Registrant's telephone number, including area code: (616) 878-2000

Securities registered pursuant to Section 12(b) of the Act: None

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   X                             No ____

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

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 15, 2000, was $110,357,482.

The number of shares of the registrant's Class A Common Stock, $2 par value, outstanding at June 15, 2000, was 9,970,770 shares.

DOCUMENTS INCORPORATED BY REFERENCE
None

PART I

Spartan Stores, Inc. is a premier regional food retailer and distributor based in Grand Rapids, Michigan. As a result of four acquisitions since January 1999, Spartan Stores operates 47 retail grocery stores in Michigan. Its company-owned grocery stores operate under the banners of Ashcraft's Markets, Family Fare, Glen's Markets and Great Day. Spartan Stores also operates two grocery distribution centers in Michigan from which it supplies a comprehensive selection of national brand and private label grocery and related products to approximately 400 retail grocery store customers. In addition to its retail food and grocery distribution businesses, Spartan Stores distributes assorted products to approximately 9,600 convenience stores and other retail locations in nine states and provides real estate and insurance services in connection with both its retail and wholesale business operations.

Financial information concering the operating segments of Spartan Stores and its subsidaires is set forth in Item 8 of this Annual Report on Form 10-K under the heading "Note 14--Operating Segment Information" and is here incorporated by reference.

Description of Business

Competition

On April 6, 2000, Spartan Stores entered into a merger agreement with Seaway. Seaway is a leading regional supermarket chain operating predominantly in northwest and central Ohio and southeast Michigan. Seaway operates 47 supermarkets and 26 deep discount drugstores under the name of the Pharm. Spartan Stores and Seaway cannot complete the merger unless the Seaway shareholders vote to adopt the merger agreement and the Spartan Stores shareholders vote to approve certain amendments to Spartan Stores' articles of incorporation and bylaws. Each company is holding a meeting of its shareholders on July 18, 2000 to vote on these and other important matters.

If the merger is consummated, each outstanding share of Spartan Stores Class A common stock, $2.00 par value, will be converted into one share of Spartan Stores common stock, no par value. Spartan Stores will declare a stock split through a dividend of 0.336 shares of Spartan Stores common stock for each share of Spartan Stores common stock outstanding immediately before the merger. In the merger, Spartan Stores will issue one share of Spartan Stores common stock and $5.00 in cash to the shareholders of Seaway in exchange for each share of Seaway common stock outstanding immediately before the merger. After the merger, Seaway will be a wholly owned subsidiary of Spartan Stores. Spartan Stores will have approximately 20 million shares of common stock outstanding which will be listed for trading on the Nasdaq National Market and will be owned approximately 33.5 percent by the current shareholders of Seaway and 66.5 percent by the current shareholders of Spartan Stores.

Pro forma financial information concerning the proposed merger with Seaway is set forth in "Item 8-Financial Statements and Supplementary Data," following the notes to the consolidated financial statements included in that item.

Item 2.    Properties

Information concering the properties of Spartan Stores and its subsidaires is set forth in Item 1 of this Annual Report on Form 10-K under the headings "Retail Grocery," "Grocery Distribution," "Convenience Store Distribution," and "Real Estate," and is here incorporated by reference.

Item 3.    Legal Proceedings

Thirty actions have been filed in state courts in Pennsylvania against the leading cigarette manufacturers operating in the United States and certain wholesalers and distributors, including J.F. Walker Company, Inc., a subsidiary of Spartan Stores. All of the Pennsylvania actions were filed by individual plaintiffs pursuant to a special notice procedure which does not include any formal complaint. In these separate cases, Spartan Stores expects that the plaintiffs are seeking compensatory, punitive and other damages, reimbursement of medical and other expenditures and equitable relief. Spartan Stores believes that J.F. Walker Company has valid defenses to these legal actions. These actions are being vigorously defended. It has been determined that J.F. Walker Company is not a defendant in three of the thirty cases that were filed. Six plaintiffs have withdrawn their complaints and Spartan Stores understands that they will not pursue their cases. One case has been dismissed with prejudice by stipulation of the plaintiff. All of the remaining Pennsylvania actions have been dismissed without prejudice pursuant to a Dismissal and Tolling Agreement under which certain defendants, including J.F. Walker Company, have agreed not to raise the defense of statute of limitations or laches if an action was filed by a plaintiff before March 31, 2000. None of the plaintiffs filed any action by March 31, 2000. One of the cigarette manufacturers named as a defendant in each action has agreed to indemnify J.F. Walker Company from damages arising out of these actions. Management believes that the ultimate outcome of these actions should not have a material adverse effect on the consolidated financial position, results of operations or liquidity of Spartan Stores.

Item 4.    Submission of Matters to a Vote of Security-Holders

No matters were submitted to a vote of Spartan Stores' shareholders during the fourth quarter of fiscal year 2000 through the solicitation of proxies or otherwise.

PART II

To date, there has been no established public trading market for Spartan Stores' securities, including its Class A common stock. In addition, although Spartan Stores has a policy to redeem Class A common stock under certain circumstances, Spartan Stores is not obligated to do so and Spartan Stores' bank credit agreement limits the annual permitted redemptions. Pending completion of the merger with Seaway, Spartan Stores has suspended its stock redemption policy.

At June 1, 2000, there were approximately 536 record holders of Spartan Stores Class A common stock. There were no holders of Spartan Stores Class B common stock.

The amount of quarterly dividends for each of the three fiscal years in the period ended March 25, 2000, was $0.0125 per share. Spartan Stores' bank credit agreement contains covenants which provide that the aggregate amount of cash dividends paid in any twelve-month period shall not exceed $800,000. If the merger with Seaway is consummated, Spartan Stores does not anticipate paying any dividends for the foreseeable future, but will invest net earnings in its operations and to acquire additional retail operations.

Item 6.    Selected Financial Data

The following table provides selected historical consolidated financial information of Spartan Stores. The historical information of Spartan Stores was derived from its audited consolidated financial statements for and as of each of the five years ended March 30, 1996 through March 25, 2000.

Until February 1996, Spartan Stores had a policy of paying volume incentive rebates to its customers in a combination of cash and stock.

Spartan Stores' operations for the years ended March 27, 1999 and March 30, 1996 were affected by restructuring, reorganization and other charges in the amount of $5.7 million and $46.4 million, respectively. The restructuring accrual recorded by Spartan Stores during the year ended March 27, 1999 was reduced during the year ended March 25, 2000, resulting in $4.5 million of income during the period.

The weighted average shares outstanding and all per share amounts for Spartan Stores have been restated to reflect a ten-for-one stock split in July 1997.

Adjusted EBITDA is computed as net earnings before interest, taxes, depreciation, amortization and restructuring charge or income. Adjusted EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles. Spartan Stores has included information concerning adjusted EBITDA in this report because it is commonly used by investors and analysts. Adjusted EBITDA should not be used as an alternative to, or be considered more meaningful than, net earnings or cash flows as an indicator of the operating performance of Spartan Stores.

The following table sets forth items from Spartan Stores' consolidated statements of earnings as percentages of net sales:

Net Sales

Net sales for the fiscal year ended March 25, 2000 increased $378.6 million compared to the fiscal year ended March 27, 1999.

Net sales in the retail grocery segment for this period increased $540.1 million. The increase was primarily the result of the acquisition of 47 retail grocery stores since the third quarter of fiscal 1999. The acquired stores continue to operate under the existing names of Ashcraft's Markets, Family Fare, Glen's Markets, and Great Day. While price inflation in Spartan Stores' retail grocery segment was negligible, comparable store sales increased approximately 2.3 percent primarily due to Spartan Stores' promotional programs and continued emphasis on product line expansion. Management continues to evaluate acquisition opportunities in the retail grocery industry and expects any future acquisitions to further contribute to Spartan Stores' sales growth. Information concerning the proposed merger with Seaway is set forth under the heading "Anticipated Merger With Seaway Food Town, Inc." in "Item 1-Business" of this Annual Report on Form 10-K. Pro forma financial information concerning this merger is set forth in "Item 8-Financial Statements and Supplementary Data," following the notes to the consolidated financial statements included in that item.

Net sales in the grocery distribution segment, after intercompany eliminations, for the fiscal year ended March 25, 2000 declined primarily as a result of Spartan Stores' acquisition of four grocery distribution segment customers since January 1999. The segment also experienced declines in sales of grocery products due to continued competitive market conditions. Partially offsetting these declines were increases in sales of perishable commodities of 3.3 percent or approximately $20.5 million as well as increases in direct sales of pharmacy and delicatessen products of 22.6 percent or approximately $48.3 million. Spartan Stores' success in increasing sales of perishable commodities is primarily attributable to aggressive promotions and the move from its cost-plus pricing methodology to a traditional variable markup pricing method for frozen and dairy products, meat, and produce to better respond to market conditions.

Net sales in the convenience store distribution segment for the fiscal year ended March 25, 2000 increased $92.5 million. The increase was primarily the result of an increase in the average sales price for cigarettes, which totaled approximately $3.10 per carton or roughly 22 percent from fiscal year ended March 27, 1999. However, the increase in sales price was partially offset by reductions in total average carton sales of approximately 7 percent. Sales of products unrelated to cigarettes rose approximately 5 percent from the prior year. The increase was primarily attributable to Spartan Stores' continued focus on its competitive pricing structure, promotional programs and customer service.

Net sales in the insurance segment increased $1.7 million. The increase was primarily the result of increases in insurance premiums written in Spartan Stores' captive insurance operations and a reduction in premiums returned to customers due to unfavorable loss experience.

Net sales in the real estate segment were comparable with those of the prior year.

Fiscal 1999

Net sales for the fiscal year ended March 27, 1999 increased $182.5 million compared to the fiscal year ended March 28, 1998.

Net sales in the grocery store distribution segment for this period increased $37.7 million. The increase was primarily the result of increased sales of pharmacy and perishable products and incremental sales associated with Spartan Stores' entrance into the retail grocery segment which is reported as a separate segment in fiscal 2000. Offsetting sales growth to a certain degree were declines in sales of grocery products due to highly competitive market conditions, declines in retail store equipment sales resulting from a reduction in retail store remodeling and expansion activity, and declines in revenue associated with the discontinuance of Spartan Stores' "Over-the-Road" trucking division.

Net sales in the convenience store distribution segment for the fiscal year ended March 27, 1999 increased $145.7 million compared to the fiscal year ended March 28, 1998 primarily due to cigarette price increases by cigarette manufacturers. Spartan Stores experienced four price increases during the first two quarters of the fiscal year that together resulted in price inflation of approximately 10 percent for cigcarettes. During the third quarter, Spartan Stores experienced another cigarette price increase of approximately 33 percent.

Net sales in the insurance segment for the fiscal year ended March 27, 1999 were comparable with net sales in the fiscal year ended March 28, 1998.

Net sales in the real estate segment declined by approximately $1.4 million due to management's planned reduction of Spartan Stores' retail property portfolio.

Gross Profit

Gross profit as a percentage of net sales for the fiscal year ended March 25, 2000 was 13.3 percent, compared to 10.2 percent at fiscal year end March 27, 1999. The increase is primarily attributable to Spartan Stores' entrance into the retail grocery segment, for which gross margins as a percentage of sales are typically higher than in wholesale operations. Gross profit in Spartan Stores' grocery distribution segment increased due to lower product costs resulting from promotional activities with vendors. These increases were partially offset by gross profits returning to a more historical level in the convenience store distribution segment. During fiscal year 1999, the convenience store distribution segment experienced gross profits substantially above historical levels due to the sale of cigarettes purchased prior to price increases.

Fiscal 1999

Gross profit as a percentage of net sales for the fiscal year ended March 27, 1999 was 10.2 percent, unchanged from 10.2 percent for the fiscal year ended March 28, 1998. The grocery store distribution segment experienced increases in gross profit as a percentage of sales resulting from a change in the methodology by which it administers its cost-plus pricing policy. Additionally, gross profit as a percentage of sales was positively impacted by Spartan Stores' entry into the retail grocery industry, where gross profits are typically higher as a percentage of sales than in wholesale operations. Offsetting these increases were disbursements by Spartan Stores to complement promotions offered by manufacturers. The convenience store distribution segment experienced substantial improvements in gross profit resulting from sales of cigarettes that were purchased prior to price increases. The increases in gross profit as a percentage of sales in the grocery and convenience store distribution segments were offset by declines in sales in the real estate segment.

Operating and Administrative Expenses

Operating and administrative expenses for the fiscal year ended March 25, 2000 were 11.8 percent of net sales, compared to 8.9 percent for the fiscal year ended March 27, 1999. The increase in operating and administrative expenses as a percentage of net sales was primarily attributable to Spartan Stores' expansion of its retail grocery operations and increases in its loss reserves in the insurance segment. Management expects operating and administrative expenses to increase as a result of the anticipated merger with Seaway.

Fiscal 1999

Operating and administrative expenses for the fiscal year ended March 27, 1999 were 8.9 percent of net sales compared to 9.2 percent in the fiscal year ended March 28, 1998. The decline was primarily the result of the increase in net sales as discussed above under the heading "Net Sales." Actual operating costs increased by approximately $9.2 million, with a majority of the increase resulting from Spartan Stores' entrance into the retail grocery business and incremental costs associated with volume increases in the convenience store distribution segment.

Restructuring Charge

On October 14, 1998, Spartan Stores' board of directors approved an initiative to replace Spartan Stores' Plymouth distribution center with a new multi-commodity distribution center. During the second quarter, Spartan Stores acquired land for approximately $1.3 million in the Toledo, Ohio area for the construction of the new distribution facility. As of the end of Spartan Stores' second quarter of fiscal 2000, $6.5 million had been accrued for contractual amounts to be paid under a collective bargaining agreement, additional severance pay, and amounts due in connection with the withdrawal from the union pension plan.

Subsequent to the above developments, management and Spartan Stores' collective bargaining work force were in discussions on how efficiency at the current location could be improved. On November 2, 1999, management of Spartan Stores and the collective bargaining work force reached an agreement to begin to design innovative work teams with the goal to improve warehouse productivity. Due to Spartan Stores' significant commitment to its retail grocery business and the potential for improved productivity at its Plymouth facility, Spartan Stores reconsidered its decision to close this facility and entered into a five-year lease agreement on the Plymouth distribution center. Therefore, Spartan Stores reduced the restructuring accrual by $5.6 million to reflect costs that no longer are expected to be incurred. The remaining accrual exists for certain severance payments for which Spartan Stores is obligated.

Interest Expense and Income

Interest expense for the fiscal year ended March 25, 2000 was 0.9 percent of net sales, compared to 0.3 percent for the fiscal year ended March 27, 1999.

Total average borrowings increased to $283.5 million for the fiscal year ended March 25, 2000, up from $195.7 million for the fiscal year ended March 27, 1999. A majority of the increase occurred in the retail grocery segment due to Spartan Stores' acquisition of 47 retail grocery stores during fiscal 1999 and fiscal 2000. In addition, Spartan Stores' effective borrowing rate increased to 9.63 percent per annum for the fiscal year ended March 25, 2000, up from 5.52 percent per annum for the fiscal year ended March 27, 1999. The increase was attributable to a new bank credit facility that was entered into during the fourth quarter of fiscal 1999. Management expects interest payments to increase as a result of additional debt incurred in connection with the anticipated merger with Seaway.

Interest on Spartan Stores' bank credit facility is payable quarterly based on the applicable LIBOR rate (currently the 90-day LIBOR) or the applicable Base Rate (higher of the prime rate or the federal funds rate plus 0.5 percent per annum) plus stipulated margins. While Spartan Stores is subject to variable interest rates, an interest rate swap agreement is used to manage interest rate risk on 65 percent of the $249.8 million currently outstanding. Refer to the "Liquidity and Capital Resources" section below for more information regarding this credit facility.

Interest income increased for the fiscal year ended March 25, 2000 primarily due to the short-term investment of cash borrowed under the credit facility in anticipation of Spartan Stores' acquisitions.

Fiscal 1999

Interest expense for the fiscal year ended March 27, 1999 declined by approximately $1.7 million from the fiscal year ended March 28, 1998. The decline was due primarily to lower average borrowings during the year as a result of Spartan Stores' increase in cash flows generated from operations. Interest income for the fiscal year ended March 27, 1999 was slightly lower than the fiscal year ended March 28, 1998 due to lower notes receivable from retailers and fewer delinquent accounts. This decline was offset somewhat by increased interest income in the convenience store segment due to Spartan Stores' short-term investment of cash generated from operations.

Other Gains and Losses

The net loss of $494,000 for fiscal year ended March 25, 2000 was predominately the result of recognized gains of approximately $2.6 million on the sale of common stock held in a supplier as well as approximately $700,000 on the sale of land. Offsetting these gains was an impairment loss of approximately $1.6 million due to the anticipated closing of one retail location, an impairment loss of $1.3 million attributable to the discontinuance of a software implementation project and an impairment loss of approximately $1.1 million on a property vacated by a lessee.

The net gain of $1.2 million for the fiscal year ended March 27, 1999 was due primarily to approximately $1.9 million in gains on the sales of three retail properties, offset by losses of approximately $700,000 on the write-down of certain assets. These assets included certain technology-related equipment in connection with the implementation of a logistics software package and assets associated with the closing of administrative offices in conjunction with Spartan Stores' continuing efforts to centralize existing processes.

Extraordinary Item

During the fourth quarter of the fiscal year ended March 27, 1999, Spartan Stores incurred a pre-payment penalty of approximately $1.6 million in connection with the repayment of senior notes outstanding. This extraordinary item was recorded in the grocery store distribution segment. The payment of the senior notes was required as a result of Spartan Stores' new bank credit agreement discussed in the "Liquidity and Capital Resources" section below.

Net Earnings

Net earnings for the fiscal year ended March 25, 2000 were $17.2 million, compared to $14.8 million for the fiscal year ended March 27, 1999. The increase in net earnings was primarily attributable to the grocery distribution segment due to improved gross profits and the reversal of the restructuring charge. This increase was partially offset by declines in the convenience store distribution segment resulting from a return in gross profits to historical amounts and a loss in the retail grocery segment's first year of operations. Management of Spartan Stores expects operations to improve in the retail grocery segment due to anticipated debt reductions and other operational efficiencies.

Liquidity and Capital Resources

Spartan Stores' principal sources of liquidity are cash flows generated from operations and borrowings under a senior secured credit facility. The credit facility consists of (i) a Revolving Credit Facility in the amount of $100.0 million with a term of six years, (ii) a Term Loan A in the amount of $100.0 million with a term of six years, (iii) an Acquisition Facility in the amount of $75.0 million with a term of seven years and (iv) a Term Loan B in the amount of $150.0 million with a term of eight years. At March 25, 2000, $249.8 million was outstanding under this credit facility. Management believes that cash flows generated from operations and available borrowings under the Revolving Credit Facility will be sufficient to support operations in the forseeable future. Available borrowings under the credit facility are based on stipulated levels of earnings before interest, taxes, depreciation and amortization as defined in the agreement.

Spartan Stores is also permitted to sell variable rate promissory notes under a note offering with a total principal amount of $100.0 million. The notes are offered in minimum denominations of $1,000 and may be issued by Spartan Stores at any time, although Spartan Stores' bank credit agreement restricts the total amount outstanding under the offering to approximately $16.1 million. At March 25, 2000, approximately $13.9 million of these notes were outstanding.

Spartan Stores' current ratio decreased from 1.85 to 1.00 at March 27, 1999 to 1.53 to 1.00 at March 25, 2000 and working capital decreased from $100.9 million to $88.5 million. The declines are primarily the result of installments under Spartan Stores' credit facility becoming current.

Spartan Stores' debt to equity ratio decreased from 2.24 to 1.00 at March 27, 1999 to 2.11 to 1.00 at March 25, 2000 due to scheduled principal payments and current earnings. Management continues to evaluate other acquisition opportunities, which if consummated could increase Spartan Stores' current leverage position.

Spartan Stores' total capital structure includes borrowings under the senior secured credit facility, variable rate promissory notes, various other debt instruments, leases, and shareholders' equity. Management continues to evaluate other acquisition opportunities, which could result in additional leases being entered into if consummated.

The Trading Value of Spartan Stores' Class A common stock customarily is established annually by the board of directors during the first quarter of the fiscal year. The Trading Value of the Class A common shares was $13.30 per share at March 25, 2000 and is the Trading Value as of the date of this Report. Spartan Stores paid quarterly dividends of $.0125 per share for each of the past three fiscal years. Dividends were $502,948 for the fiscal year ended March 25, 2000. The senior secured credit facility contains covenants which restrict the amount of cash dividends payable by Spartan Stores to $800,000 in any twelve-month period. Upon completion of the anticipated merger with Seaway, Spartan Stores expects to cease the payment of dividends and invest net earnings in its operations and to acquire additional retail operations.

If the merger is consummated, each outstanding share of Spartan Stores Class A common stock, $2.00 par value, will be converted into one share of Spartan Stores common stock, no par value. Spartan Stores will declare a stock split through a dividend of 0.336 shares of Spartan Stores common stock for each share of Spartan Stores common

Recent Accounting Pronouncements

In 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires companies to record derivatives on the balance sheet as assets and liabilities measured at fair value. The accounting treatment of gains and losses resulting from changes in the value of derivatives depends on the use of the derivative and whether it qualifies for hedge accounting. Spartan Stores will adopt SFAS No. 133 as required no later than April 1, 2001.

Management of Spartan Stores does not believe the adoption of SFAS 133 will have a material impact on Spartan Stores' consolidated financial position or results of operations.

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

The matters discussed in this Annual Report on Form 10-K include "forward-looking statements" about the proposed merger with Seaway and about Spartan Stores' other plans, strategies, objectives, goals, expectations or projections. These forward-looking statements are identifiable by words or phrases indicating that Spartan Stores or management "expects," "anticipates," "projects," "plans" or "believes" that a particular occurrence "may result" or "will likely result" or that a particular event "may occur" or "will likely occur" in the future, or similarly stated expectations. This includes information relating to the benefits, cost savings, revenues and earnings estimated to result from the Seaway merger and estimated costs in connection with the merger. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Report. In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Annual Report on Form 10-K, there are many important factors that could cause actual results to be materially different from Spartan Stores' current expectations.

Anticipated future sales are subject to competitive pressures from many sources. Spartan Stores' grocery store and convenience store retail and distribution businesses compete with many warehouse discount stores, supermarkets, pharmacies and product manufacturers. Additionally, future sales will be dependent on the number of retail stores owned and operated by Spartan Stores and competitive pressures in the retail industry. Sales volumes in Spartan Stores' convenience store distribution segment may continue to be negatively impacted by increased cigarette prices. Spartan Stores' insurance segment competes with many insurance agents and insurance companies, especially in the property and casualty insurance markets. Competitive pressures in these and other business segments may result in unexpected reductions in sales volumes, product prices or service fees.

Spartan Stores' operating and administrative expenses may be adversely affected by unexpected costs associated with, among other factors:

•     the merger with Seaway;

•     the integration of the business operations of the retail stores and other businesses acquired by Spartan Stores;

•     future business acquisitions, including additional retail stores;

•     unanticipated difficulties in the operation of the retail grocery segment, which is a new line of business;

•     difficulties in assimilation of acquired personnel, operations, systems or procedures;

•     inability to realize synergies in the amounts or within the time frame expected by management;

•     adverse effects on existing business relationships with independent retail grocery store customers;

•     unexpected difficulties in the retention or hiring of employees for the acquired businesses;

•     unanticipated labor shortages, stoppages or disputes;

•     business divestitures;

•     increased transportation or fuel costs; and

•     current or future lawsuits and administrative proceedings.

Spartan Stores' future interest expense and income also may differ from current expectations, depending upon the following, among other factors:

•     the amount of additional borrowings necessary for retail store acquisitions;

•     interest rate changes;

•     cigarette inventory levels;

•     retail property sales;

•     the volume of notes receivable; and

•     the amount of fees received on delinquent accounts.

This section is intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all economic, competitive, governmental, technological and other factors that could adversely affect Spartan Stores' expected consolidated financial position, results of operations or liquidity. Spartan Stores disclaims any obligation to update its forward-looking statements to reflect events or circumstances that occur after date of this Report.

Item 7A.    Quantitative and Qualitative Disclosure About Market Risk.

Spartan Stores is exposed to interest rate risk related to its debt outstanding and notes receivable from customers. The interest rate paid on a majority of Spartan Stores' debt outstanding is vulnerable to changes in either the prime rate, the federal funds rates or the eurodollar rate. Interest received on notes receivable from customers is vulnerable to changes in the prime rate. Spartan Stores does not use financial instruments or derivates for trading or speculative purposes.

Spartan Stores manages interest rate risk on a portion of its debt through the use of an interest rate swap agreement that is effective from June 30, 1999 to June 29, 2003. Under the terms of the agreement, Spartan Stores is protected against increases in interest rates from and after the date of the contract in the initial aggregate notional amount of $162.5 million which amount decreases in proportion to principal payments made on the Term Loan A and the Term Loan B under Spartan Stores' credit facility. The aggregate notional amount will be $123.7 million at the end of the contract's four-year term.

The following table sets forth the maturities of Spartan Stores' debt outstanding as of March 25, 2000:

CONSOLIDATED BALANCE SHEETS

Spartan Stores, Inc. and Subsidiaries
(In thousands, except per share data)

CONSOLIDATED BALANCE SHEETS (continued)

Spartan Stores, Inc. and Subsidiaries
(In thousands, except per share data)

CONSOLIDATED STATEMENTS OF EARNINGS

Spartan Stores, Inc. and Subsidiaries
(In thousands, except per share data)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Spartan Stores, Inc. and Subsidiaries
(In thousands, except per share data)

CONSOLIDATED STATEMENTS OF CASH FLOWS

Spartan Stores, Inc. and Subsidiaries
(In thousands)