MARSH SUPERMARKETS INC, 10-K, 1999-06-24

MARSH SUPERMARKETS INC
10-K, 1999-06-24
GROCERY STORES

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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
of the Securities Exchange Act of 1934

For the fiscal year ended March 27, 1999

Commission File Number: 0-1532

MARSH SUPERMARKETS, INC.
(Exact name of registrant as specified in its charter)

INDIANA 35-0918179
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

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

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Class A Common Stock
Class B Common Stock
7% Convertible Subordinated Debentures, due 2003
8 7/8% Senior Subordinated Notes, due 2007

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,
and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained to
the best of the Registrant's knowledge, in the definitive proxy statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: __

Aggregate market value of Class A Common Stock held by non-affiliates of
the Registrant as of June 1, 1999: $49,600,485. This calculation assumes all
shares of Common Stock beneficially held by officers and members of the Board of
Directors of the Registrant are owned by "affiliates", a status which each of
the officers and directors may individually disclaim.

At June 1, 1999, there were 4,010,108 shares of Class A Common Stock
and 4,510,478 shares of Class B Common Stock outstanding.

Portions of the 1999 Annual Report to Shareholders for the year ended
March 27, 1999 are incorporated by reference into Parts I and II.

Portions of the Proxy Statement for the Annual Shareholders' Meeting to
be held August 3, 1999 are incorporated by reference into Part III.

<PAGE> 2

PART I

ITEM 1. BUSINESS

GENERAL
At March 27, 1999, Marsh Supermarkets, Inc. (the "Company" or "Marsh") operated
90 supermarkets and 175 Village Pantry convenience stores in central Indiana and
western Ohio. The Company believes that Marsh supermarkets have one of the
largest market shares of supermarket chains operating in its market area and
Village Pantry has one of the largest market shares of convenience stores in its
market area. Marsh owns and operates a specialized convenience store
distribution business which serves its Village Pantry stores as well as 1,310
unaffiliated convenience stores in a nine-state area. Marsh also owns and
operates a food services division which provides upscale catering, vending,
concession and business cafeteria management services.

SUPERMARKETS
At March 27, 1999, the Company operated 77 supermarkets in central Indiana and
13 in western Ohio. The 38 stores in the Indianapolis metropolitan market area
constitute the Company's major market. The remaining supermarkets operate in 37
other communities. Revenues from supermarket operations represent approximately
67% of the Company's fiscal 1999 consolidated sales and other revenues.

The Company's supermarket merchandising strategy emphasizes service, quality and
convenient one-stop shopping at competitive prices. Of the Company's
supermarkets, 60 are open 24 hours a day and 10 are open until midnight, with
the remainder having various other schedules. All stores are open seven days a
week.

The Company believes providing quality merchandise is an important factor in
maintaining and expanding its customer base. In recent years, the Company has
devoted a greater proportion of new and remodeled stores to fresh, high quality
perishables, such as produce, delicatessen items, baked goods, prepared foods,
seafood and floral items. The Company believes fresh produce is an important
customer draw; therefore, it focuses on buying premium quality produce
worldwide. The geographic concentration of the Company's supermarkets enables
the Company to deliver fresh items to its stores quickly and frequently. An
extension of this theme is convenient, high quality, ready to eat meals. The
"Chef Fresh" program offers take-home items for immediate consumption in 38
stores. These products are prepared in the Company's central kitchen, which is
now a shared facility, providing fresh items to most of the Company's divisions.

The Company's new and expanded large superstore format offers customers
convenient one-stop shopping. Its Marsh supermarkets feature an extended line of
traditional grocery store items as well as service and specialty departments
such as delicatessens, bakeries, prepared foods, prime cut meats, fresh seafood,
floral and video rental. The Company features nationally advertised and
distributed merchandise along with products under its own trademarks, service
marks and trade names. Service and specialty departments included in Marsh
supermarkets include delicatessens (90 stores), hot prepared foods (61),
bakeries (90), prime cut service meat (58), fresh seafood (56), sushi shops (6),
floral shops (58), imported cheese shops (49), wines and beer (83), salad bars
(36), video rental (62), cosmetic counters (14) and shoe repair (17).
Twenty-seven of the Company's supermarkets include pharmacies in food and drug
combination stores. To combat increasing competition from other retail formats,
such as wholesale clubs, 46 of the Company's supermarkets also include
warehouse-type sections offering large size and multi-pack products typically
featured by wholesale clubs, priced competitively with club prices. In addition,
banks or savings institutions operate branch facilities in 35 of the Company's
stores, and 70 stores offer ATM machines. Home delivery of orders placed by
customers via telephone, fax or the Internet is offered to the Indianapolis
metropolitan market.

The Company's superstore format is in excess of 75,000 square feet, and its
modern conventional supermarket format is approximately 55,000 to 65,000 square
feet. The Company currently operates six superstores and eight modern
conventional supermarkets. Approximately one-third of the sales area in these
stores is devoted to merchandising fresh, high quality perishable products such
as delicatessens, bakeries, prepared foods and produce, and approximately 5,000
square feet are devoted to warehouse-type merchandising of bulk club pack
merchandise.

<PAGE> 3

The Company has developed a smaller, low-price supermarket format with limited
service and specialty departments as an alternative to the large, full service
Marsh supermarket. As of March 27, 1999, the Company operated 17 of its
supermarkets under this concept. Subsequent to March 27, 1999, a conventional
Marsh supermarket was converted to this format. The stores operate under the
trade name LoBill Foods. There is an ongoing development program to remodel
selected Marsh supermarkets to the LoBill format. The Company believes the
LoBill format offers an opportunity to maximize its market area by expanding
into smaller communities and inner city metropolitan areas that can be better
served by that format and to appeal to the price motivated consumer in markets
currently serviced by traditional Marsh stores. In 1999, the Company opened a
7,500 square foot limited selection, stock-up grocery store with an every day
low price format operating under the trade name Savin$.

The Company's supermarkets range in size from 7,500 to 81,500 square feet. The
average size is approximately 38,300 square feet. The Company has an ongoing
development program of constructing larger Marsh supermarkets within its market
area and remodeling, enlarging and replacing existing supermarkets. Future
development will continue to focus on a food and drug combination store format
of approximately 55,000 to 65,000 square feet, with superstores in excess of
75,000 square feet in select locations. The Company believes a larger store
format enables it to offer a wider variety of products and expanded service and
specialty departments, thereby strengthening its competitive position. The
following summarizes the number of stores by size categories:

<TABLE>
<CAPTION>
Number
Square Feet of Stores
----------- ---------
<S> <C>
More than 75,000. . . . . . . . . . . . . . . 6
55,000 - 75,000 . . . . . . . . . . . . . . . 8
45,000 - 54,999 . . . . . . . . . . . . . . . 7
35,000 - 44,999 . . . . . . . . . . . . . . . 20
25,000 - 34,999 . . . . . . . . . . . . . . . 42
Less than 25,000 . . . . . . . . . . . . . . 7
--
90
==
</TABLE>

The Company advertises through various media, including circulars, newspapers,
radio and television. Printed circulars are used extensively on a weekly basis
to advertise featured items. The focus of the television campaign promotes a
quality and service image rather than specific products and prices. The
Indianapolis television market covers approximately 80% of the Company's
supermarkets. Various sales enhancement promotional activities, including free
grocery and other programs designed to encourage repeat shoppers, are conducted
as an important part of the Company's merchandising strategy. The Company
utilizes a frequent shopper card program, "Fresh I.D.E.A(R)." The card functions
as a check cashing card, video rental card and automatically provides electronic
coupons. Further, a customer may select a VISA(R) co-branded credit card option
for their Fresh I.D.E.A. card and earn rebates on all credit card purchases
regardless of the merchant. The credit card rebates are funded by the Company's
bank partner.

CONVENIENCE STORES
At March 27, 1999, the Company operated 175 convenience stores under the Village
Pantry trade name. These self-service stores offer a broad selection of grocery,
bakery, dairy and delicatessen items, including fresh pastry products and
sandwiches prepared in the stores. All of the stores sell money orders and
lottery tickets and 100 stores have automated teller bank machines.
Approximately 52% of the stores also offer petroleum products. Two-thirds of the
petroleum stores are branded by Marathon, a marketer to 3,100 locations in 12
midwestern and southeastern states. Revenues from the convenience stores
represented approximately 11% of the Company's fiscal 1999 consolidated sales
and other revenues. Carry-out cold beer, a high-volume item typically found in
convenience stores in other states, may be sold only by package liquor stores
and taverns in Indiana; accordingly, it is not sold in the Company's convenience
stores in Indiana. In Indiana, all but 11 of the Company's convenience stores
are open 24 hours a day; the remaining stores close at midnight. All stores are
open seven days a week.

The Company has added higher margin food and beverage products, such as
store-prepared pizza (42 stores), chicken (48), and self-service fountain
drinks, as well as sit-down eating areas in 49 stores. The Company is a Taco
Bell Express franchisee in three stores which increases the variety of available
fast food. These stores include drive-thru service. The Company has also
partnered with Shell Oil Company in the Kokomo, Indiana and Anderson, Indiana
markets whereby the Company receives a fixed fee and a commission based on fuel
sales above a base level without investing capital in the fuel inventory or
dispensing equipment. Six stores have drive-thru car washes.

The Company has an ongoing program of remodeling, upgrading and replacing
existing Village Pantry stores with particular emphasis on developing locations
that will yield a high volume of gasoline sales. New stores generally average
3,700-5,000 square feet, compared to 1,800-2,500 square feet for older stores.
The larger size accommodates the aforementioned new food products. In
constructing new stores, and remodeling and expanding existing stores, the
Company tailors the format to
<PAGE> 4

each specific market, with heavy emphasis on food service in areas which the
Company believes to be less susceptible to intense competition from major fast
food operators, such as smaller towns and high density neighborhoods.

CONVENIENCE STORE DISTRIBUTING COMPANY ("CSDC")
CSDC serves the Company's Village Pantry stores and over 1,300 unaffiliated
stores in a nine-state area. CSDC distributes a wide range of products typically
sold in convenience stores, including groceries, cigarette and other tobacco
products, snack items, housewares and health and beauty care products. Customers
have the opportunity to order most product lines in single units. CSDC owns a
210,000 square foot warehouse and distribution facility in Richmond, Indiana,
which the Company estimates is operating at 70% of capacity. CSDC utilizes its
own trucks and drivers for its transportation needs. The CSDC sales and
marketing staff of approximately 45 employees services existing customers and
actively solicits new customers. CSDC accounted for approximately 20% of the
Company's fiscal 1999 consolidated sales and other revenues.

CRYSTAL FOOD SERVICES
The Company's food service operation does business under the trade name Crystal
Food Service. It offers a range of services including banquet hall catering,
special events catering, concession services, vending and cafeteria management.
The Company focuses on presenting expertly prepared cuisine of unsurpassed
freshness and quality in all of its food service operations. The Company began
its food service operations in 1993 with ALLtimate Catering and expanded in
January 1995 with the acquisition of Crystal Catering. In May 1995, the Company
expanded again with the acquisition of Martz and Associates Food Services. The
Company intends to expand the food services operations through the solicitation
of new customers and possible acquisition of businesses that will complement the
existing operations.

The combination of these operations has created a unique range of services,
products and facilities. The Company's banquet hall facilities include the
Crystal Yacht Club, the Indiana Roof Ballroom and the Murat Shrine Centre. The
Company caters special events at the Indianapolis Motor Speedway, Conner Prairie
Museum, Indianapolis Museum of Art, the Eiteljorg Western Museum of Art, the RCA
Tennis Championships and the Horizon Convention Center in Muncie, Indiana. The
Company also provides concession services at the Indianapolis Zoo, Conner
Prairie, the Indiana State Fairgrounds, Prairie View Golf Club and Eagle Point
Resort Cafe, and cafeteria management to 12 major employers and vending services
to over 100 clients throughout the greater Indianapolis area. The Company's food
service operation also provides meals at the child development centers for Marsh
and Eli Lilly and Company in Indianapolis.

SUPPLY AND DISTRIBUTION
The Company supplies its supermarkets from three Company-operated distribution
facilities. Dry grocery and frozen food products are distributed from a 409,000
square foot leased facility in Indianapolis. Produce and meat products are
distributed from a 191,000 square foot perishable products facility in Yorktown,
Indiana. Non-food products are distributed from 180,000 square feet of a 388,000
square foot Company owned warehouse in Yorktown. In addition, the Company leases
a 172,000 square foot warehouse for storage of forward purchases of merchandise
and seasonal items. Additional outside warehouse space is leased as needed to
meet seasonal demand.

The Company's distribution centers are modern and highly automated. Merchandise
is controlled through an on-line computerized buying and inventory control
system. In fiscal 1997, the perishable products facility was expanded by
approximately 67,000 square feet to provide additional capacity. The receiving
dock was modified to enhance product flow. Also, new state-of-the-art banana
rooms were added to ensure high quality bananas with consistent color. The
Company believes its distribution centers are adequate for its needs for the
foreseeable future without major additional capital investment. The Company
estimates the supermarket distribution centers currently operate at
approximately 75% of capacity. Approximately 80% of the delivery trips from
distribution centers to supermarkets are 75 miles or less. The Company also
operates a commissary and a central kitchen to produce products sold through the
delicatessen departments of its supermarkets and convenience stores and to third
parties through CSDC.

The Company believes centralized direct buying from major producers and growers
and its purchasing and distribution functions provide it with advantages
compared to purchasing from a third-party wholesaler. Direct buying, centralized
purchasing, and controlled distribution reduce merchandise cost by allowing the
Company to minimize purchases from wholesalers and distributors and to take
advantage of volume buying opportunities and forward purchases of merchandise.
Centralized purchasing and distribution promote a consistent merchandising
strategy throughout the Company's supermarkets. Rapid inventory turnover at the
warehouse permits the Company's stores to offer consistently fresh, high-quality
products. Through frequent deliveries to the stores, the Company is able to
reduce in-store stockroom space and increase square footage available for retail
selling.

Some products, principally bakery, dairy and beverage items, and snack foods are
delivered directly to the supermarkets and convenience stores by distributors of
national and regional brands.
<PAGE> 5

CSDC supplies grocery, produce, housewares, health and beauty care, and
cigarette and tobacco products to the Company's convenience stores. Also, CSDC
supplies cigarette and tobacco products to the Company's supermarkets.

The Company's supermarket transportation function is performed through a
subsidiary which leases most of its tractor/trailer fleet under long term, full
service leases with Ruan Transportation Management Systems ("Ruan"), an
unaffiliated transportation management and equipment leasing company. This
service is provided under a seven year contract, dated September 18, 1987, which
is automatically renewed for successive one year terms unless canceled by Ruan
or the Company at least 60 days prior to the anniversary date, subject to early
cancellation in stages under certain conditions. Under the arrangement, Ruan
employs the drivers, dispatchers and maintenance personnel who perform the
Company's distribution function.

MANAGEMENT INFORMATION SYSTEMS
All of the Company's supermarkets are equipped with electronic scanning checkout
systems to minimize item pricing, provide more efficient and accurate checkout
line operation, and provide product movement data for merchandising decisions
and other purposes. The checkout systems are integrated with the Company's
frequent shopper card program to provide customer specific data to facilitate
individualized marketing programs. Additionally, the Company is in the process
of upgrading supermarket front-end systems and scale equipment, and implemented
new inventory/procurement distribution software in 1999. Point-of-sale
electronic funds transfer and credit card systems are in place in the
supermarkets. Through the use of a bank debit card, a customer can authorize the
immediate transfer of funds from their account to the Company at the point of
purchase.

The Company utilizes in-store micro-computers in the supermarkets to automate
various tasks, such as electronic messaging, processing the receiving and
billing of vendor direct-store-delivered (DSD) merchandise, processing of video
rentals, processing pharmacy records in the 27 food and drug combination stores,
and time keeping for payroll processing. In 1998, the Company completed
installation of a wide area network for data communications between the
corporate office, supermarkets, warehouses and CSDC. Future supermarket
applications currently under development include computer-assisted reordering
and an electronic shelf tag program. All convenience stores are equipped with
micro-computers for electronic transmission of accounting and merchandising data
to headquarters, electronic messaging and processing DSD merchandise receiving
and billing.

In 1998, the Company began broadcasting live video communications by satellite
to its supermarkets from the corporate office. The Company believes this medium
has greater appeal to a generation of employees accustomed to learning from
television. In addition, the immediacy of live broadcasts reduces the barriers
of time, distance and consistency in communicating competitive strategies and
other information to retail operations. These communications are further
enhanced through a toll free telephone line which permits questions to be asked
and answered during each broadcast. The network is currently used for
merchandising, training and employee benefits communications.

COMPETITION
The retail food industry is highly competitive. Marsh believes competitive
factors include quality perishable products, service, price, location, product
variety, physical layout and design of store interior, ease of ingress and
egress to the store and minimal out-of-stock conditions. Marsh endeavors to
concentrate its efforts on all of these factors with special emphasis on
maintaining high quality store conditions, high quality perishable products,
expanded service and specialty departments, and competitive pricing.

The Company believes it is one of the largest supermarket chains operating in
its market area. The Company's supermarkets are subject to competition from
local, regional and national supermarket chains, independent supermarkets, and
other retail formats, such as discount stores and wholesale clubs. The number of
competitors and degree of competition experienced by the Company's supermarkets
vary by location, with the Indianapolis metropolitan market generally being
subject to more price competition than the smaller markets. The principal
supermarket chain competitors are The Kroger Co., Super Valu Food Stores, Inc.,
operating in the Indianapolis market through its "Cub Foods" stores, and Meijer,
Inc.

The Company believes Village Pantry is one of the largest convenience store
chains in its market area. Major competitors are petroleum marketing companies
which have converted or expanded gasoline locations to include convenience food
operations. National convenience store chains do not have a significant presence
in the Company's marketing area. The Company believes the principal competitive
factor for convenience stores is location, and it actively pursues the
acquisition of attractive sites for replacing existing stores and future
development of new stores.

The Company believes the primary competitive factors in CSDC's wholesale
distribution business are pricing, and the timeliness and accuracy of
deliveries. CSDC's major competitors are McLane Company, Inc. and several
regional wholesale distributors.
<PAGE> 6

SEASONALITY
Marsh's supermarket sales are subject to some seasonal fluctuation, as are other
retail food chains. Traditionally, higher sales occur during the third quarter
holiday season, and lower sales occur in the warm weather months of the second
quarter. Convenience store sales traditionally peak in the summer months.

EMPLOYEES
The Company has approximately 13,400 employees. Approximately 7,950 employees
are employed on a part-time basis. All employees are non-union, except
approximately 200 supermarket distribution facility employees who are unionized
under two three-year collective bargaining agreements which extend to May, 2001.
The Company considers its employee relations to be excellent.

The Company opened a child development center in fiscal 1997 in an effort to
help employees meet day care needs. The operation is located in a 12,500 square
foot facility near one of the Company's supermarkets in Carmel, Indiana. Marsh
owns the building and the equipment. The center is operated by an unaffiliated
child care firm. The service is limited to the Company's employees and immediate
family members and operates five days a week.

REGULATORY MATTERS
As a retailer of alcoholic beverages, tobacco products and gasoline, the Company
is subject to federal and state statutes, ordinances and regulations concerning
the storage and sale of these products. The Company is aware of the existence of
petroleum contamination at 30 Village Pantry locations and has commenced
remediation at each of these sites. The cost of remediation varies significantly
depending on the extent, source and location of the contamination, geological
and hydrological conditions and other factors.

<PAGE> 7

ITEM 2. PROPERTIES

The following table summarizes the per unit and aggregate size of the retail
facilities operated by Marsh, together with an indication of the age of the
total square footage operated.

<TABLE>
<CAPTION>
Per Store
Footage Operated Average 0-6 Years 6-12 Years Over 12 Years
---------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Supermarkets 3,453,000 38,300 36% 36% 28%
Convenience Stores 509,000 2,900 20% 39% 41%
---------
3,962,000
=========

</TABLE>

Owned and leased retail facilities are summarized as follows:
<TABLE>
<CAPTION>

Convenience
Supermarkets Stores
------------ -----------
<S> <C> <C>
Owned 33 127
Leased:
Fixed rentals only 29 28
Fixed plus contingent rentals 28 20
-- ---
57 48
-- ---
90 175
== ===
</TABLE>

All leases, except for six supermarkets and 16 Village Pantry stores, have one
to four renewal options for periods of two to five years each. The majority of
leases provide for payment of property taxes, maintenance and insurance by the
Company. In addition, the Company is obligated under leases for 21 closed
stores, of which eight were subleased at March 27, 1999.

One supermarket (considered owned for purposes of the foregoing analysis) is
leased under an equity lease arrangement pursuant to which ownership is
transferred to the Company at the expiration of the lease.

The non-perishable grocery products warehouse in Indianapolis is leased with an
initial lease term expiring in 2000 and options available through 2014. The
facility, constructed in 1969, is located on a 44 acre site and has a total of
409,000 square feet, of which 382,000 are utilized for grocery warehousing
operations. The remainder consists of a floral design center and office space.

A 191,000 square foot refrigerated perishable products handling facility in
Yorktown, Indiana, serves as the distribution center for meat, produce and
delicatessen items. The facility was completed in 1981 and was financed by an
economic development bond. Ownership of the facility was conveyed back to the
Company in 1996, and the warehouse was expanded and updated in fiscal 1997.

Marsh owns an additional 388,000 square foot facility in Yorktown, Indiana.
Approximately 180,000 square feet of this facility is used as a distribution
center for non-food products, approximately 21,000 square feet is used by the
retail maintenance department, and an additional 55,000 square feet of warehouse
space is leased to third parties. The portion of this facility formerly utilized
for the Company's corporate offices currently is vacant.

The Company leases a 172,000 square foot warehouse in Indianapolis for storage
of forward purchases of merchandise and seasonal items as well as housing the
Company's product reclamation center.

The 160,000 square foot corporate headquarters in Indianapolis is owned by the
Company. This facility was completed and occupied in May 1991.

CSDC owns a 210,000 square foot warehouse and distribution facility in Richmond,
Indiana.

<PAGE> 8

ITEM 3. LEGAL PROCEEDINGS

There are no pending legal proceedings to which Marsh is a party which are
material to its business, financial condition or results of operations or which
would otherwise be required to be disclosed under this item.

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

No matters were submitted to a vote of the security holders during the fourth
quarter of fiscal 1999.

EXECUTIVE OFFICERS OF REGISTRANT

Information required by Item 10 with respect to the Registrant's executive
officers is set forth below. Each officer has been elected for a term to expire
in August 1999 or upon election of the officer's successor by the Board of
Directors.

<TABLE>
<CAPTION>
NAME POSITION AGE FAMILY RELATIONSHIP
---- -------- --- -------------------
<S> <C> <C> <C>
DON E. MARSH Chairman of the Board, President 61 Son of Garnet R. Marsh;
and Chief Executive Officer brother of William L. Marsh
</TABLE>

Mr. Don E. Marsh has held his current position as Chairman of the Board of
Directors, President and Chief Executive Officer of the Company for more than
the past five years. He has been employed by the Company in various supervisory
and executive capacities since 1961.

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
FRANK J. BRYJA President and Chief Operating 57 None
Officer, Supermarket Division
</TABLE>

Mr. Frank J. Bryja has held his current position since August 1996. For more
than five years prior thereto, he served as Vice President-Merchandising. He has
been employed by the Company in various supervisory and executive capacities
since 1965.

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
P. LAWRENCE BUTT Senior Vice President, Counsel 57 None
and Secretary
</TABLE>

Mr. P. Lawrence Butt has held his current position since August 1997. For more
than the five years prior thereto, he served as Vice President, Counsel and
Secretary. In May 1998, he was elected a director of the Company. He has been
employed by the Company in various executive capacities since 1977.

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
DOUGLAS W. DOUGHERTY Senior Vice President, Chief Financial 55 None
Officer and Treasurer
</TABLE>

Mr. Douglas W. Dougherty has held his current position since August 1997. He has
been employed by the Company as Chief Financial Officer since March 1994. His
prior experience includes senior financial executive positions with Hartmarx,
Inc. from November 1990 to March 1994. Prior experience includes senior
management positions at Dayton Hudson Corp. and The May Department Stores
Company.
- --------------------------------------------------------------------------------

<PAGE> 9

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
WILLIAM L. MARSH Senior Vice President - Property 55 Son of Garnet R. Marsh;
Management brother of Don E. Marsh
</TABLE>

Mr. William L. Marsh has held his current position since August 1997. For more
than five years prior thereto, he served as Vice President-General Manager,
Property Management. In May 1991, he was elected a director of the Company. He
has been employed by the Company in various supervisory and executive capacities
since 1974.

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
RONALD R. WALICKI President and Chief Operating 61 None
Officer, International Division
</TABLE>

Mr. Ronald R. Walicki has held his current position since August 1998. Prior
thereto, he served as President and Chief Operating Officer, Village Pantry
Division, since August 1996, Executive Vice President, Supermarket Division,
since February 1994, and President and Chief Operating Officer of Marsh Village
Pantries, Inc. since February 1992. For more than five years prior to February
1992, he served as Vice President - General Manager, Supermarket Division. He
has been employed by the Company in various supervisory and management positions
since 1965.

<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
RANDOLPH L. POKORZYNSKI President and Chief Operating None
Officer, Village Pantry Division
</TABLE>

Mr. Randolph L. Pokorzynski has held his current position since August 1998.
Prior thereto, he served as Vice President-Grocery Merchandising, Supermarket
Division, since August 1997, Director-Grocery Merchandising, Supermarket
Division, since July 1996 and Director of Marketing, Village Pantry Division
since October 1991. He has been employed by the Company in various supervisory
and management positions since January 1980.

<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
THEODORE R. VARNER President and Chief Operating 63 None
Officer, Convenience Store
Distributing Company Division
</TABLE>

Mr. Theodore R. Varner has held his current position since August 1994. For more
than five years prior thereto, he served as Vice President - General Manager,
Convenience Store Distributing Company Division.

<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
JACK J. BAYT President and Chief Operating 42 None
Officer, Crystal Food Services Division
</TABLE>

Mr. Jack J. Bayt has held his current position since January 1995. For more than
five years prior thereto, he was President and Chief Executive Officer of
Crystal Catering of Indiana, Inc.

<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
MARK A. VARNER Corporate Controller 49 None
</TABLE>

Mr. Mark A. Varner has held his current position since 1990. He has been
employed by the Company in various accounting positions since 1971.

- -------------------------------------------------------------------------------

<PAGE> 10

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

Information on Common Stock and Shareholder Matters on pages 33, 34 and 35 of
the 1999 Annual Report to Shareholders is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

Selected Financial Data on page 16 of the 1999 Annual Report to Shareholders is
incorporated herein by reference.

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

Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 18 through 21 of the 1999 Annual Report to Shareholders is
incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk on page 21 of the 1999 Annual Report to Shareholders is incorporated
herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and notes thereto on pages 23 to 35 of the
1999 Annual Report to Shareholders are incorporated herein by reference.

Quarterly Financial Data on page 17 of the 1999 Annual Report to Shareholders is
incorporated herein by reference.

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

None.
PART III

In accordance with Instruction G(3), except as indicated in the following
sentence, the information called for by Items 10, 11, 12 and 13 is incorporated
by reference from those parts of Registrant's definitive Proxy Statement
captioned "Election of Directors", "Compensation of Executive Officers",
"Security Ownership of Management and Certain Beneficial Owners", and "Certain
Relationships and Related Transactions", respectively, which Proxy Statement
shall, pursuant to Regulation 14A, be filed with the Commission not later than
120 days after March 27, 1999, the end of the fiscal year covered by this
report. As permitted by instruction G(3), the information on executive officers
called for by Item 10 is included in Part I of this Annual Report on Form 10-K
under the caption "Executive Officers of Registrant".

<PAGE> 11

PART IV

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

(a) (1) The following consolidated financial statements of Marsh
Supermarkets, Inc. and subsidiaries, included in the 1999 Annual
Report to Shareholders are incorporated by reference in Item 8.

Consolidated Balance Sheets as of March 27, 1999 and March 28, 1998.

Consolidated Statements of Income for each of the three years in the
period ended March 27, 1999.

Consolidated Statements of Changes in Shareholders' Equity for each
of the three years in the period ended March 27, 1999.

Consolidated Statements of Cash Flows for each of the three years in
the period ended March 27, 1999.

Notes to Consolidated Financial Statements.

Report of Independent Auditors.

(2) The following consolidated financial statement schedules of Marsh
Supermarkets, Inc. and subsidiaries are included in Item 14(d):

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

(3) The following exhibits are included in Item 14(c):

Exhibit 3 (a) - Restated Articles of Incorporation, as amended as of May 15,
1991 - Incorporated by reference to Form 10-K for the year
ended March 30, 1991.
(b) - By-Laws as amended as of November 26, 1997 - Incorporated by
reference to Form 10-Q for the quarter ended January 3, 1998.
Exhibit 4 (a) - Articles V, VI and VII of the Company's Restated Articles of
Incorporation, as amended as of May 15, 1991 - Incorporated by
reference to Form 10-K for the year ended March 30, 1991.
(b) - Articles I and IV of the Company's By-Laws, as amended as of
August 7, 1990 Incorporated by reference to Form 10-Q for the
quarter ended January 5, 1991.
(c) - Agreement of the Company to furnish a copy of any agreement
relating to certain long-term debt and leases to the
Securities and Exchange Commission upon its request
Incorporated by reference to Form 10-K for the year ended
March 27, 1987.
(d) - Note Agreement, dated as of May 1, 1988, for $25,000,000 9.48%
Senior Notes due June 30, 2003 - Incorporated by reference to
Form 10-Q for the quarter ended June 25, 1988.
(e) - Amended and Restated Rights Agreement, dated as of December
24, 1998, between Marsh Supermarkets, Inc. and National City
Bank, as rights agent - Incorporated by reference to Form 8-K,
dated December 21, 1998.
(f) - Note Agreement, dated as of October 15, 1992, for $35,000,000
8.54% Senior Notes, Series A, due December 31, 2007, and
$15,000,000 8.13% Senior Notes, Series B, due December 31,
2004 - Incorporated by reference to Registration Statement on
Form S-2 (File No. 33-56738).
(g) - Indenture, dated as of February 15, 1993, between Marsh
Supermarkets, Inc. and Society National Bank, as trustee,
including form of Indenture, for $17,500,000 7% Convertible
Subordinated Debentures, due 2003 - Incorporated by reference
to Registration Statement on Form S-2 (File No. 33-56738).
(h) - Amendment to Note Agreements and Assumption Agreement, dated
March 29, 1997, for $35,000,000 8.54% Senior Notes, Series A,
due December 31, 2007, and $15,000,000 8.13%, Series B, due
December 31, 2004 - Incorporated by reference to form 10-K for
the year ended March 29, 1997.
<PAGE> 12

(i) - Amendment to Note Agreements and Assumption Agreement, dated
March 29, 1997, for $25,000,000 9.48% Senior Notes, due June
20, 2003 - Incorporated by reference to Form 10-K for the year
ended March 29, 1997.
(j) - Indenture, dated August 5, 1997, between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street Bank and
Trust Company, as trustee, for $150,000,000 8-7/8% Senior
Subordinated Notes, due 2007 - Incorporated by reference to
Registration Statement on Form S-4 (File No. 333-34855).
(k) - First Supplemental Indenture between Marsh Supermarkets, Inc.
and certain of its subsidiaries and State Street Bank and
Trust Company, as trustee, dated December 31, 1997 -
Incorporated by reference to Annual Report on Form 10-K for
the year ended March 28, 1998.

Exhibit 10 (a) - Agreements between Ruan Leasing Company and Marsh
Supermarkets, Inc., dated September 18, 1987 - Incorporated by
reference to Registration Statement on Form S-2 (File No.
33-17730).
(b) - Lease agreements relating to warehouse located at 333 South
Franklin Road, Indianapolis, Indiana - Incorporated by
reference to Registration Statement on Form S-2 (File No.
33-17730).

Management Contracts and Compensatory Plans.

(c) - Marsh Supermarkets, Inc. 1987 Stock Option Plan - Incorporated
by reference to Registration Statement on Form S-8 (File No.
33-33427).
(d) - Amendment to the Marsh Supermarkets, Inc. 1987 Stock Option
Plan - Incorporated by reference to Proxy Statement, dated
March 22, 1991, for a Special Meeting of Shareholders held May
1, 1991.
(e) - Amended and Restated Employment and Severance Agreements,
dated December 3, 1992 Incorporated by reference to
Registration Statement on Form S-2(File No. 33-56738).
(f) - Marsh Supermarkets, Inc. 1980 Marsh Stock Plan - Incorporated
by reference to Registration Statement on Form S-8 (File No.
2-74859).
(g) - Amendment to the Marsh Supermarkets, Inc. 1980 Marsh Stock
Plan - Incorporated by reference to Proxy Statement, dated
March 22, 1991, for a Special Meeting of Shareholders held May
1, 1991.
(h) - Supplemental Retirement Plan of Marsh Supermarkets, Inc. and
Subsidiaries - Incorporated by reference to Registration
Statement on Form S-2 (File No. 33-17730).
(i) - Indemnification Agreements - Incorporated by reference to
Form 10-Q for quarter ended January 6, 1990.
(j) - Marsh Supermarkets, Inc. 1991 Employee Stock Incentive Plan
- Incorporated by reference to Proxy Statement, dated March
22, 1991, for a Special Meeting of Shareholders held May 1,
1991.
(k) - Marsh Supermarkets, Inc. Executive Life Insurance Plan -
Incorporated by reference to Form 10-K for the year ended
March 30, 1991.
(l) - Marsh Supermarkets, Inc. Executive Supplemental Long-Term
Disability Plan - Incorporated by reference to Form 10-K for
the year ended March 30, 1991.
(m) - Marsh Supermarkets, Inc. 1992 Stock Option Plan for Outside
Directors - Incorporated by reference to Proxy Statement,
dated June 25, 1992, for the Annual Meeting of Shareholders
held August 4, 1992.
(n) - Employment contracts, dated January 1, 1995 - Incorporated
by reference to Form 10-Q for the quarter ended January 7,
1995.
(o) - Amendment to Marsh Supermarkets, Inc. 1991 Employee Stock
Incentive Plan - Incorporated by reference to Proxy Statement,
dated June 22, 1995, for Annual Meeting of Shareholders held
August 1, 1995.
(p) - Severance Benefits Agreements, dated as of January 1, 1996 -
Incorporated by reference to Form 10-K for the year ended
March 29, 1997.
(q) - Form of Split Dollar Insurance Agreement for the benefit of
Don E. Marsh - Incorporated by reference to Form 10-K for the
year ended March 29, 1997.
(r) - Form of Restricted Stock Agreement, dated as of September
15, 1997 - Incorporated by reference to Form 10-Q for the
quarter ended October 11, 1997.
(s) - Form of Employment Contract, dated as of June 1, 1997
- Incorporated by reference to Form 10-Q for the quarter ended
October 11, 1997.
(t) - Marsh Supermarkets, Inc. Outside Directors' Stock Plan, as
adopted November 26, 1997 - Incorporated by reference to Form
10-Q for the quarter ended January 3, 1998.
(u) - Marsh Supermarkets, Inc. 1998 - Stock Incentive Plan,
effective as of June 1, 1998 - Incorporated by reference to
Proxy Statement, dated June 25, 1998, for the Annual Meeting
of Shareholders held August 4, 1998.
(v) - Executive Stock Purchase Plan of Marsh Supermarkets, Inc.,
effective as of September 1, 1998 - Incorporated by reference
to Proxy Statement, dated June 25, 1998, for the Annual
Meeting of Shareholders held August 4, 1998.

Exhibit 13 - 1999 Annual Report to Shareholders (only portions specifically
incorporated by reference are included herein).
<PAGE> 13

Exhibit 21 - Subsidiaries of the Registrant.

Exhibit 23 - Consent of Independent Auditors.

Exhibit 27 - Financial Data Schedule for the year for which this report is
filed (for SEC use only).

(b) Reports on Form 8-K:
There were no reports on Form 8-K filed by the Registrant with respect
to the fourth quarter of its fiscal year ended March 27, 1999.

<PAGE> 14

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.

MARSH SUPERMARKETS, INC.

June 22, 1999 By: /s/ Don E. Marsh
---------------------------------------
Don E. Marsh, President and
Chief Executive Officer

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

June 22, 1999 /s/ Don E. Marsh
--------------------------------------------
Don E. Marsh, Chairman of the Board,
President and Chief Executive Officer and
Director

June 22, 1999 /s/ Douglas W. Dougherty
--------------------------------------------
Douglas W. Dougherty, Senior Vice President,
Chief Financial Officer and Treasurer

June 22, 1999 /s/ Mark A. Varner
--------------------------------------------
Mark A. Varner, Corporate Controller

June 22, 1999 /s/ William L. Marsh
--------------------------------------------
William L. Marsh, Senior Vice
President-Property Management, and Director

June 22, 1999 /s/ P. Lawrence Butt
--------------------------------------------
P. Lawrence Butt, Senior Vice President,
Counsel and Secretary, and Director

June 22, 1999 /s/ Garnet R. Marsh
--------------------------------------------
Garnet R. Marsh, Director

June 22, 1999 /s/ J. Michael Blakley
--------------------------------------------
J. Michael Blakley, Director

June 22, 1999 /s/ Charles R. Clark
--------------------------------------------
Charles R. Clark, Director

June 22, 1999 /s/ Stephen M. Huse
-------------------------------------------
Stephen M. Huse, Director

June 22, 1999 /s/ Catherine A. Langham
-------------------------------------------
Catherine A. Langham, Director

June 22, 1999 /s/ James K. Risk
-------------------------------------------
James K. Risk, III, Director

June 22, 1999 /s/ K. Clay Smith
-------------------------------------------
K. Clay Smith, Director

<PAGE> 15

<TABLE>
<CAPTION>
Exhibit Index Page No.
- ------------- --------
<S> <C>
Exhibit 3 (a) - Restated Articles of Incorporation, as amended as of May 15,
1991 - Incorporated by reference to Form 10-K for the year
ended March 30, 1991.
(b) - By-Laws, as amended as of November 26, 1997 - Incorporated
by reference to Form 10-Q for the quarter ended January 3,
1998.
Exhibit 4 (a) - Articles V, VI and VII of the Company's Restated Articles of
Incorporation, as amended as of May 15, 1991 - Incorporated by
reference to Form 10-K for the year ended March 30, 1991.
(b) - Articles I and IV of the Company's By-Laws, as amended as of
August 7, 1990 - Incorporated by reference to Form 10-Q for
the quarter ended January 5, 1991.
(c) - Agreement of the Company to furnish a copy of any agreement
relating to certain long-term debt and leases to the
Securities and Exchange Commission upon its request
Incorporated by reference to Form 10-K for the year ended
March 27, 1987.
(d) - Note Agreement, dated as of May 1, 1988, for $25,000,000
9.48% Senior Notes due June 30, 2003 - Incorporated by
reference to Form 10-Q for the quarter ended June 25, 1988.
(e) - Amended and Restated Rights Agreement, dated as of December
24, 1998, between Marsh Supermarkets, Inc. and National City
Bank, as rights agent - Incorporated by reference to Form 8-K,
dated December 21, 1998.
(f) - Note Agreement, dated as of October 15, 1992, for
$35,000,000 8.54% Senior Notes, Series A, due December 31,
2007, and $15,000,000 8.13% Senior Notes, Series B, due
December 31, 2004 - Incorporated by reference to Registration
Statement on Form S-2 (File No. 33-56738).
(g) - Indenture, dated as of February 15, 1993, between Marsh
Supermarkets, Inc. and Society National Bank, as trustee,
including form of Indenture for $17,500,000 7% Convertible
Subordinated Debentures, due 2003 - Incorporated by reference
to Registration Statement on Form S-2 (File No. 33-56738).
(h) - Amendment to Note Agreements and Assumption Agreement, dated
March 29, 1997, for $35,000,000 8.54% Senior Notes, Series A,
due December 31, 2007, and $15,000,000 8.13%, Series B, due
December 31, 2004 - Incorporated by reference to form 10-K for
the year ended March 29, 1997.
(i) - Amendment to Note Agreements and Assumption Agreement, dated
March 29, 1997, for $25,000,000 9.48% Senior Notes, due June
20, 2003 - Incorporated by reference to Form 10-K for the year
ended March 29, 1997.
(j) - Indenture, dated August 5, 1997, between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street Bank and
Trust Company, as trustee, for $150,000,000 8-7/8% Senior
Subordinated Notes, due 2007 - Incorporated by reference to
Registration Statement on Form S-4 (File No. 333-34855).
(k) - First Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street Bank and
Trust Company, as trustee, dated December 31, 1997 -
Incorporated by reference to Annual Report on Form 10-K for
the year ended March 28, 1998.
Exhibit 10 (a) - Agreements between Ruan Leasing Company and Marsh
Supermarkets, Inc., dated September 18, 1987 - Incorporated by
reference to Registration Statement on Form S-2 (File No.
33-17730).
(b) - Lease agreements relating to warehouse located at 333 South
Franklin Road, Indianapolis, Indiana - Incorporated by
reference to Registration Statement on Form S-2 (File No.
33-17730).

Management Contracts and Compensatory Plans.

</TABLE>
<PAGE> 16

<TABLE>
<S> <C>
(g) - Amendment to the Marsh Supermarkets, Inc. 1980 Marsh Stock
Plan - Incorporated by reference to Proxy Statement, dated
March 22, 1991, for a Special Meeting of Shareholders held May
1, 1991.
(h) - Supplemental Retirement Plan of Marsh Supermarkets, Inc. and
Subsidiaries Incorporated by reference to Registration
Statement on Form S-2 (File No. 33-17730).
(i) - Indemnification Agreements - Incorporated by reference to
Form 10-Q for the quarter ended January 6, 1990.
(j) - Marsh Supermarkets, Inc. 1991 Employee Stock Incentive Plan
- Incorporated by reference to Proxy Statement, dated March
22, 1991, for a Special Meeting of Shareholders held May 1,
1991.
(k) - Marsh Supermarkets, Inc. Executive Life Insurance Plan -
Incorporated by reference to Form 10-K for the year ended
March 30, 1991.
(l) - Marsh Supermarkets, Inc. Executive Supplemental Long-Term
Disability Plan Incorporated by reference to Form 10-K for the
year ended March 30, 1991.
(m) - Marsh Supermarkets, Inc. 1992 Stock Option Plan for Outside
Directors - Incorporated by reference to Proxy Statement,
dated June 25, 1992, for the Annual Meeting of Shareholders
held August 4, 1992.
(n) - Employment contracts, dated January 1, 1995 - Incorporated
by reference to Form 10-Q for the quarter ended January 7,
1995.
(o) - Amendment to Marsh Supermarkets, Inc. 1991 Employee Stock
Incentive Plan - Incorporated by reference to Proxy Statement,
dated June 22, 1995, for Annual Meeting of Shareholders held
August 1, 1995.
(p) - Severance Benefits Agreements, dated as of January 1, 1996.
- Incorporated by reference to Form 10-K for the year ended
March 29, 1997.
(q) - Form of Split Dollar Insurance Agreement for the benefit of
Don E. Marsh - Incorporated by reference to Form 10-K for the
year ended March 29, 1997.
(r) - Form of Restricted Stock Agreement, dated as of September
15, 1997 - Incorporated by reference to Form 10-Q for the
quarter ended October 11, 1997.
(s) - Form of Employment Contract, dated as of June 1, 1997
-Incorporated by reference to Form 10-Q for the quarter ended
October 11, 1997.
(t) - Marsh Supermarkets, Inc. Outside Directors' Stock Plan, as
adopted November 26, 1997 Incorporated by reference to Form
10-Q for the quarter ended January 3, 1998.
(u) - Marsh Supermarkets, Inc. 1998 Stock Incentive Plan,
effective as of June 1, 1998 Incorporated by reference to
Proxy Statement, dated June 25, 1998, for the Annual Meeting
of Shareholders held August 4, 1998.
(v) Executive Stock Purchase Plan of Marsh Supermarkets, Inc.,
effective as of September 1, 1998 - Incorporated by reference
to Proxy Statement, dated June 25, 1998, for the Annual
Meeting of Shareholders held August 4, 1998.

Exhibit 13 - Annual Report to Shareholders (only portions specifically
incorporated by reference are included herein).

Exhibit 21 - Subsidiaries of the Registrant.

Exhibit 23 - Consent of Independent Auditors.

Exhibit 27 - Financial Data Schedule for the year for which this report is
filed (for SEC use only).
</TABLE>

<PAGE> 1
EXHIBIT 13

(PORTIONS OF 1999 ANNUAL REPORT TO SHAREHOLDERS INCORPORATED
BY REFERENCE, INCLUDING OPINION OF INDEPENDENT AUDITORS)

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Shareholders and Board of Directors of Marsh Supermarkets, Inc.

We have audited the accompanying consolidated balance sheets of Marsh
Supermarkets, Inc. and subsidiaries as of March 27, 1999 and March 28, 1998, and
the related consolidated statements of income, changes in shareholders' equity
and cash flows for each of the three years in the period ended March 27, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Marsh
Supermarkets, Inc. and subsidiaries at March 27, 1999 and March 28, 1998, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended March 27, 1999, in conformity with generally
accepted accounting principles.

Indianapolis, Indiana
May 14, 1999

<PAGE> 2

CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
YEAR ENDED March 27, 1999 March 28, 1998 March 29, 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales and other revenues ............................................. $1,606,311 $ 1,505,133 $ 1,451,730
Cost of merchandise sold, including warehousing and transportation ... 1,208,097 1,132,296 1,096,586
---------- ----------- -----------
Gross profit ......................................................... 398,214 372,837 355,144
Selling, general and administrative expenses ......................... 339,927 321,977 318,634
Depreciation and amortization ........................................ 22,557 20,019 23,729
---------- ----------- -----------
Operating profit ..................................................... 35,730 30,841 12,781
Interest and debt expense amortization ............................... 19,261 17,745 13,030
---------- ----------- -----------
Income (loss) before income taxes and extraordinary item ............. 16,469 13,096 (249)
Income taxes (credit) ................................................ 4,888 3,651 (5)
---------- ----------- -----------
Income (loss) before extraordinary item .............................. 11,581 9,445 (244)
Extraordinary item, net of tax ....................................... -- (3,278) --
---------- ----------- -----------
NET INCOME (LOSS) ............................................. $ 11,581 $ 6,167 $ (244)
========== =========== ===========

Earnings (loss) per common share:
Before effect of extraordinary item ................................ $ 1.40 $ 1.13 $ (.03)
Extraordinary item ................................................. -- (.39) --
---------- ----------- -----------
Net income (loss) per common share ................................. $ 1.40 $ .74 $ (.03)
========== =========== ===========
Earnings (loss) per common share - assuming dilution:
Before effect of extraordinary item ................................ $ 1.28 $ 1.07 $ (.03)
Extraordinary item ................................................. -- (.34) --
---------- ----------- -----------
Net income (loss) per common share ................................. $ 1.28 $ .73 $ (.03)
========== =========== ===========

Dividends per share .................................................. $ .44 $ .44 $ .44
========== =========== ===========
</TABLE>

- ------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements
<PAGE> 3

CONSOLIDATED BALANCE SHEETS (in thousands)

<TABLE>
<CAPTION>
ASSETS March 27, 1999 March 28, 1998
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and equivalents .................................................... $ 30,520 $ 33,546
Accounts receivable, less allowances $1,304 in 1999, and $1,053 in 1998 . 36,096 27,315
Inventories ............................................................. 107,336 98,828
Prepaid expenses ........................................................ 9,768 4,477
Recoverable income taxes ................................................ 308 3,867
-------- --------
TOTAL CURRENT ASSETS ................................................ 184,028 168,033

Property and Equipment

Land ..................................................................... 53,372 52,799
Buildings ................................................................ 151,316 147,500
Fixtures and equipment ................................................... 147,019 121,604
Leasehold improvements ................................................... 51,075 50,402
Construction in progress ................................................. 13,895 7,650
Property under capital leases ............................................ 19,086 12,139
-------- --------
435,763 392,094
Allowances for depreciation and amortization ............................. 157,124 139,304
-------- --------
TOTAL PROPERTY AND EQUIPMENT ........................................ 278,639 252,790

Other Assets ............................................................... 47,016 39,216
-------- --------
$509,683 $460,039
======== ========
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.

<PAGE> 4

<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY March 27, 1999 March 28, 1998
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Liabilities
Accounts payable ........................................................ $ 69,466 $ 60,503
Employee compensation and other liabilities ............................. 15,433 13,563
State and local taxes ................................................... 12,173 10,852
Other accounts payable and accrued expenses ............................. 15,971 19,259
Dividends payable ....................................................... 936 933
Deferred income taxes ................................................... 994 687
Current maturities of long-term liabilities ............................. 2,990 2,806
-------- --------
TOTAL CURRENT LIABILITIES ......................................... 117,963 108,603

Long-term Liabilities
Long-term debt .......................................................... 228,900 206,004
Capital lease obligations ............................................... 12,820 6,457
-------- --------
TOTAL LONG-TERM LIABILITIES ....................................... 241,720 212,461

Deferred Items
Income taxes ............................................................ 11,768 10,219
Other ................................................................... 13,752 12,677
-------- --------
TOTAL DEFERRED ITEMS .............................................. 25,520 22,896

Shareholders' Equity
Series A Junior Participating Cumulative Preferred stock:
Authorized: 5,000,000 shares; Issued: None
Class A Common Stock, no par value:
Authorized: 15,000,000 shares; Issued: 4,695,253 .................... 8,982 8,552
Class B Common Stock, no par value:
Authorized: 15,000,000 shares; Issued: 5,265,158 .................. 16,257 16,232
Retained earnings ....................................................... 108,841 100,917
Cost of Common Stock in treasury
Class A: 1999 - 679,146; 1998 - 750,866 shares ...................... (2,069) (2,620)
Class B: 1999 - 775,118; 1998 - 780,057 shares ...................... (4,641) (4,648)
Deferred cost - restricted stock ........................................ (2,418) (2,022)
Notes receivable - stock options ........................................ (472) (332)
-------- --------
TOTAL SHAREHOLDERS' EQUITY ........................................ 124,480 116,079
-------- --------
$509,683 $460,039
======== ========
</TABLE>

<PAGE> 5

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)

<TABLE>
<CAPTION>
Class A Class B Cost of
Common Common Retained Stock in
Stock Stock Earnings Treasury Other Total
-------- ------- -------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 30, 1996 ......................... $ 8,552 $ 16,232 $ 102,414 $(7,476) $(1,564) $ 118,158
Net loss ........................................ (244) (244)
Cash dividends declared ......................... (3,694) (3,694)
Restricted stock grant of 500 shares ............ (2) 2 --
Repurchase of 2,390 shares ...................... (28) (28)
Exercise of stock options - 1,500 shares ........ 14 14
Minimum pension liability reversal .............. 1,258 1,258
Other ........................................... (16) (16)
-------- -------- --------- ------- ------- ---------
Balance at March 29, 1997 ......................... 8,552 16,232 98,474 (7,488) (322) 115,448
Net income ...................................... 6,167 6,167
Cash dividends declared ......................... (3,724) (3,724)
Restricted stock grant of 150,750 shares ........ 2,336 (2,022) 314
Repurchase of 205,150 shares .................... (3,189) (3,189)
Exercise of stock options - 88,725 shares ....... 1,073 1,073
Other ........................................... (10) (10)
-------- -------- --------- ------- ------- ---------
Balance at March 28, 1998 ......................... 8,552 16,232 100,917 (7,268) (2,354) 116,079
Net income ...................................... 11,581 11,581
Cash dividends declared ......................... (3,717) (3,717)
Amortization of prior year restricted stock grant 584 584
Restricted stock grant of 65,000 shares ......... 1,040 (980) 60
Repurchase of 74,593 shares .................... (1,218) (1,218)
Exercise of stock options - 86,252 shares ....... 430 25 60 736 1,251
Other ........................................... (140) (140)
-------- -------- --------- ------- ------- ---------
Balance at March 27, 1999 ......................... $ 8,982 $ 16,257 $ 108,841 $(6,710) $(2,890) $ 124,480
======== ======== ========= ======= ======= =========
</TABLE>

- ------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.

<PAGE> 6

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

<TABLE>
<CAPTION>
YEAR ENDED March 27, 1999 March 28, 1998 March 29, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) .......................................................... $ 11,581 $ 6,167 $ (244)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization .......................................... 22,557 20,019 23,729
Amortization of other assets ........................................... 4,949 4,743 5,343
Increase (decrease) in deferred income taxes ........................... 1,856 3,691 (1,724)
Debt extinguishment costs .............................................. -- 3,278 --
Changes in operating assets and liabilities:
Accounts receivable .................................................. (8,781) (1,681) (1,844)
Inventories .......................................................... (8,509) (10,565) 1,484
Prepaid expenses and recoverable income taxes ........................ (1,731) (2,041) (1,178)
Accounts payable and accrued expenses ................................ 8,866 8,828 5,895
Other operating activities ............................................. (922) (673) 1,085
-------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES .............................. 29,866 31,766 32,546

INVESTING ACTIVITIES
Acquisition of property, equipment and land held for expansion ............. (58,422) (46,458) (33,594)
Disposition of property, equipment and land held for expansion ............. 5,517 7,653 1,673
Other investing activities ................................................. (5,748) (5,979) (3,400)
-------- --------- ---------
NET CASH USED FOR INVESTING ACTIVITIES ................................. (58,653) (44,784) (35,321)

FINANCING ACTIVITIES
Repayments of short-term borrowings ........................................ -- (10,755) (4,245)
Proceeds of long-term borrowings ........................................... 60,000 172,000 47,580
Proceeds of sales/leaseback ................................................ 6,947 -- --
Payments of long-term debt and capital lease obligations ................... (37,504) (112,183) (37,141)
Debt acquisition costs ..................................................... -- (5,918) --
Debt extinguishment costs .................................................. -- (3,278) --
Purchase of Class A and Class B Common Stock for treasury .................. (1,218) (3,189) (28)
Cash dividends paid ........................................................ (3,714) (3,715) (3,697)
Stock options exercised .................................................... 1,250 1,073 --
Other financing activities ................................................. -- -- 13
-------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES .............................. 25,761 34,035 2,482

INCREASE (DECREASE) IN CASH AND EQUIVALENTS ................................... (3,026) 21,017 (293)
Cash and equivalents at beginning of year ..................................... 33,546 12,529 12,822
-------- --------- ---------

CASH AND EQUIVALENTS AT END OF YEAR ........................................... $ 30,520 $ 33,546 $ 12,529
======== ========= =========
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.

<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share
amounts or as otherwise noted)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies followed in preparation of the consolidated
financial statements are:

FISCAL YEAR
The Company's fiscal year ends on Saturday of the thirteenth week of each
calendar year. All references herein to "1999", "1998" and "1997" relate to the
fiscal years ended March 27, 1999, March 28, 1998, and March 29, 1997,
respectively.

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Marsh
Supermarkets, Inc. and all majority-owned subsidiaries ("the Company").
Investments in partnerships in which the Company has a minority interest are
accounted for by the equity method. Significant intercompany accounts and
transactions have been eliminated.

CASH AND EQUIVALENTS
Cash and equivalents consist of highly liquid investments with a maturity of
three months or less when purchased. The carrying amount approximates fair value
of those assets.

INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined by the
last-in, first-out ("LIFO") method for the principal components of inventories,
and by the first-in, first-out ("FIFO") method for the remainder (see Note B).

PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, including a provision for capitalized
interest. For financial reporting purposes, depreciation is computed by the
straight-line method over the estimated useful lives of the assets, generally
five to 12 years for equipment and 20 years for buildings. For income tax
purposes, accelerated methods and statutory lives are used to compute
depreciation.

CAPITALIZED LEASE PROPERTY
Capitalized lease assets are amortized using the straight-line method over the
term of the lease, or in accordance with practices established for similar owned
assets if ownership transfers to the Company at the end of the lease term.
Amortization is included with depreciation expense.

INCOME TAXES
Deferred tax assets and liabilities result from differences between financial
reporting and tax bases of assets and liabilities, measured using enacted tax
rates and laws expected to be in effect when the differences reverse.

EXCISE TAXES
Sales and cost of merchandise sold include state and federal excise taxes on
tobacco, gasoline and alcohol products of approximately $100 million, $100
million and $97 million in 1999, 1998 and 1997, respectively.

ADVERTISING COSTS
Advertising communication costs are expensed in the period incurred and
production costs are expensed the first time the advertising is distributed.
Advertising costs in the amounts of $18.5 million, $16.4 million, and $16.0
million were recorded and included in selling, general and administrative
expenses for 1999, 1998 and 1997, respectively.

COST OF OPENING STORES
Non-capital expenditures associated with opening new stores are expensed as
incurred.

RECLASSIFICATIONS
Certain items in the 1998 and 1997 consolidated financial statements were
reclassified to conform with the 1999 presentation.

USE OF ESTIMATES
Preparation of the consolidated financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. The more significant estimates include allowances
for doubtful accounts, provisions for self-insurance losses and income taxes.
Actual results could differ from those estimates.

<PAGE> 8

ACCOUNTING CHANGES
Accounting for the Impairment of Long-Lived Assets
The Company adopted FAS 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of," in the first quarter of 1997. The
Statement establishes accounting standards for recognizing and measuring
impairment of long-lived assets, and requires reducing the carrying amount of
any impaired assets to fair value. Adoption of FAS 121 resulted in a charge to
earnings of $4.6 million, net of tax, primarily related to the adjustment of
building and equipment carrying costs and leases of eight supermarkets and 12
convenience stores. The Company estimated fair value based on its experience in
the acquisition and disposal of similar assets. The charge was reflected in
income as follows: $2.6 million ($1.6 million net of tax) in selling, general
and administrative expenses, and $4.9 million ($3.0 million net of tax) in
depreciation and amortization. The Company continues to expect prospective
earnings to improve approximately $0.9 million annually ($0.6 million after tax,
or $.06 per diluted share) as a result of adopting FAS 121.

ENVIRONMENTAL LIABILITIES
The Company recognizes environmental liabilities when environmental assessments
indicate remedial efforts are required and the costs can be reasonably
estimated. Estimates of liability are based on all currently known facts, prior
remediation experience, existing technology, and presently enacted federal and
state statutes, ordinances and regulations concerning the storage and dispensing
of petroleum products. These estimated liabilities are subject to revision in
future periods as actual costs and new information becomes known. The amounts
recorded in the balance sheet are reduced by estimated recoveries the Company
may receive from the Indiana Underground Storage Tank Excess Liability fund
("ELF"), which reimburses owners and operators of underground storage tanks
("USTs") for approved costs incurred in connection with the remediation of soil
and groundwater contamination. Potential recoveries from third parties that may
be responsible for all or part of the contamination are not recorded in the
balance sheet.

The Company is aware of the existence of petroleum contamination at 30 Village
Pantry locations and has commenced remediation at each of these sites. The
Company currently estimates the maximum aggregate cost to be incurred in
connection with compliance with existing environmental laws and regulations
applicable to USTs will not exceed approximately $0.4 million and has charged
this amount, net of estimated recoveries from ELF, to earnings. Current
environmental laws and regulations require monthly UST leak detection tests be
performed, with test results to be retained for examination. The Company has
installed continuous statistical leak detection devices on all USTs and retains
weekly test results for examination.

NOTE B -- INVENTORIES
Inventories valued by the LIFO method represented approximately 76% and 75% of
consolidated inventories at March 27, 1999 and March 28, 1998, respectively.
Current inventory cost exceeded the carrying amount of LIFO inventories by $12.1
million at March 27, 1999, and $15.1 million at March 28, 1998.

NOTE C -- DEBT
Long-term debt consisted of the following:

<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Notes payable to insurance companies:
10.05% notes ..................... $ 17,253 $ 18,116
9.05% notes ..................... 18,065 18,882
Revolving credit agreements ........... 25,000 --
8 7/8% Senior Subordinated Notes ...... 150,000 150,000
Less discount ................... (1,021) (1,144)
7% convertible subordinated debentures 19,909 19,909
Other ................................. 1,941 2,391
Less current maturities ............... (2,247) (2,150)
--------- ---------
$ 228,900 $ 206,004
========= =========
</TABLE>

The 10.05% notes are payable in monthly installments (principal and interest) of
$220,000 through 2009.

The 9.05% notes are payable in quarterly installments (principal and interest)
of $625,000 through 2011. In 2000, the Company or lender may initiate an
interest rate renegotiation or require retirement of the notes.

Amounts borrowed under the revolving credit agreements are for terms selected by
the Company at the time of borrowing. Interest rates are LIBOR based and
principal and interest are payable at maturity. Of the amounts borrowed at March
27, 1999, $15.0 million matures in May, 2000, and $10.0 million matures in July,
2000. The agreements permit total borrowings of $50.0 million and commitment
fees of 0.15% to 0.25% are paid on unused amounts.

<PAGE> 9

The 7% convertible subordinated debentures mature February 15, 2003. They are
convertible, at the holder's option at any time, into Class B Common Stock at a
conversion price of $15.50 per share. They are redeemable, at the Company's
option, at declining prices which started at 103.5% of the principal amount in
1996. The debentures are subordinate to all present and future senior
indebtedness.

The 8 7/8% Senior Subordinated Notes were issued in August 1997. Proceeds from
the issuance were used to prepay senior notes and related prepayment penalties,
and amounts outstanding under existing revolving credit agreements. Interest is
payable semi-annually and the principal matures in August 2007. The effective
interest rate is 9.0%. Prepayment penalties of $5.0 million, plus $0.2 million
in unamortized debt acquisition costs, were charged to income as an
extraordinary item in the second quarter of 1998. The after tax charge of $3.3
million represents $.34 per diluted share.

Land and buildings with a net carrying amount of $36.7 million are pledged as
collateral to the 10.05% notes and the 9.05% notes. During 1999, a lender
released the Company's guarantee of a $1.5 million portion of two mortgages for
a 25% owned, unconsolidated subsidiary.

At March 27, 1999, the fair market value of the Company's long-term debt was
approximately $240.3 million. The fair market value was estimated using quoted
market rates for publicly traded debt and current incremental borrowing rates
for non-public debt.

Several of the loan agreements require maintenance of minimum working capital
and limit cash dividends, repurchases of common stock, future indebtedness,
lease obligations, investments, and disposition of assets. Under the most
restrictive covenant, the amount available for payment of dividends and
purchases of treasury shares was approximately $7.5 million at March 27, 1999.

The Company has commitments from various banks for short-term borrowings of up
to $20.0 million at rates at or below the prime rates of the committed banks. No
amounts were borrowed at March 27, 1999 or March 28, 1998.

<PAGE> 10

Aggregate future principal payments of long-term debt outstanding at March 27,
1999 are:

<TABLE>
<S> <C>
2000 ........................ $ 2,247
2001 ........................ 27,208
2002 ........................ 2,425
2003 ........................ 22,573
2004 ........................ 2,927
Thereafter .................. 174,788
</TABLE>

Interest expense consisted of:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Long-term debt ........... $18,310 $16,870 $12,141
Capital lease obligations 936 543 641
Other .................... 15 332 248
------- ------- -------
Total interest expense ... $19,261 $17,745 $13,030
======= ======= =======

Interest capitalized ..... $ 1,536 $ 413 $ 528
======= ======= =======

Cash payments for interest $20,004 $17,004 $13,511
======= ======= =======
</TABLE>

NOTE D - GUARANTOR SUBSIDIARIES
Other than three inconsequential subsidiaries, all of the Company's subsidiaries
(the "Guarantors") have guaranteed on a joint and several basis the Company's
obligations under the $150.0 million 8 7/8% Senior Subordinated Notes. The
Guarantors are 100% wholly-owned subsidiaries of the Company. The Guarantors
comprise all of the direct and indirect subsidiaries of the Company (other than
three inconsequential subsidiaries). The Company has not presented separate
financial statements and other disclosures concerning each Guarantor because
management has determined that such information is not material to investors.

Summarized combined financial information for 1999, 1998 and 1997 for the
Guarantors is set forth below:

<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Current assets..................... $178,504 $164,316
Current liabilities................ 111,778 104,486
Noncurrent assets.................. 280,966 244,400
Noncurrent liabilities............. 71,249 49,188
</TABLE>

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Total revenues..................... $1,606,289 $1,503,944 $1,451,703
Gross profit....................... 398,192 371,648 355,117
Income before
extraordinary item............... 25,924 19,634 3,809
Net income......................... 25,924 16,356 3,809
</TABLE>

<PAGE> 11

NOTE E -- LEASES
Of the Company's 265 retail stores, 105 are leased under commercial lease
agreements providing for initial terms generally from 15 to 20 years with
options to extend the initial terms up to an additional 20 years. The Company
also leases a portion of its transportation and store equipment for periods of
from three to eight years plus renewal and purchase options.

Capitalized lease property consisted of store facilities having a net carrying
cost of $12.0 million at March 27, 1999 and $5.6 million at March 28, 1998.

Future minimum lease payments for capital and operating leases with terms in
excess of one year, and the present value of capital lease obligations, at March
27, 1999, were as follows:

<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------ ---------
<S> <C> <C>
2000........................................... $2,355 $ 17,642
2001........................................... 2,190 14,466
2002........................................... 1,935 10,805
2003........................................... 1,935 7,627
2004........................................... 1,935 5,424
Later years.................................... 21,530 13,279
------- --------
31,880 $ 69,243
========
</TABLE>

<TABLE>
<S> <C>
Less:
Estimated executory costs.................. 37
Amounts representing interest.............. 18,280
--------
Present value of net minimum
lease payments............................. $ 13,563
========
</TABLE>

Minimum annual lease payments will be reduced by $4.4 million from future
sublease rentals due over the term of the subleases.

Rental expense consisted of:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Minimum rentals............. $21,913 $ 20,900 $ 21,719
Contingent rentals.......... 126 125 151
Sublease rental income...... (1,669) (1,895) (1,715)
------- ------- --------
$20,370 $19,130 $ 20,155
======= ======= ========
</TABLE>

NOTE F - EMPLOYEE BENEFIT PLANS
Historically, the Company provided a qualified defined benefit pension plan
covering the majority of its non-union employees and an unfunded supplemental
retirement plan for corporate officers designated by the Board of Directors. The
plan provides for payment of retirement benefits on the basis of employees'
length of service and earnings history. The Company's funding policy with regard
to the qualified defined benefit pension plan is consistent with federal laws
and regulations. Plan assets consist principally of listed stocks, corporate and
government notes and bonds.

On December 31, 1996, the Company froze benefit accruals under its qualified
defined benefit pension plan and concurrently amended one of the Company's
defined contribution savings plans to permit discretionary Company
contributions. As a result of freezing the pension plan, the Company recorded a
pretax net pension curtailment loss of $2.4 million in the first quarter of
1997, in addition to the $1.8 million net pension expense reported for 1997.

In February 1998, the Financial Accounting Standards Board issued Statement No.
132, "Employers' Disclosures about Pensions and Other Postretirement Benefits"
(FAS 132), which changed the disclosures previously required. The Company has
adopted FAS 132 and has restated its disclosures of pension and other
postretirement benefits for the year ended March 28, 1998.

<PAGE> 12

The amounts recognized in the consolidated balance sheets and the funded status
of the plans were as follows:

Pension Postretirement
1999 1998 1999 1998
-------- ------- -------- ------
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at
beginning of year ......... $ 49,451 $ 43,061 $ 2,739 $2,259
Service cost ................ 247 192 276 215
Interest cost ............... 3,086 3,312 180 169
Actuarial (gain) loss ....... (4,382) 4,713 (361) 242
Benefits paid ............... (1,982) ( 1,827) (172) (146)
-------- ------- -------- ------
Benefit obligation at
end of year ............... $ 46,420 $ 49,451 $ 2,662 $2,739
======== ======== ======= ======

Change in plan assets:
Fair value of plan assets
at beginning of year ...... $ 46,324 $ 38,648 $ -- $ --
Return on plan assets ....... (8) 8,515 -- --
Company contribution ........ -- 988 172 146
Benefits paid ............... (1,982) (1,827) (172) (146)
-------- -------- ------- ------
Fair value of plan assets
at end of year ............ $ 44,334 $ 46,324 $ -- $ --
======== ======== ======= ======

<CAPTION>
Pension Postretirement
1999 1998 1999 1998
------- -------- ------- --------
<S> <C> <C> <C> <C>
Funded status of the
plan (underfunded) .... $(2,086) $ (3,127) $(2,662) $ (2,739)
Unrecognized net
actuarial gain ........ (1,219) (1,008) (815) (717)
Unrecognized prior
service cost .......... 974 1,106 -- --
Unrecognized net
transition obligation . 15 52 -- --
------- -------- ---- --------
Accrued benefit cost .... $(2,316) $ (2,977) $(3,477) $ (3,456)
======= ======== ======= ========
</TABLE>

The components of net pension benefit expense (income) and assumptions used were
as follows:

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- ------
<S> <C> <C> <C>
Service cost........................... $ 247 $ 192 $1,510
Interest cost.......................... 3,086 3,312 3,267
Expected return on plan assets......... (4,083) (3,431) (3,615)
Recognized actuarial (gain) loss....... (80) -- 676
Amortization of prior service cost 132 132 10
Transition obligation/(asset)
recognition........................ 37 37 (55)
-------- ------- ------
Benefit (income) cost.................. $ ( 661) $ 242 $1,793
======== ======= ======

Discount rate.......................... 7.00% 7.00% 8.00%
Expected return on
pension plan assets................. 9.00% 9.00% 9.00%
Rate of compensation increase
for supplemental plan............... 5.00% 5.00% 3.50%
</TABLE>

<PAGE> 13

The components of net postretirement benefits costs were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Service cost............................. $ 276 $ 215 $ 215
Interest cost............................ 180 169 161
Recognized net actuarial gain............ (43) (89) (73)
----- ----- -----
Benefit cost............................. $ 413 $ 295 $ 303
===== ===== =====
</TABLE>

The discount rate assumptions used to compute the postretirement benefit
obligation at year end were 7.00% in 1999 and 1998, and 8.00% in 1997. The
Company's assumed healthcare cost trend rate is 11.00% for 2000, decreasing
gradually to 6.00% by 2014, and thereafter. The assumed health care cost trend
rate can have a significant effect on the amounts reported. A
one-percentage-point change in the assumed rate, however, would not have a
material effect on the benefit obligation or expense.

The Company provides certain postretirement health care benefits for its
non-union retirees and their eligible spouses. The plans are contributory with
retiree contributions adjusted annually and certain other cost sharing features,
such as deductibles and co-insurance.

The Company provides two defined contribution savings plans that allow 401(k)
contributions by employees who elect to participate and can satisfy minimum age
and annual service requirements. The plans provide the opportunity for
additional financial security during retirement by offering employees an
incentive to make tax advantaged contributions to a savings plan. The Company
expense for these plans was $3.0 million in 1999, $3.4 million in 1998 and $1.3
million in 1997. The increase subsequent to 1997 represents the Company's
discretionary contribution to the plan amended concurrent with the December 1996
benefit freeze under the defined benefit plan.

The Company also participates in a multi-employer plan that provides defined
benefits to its union employees. The Company expense for this plan amounted to
$0.7 million in 1999, 1998 and 1997.

NOTE G -- INCOME TAXES
The following are components of deferred tax assets and liabilities:

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Deferred tax assets:
Compensation and benefit accruals........................... $ 3,720 $ 3,565
Self insurance reserves..................................... 2,619 1,967
Other....................................................... 3,975 2,873
-------- --------
Total deferred tax assets................................ 10,314 8,405
Deferred tax liabilities:
Property and equipment, including
leased property.......................................... (16,211) (14,764)
Prepaid employee benefits................................... (3,158) (1,341)
Inventory................................................... (3,036) (2,531)
Other....................................................... (671) (675)
-------- --------
Total deferred tax liabilities........................... (23,076) (19,311)
-------- --------
Net deferred tax liability..................................... $(12,762) $(10,906)
======== ========
</TABLE>

<PAGE> 14

Income tax expense (credit) consisted of the following:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------- -------
<S> <C> <C> <C>
Current - Federal.......................... $2,969 $ (230) $ 526
State............................ 63 189 445
Deferred - Federal.......................... 1,833 4,431 (849)
State............................ 23 (739) (127)
------ ------- -------
$4,888 $ 3,651 $ (5)
====== ======= =======

Cash payments............................. $1,233 $ 1,340 $ 1,807
====== ======= =======
</TABLE>

A reconciliation of income tax expense (credit) is as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------- -----
<S> <C> <C> <C>
Federal statutory tax rate................ $5,764 $ 4,584 $ (96)
State and local, net of federal tax 56 (357) 206
Other..................................... (932) (576) (115)
------ ------- -------
Total income tax expense (credit) $4,888 $ 3,651 $ (5)
====== ======= =======
</TABLE>

NOTE H - EARNINGS PER SHARE
The following table sets forth the computation of the numerators and
denominators used in the computation of earnings per share and diluted earnings
per share (amounts in thousands):

<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
Income before extraordinary item ... $ 11,581 $ 9,445 $ (244)
Extraordinary item, net of tax ..... -- (3,278) --
-------- ------- -------
Numerator for earnings per share ... 11,581 6,167 (244)
Effect of convertible debentures ... 981 999 --
-------- ------- -------
Numerator for diluted EPS - income
(loss) after assumed conversions .. $ 12,562 $ 7,166 $ (244)
======== ======= =======

Weighted average shares outstanding 8,447 8,438 8,395
Non-vested restricted shares ..... (150) (80) --
-------- ------- -------
Denominator for earnings per share . 8,297 8,358 8,395
Effect of dilutive securities:
Non-vested restricted shares ..... 150 80 --
Employee stock options ........... 89 116 37
Convertible debentures ........... 1,290 1,290 --
-------- ------- -------
Denominator for diluted EPS -
adjusted weighted average shares . 9,826 9,844 8,432
======== ======= =======
</TABLE>

Convertible debentures were not included in the computation of 1997 earnings per
share because the effect would be antidilutive.

NOTE I - BUSINESS SEGMENTS
The Company operates within two business segments; the retail sale of food and
related products through supermarkets, convenience stores and food services, and
the wholesale distribution of food and related products by CSDC, principally to
unaffiliated convenience stores. The business units within each segment are
evaluated on revenues, operating income, and income before taxes and
extraordinary items.

The following table represents the Company's adoption of Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information."

<PAGE> 15

<TABLE>
<CAPTION>
Retail Wholesale Consolidated
------ --------- ------------
<S> <C> <C> <C>
Year ended March 27, 1999:
External revenues ............ $ 1,288,996 $317,315 $ 1,606,311
Intersegment sales ........... 30,791 84,332 115,123
Depreciation and
amortization .............. 21,804 753 22,557
Operating income ............. 29,369 6,361 35,730
Interest expense ............. 17,754 1,507 19,261
Income before taxes and
extraordinary item ......... 11,615 4,854 16,469
Total assets ................. 474,408 35,275 509,683
Capital expenditures ......... 57,479 943 58,422

Year ended March 28, 1998:

External revenues ............ $ 1,231,437 $273,696 $ 1,505,133
Intersegment sales ........... 30,010 75,516 105,526
Depreciation and
amortization .............. 19,321 698 20,019
Operating income ............. 26,943 3,898 30,841
Interest expense ............. 16,464 1,281 17,745
Income before taxes and
extraordinary item ......... 10,479 2,617 13,096
Total assets ................. 426,822 33,217 460,039
Capital expenditures ......... 45,790 668 46,458

Year ended March 29, 1997:

External revenues ............ $ 1,208,622 $243,108 $ 1,451,730
Intersegment sales ........... 31,586 75,236 106,822
Depreciation and
amortization .............. 23,032 697 23,729
Operating income ............. 10,371 2,410 12,781
Interest expense ............. 12,197 833 13,030
Income (loss) before taxes and
extraordinary item ......... (1,826) 1,577 (249)
Total assets ................. 370,331 25,300 395,631
Capital expenditures ......... 33,426 216 33,642
</TABLE>

Intersegment sales are at cost plus a nominal markup and are eliminated in the
consolidated statements of income. Operating income for the year ended March 27,
1999, included $1.7 million of retail and $1.7 million of wholesale gains
resulting from an approximate 25% increase in cigarette manufacturers' prices.
Retail amounts for the year ended March 27, 1997, reflect pre-tax charges of
$2.6 million in selling, general and administrative expenses and $4.9 million in
depreciation and amortization resulting from the adoption of FAS 121.

<PAGE> 16

NOTE J -- SHAREHOLDERS' EQUITY AND EMPLOYEE STOCK PLANS

COMMON STOCK
Class A Common Stock has one vote per share; Class B is non-voting except with
respect to certain matters affecting the rights and preferences of that class.
Each class is entitled to equal per share dividends and consideration in any
merger, consolidation or liquidation of the Company. A person who, subsequent to
May 15, 1991, acquires 10% or more of outstanding Class A Common Stock without
acquiring a like percentage of Class B Common Stock must make a public tender
offer to acquire additional Class B Common Stock. Failure to do so results in
suspension of the voting rights of the Class A Common Stock held by such person.

CHANGES IN SHARES OUTSTANDING
Changes in shares issued and treasury shares during the three years ended March
27, 1999, were as follows:

<TABLE>
<CAPTION>
Issued shares: Class A Class B
- -------------- --------- ---------
<S> <C> <C>
Balance at March 29, 1997, March 28,
1998 and March 27, 1999 .......... 4,695,253 5,265,158

Treasury shares:
Balance at March 30, 1996 .......... 844,555 720,303
Acquisition of shares ............ 107 2,283
Stock options exercised .......... -- (1,500)
Restricted stock grant ........... -- (500)
---------- ----------
Balance at March 29, 1997 .......... 844,662 720,586
Acquisition of shares ............ 91,604 113,546
Stock options exercised .......... (34,650) (54,075)
Restricted stock grant ........... (150,750) --
---------- ----------
Balance at March 28,1998 ........... 750,866 780,057
Acquisition of shares ............ 64,905 9,688
Stock options exercised .......... (71,625) (14,627)
Restricted stock grant ........... (65,000) --
Balance at March 27, 1999 .......... 679,146 775,118
---------- ----------

Net outstanding at March 27, 1999 .. 4,016,107 4,490,040
========== ==========
</TABLE>

STOCK OPTION PLANS AND SHARES RESERVED
The 1998 Stock Incentive Plan reserves 750,000 shares of common stock, in any
combination of Class A and Class B, for the grant of stock options, restricted
stock and/or other stock-based awards. The option price for any incentive stock
option may not be less than 100% of the fair market value of the Common Stock as
of the date of grant and for any non-qualified stock option may not be less than
85% of the fair market value as of the date of grant. Options granted to date
become exercisable pro-rata over a four year period beginning one year from the
date of grant and expire 10 years from date of grant.The 1991 Employee Stock
Incentive Plan (as amended in May 1995) reserves 750,000 shares of common stock,
in any combination of Class A and Class B, for the grant of stock options, stock
appreciation rights, restricted stock, deferred stock, stock purchase rights
and/or other stock-based awards. Grants of options made under this plan are
non-qualified. Substantially all grants were at the market value of the
underlying common stock at date of grant. They become exercisable pro-rata over
a four year period beginning one year from date of grant and expire 10 years
from date of grant.

Grants made prior to 1992 were under the 1987 Stock Option Plan at prices equal
to 85% of market value of the underlying common stock at the date of grant. They
are exercisable pro-rata over a four year period and expire 10 years from date
of grant. The 1987 Plan authorized 375,000 shares for grants of options; no
further grants may be made under the 1987 Plan.

At the 1992 Annual Meeting, shareholders approved the 1992 Stock Option Plan for
Outside Directors under which 50,000 shares of Class B Common Stock were
reserved for the grant of stock options and restricted stock to non-employee
directors. Options are granted upon election of each of the directors by the
shareholders at the market value of the underlying common stock at date of
grant. The options become exercisable and restrictions lapse in equal
installments, on the date of each of the two Annual Meetings following the date
of grant and expire 10 years from date of grant. Additionally, 3,500 shares of
restricted stock have been issued to outside directors upon their first election
as a director.

<PAGE> 17

In 1998, shareholders approved the Outside Directors' Stock Plan which provides
outside directors the opportunity to use all or any portion of the fees paid by
the Company for their services as directors to purchase Class B Common Stock
from the Company in lieu of a cash payment of such fees. The plan authorized
100,000 shares of Class B Common Stock and shares issued pursuant to the plan
may be authorized but unissued shares or treasury shares.
Shares are purchased quarterly at market price.

A summary of the Company's stock option activity follows (price is weighted
average; options are in thousands):

<TABLE>
<CAPTION>
Class A shares Class B shares
---------------- ------------------
Price Options Price Options
----- ------- ----- -------
<S> <C> <C> <C> <C>
Outstanding at March 30, 1996 $13.26 518 $12.10 463
Granted ..................... 13.50 10 10.50 4
Exercised ................... -- -- 9.50 (2)
Forfeited ................... 12.86 (33) 12.73 (53)
---- ----
Outstanding at March 29, 1997 13.28 495 12.01 412
Granted ..................... -- -- 14.75 2
Exercised ................... 10.91 (35) 10.40 (54)
Forfeited ................... 13.50 (18) 11.35 (3)
---- ----
Outstanding at March 28, 1998 13.46 442 12.27 357
Granted ..................... 15.38 98 14.13 4
Exercised ................... 13.23 (72) 10.60 (13)
Expired ..................... 12.75 (19) 12.75 (42)
---- ----
Outstanding at March 27, 1999 13.94 449 12.31 306
==== ====
</TABLE>

Related stock option information is as follows (options are in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Exercisable at the end of the year
Class A shares ............... 277 272 227
Class B shares ............... 297 328 345
Weighted average exercise price
Class A shares ............... $ 13.56 $ 13.44 $ 13.03
Class B shares ............... 12.28 12.48 12.47
Weighted average exercise price
of options granted during
the year
Class A shares ............... $ 15.38 $ -- $13.50
Class B shares ............... 14.13 14.75 10.50
</TABLE>

At March 27, 1999, the range of option exercise prices for Class A shares was
$13.50 to $15.38 and for Class B shares was $9.50 to $15.50 and the
weighted-average remaining contractual life of those options for Class A and
Class B shares was 8.6 years and 3.6 years, respectively.

The Company has adopted the disclosure only provisions of FAS 123, "Accounting
for Stock Based Compensation". In accordance with the provisions of FAS 123, the
Company applies APB Opinion 25 and related interpretations in accounting for its
stock option plans and, accordingly, does not recognize compensation cost if the
exercise price of the options granted is equal to the market price of the
underlying common stock at the date of grant. If the Company had elected to
recognize compensation cost based on the fair value of the options granted at
grant date as prescribed by FAS 123, net income would have been reduced by
$273,000 in 1999, $234,000 in 1998 and $201,000 in 1997. Earnings per share
would have been reduced by $.04 in 1999, $.03 in 1998 and $.02 in 1997. Diluted
earnings per share would have been reduced by $.01 in 1999 and $.02 in both 1998
and 1997.

The fair values of options granted were estimated using a Black-Scholes option
pricing model with the following assumptions for 1999: a risk-free interest rate
of 5.7%; dividend yield of 3.3%, a volatility factor of the expected market
price of the Company's common stock of .38; and a weighted-average expected life
of the options of nine years. The assumptions for 1998 and 1997 were; a
risk-free interest rate of 6.8%; dividend yield of 3.3%, a volatility factor of
.26; and a weighted-average expected life of the options of nine years. Because
the Company's employee stock options have characteristics significantly
different from those typically valued using the Black-Scholes option pricing
model, and

<PAGE> 18

changes in the subjective input assumptions can materially affect the fair
market estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.

In December 1998, 65,000 shares of restricted Class A Common Stock were granted
under the 1998 Stock Incentive Plan and in September 1997, 150,750 shares of
restricted Class A Common Stock were granted under the 1991 Employee Stock
Incentive Plan to certain key employees. The shares will vest ratably on each of
the first four anniversaries of the date of grant and are subject to
restrictions on their sale or transfer.

The Company presently holds notes receivable totaling $472,000 for funds loaned
to six employees to exercise certain stock options granted under the 1987 Plan
and under an expired 1980 plan. The notes bear interest at 6% per annum, are due
on various dates with the last maturing October, 2001, and are collateralized by
the shares. The amount of the receivable is shown on the balance sheet as a
reduction of equity.

As of March 27, 1999, a total of 1,290,323 shares of Class B Common Stock was
reserved for conversion of debentures; 65,725 shares in any combination of Class
A and Class B were reserved for future awards under the 1991 Plan; 587,250
shares in any combination of Class A and Class B were reserved for future awards
under the 1998 Plan; and 22,500 shares of Class B were reserved under the 1992
Stock Option Plan for Outside Directors.

AMENDED AND RESTATED RIGHTS PLAN
In December 1998, the Company announced that the Board of Directors had amended
and restated the 1989 Shareholder Rights Plan, pursuant to which preferred stock
purchase rights ("Rights") were previously distributed as a dividend at the rate
of one Right for each common share held. Each Right entitles a shareholder to
buy one one-hundredth of a share of Series A Junior Participating Cumulative
Preferred Stock of the Company at an exercise price of $65. The Rights will be
exercisable only if a person or group acquires beneficial ownership of 20% or
more of either class of the Company's common stock or commences a tender or
exchange offer upon consummation of which such person or group would
beneficially own 20% or more of either class of the Company's common stock. If
any person becomes the beneficial owner of 20% or more of either class of the
Company's common stock, or if a 20% or more shareholder engages in certain
self-dealing transactions or a merger transaction with the Company in which the
Company is the surviving corporation and its common shares are not changed or
converted, then each Right not owned by such person or related parties will
entitle its holder to purchase, at the Right's then-current exercise price,
shares of common stock (or, in certain circumstances as determined by the Board,
cash, property or other securities of the Company) having a value of twice the
Right's exercise price.

In addition, if the Company is involved in a merger or other business
combination transaction with another person in which its common stock is changed
or converted, or sells 50% or more of its assets or earning power to another
person, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, common shares of such other person having a value
of twice the Right's exercise price. The Company will generally be entitled to
redeem the rights at $.01 per Right, at any time until the 15th day following
public announcement that a 20% position has been acquired. The Rights expire on
December 24, 2008.

<PAGE> 19

SELECTED FINANCIAL DATA (in thousands, except per share amounts)

<TABLE>
<CAPTION>
March 27, March 28, March 29, March 30, April 1,
As of and for the year ended 1999 1998 1997 1996 1995
- --------------------------------------------------- --------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Sales and other revenues .......................... $1,606,311 $1,505,133 $1,451,730 $1,390,543 $1,303,261

Income (loss) before income taxes and
extraordinary item .............................. 16,469 13,096 (249) 14,284 12,790

Income (loss) before extraordinary item ........... 11,581 9,445 (244) 9,033 8,573
Extraordinary item, net of tax .................... -- (3,278) -- -- --
---------- ---------- ---------- ---------- ----------
Net income (loss) ................................. $ 11,581 $ 6,167 $ (244) $ 9,033 $ 8,573
========== ========== ========== ========== ==========

Earnings (loss) per common share:
Before extraordinary item ..................... $ 1.40 $ 1.13 $ (.03) $ 1.07 $ 1.02
Net income (loss) ............................. 1.40 .74 (.03) 1.07 1.02

Earnings (loss) per common share -
assuming dilution:
Before extraordinary item ..................... $ 1.28 $ 1.07 $ (.03) $ 1.02 $ .98
Net income (loss) ............................. 1.28 .73 (.03) 1.02 .98

Dividends declared per share ...................... $ .44 $ .44 $ .44 $ .44 $ .44

Total assets ...................................... $ 509,683 $ 460,039 $ 395,631 $ 387,294 $ 378,471
Long-term liabilities ............................. 241,720 212,461 145,429 135,066 143,102
Total shareholders' equity ........................ 124,480 116,079 115,448 118,158 114,314
</TABLE>

Earnings per share amounts for 1995 through 1997 have been restated to comply
with Statement of Financial Accounting Standard No. 128, "Earnings Per Share".

<PAGE> 20

SELECTED QUARTERLY FINANCIAL DATA (unaudited)
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
----------------------------------------- ------------------------------------------
1999 1998
Fourth Third Second First Fourth Third Second First
----------------------------------------- ------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales and other revenues................. $374,164 $383,042 $488,483 $360,622 $339,353 $356,206 $465,650 $343,924
-------- -------- -------- -------- -------- -------- -------- --------
Gross profit............................. 93,431 94,446 120,928 89,409 86,257 87,932 114,871 83,777
Selling, general and administrative...... 79,619 80,157 104,446 75,705 73,196 76,072 100,446 72,263
Depreciation and amortization............ 5,768 5,180 6,712 4,897 5,039 4,669 5,935 4,376
-------- -------- -------- -------- -------- -------- -------- --------
Operating profit......................... 8,044 9,109 9,770 8,807 8,022 7,191 8,490 7,138
Interest and debt expense amortization... 4,347 4,510 6,120 4,284 4,406 4,454 5,822 3,063
-------- -------- -------- -------- -------- -------- -------- --------
Income before income taxes and
extraordinary item..................... 3,697 4,599 3,650 4,523 3,616 2,737 2,668 4,075
Income taxes............................. 798 1,401 1,194 1,495 856 776 843 1,176
-------- -------- -------- -------- -------- -------- -------- --------
Income before extraordinary item......... 2,899 3,198 2,456 3,028 2,760 1,961 1,825 2,899
Extraordinary item, net of tax........... -- -- -- -- -- -- (3,278) --
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss)........................ $ 2,899 $ 3,198 $ 2,456 $ 3,028 $ 2,760 $ 1,961 $ (1,453) $ 2,899
======== ======== ======== ======== ======== ======== ======== ========

Earnings (loss) per common share:
Before effect of extraordinary item.... $ .35 $ .38 $ .30 $ .37 $ .33 $ .24 $ .22 $ .35
Extraordinary item..................... -- -- -- -- -- -- (.39) --
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss) per common share..... $ .35 $ .38 $ .30 $ .37 $ .33 $ .24 $ (.17) $ .35
======== ======== ======== ======== ======== ======== ======== ========

Earnings (loss) per common share -
assuming dilution:
Before effect of extraordinary item.... $ .32 $ .35 $ .28 $ .34 $ .31 $ .22 $ .21 $ .32
Extraordinary item..................... -- -- -- -- -- -- (.38) --
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss) per common share..... $ .32 $ .35 $ .28 $ .34 $ .31 $ .22 $ (.17) $ .32
======== ======== ======== ======== ======== ======== ======== ========

COMMON STOCK PRICES:
Class A - High................... $ 17.25 $ 17.88 $ 17.75 $ 16.75 $ 16.75 $ 15.75 $ 16.25 $ 14.88
Low.................... 12.88 13.50 14.00 13.00 15.38 14.88 13.75 12.25

Class B - High................... 15.00 15.00 15.38 15.75 16.13 16.50 17.00 14.38
Low.................... 11.38 12.38 12.31 13.00 14.88 14.75 13.75 11.75

CASH DIVIDEND: Class A................ $ .11 $ .11 $ .11 $ .11 $ .11 $ .11 $ .11 $ .11
Class B................ .11 .11 .11 .11 .11 .11 .11 .11
</TABLE>

Cash dividends have been paid on the common stock during each quarter for the
past 39 years.

Quarterly earnings per share are based on weighted average shares outstanding
for the quarter, therefore, the sum of the quarters may not equal the full year
earnings per share amount.

The first, third and fourth quarters are 12 weeks, and the second quarter is 16
weeks.

Unusual or infrequently occurring items recognized in net income in the
quarterly results are as follows:
Fourth quarter 1999: Income per diluted share increased $.11 from sales of
surplus real estate.
Third quarter 1999: Income per diluted share increased $.20 from
cigarette manufacturers' price increase, net of LIFO
effect.
Second quarter 1999: Income per diluted share increased $.08 from sales of
surplus real estate and $.04 from the reversal of
environmental remediation reserves.
Fourth quarter 1998: Income per diluted share increased $.12 from sales of
surplus real estate.
Third quarter 1998: Income per diluted share increased $.02 from sales of
surplus real estate.
Second quarter 1998: Income per diluted share increased $.03 from sales of
surplus real estate.

<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
The following discussion includes certain forward-looking statements. Actual
results could differ materially from those reflected by the forward-looking
statements for they are subject to known and unknown risks and uncertainties
which could adversely affect future results, liquidity and capital resources.
These factors include softness in the general retail food industry, the entry of
new competitive stores in the Company's market, the stability of distribution
incentives from suppliers, the level of discounting by competitors, the timely
and on budget completion of store construction, expansion, conversion and
remodeling, uncertainties relating to tobacco and environmental matters, the
ability of the Company and significant third parties with whom it does business
to effect conversions to new technological systems, including being Year 2000
compliant, and the level of margins achievable in the Company's operating
divisions and their ability to minimize operating expenses. Although management
believes it has the business strategy and resources needed for improved
operations, future revenue and margin trends cannot be reliably predicted. The
Company undertakes no obligation to update or revise any forward-looking
statements to reflect subsequent events or circumstances.

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

<TABLE>
<CAPTION>
Percentage of Revenues
Year Ended Percentage Change
------------------------------- -------------------
March 27, March 28, March 29, 1999 1998
1999 1998 1997 vs. 1998 vs. 1997
---- ---- ---- -------- --------

<S> <C> <C> <C> <C> <C>
Sales and other revenues ...................... 100.0% 100.0% 100.0% 6.7% 3.7%
Gross profit .................................. 24.8 24.8 24.5 6.8 5.0
Selling, general and administrative expenses... 21.2 21.4 21.9 5.6 1.0
Depreciation and amortization ................. 1.4 1.3 1.6 12.7 (15.6)
Operating profit .............................. 2.2 2.0 0.9 15.9 141.3
Interest and debt amortization expense ........ 1.2 1.2 0.9 8.5 36.2
Income (loss) before income taxes
and extraordinary item ...................... 1.0 0.9 0.0 25.8 n/m
Income taxes (credit) ......................... 0.3 0.2 0.0 33.9 n/m
Income (loss) before extraordinary item ....... 0.7 0.6 0.0 22.6 n/m
Extraordinary item, net of tax ................ -- (0.2) 0.0 n/m n/m
Net income (loss) ............................. 0.7 0.4 0.0 87.8 n/m
</TABLE>

n/m = not meaningful

SALES AND OTHER REVENUES
In 1999, consolidated sales and other revenues of $1,606.3 million increased
$101.2 million, or 6.7%, from 1998. Supermarket, convenience store (Village
Pantry), convenience wholesale (CSDC), and food service (Crystal Food Services)
revenues accounted for 67%, 11%, 20%, and 2%, respectively, of consolidated
revenues. Revenues increased $55.1 million from supermarkets, $43.6 million from
CSDC, and $1.1 million from Crystal Food Services, while Village Pantry revenues
decreased $1.1 million. In 1999, consolidated retail sales (excluding fuel
sales) increased 5.6% and sales in comparable stores, including replacement
stores and format conversions, increased 5.2% from 1998. Approximately
two-thirds of the revenue increase in supermarkets was due to same store gains,
with the remainder attributable to new stores. Village Pantry inside sales
increased $5.3 million and fuel gallons sold increased 1.6% in 1999 from 1998.
However, fuel sales declined $6.4 million as retail pump prices averaged 14.2
cents per gallon lower than in 1998. Essentially all of the increase in CSDC
revenues resulted from higher manufacturer cigarette prices. At the end of 1999,
CSDC served 1,310 non-related stores, compared to 1,290 a year earlier.

Comparable store sales for each of the past nine quarters have increased over
the respective year earlier quarter, in spite of competitive activity and low
rates of food price inflation. With the pace of new competitive openings
slowing, the Company believes that current marketing and merchandising programs
continue to be positioned to maintain the comparable store sales trend.

In 1998, consolidated sales and other revenues of $1,505.1 million increased
$53.4 million, or 3.7%, from 1997, despite 1998 not including an Easter holiday.
Supermarket, Village Pantry, CSDC and Crystal Food Services revenues accounted
for 68%, 12%, 18%, and 2%, respectively, of consolidated revenues. Revenues
increased approximately $26.8 million from supermarkets, $30.6 million from
CSDC, and $2.9 million from Crystal Food Services, while Village Pantry revenues
decreased $7.7 million. Consolidated retail sales (excluding fuel sales)
increased 2.0%. In 1998, sales in comparable stores, including replacement
stores

<PAGE> 22
and format conversions, increased 1.4% from 1997. Approximately two-thirds of
the revenue increase in supermarkets was due to identical store gains, with the
remainder attributable to new stores and format conversions. Of the decrease in
Village Pantry revenues, approximately half resulted from lower retail fuel
prices and the closing of 14 fuel operations beginning in the middle of the
prior year, with the remaining decline due to competition from fast food
restaurants and other convenience stores. Half of the increase in CSDC revenues
resulted from passing on cigarette manufacturer price increases to customers.
At the end of 1998, CSDC served 1,290 non-related stores, compared to 1,400 at
the end of 1997. The decrease was due to the loss of a 160 store chain that
accounted for sales of $10.3 million in 1998 and $11.1 million in 1997. The
increase in Crystal Food Services revenues resulted primarily from the
maturation of service sites added in the prior year.

GROSS PROFIT
Gross profit is net of warehousing, transportation and promotional expenses. In
1999, consolidated gross profit was $398.2 million and increased $25.4 million,
or 6.8%, from 1998. Expressed as a percentage of revenues, consolidated gross
profit was 24.8% in both 1999 and 1998. In November 1998, cigarette
manufacturers increased wholesale prices approximately 25% and cigarette
retailers and wholesalers immediately increased their prices accordingly. The
increase allowed the Company to realize a one-time gain of $2.8 million, net of
the estimated LIFO impact. Excluding the cigarette price increase gain,
consolidated gross profit increased $22.5 million, or 6.0%, from the year
earlier. Consolidated gross profit excluding the cigarette price increase gain,
expressed as a percentage of revenues, was 24.6% in 1999. The $22.5 million
increase in gross profit resulted from improvements in profit margin rates in
all divisions and profits on incremental revenues.

In 1998, consolidated gross profit was $372.8 million and increased $17.7
million, or 5.0%, compared to 1997. Expressed as a percentage of revenues,
consolidated gross profit was 24.8% in 1998, an increase of 0.3% from 24.5% in
1997. The $17.7 million increase in gross profit resulted from improvements in
profit margin rates in all divisions and profits on incremental revenues.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses in 1999, compared to 1998,
increased $18.0 million, or 5.6%, to $339.9 million. Expressed as a percentage
of revenues, selling, general and administrative expenses decreased 0.2% to
21.2% in 1999, from 21.4% in 1998. In 1999, wages and fringe benefits increased
$11.3 million, advertising increased $2.1 million, store occupancy costs
increased $2.5 million and other operating costs increased $4.1 million. The
increases were partially offset by a reversal of $0.6 million in environmental
remediation reserves. Additionally, $1.5 million of reorganization related
consulting fees expensed during 1998 did not recur in 1999.

Wages in identical stores increased 1.7% in 1999 from 1998, following a 1.5%
increase in 1998 from 1997. A tight labor market continues, resulting in a
shift to more full-time employees, higher wage rates and increased overtime.
Retailers, including the Company, generally offset wage increases with higher
gross margin rates, higher same store sales, and productivity gains. The
Company expects the tight labor market to continue, but implemented labor
productivity changes in 1999 and 1998 aimed at reducing the recent increases in
wage costs, while continuing to maintain high customer service levels.

Selling, general and administrative expenses in 1998, compared to 1997,
increased $3.3 million, or 1.0%, to $322.0 million. Expressed as a percentage
of revenues, selling, general and administrative expenses decreased 0.5% to
21.4% in 1998, from 21.9% in 1997. In 1998, wages and fringe benefits increased
$8.7 million (including a $2.1 million discretionary contribution to the 401(k)
plan), advertising increased $0.4 million, store occupancy costs increased $0.8
million and other operating costs increased $3.3 million. The increases were
partially offset by a decrease of $1.6 million in workers compensation and
general liability expenses, and a $3.0 million reduction in certain expenses
that is anticipated to recur annually as a result of the restructuring of
retail operations. Additionally, $1.5 million of reorganization related
consulting fees were expensed during 1998. Expenses in 1997 that did not recur
in 1998 included: $2.6 million in FAS 121 charges related to future lease
obligations and the write-down of land values for impaired stores; $2.4 million
from the decision to curtail the accrual of benefits under the Company's
qualified defined benefit pension plan; $1.3 million for recruiting and
relocation of certain personnel hired during the first quarter of 1997,
consulting fees and the severance of certain employees, and a $0.5 million
charge to merchandising allowances related to a supplier contract.

<PAGE> 23

DEPRECIATION AND AMORTIZATION EXPENSE
Depreciation and amortization expense was $22.6 million, $20.0 million and
$23.7 million for 1999, 1998 and 1997, respectively. Depreciation and
amortization in 1997 included $4.9 million in FAS 121 charges primarily related
to the adjustment of building and equipment carrying costs of eight
supermarkets and 12 convenience stores. Expressed as a percentage of revenues,
depreciation and amortization expense was 1.4% for 1999, 1.3% for 1998 and 1.6%
for 1997.

INTEREST EXPENSE
Interest expense was $19.3 million in 1999 compared to $17.7 million in 1998.
The increase is primarily attributable to the $150.0 million of 8 7/8% Senior
Subordinated Notes outstanding for the full year in 1999, compared to seven
months in 1998, net of an increase of $1.1 million in capitalized interest. As
a percentage of revenues, interest was 1.2% in both 1999 and 1998, compared to
0.9% in 1997.

INCOME TAXES
The effective income tax rate was 29.7% for 1999 and was lower than the
statutory rate due to contributions, research and development credits and other
tax credits. The effective income tax rate for 1998 was 27.9% and for 1997 was
not meaningful. The effective income tax rate for 2000 is expected to
approximate 33%.

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM
Income before extraordinary item was $11.6 million, or 0.7% of revenues, for
1999 compared to $9.4 million, or 0.6%, for 1998 as gross profit gains from
higher revenues in 1999 outpaced increased expenses.

Income (loss) in 1997 was a $0.2 million loss due principally to FAS 121
charges for the write-down of impaired assets and additional charges not
normally recurring.

EXTRAORDINARY ITEM: DEBT EXTINGUISHMENT
In August 1997, the Company consummated the issuance of $150.0 million in
principal amount of 8 7/8% Senior Subordinated Notes. A portion of the proceeds
was used to repay $60.9 million in principal amount of senior unsecured
indebtedness and $5.0 million in related prepayment penalties. The prepayment
penalties, plus $0.2 million in unamortized debt acquisition costs, were
charged to income during the second quarter of 1998. The after tax charge of
$3.3 million represents $.34 per diluted share.

CAPITAL EXPENDITURES
Capital expenditures and major capital projects completed during the last three
years consisted of:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Capital expenditures (millions) ........ $ 58.4 $ 46.5 $ 33.6
====== ====== ======
Supermarkets
New/acquired stores ............. 2 2 1
Closed stores ................... 1 1 3
Major remodels/expansions ....... 1 2 0
Convenience stores
New/acquired stores ............. 8 0 3
Closed stores ................... 14 1 2
</TABLE>

All years include land acquisitions for future store development.
<PAGE> 24

During 1999, the Company opened the following stores:

<TABLE>
<CAPTION>
SQUARE
TYPE / CATEGORY FEET LOCATION OPENED
- ------------------------ ------ --------------- --------------
<S> <C> <C> <C> <C>
Superstore New 80,000 Carmel, IN Jun. 23, 1998
Superstore Remodel 80,000 Lafayette, IN Sept. 21, 1998
LoBill Acquired 30,000 Noblesville, IN Aug. 28, 1998
LoBill Conversion 27,000 Rushville, IN Apr. 2, 1998
Savin$ New 7,500 Frankfort, IN Mar. 3, 1999
Convenience New 5,000 Cicero, IN May 20, 1998
Convenience Acquired 2,500 Kokomo, IN May 20, 1998
Convenience New 5,000 Zionsville, IN Jul. 14, 1998
Convenience New 5,000 Lafayette, IN Oct, 9, 1998
Convenience New 5,000 Muncie, IN Jan. 26, 1999
Convenience Acquired 4,200 Indianapolis, IN Mar. 19, 1999
Convenience Acquired 3,900 Indianapolis, IN Mar. 19, 1999
Convenience Acquired 2,800 Zionsville, IN Mar. 19, 1999
</TABLE>

During 1998, the Company opened the following stores:

<TABLE>
<CAPTION>
SQUARE
TYPE / CATEGORY FEET LOCATION OPENED
- ------------------------ ------ --------------- --------------
<S> <C> <C> <C> <C>
Superstore Remodel 80,000 Fishers, IN Sep. 8, 1997
Superstore Remodel 75,000 Westfield, IN Nov. 17, 1997
LoBill Acquired 42,000 Hamilton, OH Apr. 24, 1997
LoBill Conversion 23,000 Connersville, IN Apr. 7, 1997
LoBill Replacement 32,000 Portland, IN Jan 15, 1998
</TABLE>

In 1999, the Company also began construction of a replacement supermarket in
Indianapolis, Indiana, which opened subsequent to the end of the fiscal year,
and of two new supermarkets in the Indianapolis metropolitan area. The Company
also opened a 7,500 square foot limited assortment, every day low price format
store operating under the name Savin$, installed a wide area network for office
data communications with supermarkets, LoBill stores, warehouses and CSDC,
replaced checkout systems and equipment in eighteen stores, initiated a
self-scan equipment test in the Noblesville, Indiana supermarket, and completed
the implementation of a new generation inventory procurement/distribution
system.

In 2000, the Company plans to open one new and two replacement supermarkets,
remodel one supermarket, open a new LoBill, convert a supermarket to the LoBill
format and open ten to twelve new convenience stores. The cost of these
projects and other capital commitments is estimated to be $85 million. Of this
amount, the Company plans to fund $15 million through equipment leasing, $40
million through sale/leasebacks and believes it can finance the balance with
current cash balances and internally generated funds.

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

LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities during 1999 was $29.9 million, a $1.9
million decrease from 1998. Working capital increased $6.6 million as cash
decreased $3.0 million, accounts receivable increased $8.8 million, inventories
increased $8.5 million, prepaid expenses and recoverable income taxes increased
$1.7 million and trade accounts payable increased $9.0 million. The increase in
accounts receivable results primarily from higher cigarette receivables in the
wholesale division. Inventory increased due to seasonal build-up for Easter
holiday sales in early April, but was essentially funded by an offsetting
increase in trade accounts payable.

For 1999, investing activities consisted of $58.4 million in expenditures for
acquisition of property, equipment and land for expansion, net of dispositions,
and $5.7 million in other investing activities, primarily deferred costs
associated with the new generation inventory procurement/distribution software
project, acquisition of rental video tapes and other deferred costs. The
<PAGE> 25

Company's capital requirements are traditionally financed through internally
generated funds, long-term borrowings and lease financings, including capital
and operating leases. The Company anticipates continued access to such
financing sources.

The Company's long-term debt and capital lease obligations, net of current
maturities, amounted to $241.7 million at March 27, 1999, compared to $212.5
million at March 28, 1998. At March 27, 1999, 90% of the long-term debt and
capital lease obligations were at fixed rates of interest with an 8.7% weighted
average rate and 10% were at variable rates of interest with a 5.6% weighted
average rate.

In connection with the issuance of the 8 7/8% Senior Subordinated Notes in
August 1997, the Company repaid $35.0 million borrowed on existing revolving
credit facilities and short-term borrowing arrangements and entered into new
$30.0 million and $20.0 million revolving credit facilities. As a result, at
March 27, 1999, the Company had $50.0 million of availability under its
revolving credit facilities. Commitments from various banks for short-term
borrowings provide an additional $20.0 million of available financing at rates
based upon the then prevailing federal funds rate. At March 27, 1999, $25.0
million was borrowed on revolving credit facilities and no amounts were
outstanding under short-term borrowing arrangements.

The Company believes amounts available under its revolving credit agreements
and notes payable to banks, cash flows from operating activities and lease
financings will be adequate to meet the Company's working capital needs, debt
service obligations and capital expenditures for the foreseeable future.

YEAR 2000 ISSUE
The Company has completed an assessment of its computer and other operating
systems to identify those which could be affected by the "Year 2000" issue. The
assessment included the review of business applications hardware and software
(information technology, or IT), non-IT areas such as microprocessors and
embedded chips, and third parties, including merchandise suppliers and service
providers. The Company is monitoring progress toward Year 2000 compliance
through three phases; the remediation phase, which includes modification to, or
replacement of, software, hardware or microprocessors, and obtaining assurances
from third parties that they have addressed the Year 2000 issue; the testing
phase which includes conducting trials adequate to ensure compliance prior to
the implementation, or installation, of the compliant solution, and the
implementation phase.

At March 27, 1999, the percentage completion of the remediation phase was 83%
in the area of mainframe and central servers, 78% in stores, 95% in warehouses,
and 90% in non-IT areas. The percentage completion of the testing phase was 75%
in the area of mainframe and central servers, 59% in stores, 89% in warehouses
and 90% in non-IT areas. The percentage completion in the implementation phase
was 70% in the area of mainframe and central servers, 54% in stores, 89% in
warehouses and 90% in non-IT areas. Expected completion of all areas through
final implementation is staged from July, 1999 through October, 1999.

The estimated total costs, excluding internal costs, to complete compliance are
$15.8 million, of which $15.4 million will be capitalized and $0.4 million will
be charged to expense. The cost includes replacement of inventory
procurement/distribution systems for both supermarkets and CSDC aggregating
approximately $14.4 million. As of March 27, 1999, the Company had expended
$12.5 million, of which $12.2 million was capitalized and $0.3 million was
expensed. The Company does not separately track the internal costs incurred for
the Year 2000 project; those costs are principally the payroll and related
costs for its information systems group. The costs of the project have been,
and will continue to be, funded through operating cash flows.

The Company believes it has an effective program in place to resolve the Year
2000 issue in a timely manner. As indicated above, the Company has not
completed all necessary phases of the Year 2000 project. Year 2000 risks for
the Company include unsuccessful testing of software changes, failed attempts
to obtain vendor software and failure on the part of suppliers and service
providers. The Company believes that under reasonably likely worst case
scenarios, CSDC would be unable to order product or to fill customer orders,
and certain supermarket automated data collection processes would revert to
manual processes. Such an event could have a material adverse impact on the
Company's operating results and financial position. Contingency plans to
address those risks have not been fully developed; however, the Company intends
to finalize its contingency plan for those risks by June 1999. No IT projects
have been delayed, as a result of the Year 2000 compliance effort, that would
have a material effect on the company's operating results or financial
position.
<PAGE> 26

MARKET RISK - INTEREST
The Company, as a policy, does not engage in speculative or leveraged
transactions, nor does it hold or issue financial instruments for trading
purposes. The Company is exposed to changes in interest rates primarily as a
result of its borrowing activities. Based on interest rates at March 27, 1999,
a 100 basis point change in interest rates would not have a material impact on
the Company.

<PAGE> 1

EXHIBIT 21

MARSH SUPERMARKETS, INC. AND SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

<TABLE>
<CAPTION>
State of Name under which Business
Name as Specified Incorporation Done if Different from
in Charter or Organization Name Specified in Charter
- ----------------- --------------- -------------------------

<S> <C> <C>
Marsh Drugs, Inc. Indiana Marsh Drugs
Marsh Village Pantries, Inc. Indiana Village Pantry
Mundy Realty, Inc. Indiana
Mar Properties, Inc. Indiana
Marlease, Inc. Indiana
Marsh International, Inc. Indiana
Maraines Greenery, Inc. Indiana Floral Fashions
Limited Holdings, Inc. Indiana
Convenience Store
Distributing Company Ohio CSDC
Marsh P.Q., Inc. Indiana
S.C.T., Inc. Indiana
North Marion Development Corp. Indiana
Contract Transport, Inc. Indiana
Crystal Food Services, LLC Indiana Crystal Food Services
LoBill Foods, LLC Indiana LoBill
Contract Transport, LLC Indiana
Marsh Supermarkets, LLC Indiana Marsh
Village Pantry, LLC Indiana Village Pantry
Marsh Drugs, LLC Indiana Marsh Drugs
Trademark Holdings, Inc. Delaware
Marsh Clearing House, LLC Indiana
Convenience Store
Transportation Company, LLC Indiana CSTC
Convenience Store Distributing Company, LLC Indiana CSDC
Crystal Food Management Services, LLC Indiana
Butterfield Foods, LLC Indiana Butterfield
</TABLE>

<PAGE> 1

EXHIBIT 23

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Marsh Supermarkets, Inc. of our report, dated May 14, 1999, included in the
1999 Annual Report to Shareholders of Marsh Supermarkets, Inc.

We also consent to the incorporation by reference in Registration Statement
Number 2-74859 on Form S-8 of the 1980 Marsh Stock Plan, dated December 2,
1981, Registration Statement Number 33-33427 on Form S-8 of the Marsh
Supermarkets, Inc. 1987 Stock Option Plan, dated February 12, 1990,
Registration Statement Number 33-43817 on Form S-8 of the Marsh Employees'
Monthly Stock Investment Plan - 1977, dated November 7, 1991, Registration
Statement Number 33-56630 on Form S-8 of the 1991 Employee Stock Incentive
Plan, dated December 31, 1992, Registration Statement Number 33-56624 on Form
S-8 of the 1992 Stock Option Plan for Outside Directors, dated December 31,
1992, Registration Statement Number 33-56626 on Form S-8 of the Marsh
Supermarkets, Inc. 401(k) Plan, dated December 31, 1992, Registration Statement
Number 333-64321 on Form S-8 of the Outside Directors Stock Plan, the Marsh
Supermarkets, Inc. 1998 Stock Incentive Plan and the Executive Stock Purchase
Plan of Marsh Supermarkets, Inc., dated September 25, 1998, and Registration
Statement Number 333-64343 on Form S-8 of the Marsh Deferred Compensation Plan,
dated September 25, 1998, of our report dated May 14, 1999, with respect to the
consolidated financial statements incorporated by reference in the Annual
Report (Form 10-K) of Marsh Supermarkets, Inc.

Ernst & Young LLP
Indianapolis, Indiana
June 22, 1999

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 10-K FOR THE PERIOD ENDED MARCH 27, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-27-1999
<PERIOD-END> MAR-27-1999
<CASH> 30,520
<SECURITIES> 0
<RECEIVABLES> 36,096
<ALLOWANCES> 1,304
<INVENTORY> 107,336
<CURRENT-ASSETS> 184,028
<PP&E> 435,763
<DEPRECIATION> 157,124
<TOTAL-ASSETS> 509,683
<CURRENT-LIABILITIES> 117,963
<BONDS> 241,720
0
0
<COMMON> 8,506<F1>
<OTHER-SE> 105,951
<TOTAL-LIABILITY-AND-EQUITY> 509,683
<SALES> 1,606,311
<TOTAL-REVENUES> 1,606,311
<CGS> 1,208,097
<TOTAL-COSTS> 1,548,024<F2>
<OTHER-EXPENSES> 22,557
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,261
<INCOME-PRETAX> 16,469
<INCOME-TAX> 4,888
<INCOME-CONTINUING> 11,581
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,581
<EPS-BASIC> 1.40
<EPS-DILUTED> 1.28<F3>
<FN>
<F1>Number of Class A and Class B shares outstanding
<F2>Includes (i) $1,208,097 of Cost of Goods Sold (Item 5-03(b)2(a) of
Regulation S-X) and
(ii) $339,927 of Selling, General and Administrative Expenses
(Item 5-03(b)4 of Regulation S-X).
<F3>Multiplier is 1 for per share data.
</FN>

</TABLE>