28.63    46.69-36.94       38.50-33.06

</TABLE>

                                      F-31
<PAGE>


              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
    Dollar amounts in thousands except per share data, unless otherwise noted

14.      Quarterly Results of Operations (Unaudited), continued

         During 2000 and 1999, the fourth quarter  results reflect a change from
         the estimate of inflation used in the  calculation of LIFO inventory to
         the actual rate  experienced by the Company of 1.0% to 1.1% and 1.1% to
         0.3%, respectively.
<TABLE>
<CAPTION>

                                                                              Fourth Quarter Results of Operations
                                                                            June 28, 2000            June 30, 1999
                                                                            (12 Weeks)               (13 Weeks)
                                                                         ------------------       -----------------
<S>                                                                  <C>        <C>                     <C>
         Net sales...............................................    $          3,059,996               3,478,017
         Cost of sales...........................................               2,255,053               2,547,038
                                                                         -----------------       -----------------
         Gross profit on sales...................................                 804,943                 930,979
         Operating and administrative expenses...................                 796,247                 868,563
         Restructuring and other non-recurring charges...........                 396,029                       -
                                                                         -----------------       -----------------
         Operating (loss) income.................................                (387,333)                 62,416
         Cash discounts and other income, net....................                  20,245                  32,481
         Interest expense........................................                  (6,784)                 (2,851)
                                                                         -----------------       -----------------
         (Loss) earnings before income taxes.....................                (373,872)                 92,046
         Income taxes............................................                (131,428)                 35,438
                                                                         -----------------       -----------------
         Net (loss) earnings.....................................    $           (242,444)                 56,608
                                                                         =================       =================
</TABLE>

                                      F-32
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
                         ON FINANCIAL STATEMENT SCHEDULE



The Shareholders and Board of Directors
Winn-Dixie Stores, Inc.:


Under date of August 9, 2000, we reported on the consolidated  balance sheets of
Winn-Dixie Stores,  Inc. and subsidiaries as of June 28, 2000 and June 30, 1999,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the  three-year  period ended June 28, 2000,
as contained in the annual  report on Form 10-K for the year 2000. In connection
with our audits of the aforementioned consolidated financial statements, we also
audited the related  consolidated  financial statement schedule as listed in the
accompanying  index on page 17 of the  annual  report  on Form 10-K for the year
2000. This consolidated  financial  statement  schedule is the responsibility of
the Company's  management.  Our  responsibility is to express an opinion on this
consolidated financial statement schedule based on our audits.

In our opinion, the consolidated  financial statement schedule,  when considered
in relation to the basic  consolidated  financial  statements  taken as a whole,
presents fairly, in all material respects, the information set forth therein.



                                                                      KPMG LLP



Jacksonville, Florida
August 9, 2000

                              S-1


<PAGE>
<TABLE>
<CAPTION>


                                                                                                   Schedule II


                                  WINN-DIXIE STORES, INC. AND SUBSIDIARIES
                               Consolidated Valuation and Qualifying Accounts
                         Years Ended June 28, 2000, June 30, 1999 and June 24, 1998
                                           (Amounts in thousands)


                                                          Balance at      Additions     Deductions      Balance at
                                                           beginning      charged          from             end
                     Description                            of year       to income      reserves         of year
------------------------------------------------------    ------------    -----------   ------------    ------------

<S>                                                             <C>           <C>            <C>              <C>
Year ended June 28, 2000:
Reserves deducted from assets to which they apply:
   Allowance for doubtful receivables                 $         3,615         19,021         18,814           3,822
                                                          ============    ===========   ============    ============


Year ended June 30,1999:
Reserves deducted from assets to which they apply:
   Allowance for doubtful receivables                 $         2,623         14,506         13,514           3,615
                                                          ============    ===========   ============    ============


Year ended June 24,1998:
Reserves deducted from assets to which they apply:
   Allowance for doubtful receivables                 $         1,699         13,995         13,071           2,623
                                                          ============    ===========   ============    ============
</TABLE>




                                       S-2