As filed with the Securities and Exchange Commission on May 1, 1995
                                    Registration No. 33-_________
=================================================================
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM S-1
                     REGISTRATION STATEMENT
                              UNDER
                   THE SECURITIES ACT OF 1933

                 KASH N' KARRY FOOD STORES, INC.
     (Exact name of Registrant as specified in its charter)

     DELAWARE                5411                95-4161591
(State or other   (Primary Standard Industrial  (I.R.S. Employer
jurisdiction of    Classification Code Number)   Identification
incorporation)                                   Number)
                        6422 Harney Road
                      Tampa, Florida  33610
                         (813) 621-0200
       (Address, including zip code, and telephone number,
including area code, of Registrant's principal executive office)

                       RAYMOND P. SPRINGER
       Senior Vice President, Chief Financial Officer, 
                    Treasurer and Secretary
                 Kash n' Karry Food Stores, Inc.
                        6422 Harney Road
                      Tampa, Florida  33610
                         (813) 621-0200
        (Name, address, including zip code, and telephone
       number, including area code, of agent for service)
                         with copies to:

 LAWRENCE LEDERMAN, ESQ.          ROBERT S. BOLT, ESQ.
 Milbank, Tweed, Hadley & McCloy  Barnett, Bolt, Kirkwood & Long
 1 Chase Manhattan Plaza          601 Bayshore Boulevard, Suite 700
 New York, New York  10005        Tampa, Florida  33606
 (212) 530-5680                   (813) 253-2020

     Approximate date of commencement of proposed sale to the
public:  From time to time after the effective date of this
Registration Statement, as determined by the Selling Stockholders.

     If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box.   x 

                                      (continues on following page)

                     Page one of 384 pages.
               Exhibit Index appears on page 117.
                                       (continuation of cover page)
<PAGE>
                 CALCULATION OF REGISTRATION FEE

                                 Proposed     Proposed 
                                 Maximum      Maximum   Amount
Title of Each                    Offering     Aggregate of
Class of Securities Amount to be Price        Offering  Regis-
to be Registered    Registered   Per Share(1) Price(1)  tration fee

Common Stock,       3,100,000    $19.25     $59,675,000 $20,577.59
par value
$.01 per share

(1)  Estimated solely for purposes of calculating the registration
     fee, pursuant to Rule 457.

The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE>
                      CROSS REFERENCE SHEET

           (Pursuant to Item 501(b) of Regulation S-K)

The following information sets forth the location in the Prospectus
   of information required by Items 1-12, Part I, of Form S-1

Registration Statement, Items              Location in Prospectus
   and Heading

1. Forepart of the Registration         
   Statement and Outside Front          
   Cover Page of Prospectus.............Cover Page of Registration 
                                        Statement; Outside Front
                                        Cover Page of Prospectus; 
                                        Cross Reference Sheet
2.  Inside Front and Outside Back 
    Cover Pages of Prospectus...........Inside Front Cover Page of
                                        Prospectus; Outside Back
                                        Cover Page of Prospectus
3.  Summary Information, Risk 
    Factors and Ratio of Earnings 
    to Fixed Charges....................Prospectus Summary; Investment
                                        Considerations; Selected 
                                        Financial Information 

4.  Use of Proceeds.....................Not Applicable

5.  Determination of Offering Price.....Not Applicable

6.  Dilution............................Not Applicable

7.  Selling Security Holders............Selling Stockholders

8.  Plan of Distribution................Plan of Distribution

9.  Description of Securities to be 
    Registered..........................Outside Front Cover Page of
                                        Prospectus; Prospectus Summary;
                                        Description of Capital Stock 
10.  Interests of Named Experts 
     and Counsel........................Not Applicable

11.  Information With Respect to the 
     Registrant.........................Inside Front Cover of Prospectus;
                                        Prospectus Summary; The Company; The 
                                        Restructuring; Capitalization;
                                        Selected Financial Information;
                                        MarketPrice and Dividend Policy;
                                        Management's Discussion and Analysis
                                        of Financial Condition and Results
                                        of Operations; Business; Management; 
                                        Certain Relationships and Related
                                        Transactions; Principal Stockholders;
                                        Description of Capital Stock
12.  Disclosure of Commission 
     Position on Indemnification for
     Securities Act Liabilities ........Not Applicable
<PAGE>
     INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT.  A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.  THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE.  THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER
THE SECURITIES LAWS OF ANY SUCH STATE. 

<PAGE>
            SUBJECT TO COMPLETION, DATED MAY 1, 1995
[LOGO]
                 KASH N' KARRY FOOD STORES, INC.

                          COMMON STOCK

     Up to 3,100,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), of Kash n' Karry Food Stores, Inc. (the "Company"), may be
offered from time to time by certain holders of the Common Stock
(collectively, the "Selling Stockholders").  See "Selling Stockholders."  The
Common Stock offered hereby is listed on the Nasdaq Stock Market's Small Cap
Market under the symbol "KASH."  See "Market Price and Dividend Policy."

     The Company will not receive any of the proceeds from any sale of Common
Stock offered from time to time by the Selling Stockholders.  Any or all of
such Common Stock may be sold by the Selling Stockholders from time to time
(i) to or through underwriters or dealers, (ii) directly to one or more other
purchasers, (iii) through agents on a best-efforts basis, or (iv) through a
combination of any such methods of sale.  If required, the names of any
underwriters or agents and the applicable commissions or discounts, along
with pricing information, will also be set forth in an accompanying
Prospectus Supplement.  See "Plan of Distribution."

     See "Investment Considerations" for a discussion of certain factors that
should be considered by prospective investors in connection with an
investment in the Common Stock.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE. 


      The date of this Prospectus is _______________, 1995

<PAGE>

                      AVAILABLE INFORMATION


     The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission").  Such reports and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street N.W.,
Washington, D.C.  20549, and at certain of the following regional offices: 
7 World Trade Center, Suite 1300, New York, New York  10048, and Northwest
Atrium Center, 550 West Madison Street, Suite 1400, Chicago, Illinois  60661. 
Copies of such material can also be obtained from the Public Reference
Section of the Commission, 450 Fifth Street N.W., Washington, D.C.  20549, at
prescribed rates.  The Common Stock is listed on the Nasdaq Small Cap Market;
accordingly, such reports and other information concerning the Company may
also be inspected at the offices of the Nasdaq Stock Market, 1735 K Street
N.W., Washington, D.C.  20006.

     The Company has filed with the Commission a Registration Statement under
the Securities Act of 1933 (the "Securities Act") with respect to the Common
Stock offered hereby.  This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement and the exhibits thereto, certain parts of which
have been omitted in accordance with the rules and regulations of the
Commission.  For further information with respect to the Company and the
offering of Common Stock, reference is made hereby to such Registration
Statement and exhibits.


















                                    2
<PAGE>
                       PROSPECTUS SUMMARY

     The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and the financial
statements, including the notes thereto, appearing elsewhere in this
Prospectus.  References in this Prospectus to the "Company" mean Kash n'
Karry Food Stores, Inc., references to "Common Stock" mean the 3,100,000
shares of common stock of the Company, par value $.01 per share, issued on
December 29, 1994 in connection with the Restructuring (as herein defined). 
All financial information set forth herein is presented in accordance with
generally accepted accounting principles ("GAAP"), unless otherwise noted.  

                           The Company

     The Company is the third largest food retailer in west central Florida,
operating 92 multi-department supermarkets, five conventional supermarkets
and 33 liquor stores under the "Kash n' Karry" name and two super warehouse
stores under the "Save 'n Pack" name, all supported by a centrally-located
warehouse and distribution facility.  More than one-half of the Company's
stores are located in the Tampa-St. Petersburg area, which is Florida's
largest retail food sales market, with the balance located between
Gainesville, approximately 130 miles to the north, and Bonita Springs,
approximately 150 miles to the south.  The west central Florida area has a
diverse and growing economy, which includes high technology and financial
centers, an insurance industry presence, retirement communities, coastal
resorts and commercial agricultural activity.  The region's population is
estimated to be increasing at an annual rate of approximately 2%.

     The Company currently operates two distinct store concepts:

     .    a large, full-service multi-department supermarket under the Kash
          n' Karry name, which is designed to operate profitably at lower
          sales levels than certain competitors; and

     .    a super warehouse store under the Save 'n Pack name designed to
          serve trade areas with low household income.

     The Company has developed, and continues to implement, the following
marketing and operating strategies to promote growth in revenues and
operating cash flow: 

     Marketing Strategy.  The Company emphasizes competitive prices on
everyday items, strong weekly features, high quality perishables and a broad
assortment of both national and corporate brands.  The Company's food stores
are open seven days a week, with most operating 24 hours a day.  The Company
seeks to be either first or second among its competitors in

                                    3<PAGE>
assortment of branded merchandise, stocking over 29,000 SKU's (stock keeping
units) of national brand and corporate brand items.  In addition to a full
range of grocery and general merchandise items, most of the Company's
multi-department supermarkets also feature expanded perishable goods
departments, delicatessens and in-store bakeries, and many contain pharmacies
and full-service seafood, full-service floral and video rental departments.

     In 1992, the Company introduced its own corporate brand merchandise. 
The Company's corporate brand strategy is to offer a product comparable in
quality to the best-selling national brand at a lower price.  The Kash n'
Karry brand item generally sells for approximately 10% less than the
competing best-selling national brand but generates a higher per unit gross
profit contribution to the Company.  Over 1,100 SKU's in a wide variety of
product categories carry the Kash n' Karry brand name.

     Operations Strategy.  The Company believes that up-to-date,
strategically located facilities, well-trained associates and information
management systems are key elements to the Company's future success.  The
Company operates a modern, 687,000 square foot warehouse, distribution and
office facility in Tampa with sufficient capacity to service anticipated
store expansion for the foreseeable future.  The warehouse enables the
Company to reduce costs by purchasing in large quantities, taking advantage
of special promotional prices offered by vendors and purchasing prior to
impending price increases, and reducing delivery costs through cross docking
and backhauls.  The central location of the warehouse facility to its stores
also provides the Company with operating efficiencies.

     The Company relies on information technology to enhance operating
efficiency.  The Company recently entered into an agreement to outsource its
information systems development in order to minimize costs, accelerate the
implementation period for systems improvements, facilitate future software
upgrades, reduce personnel issues and eliminate equipment lease costs. 
Specifically, the agreement provides for the acquisition of new procurement,
billing, labor scheduling and accounts payable systems and new point-of-sale
equipment in the stores within the next 18 months.

     The Company also devotes significant resources to personnel training,
utilizes labor scheduling programs to allocate manpower based on anticipated
sales levels, and employs a variety of strategies to minimize inventory
losses.  None of the Company's associates is covered by a collective
bargaining agreement.

     The principal executive offices of the Company are located at 6422
Harney Road, Tampa, Florida  33610, and its telephone number is (813)
621-0200.





                                    4<PAGE>
                               The Restructuring

     The Company was formed in connection with a leveraged acquisition in
1988.  Although the Company consistently generated stable operating cash
flows through its 1993 fiscal year, it experienced net losses for each of the
last five fiscal years and the 22-week period ended January 1, 1995 due
primarily to its highly leveraged position.

     On November 9, 1994, the Company filed with the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") a "prepackaged"
plan of reorganization (the "Prepackaged Plan") pursuant to Chapter 11 of the
U.S. Bankruptcy Code.  The Prepackaged Plan was confirmed by the Bankruptcy
Court on December 12, 1994.  Under the terms of the Prepackaged Plan, the
Company effected a comprehensive financial restructuring (the
"Restructuring").  Among other things, the Company restructured its senior
debt, converted its subordinated debt into an 85% equity interest in the
Company, and received $10.0 million in cash from Green Equity Investors, L.P.
("GEI") for the remaining 15% equity interest of the Company.  The Company
emerged from bankruptcy on December 29, 1994.  For further information with
respect to the Prepackaged Plan and the Restructuring, see "The
Restructuring," "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."


                    Investment Considerations

     The shares offered hereby involve a high degree of risk and should not
be purchased by anyone who cannot afford the loss of their entire investment. 
See "Investment Considerations."



















                                    5<PAGE>
                          Summary Financial Data

     The following table presents summary financial information of the
Company as of and for each of the fiscal years ended on the Sunday nearest to
July 31, 1994, 1993 and 1992, and as of and for the periods ended January 29,
1995, January 1, 1995 and January 30, 1994, and should be read in conjunction
with the financial statements and related notes thereto appearing elsewhere
in this Prospectus and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."  

     The financial statements as of and for the periods ended January 29,
1995, January 1, 1995 and January 30, 1994, from which the summary financial
data has been derived, have not been audited by independent accountants in
accordance with generally accepted auditing standards, but, in the opinion of
management, the financial statements as of and for the period ended January
30, 1994 include all adjustments, consisting only of normal recurring
adjustments, necessary to summarize fairly the Company's financial position
and results of operations.  As discussed herein, the Company's Prepackaged
Plan was consummated on December 29, 1994 (the "Effective Date").  The
financial statements as of and for the periods ended January 29, 1995 and
January 1, 1995 reflect the Company's emergence from Chapter 11 and were
prepared utilizing the principles of fresh-start reporting contained in the
American Institute of Certified Public Accountants' Statement of Position
90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code." Operations during the period from the Effective Date through January
1, 1995 had no significant impact on the emergence transactions and as a
result have not been separately identified.  As a result of the
implementation of fresh-start accounting, certain of the summary financial
data as of and for the periods ended January 29, 1995 and January 1, 1995 is
not comparable to the summary financial data of prior periods due to the
change in reporting entity resulting from the application of fresh-start
accounting.  Therefore, summary financial data for the "Reorganized Company"
has been separately identified from that of the "Predecessor Company." 
Results for the periods ended January 29, 1995 or January 1, 1995 are not
necessarily indicative of the results for the full year.  

     The summary store data have been derived from the Company's management
reporting records.













                                    6<PAGE>
                                                                            
                               Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,      January 1,   January 30,
                                 1995            1995           1994
                               (4 weeks)       (22 weeks)    (26 weeks)
                              (In Thousands, Except Per Share Amounts)
Statement of Operations Data
 Sales . . . . . . . . . . .      $86,354      $426,681       $534,801
 Cost of sales . . . . . . .       68,940       340,802        425,915 
                                  -------       -------        -------
 Gross profit. . . . . . . .       17,414        85,879        108,886 
 Selling, general and 
    administrative expenses        12,226        68,819         90,128 
 Depreciation and amortization      1,979        10,234         12,111 
 Store closing and other costs        --           --           11,016 
                                   ------        ------        --------
 Operating income (loss) . .        3,209         6,826         (4,369)
 Net interest expense (1). .        2,402        13,719         22,513 
                                   ------        ------        --------
 Income (loss) from operations before
    reorganization items, income taxes, 
    extraordinary items and change in 
    accounting principle              807        (6,893)       (26,882)

 Reorganization items. . . .           --          (219)          --  

 Extraordinary items - 
    gain on debt discharge             --        70,166           --  
 
 Cumulative effect of change in accounting
    principle. . . . . . . .           --        (2,000)          --  
                                    -----       -------        --------
 Net income (loss) . . . . .         $807       $61,054        $(26,882)
                                    =====       =======        ========
 Income per common share (2), (3)    $0.26         --             --

                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                                     1994        1993           1992
                                              (In Thousands)
Statement of Operations Data
 Sales . . . . . . . . . . .     $1,065,165   $1,086,125     $1,071,038
 Cost of sales . . . . . . .        845,597      856,156        848,441
                                 ----------   ----------     ----------
 Gross profit. . . . . . . .        219,568      229,969        222,597
 Selling, general and 
    administrative expenses         176,945      175,177        164,897
 Depreciation and amortization       24,112       23,455         20,132
 Store closing and other costs       11,016         --             -- 
                                 ----------   ----------     ----------
 Operating income. . . . . .          7,495       31,337         37,568  

 Net interest expense (1). .         45,390       43,257         44,869  
                                 ----------   ----------     ----------
 Net loss. . . . . . . . . .       $(37,895)    $(11,920)       $(7,301)
                                 ==========   ==========     ==========
                                    7<PAGE>
                                Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,     January 1,    January 30,
                                 1995            1995           1994
                               (4 weeks)      (22 weeks)     (26 weeks)
                                     (Dollar Amounts In Thousands)
Balance Sheet Data
 Total assets. . . . . . . .   $381,751        $381,492       $408,154 
 Inventories . . . . . . . .     78,756          87,115         85,952 
 Property and equipment, net    143,813         144,979        165,518 
 Working capital . . . . . .      7,207           7,045         (367)
 Total long-term debt and capital 
  leases (including current 
  maturities)(5)                240,286         242,786        353,723 
 Preferred stock . . . . . .        --             --            4,650 
 Total stockholders' 
  equity (deficit)               47,302          46,495        (50,041)

Other Data
 Operating cash flow (EBITDA) (6) 5,188          17,060         18,758 
 Capital expenditures (7). .        162             665         10,606 
 
Store Data
 Food stores open at end of
   period (8). . . . . . . .         99              99            101 
 Avg. selling sq. ft. during period (in
   thousands) (9). . . . . .      2,903           2,903          3,096 
 Avg. sales per store week (10)    $218            $196           $190 

                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                                     1994        1993           1992
Balance Sheet Data                    (Dollar Amounts in Thousands)
 Total assets. . . . . . . .   $389,893        $423,208       $399,419 
 Inventories . . . . . . . .     76,094          95,385         91,226 
 Property and equipment, net    160,491         164,937        145,372 
 Working capital . . . . . .    (12,747)         19,137         26,031 
 Total long-term debt and capital 
   leases (including current 
   maturities) (5)              360,121         351,890        316,220 
 Preferred stock . . . . . .      4,650           4,650          4,650 
 Total stockholders' deficit    (61,054)        (23,159)       (11,239)

Other Data
 Operating cash flow 
    (EBITDA) (6)                $42,623         $54,792        $57,700 
 Capital expenditures (7). .     15,471          37,703         15,385 
 
Store Data
 Food stores open at end of 
   period (8). . . . . . . .        100             115            111 
 Avg. selling sq. ft. during period (in
   thousands) (9). . . . . .      3,084           3,100          2,970 
 Avg. sales per store week (10)    $196            $183           $181 
                                    8<PAGE>
                 Notes to Summary Financial Data
                  (Dollar Amounts In Thousands)

(1)  Includes amortization of deferred financing costs of $182, $1,152 and
     $1,549 for the four weeks ended January 29, 1995, 22 weeks ended January
     1, 1995, and 26 weeks ended January 30, 1994, respectively; and $2,950,
     $2,850, and $2,932 for the 1994, 1993 and 1992 fiscal years,
     respectively.

(2)  Based on 3,100,00 shares (the weighted average number of shares of
     Common Stock outstanding).

(3)  Net income per share of Common Stock is not meaningful prior to January
     1, 1995 due to the significant change in the capital structure in
     connection with the Restructuring. 

(4)  The Company's fiscal year is based on a 52/53 week fiscal year ending on
     the Sunday nearest to July 31.  Therefore, the 1992 fiscal year included
     53 weeks of operations.  The 1994 and 1993 fiscal years each had 52
     weeks of operations.

(5)  Total long-term debt includes long-term debt, current maturities of
     long-term debt, capital lease obligations and certain other debt.

(6)  Represents earnings before net interest expense (which includes
     amortization of deferred financing costs), provision for income taxes,
     depreciation and amortization, store closing and other costs,
     reorganization items, extraordinary items, and cumulative effect of
     change in accounting principle.  Operating cash flow (EBITDA) is
     presented here as a measure of the Company's debt service ability, and
     should not be construed as an alternative to operating income (as
     determined in accordance with generally accepted accounting principles)
     or to cash flows from operating activities (as determined on the
     Statements of Cash Flows in the Company's financial statements).

(7)  Capital expenditures consist of cash expenditures, additions to capital
     leases and, for the 1994, 1993 and 1992 fiscal years, amounts funded
     under the capital improvements revolving credit facility under the Old
     Credit Agreement (as defined in "The Restructuring").

(8)  Data relating to the number of stores is expressed in actual numbers.

(9)  Represents the average of the selling square footage of the Company's
     stores on the first and last day of the respective periods.  Selling
     square footage includes adjacent liquor stores, where applicable, but
     does not include backroom and receiving areas.

(10) Represents, for each of the respective periods, sales for such period
     divided by the sum of the number of weeks for which each of the
     Company's stores was open during such period.
                                    9<PAGE>
                    INVESTMENT CONSIDERATIONS

     An investment in the shares of Common Stock offered hereby involves a
high degree of risk.  Prospective investors should carefully consider the
following matters, in addition to the other information set forth in this
Prospectus, in connection with an investment in the Common Stock offered
hereby.


History of Net Losses; Reorganization 

     The Company experienced net losses for each of the last five fiscal
years.  The Company's statements of operations reflect a net loss of
approximately $37.9 million for the 1994 fiscal year, $11.9 million for the
1993 fiscal year, $7.3 million for the 1992 fiscal year, $39.0 million for
the 1991 fiscal year, and $25.6 million for the 1990 fiscal year.  See
"Selected Financial Information" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

     On November 9, 1994, the Company sought relief pursuant to a
"prepackaged" plan of reorganization under Chapter 11 of the U.S. Bankruptcy
Code to reduce its debt service requirements and overall level of
indebtedness, to realign its capital structure and to provide the Company
with greater liquidity.  See "The Restructuring."  There can be no assurance
that the Company will operate profitably in its reorganized form. 

Tax Considerations

     As a result of the Restructuring (as defined in "The Restructuring"), an
ownership change within the meaning of Code section 382(g) occurred with
respect to the Company on December 29, 1994 (the "Change Date"). 
Accordingly, the Company's ability to carry forward all of the net operating
losses (and "recognized built-in losses," if any), to taxable years beginning
after the Change Date within the meaning of Code section 382(j) (and a
portion of the taxable year which includes the Change Date) will become
subject to an annual limitation under Code sections 382 and 383.

     The Company intends to determine the annual limitation under the
provisions of Code section 382(l)(6), which deals with a loss corporation
that exchanges stock for debt and undergoes an ownership change in a
proceeding under Chapter 11.  The amount of income that may be offset by the
net operating loss carryovers should generally be limited to an amount
(subject to a proration rule for the taxable year that includes the Effective
Date) equal to the product of (i) the value of the stock of the Company,
determined immediately prior to the Restructuring but increased to take into
account the effect on such value of the issuance of Common Stock to the
holders of Old Subordinated Debentures (as defined in "The Restructuring")
and (ii) the long-term tax-exempt rate, within the meaning of Code section
382(f).  This annual limitation will be increased by "recognized built-in
gain," if any.  The 
                                    10<PAGE>
Annual limitation on the Company's ability to carry forward its net operating
losses (and "reorganized built-in losses," if any) may be substantial.


Highly Leveraged Position

     Even after the Restructuring, the Company remains highly leveraged.  As
of January 29, 1995, the Company had total long-term indebtedness (including
current maturities) of $240.2 million, including $144.1 million of aggregate
principal amount of New Senior Floating Rate Notes and New Senior Fixed Rate
Notes (as defined in "The Restructuring") (collectively, the "New Notes"),
which mature on February 1, 2003, $47.0 million of term loan and revolving
loan indebtedness under the New Credit Agreement (as defined in "The
Restructuring"), $33.6 million of indebtedness under mortgages maturing
between 1999 and 2003, and $15.6 million of capital lease and other
obligations.  Under the indentures governing the New Notes, the Company has
the option of paying interest in kind on the New Senior Floating Rate Notes
through August 1, 1995, and on the New Senior Fixed Rate Notes through
February 1, 1996.  The Company expects to exercise the payment-in-kind
option, which will increase the principal amount of the New Notes outstanding
by $16.9 million through February 1, 1996 (assuming a 9.0% annual interest
rate on the New Senior Floating Rate Notes and 11.5% on the New Senior Fixed
Rate Notes).  If future cash provided by operations is less than currently
expected, the Company may experience difficulty in meeting interest and
principal payments due on outstanding indebtedness and other obligations. 
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

     The degree to which the Company is leveraged could have important
consequences to holders of Common Stock of the Company, including the
following: (i) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired; (ii) a substantial
portion of the Company's cash flow from operations must be dedicated to the
payment of the principal of and interest on its existing indebtedness, which
materially decreases the funds available to the Company to finance its
working capital, capital expenditures and business operations generally;
(iii) certain of the Company's borrowings are at variable rates of interest,
which, in the absence of interest rate hedging arrangements, make the Company
vulnerable to increases in interest rates; (iv) the Company's indentures and
New Credit Agreement impose significant financial and operating restrictions
which, if violated, could permit the Company's creditors to accelerate
payments thereunder (see "Investment Considerations -- Restrictions Imposed
Under Indebtedness"); (v) the Company is more highly leveraged than its
principal competitors, which may place the Company at a competitive
disadvantage (see "Competition" below); and (vi) the Company's high degree of
leverage may make it vulnerable to economic downturns and may limit its
ability to withstand competitive pressures and adverse changes in government
regulation and to capitalize on significant business opportunities.
                                    11<PAGE>
Restrictions Imposed Under Indebtedness

     The New Credit Agreement (as defined in "The Restructuring") and the
indentures governing the New Notes contain numerous limitations, including
restrictions on the ability of the Company to (i) incur additional
indebtedness, (ii) place liens on assets, (iii) sell assets, (iv) engage in
mergers or consolidations, (v) pay dividends and (vi) engage in certain
transactions with affiliates.  The New Credit Agreement also requires the
Company to maintain compliance with certain financial covenants.  These
limitations and requirements may restrict the ability of the Company to
obtain additional financing for working capital, capital expenditures,
acquisitions, general corporate purposes or other purposes.

     The ability of the Company to comply with the covenants in its debt
agreements will be dependent on its future financial performance, which will
be subject to prevailing economic conditions and other factors, including
factors beyond the control of the Company.  Failure to comply with any of
these covenants could result in a default or event of default under the
relevant debt agreements, permitting lenders to accelerate the maturity of
the indebtedness under such agreements and to foreclose upon any collateral
securing such indebtedness.  Any such failure to comply or any default, event
of default or acceleration under any particular indebtedness could also
result in the acceleration of other debt of the Company under agreements that
contain cross-default or cross-acceleration provisions.


Fresh-Start Reporting Presentation

     The Company's Prepackaged Plan was confirmed by the U.S. Bankruptcy
Court on December 12, 1994, and consummated on December 29, 1994.  In
accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code," the Company adopted "fresh-start
reporting."  Accordingly, financial statements for periods subsequent to
December 29, 1994 have been prepared on a basis not comparable to prior
periods.  The application and impact of "fresh-start reporting" is set forth
in greater detail in the notes to the Company's financial statements, which
are included in this Prospectus.  See "Capitalization," "Selected Financial
Data," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the Company's financial statements, including the
notes thereto.


Competition

     The food retailing business is highly competitive.  The Company competes
with several national, regional and local supermarket chains, particularly
Publix, Winn-Dixie, Albertson's and Food Lion.  The Company is also in
competition with convenience stores, stores owned and operated or otherwise
affiliated with large food wholesalers, unaffiliated independent food stores,
merchandise clubs, discount drugstore chains and discount general merchandise
chains and supercenters.  
                                    12<PAGE>
     The Company's principal competitors have greater financial resources
than the Company and could use those resources to take steps which could
adversely affect the Company's competitive position and financial
performance.  For example, operating results generally and sales growth in
particular were adversely affected by approximately 84 competitive
supermarket openings during the 1994, 1993, 1992 and 1991 fiscal years by
both established competitors and new entrants in the Company's market area. 
In fiscal 1995, the Company expects approximately 12 such competitive store
openings, and it is anticipated that these competitive store openings will
continue in the future.

     Another example of the highly competitive nature of the food retailing
business is the practice of competitors to reposition their pricing
structure.  Over the past several years, each of the Company's major
competitors has changed its pricing practices in a manner that has adversely
affected general retail pricing in the market.  Winn-Dixie discontinued
double coupons and introduced its every day low price program in the spring
of 1991.  In the spring of 1993, Publix began a campaign focused on
"surprisingly low prices," and Food Lion began a double coupon program which
has since been discontinued.  The Company has had to deal with each of these
changes in a manner that has, in some instances, adversely affected its
operating results and may continue to do so in the future.

     In addition, the Company's ability to compete may be adversely affected
by its high leverage and the limitations imposed by its debt agreements.  

Anti-Takeover Provisions

     The Company has adopted a preferred stock purchase rights plan (the
"Rights Plan").  See "Description of Capital Stock -- Certain Anti-Takeover
and Charter Provisions."  The Rights Plan is designed to assure that all
stockholders receive fair and equal treatment in the event of any proposed
takeover of the Company.  The Rights Plan could discourage certain potential
acquisition proposals and could delay or prevent a change in control of the
Company in certain circumstances.  The Rights Plan could diminish the
opportunities for a stockholder to participate in tender offers, including
tender offers at a price above the then current market value of the Common
Stock, or proxy contests, and may also inhibit fluctuations in the market
price of the Common Stock that could result from takeover attempts.  In
addition, the Board of Directors, without further stockholder approval, may
issue Preferred Stock with such terms as the Board of Directors may
determine, and which could have the effect of delaying or preventing a change
in control of the Company.  The issuance of such Preferred Stock could also
adversely affect the voting power of the holders of Common Stock.  See
"Description of Capital Stock -- Preferred Stock."  The Company is also
afforded the protections of Section 203 of the Delaware General Corporation
Law, which could delay or prevent a change in control of the Company or could
impede a merger, consolidation, takeover or other business combination
involving the Company or discourage a potential acquiror from making a tender
offer or otherwise attempting to obtain control of the Company.  See
"Description of Capital Stock -- Certain Anti-takeover and Charter
Provisions."
                                 13<PAGE>
Restrictions on Dividends

     The Company presently does not intend to pay dividends or make other
distributions with respect to the Common Stock for the foreseeable future. 
In addition, the New Credit Agreement and the indentures governing the New
Notes contain limitations on the ability of the Company to pay dividends. 
See "Market Price and Dividend Policy" and "Description of Capital Stock."


Limited Public Market

     On March 2, 1995 the Common Stock was listed for trading on the Nasdaq
Small Cap Market under the symbol "KASH."  Prior to such date, there was no
established public trading market for its Common Stock.  There is no
assurance that an active trading market in the Common Stock will continue. 
Accordingly, no assurance can be given as to the price at which any holder
may sell his Common Stock or whether a liquid market in the Common Stock will
exist at the time of any given sale.


                           THE COMPANY


     The Company is a Delaware corporation, formed as a vehicle for the
October 1988 leveraged acquisition of 121 food and 25 liquor stores in two
separate transactions from Lucky Stores, Inc., a subsidiary of American
Stores Company, and Superx Drugs Corporation, a subsidiary of The Kroger Co. 
The Company's original equity capitalization was provided by The Fulcrum III
Limited Partnership and The Second Fulcrum III Limited Partnership
(collectively, the "Fulcrum Partnerships") (the Fulcrum Partnerships are
investment funds managed by Gibbons, Goodwin, van Amerongen, L.P. ("GGvA")
(formerly known as Gibbons, Green, van Amerongen, L.P.)), certain affiliates
of Merrill Lynch & Co., Inc. and members of management.  In November 1991,
Green Equity Investors, L.P. ("GEI"), an investment fund managed by Leonard
Green & Partners, L.P., invested $27.7 million in cash in exchange for an
equity interest in the Company.  At the same time, the Fulcrum Partnerships
invested an additional $2.3 million and exchanged certain preferred stock of
the Company for common stock of the Company.  After the November 1991 equity
infusion, and until the Restructuring was consummated, GEI owned
approximately 60.9%, and the Fulcrum III Partnerships owned approximately
33.8%, of the outstanding Common Stock of the Company.

     The principal executive offices of the Company are located at 6422
Harney Road, Tampa, Florida 33610, and its telephone number is (813)
621-0200.  The Company's symbol for trading on the Nasdaq Small Cap Market is
"KASH."




                                    14<PAGE>
                        THE RESTRUCTURING

     On November 9, 1994 (the "Petition Date") the Company filed with the
U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court")
a voluntary petition for reorganization under Chapter 11 of the Bankruptcy
Code and a "prepackaged" plan of reorganization (the "Prepackaged Plan"). 
During the pendency of the bankruptcy case, the Company, with the approval of
the Bankruptcy Court, operated its business in the ordinary course, and paid
all pre-petition and post-petition claims of its general unsecured creditors,
trade creditors and employees in full.  The Prepackaged Plan was confirmed by
the Bankruptcy Court on December 12, 1994, and the Company emerged from
bankruptcy on December 29, 1994 (the "Effective Date").  

     Pursuant to the Prepackaged Plan, on the Effective Date:

     (1)  Each $1,000 principal amount of the Company's $85.0 million Senior
Floating Rate Notes due August 2, 1996 (the "Old Senior Floating Rate Notes")
was exchanged for (a) new Senior Floating Rate Notes due February 1, 2003
(the "New Senior Floating Rate Notes") in an original principal amount equal
to $1,000 plus 100% of the accrued interest under the Old Senior Floating
Rate Notes from and including February 3, 1994, through but not including the
Petition Date, or, at such holder's election, (b) new 11.5% Senior Fixed Rate
Notes due February 1, 2003 (the "New Senior Fixed Rate Notes") in the same
original principal amount, or, at such holder's election, (c) an amount of
New Senior Floating Rate Notes and an amount of New Senior Fixed Rate Notes
equal, in the aggregate, to 100% of such claim; 

     (2)  Each $1,000 principal amount of the Company's $50.0 million 12 3/8%
Senior Fixed Rate Notes due February 1, 1999 (the "Old Senior Fixed Rate
Notes") was exchanged for (a) New Senior Floating Rate Notes in an original
principal amount equal to $1,000 plus 100% of the accrued interest under the
Old Senior Fixed Rate Notes from and including February 2, 1994, through but
not including the Petition Date, or, at such holder's election, (b) New
Senior Fixed Rate Notes in the same original principal amount, or, at such
holder's election, (c) an amount of New Senior Floating Rate Notes and an
amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of
such claim;

     (3)  the Company's $105.0 million 14% Subordinated Debentures due
February 1, 2001 (the "Old Subordinated Debentures") were exchanged for the
aggregate amount of 2,635,000 shares of newly-issued Common Stock,
representing 85 percent of the Common Stock outstanding on the Effective
Date;

     (4)  GEI invested $10.0 million cash in exchange for 465,000 shares of
newly-issued Common Stock, representing 15 percent of the Common Stock
outstanding on the Effective Date; and

     (5)  all of the existing preferred stock, common stock, and options and
warrants to purchase common stock of the Company were extinguished.


                                    15<PAGE>
     Pursuant to the Prepackaged Plan, the Company is required within four
months after the Effective Date, or such longer time as may be required to
prepare the necessary financial statements, to take the necessary steps to
register the newly-issued shares of Common Stock in a "shelf registration,"
to be effective for a period of three years, pursuant to the appropriate
requirements of the Securities and Exchange Commission.  The Registration
Statement, of which this Prospectus is a part, has been filed to satisfy that
requirement.

     Also pursuant to the Prepackaged Plan, the Company refinanced its
principal bank indebtedness on the Effective Date by entering into a new
Credit Agreement with The CIT Group/Business Credit, Inc., as administrative
agent for itself and certain other lenders (the "New Credit Agreement").  The
New Credit Agreement provides the Company with a 3-year $35.0 million term
loan facility and a 3-year $50.0 million revolving credit facility, and is
secured by liens upon substantially all of the Company's real and personal
property.  As a result of such refinancing, the obligations of the Company
under the Credit Agreement dated October 12, 1988, as restated on September
14, 1989, and thereafter amended, with Bank of America National Trust and
Savings Association (as successor by merger to Security Pacific National
Bank), as administrative agent, and certain other senior lenders (the "Old
Credit Agreement"), were satisfied, and the Old Credit Agreement was
terminated.  See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Financial Condition."


                MARKET PRICE AND DIVIDEND POLICY


     On March 2, 1995 the Common Stock was listed for trading on the Nasdaq
Small Cap Market under the symbol "KASH."  Prior to such date, there was no
established public trading market for its Common Stock.  For the period of
March 2, 1995 through April 26, 1995, the range of high and low bids for a
single share of Common Stock was $20 - $18.25, as quoted in the Nasdaq Small
Cap Market.  As of April 26, 1995, the average of the low bid and high ask
prices as quoted on the Nasdaq Small Cap Market was $19.25.  Such
over-the-market quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not necessarily represent actual
transactions.

     As of April 26, 1995, there were approximately 21 holders of record of
shares of Common Stock.

     The Company has not in the past paid cash dividends to its stockholders
and does not intend to pay any cash dividends in the foreseeable future.  The
Company's ability to declare cash dividends on its Common Stock is materially
limited by prohibitions or restrictions in the New Credit Agreement and the
indentures governing the New Senior Fixed Rate Notes and the New Senior
Floating Rate Notes.  See "Description of Capital Stock."

                                    16<PAGE>
                         CAPITALIZATION

     The following table sets forth the unaudited capitalization of the
Company as of January 29, 1995 on an actual basis after giving effect to the
transactions in connection with the Restructuring and the application of
fresh-start reporting.  This table should be read in conjunction with the
detailed information and financial statements and related notes appearing
elsewhere in this Prospectus.  
                                       As of January 29, 1995
                                       (dollars in thousands)

Current portion of long-term debt (1). . . .     $12,764    
                                                 =======
Long-term debt:
 Term Loan Facility. . . . . . . . . . . . .     $35,000    
 Revolving Loan Facility (2)   . . . . . . .      12,000    
 Mortgages payable, bearing interest
  at rates from 7.50% to 10.35%,
  in equal monthly installments of $355,
  with maturities from 1999 through 2003 . .      33,555    
 Capital lease obligations . . . . . . . . .       8,410    
 Senior Floating Rate Notes due 2003 . . . .      22,953    
 11.5% Senior Fixed Rate Notes Due 2003. . .     121,162    
 Other . . . . . . . . . . . . . . . . . . .       7,206    
  Less current portion . . . . . . . . . . .    (12,764)
                                                --------    
  Total long-term debt . . . . . . . . . . .    $227,522
                                                --------    
Stockholders' equity:
 Common Stock of $.01 par value:
  authorized 5,500,000 shares;
  outstanding 3,100,000 shares . . . . . . .          31    
 Capital in excess of par value. . . . . . .      46,464    
 Retained Earnings (3) . . . . . . . . . . .         807    
                                                --------    
  Total stockholders' equity . . . . . . . .      47,302    
                                                --------    
  Total capitalization . . . . . . . . . . .    $274,824    
                                                ========    
_______________

(1)  Includes term loan facility under the New Credit Agreement, $7.0
     million; mortgages payable, $.9 million; and capital lease obligations
     and other, $4.9 million.

(2)  The New Credit Agreement has a revolving credit facility with an
     individual sublimit of $25.0 million for letters of credit (of which
     $17.3 million were outstanding at January 29, 1995), with a maximum of
     the lesser of (i) 85% of eligible receivables and 80% of eligible
     inventories (as defined in the New Credit Agreement), or (ii) $50.0
     million permitted to be outstanding under the revolving credit facility
     at any one time.  

(3)  Reflects the application of fresh-start reporting.

                                    17<PAGE>
                 SELECTED FINANCIAL INFORMATION

     The following table presents selected financial information of the
Company as of and for each of the fiscal years ended on the Sunday nearest to
July 31, 1994, 1993, 1992, 1991 and 1990 and as of and for the periods ended
January 29, 1995, January 1, 1995 and January 30, 1994, and should be read in
conjunction with the financial statements and related notes thereto appearing
elsewhere in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."  

     The financial statements as of and for the periods ended January 29,
1995, January 1, 1995 and January 30, 1994 from which the selected financial
information has been derived, have not been audited by independent
accountants in accordance with generally accepted auditing standards, but, in
the opinion of management, the financial statements as of and for the period
ended January 30, 1994 include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the Company's financial
position and results of operations.  As discussed herein, the Company's
Prepackaged Plan was consummated on December 29, 1994 (the "Effective Date"). 
The financial statements as of and for the periods ended January 29, 1995 and
January 1, 1995 reflect the Company's emergence from Chapter 11 and were
prepared utilizing the principles of fresh-start reporting contained in the
American Institute of Certified Public Accountants' Statement of Position
90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code."  Operations during the period from the Effective Date through January
1, 1995 had no significant impact on the emergence transactions and as a
result have not been separately identified.  As a result of the
implementation of fresh-start accounting, certain of the selected financial
data as of and for the periods ended January 29, 1995 and January 1, 1995 is
not comparable to the selected financial data of prior periods due to the
change in reporting entity resulting from the application of fresh-start
accounting.  Therefore, selected financial data for the "Reorganized Company"
has been separately identified from that of the "Predecessor Company." 
Results for the periods ended January 29, 1995 or January 1, 1995 are not
necessarily indicative of the results for the full year.

     The selected store data have been derived from the Company's management
reporting records.












                                    18<PAGE>
                                                                            
                                Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,      January 1,   January 30,
                                 1995            1995           1994
                               (4 weeks)       (22 weeks)    (26 weeks)
                              (In Thousands, Except Per Share Amounts)
Statement of Operations Data
 Sales . . . . . . . . . . .      $86,354      $426,681       $534,801
 Cost of sales . . . . . . .       68,940       340,802        425,915 
                                  -------      --------        -------
 Gross profit. . . . . . . .       17,414        85,879        108,886 
 Selling, general and 
    administrative expenses        12,226        68,819         90,128 
 Depreciation and amortization      1,979        10,234         12,111 
 Store closing and other costs        --           --           11,016 
                                  -------      --------        -------
 Operating income (loss) . .        3,209         6,826         (4,369)
 Net interest expense (1). .        2,402        13,719         22,513 
                                  -------      --------        -------
 Income (loss) from operations before
    reorganization items, income taxes, 
    extraordinary items and change in 
    accounting principle              807        (6,893)       (26,882)
 Reorganization items. . . .           --          (219)          --  
 Extraordinary items - 
    gain on debt discharge             --        70,166           --  
 Cumulative effect of change in accounting
    principle. . . . . . . .           --        (2,000)          --  
                                  -------      --------        -------
 Net income (loss) . . . . .         $807       $61,054        $(26,882)
                                  =======      ========        ========
 Income per common share (2), (3)    $0.26         --             --
                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                            1994      1993       1992      1991       1990
Statement of Operations                     (In Thousands)
 Data Sales . . . . . . $1,065,165 $1,086,125 $1,071,038 $1,059,636 $1,039,209 
 Cost of sales . . . . . . 845,597    856,156    848,441    842,687    831,644 
                        ---------- ---------- ---------- ---------- ----------
 Gross profit. . . . . . . 219,568    229,969    222,597    216,949    207,565 
 Selling, general and 
  administrative expenses  176,945    175,177    164,897    159,359    151,970 
 Depreciation and 
   amortization             24,112     23,455     20,132     54,435     31,416 
 Store closing and other 
   costs                    11,016       --         --         --         --  
                        ---------- ---------- ---------- ---------- ----------
 Operating income. . . . .   7,495     31,337     37,568      3,155     24,179 
 Net interest expense (1).  45,390     43,257     44,869     45,610     50,692 
                        ---------- ---------- ---------- ---------- ----------
 Loss from operations before
   extraordinary items     (37,895)   (11,920)    (7,301)   (42,455)   (26,513)
                        ---------- ---------- ---------- ---------- ----------
 Extraordinary gain              0          0          0      3,427        943
 Net loss. . . . . . . . .$(37,895)  $(11,920)   $(7,301)  $(39,028)  $(25,570)
                        ========== ========== ========== ========== ==========
                                    19<PAGE>
                                Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,     January 1,    January 30,
                                 1995            1995           1994
                               (4 weeks)      (22 weeks)     (26 weeks)
                                     (Dollar Amounts In Thousands)
Balance Sheet Data
 Total assets. . . . . . . .   $381,751        $381,492       $408,154 
 Inventories . . . . . . . .     78,756          87,115         85,952 
 Property and equipment, net    143,813         144,979        165,518 
 Working capital . . . . . .      7,207           7,045         (367)
 Total long-term debt and capital 
  leases (including current 
  maturities)(5)                240,286         242,786        353,723 
 Preferred stock . . . . . .        --             --            4,650 
 Total stockholders' 
  equity (deficit)               47,302          46,495        (50,041)
Other Data
 Operating cash flow (EBITDA) (6) 5,188          17,060         18,758 
 Capital expenditures (7). .        162             665         10,606 
Store Data
 Food stores open at end of
   period (8). . . . . . . .         99              99            101 
 Avg. selling sq. ft. during period (in
   thousands) (9). . . . . .      2,903           2,903          3,096 
 Avg. sales per store week (10)    $218            $196           $190 

                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                                  1994    1993     1992     1991     1990
                                          (Dollar Amounts in Thousands)
Balance Sheet Data
 Total assets. . . . . . .     $389,893 $423,208 $399,419 $401,860 $455,204 
 Inventories . . . . . . .       76,094   95,385   91,226   92,451   92,474 
 Property and equipment, net .  160,491  164,937  145,372  146,513  148,100 
 Working capital . . . . . . .  (12,747)  19,137   26,031   15,684   11,959 
 Total long-term debt and 
   capital leases (including 
   current maturities)(5)       360,121  351,890  316,220  342,826  337,861 
 Preferred stock . . . . . . .    4,650    4,650    4,650   45,991   45,991 
 Total stockholders' deficit    (61,054) (23,159) (11,239) (72,640) (33,609)

Other Data
 Operating cash flow(EBITDA)(6) $42,623  $54,792  $57,700  $57,590  $55,595 
 Capital expenditures (7). . .   15,471   37,703   15,385   15,672   16,079 

Store Data
 Food stores open at end of 
   period (8). . . . . . . . .      100      115      111      113      112 
 Avg. selling sq. ft. during 
   period (in thousands) (9) .    3,084    3,100    2,970    2,949    2,918 
 Avg. sales per store week(10)     $196     $183     $181     $180     $175 
                                    20<PAGE>
             Notes to Selected Financial Information
                  (Dollar Amounts in Thousands)

(1)  Includes amortization of deferred financing costs of $182, $1,152 and
     $1,549 for the four weeks ended January 29, 1995, 22 weeks ended January
     1, 1995, and 26 weeks ended January 30, 1994, respectively; and $2,950,
     $2,850, $2,932, $3,017 and $6,346 for the 1994, 1993, 1992, 1991 and 1990
     fiscal years, respectively.  

(2)  Based on 3,100,00 shares (the weighted average number of shares of Common
     Stock outstanding).

(3)  Net income per share of Common Stock is not meaningful prior to January 1,
     1995 due to the significant change in the capital structure in connection
     with the Restructuring.

(4)  The Company's fiscal year is based on a 52/53 week fiscal year ending on
     the Sunday nearest to July 31.  Therefore, the 1992 fiscal year included
     53 weeks of operations.  The 1994, 1993, 1991 and 1990 fiscal years each
     had 52 weeks of operations.

(5)  Total long-term debt includes long-term debt, current maturities of
     long-term debt, capital lease obligations and certain other debt.

(6)  Represents earnings before net interest expense (which includes
     amortization of deferred financing costs), provision for income taxes,
     depreciation and amortization, store closing and other costs,
     reorganization items, extraordinary items, and cumulative effect of change
     in accounting principle.  Operating cash flow (EBITDA) is presented here
     as a measure of the Company's debt service ability, and should not be
     construed as an alternative to operating income (as determined in
     accordance with generally accepted accounting principles) or to cash flows
     from operating activities (as determined on the Statements of Cash Flows
     in the Company's financial statements).  

(7)  Capital expenditures consist of cash expenditures, additions to capital
     leases and, for the 1994, 1993 and 1992 fiscal years, amounts funded under
     the capital improvements revolving credit facility under the Old Credit
     Agreement (as defined in "The Restructuring").

(8)  Data relating to the number of stores is expressed in actual numbers.

(9)  Represents the average of the selling square footage of the Company's
     stores on the first and last day of the respective periods.  Selling
     square footage includes adjacent liquor stores where applicable but does
     not include backroom and receiving areas.

(10) Represents, for each of the respective periods, sales for such period
     divided by the sum of the number of weeks for which each of the Company's
     stores was open during such period.


                                    21<PAGE>
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     This analysis should be read in conjunction with the financial
statements and related notes thereto included elsewhere in this document. 
The Company follows a 52/53 week fiscal year ending on the Sunday nearest to
July 31.  The fiscal year ended August 2, 1992 included 53 weeks of
operations.  Historical results of operations are given for the Company's
fiscal years ended July 31, 1994, August 1, 1993 and August 2, 1992
(respectively, the "1994, 1993 and 1992 Fiscal Years"), the four weeks ended
January 29, 1995 and the 22 weeks ended January 1, 1995 (combined, the "1995
Six-Month Period"), and the 26 weeks ended January 30, 1994 (the "1994
Six-Month Period").  On November 9, 1994, the Company filed a voluntary
petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code; on
December 12, 1994, the Bankruptcy Court confirmed the Company's "prepackaged"
plan of reorganization.  The Prepackaged Plan became effective on December
29, 1994, when the Company emerged from bankruptcy.  The financial statements
as of and for the periods ended January 29, 1995 and January 1, 1995 reflect
the Company's emergence from Chapter 11 proceedings and were prepared
utilizing the principles of fresh-start reporting contained in the American
Institute of Certified Public Accountants' Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code"
(the "SOP 90-7").  Operations during the three-day period from the Effective
Date through January 1, 1995 had no significant impact on the emergence
transactions and as a result have not been separately identified.  

     The Company acquired substantially all of its assets in October 1988. 
The acquisitions were accounted for as purchases and the assets were recorded
at fair market value based on independent appraisals, resulting in an
increase in the carrying value of the assets of approximately $215.4 million. 
The write-up was allocated to property and equipment ($22.6 million),
favorable lease interests ($26.2 million), depreciable intangible assets
($53.6 million), and excess of cost over net assets acquired ($113.0
million).  As a result, the Company has since incurred a significant amount
of noncash charges.  In addition, during the first quarter of 1994, the
Company recorded a non-recurring charge of $11.0 million, which reflects
expenses associated with a program of closing 12 underperforming stores,
reducing administrative staff, and expensing costs associated with
unsuccessful financing activities.  The financial statements as of and for
the periods ending January 29, 1995 and January 1, 1995 are not comparable to
the financial statements of prior periods due to the change in reporting
entity resulting from the application of fresh-start accounting.  For the
reasons outlined above, the Company believes that the most relevant measure
of its operating results is earnings before interest, taxes, depreciation and
amortization, store closing and other costs, reorganization items,
extraordinary items, and the cumulative effect of change in accounting
principle (operating cash flow):



                                    22<PAGE>
                   Four   Twenty-two
                   Weeks    Weeks  Twenty-six
                   Ended    Ended  Weeks Ended  Sunday Nearest July 31 
                 January  January  January 30,     Fiscal Year Ended
                 29, 1995 1, 1995     1994     1994  1993    1992    1991 
                                   (In Thousands)

Operating income
  (loss)         $3,209  $6,826   $(4,369)  $ 7,495 $31,337 $37,568 $3,155
Depreciation and 
  amortization    1,979  10,234    12,111    24,112  23,455  20,132 54,435
Store closing and 
  other costs       --    --       11,016    11,016    --      --     --
                 ------  ------   -------    ------  ------  ------ ------
Operating cash 
  flow           $5,188  $17,060  $18,758   $42,623 $54,792 $57,700 $57,590
                 ======  =======  =======   ======= ======= ======= =======

              Results of Operations of the Company

     The discussion below compares the results of operations for the 1995
Six-Month Period with the 1994 Six-Month Period.  Except as specifically
acknowledged below, management believes that the impact of the Restructuring
and the implementation of fresh-start reporting did not significantly affect
the results of operations for the 1995 Six-Month Period, and that the
operating results of the individual four-week period and 22-week period ended
January 29, 1995 and January 1, 1995, respectively, are indicative of the
results of operations for the 26-week period ended January 29, 1995.

     Operating cash flow for the 1995 Six-Month Period was $22.2 million
compared to $18.8 million for the 1994 Six-Month Period.  The increase in
operating cash flow was attributable to the factors indicated below.

 
     Sales                                      26 Weeks Ended
 
                                            January 29,  January 30,
                                               1995         1994

Sales (in millions). . . . . . . . . . . . . $513.0        $534.8
Change in same store sales . . . . . . . . . (0.22%)      (2.96%)
Average sales per store week (in thousands). $199          $190

     The Company closed 17 stores and opened two new stores over the last
year as part of an overall strategic consolidation of its store network.  The
Company was able to mitigate the sales impact of these store closings by
transferring a portion of the sales of the closed stores to operating stores;
therefore, there was not a substantial adverse impact on the Company's
operating cash flow.  In addition, sales have been positively impacted as a
result of a recently-initiated store remodelling program and aggressive sales
promotional activities.


                                    23<PAGE>
 Gross Profit

     The Company had gross profit of $103.3 million, or 20.1% as a percentage
of sales, for the 1995 Six-Month Period; and gross profit of $108.9 million,
or 20.4% of sales, for the 1994 Six-Month Period.  The decrease in gross
margin as a percentage of sales was due to the effect of lower investment in
forward buy inventory and receipt of less promotional funds, offset by
improved perishable margins and increased efficiency in warehouse and
distribution operations.


  Selling, General and Administrative Expenses

     The Company had selling, general and administrative expenses of $81.0
million, or 15.8% as a percentage of sales, for the 1995 Six-Month Period and
$90.1 million, or 16.9% as a percentage of sales, for the 1994 Six-Month
Period.  The reduction of selling, general and administrative expenses was
due to lower store labor costs, reduced corporate overhead expenses and lower
advertising expenditures associated with a comprehensive operational
restructuring of the Company initiated during the year; and reduced operating
costs associated with stores that were closed during the last 12 months. 
These improvements were partially offset by an increase in workers'
compensation insurance reserves.


  Depreciation and Amortization

     The Company's depreciation and amortization expenses were $12.2 million
for the 1995 Six-Month Period compared to $12.1 million for the 1994
Six-Month Period.  The increase is primarily attributable to new stores and
major remodels, partially offset by the retirement of assets of stores
closed.


  Store Closing and Other Costs

     During the first quarter of fiscal 1994, the Company recorded a
non-recurring charge of $11.0 million.  This charge included $1.9 million of
costs associated with unsuccessful financing activities, $4.2 million of
favorable lease interests written off in connection with the closing of 12
underperforming stores, $4.0 million representing an adjustment to the
expected lease liability on closed stores, net of sublease income, and $.9
million of other store closing and related expenses.


  Interest Expense

     Interest expense for the 1994 Six-Month Period was primarily comprised
of interest under the Old Credit Agreement, the Old Senior Floating Rate
Notes, the Old Senior Fixed Rate Notes, the Old Subordinated Debentures, and
various mortgages and capital leases.  For the 

                                    24<PAGE>
1995 Six-Month Period, interest expense was reported on the Old Senior
Floating Rate Notes, the Old Senior Fixed Rate Notes, and the Old
Subordinated Debentures through the Petition Date; and interest expense was
reported on the New Senior Floating Rate Notes and the New Senior Fixed Rate
Notes from the Effective Date through January 29, 1995.  In accordance with
the Prepackaged Plan, no interest was due to the holders of the Old Senior
Floating Rate Notes, Old Senior Fixed Rate Notes, or Old Subordinated
Debentures for the period between the Petition Date and the Effective Date,
and therefore no interest expense allocable to such instruments was recorded
for this period.  As provided in the Prepackaged Plan, interest accrued from
and including February 2, 1994, in the case of the Old Senior Fixed Rate
Notes, and from and including February 3, 1994, in the case of the Old Senior
Floating Rate Notes, through the Petition Date, was paid by issuing
additional New Senior Floating Rate Notes and New Senior Fixed Rate Notes. 
Interest on the Old Subordinated Debentures accrued from and including
February 2, 1994 through the Petition Date was converted into stockholders'
equity.


  Reorganization Costs

      In accordance with SOP 90-7, income and costs directly related to the
reorganization have been segregated and are separately disclosed.  The major
components are restructuring costs, adjustments to fair value, professional
fees and other expenses.


  Gain on Debt Discharge

     The gain on debt discharge reflects the conversion of $105.0 million of
Old Subordinated Debentures, plus accrued interest from and including
February 2, 1994 through the Petition Date, into $39.5 million of
stockholders' equity, resulting in a $70.2 million gain.  The gain is
presented net of write-offs and costs associated with the repayment of
borrowings on the Effective Date.


                     1994, 1993 and 1992 Fiscal Years

      During the three year period ended July 31, 1994, the Company opened
seven new food stores, acquired one food store and three super warehouse food
stores (operating under the "Save 'n Pack" name), and completed major
expansion remodels on three existing food stores.  However, sales growth was
constrained primarily by the opening of 54 competitive supermarkets and the
closing of 24 of the Company's stores during this three year period.  The
Company experienced a net loss in each of the 1994, 1993 and 1992 Fiscal
Years primarily due to depreciation and amortization resulting from, and
interest costs associated with, financing the 1988 acquisition of the Kash n'
Karry and Superx stores.

     The following table sets forth certain items from the Company's
Statements of Operations as a percentage of sales for the periods indicated:
                                    25<PAGE>
                             52 Weeks     52 Weeks        52 Weeks
                               Ended        Ended           Ended
                          July 31, 1994 August 1, 1993  August 2, 1992

Sales                          100.00%     100.00%        100.00%
Gross profit                    20.6%       21.2%          20.8% 
Selling, general
   and administrative expenses  16.6%       16.1%          15.4% 
Depreciation and amortization    2.3%        2.2%           1.9% 
Interest expense                 4.3%        4.0%           4.2% 
Net loss                        -3.6%       -1.1%          -0.7% 
Operating cash flow (EBITDA)     4.0%        5.0%           5.4% 



     The Company generated operating cash flow of $42.6 million for the 52
weeks ended July 31, 1994, compared to operating cash flow of $54.8 million
for the 52 weeks ended August 1, 1993 and $57.7 million for the 53 weeks
ended August 2, 1992.


  Sales                       52 Weeks       52 Weeks       53 Weeks
                               Ended          Ended           Ended
                           July 31, 1994   August 1, 1993  August 2, 1992

Sales (in millions)             $1,065      $1,086          $1,071
Number of stores:
  Food stores opened or acquired     2           8               1
  Food stores closed                17           4               3
  Expansion remodels                 1           2              --
  Total food stores at period end  100          115             111
Average selling square feet during
    year (in thousands)          3,084        3,100           2,970
Average sales per store week 
    (in thousands)                $196         $183            $181

     The Company maintained a relatively stable level of sales during the
three year period. Sales were positively impacted by opening and acquiring
new stores, expanding and upgrading existing stores and increasing
promotional activities and advertising expenditures.  However, sales were
adversely affected by a weak economy, price deflation in certain commodities,
ongoing competitive new store and remodel activity, pricing and promotional
changes by certain competitors, and the closing of 24 of the Company's
stores.  Store closings adversely impacted sales, but did not cause a
substantial adverse impact on the Company's operating cash flow. 




                                    26<PAGE>
  Gross Profit

     Gross profit as a percentage of sales was 20.6% in the 1994 Fiscal Year,
21.2% in the 1993 Fiscal Year, and 20.8% in the 1992 Fiscal Year.  The
decrease in gross profit as a percentage of sales from the 1993 Fiscal Year
to the 1994 Fiscal Year was attributable to the impact of eliminating
investment in forward buy inventory (estimated to be approximately 57 basis
points), receipt of fewer promotional funds, and generally lower retail
prices, partially offset by improved perishable margins and efficiencies in
product preparation and handling.  The improvement from the 1992 Fiscal Year
to the 1993 Fiscal Year was primarily attributable to the receipt of more
promotional funds and increased efficiencies in product acquisition and
warehousing and distribution operations, partially offset by low inflation
and the competitive factors mentioned above.


  Selling, General and Administrative Expenses

     Selling, general and administrative expenses of the Company, as a
percentage of sales, were 16.6% in the 1994 Fiscal Year, 16.1% in the 1993
Fiscal Year, and 15.4% in the 1992 Fiscal Year.  The increase of $1.8 million
from the 1993 Fiscal Year to the 1994 Fiscal Year was primarily the result of
increased occupancy costs and other expenses related to stores opened,
acquired or remodeled, and an increase in insurance reserves and advertising
expenses, offset by reduced operating costs due to store closings.  The
increase as a percentage of sales was attributable to operating costs of
comparable stores in the aggregate declining at a lesser rate than the rate
of sales decline in those stores.  The increase, as a percentage of sales,
for the 1993 Fiscal Year compared to the 1992 Fiscal Year was primarily
attributable to certain expenses, such as employee benefits, utilities, and
repairs and maintenance, which increased at a faster rate than the rate of
growth in sales, offset partially by lower average cost per hour and improved
labor productivity in the stores.


  Depreciation and Amortization

     The Company's depreciation and amortization expenses were $24.1 million,
or 2.3% of sales, for the 1994 Fiscal Year; $23.5 million, or 2.2% of sales,
for the 1993 Fiscal Year; and $20.1 million, or 1.9% of sales, for the 1992
Fiscal Year.  The increase in depreciation and amortization for the three
year period was attributable to the new stores and major remodels, and
accelerated amortization of favorable lease interests on certain stores
closed during the period.






                                    27<PAGE>
  Interest Expense
                                       Fiscal Year ended Sunday Nearest 
                                                    July 31, 
                                         1994        1993       1992
                                               (In Thousands)
Interest expense, net. . . . . . . . . .$42,917    $41,211     $42,292
Amortization of deferred financing costs  2,950      2,850       2,932
Capitalized interest . . . . . . . . . . . (477)      (804)       (355)
                                        -------    -------     -------
      Interest expense, net. . . . . . .$45,390    $43,257     $44,869
                                        =======    =======     =======

     Interest expense for the 1994 Fiscal Year was primarily comprised of
interest under the Old Credit Agreement, the Old Senior Floating Rate Notes,
the Old Senior Fixed Rate Notes, the Old Subordinated Debentures, various
mortgages and capital leases.  The increase in interest expense for the 1994
Fiscal Year was primarily attributable to increased average borrowings under
the revolving credit facility under the Old Credit Agreement, additional
capital leases on store equipment, and slightly higher interest rates on bank
borrowings.


  Losses

     For the reasons set forth above, the Company experienced net losses of
$37.9 million for the 1994 Fiscal Year, $11.9 million for the 1993 Fiscal
Year, and $7.3 million for the 1992 Fiscal Year.



Financial Condition

     During the pendency of its bankruptcy case discussed above, the Company
operated its business in the ordinary course, and paid all pre-petition and
post-petition claims of the Company's general unsecured creditors, trade
creditors, and employees in full.  The provisions of the Prepackaged Plan,
which are discussed in footnote 1 to the accompanying condensed financial
statements, have had an immediate beneficial impact on the Company's
financial condition, primarily as a result of significantly deleveraging the
Company's balance sheet.

     Prior to the Petition Date, the Company's Old Credit Agreement provided
for a revolving credit facility with individual sublimits of $30.0 million
for working capital loans and $25.0 million for letters of credit, with a
maximum of $50.0 million outstanding under the total facility at any one
time.  During the weeks preceding the bankruptcy filing, the Company, with
the approval of its bank lenders, increased its cash position by fully
drawing the remaining availability under its working capital line.  On
November 9, 1994, the Bankruptcy Court approved the use of cash collateral
and a letter of credit facility of $17.7 million under the Old Credit
Agreement, and additional debtor-in-possession financing provided by
BankAmerica Business Credit, Inc. of $11.2 million, subject to certain terms
and conditions.  The outstanding 
                                    28<PAGE>
borrowings under those facilities were refinanced on the Effective Date, when
the Company entered into the New Credit Agreement with The CIT Group/Business
Credit Inc. and certain bank lenders to provide a 3-year $35.0 million term
loan facility and a 3-year $50.0 million revolving credit facility.

     Beginning August 1, 1994, the Company implemented a new short-term
business strategy to improve the Company's financial performance.  The focus
of this strategy is to conserve capital, reduce administrative and operating
expenses, and direct management attention toward the operation of existing
stores.  During the first six months of fiscal 1995 the Company significantly
improved its liquidity as a result of the payment moratorium on interest due
on the Old Senior Fixed Rate Notes, Old Senior Floating Rate Notes, and Old
Subordinated Debentures; managing working capital; and reducing operating
expenses and capital expenditures by $12.0 million on an annualized basis. 
In addition, the Company expects to exercise its option of paying interest in
kind under the New Senior Floating Rate Notes through August 1, 1995, and on
the New Senior Fixed Rate Notes through February 1, 1996, which will further
increase its liquidity through the first half of fiscal 1996.  The Company
also has an agreement in principle for a $28.0 million sale-leaseback
transaction on 11 of its fee-owned store properties.  The Company intends to
apply $13.0 million of the proceeds to reduce the term loan facility under
the New Credit Agreement, and $14.0 million of such proceeds to reduce its
mortgage obligations.  As a result of its increased liquidity, the Company
expects to invest $6.0 million in forward buy inventory in fiscal 1995, has
made prepayments totalling $7.0 million on its term loan facility, and
intends to repay the balance of the term loan facility under the New Credit
Agreement by the end of fiscal 1995.  As of April 21, 1995, the outstanding
principal balance under the term loan facility was $28.0 million, and the
Company had $7.4 million in borrowings and $12.6 million in letters of credit
outstanding under the revolving credit facility under the New Credit
Agreement.

     Consistent with its short-term business strategy, the Company does not
anticipate opening or acquiring any new stores during the current fiscal
year, but expects that capital expenditures of approximately $6.0 million
will be used to upgrade its existing store facilities, including minor
remodelling projects at 41 stores.  The Company's capital expenditure plans
through the end of fiscal 1996 include the completion of major remodelling
projects at 19 stores, minor remodelling projects at 25 additional stores and
the construction of two new stores.  

     The Company has entered into an interest rate swap through August 1995
to reduce its exposure to increases in short-term interest rates on the
majority of its floating rate debt.  The Company does not believe that there
would be any material impact on the accompanying financial statements as of
January 29, 1995 as a result of liquidating this contract.

     Based upon the Company's ability to generate working capital through its
operations and its new $50.0 million revolving credit facility, the Company
believes that it has the financial resources necessary to pay its capital
obligations and implement its business plan.

                                    29<PAGE>
                      Effects of Inflation

     The Company's primary costs, inventory and labor, are affected by a
number of factors that are beyond its control, including availability and
price of merchandise, the competitive climate and general and regional
economic conditions.  As is typical of the supermarket industry, the Company
has generally been able to maintain margins by adjusting its retail prices,
but competitive conditions may from time to time render it unable to do so
while maintaining its market share.

                              BUSINESS

                              General

     The Company is the third largest food retailer in west central Florida,
operating 92 multi-department supermarkets, five conventional supermarkets
and 33 liquor stores under the "Kash n' Karry" name and two super warehouse
stores under the "Save 'n Pack" name, all supported by a centrally-located
warehouse and distribution facility.  More than one-half of the Company's
stores are located in the Tampa-St. Petersburg area, which is Florida's
largest retail food sales market, with the balance located between
Gainesville, approximately 130 miles to the north, and Bonita Springs,
approximately 150 miles to the south.  The west central Florida area has a
diverse and growing economy, which includes high technology and financial
centers, an insurance industry presence, retirement communities, coastal
resorts and commercial agricultural activity.  The region's population is
estimated to be increasing at an annual rate of approximately 2%.

                      Company Store Profile

     The following table presents a profile of the Company's stores:

                                    Number of Stores At Fiscal Year End
                           Total Square
           Store Type        Footage(1)     1994  1993  1992  1991 1990
           ----------      ------------     ----  ----  ----  ---- ----
Kash n' Karry Food Stores  40,000--57,000    50    48    42    42   39
                           25,000--39,999    43(2) 55    57    57   58
                         less than 25,000     5     9    12    14   15
Save 'n Pack Super 
  Warehouse Stores         76,000--88,000     2     3    --    --   --
Kash n' Karry Liquor Stores 1,800-- 2,700    33    35    30    31   26

_______________

(1)  Includes selling and backroom areas.

(2)  Includes one store that was closed subsequent to July 31, 1994.

                                    30<PAGE>
  Supermarket stores
     The Company currently operates 92 multi-department supermarkets, with an
average size of approximately 40,000 total square feet.  The Company also
operates five conventional supermarkets which average approximately 18,000
total square feet.  All of the Company's supermarket stores offer a wide
selection of items typically sold in grocery stores, including staple
groceries, fresh fruits and vegetables, bakery and dairy products,
delicatessen items, frozen foods and fresh meats.  Each of the Company's
supermarket stores also sells certain non-food items such as health and
beauty care items, paper and tobacco products, soaps and detergents, drugs,
sundries and housewares.  The Company's multi-department stores offer, in
addition, a wider variety of non-food items, including cosmetics and
toiletries, small hardware and a limited selection of soft goods.  Most of
the Company's multi-department stores also feature expanded perishable goods
departments, delicatessens and in-store bakeries, and many contain pharmacies
and full-service seafood, full-service floral and video rental departments. 
All of the Company's stores feature national brands and also carry a
selection of corporate brand merchandise.  Most of the Company's food stores
are located in shopping centers.  The Company's food stores are open seven
days a week, and most operate 24 hours a day.

  Super warehouse stores
     In 1993, the Company acquired three super warehouse stores (one of which
was subsequently closed) operating under the "Save 'n Pack" name.  The two
existing super warehouse stores, which are 76,000 and 88,000 square feet in
size, respectively, feature among the lowest prices on basic items carried by
supermarkets and are designed to cater to the needs of the low-income
household.  In its super warehouse store promotions, the Company encourages
consumers to verify the stores' tag line, "No One Has Lower Prices." The
assortment of packaged goods carried by the super warehouse stores is more
limited than that of a supermarket and is frequently augmented by one-time
purchases of specially priced products that may not be available on a regular
basis.  Store decor is austere compared to that of a traditional supermarket,
and product is displayed on warehouse racking and on floor pallets to enhance
productivity and promote a low-price impression.  The stores provide a full
complement of perishable departments, including meat, produce, bakery, deli
and fresh seafood, which also feature low prices and are frequently
self-service.  The super warehouse stores do not have certain specialty
departments such as pharmacies, video rental departments or full-service
floral departments and do not provide supermarket services such as grocery
bagging, carry-out service, check cashing services and electronic funds
transfer.  Because of reduced display, labor and advertising costs and the
more limited services, the Company is able to operate its super warehouse
stores successfully with lower gross margins than the Kash n' Karry
supermarket stores.  The super warehouse stores operate 24 hours a day, seven
days a week.

  Liquor stores

     Each of the Company's 33 liquor stores is located on property adjacent
to one of the Company's supermarket stores and is operated as a department of
such store, although, in 
                                    31<PAGE>
accordance with Florida law, each liquor store must maintain a separate
entrance.  Liquor stores complement the Company's core business, as they can
be advertised through existing media without incremental expense, pay
supermarket (as compared to shopping center) rents and benefit from operating
and marketing synergies with the adjacent supermarkets.  The liquor stores
offer a wide variety of wines, beers and hard liquors, as well as mixers,
soft drinks, snacks, ice and other party accessories and a limited number of
traditional grocery items.  Sales from the Company's liquor stores represent
approximately 2% of the Company's total sales.  The Company's liquor stores
range in size from 1,800 to 2,700 square feet, and most are open seven days
a week. 

                       Operations Strategy

     The Company believes that up-to-date, strategically located facilities,
well-trained associates and information management systems are key elements
to the Company's future success.  The Company operates a modern, 687,000
square foot warehouse, distribution and office facility in Tampa with
sufficient capacity to service anticipated store expansion for the
foreseeable future.  The warehouse enables the Company to reduce costs by
purchasing in large quantities, taking advantage of special promotional
prices offered by vendors and purchasing prior to impending price increases,
and reducing delivery costs through cross docking and backhauls.  The central
location of the warehouse facility to its stores also provides the Company
with operating efficiencies. 

     The Company relies on information technology to enhance operating
efficiency.  The Company recently entered into an agreement to outsource its
information systems development in order to minimize costs, accelerate the
implementation period for systems improvements, facilitate future software
upgrades, reduce personnel issues and eliminate equipment lease costs. 
Specifically, the agreement provides for the acquisition of new procurement,
billing, labor scheduling and accounts payable systems and new point-of-sale
equipment in the stores within the next 18 months.

                       Marketing Strategy

     The Company emphasizes competitive prices on everyday items, strong
weekly features, high quality perishables and a broad assortment of both
national and corporate brands.  The Company's food stores are open seven days
a week, with most operating 24 hours a day.  The Company seeks to be either
first or second among its competitors in assortment of branded merchandise,
stocking over 29,000 SKU's (stock keeping units) of national brand and
corporate brand items.  In addition to a full range of grocery and general
merchandise items, most of the Company's multi-department supermarkets also
feature expanded perishable goods departments, delicatessens and in-store
bakeries, and many contain pharmacies and full-service seafood, full-service
floral and video rental departments.



                                    32
<PAGE>
     In 1992, the Company introduced its own corporate brand merchandise. 
The Company's corporate brand strategy is to offer a product comparable in
quality to the best-selling national brand at a lower price.  The Kash n'
Karry brand item generally sells for approximately 10% less than the
competing best-selling national brand but generates a higher per unit gross
profit contribution to the Company.  Over 1,100 SKU's in a wide variety of
product categories carry the Kash n' Karry brand name.


                           Competition

     The food retailing business is highly competitive.  The Company operates
in an environment where more than 90% of sales are by chains.  The principal
competitive factors include store locations, product selection and quality,
price, cleanliness of stores, customer service and overall store image. 
Based on its marketing research, the Company believes that consumers perceive
the Company as having a favorable value image in the markets that it serves
and offering a wide variety of quality products and services in a pleasant
environment.  The Company believes that its competitive strengths include
desirable store locations combined with a strong consumer franchise and
efficient warehousing and distribution facilities.

     The Company competes with several national, regional and local
supermarket chains, particularly Publix, Winn-Dixie, Albertson's and Food
Lion.  The Company is also in competition with convenience stores, stores
owned and operated or otherwise affiliated with large food wholesalers,
unaffiliated independent food stores, merchandise clubs, discount drugstore
chains and discount general merchandise chains.  The Company's principal
competitors have greater financial resources than the Company and could use
those resources to take steps which could adversely affect the Company's
competitive position and financial performance.  For example, operating
results generally and sales growth in particular were adversely affected by
approximately eight, 21, 25 and 30 store openings by principal grocery
competitors during the 1994, 1993, 1992 and 1991 fiscal years, respectively. 
In the first six months of fiscal 1995, there were approximately four such
competitive store openings, and it is anticipated that competitive store
openings will continue.  Another example of the highly competitive nature of
the food retailing business is the practice of competitors to reposition
their pricing structure.  Over the past several years, each of the Company's
major competitors has changed its pricing practices in a manner that has
adversely affected general retail pricing in the market.  Winn-Dixie
discontinued double coupons and introduced its everyday low-price program in
the spring of 1991.  In the spring of 1993, Publix began a campaign focused
on "surprisingly low prices," and Food Lion began a double coupon program
which has since been discontinued.  The Company has had to deal with each of
these changes in a manner that has, in some instances, adversely affected its
operating results and may continue to do so in the future.  In addition, the
Company's ability to compete may be adversely affected by its high leverage
and the limitations imposed by the New Credit Agreement and other debt
agreements.


                                    33<PAGE>
                           Seasonality

      The Company's sales and related inventory levels tend to increase
during the winter months due to the holidays, increased tourism and the
influx of winter residents, and to decrease during the summer months. 
Typically, approximately 60% of the Company's operating cash flow is recorded
during the second and third quarters of its fiscal year.


                            Employees

     The Company currently employs approximately 3,700 full-time and 5,600
part-time associates, none of whom is covered by a collective bargaining
agreement.  The Company believes that it has good relations with its
associates.


                     Trademarks and Licenses

     The Company employs various trademarks, trade names and service marks in
its business, including the "Kash n' Karry" logo and trade name.  Except for
"Kash n' Karry" and its derivatives, and "So Much More to Pay Less For!,"
"Kash $aver," "$mart Buy," "Five Star Meat," "Nature Friendly" and "Save 'n
Pack," the Company does not believe that any of such trademarks or service
marks are material to the business of the Company.

     Certain governmental licenses and permits, including alcoholic beverage
licenses, health permits and various business licenses, are necessary in the
Company's operations.  The Company believes it has all material licenses and
permits necessary to enable it to conduct its business.


                           Properties

     The Company's 92 multi-department supermarkets and five conventional
supermarket stores have an aggregate selling area of approximately three
million square feet.  Thirteen of the food stores (comprising approximately
504,000 square feet) are owned by the Company.  The remaining 84 supermarket
stores are leased by the Company.  Six of the leased stores are operated
under long-term ground leases with the Company owning the improvements at
such locations.  Seventeen leases expire during the next five years, with the
Company having options to renew all but two.  Most of the Company's food
store leases have minimum rentals with additional rentals based on a
percentage of sales.  In March 1995, the Company entered into an agreement in
principle to sell 11 of its fee-owned stores to a third party, and to
simultaneously enter into long-term leases for those sites.  The Company
expects to consummate the sale-leaseback transaction before the end of the
1995 fiscal year.  


                                    34<PAGE>
     The Company's two Save 'n Pack super warehouse stores have an aggregate
selling area of approximately 119,000 square feet.  One of the stores is
leased, with the remaining store operated under a long-term ground lease with
the Company owning the improvements at the location.  Neither of the leases
expires within the next five years.

     The Company's liquor stores have an aggregate selling area of
approximately 53,000 square feet.  Four of the liquor stores are owned by the
Company.  The remaining 29 liquor stores are leased by the Company.  Three of
the leases expire during the next five years, with the Company having an
option to renew.

     The Company's warehouse, distribution and office facility is located on
53.6 acres of land, which the Company owns.


                        Legal Proceedings

     For information regarding the Company's reorganization proceedings under
Chapter 11 of the U.S. Bankruptcy Code, see "The Restructuring" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

     On December 30, 1994, the Company's former chief executive officer,
Ronald J. Floto, filed a proof of claim in the bankruptcy proceeding seeking
payments allegedly owed to him in connection with his severance from the
Company.  The total principal amount of Mr. Floto's claim is less than $1.5
million.  On March 31, 1995, the Company filed an objection to the proof of
claim, and on April 29, 1995, Mr. Floto filed a response to the Company's
objection.  A hearing on the Company's objection is scheduled for May 18,
1995.

     The Company has been engaged in various other legal actions and claims
arising in the ordinary course of business.  Management believes, after
discussions with legal counsel, that the ultimate outcome of such litigations
and claims will not have a material adverse affect on the Company's financial
position.  














                                    35<PAGE>
                           MANAGEMENT

                       BOARD OF DIRECTORS

     Set forth below is certain information regarding each of the directors
of the Company as of April 24, 1995:

Name                                                      Age

Everett L. Buckardt. . . . . . . . . . . . . . . . .       61
John J. Delucca. . . . . . . . . . . . . . . . . . .       52
Jennifer Holden Dunbar . . . . . . . . . . . . . . .       32
Ben Evans. . . . . . . . . . . . . . . . . . . . . .       65
Thomas W. Harberts . . . . . . . . . . . . . . . . .       50
Ronald E. Johnson. . . . . . . . . . . . . . . . . .       45
Robert Spiegel . . . . . . . . . . . . . . . . . . .       58
Christopher V. Walker. . . . . . . . . . . . . . . .       48
Peter Zurkow . . . . . . . . . . . . . . . . . . . .       41

     Ms. Dunbar, Mr. Evans and Mr. Zurkow comprise the Company's Compensation
Committee, its Stock Option Committee, and its Nominating Committee, and Mr.
Buckardt, Ms. Dunbar, Mr. Evans and Mr. Harberts comprise the Company's Audit
Committee.

     Pursuant to an understanding among the Company, Green Equity Investors,
L.P. ("GEI") and the unofficial committee of the holders of the Old Senior
Fixed Rate Notes, the Old Senior Floating Rate Notes and the Old Subordinated
Debentures (the "Bondholder Committee"), as of December 29, 1994 the
Company's Board of Directors was reconstituted to consist of nine members
selected as follows: GEI selected Ms. Dunbar and Mr. Walker, the Bondholder
Committee selected Messrs. Buckardt, Delucca, Evans, Harberts, Spiegel and
Zurkow, and the Company selected its then acting Chief Executive Officer,
Anthony R. Petrillo.  No such understanding exists as to the election of
directors following the expiration of the terms of the incumbent directors,
or upon their resignation or removal as directors.  On March 9, 1995, Mr.
Petrillo resigned as a director and Mr. Johnson was appointed to succeed him.

                    Biographical Information

      Everett L. Buckardt has been a Director of the Company since December
29, 1994.  Mr. Buckardt has been Chairman and Chief Executive Officer of
Warehouse Club, Inc. since January 1993.  On February 3, 1995, Warehouse
Club, Inc. filed a voluntary petition for reorganization under Chapter 11 of
the U.S. Bankruptcy Code.  In 1992, Mr. Buckardt retired from a 33 year
career with Sears Roebuck and Company, where he served in various capacities,
most recently as President of Sears Catalog and Direct Marketing Division.



                                    36<PAGE>
     John J. Delucca has been a Director of the Company since December 29,
1994.  Mr. Delucca has been the Senior Vice President and Treasurer of RJR
Nabisco since October 1993.  He served as Managing Director and Chief
Financial Officer of HASCO Associates, Inc., a Greenwich, Connecticut-based
private holding company, from May 1991 to October 1993, as President and
Chief Financial Officer of the Lexington Group, a workout and restructuring
advisory group, from January 1990 to May 1991, and as Senior Vice President
of Finance and Managing Director of the Trump Group from June 1988 to January
1990.  Mr. Delucca is a director of Edison Controls Corp. and Enzo Biochem,
Inc.

     Jennifer Holden Dunbar has been a Director of the Company since November
1991.  Ms. Dunbar has been a general partner of Leonard Green & Partners,
L.P. since 1994, and was a principal of Leonard Green & Partners, L.P. from
January 1992 to January 1994 and an associate of Leonard Green & Partners,
L.P. from November 1989.  Prior to that time, Ms. Dunbar was an associate of
Gibbons, Green, van Amerongen, L.P. and a financial analyst with Morgan
Stanley & Co., Incorporated in its mergers and acquisitions department.  Ms.
Dunbar is a director of Big 5 Holdings Inc., UMC Corporation, Thrifty
Payless, Inc., and Thrifty PayLess Holdings, Inc.

     Ben Evans has been a Director of the Company since December 29, 1994. 
Mr. Evans has been a consultant for the firm of Ernst & Young in its
financial advisory services group since 1989.  He is a director of Revco
D.S., Inc., Jamesway Corporation and Megafoods Stores, Inc.

     Thomas W. Harberts has been a Director of the Company since December 29,
1994.  Mr. Harberts is the owner of Cub Foods, a single outlet retail food
store in Oshkosh, Wisconsin.  From 1970 to 1994, he served in various
capacities for Byerly's, an upscale retail food chain based in Minnesota,
most recently as its Chief Executive Officer.

     Ronald E. Johnson has been Chairman of the Board of the Company since
March 1995 and has been its President and Chief Executive Officer since
January 1995.  Mr. Johnson served as Chief Operating Officer of Farm Fresh
from December 1993 to January 1995 and as its Senior Vice President of Store
Operations from 1990 to 1993.

     Robert Spiegel has been a Director of the Company since December 29,
1994.  Mr. Spiegel has served as Chairman and Chief Executive Officer of RJR
Drug Distributors, a Louisville, Kentucky franchisee of Drug Emporium, since
1984.  Mr. Spiegel is a director of Graham Field Health Products, Inc., and
Hoenig Group, Inc.

     Christopher V. Walker has been a Director of the Company since November
1991.  Mr. Walker also served as a Director of the Company from April 1988 to
July 1991, and from November 1991 to present.  Mr. Walker is a Managing
Director of Trust Company of the West.  He was a general partner of Leonard
Green & Partners, L.P. from November 1989 to March 1995, was a general
partner of Gibbons, Green, van Amerongen, L.P. from January 1989 to August
1989, and was a limited partner of Gibbons, Green, van Amerongen, L.P. from

                                    37<PAGE>
October 1985 to January 1989.  Mr. Walker is a director of Foodmaker, Inc.,
and Australian Resources and Mining Company NL.

     Peter Zurkow has been a Director of the Company since December 29, 1994. 
Mr. Zurkow has been a member of the High Yield Department of PaineWebber
Incorporated since August 1994.  He was an Associate Managing Director and
served as a portfolio manager in the risk arbitrage department of Wertheim
Schroder for more than five years prior to joining PaineWebber Incorporated.


     All Directors hold office until their successors are duly elected and
qualified or until their earlier resignation or removal.


                      Director Compensation

     Each member of the Board of Directors (excluding management) receives
$12,500 per year (payable quarterly), plus $2,500 for each Board meeting
attended in person, and $1,000 for each meeting of a committee to which such
director is a member attended in person.  In addition, each director is
reimbursed for reasonable and necessary out-of-pocket expenses incurred in
connection with attending such meetings in person.  The cash compensation
payable to directors affiliated with Leonard Green & Partners, L.P. ("LGP")
is credited against the annual management fee payable to LGP.  See "Certain
Relationships and Related Transactions."  As of April 24, 1995, Ms. Dunbar
and Mr. Walker are the only directors who are affiliated with LGP.  

     On March 9, 1995, the Company adopted the 1995 Non-Employee Director
Stock Option Plan (the "Director Plan"), and, pursuant to the Director Plan,
granted to certain of its directors options to purchase a total amount of
36,000 shares of Common Stock.  Messrs. Buckardt, Delucca, Evans, Harberts,
Spiegel and Zurkow each received options to purchase 3,000 shares of Common
Stock for $15.00 per share, vesting on July 30, 1995, and options to purchase
an additional 3,000 shares of Common Stock for $20.00 per share, vesting on
July 28, 1996.  All of such options expire on March 8, 2005, or earlier upon
the occurrence of certain events.  On the same date, in lieu of granting
options to Ms. Dunbar and Mr. Walker under the Director Plan, the Company
granted to Green Equity Investors, L.P. ("GEI") options to purchase 6,000
shares of Common Stock for $15.00 per share, vesting on July 30, 1995, and
options to purchase an additional 6,000 shares of Common Stock for $20.00 per
share, vesting on July 28, 1996.  GEI is a principal stockholder of the
Company.  See "Principal Stockholders."  The terms of the options granted to
GEI are substantially the same as the terms of the options granted under the
Director Plan.








                                    38<PAGE>
                       EXECUTIVE OFFICERS

     Set forth below is certain information regarding each of the executive
officers of the Company as of April 24, 1995.

Name                   Age   Position

Ronald E. Johnson. . .  45   Chairman of the Board, President and Chief
                             Executive Officer

Raymond P. Springer. .  44   Senior Vice President, Chief Financial Officer,
                             Treasurer and Secretary

Edward Kolodzieski . .  35   Senior Vice President, Operations

Gary M. Shell. . . . .  47   Senior Vice President, Marketing/Nonperishables

Clifford C. Smith Jr..  35   Senior Vice President, Marketing/Perishables

Richard D. Coleman . .  40   Vice President, Controller


                    Biographical Information

     See "-- Board of Directors; Biographical Information" for biographical
information concerning Ronald E. Johnson.

     Raymond P. Springer has been Senior Vice President, Chief Financial
Officer, and Treasurer of the Company since March 1995, and Secretary of the
Company since January 1995.  Mr. Springer served as Executive Vice President,
Administration of the Company from October 1988 to March 1995.  Mr. Springer
also served as a Director of the Company from October 1988 to July 1991, and
from November 1991 to December 1994. 

     Edward Kolodzieski has been Senior Vice President of Operations of the
Company since March 1995.  Mr. Kolodzieski served in various capacities with
the Company since October 1988, including Vice President, Operations and
Regional Manager.  

     Gary M. Shell has been Senior Vice President of Marketing of
Nonperishables of the Company since March 1995.  Mr. Shell served as Vice
President of Marketing and Merchandising of B. Green & Company, a food
wholesaler and retailer, from May 1991 to February 1995, and as Vice
President of Purchasing and Promotions of Rich Foods, Inc. from 1987 to 1991. 








                                    39<PAGE>
     Clifford C. Smith Jr. has been Senior Vice President of Marketing of
Perishables of the Company since March 1995.  Mr. Smith served as the
Director of Deli, Bakery and Food Service for Harris-Teeter from 1992 to
March 1995, and as the Vice President of Deli, Bakery and Food Service for
Mayfair Supermarkets, Inc. from 1981 to 1992.  

     Richard D. Coleman has been Vice President and Controller of the Company
since October 1988, and Director of Risk Management of the Company since
January 1995.  From October 1988 to January 1995, Mr. Coleman also served as
Secretary of the Company.


               Compensation of Executive Officers

     Summary Compensation

     The following table sets forth compensation for the fiscal years ended
July 31, 1994, August 1, 1993 and August 2, 1992, respectively, awarded to,
earned by, or paid to the Chief Executive Officer and the acting Chief
Executive Officer of the Company during fiscal year 1994, and the individuals
who, in fiscal year 1994, were the other four most highly compensated
executive officers of the Company (collectively, the "Named Executive
Officers").




























                                    40<PAGE>
                      Summary Compensation Table                            
                                                    Long-Term
                                                  Compensation
                               Annual Compensation   Awards
                                                             All Other
Name & Principal Position(1)  Year Salary(2) Bonus Options  Compensation
Ronald J. Floto
  Chairman of the Board,
  President and 
  Chief Executive Officer...1994 $346,056 $     0      0  $  8,978(3),(4)
                            1993  248,358  41,400      0   100,990
                            1992  358,270 267,720 39,485    24,265
Raymond P. Springer
  Executive Vice President,
  Administration............1994 $177,298 $     0      0  $ 11,910(3)
                            1993  131,233  15,000      0    51,832
                            1992  186,923  87,300 18,120    12,617
Dennis V. Carter
  Executive Vice President,
  Operations ...............1994 $133,356 $     0      0  $  7,514(3)
                            1993  123,250  17,000  4,162     8,764
                            1992  139,038  91,665 15,351     9,618
Thomas A. Whipple
  Executive Vice President,
  Marketing.................1994 $118,331 $     0      0  $  3,073(3)
                            1993   60,923       0      0       787
                            1992  186,923  87,300 12,165    12,962
Richard D. Coleman
  Vice President,
  Controller and Secretary..1994 $100,000 $     0      0  $  2,574(3)
                            1993   95,481   5,000      0     6,682
                            1992  103,846  27,160  4,515     6,948

____________________________

(1)  The principal position held by the Named Executive Officers as of July
     31, 1994 is given, except in the case of Mr. Floto.  Mr. Floto's
     employment with the Company terminated on July 29, 1994, and Anthony R.
     Petrillo was appointed to replace him on an interim basis on August 1,
     1994.  Since the Restructuring was consummated on December 29, 1994,
     Ronald E. Johnson joined the Company as Chairman of the Board, President
     and Chief Operating Officer, replacing Mr. Petrillo, Messrs. Carter and
     Whipple resigned from the Company, Mr. Springer's title was
     re-designated as Senior Vice President, Chief Financial Officer, and
     Edward Kolodzieski, Gary M. Shell and Clifford C. Smith Jr. became
     executive officers.  The current annual salaries of Messrs. Johnson,
     Kolodzieski, Shell and Smith are $325,000, $150,000, $130,000 and
     $130,000, respectively.  During his tenure as acting Chairman of the
     Board, President and Chief Executive Officer, Mr. Petrillo received a
     weekly salary of $13,462 and a bonus of $200,000.  Mr. Petrillo
     continues to serve as a consultant to the Company, for which he is
     compensated at the rate of $200 per hour. 
                                    41a<PAGE>
(2)  Includes amounts deferred at the election of the Named Executive
     Officers under the Company's Retirement Estates 401(k) Plan (the
     "Retirement Plan"), a trusteed defined contribution plan, and its
     nonqualified unfunded supplemental salary deferral plan (the
     "Supplemental Retirement Plan"). 

(3)  Represents (i) matching contributions by the Company under its
     Retirement Plan of $2,587 for the benefit of Mr. Floto, $1,292 for the
     benefit of Mr. Whipple, $1,321 for the benefit of Mr. Springer, $990 for
     the benefit of Mr. Carter and $741 for the benefit of Mr. Coleman; (ii)
     matching allocations by the Company under its Supplemental Retirement
     Plan of $5,175 for the benefit of Mr. Floto, $1,453 for the benefit of
     Mr. Whipple, $9,854 for the benefit of Mr. Springer, $6,075 for the
     benefit of Mr. Carter and $1,500 for the benefit of Mr. Coleman; and
     (iii) above-market interest recorded by the Company under its
     Supplemental Retirement Plan of $1,216 for the benefit of Mr. Floto,
     $328 for the benefit of Mr. Whipple, $735 for the benefit of Mr.
     Springer, $449 for the benefit of Mr. Carter and $333 for the benefit of
     Mr. Coleman.































                                    41b<PAGE>
(4)  Mr. Floto filed a proof of claim against the Company seeking payments
     allegedly owed to him in connection with his severance from the Company. 
     See "Business -- Legal Proceedings."  Due to the contingency of such
     claim, it is not reflected in this table. 

     Stock Option Grants in Last Fiscal Year

     Prior to the Restructuring, the Company administered two stock option
plans for the benefit of its executive officers and other valued employees --
the Restated 1988 Management Stock Option Plan and the 1991 Management Stock
Option Plan (the "Old Option Plans").  No options were granted in fiscal year
1994 under either of the Old Option Plans.  Pursuant to the Prepackaged Plan,
all of the outstanding options under the Old Option Plans were extinguished
on December 29, 1994.  

     In March 1995, the Company adopted the 1995 Key Employee Stock Option
Plan (the "New Option Plan"), which authorizes the issuance to eligible
participants of options to purchase up to 236,946 shares of Common Stock of
the Company.  (Capitalized terms not otherwise defined in this paragraph are
defined in the New Option Plan.)  Thereafter, the Stock Option Committee
granted to certain executive officers options to purchase the aggregate
amount of 125,240 shares of Common Stock under the New Option Plan (the
"Initial Options").  The Initial Options vest in serial increments in the
amount of 20% per year, on the last day of each of the 1995, 1996, 1997, 1998
and 1999 fiscal years of the Company.  However, upon the occurrence of a
Merger Event or a Change of Control, the Initial Options become 100% vested. 
In addition, upon the termination of Mr. Johnson's employment Without Cause
(as defined in his employment agreement), all of Mr. Johnson's Initial
Options become 100% vested.  The Initial Options expire, to the extent not
exercised, on the tenth anniversary of the date of grant.  However, upon
termination of an optionee's employment with the Company, all unvested
Initial Options lapse, and all vested Initial Options expire 180 days after
the termination of employment, if such termination is due to the death,
Disability or Retirement of the optionee, or 45 days after the termination of
employment, if such termination is due to any other reason, other than a
Termination for Cause.  If a Termination for Cause occurs, all vested and
unvested Initial Options expire immediately.  The following table sets forth
certain information with respect to the Initial Options:

              Number of Securities
               Underlying Options    Exercise Price
  Name                Granted        (Dollars/Share)    Expiration Date

Ronald E. Johnson     33,849            $15.00           March 8, 2005

Raymond P. Springer   30,464            $15.00           March 8, 2005

Edward Kolodzieski    20,309            $15.00           March 8, 2005

Gary M. Shell         20,309            $15.00           March 8, 2005

Clifford C. Smith Jr. 20,309            $15.00           March 25, 2005
                                    42<PAGE>
     Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End
Option Values

     None of the options granted under the Old Option Plans were exercised
before they were extinguished pursuant to the Prepackaged Plan on December
29, 1994.  The following table shows information concerning the value of the
unexercised options granted under the Old Option Plans held by the Named
Executive Officers as of July 31, 1994:
                                                     Value of
                                  Number of        Unexercised
Name                             Unexercised       In-the-Money
                                   Options at        Options at
                               Fiscal Year End    Fiscal Year End

                                Exercisable/       Exercisable/
                                Unexercisable      Unexercisable
Ronald J. Floto                    -0-/-0-             (1)
Thomas A. Whipple                1,877/12,349          (1)
Raymond P. Springer              1,877/18,304          (1)
Dennis V. Carter                 1,102/19,697          (1)
Richard D. Coleman                 610/4,569           (1)


(1)  As of July 31, 1994, the Company had reached an agreement in principle
     with the Unofficial Bondholders' Committee with respect to the
     Restructuring.  Accordingly, the fair market value of the Common Stock
     underlying the options was nil and none of the options were
     in-the-money.  On December 29, 1994, all of such options were
     extinguished pursuant to the Prepackaged Plan.

     Employment Contracts and Termination of Employment and Change-of-Control
     Arrangements

     Messrs. Johnson, Shell and Smith have each entered into employment
agreements with the Company for a three-year term.  Mr. Johnson's term
commenced in January 1995 and Messrs. Shell's and Smith's terms each
commenced in March 1995.  Under the employment agreements, the Company agrees
to pay a base salary and to allow the employee to participate proportionally
in all fringe benefit plans available to the most senior executive officers
of the Company from time to time during the term, including the Company's
current bonus plan.  Employment under the agreements may be terminated for
cause or without cause in certain circumstances, as defined therein,
including the employee's death or disability.  Upon a termination without
cause, the employee is entitled to continuation of salary and, in certain
circumstances, benefits and bonus, through the term of the employment
agreement.  Mr. Johnson's agreement also provides that options granted to him
under the New Option Plan will become fully vested upon a termination of his
employment without cause.  The agreements also 


                                    43<PAGE>
contain certain requirements of noncompetition, including a requirement of
noncompetition for a period of one year following a termination of
employment, other than a termination without cause.  

     The Company has severance pay agreements with certain members of its
senior management and other key employees.  The severance pay agreements
provide, among other things, that if the employee is terminated without Cause
(as defined therein) in connection with a Change of Control (as defined
therein) then such employee will be entitled to payment ranging from 50% to
100% of that employee's annual compensation.

     The Company maintains the Kash n' Karry Retirement Estates ("KKRE"), a
trusteed defined contribution retirement plan.  KKRE is a tax savings/profit
sharing plan maintained for the purpose of providing retirement income for
eligible employees of the Company.  KKRE is qualified under Section 401(a)
and Section 401(k) of the Internal Revenue Code of 1986, as amended. 
Generally, all employees who have attained the age of 21 years and complete
one year of participation service (as defined under KKRE) are eligible to
participate in KKRE.  During the 1994 fiscal year, each of the Named
Executive Officers participated in KKRE.

     Certain members of senior management and other key employees also
participate in the Kash n' Karry Executive Supplemental Retirement Plan
("KESP"), a non-qualified, unfunded salary deferral plan.  During the 1994
fiscal year, each of the Named Executive Officers participated in KESP. 
Prior to the beginning of each plan year, a participant may elect to defer an
amount not to exceed 15% of such participant's annual base compensation (as
defined under KESP).  The Company matches a certain portion of the amount
deferred by the participant, but the amount of the match may not exceed 6% of
such participant's annual base compensation.  The Company records income to
the participant's account at an annual rate as determined by the Board of
Directors, but the rate of such income shall not be less than 8% per annum. 
The vested percentage of the amounts recorded in the participant's account
will be paid to the participant upon the earlier of:  (i) such participant's
death, disability, retirement or other separation of service from the
Company; (ii) the date the Plan is terminated; or (iii) the date that a
change in control occurs (as defined under KESP).


     Compensation Committee Interlocks and Insider Participations

     The Board of Directors has established a Compensation Committee and a
Stock Option Committee.  The Compensation Committee approves compensation
payable to the executive officers and the Stock Option Committee administers
the Company's stock option plans.  Currently, Jennifer Holden Dunbar, Ben
Evans and Peter Zurkow comprise both such committees.  During the 1994 fiscal
year, Ronald J. Floto, Leonard I. Green, Christopher V. Walker and Edward W.
Gibbons (each of whom was a director during the 1994 fiscal year) performed
the functions of the Compensation Committee and Messrs. Floto, Green and
Gibbons served on the Stock Option Committee.

                                    44<PAGE>
     Mr. Green and Ms. Dunbar are each controlling shareholders of general
partners of LGP, and Mr. Green is a former partner of Gibbons, Green, van
Amerongen, L.P. ("Gibbons, Green"), now known as Gibbons, Goodwin, van
Amerongen, L.P. ("GGvA").  Mr. Walker is a former general partner of LGP and
of Gibbons, Green.  Mr. Gibbons is a general partner of GGvA.  LGP is the
general partner of Green Equity Investors, L.P., which owned 60.9% of the
Company's common stock during the 1994 fiscal year, and which currently owns
27.7% of the Company's Common Stock.  See "Principal Stockholders."  GGvA is
the general partner of the Fulcrum Partnerships, which collectively owned
33.8% of the Company's common stock during the 1994 fiscal year.  The equity
interest of the Fulcrum Partnerships was extinguished in December 1994
pursuant to the Prepackaged Plan.  Gibbons, Green is a predecessor of GGvA. 
Mr. Floto was the Chairman of the Board, President and Executive Officer of
the Company until July 29, 1994.

     During fiscal 1994, as consideration for the provision of financial
advisory services, the Company agreed to pay an annual fee of $554,000, plus
related out-of-pocket expenses, to LGP and an annual fee of $232,000, plus
related out-of-pocket expenses, to GGvA.  From September 1993 through
December 1994, the Company did not pay the annual fees to LGP or GGvA, but
reimbursed them for out-of-pocket expenses billed to the Company.  Pursuant
to the Prepackaged Plan, on December 29, 1994 the Company entered into a
Management Services Agreement with LGP, pursuant to which LGP agreed to
provide management, consulting, financial planning and financial advisory
services for a two year term, in consideration for an annual fee of $200,000.



























                                    45<PAGE>
                Security Ownership of Management

     The following table sets forth as of April 24, 1995, the number and
percentage of all shares of Common Stock owned by each of the directors of
the Company, each of the Named Executive Officers, each of the current
executive officers of the Company, and all directors, Named Executive
Officers and current executive officers as a group.  

                                  Number of
    Name                        Shares Owned      Percent (1)
Everett L. Buckardt                 -0-              -0-

John J. Delucca                     -0-              -0-

Dennis V. Carter                    -0-              -0-

Richard D. Coleman                  -0-              -0-

Jennifer Holden Dunbar (2)        857,629           27.7

Ben Evans                           2,500             *

Ronald J. Floto                     -0-              -0-

Thomas W. Harberts                  -0-              -0-

Ronald E. Johnson                   -0-              -0-

Edward Kolodzieski                  -0-              -0-

Gary M. Shell                       -0-              -0-

Clifford C. Smith Jr.               -0-              -0-

Robert Spiegel                     10,000             *

Raymond P. Springer                 -0-              -0-

Christopher V. Walker (2)         857,378           27.7

Thomas A. Whipple                   -0-              -0-

Peter Zurkow                        -0-              -0-
All Directors, Named Executive Officers and
  current executive officers as a group
  (17 persons) (2). . . . . . . . 870,129           28.1
- ----------------------
*    Less than 1%
(1)  Based on 3,100,000 shares of Common Stock outstanding.
(2)  Includes 857,378 shares owned by Green Equity Investors, L.P., of which
     Leonard Green & Partners, L.P. ("LGP"), is the sole general partner. 
     Ms. Dunbar may be deemed to be the beneficial owner of such shares by
     reason of her being the controlling shareholder of a general partner of
     LGP, and Mr. Walker may be deemed to be the beneficial owner of such
     shares by reason of his being a former general partner of LGP. 
                                    46<PAGE>
          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During fiscal 1994, 1993, and 1992, respectively, as consideration for
the provision of financial advisory services, the Company agreed to pay an
annual fee of $554,000, plus related out-of-pocket expenses, to Leonard Green
& Partners, L.P. ("LGP"), and an annual fee of $232,000, plus related out-of-
pocket expenses, to Gibbons, Goodwin, van Amerongen, L.P. ("GGvA").  From
September 1993 through December 1994, the Company did not pay the annual fees
to LGP or GGvA, but reimbursed them for out-of-pocket expenses billed to the
Company.  Pursuant to the Prepackaged Plan, on December 29, 1994 the Company
entered into a Management Services Agreement with LGP, pursuant to which LGP
agreed to provide management, consulting, financial planning and financial
advisory services for a two year term, in consideration for an annual fee of
$200,000.  

     LGP is the sole general partner of Green Equity Investors, L.P., which
owned approximately 60.9% of the Company's outstanding common stock
immediately prior to the consummation of the Prepackaged Plan.  GGvA is the
general partner of The Fulcrum III Limited Partnership and The Second Fulcrum
III Limited Partnership, which collectively owned 33.8% of the Company's
outstanding common stock immediately prior to the consummation of the
Prepackaged Plan.  Jennifer Holden Dunbar, who is a director of the Company,
is the controlling shareholder of a general partner of LGP.  Christopher V.
Walker, who is also a director of the Company, is a former general partner of
LGP and of GGvA.  



























                                    47<PAGE>
                     PRINCIPAL STOCKHOLDERS


     The following table sets forth, as of April 24, 1995 (unless otherwise
specified), the name and address of each person known by the Company to be
the beneficial owner of more than five percent of the outstanding Common
Stock (the only class of voting securities of the Company):

Name and Address                     Number of Shares    Percent

American Express Company                  652,470(1)      21.1%
  American Express Tower
  World Financial Center
  New York, NY  10285

American Express Financial Corporation    652,470(1)      21.1 
  IDS Tower 10
  Minneapolis, MN  55440

Green Equity Investors, L.P.              857,378(2)      27.7 
  333 S. Grand Avenue
  Suite 5400
  Los Angeles, CA  90071

IDS Extra Income Fund                     552,090(1)      17.8 
  IDS Tower 10
  Minneapolis, MN  55440

The Prudential Insurance Company          435,384(3)      14.0 
  of America
  Prudential Plaza
  Newark, NJ  07102-3777

PaineWebber Incorporated                  402,568(4)      13.0 
  1285 Avenue of the Americas
  New York, NY  10019

(1)  Based upon information supplied by American Express Company, American
     Express Financial Corporation and IDS Extra Income Fund.  Represents
     shares over which each such person shares dispositive power, with
     respect to which American Express Company has advised the Company that
     it disclaims beneficial ownership.

(2)  Based upon information supplied by Green Equity Investors, L.P.

(3)  Based upon information supplied by The Prudential Insurance Company of
     America ("Prudential").  Includes 32,233 shares held for the benefit of
     clients of Prudential over which Prudential may have direct or indirect
     voting and/or investment discretion, with 


                                    48<PAGE>
     respect to which Prudential has advised the Company that it disclaims
     beneficial ownership.

(4)  Based upon information supplied by PaineWebber Incorporated, as of April
     15, 1995.  PaineWebber Incorporated, a registered broker-dealer, makes
     a market in the Common Stock of the Company.


                  DESCRIPTION OF CAPITAL STOCK


Authorized Capital Stock

     The authorized capital stock of the Company consists of 5,500,000 shares
of Common Stock, par value $.01 per share, and 1,000,000 shares of Preferred
Stock, par value $.01 per share.  The authorized Preferred Stock includes
35,000 shares of Series A Junior Participating Preferred Stock (the "Series
A Preferred").  As of April 24, 1995, 3,100,000 shares of Common Stock and no
shares of Preferred Stock were outstanding, an additional 173,240 shares of
Common Stock were reserved for issuance pursuant to outstanding options
granted to GEI and to certain directors and executive officers pursuant to
the Director Plan and New Option Plan, and all 35,000 shares of Series A
Preferred were reserved for issuance to the holders of Rights.  See
"Management" and "-- Certain Anti-Takeover and Charter Provisions; Rights
Plan."  

     The following description of those terms and provisions of the capital
stock of the Company which are deemed material to an investment in the Common
Stock is intended to be a summary thereof and does not purport to be a
complete description of the terms and conditions of such capital stock. 
Reference is made to the Company's Restated Certificate of Incorporation, the
Certificate of Designations of the Series A Preferred, and the Rights
Agreement dated as of April 13, 1995 (the "Rights Agreement") between the
Company and Shawmut Bank Connecticut, N.A., as Rights Agent (the "Rights
Agent").  Copies of each of the foregoing documents have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.


Common Stock

     Each holder of Common Stock is entitled to one vote per share on all
matters to be voted on by the stockholders, including elections of directors,
and, except as otherwise provided by law or as may be provided with respect
to any series of Preferred Stock created by the Board of Directors from time
to time, the holders of such shares of Common Stock exclusively possess all
voting power.  See "Description of Capital Stock -- Preferred Stock." 
Holders of Common Stock are not entitled to cumulate their votes.




                                    49<PAGE>
     Subject to certain preferential rights of any outstanding series of
Preferred Stock created by the Board of Directors from time to time, holders
of Common Stock are entitled to dividends and other distributions as and when
declared by the Board of Directors out of assets legally available therefor,
and upon the liquidation, dissolution or winding up of the Company, the
holders of Common Stock would be entitled to share equally in the
distribution of all of the Company's assets.  The holders of Common Stock
have no preemptive rights to purchase shares of Common Stock of the Company.

     The transfer agent and registrar for the Company's Common Stock is
Shawmut Bank Connecticut, N.A., of 777 Main Street, MSN 238, Hartford,
Connecticut  06115.

     The Common Stock is listed on the Nasdaq Small Cap Market under the
symbol "KASH."


Preferred Stock

     Blank check authority

     The Board of Directors has the authority, without action by the
stockholders, to issue shares of Preferred Stock in one or more series and,
within certain limitations, to determine the dividend rights, dividend rate,
rights and terms of redemption, liquidation preferences, sinking fund terms,
conversion rights and voting rights of any series of Preferred Stock, the
number of shares constituting any such series, the designation thereof, and
the price therefor.

     As of April 24, 1995, the Board of Directors has not authorized the
issuance of any Preferred Stock other than the Series A Preferred.  See "--
Series A Preferred."

     The Company believes that the ability of its Board of Directors to issue
one or more series of Preferred Stock will provide the Company with
flexibility in structuring possible future financings and acquisitions, and
in meeting other corporate needs which might arise.  The authorized shares of
Preferred Stock, as well as Common Stock, will be available for issuance
without further action by the Company's stockholders, unless such action is
required by applicable law or the rules of any exchange or automated
quotation system on which the Company's securities may be listed or traded.

     Series A Preferred

     There are 35,000 authorized shares of Series A Preferred.  As of April
24, 1995, none of the Series A Preferred is outstanding, but all of such
shares are reserved for issuance pursuant to an exercise of Rights.  See "--
Certain Anti-Takeover and Charter Provisions; Rights Plan."





                                    50<PAGE>
     The Series A Preferred is not redeemable and has no sinking fund.  Each
share of Series A Preferred will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend equal to the dividends on 100 shares of Common Stock.  In
addition, each share of Series A Preferred will have a liquidation preference
of $100 per share but will be entitled to an aggregate payment of 100 times
the payment made per share of Common Stock.  Each share of Series A Preferred
will have 100 votes, voting together with the shares of Common Stock. 
Finally, in the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each share of Series A Preferred
will be entitled to receive 100 times the amount received per share of Common
Stock.  These rights are protected by customary anti-dilution provisions.

Restrictions on Dividends

     The indentures governing the New Senior Fixed Rate Notes and the New
Senior Floating Rate Notes (the "Indentures") provide that the Company will
not, directly or indirectly, (i) declare or pay any dividend on or make any
distributions in respect of the capital stock of the Company or any
Subsidiary thereof (except for (x) dividends or distributions payable solely
to the Company or any Subsidiary of the Company and (y) dividends or
distributions of a Subsidiary of the Company solely on the capital stock of
such Subsidiary), or purchase, redeem or retire for value, or make any
payment on account of the purchase, redemption or other acquisition or
retirement for value of, any capital stock or warrants, rights or options to
purchase such capital stock, (ii) make any principal payment on, or redeem,
repurchase or defease, or otherwise acquire or retire for value, Subordinated
Debt (as defined in the Indentures), prior to any scheduled principal
payment, scheduled sinking fund payment or maturity thereof, or (iii) make
any loan or advance to, or any other Investment (as defined in the
Indentures) in, any of its Affiliates other than a Subsidiary of the Company
(such payments or any other actions described in (i), (ii) and (iii),
collectively, "Restricted Payments") unless (1) at the time of and after
giving effect to the proposed Restricted Payment, no Event of Default (as
defined in the Indentures) or event that, after notice or lapse of time or
both would become an Event of Default, shall have occurred and be continuing,
and (2) at the time of and after giving effect to the proposed Restricted
Payment (the amount of any such payment, if other than cash, to be determined
by the Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution (as defined in the Indentures)) (A) the
Consolidated Net Worth (as defined in the Indentures) of the Company shall be
at least $75,000,000 and (B) the aggregate amount of all Restricted Payments
after January 29, 1995 shall not exceed 50% of Cumulative Net Available Cash
(as defined in the Indentures) of the Company and (C) the Fixed Charge
Coverage Ratio (as defined in the Indentures) calculated on a pro forma basis
for the full twelve-month period ending on the last day of the Company's
fiscal quarter immediately preceding such proposed Restricted Payment shall
be at least 1.50 to 1.  Notwithstanding the foregoing, this provision will
not prohibit the redemption, by the Company, of its common stock (on a fully
diluted basis) from time to time under the terms and conditions of management
equity subscription agreements or stock option agreements and related
exhibits, so long as such 


                                    51<PAGE>
redemption does not otherwise result in an Event of Default or event that,
after notice or lapse of time or both, would become an Event of Default.

     The foregoing provisions shall not be deemed to prohibit (1) the payment
of any dividend within 60 days after the date of declaration thereof, if at
such declaration date such declaration complied with the provisions of the
Indentures, or (2) the redemption, repurchase or other acquisition or
retirement (a "retirement") of any shares of any class of capital stock of
the Company or of any Subsidiary thereof in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the proceeds of a substantially concurrent issue
and sale (other than to a Subsidiary of the Company) of, other shares of
capital stock of the Company, or (3) the retirement of Subordinated Debt out
of the proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of capital stock of the Company or
issuance other than to a Subsidiary of the Company of new Indebtedness which
has a weighted average life to maturity at least as long as the Stated
Maturity of the New Notes and no sinking fund or scheduled principal payments
prior to the maturity of the New Notes and the payment of which is
subordinated in right of payment and otherwise to the New Notes at least to
the same extent as such Subordinated Debt, or (4) the payment of dividends or
the making of distributions on shares of capital stock of the Company solely
in shares of capital stock of the Company.

     The New Credit Agreement provides that the Company will not declare or
make any Dividend Payment (as defined in the New Credit Agreement) at any
time (other than Dividend Payments in respect of the Company's obligations to
repurchase capital stock or Equity Rights (as defined in the New Credit
Agreement) of the Company of retired, terminated or deceased directors,
officers or employees of the Company, provided that (a) the aggregated amount
of such payments in any fiscal year of the Company shall not exceed the sum
of (i) $500,000 plus (ii) for each fiscal year of the Company beginning after
the Effective Date, an amount equal to the excess (if any) of $500,000 over
the amount of such payments made by the Company in its immediately preceding
fiscal year and (b) no such Dividend Payments may be made after the
occurrence and during the continuance of any Default (as defined in the New
Credit Agreement)).

Certain Anti-Takeover and Charter Provisions

     Delaware General Corporation Law

     The Company is subject to Section 203 of the Delaware General
Corporation Law, as amended ("Section 203").  Section 203 provides that,
subject to certain exceptions specified therein, an "interested stockholder"
of a Delaware corporation shall not engage in any business combination,
including mergers or consolidations or acquisitions of additional shares of
the corporation, with the corporation for a three-year period following the
date that such stockholder becomes an "interested stockholder" unless (i)
prior to such date, the board of directors of the 
                                    52<PAGE>
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an "interested stockholder," (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
"interested stockholder," the interested stockholder owned at least 85% of
the voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares), or (iii) on or subsequent to such date,
the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of stockholders by
the affirmative vote of at least 66-2/3% of the outstanding voting stock
which is not owned by the "interested stockholder." Except as otherwise
specified in Section 203, an "interested stockholder" is defined to include
(x) any person that is the owner of 15% or more of the outstanding voting
stock of the corporation, or is an affiliate or associate of the corporation
and was the owner of 15% or more of the outstanding voting stock of the
corporation at any time within three years immediately prior to the relevant
date and (y) the affiliates and associates of any such person.

     Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions imposed
thereunder.  The Certificate of Incorporation does not exclude the Company
from the restrictions imposed under Section 203.  The provisions of Section
203 may encourage companies interested in acquiring the Company to negotiate
in advance with the Board of Directors, since the stockholder approval
requirement would be avoided if a majority of the directors then in office
approve either the business combination or the transaction which results in
the shareholder becoming an interested shareholder.  Such provisions also may
have the effect of preventing changes in the management of the Company.  It
is possible that such provisions could make it more difficult to accomplish
transactions which stockholders may otherwise deem to be in their best
interests.

     Severance arrangements

     Certain executive officers of the Company have severance arrangements
with the Company, which may have the effect of increasing the costs of
acquiring the Company in a hostile takeover.  See "Management -- Termination
of Employment and Change-of-Control Arrangements."

     Rights Plan

     On April 13, 1995, the Company adopted a preferred stock purchase rights
plan (the "Rights Plan").  Under the Rights Plan, the Board declared a
dividend in the form of one right (a "Right" and, collectively, the "Rights")
for each outstanding share of Common Stock.  The dividend was payable on
April 27, 1995 (the "Record Date") and was declared with respect to both the
shares then outstanding and shares that shall become outstanding between the
Record Date and the earliest of the Distribution Date (as defined below) and
the date on which the 





                                    53<PAGE>
Rights are redeemed or expire.  The certificates representing any such shares
of Common Stock so issued will bear a legend to the effect that the
certificates also evidence the Rights.

     Subject to adjustment upon the occurrence of certain events described
below, each Right entitles the holder thereof to purchase one one-hundredth
of a share of Series A Preferred (the "Preferred Shares") for $76.00 (the
"Purchase Price"), ten days after a person or group (an "Acquiring Person")
acquires 25% or more of the Company's Common Stock (or, subject to the terms
of the Rights Agreement, more than 29% in the case of Leonard Green &
Partners, L.P. ("LGP") or any person or entity which at any time purchases
all of the shares of Common Stock owned by LGP), or certain actions are taken
in respect of such acquisition.  The first date on which the right to
purchase Preferred Shares could be exercised is referred to herein as the
Distribution Date.  

     The Purchase Price payable, and the number of Preferred Shares or other
securities issuable, upon exercise of the Rights shall be adjusted in the
event (i) of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) of a grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for or purchase
Preferred Shares at a price, or securities convertible into Preferred Shares
with a conversion price, less than the then-current market price of the
Preferred Shares or (iii) of a distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular periodic
cash dividends paid out of earnings or retained earnings or dividends payable
in Preferred Shares) or of subscription rights or warrants (other than those
referred to above).

     The number of outstanding Rights and the number of one one-hundredths of
a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the shares of Common Stock or a
stock dividend on the shares of Common Stock payable in shares of Common
Stock or subdivisions, consolidations or combinations of shares of the Common
Stock occurring, in any such case, prior to the Distribution Date.

     In the event any person or group becomes an Acquiring Person, each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the right to
receive (subject to adjustment) upon exercise that number of shares of Common
Stock having a market value of two times the exercise price of the Right.  In
addition, if there is a merger or other business combination between the
Company and an Acquiring Person, or if certain other events occur involving
an Acquiring Person, each Right (if not previously exercised) would entitle
the holder to purchase that number of shares of common stock of the Acquiring
Person which at the time of such transaction will have a market value of two
times the exercise price of the Right.

     Prior to the Distribution Date, the Rights cannot be transferred apart
from the Common Stock and will be represented solely by the Common Stock
certificates.  If the Distribution Date occurs, separate certificates
representing the Rights will be mailed to holders of the Common 


                                    54<PAGE>
Stock as of such date, and the Rights could then begin to trade separately
from the Common Stock.

     At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Company may exchange the Rights
(other than Rights owned by an Acquiring Person, which will have become
void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a Preferred Share (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges), per Right (subject to adjustment).

     The Rights are redeemable by the Company at $.01 per Right at any time
prior to the occurrence of the Distribution Date.  In the event the Company
receives a written notice from the holder or holders of at least ten percent
of the shares of Common Stock then outstanding directing the Board of
Directors to submit to a vote of stockholders at the Company's next annual
meeting of stockholders a resolution authorizing the redemption of all the
then outstanding Rights at the Redemption Price (the "Resolution") and the
written notice complies with certain procedural requirements, then the Board
of Directors is required to take such actions as are necessary or desirable
to cause the Resolution to be so submitted to a vote of stockholders,
including by including a proposal relating to the adoption of the Resolution
in the Board of Directors' proxy materials relating to such annual meeting of
stockholders.  Subject to the requirements of applicable law, the Board of
Directors of the Company may take a position in favor of or opposed to the
adoption of the Resolution, or no position with respect to the Resolution, as
it deems appropriate.  If at the annual meeting the Resolution receives the
affirmative vote of a majority of the shares of Common Stock outstanding as
of the record date for such annual meeting, and provided that no person or
entity has become an Acquiring Person prior to the redemption date, then all
of the Rights will be redeemed by such stockholder action at the Redemption
Price, effective as of the close of business on the tenth business day
following the date on which the results of the vote on the Resolution at the
annual meeting are certified as official.  The Rights will automatically
expire on April 13, 2000 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company.

     The Rights will not have any voting rights and will not be entitled to
dividends.  The terms of the Rights may be amended without the consent of the
holders of the Rights, provided that after the Distribution Date the
amendment does not adversely affect the interest of the holders. 

     The Preferred Shares are not redeemable and have no sinking fund.  Each
Preferred Share will be entitled to a minimum preferential quarterly dividend
payment of $1 per share but will be entitled to an aggregate dividend equal
to the dividends on 100 shares of Common Stock.  In addition, each Preferred
Share will have a liquidation preference of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per share of
Common Stock.  

                                    55<PAGE>
Each Preferred Share will have 100 votes, voting together with the shares of
Common Stock.  Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each Preferred
Share will be entitled to receive 100 times the amount received per share of
Common Stock.  These rights are protected by customary anti-dilution
provisions.

     The Rights may have certain anti-takeover effects.  The Rights will
cause substantial dilution to any person or group which becomes an Acquiring
Person or if an Acquiring Person attempts to merge with, or engage in certain
other transactions with, the Company.  The Rights should not, however,
interfere with any merger or other business combination approved by the
Company's Board of Directors prior to the occurrence of a Distribution Date
because the Rights may be redeemed prior to such time.


Limitation of Liability of Directors

     The Certificate of Incorporation provides that a director of the Company
will not be personally liable to the Company or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware General Corporation Law, which concerns unlawful payments of
dividends, stock purchases or redemptions, or (iv) for any transaction from
which the director derived an improper personal benefit.

     While the Certificate of Incorporation provides directors with
protection from awards for monetary damages for breaches of their duty of
care, it does not eliminate such duty.  Accordingly, the Certificate of
Incorporation will have no effect on the availability of equitable remedies
such as an injunction or rescission based on a director's breach of his or
her duty of care.  The provisions of the Certificate of Incorporation
described above apply to an officer of the Company only if he or she is a
director of the Company and is acting in his or her capacity as director, and
do not apply to officers of the Company who are not directors.


















                                    56<PAGE>
                      SELLING STOCKHOLDERS

     Certain holders of Common Stock (the "Selling Stockholders") may offer
such securities hereby on a continuous or delayed basis pursuant to Rule 415
promulgated under the Securities Act.  

     The following table sets forth certain information as of April 26, 1995
with respect to each Selling Stockholder for whose account Common Stock may
be sold pursuant to this Prospectus, which information has been furnished to
the Company by the Selling Stockholders and other sources that the Company
has not certified.  Because the Selling Stockholders may sell, pursuant to
this Prospectus, all or some part of the Common Stock that they hold, no
estimate can be given as to the amount of Common Stock that will be held by
the Selling Stockholders at any time subsequent to the date of this
Prospectus.  See "Plan of Distribution."  As of April 26, 1995, none of the
Selling Stockholders except Green Equity Investors, L.P. ("GEI") has had a
material relationship within the past three years with the Company, other
than as a result of the ownership of securities of the Company.  For a
discussion of the relationship between GEI and the Company, see "Certain
Relationships and Related Transactions."



                             Beneficial Ownership Prior      Beneficial
                                 to Offering (1)             Ownership
                                                             After
                           Number of Percentage  Shares      Offering
Name of Selling Stockholder  Shares  of Class Offered Hereby (1), (2)

American Express Company    652,470(3)  21.1   652,470       -0-

American Express Financial  
  Corporation               652,470(3)  21.1   652,470       -0-

Eugene Aspy and Helen
Breland, as joint tenants        10      *          10       -0-

William H. Bartman and          251      *         251       -0-
Margaret L. Bartman, as
Trustees u/a dated July 28,
1971

Wayne R. Bernhardt              125      *         125       -0-

Harold Buchhalter               501      *         502       -0-

Gino J. Caccanisi and           250      *         250       -0-
Barbara V. Caccanisi, as
joint tenants

Cede & Co.                3,076,283(4) 99.24 3,076,283       -0-

Jennifer Holden Dunbar          251       *        251       -0-

                                    57<PAGE>
Mary J. Eichhorn, as Trustee      502       *        502       -0-
u/a dated May 21, 1991 f/b/o
Walter J. Eichhorn, Sr.
Revocable Trust

Ruth E. Geniesse                   50       *         50       -0-

Green Equity Investors, L.P.  857,378     27.7   857,378       -0-

Paul J. Green & Joan Green,       125       *        125       -0-
as joint tenants

Florence T. Harlow and            251       *        251       -0-
Joseph E. Harlow, as joint
tenants

Letitia Haugen, as Trustee        250       *        250       -0-
u/a dated April 30, 1980
f/b/o Letitia Haugen Trust

IDS Extra Income Fund         552,090(3)     17.8    

Kray & Co.                      5,321       *      5,321       -0-

Lewis J. Lamm                   2,761       *      2,761       -0-

Malcom W. Morris, Jr.             176       *        176       -0-

Edward J. Mytkowicz and           627       *        627       -0-
Esther Mytkowicz, as trustee
f/b/o Edward J. Mytkowicz
and Esther Mytlowicz Family
Trust dated April 29, 1980

PaineWebber Incorporated      402,568(5)   13.0  402,568       -0-

Philadep & Co.                  1,004        *     1,004       -0-

The Prudential Insurance      435,384      14.0  435,384       -0-
Company of America

Richard H. Rohlwing and           627        *       627       -0-
Linda Rohlwing, as joint
tenants

George A. Shurick               6,526        *     6,526       -0-

Ellen M. Skaggs and Delois        125        *       125       -0-
V. Skaggs, as joint tenants

Geoffrey Skinner                2,000        *     2,000       -0-


                                    58<PAGE>
Raymond L. Valente, as            376         *      376       -0-
Trustee f/b/o Loretta S.
Valente Trust u/a dated July
12, 1990

* Less than 1%

(1)  Information with respect to beneficial ownership was obtained from the
     Selling Stockholders.  Except to the extent otherwise provided herein,
     the persons named in the table have sole voting and dispositive power
     with respect to all shares of Common Stock shown as beneficially owned
     by them.

(2)  Assumes sale of all, and no other purchases of, Common Stock.  See "Plan
     of Distribution."

(3)  Represents shares over which American Express Company, American Express
     Financial Corporation and IDS Extra Income Fund share dispositive power,
     and as to which American Express Company has indicated that it disclaims
     beneficial ownership.  

(4)  Includes 857,378 shares beneficially owned by Green Equity Investors,
     L.P., 652,470 shares beneficially owned by American Express Company,
     American Express Financial Corporation and IDS Extra Income Fund,
     435,384 shares beneficially owned by the Prudential Insurance Company of
     America, 402,568 shares beneficially owned by PaineWebber Incorporated,
     and 251 shares beneficially owned by Jennifer Holden Dunbar.

(5)  As of April 15, 1995.

     All of the shares offered hereby were acquired by the Selling
Stockholders (or their authorized assignors) pursuant to the Prepackaged
Plan.  The shares of Common Stock are being registered to satisfy a condition
set forth in the Prepackaged Plan.  Pursuant to the Prepackaged Plan, the
Company is required to use its best efforts to keep such Registration
Statement continuously effective until the third anniversary of its original
effectiveness.  However, there can be no assurance that the Selling
Stockholders will sell any or all of the shares of Common Stock which may be
offered pursuant to this Prospectus. 












                                    59<PAGE>
                      PLAN OF DISTRIBUTION


     The Company will not receive any of the proceeds from the sale by the
Selling Stockholders of the Common Stock offered by this Prospectus.  Any or
all of such Common Stock may be sold by the Selling Stockholders from time to
time (i) to or through underwriters or dealers, (ii) directly to one or more
other purchasers, (iii) through agents on a best-efforts basis, or (iv)
through a combination of any such methods of sale.  The Selling Stockholders
and any such underwriters, dealers or agents that participate in the
distribution of the Common Stock may be deemed to be underwriters within the
meaning of the Securities Act, and any profit on the sale of the Common Stock
by them, and any discounts, commissions or concessions received by them, may
be deemed to be underwriting discounts and commissions under the Securities
Act.  The Common Stock may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices.  Such prices
will be determined by the Selling Stockholders or by agreement between the
Selling Stockholders and underwriters or dealers.  Brokers or dealers acting
in connection with the sale of Common Stock contemplated by this Prospectus
may receive fees or commissions in connection therewith.

     At the time a particular offer of Common Stock is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter
for Common Stock purchased from the Selling Stockholders, any discounts,
commissions and other items constituting compensation from the Selling
Stockholders and/or the Company and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, including the proposed selling price
to the public.  Each supplement to this Prospectus and, if necessary, a
post-effective amendment to the Registration Statement of which this
Prospectus is a part, will be filed with the Commission to reflect the
disclosure of additional information with respect to the distribution of
Common Stock.

     The outstanding Common Stock is, and the Common Stock offered hereby
will be, listed on the Nasdaq Small Cap Market.

     Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of Common Stock may not simultaneously
engage in market making activities with respect to the Common Stock for a
period of nine business days prior to the commencement of such distribution. 
In addition and without limiting the foregoing, the Selling Stockholders and
any person participating in the distribution of the Common Stock will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of the Common
Stock by the Selling Stockholders or any such other person.



                                    60<PAGE>
     In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered
or licensed brokers or dealers.  In certain states the Common Stock may not
be sold unless it has been registered or qualified for sale in such state, or
unless an exemption from registration or qualification is available. 

     The Registration Statement, of which the Prospectus is a part, is being
filed by the Company to satisfy a condition set forth in the Prepackaged
Plan.  Pursuant to the Prepackaged Plan, the Company is required to use its
best efforts to keep such Registration Statement continuously effective until
the third anniversary of its original effectiveness.  

     Pursuant to the Prepackaged Plan, the Company has paid or will pay any
and all expenses incident to the performance of or compliance with its
registration obligations, including, among other things, registration and
filing fees, fees and expenses incurred in connection with compliance with
securities or blue sky laws of the applicable states, fees and disbursements
of counsel and independent public accountants for the Company, but excluding
underwriting discounts and commissions, the fees and expenses of counsel to
the Selling Stockholders and transfer taxes, if any.



                          LEGAL MATTERS

     The validity of the Common Stock offered hereby will be passed upon by
Milbank, Tweed, Hadley & McCloy.


                             EXPERTS

     The financial statements of the Company as of July 31, 1994 and August
1, 1993 and for the 52 weeks ended July 31, 1994 and August 1, 1993 and the
53 weeks ended August 2, 1992, have been included herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP
("KPMG"), independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.

     On February 17, 1995, KPMG, the Company's independent accountants who
were previously engaged as the principal accountants to audit the Company's
financial statements, were dismissed.  KPMG's report on the financial
statements of the Company for the past two years contained no adverse opinion
or disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principles, except that KPMG's report
on the 1994 financial statements of the Company contained a separate
paragraph stating that "Kash n' Karry Food Stores, Inc. has suffered
recurring losses from operations and has a net capital deficiency.  As
discussed in note 1 to the financial statements, Kash n' Karry Food Stores,
Inc. filed a pre-packaged petition under Chapter 11 of the United 



                                    61<PAGE>
States Bankruptcy Code on November 9, 1994.  These matters raise substantial
doubt about its ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty."  The Company's plan of reorganization was approved by
the bankruptcy court on December 12, 1994 and became effective on December
29, 1994.   

     The decision to change accountants was approved by the Board of
Directors of the Company.  During the Company's two most recent fiscal years
and any subsequent interim period preceding the dismissal, there were no
disagreements between the Company and KPMG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of KPMG would have
caused KPMG to make reference to the subject matter of the disagreement in
connection with its report.  Also, during the aforementioned period, there
occurred no "reportable event" within the meaning of Item 304(a)(1)(v) of
Regulation S-K of the Commission.  

     On February 17, 1995, the Company engaged Coopers & Lybrand L.L.P. as
the principal accountants to audit the Company's financial statements for the
fiscal year ending July 30, 1995.  The Company did not consult with Coopers
& Lybrand, L.L.P. regarding accounting advice prior to its engagement.


























                                    62<PAGE>
                            INDEX TO FINANCIAL STATEMENTS


                  UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS


                                                                                
                                                                           Page

Condensed Balance Sheets as of January 29, 1995, and July 31, 1994 . . . .  F- 3

Condensed Statements of Operations for the four weeks ended
     January 29, 1995, the 22 weeks ended January 1, 1995,
     and the 26 weeks ended January 30, 1994 . . . . . . . . . . . . . . .  F- 5

Condensed Statements of Cash Flows for the four weeks ended
     January 29, 1995, the 22 weeks ended January 1, 1995,
     and the 26 weeks ended January 30, 1994 . . . . . . . . . . . . . . .  F- 7

Notes to Condensed Financial Statements. . . . . . . . . . . . . . . . . .  F- 9



                            AUDITED FINANCIAL STATEMENTS

                                                                                
                                                                           Page

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .  F-15

Balance Sheets as of July 31, 1994 and August 1, 1993. . . . . . . . . . .  F-16

Statements of Operations for the fiscal years ended July 31, 1994,
     August 1, 1993 and August 2, 1992 . . . . . . . . . . . . . . . . . .  F-17

Statement of Stockholders' Deficit for the fiscal years ended July 31, 1994,
     August 1, 1993 and August 2, 1992 . . . . . . . . . . . . . . . . . .  F-18

Statements of Cash Flows for the fiscal years ended July 31, 1994,
     August 1, 1993 and August 2, 1992 . . . . . . . . . . . . . . . . . .  F-19

Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . .  F-21














                                    F-1<PAGE>

                      UNAUDITED PRO FORMA FINANCIAL STATEMENTS
                                                                                
                                                                           Page

Pro Forma Financial Information. . . . . . . . . . . . . . . . . . . . . . F-36

Unaudited Pro Forma Balance Sheet as of July 31, 1994. . . . . . . . . . . F-37

Notes to Unaudited Pro Forma Balance Sheet . . . . . . . . . . . . . . . . F-39

Unaudited Pro Forma Statement of Operations 
     for the fiscal year ended July 31, 1994 . . . . . . . . . . . . . . . F-40

Notes to Unaudited Pro Forma Statement of Operations . . . . . . . . . . . F-41










































                                    F-2<PAGE>
                        KASH N' KARRY FOOD STORES, INC.
                                 BALANCE SHEETS
          (Dollar Amounts in Thousands, Except Per Share Amounts)


                                      ASSETS                                


                                                      Reorganized  Predecessor
                                                        Company      Company
                                                      ------------ -----------
                                                       January 29,   July 31,   
                                                              
                                                           1995        1994  
                                                      ------------ -----------
                                                       (Unaudited)
                                                         (Note 1)
Current assets:                                         
   Cash and cash equivalents                             $ 10,517    $  6,852
   Accounts receivable                                      6,701       8,084
   Inventories                                             78,756      76,094
   Prepaid expenses and other current assets                3,246      12,805
                                                         ---------   ---------
      Total current assets                                 99,220     103,835
Property and equipment, at cost, less
   accumulated depreciation                               143,813     160,491
Favorable lease interests, less accumulated
   amortization of $192 and $13,543                        29,762      12,312
Deferred financing costs, less accumulated
   amortization of $182 and $22,572                         4,043      12,630
Reorganization value in excess of amount allocable
   to identifiable assets, less accumulated
   amortization of $460 at January 29, 1995               102,059         --
Excess of cost over net assets acquired, less
   accumulated amortization of $16,288 at
   July 31, 1994                                              --       96,758
Other assets                                                2,854       3,867
                                                         ---------   ---------
      Total assets                                       $381,751    $389,893
                                                         =========   =========
















               See accompanying notes to condensed financial statements. 

                                    F-3<PAGE>
                        KASH N' KARRY FOOD STORES, INC.
                                 BALANCE SHEETS
              (Dollar Amounts in Thousands, Except Per Share Amounts)


               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


                                                      Reorganized  Predecessor
                                                        Company      Company
                                                      ------------ -----------
                                                       January 29,   July 31,   
                                                              
                                                           1995        1994  
                                                      ------------ -----------
                                                       (Unaudited)
                                                         (Note 1)
Current liabilities:
   Current portion of long-term debt                     $ 12,764    $ 42,740
   Accounts payable                                        39,883      34,908
   Accrued payroll and benefits                             9,023       5,579
   Accrued interest                                         4,618      15,849
   Taxes, other than income                                 4,052       6,056
   Other accrued expenses                                  21,673      11,450
                                                         ---------   ---------
      Total current liabilities                            92,013     116,582

Long-term debt, less current obligations                  227,522     317,381 
Other long-term liabilities                                14,914      12,334
Old Series B Cumulative Preferred Stock of $.01 par 
   value and a stated value of $100 a share.  
   Authorized 50,000 shares; 38,750 shares 
   outstanding at July 31, 1994.                              --        3,875 
Old Series C Convertible Preferred Stock of 
   $.01 par value. Authorized 100,000 shares; 
   77,500 shares outstanding at July 31, 1994.                --          775 

Stockholders' equity (deficit):
   New Common Stock of $.01 par value.
      Authorized 5,500,000 shares; 3,100,000
      shares outstanding at January 29, 1995.                  31         --
   Old Common Stock of $.01 par value.   
      Authorized 4,000,000 shares; 2,819,589  
      shares outstanding at July 31, 1994.                    --           28 
   Capital in excess of par value                          46,464      77,695 
   Retained earnings (deficit)                                807    (138,740)
   Less cost of treasury stock - 2,437 shares
      at July 31, 1994                                        --          (37)
                                                         ---------   ---------
       Total stockholders' equity (deficit)                47,302     (61,054)
                                                         ---------   ---------
       Total liabilities & stockholders' equity          $381,751    $389,893 
                                                         =========   =========



               See accompanying notes to condensed financial statements. 

                                      F-4<PAGE>
                          KASH N' KARRY FOOD STORES, INC.
                        CONDENSED STATEMENTS OF OPERATIONS
                                  (In Thousands)
                                    (Unaudited)
                                   Reorganized          Predecessor
                                     Company              Company
                                   -----------    --------------------------
                                      Four          Nine          Thirteen
                                   Weeks Ended    Weeks Ended    Weeks Ended
                                   January 29,    January 1,     January 30,
                                      1995          1995            1994
                                   -----------    -----------    -----------
Sales                               $ 86,354       $186,535       $278,166
Cost of sales                         68,940        149,070        221,706
                                    ---------     -----------    ----------
   Gross profit                       17,414         37,465         56,460
Selling, general and 
   administrative expenses            12,226         28,319         45,300
Depreciation and amortization          1,979          4,161          6,220
                                    ---------      ---------     ----------
   Operating income                    3,209          4,985          4,940

Interest expense                       2,402          3,159         11,372
                                    ---------      ---------     ----------
Income (loss) before reorganization
   items, income taxes, extra-
   ordinary item and change in
   accounting principle                 807          1,826         (6,432)

Reorganization items                    --            (219)           -- 
                                    ---------      ---------     ----------
Income (loss) before income taxes,
    extraordinary item and change
    in accounting principle             807          1,607         (6,432)

Provision for income taxes              --             --             --
                                    ---------      ---------     ----------
Income (loss) before extra-
    ordinary item and change in
    accounting principle                807          1,607         (6,432)

Extraordinary item - gain on 
    debt discharge                      --          70,166            --
Cumulative effect of change in
    accounting principle -
    postretirement medical benefits     --          (2,000)           --
                                    ---------      ---------     ----------
Net income (loss)                   $   807        $69,773       $ (6,432)
                                    =========      =========     ==========

Net income per common share (A)(B)  $   0.26                             
                                    =========          
(A)  Based on a weighted average number of shares of common stock of 3,100,000 
     outstanding.
(B)  Net income per common share is not meaningful prior to January 1, 1995 
     due to the significant change in the capital structure in connection with 
     the Restructuring.
               See accompanying notes to condensed financial statements. 
                                    F-5<PAGE>
                          KASH N' KARRY FOOD STORES, INC.
                        CONDENSED STATEMENTS OF OPERATIONS
                                  (In Thousands)
                                    (Unaudited)
                                   Reorganized          Predecessor
                                     Company              Company
                                   -----------    --------------------------
                                      Four        Twenty-Two     Twenty-Six
                                   Weeks Ended    Weeks Ended    Weeks Ended
                                   January 29,    January 1,     January 30,
                                      1995          1995            1994
                                   -----------    -----------    -----------
Sales                               $ 86,354       $426,681       $534,801
Cost of sales                         68,940        340,802        425,915
                                    ---------     -----------    ----------
   Gross profit                       17,414         85,879        108,886
Selling, general and 
   administrative expenses            12,226         68,819         90,128
Depreciation and amortization          1,979         10,234         12,111 
Store closing and other costs            --             --          11,016
                                    ---------      ---------     ----------
   Operating income (loss)             3,209          6,826         (4,369)

Interest expense                       2,402         13,719         22,513
                                    ---------      ---------     ----------
Income (loss) before reorganization
   items, income taxes, extra-
   ordinary item and change in
   accounting principle                  807         (6,893)       (26,882)

Reorganization items                     --            (219)           --
                                    ---------      ---------     ----------
Income (loss) before income taxes,
    extraordinary item and change
    in accounting principle              807         (7,112)       (26,882)

Provision for income taxes               --             --             --
                                    ---------      ---------     ----------
Income (loss) before extra-
    ordinary item and change
    in accounting principle              807         (7,112)       (26,882)

Extraordinary item - gain on 
    debt discharge                       --          70,166            --
Cumulative effect of change in
    accounting principle -
    postretirement medical benefits      --          (2,000)           --
                                    ---------      ---------     ----------
Net income (loss)                   $    807       $ 61,054      $ (26,882)
                                    =========      =========     ==========
Net income per common share (A)(B)  $   0.26                             
                                    =========           
(A)  Based on a weighted average number of shares of common stock of 3,100,000 
     outstanding.
(B)  Net income per common share is not meaningful prior to January 1, 1995 
     due to the significant change in the capital structure in connection with 
     the Restructuring.
               See accompanying notes to condensed financial statements. 
                                    F-6<PAGE>
                        KASH N' KARRY FOOD STORES, INC.
                            STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)


                                          Reorganized       Predecessor
                                            Company           Company
                                          ------------ -----------------------
                                           Four Weeks  Twenty-Two  Twenty-Six
                                              Ended    Weeks Ended Weeks Ended
                                           January 29, January 1,  January 30, 
                                              1995        1995        1994
                                           ----------- ----------- -----------

Net cash flow from operating activities:          
   Net income (loss)                         $    807    $61,054    $(26,882)
   Adjustments to reconcile net income     
      (loss) to net cash provided (used)
      by operating activities:
      Depreciation and amortization, 
         excluding deferred financing costs     1,979     11,234      12,111
      Store closing and other costs               --         --       11,016
      Amortization of deferred financing costs    182      1,152       1,549
      Reorganization expense                      --       4,329         --
      Adjustment of accounts to fair value        --      (4,110)        --
      Change in accounting principle              --       2,000         --
      Write-off of transaction costs              --      12,989         --
      Gain on discharge of debt                   --     (70,166)        --
      (Increase) decrease in assets:
         Accounts receivable                     (939)     2,322         660
         Inventories                            8,358     (5,917)      9,433
         Prepaid expenses and other assets       (149)      (270)       (454)
      Increase (decrease) in liabilities:                                   
         Accounts payable                       3,175      1,800       1,652
         Accrued expenses and other                 
            liabilities                        (1,072)    (4,012)      2,697
                                             ---------   --------   ---------

            Net cash provided (used) by 
               operating activities            12,341     12,405      11,782
                                             ----------  --------   ---------

Cash used by investing activities:
   Additions to property and equipment           (162)      (665)     (6,194)
   Leased/financed asset additions                --         --       (4,412)
   Proceeds from sale of property and
      equipment                                   --         --          359
                                             ----------  --------   ---------

            Net cash used by investing 
               activities                        (162)      (665)    (10,247)
                                             ----------  --------   ---------




               See accompanying notes to condensed financial statements. 
                                    F-7<PAGE>
                        KASH N' KARRY FOOD STORES, INC.
                            STATEMENTS OF CASH FLOWS
                                  (Continued)
                                 (In Thousands)
                                   (Unaudited)

                                          Reorganized       Predecessor
                                            Company           Company
                                          ------------ -----------------------
                                           Four Weeks  Twenty-Two  Twenty-Six
                                              Ended    Weeks Ended Weeks Ended
                                           January 29, January 1,  January 30, 
                                              1995        1995        1994
                                           ----------- ----------- -----------

Cash provided (used) by financing activities:
   Borrowings under revolving loan facility   $  4,200   $    800   $  15,700
   Additions to obligations under 
      capital leases and notes payable             --         --          799
   Repayments on revolving loan facility        (6,700)   (18,000)     (9,100)
   Repayments on term loan facility                --      (3,098)     (2,925)
   Repayments of other long-term liabilities      (151)    (2,235)     (2,642)
   Sale of Common Stock                            --      10,000         --
   Other financing activities                      --      (5,070)       (512)
                                              ---------  ---------  ----------

            Net cash provided (used) by                                   
               financing activities             (2,651)   (17,603)      1,320
                                              ---------  ---------  ----------

Net increase (decrease) in cash 
   and cash equivalents                          9,528     (5,863)      2,855
Cash and cash equivalents at beginning 
   of period                                       989      6,852       2,145
                                              ---------  ---------  ----------

Cash and cash equivalents at end of period    $ 10,517   $    989   $   5,000
                                              =========  =========  ==========


















               See accompanying notes to condensed financial statements. 

                                    F-8<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)


1.   On September 3, 1994, the Company began to solicit acceptances of all 
impaired parties of a restructuring of the Company which would be implemented 
through the consummation of a "prepackaged" plan of reorganization under 
Chapter 11 of the United States Bankruptcy Code (the "Restructuring").  As a 
result of this solicitation, the voting requirements prescribed by Section 
1126 of the Bankruptcy Code were satisfied, and on November 9, 1994 (the 
"Petition Date") the Company filed with the Bankruptcy Court a voluntary 
petition for reorganization under Chapter 11 of the Bankruptcy Code.  On 
December 12, 1994, the Bankruptcy Court confirmed the plan of reorganization, 
and the Company emerged from bankruptcy on December 29, 1994 (the "Effective 
Date").  During the pendency of the bankruptcy case, the Company, with the 
Bankruptcy Court's approval, operated its business in the ordinary course, 
and paid all pre-petition and post-petition claims of the Company's general 
unsecured creditors, trade creditors and employees in full.  In connection 
with the Restructuring:

     (i)  Each $1,000 principal amount of the Company's Old Senior Floating 
Rate Notes was exchanged for (a) new Senior Floating Rate Notes due February 
1, 2003 (the "New Senior Floating Rate Notes") in an original principal 
amount equal to $1,000 plus 100% of the accrued interest under the Old Senior 
Floating Rate Notes from and including February 3, 1994, through but not 
including the Petition Date, or, at such holder's election, (b) new 11.5% 
Senior Fixed Rate Notes due February 1, 2003 (the "New Senior Fixed Rate 
Notes") in the same original principal amount, or, at such holder's election, 
(c) an amount of New Senior Floating Rate Notes and an amount of New Senior 
Fixed Rate Notes equal, in the aggregate, to 100% of such claim;

     (ii)  Each $1,000 principal amount of the Company's Old Senior Fixed 
Rate Notes was exchanged for (a) New Senior Floating Rate Notes in an 
original principal amount equal to $1,000 plus 100% of the accrued interest 
under the Old Senior Fixed Rate Notes from and including February 2, 1994, 
through but not including the Petition Date, or, at such holder's election, 
(b) New Senior Fixed Rate Notes in the same original principal amount, or, at 
such holder's election, (c) an amount of New Senior Floating Rate Notes and 
an amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of 
such claim;

     (iii)  the Old Subordinated Debentures were exchanged for newly-issued 
common stock of the Company representing 85 percent of the common stock 
outstanding on the Effective Date;

     (iv)  Green Equity Investors, L.P. invested $10,000 cash in exchange for 
newly-issued common stock of the Company representing 15 percent of the 
common stock outstanding on the Effective Date; 

     (v)  the Company entered into a new credit agreement with The CIT 
Group/Business Credit, Inc. as Administrative Agent, and the lenders under 
its old bank credit agreement; and 



                                    F-9<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)


     (vi)  all of the existing preferred stock, common stock, and options and 
warrants to purchase common stock of the Company was extinguished.

2.   The condensed financial statements presented herein have been prepared 
in accordance with the instructions to Form 10-Q and do not include all of 
the information and note disclosures required by generally accepted 
accounting principles.  These statements should be read in conjunction with 
the fiscal 1994 Form 10-K filed by the Company.  The accompanying condensed 
financial statements have not been audited by independent accountants in 
accordance with generally accepted auditing standards, but in the opinion of 
management the condensed financial statements for the period ended January 
30, 1994 includes all adjustments, consisting only of normal recurring 
adjustments, necessary to summarize fairly the Company's financial position 
and results of operations.  

     The condensed financial statements as of and for the period ended 
January 29, 1995 reflect the Company's emergence from Chapter 11 and were 
prepared according to the principles of fresh start reporting contained in 
American Institute of Certified Public Accountants' Statement of Position 
90-7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy 
Code" ("SOP 90-7").  Operations during the period from the Effective Date 
through January 1, 1995 had no significant impact on the emergence 
transactions and as a result have not been separately identified.  As a 
result of the implementation of fresh start accounting, the Company's 
condensed financial statements are not comparable to the Company's condensed 
financial statements of prior periods.  Results for the periods ended January 
29, 1995 or January 1, 1995 are not necessarily indicative of the results for 
the full year.

     The total reorganization value assigned to the Company's assets was 
estimated by calculating projected cash flows before debt service 
requirements discounted back to present value using a discount rate of 13.3% 
(representing the estimated weighted cost of capital), as well as by 
analyzing market cash flow multiples applied to the Company's adjusted 
12-month trailing cash flows.  After extensive negotiations between 
independent investment banking firms representing the Company and an ad hoc 
committee of bondholders, the reorganization value was agreed to by the 
parties and confirmed by the Bankruptcy Court.  The excess of the 
reorganization value over the value of the identifiable assets is reported as 
"Reorganization Value in Excess of Amounts Allocable to Identifiable Assets" 
and is being amortized over twenty years.  Under the principles of fresh 
start accounting, the Company's total assets were recorded at this assumed 
reorganization value, with the reorganization value allocated to identifiable 
tangible and intangible assets on the basis of their estimated fair value.  
In addition, the Company's accumulated deficit was eliminated.                  
       

     The effect of the Restructuring and the implementation of fresh start 
accounting on the Company's condensed balance sheet as of January 1, 1995 was 
as follows:                               F-10
<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)
                                                                      Fresh
                                                                      Start 
                              Pre-Fresh                              Balance
                            Start Balance  Adjustments                Sheet
                            Sheet January       of       Fair Value  January 
                              1, 1995      Restructuring Adjustment  1, 1995
                                                (A)          (B)
                            -------------  ------------- ----------  --------
Cash and cash equivalents      $  9,166       $ (8,177)  $    --     $    989
Accounts receivable               5,762            --         --        5,762
Inventories                      82,011            --       5,104      87,115
Prepaid expenses and other 
   current assets                 3,088            --         --        3,088
                               ---------      ---------  ---------   --------
   Total current assets         100,027         (8,177)     5,104      96,954

Property and equipment, net     162,754            --     (17,775)    144,979
Favorable lease interests, net   11,673            --      18,280      29,953
Deferred financing costs         17,769         (7,456)    (6,088)      4,225
Reorganization value in 
   excess of amount alloc-
   able to identifiable 
   assets                           --             --     102,519     102,519
Excess of cost over net 
   assets acquired               95,560            --     (95,560)        --
Other assets                      3,790            --        (928)      2,862
                               ---------      ---------  ---------   --------
      Total assets             $391,573       $(15,633)  $  5,552    $381,492
                               =========     ==========  =========   ========
Current liabilities, excluding
    current portion of long- 
    term debt                  $ 82,983       $(12,617)  $  6,779    $ 77,145
Long-term debt, including 
    current obligations         366,231       (119,486)    (3,959)    242,786
Other long-term liabilities       6,226            --       8,840      15,066
Redeemable Preferred Stock        4,650         (4,650)       --          --
Stockholders' equity (deficit)  (68,517)       121,120     (6,108)     46,495
                               ---------      ---------  ---------   --------
      Total liabilities                                                      
         and stockholders' 
         equity                $391,573       $(15,633)  $  5,552    $381,492
                               =========     ==========  =========   ========

(A)  To record the transactions applicable to the Restructuring as outlined 
     in footnote 1 and eliminate the deficit in accumulated deficit.
(B)  To record the adjustments to state assets and liabilities at fair value, 
     and to record the cumulative effect of adopting SFAS No. 106 as of the 
     Effective Date.


3.   Inventories consist of merchandise held for resale and are stated at the 
lower of cost or market; cost is determined using average cost, which 
approximates the first-in, first-out (FIFO) method.  

                                    F-11<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)

4.   The Company had a policy of classifying capital expenditures to be 
refinanced within one year as prepaid expenses and other current assets.  
These amounts have been classified as property and equipment at January 29, 
1995.  At July 31, 1994, prepaid expenses and other current assets included 
$9,987 of expenditures for construction in progress expected to be financed 
within one year.

5.  Long-term debt consists of the following:

                                        January 29,       July 31,
                                           1995             1994
                                        -----------       --------

New term loan and revolving 
   credit facilities (A)                 $ 47,000         $    --
Old bank term and revolving 
   credit facilities (A)                      --            59,629
New Senior Floating 
   Rate Notes (B)                          22,953              --
New Senior Fixed Rate 
   Notes (C)                              121,162              --
Old Senior Floating 
   Rate Notes (B)                             --            85,000
Old Senior Fixed 
   Rate Notes (C)                             --            50,000
Subordinated Debentures                       --           105,000
Mortgages payable                          33,555           34,368
Capital lease obligations                   8,410           13,877
Other                                       7,206           12,247
                                         ---------        ---------
Long-term debt including
    current portion                       240,286          360,121

Less current portion                      (12,764)         (42,740)
                                         ---------        ---------
Long-term debt                           $227,522         $317,381
                                         =========        =========

(A)   In connection with the Restructuring, the Company entered into a new 
term loan and revolving credit agreement (the "New Credit Agreement") on 
December 29, 1994.  At January 29, 1995, the Company's New Credit Agreement 
provides for borrowings of up to $35,000 under a term loan facility (with 
quarterly principal repayments of $1,750 and a $14,000 repayment due when the 
facility terminates on December 29, 1997) and a $50,000 revolving credit 
facility with a $25,000 sublimit for letters of credit.  At January 29, 1995, 
the Company had $12,000 in borrowings under the working capital line, and had 
$17,300 of letters of credit issued against the revolving credit facility.  
Amounts outstanding under the term facility bear interest (11.0% at January 
29, 1995) equal to the prime rate (as defined) plus 250 basis points.  
Amounts outstanding under the revolving credit facility bear interest (9.50% 
at January 29, 1995) equal to the prime rate plus 100 basis points.

                                    F-12<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)


(B)   The New Senior Floating Rate Notes mature on February 1, 2003, and bear 
interest (7.31% at January 29, 1995) payable semiannually, at a rate equal to 
six-month LIBOR (as defined in the New Senior Floating Rate Note Indenture) 
plus 200 basis points.  The New Senior Floating Rate Notes are redeemable in 
whole or in part, at the option of the Company, on not less than 30 nor more 
than 60 days' prior notice in amounts of $1,000 or an integral multiple 
thereof, at 100% of the principal amount and unpaid interest, if any, to the 
redemption date.  Through August 1, 1995, all interest on the New Senior 
Floating Rate Notes may, at the option of the Company, be paid by issuing in 
lieu of cash additional New Senior Floating Rate Notes in an aggregate 
principal amount equal to the amount of interest due.  The Old Senior 
Floating Rate Notes bore interest (5.88% at July 31, 1994) payable 
semiannually, at a rate equal to six-month LIBOR plus 250 basis points.

(C)   The New Senior Fixed Rate Notes mature on February 1, 2003, and bear 
interest at 11.5% per annum, payable semiannually.  The New Senior Fixed Rate 
Notes are redeemable in whole or in part, at the option of the Company, on 
not less than 30 nor more than 60 days' prior notice in amounts of $1,000 or 
an integral multiple thereof, at 100% of the principal amount and unpaid 
interest, if any, to the redemption date.  Through February 1, 1996, all 
interest on the New Senior Fixed Rate Notes may, at the option of the 
Company, be paid by issuing in lieu of cash additional New Senior Fixed Rate 
Notes in an aggregate principal amount equal to the amount of interest due.  
The Old Senior Fixed Rate Notes bore interest, payable semiannually, at an 
annual rate of 12.375%.

6.  Reorganization items included in the condensed statements of operations 
consist of restructuring costs, adjustments to fair value, professional fees 
and other expenses.

7.   The Company has a retiree medical plan under which medical coverage is 
available to current retirees and those active employees who, on August 1, 
1993, had attained age 65 with at least 15 years of service.  In accordance 
with SOP 90-7, which the Company adopted on the Effective Date of the 
Restructuring, the provisions of Financial Accounting Standards Board 
Statement 106 "Employers' Accounting for Postretirement Benefits Other Than 
Pensions" were also adopted as of that date.    The following table sets 
forth the projected actuarial present value of unfunded postretirement 
benefit obligations for the plan at January 29, 1995:

     Accumulated postretirement
        benefit obligation:

           Retirees                               $1,915
           Fully eligible active
              plan participants                       85
                                                  -------
           Accrued postretirement
              benefit obligation                  $2,000
                                                  =======
                                    F-13<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)


     The weighted average discount rate used in determining the accumulated 
postretirement benefit obligation was 8.0%.

8.   During the first quarter of fiscal 1994, the Company recorded a 
non-recurring charge of $11,016 which reflects expenses associated with a 
program of closing twelve underperforming stores and expensing costs 
associated with unsuccessful financing activities.










































                                    F-14<PAGE>
                          Independent Auditors' Report


The Board of Directors
Kash n' Karry Food Stores, Inc.:

We have audited the accompanying balance sheets of Kash n' Karry
Food Stores, Inc. as of July 31, 1994 and August 1, 1993, and the
related statements of operations, stockholders' deficit, and cash
flows for the fifty-two weeks ended July 31, 1994 and August 1,
1993, and fifty-three weeks ended August 2, 1992.  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 audits 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 financial position of Kash n'
Karry Food Stores, Inc. at July 31, 1994 and August 1, 1993, and
the results of its operations and its cash flows for the fifty-two
weeks ended July 31, 1994 and August 1, 1993, and fifty-three weeks
ended August 2, 1992, in conformity with generally accepted
accounting principles.  

The accompanying financial statements have been prepared assuming
that Kash n' Karry Food Stores, Inc. will continue as a going
concern.  However, Kash n' Karry Food Stores, Inc. has suffered
recurring losses from operations and has a net capital deficiency. 
As discussed in Note 1 to the financial statements, Kash n' Karry
Food Stores, Inc. filed a pre-packaged petition under Chapter 11 of
the United States Bankruptcy Code on November 9, 1994 and these
matters raise substantial doubt about its ability to continue as a
going concern.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ KPMG Peat Marwick LLP
- -----------------------------------
Tampa, Florida
September 16, 1994, except with respect to
              Notes 1 and 5, which are as of November 9, 1994

                              F-15<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                                BALANCE SHEETS
              (Dollar Amounts in Thousands, Except Per Share Amounts)

                                    ASSETS
                                                  July 31,       August 1,
                                                    1994           1993
                                                  --------       ---------
Current assets:
   Cash and cash equivalents                      $  6,852       $  2,145
   Accounts receivable                               8,084         10,888
   Inventories                                      76,094         95,385
   Prepaid expenses and other current assets        12,805         13,151
                                                  --------       --------
      Total current assets                         103,835        121,569
Property and equipment, at cost, net               160,491        164,937
Favorable lease interests, less accumulated
   amortization of $13,543 and $7,506               12,312         18,349
Deferred financing costs, less accumulated
   amortization of $22,572 and $19,622              12,630         15,153
Excess of cost over net assets acquired, less
   accumulated amortization of $16,288 and $13,457  96,758         99,589
Other assets                                         3,867          3,611
                                                  --------       --------
      Total assets                                $389,893       $423,208
                                                  ========       ========
                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Current portion of long-term debt              $ 42,740       $ 22,628
   Accounts payable                                 34,908         42,561
   Accrued expenses                                 38,934         37,243
                                                  --------       --------
      Total current liabilities                    116,582        102,432

Long-term debt, less current portion               317,381        329,262
Other long-term liabilities                         12,334         10,023
Series B Cumulative Preferred Stock of $.01
   par value and a stated value of $100 a share.
   Authorized 50,000 shares; 38,750 shares
   outstanding.                                      3,875          3,875
Series C Convertible Preferred Stock of $.01
   par value. Authorized 100,000 shares; 77,500
   shares outstanding.                                 775            775
Stockholders' deficit:
   Common Stock of $.01 par value. Authorized
      4,000,000 and 3,200,000 shares; 2,819,589
      shares outstanding.                               28             28
   Capital in excess of par value                   77,695         77,695
   Accumulated deficit                            (138,740)      (100,845)
   Less cost of Treasury Stock - 2,437 shares          (37)           (37)
                                                  --------       --------
      Total stockholders' deficit                  (61,054)       (23,159)
                                                  --------       --------
      Total liabilities and stockholders' deficit $389,893       $423,208
                                                  ========       ========
               See accompanying notes to financial statements.
                                      F-16<PAGE>
                             KASH N' KARRY FOOD STORES, INC.
                                STATEMENTS OF OPERATIONS
                                     (In Thousands)


                                    Fifty-two      Fifty-two    Fifty-three
                                   Weeks Ended    Weeks Ended   Weeks Ended
                                  July 31, 1994 August 1, 1993 August 2, 1992
                                  ------------- -------------- --------------

Sales                              $1,065,165      $1,086,125     $1,071,038

Cost of sales                         845,597         856,156        848,441
                                   ----------      ----------     ----------

    Gross profit                      219,568         229,969        222,597

Selling, general and administrative
  expenses                            176,945         175,177        164,897
Depreciation and amortization          24,112          23,455         20,132
Store closing and other costs          11,016             --             --
                                   ----------      ----------     ----------
    Operating income                    7,495          31,337         37,568

Interest expense (net of interest
  income of $4, $1 and $25)            45,390          43,257         44,869
                                   ----------      ----------     ----------
    Net loss                          (37,895)        (11,920)        (7,301)
Undeclared dividends on
   Preferred Stock                        464             464            474
                                   ----------      ----------     ----------

    Loss attributable to
        Common Stock               $  (38,359)     $  (12,384)    $   (7,775)
                                   ==========      ==========     ==========




















              See accompanying notes to financial statements.

                                     F-17<PAGE>
                           KASH N' KARRY FOOD STORES, INC.
                         STATEMENT OF STOCKHOLDERS' DEFICIT
                          Fiscal Years Ended July 31, 1994,
                          August 1, 1993 and August 2, 1992
                            (Dollar Amounts In Thousands)

                                   Capital
                                  in Excess
                           Common   of Par  Accumulated Treasury
                           Stock    Value     Deficit     Stock    Total
                           ------ --------- ----------- --------  ---------

Balance at July 28, 1991    $  9   $ 8,994   $(81,624)   $ (19)   $(72,640)

Purchase of 250 shares
   for Treasury               --       --         --        (3)         (3)

Reclassification of Series
   A Preferred Stock to       --    40,000        --       (11)     39,989
   Common Stock

Conversion of 11,250 shares
   of Series B Preferred
   Stock and 22,500 shares
   of Series C Preferred
   Stock to 22,500 shares
   of Common Stock            --     1,350        --        --       1,350

Sale of 1,859,531 shares
   of Common Stock for cash   19    27,347        --        --      27,366

Loss for period               --       --      (7,301)      --      (7,301)
                            ----   -------  ---------    -----    --------

Balance at August 2, 1992   $ 28   $77,691   $(88,925)   $ (33)   $(11,239)

Purchase of 2,713 shares
   for Treasury               --       --         --       (40)        (40)

Sale of 2,436 shares
   of Treasury Stock          --        4         --        36          40

Loss for period               --       --     (11,920)      --     (11,920)
                            ----   -------  ---------    -----    --------

Balance at August 1, 1993   $ 28   $77,695  $(100,845)   $ (37)   $(23,159)

Loss for period               --       --     (37,895)      --    $(37,895)
                            ----   -------  ---------    -----    --------

Balance at July 31, 1994    $ 28   $77,695  $(138,740)   $ (37)   $(61,054)
                            ====   =======  =========    =====    ========




                See accompanying notes to financial statements.

                                     F-18<PAGE>
                            KASH N' KARRY FOOD STORES, INC.
                               STATEMENTS OF CASH FLOWS
                                    (In Thousands)


                                     Fifty-two     Fifty-two    Fifty-three
                                    Weeks Ended   Weeks Ended   Weeks Ended
                                   July 31, 1994 August 1,1993 August 2, 1992
                                   ------------- ------------- --------------

Net cash flows from
   operating activities:
   Net loss                         $  (37,895)    $ (11,920)    $  (7,301)
   Adjustments to reconcile
      net loss to net cash
      provided by operating
      activities:
      Depreciation and amortization,
         excluding deferred
         financing costs                24,112        23,455        20,132
      Store closing and other costs     11,016           --            --
      Amortization of deferred
         financing costs                 2,950         2,850         2,932
      Senior Subordinated Extendible
         Reset Notes ("Reset Notes")
         issued in lieu of cash interest   --            --          2,222
      (Increase) decrease in assets:
         Accounts receivable             2,804        (3,778)       (2,090)
         Inventories                    19,291        (4,159)        1,225
         Prepaid expenses and
            other assets                  (278)       (5,426)         (842)
      Increase (decrease) in liabilities:
         Accounts payable               (7,653)        3,722          3,283
         Accrued expenses and
            other liabilities           (1,565)       (3,684)           822
                                     ---------     ---------       --------
            Net cash provided by
               operating activities     12,782         1,060         20,383
                                     ---------     ---------       --------

Cash provided (used) by investing
   activities:
   Additions to property and equipment (10,942)      (13,103)       (11,660)
   Leased asset additions               (4,529)      (24,600)        (3,725)
   Sale of property and equipment          504            91            570
                                     ---------     ---------       --------
         Net cash used by investing
            activities                 (14,967)      (37,612)       (14,815)
                                     ---------     ---------       --------








                                     F-19<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                             STATEMENTS OF CASH FLOWS
                                 (CONTINUED)
                                (In Thousands)


                                     Fifty-two     Fifty-two    Fifty-three
                                    Weeks Ended   Weeks Ended   Weeks Ended
                                   July 31, 1994 August 1,1993 August 2, 1992
                                   ------------- ------------- --------------


Cash provided (used) by financing
   activities:
   Borrowings under term and
      revolving loan facilities         17,700        38,100          16,000
   Additions to obligations under
      capital leases and notes payable   5,230        14,867           3,725
   Sale of Senior Notes                    --            --           49,750
   Sale of Common Stock (net of
      Treasury Stock transactions
      and transaction costs)               --            --           27,362
   Repurchase of Reset Notes               --            --          (32,426)
   Repayments of term and revolving
      loan facilities                   (5,488)      (12,881)        (62,497)
   Repayments of other long-term
      liabilities                       (9,212)       (4,415)         (3,632)
   Financing costs                      (1,338)       (1,453)         (3,160)
                                     ---------     ---------       ---------
         Net cash provided (used)
            by financing activities      6,892        34,218          (4,878)
                                     ---------     ---------       ---------

Net increase (decrease) in cash and
   cash equivalents                      4,707        (2,334)            690
Cash and cash equivalents at
   beginning of year                     2,145         4,479           3,789
                                     ---------     ---------       ---------

Cash and cash equivalents at
   the end of year                   $   6,852     $   2,145       $   4,479
                                     =========     =========       =========














              See accompanying notes to financial statements.

                                     F-20<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)


(1)  Subsequent Event.

On September 3, 1994, the Company began to solicit acceptances of all
impaired parties of a restructuring of the Company which would be implemented
through the consummation of a "prepackaged" plan of reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Plan").  As a result of
such solicitation, the voting requirements prescribed by Section 1126 of the
Bankruptcy Code were satisfied, and the Company filed with the Bankruptcy
Court a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code, and is seeking, as promptly as is practicable, confirmation
by the Bankruptcy Court of the Plan.  During the pendency of the bankruptcy
case, the Company intends to operate its business in the ordinary course, and
to pay all pre-petition claims of the Company's secured lenders, general
unsecured creditors, trade creditors and employees in full.  The Plan also
provides that:

     (i)  Each $1,000 principal amount of the Company's Old Senior Floating
Rate Notes would be exchanged for (a) new Senior Floating Rate Notes due
February 1, 2003 (the "New Senior Floating Rate Notes") in an original
principal amount equal to $1,000 plus 100% of the accrued interest under the
Old Senior Floating Rate Notes from and including February 3, 1994, through
but not including the petition date, or, at such holder's election, (b) new
11.5% Senior Fixed Rate Notes due February 1, 2003 (the "New Senior Fixed
Rate Notes") in the same original principal amount, or, at such holder's
election, (c) an amount of New Senior Floating Rate Notes and an amount of
New Senior Fixed Rate Notes equal, in the aggregate, to 100% of such claim.

     (ii)  Each $1,000 principal amount of the Company's Old Senior Fixed
Rate Notes would be exchanged for (a) New Senior Floating Rate Notes in an
original principal amount equal to $1,000 plus 100% of the accrued interest
under the Old Senior Fixed Rate Notes from and including February 2, 1994,
through but not including the petition date, or, at such holder's election,
(b) New Senior Fixed Rate Notes in the same original principal amount, or, at
such holder's election, (c) an amount of New Senior Floating Rate Notes and
an amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of
such claim.

     (iii)  the Old Subordinated Debentures would be exchanged for
newly-issued common stock of the Company representing 85 percent of the
common stock to be outstanding on the effective date of the Plan (the
"Effective Date");

     (iv)  Green Equity Investors, L.P., would invest $10 million cash in
exchange for newly-issued common stock of the Company representing 15 percent
of the common stock to be outstanding on the Effective Date; and

     (v)  all of the existing preferred stock, common stock, and options and
warrants to purchase common stock of the Company would be extinguished.

See also Footnote 5 - "Long-Term Debt," Footnote 6 - "Redeemable Preferred
Stock," Footnote 7 - "Common Stock," Footnote 8 - "Stock Option Plans," and
Footnote 10 - "Income Taxes."
                                     F-21<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(2)  Summary of Significant Accounting Policies

     Fiscal Year End.  The Company follows a 52/53 week fiscal year ending on
the Sunday nearest July 31.  The fiscal year ended August 2, 1992 included 53
weeks of operations.

     Inventories.  Inventories consist of merchandise held for resale and are
stated at the lower of cost or market; cost is determined using average cost,
which approximates the first-in, first-out (FIFO) method.

     Prepaid Expenses and Other Current Assets.  Prepaid expenses and other
current assets include expenditures for construction in progress expected to
be financed  ($9,987 at July 31, 1994 and $9,246 at August 1, 1993) and
prepaid expenses to be recognized over the next twelve months.

     Depreciation, Amortization, and Maintenance and Repairs.  Depreciation
is provided principally using the composite method based on the estimated
useful lives of the respective asset groups.  Amortization of leasehold
improvements is based on the estimated useful lives or the remaining lease
terms, whichever is shorter.  Property under capital leases consists of
buildings and fixtures and equipment.  Interest costs of property under
development are capitalized during the development period.  Capitalized
amounts were $477, $804, and $355 for the fiscal years ended July 31, 1994,
August 1, 1993, and August 2, 1992, respectively.  The approximate annual
rates used to compute depreciation and amortization are:
                                                             Rate
                                                             ----
          Buildings and improvements                           5%
          Fixtures and equipment                              10%
          Transportation equipment                            25%
          Leasehold improvements                               8%

     Maintenance and repairs are charged to expense as incurred.  The Company
capitalizes expenditures for renewals and betterments.

     Favorable Lease Interests.  Favorable lease interests represent the
present value of the excess of current market rental rates over rents that
existed under the Company's operating leases of store locations as of October
12, 1988.  Such costs are amortized on the straight-line method over the
average life of the favorable leases, which was approximately 20 years.

     Deferred Financing Costs.  Deferred financing costs represent fees and
expenses related to various financing activities and are amortized on a
straight-line basis over the life of the related debt and classified as
interest expense.

     Excess of Cost Over Net Assets Acquired.  Excess of cost over net assets
acquired represents the excess of amounts paid over the fair value of net
assets acquired, and is being amortized over forty years.  As discussed in
Footnote 1, the Company filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code.  Management of the Company believes that,
based on the proposed restructuring, the excess of cost over net assets
acquired has not been permanently impaired, and that an appropriate valuation
of such amounts is reflected in the accompanying financial statements as of
July 31, 1994 and August 1, 1993.  F-22  <PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)


     Costs of Opening and Closing Stores.  Preopening costs of new stores are
charged to expense in the year the store opens.  These costs are primarily
labor to stock the store, preopening advertising, store supplies and other
expendable items.  When operations are discontinued and a store is closed,
the remaining investment, net of realizable value, is charged against
earnings, and, for leased stores, a provision is made for the remaining lease
liability, net of expected sublease income.
     Store Closing and Other Costs.  During the first quarter of fiscal 1994
the Company recorded a non-recurring charge of $11,016.  This charge included
$1,900 of costs associated with unsuccessful financing activities, $4,159 of
favorable lease interests written off in connection with the closing of
twelve underperforming stores, $4,000 representing an adjustment to the
expected lease liability on closed stores, net of sublease income, and $957
of other store closing and related expenses.

     Income Taxes.  The Company is in a loss position for income tax
purposes, and, consequently, no income taxes have been provided.   The
Company adopted Statement of Financial Accounting Standards No. 109 ("SFAS
109") as of August 2, 1993.  No cumulative effect of this change in
accounting was required as of August 2, 1993 and prior years' financial
statements have not been restated to apply the provisions of SFAS 109.  The
effect on prior years' financial statements of retroactively implementing
SFAS 109 would be immaterial.
     Interest Rate Hedge Agreements.  The Company enters into interest rate
hedging agreements which involve the exchange of fixed and floating rate
interest payments periodically over the life of such agreements without the
exchange of the underlying principal amounts.  The differential to be paid or
received is accrued as interest rates change and is recognized over the life
of the agreements as an adjustment to interest expense.

     Cash and Cash Equivalents.  The Company considers all highly liquid
investment instruments with a maturity of three months or less when purchased
to be cash equivalents.  There were no cash equivalents at July 31, 1994 or
August 1, 1993.

     Cash interest paid (excluding financing costs) was $41,545, $41,675, and
$39,202, for the fiscal years ended July 31, 1994, August 1, 1993, and August
2, 1992, respectively.













 
                                   F-23<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)



(3)  Property and Equipment

     Property and equipment is summarized as follows:   July 31,    August 1,
                                                          1994          1993
                                                        --------    ---------

          Land                                          $ 19,543     $ 18,713
          Buildings and improvements                      63,517       56,421
          Fixtures and equipment                         100,717      104,686
          Transportation equipment                         2,593        2,595
          Leasehold improvements                          28,402       25,957
          Construction in progress                         4,115        4,275
                                                        --------     --------
                                                         218,887      212,647
             Less accumulated depreciation               (70,196)    (61,831)
                                                        --------     --------
                                                         148,691      150,816
          Property under capital leases
             (less accumulated amortization
             of $11,154 and $8,032)                       11,800       14,121
                                                        --------     --------
                                                        $160,491     $164,937
                                                        ========     ========

(4)  Accrued Expenses

     Accrued expenses consist of the following:         July 31,    August 1,
                                                          1994          1993
                                                        --------    ---------

          Accrued payroll and benefits                  $  5,579     $  4,492
          Accrued interest                                15,849       15,080
          Taxes, other than income                         6,056        5,708
          Accrued insurance reserves                       4,886        5,684
          Other accrued expenses                           6,564        6,279
                                                        --------     --------
                                                        $ 38,934     $ 37,243
                                                        ========     ========






 





                                     F-24<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(5)  Long-Term Debt

     Long-term debt consists of the following:          July 31,    August 1,
                                                          1994          1993
                                                        --------    ---------
          Bank term and revolving loan facilities (a)   $ 59,629     $ 47,417
          Senior Floating Rate Notes (b)                  85,000       85,000
          Senior Fixed Rate Notes (c)                     50,000       50,000
          Subordinated Debentures (d)                    105,000      105,000
          Mortgages payable, bearing interest at rates
              from 7.50% to 10.35%, in equal monthly
              installments of $355, with maturities
              from 1999 through 2003 (e)                  34,368       34,772
          Capital lease obligations                       13,877       16,999
          Other                                           12,247       12,702
                                                        --------     --------
          Long-term debt including current portion       360,121      351,890
          Less current portion (f)                       (42,740)    (22,628)
                                                        --------     --------
          Long-term debt                                $317,381     $329,262
                                                        ========     ========
     (a)  At July 31, 1994, the Bank Credit Agreement (as amended and
restated) provides for borrowings of up to $17,229 under a term loan facility
(with principal repayments varying from $1,463 to $4,409 per quarter until
the Bank Credit Agreement terminates in April 1996), and a revolving credit
facility with individual sublimits of $30,000 for working capital, $25,000
for letters of credit, and $13,700 for capital improvement loans, with a
maximum of $60,000 outstanding under the revolving credit facility at any
time.  At July 31, 1994, the Company had $28,700 in borrowings under the
working capital line, $13,700 in borrowings under the capital improvement
line, and had $16,358 of letters of credit issued against the revolving
credit facility.  On August 1, 1994, the outstanding balance of capital
improvement loans converted into a term loan amortizing to maturity in April
1996 (with principal repayments varying from $1,713 to $2,283 per quarter)
and the maximum borrowings under the revolving credit facility was reduced to
$50,000.

          Amounts outstanding under the Bank Credit Agreement bear interest
(8.36% at July 31, 1994) equal to the bank's prime rate plus 1.0%.  Prior to
December 15, 1993, amounts outstanding under the Bank Credit Agreement bore
interest (6.27% at August 1, 1993) equal to, at the Company's option, (1) the
bank's prime rate plus 1.0%, (2) the certificate of deposit rate plus 2.25%
or (3) the Eurodollar rate plus 2.0%.

     (b)  The Senior Floating Rate Notes mature on August 2, 1996, and bear
interest (5.88% at July 31, 1994 and August 1, 1993) payable semiannually, at
a rate equal to six-month LIBOR (as defined in the Senior Floating Rate Note
Indenture) plus 250 basis points.  The Senior Floating Rate Notes are
redeemable in whole or in part (subject to a minimum redemption of $9,000),
at the option of the Company, on any interest payment date at a redemption
price equal to 101% of the principal amount with accrued interest to the
redemption date.

                                     F-25<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

     (c)  The Senior Fixed Rate Notes mature on February 1, 1999, and bear
interest at 12.375% per annum, payable semiannually.  The Senior Fixed Rate
Notes will be subject to redemption, otherwise than through operation of the
sinking fund, at any time on and after February 1, 1996 or from time to time
thereafter, at the option of the Company, as a whole or in part, on not less
than 30 nor more than 60 days notice, at the following redemption prices
(expressed as percentages of the principal amount), if redeemed during the
12-month period beginning February 1, of the years indicated:

                                             Redemption
                              Year             Price
                              ----           ----------
                              1996            104.125%
                              1997            102.000%
                              1998            100.000%

and thereafter at 100% of the principal amount, together in the case of any
such redemption with accrued interest to the redemption date.  The Senior
Fixed Rate Notes are subject to redemption on February 1, 1998 through the
operation of a sinking fund, at a redemption price equal to the principal
amount and accrued interest at the redemption date.  The sinking fund
provides for the redemption in such year of $25,000 aggregate principal
amount of the Senior Fixed Rate Notes, calculated to retire 50% of the notes
prior to maturity.  Senior Fixed Rate Notes acquired or redeemed by the
Company (other than through the operation of the sinking fund) may be
credited against sinking fund requirements.  The Senior Fixed Rate Notes are
also subject to mandatory redemption upon a change in control of the Company
(as defined in the Senior Fixed Rate Note Indenture).

     (d)  The Subordinated Debentures will mature on February 1, 2001, and
bear interest, payable semiannually, at the rate of 14% per annum.  The
Subordinated Debentures are redeemable, in whole or in part, at the option of
the Company, at any time and from time to time on and after February 1, 1994
at the following redemption prices together with accrued interest to the date
of redemption:
                              Year           Redemption Price
                              ----           ----------------
                              1994                106.22%
                              1995                104.67%
                              1996                103.11%
                              1997                101.56%
                              1998                100.00%

Mandatory sinking fund payments on the Subordinated Debentures, commencing
February 1, 1999, are calculated to retire 50% of the original principal
amount prior to maturity.

     (e)  In September 1989, the Company completed a $17,000 mortgage
financing of its warehouse, distribution, and office facility; in November
1989, seven fee-owned store properties were mortgaged for $13,200; and in
January 1990, an additional fee-owned store property was mortgaged for
$2,000.  The net proceeds of these transactions were used to reduce existing
bank debt. Final payments of $12,529 and $13,895 are due October 1999 and
November 1999, respectively, on these mortgages.
                                     F-26<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

     (f)  Approximate principal payments for the next five fiscal years are:

                             Senior                Capital
Year Ending    Term Loans    Notes     Mortgages   Leases    Other     Total*
- -----------    ----------   -------    ---------   -------   ------   -------
   1995         $11,504     $   --      $ 1,260     $4,114   $2,162   $19,040
   1996          19,425         --          960      4,357      949    25,691
   1997             --       85,000       1,057      2,694      752    89,503
   1998             --       25,000       1,163        734      640    27,537
   1999             --       25,000       1,282        370      540    27,192


*  Does not include $28,700 outstanding under the working capital line at
July 31, 1994.  The revolving credit facility under the Bank Credit Agreement
requires the Company to pay down its outstanding working capital borrowings
for a 30 day period in each fiscal year to an average daily balance not to
exceed $5,000 with all such borrowings required to be repaid prior to
termination of the Bank Credit Agreement in April 1996.  Therefore, the
Company classifies any outstanding balance in excess of $5,000 as current
portion of long-term debt.  In August 1994, the outstanding balance of
capital improvement loans of $13,700 converted into a term loan amortizing to
maturity in April 1996, and these amounts are included as term loans in the
table above.
     The Bank Credit Agreement, which is secured by a pledge of substantially
all assets of the Company, requires the Company to maintain a minimum net
worth and to satisfy certain other financial ratios, and provides for certain
restrictions on nonstock distributions and certain other restrictions.  The
Senior Floating Rate Notes, the Senior Fixed Rate Notes, the Subordinated
Debentures, and certain other of the Company's indebtedness also contain
compliance covenants that are less restrictive than the covenants under the
Bank Credit Agreement.  Due to the non-recurring charges incurred during the
first quarter as well as its operating performance, the Company breached
several financial covenants under its Bank Credit Agreement for each of the
reporting periods during the fiscal year ended July 31, 1994.  The Company
has received all necessary waivers from the banks through the petition date
discussed in Note 1.  Additionally, the Company has not paid $2,511, $3,094,
and $7,350 in interest due on the Senior Floating Rate Notes, the Senior
Fixed Rate Notes, and the Subordinated Debentures, respectively.  These
amounts have been accrued on the accompanying financial statements, and as
provided in the plan of reorganization discussed in Footnote 1, all interest
on the Senior Floating Rate Notes and the Senior Fixed Rate Notes which is
accrued and unpaid as of the date the Company filed its voluntary petition
with the Bankruptcy Court shall be capitalized into New Senior Floating Rate
Notes or New Senior Fixed Rate Notes and all interest which is accrued and
unpaid on the Subordinated Debentures will be converted into equity.  Given
the automatic stay provisions of the Chapter 11 filing discussed in Note 1
the creditors discussed above are not able to declare these obligations in
default and currently due.  Therefore, certain portions of these obligations
have been classified as long-term debt in the July 31, 1994 balance sheet.

     The Company has entered into a series of interest rate hedging
transactions to reduce its exposure to fluctuations in short-term interest

                                     F-27<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

rates on the majority of its floating rate indebtedness.  Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
107 (SFAS 107), "Disclosures about Fair Value of Financial Instruments",
requires disclosure of estimated fair values of financial instruments, whether
recognized or not in the balance sheets, for which it is practical to
estimate such value.  In calculating the fair value of each material class of
financial instrument, the value is estimated by the Company to be the current
carrying value adjusted to estimate the cost to liquidate the financial
instruments.  The Company does not intend to dispose of a significant portion
of its financial instruments and thus any aggregate unrealized gains and
losses should not be interpreted as a forecast of future earnings or cash
flows.  The Company estimates the cost to liquidate its interest rate hedging
agreements to be approximately $2,600 at July 31, 1994.  Carrying value is
considered a reasonable estimate of the fair value of the remainder of the
Company's financial instruments.  Fair value estimates do not include the
value of nonfinancial instruments, such as fixed assets, the value of
customer relationships and various other factors.  As a result, these fair
values are not comprehensive and, therefore, do not reflect the underlying
value of the Company.

(6)  Redeemable Preferred Stock

     The Series B Preferred Stock shareholders are entitled to receive, when,
as, and if declared by the Board of Directors of the Company, cash dividends
at the rate of 12% per annum on the face amount per share, and such dividends
shall be cumulative and shall accrue whether or not earned or declared from
the date of issue or from the most recent preceding dividend payment date
through which dividends have been paid, as the case may be.  Cumulative
undeclared dividends are $2,562 from October 12, 1988 through July 31, 1994. 
Shares of Series B Preferred Stock are not entitled to any voting rights with
respect to matters voted on by stockholders of the Company, except as
otherwise required by Delaware law.

     The Series C Preferred Stock ranks junior to all classes and series of
stock of the Company other than Common Stock.  The holders of Common Stock
and Series C Preferred Stock are entitled to share equally in such dividends
(other than dividends in Common Stock) as may be declared by the Board of
Directors and paid by the Company out of funds legally available therefor. 
Upon the voluntary or involuntary liquidation, dissolution or winding up of
the Company, the holders of shares of Series C Preferred Stock shall be
entitled, before any payment is made in respect of the Common Stock, to be
paid a liquidation preference in cash equal to $4.00 per share.  After
payment of the liquidation preference to the holders of the Series C
Preferred Stock, the holders of shares of Common Stock then outstanding shall
be entitled to be paid an amount in cash equal to $4.00 per share, following
which each outstanding share of Series C Preferred Stock and Common Stock
shall share in the distribution of the remaining assets of the Company, each
share of Series C Preferred Stock being entitled to the amount it would have
received had it been converted to Common Stock immediately prior to such
distribution.  Except as otherwise provided by Delaware law, holders of
Series C Preferred Stock have no right to vote for the election of directors
or on any other matters that may be submitted to a vote of the Company's
stockholders except in the case of a proposal to merge or consolidate the
Company with or into another       F-28          <PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

entity, to sell, lease or exchange all or substantially all of the assets of
the Company as an entirety, to dissolve or liquidate the Company or to adopt
a plan to do any of the foregoing.  In any such event, holders of shares of
Series C Preferred Stock shall be entitled to one vote per share and shall
vote together as a class with the Common Stock and not as a separate class.

     The payment of cash dividends by the Company is prohibited by the terms
of the Bank Credit Agreement and restricted by the Indentures relating to the
Company's Senior Floating Rate Notes, Senior Fixed Rate Notes and
Subordinated Debentures.

     The Company has certain mandatory redemption requirements applicable to
the Series B Preferred Stock, and certain repurchase obligations on the
Series B Preferred Stock and Series C Preferred Stock, provided that such
redemption or repurchase does not, among other things, violate any terms of
an existing or future financing agreement.  The Company's current Bank Credit
Agreement and its current Indentures prohibit or significantly restrict the
redemption or repurchase by the Company of any shares of its capital stock. 
However, due to these redemption requirements, preferred stock has been
excluded from the stockholders' deficit section of the accompanying balance
sheets.  If or when such redemption or repurchase is allowed to occur, the
Company, at its option, may consummate the transaction in the form of cash or
by issuing subordinated notes.

(7)  Common Stock

     In November 1991, Green Equity Investors, L.P. ("GEI"), an investment
fund managed by Leonard Green & Partners, L.P. ("LGP"), purchased 1,716,967
newly issued shares of the Company's Common Stock, or approximately 55.4% on
a fully-diluted basis, for $27,700 in cash and The Fulcrum III Limited
Partnership and The Second Fulcrum III Limited Partnership (collectively, the
"Fulcrum Partnerships"), investment funds managed by Gibbons, Goodwin, van
Amerongen ("GGvA"), collectively purchased 142,564 newly issued shares of the
Company's Common Stock, or approximately 4.5% on a fully-diluted basis, for
$2,300 in cash.  Contemporaneously, a majority of the holders of the
Company's Series A Preferred Stock voted to amend the Company's Certificate
of Incorporation to reclassify each share of Series A Preferred Stock and all
cumulative and unpaid dividends thereon into one-tenth (1/10) of a share of
Common Stock.  As a result of the reclassification, all shares of Series A
Preferred Stock, together with all cumulative and unpaid dividends thereon,
were converted into an aggregate of 40,000 shares of Common Stock,
representing 1.3% of the Common Stock, on a fully-diluted basis.  In
addition, the Fulcrum Partnerships exchanged shares of the Company's Series B
Preferred Stock, and all cumulative and unpaid dividends thereon, and Series
C Preferred Stock for Common Stock.  As a result, cumulative undeclared
dividends as of the date of these transactions were reduced from $16,648 to
$1,304.

     In February 1994, GEI loaned the Company $2,000 in cash in exchange for
warrants to purchase 63,235 shares of Common Stock.  At the time of this
transaction, the warrant was deemed to have nominal value, and therefore no
adjustment was made to equity in the accompanying financial statements.

                                     F-29 <PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(8)  Stock Option Plans

     Certain key employees, including all executive officers, are eligible to
receive nonqualified stock options to purchase Common Stock under the
Restated 1988 Management Stock Option Plan (the "1988 Option Plan") and/or
the 1991 Management Stock Option Plan (the "1991 Option Plan" and, together
with the 1988 Option Plan, the "Option Plans").  Options granted under the
1988 Option Plan have an exercise price of the greater of 85% of fair market
value at the date of grant or $10 per share and options granted under the
1991 Option Plan have an exercise price of (a) $16.13 per share for options
granted within 30 days of the approval of the 1991 Option Plan by the
stockholders of the Company and (b) thereafter at 100% of the fair market
value at the date of grant.  The 1988 Option Plan terminates at the end of
the Company's 1995 fiscal year and the 1991 Option Plan terminates on
November 26, 2001.  A three-person committee of the Board of Directors (the
"Option Committee"), which includes one officer of the Company, administers
both Option Plans.  The Option Committee designates the class of employees
eligible to participate in the Option Plans and, during each fiscal year of
the Option Plans, designates eligible employees who will be granted options
and the number of shares subject to such options.  Members of the Option
Committee are eligible to receive options.

     The Option Plans provide for tenure-vesting based upon a participant's
employment with the Company and, in addition, the 1988 Option Plan provides
for performance-vesting based on the Company meeting certain earnings
targets.  Once exercised, the transfer of the shares subject to the options
will be restricted pursuant to the terms of a Restricted Stock Agreement to
be entered into among the Company and each holder.
     A summary of changes in the Option Plans for the fiscal years ended July
31, 1994, August 1, 1993, and August 2, 1992, are presented below:

                                           1988 Option Plan
                                               Fiscal Year
                                               -----------
                                    1994          1993           1992
                                    ----          ----           ----
Stock options outstanding
  at beginning of year             27,147        27,976         28,924
Granted                               --            --             --
Exercised                             --            --             --
Forfeited                           1,136           829            948

Outstanding at end
  of year                          26,011        27,147         27,976

Exercisable at end
  of year                          25,061        18,255         15,972

Average option price
  per share                        $11.45        $11.54         $11.50

Reserved for future
  grant                               --            --             --

                                     F-30<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)


                                           1991 Option Plan
                                               Fiscal Year
                                               -----------
                                    1994          1993          1992
                                    ----          ----          ----

Stock options outstanding
  at beginning of year             118,597       110,722          --
Granted                                --          8,875       110,722
Exercised                              --           --            --
Forfeited                            1,000         1,000          --

Outstanding at
  end of year                      117,597       118,597       110,722

Exercisable at
  end of year                          --           --            --

Average option price
  per share                         $16.16        $16.16        $16.13

Reserved for future
  grant                              1,000         1,000         8,875



     For the 1988 Option Plan, compensation expense is determined based on
the difference between the fair market value (as determined by the Option
Committee) and exercise price upon performance-vesting, such compensation
expense to be recognized over the tenure-vesting period on a pro rata basis.

     For the 1991 Option Plan, options are granted at the fair market value
of Common Stock (as determined by the Option Committee) at the date of grant
and therefore no compensation expense will be recorded.


(9)  Leases

     The Company leases certain stores, other facilities and equipment under
leases that are not cancelable.  Such leases generally contain renewal
options exercisable at the Company's option.  In addition to minimum rental
payments, certain leases provide for payments of taxes, maintenance and
percentage rentals based upon sales in excess of stipulated amounts.  The
future minimum payments under leases that are not cancelable, as of July 31,
1994, are:







                                     F-31<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

                                                       Operating      Capital
       Year Ending in                                    leases       leases
       --------------                                  ---------     --------
            1995                                       $ 23,200      $ 5,430
            1996                                         22,900        5,238
            1997                                         21,800        3,163
            1998                                         20,600        1,030
            1999                                         20,400          965
          Thereafter                                    212,400        2,329
                                                       --------      --------
       Total minimum lease payments                    $321,300       18,155
                                                       ========
     Less portion representing interest                               (4,278)
     Present value of net minimum lease payments at                  --------
         July 31, 1994                                               $13,877
                                                                     ========
      Total rent expense was $26,642, $25,475, and $24,059 for the fiscal
years ended July 31, 1994, August 1, 1993, and August 2, 1992, respectively. 
Included in total rent expense are percentage rents totaling $241, $446, and
$534, for 1994, 1993, and 1992, respectively.


(10) Income Taxes

     The Company has reported a pretax loss for all fiscal years since
October 12, 1988, and, consequently, no income tax expense has been reported. 
Financial Accounting Standards Board Statement 109 (SFAS 109) was adopted by
the Company as of August 2, 1993.  There was no cumulative effect of this
change in accounting for income taxes determined as of August 2, 1993.  Prior
years' financial statements have not been restated to apply the provisions of
SFAS 109.  The effect on prior years' financial statements of retroactively
implementing SFAS 109 would be immaterial.

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of July
31, 1994 are presented as follows:

     Deferred tax assets:
        Inventory, principally due to reserves and
           additional costs inventoried for tax purposes
           pursuant to the Tax Reform Act of 1986          $    900
        Insurance and other reserves                          8,100
        Net operating loss carryforward                      35,000
        General business credit carryforward                  1,600
        Charitable contributions carryforward                 3,200
        Other, net                                            1,800
                                                           --------
                 Total gross deferred tax assets             50,600

           Less valuation allowance                         (50,600)
                                                           --------
              Net deferred tax assets                      $    --
                                                           ========
                                     F-32<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)



     Upon adoption of SFAS 109, effective August 2, 1993, the Company
determined a valuation allowance requirement in the amount of $36,200. The
valuation allowance as of July 31, 1994 has been determined to be $50,600,
resulting in a change in the valuation allowance in the amount of $14,400.

     The Company has net operating loss ("NOL") carryforwards for federal
income tax purposes of $93,000 which are available to offset future taxable
income, if any, through the year 2009.  The Company has general business
credit carryforwards of $1,600 which are also available to reduce future
federal income taxes, if any, through the year 2009.  The Company anticipates
that, in connection with the restructuring discussed in Footnote 1, it will
undergo an ownership change pursuant to Internal Revenue Code Section 382
that will result in an annual limitation on the amount of the NOL and general
business credit carryforwards that the Company may utilize to offset future
federal taxable income.  In addition, should the Company fail to emerge from
bankruptcy by December 31, 1994, its NOL and general business credit
carryforwards will be eliminated to the extent of any income realized from
the cancellation of debt by the Company.

(11) Supplementary Statements of Operations Information

     Supplementary Statements of Operations information is as follows:

                                 Fifty-two      Fifty-two      Fifty-three
                                Weeks Ended    Weeks Ended     Weeks Ended
                               July 31, 1994  August 1, 1993  August 2, 1992
                              --------------  --------------  --------------
     Amortization of:
         Lease interests           $ 6,037        $ 2,576        $ 1,293
         Deferred financing costs    2,950          2,850          2,932
         Goodwill                    2,831          2,832          2,886
                                   -------        -------        -------
         Total amortization of
             intangible assets     $11,818        $ 8,258        $ 7,111
                                   =======        =======        =======

     Advertising costs             $14,099        $13,530        $12,428
                                   =======        =======        =======


(12)  Employee Benefit Plans

     Kash n' Karry Retirement Estates ("KKRE"), a trusteed defined
contribution retirement plan, was authorized by the Company's Board of
Directors in 1988.  KKRE is a tax savings/profit sharing plan maintained
primarily for the purpose of providing retirement income for eligible
employees of the Company.  KKRE is qualified under Section 401(a) and Section
401(k) of the Internal Revenue Code of 1986.  Generally, all employees who
have attained the age of 21 years and complete one year of participation


                                     F-33<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)


service (as defined under KKRE) are eligible to participate in KKRE. 
Participants may, subject to certain federal limitations, elect to defer an
amount not to exceed 15% of their base compensation and have such amount
contributed to KKRE.  The Company may match all or a portion of the
participant's deferred compensation, but the amount of the matching
contribution may not exceed 3% of such participant's compensation. 
Additional non-matching contributions may be made to KKRE by the Company in
such amount as determined by the Company's Board of Directors based on the
Company's operating performance.  Funds that participants elect to defer are
invested, at the participant's option, into various investment accounts.  The
vested percentage of the amounts allocated to a participant's account will be
payable to the participant upon such participant's death, disability,
retirement, or other separation of service from the Company.  Plan expenses
were $573, $573, and $461, for the fiscal years ended July 31, 1994, August
1, 1993, and August 2, 1992, respectively.

     Kash n' Karry Executive Supplemental Retirement Plan ("KESP"), a non-
qualified, unfunded salary deferral plan, was authorized by the Company's
Board of Directors in November 1989.  Certain Key Employees (as defined under
KESP) of the Company as selected by its Board of Directors participate in
KESP. Currently, nineteen Key Employees participate in KESP.  Prior to the
beginning of each plan year, a participant may elect to defer an amount not
to exceed 15% of such participant's annual base compensation (as defined
under KESP).  The Company will match a certain portion of the amount deferred
by the participant, but the amount of the match may not exceed 6% of such
participant's annual base compensation.  The Company will record income to
the participant's account at an annual rate (11% for the 1994, 1993 and 1992
plan years) as determined by the Company's Board of Directors, but the rate
of such income shall not be less than 8% per annum.

     The vested percentage of the amounts recorded in the participant's
account will be paid to the participant upon the earlier of:  (i) such
participant's death, disability, retirement, or other separation of service
from the Company; (ii) the date the plan is terminated; or (iii) the date
that a change in control occurs (as defined under KESP).  Expense for this
plan was $135, $149, and $172, for the fiscal years ended July 31, 1994,
August 1, 1993, and August 2, 1992, respectively.


(13) Commitments and Contingencies

     The Company had letters of credit outstanding totaling $16,358 and
$19,118 at July 31, 1994 and August 1, 1993, respectively, which amounts have
been reflected as reductions of the available revolving loan facility as of
those dates.  These letters of credit primarily guarantee various insurance
and financing activities.






                                     F-34<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(14) Related Party Transactions


     Leonard Green & Partners ("LGP"), the sole general partner of Green
Equity Investors, L.P., which owns approximately 55.4% of the Company's
Common Stock on a fully-diluted basis, received a closing fee on November 26,
1991 as compensation in connection with its equity investment in the Company
and was also reimbursed for its out-of-pocket expenses.  In addition, as
consideration for the provision of ongoing financial advisory services, the
Company agreed to pay LGP an annual fee plus related out-of-pocket expenses. 
Three of the Company's Directors are general partners of LGP. The Company has
made $143, $598 and $489 in such payments for the fiscal years ended July 31,
1994, August 1, 1993 and August 2, 1992, respectively.

     Gibbons, Goodwin, van Amerongen ("GGvA"), the sole general partner of
The Fulcrum III and The Second Fulcrum III Limited Partnerships, which
combined own approximately 30.7% of the Company's Common Stock on a
fully-diluted basis, received a closing fee on November 26, 1991 as
compensation in connection with its equity investment in the Company and was
also reimbursed for its out-of-pocket expenses. In addition, GGvA receives,
as consideration for the provision of ongoing financial advisory services, an
annual fee plus related out-of-pocket expenses.  One of the Company's
Directors is a general partner of GGvA.  The Company made total payments to
GGvA for on-going services of $42, $235, and $262, for the fiscal years ended
July 31, 1994, August 1, 1993, and August 2, 1992, respectively.




























                                     F-35<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                         PRO FORMA FINANCIAL INFORMATION

     The following unaudited pro forma financial statements have been
prepared using the principles of "fresh-start" accounting pursuant to the
American Institute of Certified Public Accountants Statement of Position No.
90-7, entitled "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOS No. 90-7").  The unaudited pro forma statement of
operations of the Company for the fiscal year ended July 31, 1994 gives
effect to the Restructuring as if it had occurred on August 2, 1993.  The
unaudited pro forma balance sheet of the Company as of July 31, 1994 gives
effect to the Restructuring as if such Restructuring had occurred on July 31,
1994.  The pro forma data are not necessarily indicative of the financial
position or results of operations that would have been reported had the
Restructuring occurred on the dates referred to, nor are they necessarily
indicative of the financial position or results of operations to be expected
in the future.  KPMG Peat Marwick LLP, the Company's independent auditors,
have neither examined, reviewed nor compiled the pro forma information and,
consequently, do not express an opinion or any other form of assurance or
other association with respect thereto.

     The pro forma data should be read together with the other information
contained herein under the headings "Selected Financial Data," and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements of the Company and the notes
thereto.































                                     F-36<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                        UNAUDITED PRO FORMA BALANCE SHEET
                                As of July 31, 1994
                                   (In Thousands)

                                   ASSETS

                                            Pro Forma Adjustments
                                            ---------------------
                                   July 31,   Discharge     Fresh   Pro Forma
                                    1994    and Exchange    Start Reorganized
Current assets:                   --------- -------------- ------ -----------
  Cash and cash equivalents       $   6,852 $   (2,312)(a)$        $  5,600
                                                10,000 (b)
                                                (4,500)(c)
                                                (4,440)(d)
  Accounts receivable                 8,084                           8,084
  Inventories                        76,094               5,104(g)   81,198
  Prepaid expenses and
      other current assets           12,805                          12,805
                                  --------- ----------    -------- --------
        Total currents assets       103,835    (1,252)    5,104     107,687
Property and equipment,
   at cost, net                     160,491             (17,775)(g) 142,716
Favorable lease interest, net        12,312              18,280 (g)  30,592
Deferred financing costs, net        12,630   (10,717)(e)             4,225
                                                2,312 (a)
Excess of cost over fair value of
  net assets acquired, net           96,758             (96,758)(f)    -- 
Reorganization value in excess of
  amounts allocated to net assets       --              102,521 (g) 102,521
Other assets                          3,867                (928)(g)   2,939
                                  ---------  --------    --------   -------
         Total assets             $ 389,893  $ (9,657)   $10,444   $390,680
                                  =========  ========    ========  ========





















                                     F-37<PAGE>
                         KASH N' KARRY FOOD STORES, INC.
                        UNAUDITED PRO FORMA BALANCE SHEET
                                As of July 31, 1994
                                    (Continued)
                                   (In Thousands)

                        LIABILITIES & STOCKHOLDERS' EQUITY

                                            Pro Forma Adjustments
                                            ---------------------
                                   July 31,   Discharge     Fresh   Pro Forma
                                    1994    and Exchange    Start Reorganized
                                  --------- -------------- ------ -----------
Current liabilities:
  Current portion of
    long-term debt                $  42,740 $    (940)(d)$         $  13,596
                                              (28,204)(h)
  Accounts payable                   34,908                           34,908
  Accrued expenses                   38,934    (7,350)(i)   5,838(g)  31,831
                                               (5,591)(j)
                                  --------- ----------   --------   --------
         Total current liabilities  116,582   (42,085)      5,838     80,335
Long-term debt,
   less current portion             317,381  (105,000)(i)            242,676
                                               28,204 (h)
                                                5,591 (j)
                                               (3,500)(d)
Other long-term liabilities          12,334                 8,840(g)  21,174
Series B preferred stock              3,875    (3,875)(k)                --
Series C preferred stock                775      (775)(k)                --
Stockholders' equity (deficit):
  Common stock, pre-restructuring        28       (28)(k)                --
  Common stock, post-restructuring       --        26 (i)                 31
                                                    5 (b)
  Capital in excess of par value     77,695   (77,695)(k)             46,464
                                              112,324 (i)
                                                9,995 (b)
                                               (4,500)(c)
                                                          (71,355)(g)
  Accumulated deficit              (138,740)   71,619 (l)                 --
                                                           67,121 (g)
    Less cost of treasury stock         (37)       37 (k)                 --
                                  ---------  ---------   --------    --------
         Total stockholders'
           equity (deficit)         (61,054)  111,783       4,606      46,495
                                  ---------  ---------   --------    --------
         Total liabilities and
           stockholders' equity
           (deficit)              $ 389,893  $ (9,657)   $ 10,444    $390,680
                                  =========  =========   ========    ========







                                     F-38<PAGE>
                          KASH N' KARRY FOOD STORES, INC.
                    NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
            (Dollar Amounts in Thousands, Except per Share Amounts)

     The following notes set forth an explanation of the assumptions used in
preparing the unaudited pro forma Balance Sheet.  The pro forma adjustments
are based on management's best estimates using information currently
available.

      The pro forma Balance Sheet has been prepared based on the
post-restructuring capital structure of the Company, which was 3,100,000
shares of $.01 common stock with an approximate market value of $15 per
share.  Market value is based on a multiple of projected operating cash flow
(which is the methodology most often used to value grocery businesses) less
the long-term debt of the Company, and was the approximate trading value of
the shares when they began trading publicly subsequent to December 29, 1994.

(a)  To reflect estimated transaction costs associated with the Company's New
     Bank Credit Agreement.

(b)  To reflect the purchase of 15.0% of the New Common Stock by GEI in
     exchange for $10,000 in cash.

(c)  To reflect estimated transaction costs associated with the
     Restructuring.

(d)  To repay certain notes on the Effective Date.

(e)  To reflect the elimination of net capitalized transaction costs
     associated with the $105,000 Old Subordinated Debentures, Old Credit
     Agreement, and the Old Senior Floating Rate Notes and Old Senior Fixed
     Rate Notes.

(f)  To reflect the elimination of pre-existing goodwill.

(g)  To record "fresh-start" accounting adjustments.

(h)  To reflect principal amortization adjustments between the New Bank 
     Credit Agreement and the Old Credit Agreement.  Adjustment reflects  
     current portions of the Old Credit Agreement of $35,204 and current 
     portions of the New Bank Credit Agreement of $7,000.

(i)  To reflect the conversion of $105,000 Old Subordinated Debentures, plus
     accrued interest totaling approximately $7,350 for 85.0% of the New
     Common Stock.

(j)  To reflect the conversion of Old Senior Floating Rate Notes totaling
     $85,000 and Old Senior Fixed Rate Notes totaling $50,000, along with
     accrued interest thereon totaling approximately $5,591, into New Senior
     Fixed Rate Notes.

(k)  To reflect the elimination of Old Equity Interests.

(l)  To reflect the net operating impact of discharge and exchange
     adjustments.

                                       F-39<PAGE>
                          KASH N' KARRY FOOD STORES, INC.
                    UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

                         Fifty-Two Weeks Ended July 31, 1994
                 (In Thousands, Except Share and Per Share Amounts)


                                         July 31,     Pro Forma     Pro Forma
                                           1994      Adjustments  Reorganized
                                        ----------   -----------  -----------

Sales                                   $1,065,165   $             $1,065,165
Cost of sales                              845,597                    845,597
                                        ----------   ---------     ----------
  Gross profit                             219,568                    219,568
Selling, general and
    administrative expenses                176,945                    176,945
Depreciation and amortization               24,112     (2,832)(a)      26,406
                                                        5,126 (b)
Store closing and other costs               11,016                     11,016
                                        ----------   ---------     ----------
  Operating income                           7,495                      5,201
Interest expense, net                       45,390    (14,700)(c)      34,386
                                                      (11,289)(d)
                                                       16,000 (e)
                                                       (2,423)(f)
                                                        1,408 (g)
                                        ----------   ---------     ----------
  Loss before income taxes                 (37,895)                  (29,185)
Income taxes                                   --                         --
                                        ----------   ---------     ----------
  Net loss                                 (37,895)                  (29,185)
Undeclared dividends on preferred stock       (464)       464 (h)         --
                                        ----------                 ----------
  Net loss attributable to common stock $  (38,359)                $ (29,185)
                                        ==========                 ==========
  Pro forma loss per common share                                  $   (9.41)
                                                                   ==========
  Weighted average common shares outstanding                        3,100,000
                                                                   ==========

















                                     F-40<PAGE>
                          KASH N' KARRY FOOD STORES, INC.
               NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
                          (Dollar Amounts In Thousands)

     The following notes set forth an explanation of the assumptions used in
preparing the unaudited pro forma Statement of Operations.  The pro forma
adjustments are based on management's best estimates using information
currently available. 

     The pro forma Statement of Operations has been prepared based on the
post-restructuring capital structure of the Company, which was 3,100,000
shares of $.01 common stock with an approximate market value of $15 per
share.  Market value is based on a multiple of projected operating cash flow
(which is the methodology most often used to value grocery businesses) less
the long-term debt of the Company, and was the approximate trading value of
the shares when they began trading publicly subsequent to December 29, 1994.

(a)  To reflect the elimination of amortization on previously capitalized
     excess of cost over fair value of net assets acquired.

(b)  To reflect the amortization of reorganizational value in excess of
     amounts allocated to net assets totaling $102,521 over 20 years.

(c)  To reflect the elimination of interest expense occurred at 14% on the
     $105,000 Old Subordinated Debentures.

(d)  To reflect the elimination of interest expense on the Old Senior Fixed
     Rate Notes and Old Senior Floating Rate Notes.

(e)  To reflect interest expense on New Senior Fixed Rate Notes of $121,162
     at 11.5% and on New Senior Floating Rate Notes of $22,953 at 9.0%.

(f)  To reflect the elimination of amortization on deferred transaction costs
     related to the Old Credit Agreement and the $105,000 Old Subordinated
     Debentures and the Old Senior Floating Rate Notes and Old Senior Fixed
     Rate Notes.

(g)  To reflect the amortization of transaction costs related to the New Bank
     Credit Agreement.

(h)  To reflect the elimination of undeclared dividends on Old Equity
     Interests.









                                     F-41           
                                              20/WL/LWH/KNK.SEC/S1.95/FS.1<PAGE>
No dealer, salesperson or any other 
person has been authorized to give 
any information or to make any     
representations in connection with 
this offering other than those 
contained in this Prospectus, and,  
if given or made, such information  
or representations must not be 
relied upon as having been so                         [Logo]
authorized.  This Prospectus does 
not constitute an offer to sell or 
a solicitation of an offer to     
buy by anyone in any jurisdiction 
in which such offer or solicitation                KASH N' KARRY
is not authorized or in which such                FOOD STORES, INC.
person making such offer or solicitation 
is not qualified to do so or to any 
person to whom it is unlawful to        
make such offer or solicitation.  
Neither the delivery of this 
Prospectus nor any sale hereunder 
shall, under any circumstances, 
create any implication that there 
has been no change in the affairs 
of the Company since the date 
hereof or that the information 
contained herein is correct as of 
any time subsequent to its date.
                                                   Common Stock
        TABLE OF CONTENTS
                                     Page
Available Information. . . .          2 
Prospectus Summary . . . . .          3 
Investment Considerations. .         10 
The Company. . . . . . . . .         14 
The Restructuring. . . . . .         15 
Market Price and Dividend Policy     16 
Capitalization . . . . . . .         17 
Selected Financial Information       18 
Management's Discussion and Analysis               PROSPECTUS
  of Financial Condition and 
  Results of Operations              22 
Business . . . . . . . . . .         30 
Management . . . . . . . . .         36 
Certain Relationships and
  Related Transactions . . .         47 
Principal Stockholders . . .         48 
Description of Capital Stock         49 
Selling Stockholders . . . .         57 
Plan of Distribution . . . .         60 
Legal Matters. . . . . . . .         61 
Experts. . . . . . . . . . .         61 
Index to Financial Statements        F-1
                                                  ________________, 1995
<PAGE>
                             PART II

             INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution

     The following table sets forth the fees and expenses payable in
connection with the sale of the Common Stock being registered.  The Company
will pay all such fees and expenses.  All amounts are estimates except for
the registration fee.

SEC Registration Fee . . . . . . . .     $20,577.59

Blue Sky fees and expenses . . . . .       *

Accounting fees and expenses . . . .       *

Legal fees and expenses  . . . . . .       *

Transfer agent fees and expenses . .       *

Printing and engraving fees and expenses   *

Miscellaneous fees and expenses  . .       *

     Total        . . . . . . . . . . .    *      

*    To be completed by amendment.



Item 14.  Indemnification of Directors and Officers

     Section 145 of the Delaware General Corporation Law ("DGCL") permits a
Delaware corporation to indemnify any person who is or was a director,
officer, employee and agent of the corporation, or who is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against actual and reasonable expenses
(including attorneys' fees) incurred by such person in connection with any
action, suit or proceeding if (i) he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and (ii) in the case of a criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.  Except as ordered by
a court, no indemnification shall be made in connection with any proceeding
brought by or in the right of the Company where the person involved is
adjudged to be liable to the Company.

     Article XV of the Bylaws of the Company provides for indemnification of
the officers and directors of the Company to the full extent permitted by
law, as now in effect or later amended.




                                    II-1<PAGE>
     The Company has entered into indemnity agreements with each of its
directors and executive officers.  The indemnity agreements generally
indemnify such persons against liabilities arising out of their service in
their capacities as directors, officers, employees or agents of the Company. 
The Company may from time to time enter into indemnity agreements with
additional individuals who become officers and/or directors of the Company. 

     Section 145 of the DGCL further authorizes a corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation or enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would otherwise have the power to indemnify
him under Section 145.  The Company maintains policies insuring the Company's
directors and executive officers against certain liabilities for actions
taken in such capacities, including liabilities under the Securities Act.

     Article Seventh of the Company's Restated Certificate of Incorporation
limits under certain circumstances the liability of the Company's directors
for a breach of their fiduciary duty as directors.  These provisions do not
eliminate the liability of a director (i) for a breach of the director's duty
of loyalty to the Company or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL (relating to the declaration of
dividends and purchase or redemption of shares in violation of the DGCL), or
(iv) for any transaction from which the director derived an improper personal
benefit.

     At present, there is no pending litigation or proceeding involving a
director or officer of the Company as to which indemnification is being
sought nor is the Company aware of any threatened litigation that may result
in claims for indemnification by any officer, director or employee of the
Company.


Item 15.  Recent Sales of Unregistered Securities

     On November 9, 1994, the Company filed with the United States Bankruptcy
Court for the District of Delaware a "prepackaged" plan of reorganization
(the "Prepackaged Plan") pursuant to Chapter 11 of the U.S. Bankruptcy Code. 
The Prepackaged Plan was confirmed by the Bankruptcy Court on December 12,
1994.  Pursuant to the Prepackaged Plan, on December 29, 1994 the Company
issued 2,635,000 shares of Common Stock to the holders of its $105.0 million
14% Subordinated Debentures due February 1, 2001 (the "Old Subordinated
Debentures"), in exchange for the Old Subordinated Debentures, and issued
465,000 shares of its Common Stock to Green Equity Investors, L.P., its
former majority shareholder, in consideration for the sum of $10.0 million. 
In addition, holders of the Company's $85.0 million Senior Floating Rate
Notes due August 2, 1996 and its $50.0 million 12 3/8% Senior Fixed Rate
Notes due February 1, 1999, exchanged such notes for $23.0 million aggregate
principal amount of new Senior Floating Rate Notes due February 1, 2003 and
$121.1 million aggregate principal amount of new 11.5% Senior Fixed Rate
Notes due February 1, 2003 (collectively, the "New Senior Notes").

                                    II-2<PAGE>
     The Common Stock and New Senior Notes issued pursuant to the Prepackaged
Plan were issued in reliance upon Section 1145(a) of the U.S. Bankruptcy Code
under an order confirming the Company's Prepackaged Plan.  This section
provides an independent exemption from the registration requirement for the
offer and sale of securities of a debtor issued under a plan of
reorganization.  The requirements for relying upon the exemption under
Section 1145(a) of the Bankruptcy Code -- i.e., (i) issuance of securities
under a plan of reorganization; (ii) issuance of securities by the debtor;
and (iii) issuance of securities in exchange or principally in exchange for
claims or interests -- have been satisfied and the Prepackaged Plan was
confirmed by the Bankruptcy Court.


Item 16.  Exhibits and Financial Statement Schedules

     (a)  The following exhibits are filed as part of this Registration
Statement:

Exhibit No.                   Description

2         First Amended Plan of Reorganization filed by the Company with the
          United States Bankruptcy Court of the District of Delaware on
          November 9, 1994, as amended by notices of technical modifications
          thereto filed on November 9, 1994, and December 12, 1994
          (previously filed as Exhibit 2 to the Company's Quarterly Report on
          Form 10-Q for the period ended October 30, 1994, which exhibit is
          hereby incorporated by reference).  

3(i)(a)   Restated Certificate of Incorporation filed with the Delaware
          Secretary of State on December 29, 1994 (previously filed as
          Exhibit 3(i) to the Company's Quarterly Report on Form 10-Q for the
          period ended January 29, 1995, which exhibit is hereby incorporated
          by reference).  

3(i)(b)   Certificate of Designations of Series A Junior Participating
          Preferred Stock filed with the Secretary of State of the State of
          Delaware on April 26, 1995 (filed herewith).  

3(ii)(a)  Bylaws adopted October 12, 1988 (previously filed as Exhibit
          3(ii)(a) to the Company's Quarterly Report on Form 10-Q for the
          period ended January 29, 1995, which exhibit is hereby incorporated
          by reference).  

3(ii)(b)  First Amendment to Bylaws adopted July 30, 1991 (previously filed
          as Exhibit 3(ii)(b) to the Company's Quarterly Report on Form 10-Q
          for the period ended January 29, 1995, which exhibit is hereby
          incorporated by reference).  

3(ii)(c)  Second Amendment to Bylaws adopted December 29, 1994 (previously
          filed as Exhibit 3(ii)(c) to the Company's Quarterly Report on Form
          10-Q for the period ended January 29, 1995, which exhibit is hereby
          incorporated by reference).  

                                    II-3<PAGE>
4.1       Indenture dated as of December 29, 1994, between the Company and
          Shawmut Bank Connecticut, N.A., as Trustee, relating to 11.5%
          Senior Fixed Rate Notes due 2003 (previously filed as Exhibit 4.1
          to the Company's Quarterly Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby incorporated by
          reference).  

4.2       Indenture dated as of December 29, 1994, between the Company and
          IBJ Schroder Bank & Trust Company, as Trustee, relating to Senior
          Floating Notes due 2003 (previously filed as Exhibit 4.2 to the
          Company's Quarterly Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby incorporated by
          reference).

4.3       Rights Agreement dated as of April 13, 1995 between the Company and
          Shawmut Bank Connecticut, N.A., as Rights Agent (previously filed
          as Exhibit 1 to the Company's Current Report on Form 8-K dated
          April 13, 1995, which exhibit is hereby incorporated by reference).

4.4       Specimen form of Common Stock certificate (filed herewith).

5         Opinion of Milbank, Tweed, Hadley & McCloy re: legality (to be
          filed by amendment).

10.1      Credit Agreement dated as of December 29, 1994, among the Company,
          certain lenders, The CIT Group/Business Credit, Inc., as
          administrative agent, and Bank of America National Trust and
          Savings Association, as co-agent (previously filed as Exhibit 10.1
          to the Company's Quarterly Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby incorporated by
          reference). 

10.2      Mortgage, Fixture Filing, Security Agreement and Assignment of
          Rents between the Company, as mortgagor, and Sun Life Insurance Co.
          of America, as mortgagee, dated as of September 7, 1989 (previously
          filed as Exhibit 28.1(a) to the Company's Quarterly Report on Form
          10-Q for the period ended October 29, 1989, which exhibit is hereby
          incorporated by reference).

10.3      Mortgage between the Company, as mortgagor, and Ausa Life Insurance
          Company, as mortgagee, dated as of November 21, 1989 (previously
          filed as Exhibit 28.2(a) to the Company's Quarterly Report on Form
          10-Q for the period ended October 29, 1989, which exhibit is hereby
          incorporated by reference).

10.4      Trademark License Agreement dated as of October 12, 1988 between
          the Company and Lucky Stores, Inc. (previously filed as Exhibit
          10.11 to the Company's Registration Statement on Form S-1,
          Registration No. 33-25621, which exhibit is hereby incorporated by
          reference).

10.5(a)   Services Agreement dated as of March 1, 1995 between the Company
          and GSI Outsourcing Corporation (filed herewith).

                                    II-4<PAGE>
10.5(b)   First Amendment to Services Agreement between the Company and GSI
          Outsourcing Corporation (filed herewith).

10.6      Form of Indemnity Agreement between the Company and its directors
          and certain of its officers (previously filed as Exhibit 10.3 to
          the Company's Registration Statement on Form S-1, Registration No.
          33-25621, which exhibit is hereby incorporated by reference).

10.7(a)   1995 Non-Employee Director Stock Option Plan adopted on March 9,
          1995 (filed herewith). 

10.7(b)   Form of Non-Qualified Stock Option Agreement entered into between
          the Company and certain directors, as optionees, pursuant to the
          1995 Non-Employee Director Stock Option Plan (filed herewith).

10.8      Non-Qualified Stock Option Agreement dated as of January 17, 1995,
          between the Company and Green Equity Investors, L.P. (filed
          herewith).

10.9      Management Services Agreement dated as of December 29, 1994, by and
          between the Company and Leonard Green & Partners (previously filed
          as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for
          the period ended January 29, 1995, which exhibit is hereby
          incorporated by reference).

10.10     Employment Agreement dated as of January 24, 1995, between the
          Company and Ronald Johnson (filed herewith).

10.11     Employment Agreement dated as of March 6, 1995, between the Company
          and Gary M. Shell (filed herewith).

10.12     Employment Agreement dated as of March 16, 1995, between the
          Company and Cliff Smith (filed herewith).

10.13     Incentive Compensation Plan adopted on October 26, 1994 (filed
          herewith).

10.14     Amended and Restated Kash n' Karry Retirement Estates and Trust
          (401(k) Plan) dated October 14, 1993, effective as of January 1,
          1992 (previously filed as Exhibit 10.5 to the Company's Annual
          Report on Form 10-K for the period ended August 1, 1993, which
          exhibit is hereby incorporated by reference).

10.15(a)  Form of Deferred Compensation Agreement dated as of December 21,
          1989 between the Company and key employees and a select group of
          management (KESP) (previously filed as Exhibit 28.3(a) to the
          Company's Quarterly Report on Form 10-Q for the period ended
          January 28, 1990, which exhibit is hereby incorporated by
          reference).

                                    II-5<PAGE>
10.15(b)  Master First Amendment to Deferred Compensation Agreements, dated
          as of November 11, 1991 between the Company and the key employees
          party thereto (previously filed as Exhibit 28.3 to the Company's
          Quarterly Report on Form 10-Q for the period ended November 3,
          1991, which exhibit is hereby incorporated by reference).

10.15(c)  Master Second Amendment to Deferred Compensation Agreements, dated
          as of December 30, 1993 between the Company and the key employees
          party thereto (previously filed as Exhibit 10.13(d) to the
          Company's Quarterly Report on Form 10-Q for the period ended
          January 30, 1994, which exhibit is hereby incorporated by
          reference).

10.15(d)  Master Third Amendment to Deferred Compensation Agreements, dated
          as of September 2, 1994, between the Company and the key employees
          party thereto (previously filed as Exhibit 10.2 to the Company's
          Quarterly Report on Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by reference).

10.16(a)  1995 Key Employee Stock Option Plan (filed herewith).

10.16(b)  Non-Qualified Stock Option Agreement dated March 9, 1995 between 
          the Company and Ronald E. Johnson (filed herewith).

10.16(c)  Form of Non-Qualified Stock Option Agreement entered into between
          the Company and certain key employees, as optionees, pursuant to
          the 1995 Key Employee Stock Option Plan (filed herewith).

16        Letter re change in certifying accountant (previously filed as
          Exhibit 16 to the Company's Current Report on Form 8-K dated
          February 17, 1995).

23.1      Consent of Milbank, Tweed, Hadley & McCloy (to be included in
          Exhibit 5).

23.2      Consent of KPMG Peat Marwick, L.L.P. (filed herewith).

24        Power of Attorney (included in signature page).

27        Financial Data Schedule (filed herewith).














                                    II-6<PAGE>
Item 17.  Undertakings

     1.   Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to its Certificate of Incorporation,
Bylaws or otherwise, the registrant has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

     2.   The undersigned registrant hereby undertakes:

      (1)  To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;

         (i)  To include any prospectus required by Section 10(a)(3) of the
Securities Act;

        (ii)  To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;

       (iii)  To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;

     (2)  That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and

     (3)  To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering. 








                                    II-7
<PAGE>
                           SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tampa,
State of Florida, on April 30, 1995.

                         KASH N' KARRY FOOD STORES, INC.


                         /s/ Ronald E. Johnson
                         By:                                 
                            Ronald E. Johnson
                            Chairman of the Board,
                            President and Chief Executive Officer


     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ronald E. Johnson and Raymond P. Springer, and
each or either of them, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments and post-effective amendments to this Registration Statement, and
to file the same with all exhibits thereto, unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
either of them or their substitutes, may lawfully do or cause to be done by
virtue thereof.

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.


        Signature           Capacity                  Date



/s/ Ronald E. Johnson
Ronald E. Johnson     Chairman of the Board,       April 30, 1995
                  President and Chief Executive
                            Officer
                  (principal executive officer)




/s/ Raymond P. Springer
Raymond P. Springer   Senior Vice President,        April 28, 1995
                     Chief Financial Officer
                  (principal financial officer)

                                    <PAGE>

/s/ Richard D. Coleman    
Richard D. Coleman    Vice President, Controller    April 30, 1995
                    (principal accounting officer)



/s/ Everett L. Buckardt  
Everett L. Buckardt       Director                  April 30, 1995



/s/ John J. Delucca           
John J. Delucca           Director                  April 30, 1995




Jennifer Holden Dunbar    Director                  April ___, 1995




Ben Evans                 Director                  April ___, 1995



/s/ Thomas W. Harberts        
Thomas W. Harberts        Director                  April 28, 1995



/s/ Robert Spiegel            
Robert Spiegel            Director                  April 28, 1995



Christopher V. Walker     Director                  April ___, 1995


/s/ Peter Zurkow              
Peter Zurkow              Director                  April 28, 1995


20/LWH/KNK.SEC/S1.95/K10008s1.4

<PAGE>


                          EXHIBIT INDEX               Sequentially
Exhibit                                                 Numbered
No.                 Description of Exhibit                Page    


2         First Amended Plan of Reorganization filed      
          by the Company with the United States
          Bankruptcy Court of the District of Delaware
          on November 9, 1994, as amended by notices of
          technical modifications thereto filed on
          November 9, 1994, and December 12, 1994
          (previously filed as Exhibit 2 to the
          Company's Quarterly Report on Form 10-Q for
          the period ended October 30, 1994, which
          exhibit is hereby incorporated by reference).

3(i)(a)   Restated Certificate of Incorporation filed     
          with the Delaware Secretary of State on
          December 29, 1994 (previously filed as Exhibit
          3(i) to the Company's Quarterly Report on Form
          10-Q for the period ended January 29, 1995,
          which exhibit is hereby incorporated by
          reference).

3(i)(b)   Certificate of Designations of Series           122
          A Junior Participating Preferred Stock filed
          with the Secretary of State of the State of
          Delaware on April 26, 1995.

3(ii)(a)  Bylaws adopted October 12, 1988 (previously     
          filed as Exhibit 3(ii)(a) to the Company's
          Quarterly Report on Form 10-Q for the period
          ended January 29, 1995, which exhibit is
          hereby incorporated by reference).

3(ii)(b)  First Amendment to Bylaws adopted               
          July 30, 1991 (previously filed as Exhibit
          3(ii)(b) to the Company's Quarterly Report on
          Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by
          reference).

3(ii)(c)  Second Amendment to Bylaws adopted              
          December 29, 1994 (previously filed as Exhibit
          3(ii)(c) to the Company's Quarterly Report on
          Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by
          reference).

4.1       Indenture dated as of December 29, 1994,        
          between the Company and Shawmut Bank
          Connecticut, N.A., as Trustee, relating to<PAGE>
          11.5% Senior Fixed Rate Notes due 2003
          (previously filed as Exhibit 4.1 to the
          Company's Quarterly Report on Form 10-Q for
          the period ended January 29, 1995, which
          exhibit is hereby incorporated by reference).

4.2       Indenture dated as of December 29, 1994,        
          between the Company and IBJ Schroder Bank &
          Trust Company, as Trustee, relating to Senior
          Floating Rate Notes due 2003 (previously filed
          as Exhibit 4.2 to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby
          incorporated by reference).

4.3       Rights Agreement dated as of April 13, 1995     
          between the Company and Shawmut Bank
          Connecticut, N.A., as Rights Agent (previously
          filed as Exhibit 1 to the Company's Current
          Report on Form 8-K dated April 13, 1995, which
          exhibit is hereby incorporated by reference).

4.4       Specimen form of Common Stock certificate.      129

5         Opinion of Milbank, Tweed, Hadley & McCloy      
          re:  legality (to be filed by amendment).

10.1      Credit Agreement dated as of                    
          December 29, 1994, among the Company, certain
          lenders, The CIT Group/Business Credit, Inc.,
          as administrative agent, and Bank of America
          National Trust and Savings Association, as
          co-agent (previously filed as Exhibit 10.1 to
          the Company's Quarterly Report on Form 10-Q
          for the period ended January 29, 1995, which
          exhibit is hereby incorporated by reference). 

10.2      Mortgage, Fixture Filing, Security Agreement    
          and Assignment of Rents between the Company,
          as mortgagor, and Sun Life Insurance Co. of
          America, as mortgagee, dated as of September
          7, 1989 (previously filed as Exhibit 28.1(a)
          to the Company's Quarterly Report on Form 10-Q
          for the period ended October 29, 1989, which
          exhibit is hereby incorporated by reference).

10.3      Mortgage between the Company, as mortgagor,     
          and Ausa LifeInsurance Company, as mortgagee,
          dated as of November 21, 1989 (previously
          filed as Exhibit 28.2(a) to the Company's
          Quarterly Report on Form 10-Q for the period
          ended October 29, 1989, which exhibit is
          hereby incorporated by reference).
<PAGE>
10.4      Trademark License Agreement dated as of         
          October 12, 1988 between the Company and Lucky
          Stores, Inc. (previously filed as Exhibit
          10.11 to the Company's Registration Statement
          on Form S-1, Registration No. 33-25621, which
          exhibit is hereby incorporated by reference).

10.5(a)   Services Agreement dated as of March 1, 1995    132
          between the Company and GSI Outsourcing
          Corporation.

10.5(b)   First Amendment to Services Agreement between   241
          the Company and GSI Outsourcing Corporation.

10.6      Form of Indemnity Agreement between the         
          Company and its directors and certain of its
          officers (previously filed as Exhibit 10.3 to
          the Company's Registration Statement on Form
          S-1, Registration No. 33-25621, which exhibit
          is hereby incorporated by reference).

10.7(a)   1995 Non-Employee Director Stock Option Plan    247
          adopted on March 9, 1995.

10.7(b)   Form of Non-Qualified Stock Option Agreement    261
          entered into between the Company and certain
          directors, as optionees, pursuant to the 1995
          Non-Employee Director Stock Option Plan.

10.8      Non-Qualified Stock Option Agreement dated      266
          as of January 17, 1995, between the Company
          and Green Equity Investors, L.P.

10.9      Management Services Agreement dated as of       
          December 29, 1994, by and between the Company
          and Leonard Green & Partners (previously filed
          as Exhibit 10.3 to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby
          incorporated by reference).

10.10     Employment Agreement dated as of                272
          January 24, 1995, between the Company and
          Ronald Johnson.

10.11     Employment Agreement dated as of                295
          March 6, 1995, between the Company and Gary M.
          Shell.

10.12     Employment Agreement dated as of                322
          March 16, 1995, between the Company and Cliff
          Smith.

<PAGE>
10.13     Incentive Compensation Plan adopted             349
          on October 26, 1994.

10.14     Amended and Restated Kash n' Karry              
          Retirement Estates and Trust (401(k) Plan)
          dated October 14, 1993, effective as of
          January 1, 1992 (previously filed as Exhibit
          10.5 to the Company's Annual Report on Form
          10-K for the period ended August 1, 1993,
          which exhibit is hereby incorporated by
          reference).

10.15(a)  Form of Deferred Compensation Agreement         
          dated as of December 21, 1989 between the
          Company and key employees and a select group
          of management (KESP) (previously filed as
          Exhibit 28.3(a) to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 28, 1990, which exhibit is hereby
          incorporated by reference).

10.15(b)  Master First Amendment to Deferred              
          Compensation Agreements, dated as of November
          11, 1991 between the Company and the key
          employees party thereto (previously filed as
          Exhibit 28.3 to the Company's Quarterly Report
          on Form 10-Q for the period ended November 3,
          1991, which exhibit is hereby incorporated by
          reference).

10.15(c)  Master Second Amendment to Deferred             
          Compensation Agreements, dated as of December
          30, 1993 between the Company and the key
          employees party thereto (previously filed as
          Exhibit 10.13(d) to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 30, 1994, which exhibit is hereby
          incorporated by reference).

10.15(d)  Master Third Amendment to Deferred              
          Compensation Agreements, dated as of September
          2, 1994, between the Company and the key
          employees party thereto (previously filed as
          Exhibit 10.2 to the Company's Quarterly Report
          on Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by
          reference).

10.16(a)  1995 Key Employee Stock Option Plan.            355

10.16(b)  Non-Qualified Stock Option Agreement            373
          dated March 9, 1995 between the Company and
          Ronald E. Johnson.
<PAGE>
10.16(c)  Form of Non-Qualified Stock Option              378
          Agreement entered into between the Company and
          certain key employees, as optionees, pursuant
          to the 1995 Key Employee Stock Option Plan.

16        Letter re change in certifying accountant       
          (previously filed as Exhibit 16 to the
          Company's Current Report on Form 8-K dated
          February 17, 1995).

23.1      Consent of Milbank, Tweed, Hadley & McCloy      
          (to be included in Exhibit 5).

23.2      Consent of KPMG Peat Marwick, L.L.P.            383

24        Power of Attorney (included in                  
          signature page)

27        Financial Data Schedule                         384
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT FILED 5/1/95", "secsgml_size_bytes": 323941}]
{"company-data": {"conformed-name": "KASH N KARRY FOOD STORES INC", "cik": "0000842913", "assigned-sic": "5411", "irs-number": "954161591", "state-of-incorporation": "DE", "fiscal-year-end": "0730"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "033-58999", "film-number": "95533660"}, "business-address": {"street1": "6422 HARNEY RD", "city": "TAMPA", "state": "FL", "zip": "33610", "phone": "8136210276"}}
As filed with the Securities and Exchange Commission on May 1, 1995
                                    Registration No. 33-_________
=================================================================
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM S-1
                     REGISTRATION STATEMENT
                              UNDER
                   THE SECURITIES ACT OF 1933

                 KASH N' KARRY FOOD STORES, INC.
     (Exact name of Registrant as specified in its charter)

     DELAWARE                5411                95-4161591
(State or other   (Primary Standard Industrial  (I.R.S. Employer
jurisdiction of    Classification Code Number)   Identification
incorporation)                                   Number)
                        6422 Harney Road
                      Tampa, Florida  33610
                         (813) 621-0200
       (Address, including zip code, and telephone number,
including area code, of Registrant's principal executive office)

                       RAYMOND P. SPRINGER
       Senior Vice President, Chief Financial Officer, 
                    Treasurer and Secretary
                 Kash n' Karry Food Stores, Inc.
                        6422 Harney Road
                      Tampa, Florida  33610
                         (813) 621-0200
        (Name, address, including zip code, and telephone
       number, including area code, of agent for service)
                         with copies to:

 LAWRENCE LEDERMAN, ESQ.          ROBERT S. BOLT, ESQ.
 Milbank, Tweed, Hadley & McCloy  Barnett, Bolt, Kirkwood & Long
 1 Chase Manhattan Plaza          601 Bayshore Boulevard, Suite 700
 New York, New York  10005        Tampa, Florida  33606
 (212) 530-5680                   (813) 253-2020

     Approximate date of commencement of proposed sale to the
public:  From time to time after the effective date of this
Registration Statement, as determined by the Selling Stockholders.

     If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box.   x 

                                      (continues on following page)

                     Page one of 384 pages.
               Exhibit Index appears on page 117.
                                       (continuation of cover page)
CALCULATION OF REGISTRATION FEE

                                 Proposed     Proposed 
                                 Maximum      Maximum   Amount
Title of Each                    Offering     Aggregate of
Class of Securities Amount to be Price        Offering  Regis-
to be Registered    Registered   Per Share(1) Price(1)  tration fee

Common Stock,       3,100,000    $19.25     $59,675,000 $20,577.59
par value
$.01 per share

(1)  Estimated solely for purposes of calculating the registration
     fee, pursuant to Rule 457.

The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
CROSS REFERENCE SHEET

           (Pursuant to Item 501(b) of Regulation S-K)

The following information sets forth the location in the Prospectus
   of information required by Items 1-12, Part I, of Form S-1

Registration Statement, Items              Location in Prospectus
   and Heading

1. Forepart of the Registration         
   Statement and Outside Front          
   Cover Page of Prospectus.............Cover Page of Registration 
                                        Statement; Outside Front
                                        Cover Page of Prospectus; 
                                        Cross Reference Sheet
2.  Inside Front and Outside Back 
    Cover Pages of Prospectus...........Inside Front Cover Page of
                                        Prospectus; Outside Back
                                        Cover Page of Prospectus
3.  Summary Information, Risk 
    Factors and Ratio of Earnings 
    to Fixed Charges....................Prospectus Summary; Investment
                                        Considerations; Selected 
                                        Financial Information 

4.  Use of Proceeds.....................Not Applicable

5.  Determination of Offering Price.....Not Applicable

6.  Dilution............................Not Applicable

7.  Selling Security Holders............Selling Stockholders

8.  Plan of Distribution................Plan of Distribution

9.  Description of Securities to be 
    Registered..........................Outside Front Cover Page of
                                        Prospectus; Prospectus Summary;
                                        Description of Capital Stock 
10.  Interests of Named Experts 
     and Counsel........................Not Applicable

11.  Information With Respect to the 
     Registrant.........................Inside Front Cover of Prospectus;
                                        Prospectus Summary; The Company; The 
                                        Restructuring; Capitalization;
                                        Selected Financial Information;
                                        MarketPrice and Dividend Policy;
                                        Management's Discussion and Analysis
                                        of Financial Condition and Results
                                        of Operations; Business; Management; 
                                        Certain Relationships and Related
                                        Transactions; Principal Stockholders;
                                        Description of Capital Stock
12.  Disclosure of Commission 
     Position on Indemnification for
     Securities Act Liabilities ........Not Applicable
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT.  A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.  THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE.  THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER
THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 1, 1995
[LOGO]
                 KASH N' KARRY FOOD STORES, INC.

                          COMMON STOCK

     Up to 3,100,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), of Kash n' Karry Food Stores, Inc. (the "Company"), may be
offered from time to time by certain holders of the Common Stock
(collectively, the "Selling Stockholders").  See "Selling Stockholders."  The
Common Stock offered hereby is listed on the Nasdaq Stock Market's Small Cap
Market under the symbol "KASH."  See "Market Price and Dividend Policy."

     The Company will not receive any of the proceeds from any sale of Common
Stock offered from time to time by the Selling Stockholders.  Any or all of
such Common Stock may be sold by the Selling Stockholders from time to time
(i) to or through underwriters or dealers, (ii) directly to one or more other
purchasers, (iii) through agents on a best-efforts basis, or (iv) through a
combination of any such methods of sale.  If required, the names of any
underwriters or agents and the applicable commissions or discounts, along
with pricing information, will also be set forth in an accompanying
Prospectus Supplement.  See "Plan of Distribution."

     See "Investment Considerations" for a discussion of certain factors that
should be considered by prospective investors in connection with an
investment in the Common Stock.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE. 

      The date of this Prospectus is _______________, 1995
AVAILABLE INFORMATION

     The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission").  Such reports and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street N.W.,
Washington, D.C.  20549, and at certain of the following regional offices: 
7 World Trade Center, Suite 1300, New York, New York  10048, and Northwest
Atrium Center, 550 West Madison Street, Suite 1400, Chicago, Illinois  60661. 
Copies of such material can also be obtained from the Public Reference
Section of the Commission, 450 Fifth Street N.W., Washington, D.C.  20549, at
prescribed rates.  The Common Stock is listed on the Nasdaq Small Cap Market;
accordingly, such reports and other information concerning the Company may
also be inspected at the offices of the Nasdaq Stock Market, 1735 K Street
N.W., Washington, D.C.  20006.

     The Company has filed with the Commission a Registration Statement under
the Securities Act of 1933 (the "Securities Act") with respect to the Common
Stock offered hereby.  This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement and the exhibits thereto, certain parts of which
have been omitted in accordance with the rules and regulations of the
Commission.  For further information with respect to the Company and the
offering of Common Stock, reference is made hereby to such Registration
Statement and exhibits.

                                    2
PROSPECTUS SUMMARY

     The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and the financial
statements, including the notes thereto, appearing elsewhere in this
Prospectus.  References in this Prospectus to the "Company" mean Kash n'
Karry Food Stores, Inc., references to "Common Stock" mean the 3,100,000
shares of common stock of the Company, par value $.01 per share, issued on
December 29, 1994 in connection with the Restructuring (as herein defined). 
All financial information set forth herein is presented in accordance with
generally accepted accounting principles ("GAAP"), unless otherwise noted.  

                           The Company

     The Company is the third largest food retailer in west central Florida,
operating 92 multi-department supermarkets, five conventional supermarkets
and 33 liquor stores under the "Kash n' Karry" name and two super warehouse
stores under the "Save 'n Pack" name, all supported by a centrally-located
warehouse and distribution facility.  More than one-half of the Company's
stores are located in the Tampa-St. Petersburg area, which is Florida's
largest retail food sales market, with the balance located between
Gainesville, approximately 130 miles to the north, and Bonita Springs,
approximately 150 miles to the south.  The west central Florida area has a
diverse and growing economy, which includes high technology and financial
centers, an insurance industry presence, retirement communities, coastal
resorts and commercial agricultural activity.  The region's population is
estimated to be increasing at an annual rate of approximately 2%.

     The Company currently operates two distinct store concepts:

     .    a large, full-service multi-department supermarket under the Kash
          n' Karry name, which is designed to operate profitably at lower
          sales levels than certain competitors; and

     .    a super warehouse store under the Save 'n Pack name designed to
          serve trade areas with low household income.

     The Company has developed, and continues to implement, the following
marketing and operating strategies to promote growth in revenues and
operating cash flow: 

     Marketing Strategy.  The Company emphasizes competitive prices on
everyday items, strong weekly features, high quality perishables and a broad
assortment of both national and corporate brands.  The Company's food stores
are open seven days a week, with most operating 24 hours a day.  The Company
seeks to be either first or second among its competitors in

                                    3
assortment of branded merchandise, stocking over 29,000 SKU's (stock keeping
units) of national brand and corporate brand items.  In addition to a full
range of grocery and general merchandise items, most of the Company's
multi-department supermarkets also feature expanded perishable goods
departments, delicatessens and in-store bakeries, and many contain pharmacies
and full-service seafood, full-service floral and video rental departments.

     In 1992, the Company introduced its own corporate brand merchandise. 
The Company's corporate brand strategy is to offer a product comparable in
quality to the best-selling national brand at a lower price.  The Kash n'
Karry brand item generally sells for approximately 10% less than the
competing best-selling national brand but generates a higher per unit gross
profit contribution to the Company.  Over 1,100 SKU's in a wide variety of
product categories carry the Kash n' Karry brand name.

     Operations Strategy.  The Company believes that up-to-date,
strategically located facilities, well-trained associates and information
management systems are key elements to the Company's future success.  The
Company operates a modern, 687,000 square foot warehouse, distribution and
office facility in Tampa with sufficient capacity to service anticipated
store expansion for the foreseeable future.  The warehouse enables the
Company to reduce costs by purchasing in large quantities, taking advantage
of special promotional prices offered by vendors and purchasing prior to
impending price increases, and reducing delivery costs through cross docking
and backhauls.  The central location of the warehouse facility to its stores
also provides the Company with operating efficiencies.

     The Company relies on information technology to enhance operating
efficiency.  The Company recently entered into an agreement to outsource its
information systems development in order to minimize costs, accelerate the
implementation period for systems improvements, facilitate future software
upgrades, reduce personnel issues and eliminate equipment lease costs. 
Specifically, the agreement provides for the acquisition of new procurement,
billing, labor scheduling and accounts payable systems and new point-of-sale
equipment in the stores within the next 18 months.

     The Company also devotes significant resources to personnel training,
utilizes labor scheduling programs to allocate manpower based on anticipated
sales levels, and employs a variety of strategies to minimize inventory
losses.  None of the Company's associates is covered by a collective
bargaining agreement.

     The principal executive offices of the Company are located at 6422
Harney Road, Tampa, Florida  33610, and its telephone number is (813)
621-0200.

                                    4
The Restructuring

     The Company was formed in connection with a leveraged acquisition in
1988.  Although the Company consistently generated stable operating cash
flows through its 1993 fiscal year, it experienced net losses for each of the
last five fiscal years and the 22-week period ended January 1, 1995 due
primarily to its highly leveraged position.

     On November 9, 1994, the Company filed with the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") a "prepackaged"
plan of reorganization (the "Prepackaged Plan") pursuant to Chapter 11 of the
U.S. Bankruptcy Code.  The Prepackaged Plan was confirmed by the Bankruptcy
Court on December 12, 1994.  Under the terms of the Prepackaged Plan, the
Company effected a comprehensive financial restructuring (the
"Restructuring").  Among other things, the Company restructured its senior
debt, converted its subordinated debt into an 85% equity interest in the
Company, and received $10.0 million in cash from Green Equity Investors, L.P.
("GEI") for the remaining 15% equity interest of the Company.  The Company
emerged from bankruptcy on December 29, 1994.  For further information with
respect to the Prepackaged Plan and the Restructuring, see "The
Restructuring," "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

                    Investment Considerations

     The shares offered hereby involve a high degree of risk and should not
be purchased by anyone who cannot afford the loss of their entire investment. 
See "Investment Considerations."

                                    5
Summary Financial Data

     The following table presents summary financial information of the
Company as of and for each of the fiscal years ended on the Sunday nearest to
July 31, 1994, 1993 and 1992, and as of and for the periods ended January 29,
1995, January 1, 1995 and January 30, 1994, and should be read in conjunction
with the financial statements and related notes thereto appearing elsewhere
in this Prospectus and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."  

     The financial statements as of and for the periods ended January 29,
1995, January 1, 1995 and January 30, 1994, from which the summary financial
data has been derived, have not been audited by independent accountants in
accordance with generally accepted auditing standards, but, in the opinion of
management, the financial statements as of and for the period ended January
30, 1994 include all adjustments, consisting only of normal recurring
adjustments, necessary to summarize fairly the Company's financial position
and results of operations.  As discussed herein, the Company's Prepackaged
Plan was consummated on December 29, 1994 (the "Effective Date").  The
financial statements as of and for the periods ended January 29, 1995 and
January 1, 1995 reflect the Company's emergence from Chapter 11 and were
prepared utilizing the principles of fresh-start reporting contained in the
American Institute of Certified Public Accountants' Statement of Position
90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code." Operations during the period from the Effective Date through January
1, 1995 had no significant impact on the emergence transactions and as a
result have not been separately identified.  As a result of the
implementation of fresh-start accounting, certain of the summary financial
data as of and for the periods ended January 29, 1995 and January 1, 1995 is
not comparable to the summary financial data of prior periods due to the
change in reporting entity resulting from the application of fresh-start
accounting.  Therefore, summary financial data for the "Reorganized Company"
has been separately identified from that of the "Predecessor Company." 
Results for the periods ended January 29, 1995 or January 1, 1995 are not
necessarily indicative of the results for the full year.  

     The summary store data have been derived from the Company's management
reporting records.

                                    6
Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,      January 1,   January 30,
                                 1995            1995           1994
                               (4 weeks)       (22 weeks)    (26 weeks)
                              (In Thousands, Except Per Share Amounts)
Statement of Operations Data
 Sales . . . . . . . . . . .      $86,354      $426,681       $534,801
 Cost of sales . . . . . . .       68,940       340,802        425,915 
                                  -------       -------        -------
 Gross profit. . . . . . . .       17,414        85,879        108,886 
 Selling, general and 
    administrative expenses        12,226        68,819         90,128 
 Depreciation and amortization      1,979        10,234         12,111 
 Store closing and other costs        --           --           11,016 
                                   ------        ------        --------
 Operating income (loss) . .        3,209         6,826         (4,369)
 Net interest expense (1). .        2,402        13,719         22,513 
                                   ------        ------        --------
 Income (loss) from operations before
    reorganization items, income taxes, 
    extraordinary items and change in 
    accounting principle              807        (6,893)       (26,882)

 Reorganization items. . . .           --          (219)          --  

 Extraordinary items - 
    gain on debt discharge             --        70,166           --  
 
 Cumulative effect of change in accounting
    principle. . . . . . . .           --        (2,000)          --  
                                    -----       -------        --------
 Net income (loss) . . . . .         $807       $61,054        $(26,882)
                                    =====       =======        ========
 Income per common share (2), (3)    $0.26         --             --

                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                                     1994        1993           1992
                                              (In Thousands)
Statement of Operations Data
 Sales . . . . . . . . . . .     $1,065,165   $1,086,125     $1,071,038
 Cost of sales . . . . . . .        845,597      856,156        848,441
                                 ----------   ----------     ----------
 Gross profit. . . . . . . .        219,568      229,969        222,597
 Selling, general and 
    administrative expenses         176,945      175,177        164,897
 Depreciation and amortization       24,112       23,455         20,132
 Store closing and other costs       11,016         --             -- 
                                 ----------   ----------     ----------
 Operating income. . . . . .          7,495       31,337         37,568  

 Net interest expense (1). .         45,390       43,257         44,869  
                                 ----------   ----------     ----------
 Net loss. . . . . . . . . .       $(37,895)    $(11,920)       $(7,301)
                                 ==========   ==========     ==========
                                    7
Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,     January 1,    January 30,
                                 1995            1995           1994
                               (4 weeks)      (22 weeks)     (26 weeks)
                                     (Dollar Amounts In Thousands)
Balance Sheet Data
 Total assets. . . . . . . .   $381,751        $381,492       $408,154 
 Inventories . . . . . . . .     78,756          87,115         85,952 
 Property and equipment, net    143,813         144,979        165,518 
 Working capital . . . . . .      7,207           7,045         (367)
 Total long-term debt and capital 
  leases (including current 
  maturities)(5)                240,286         242,786        353,723 
 Preferred stock . . . . . .        --             --            4,650 
 Total stockholders' 
  equity (deficit)               47,302          46,495        (50,041)

Other Data
 Operating cash flow (EBITDA) (6) 5,188          17,060         18,758 
 Capital expenditures (7). .        162             665         10,606 
 
Store Data
 Food stores open at end of
   period (8). . . . . . . .         99              99            101 
 Avg. selling sq. ft. during period (in
   thousands) (9). . . . . .      2,903           2,903          3,096 
 Avg. sales per store week (10)    $218            $196           $190 

                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                                     1994        1993           1992
Balance Sheet Data                    (Dollar Amounts in Thousands)
 Total assets. . . . . . . .   $389,893        $423,208       $399,419 
 Inventories . . . . . . . .     76,094          95,385         91,226 
 Property and equipment, net    160,491         164,937        145,372 
 Working capital . . . . . .    (12,747)         19,137         26,031 
 Total long-term debt and capital 
   leases (including current 
   maturities) (5)              360,121         351,890        316,220 
 Preferred stock . . . . . .      4,650           4,650          4,650 
 Total stockholders' deficit    (61,054)        (23,159)       (11,239)

Other Data
 Operating cash flow 
    (EBITDA) (6)                $42,623         $54,792        $57,700 
 Capital expenditures (7). .     15,471          37,703         15,385 
 
Store Data
 Food stores open at end of 
   period (8). . . . . . . .        100             115            111 
 Avg. selling sq. ft. during period (in
   thousands) (9). . . . . .      3,084           3,100          2,970 
 Avg. sales per store week (10)    $196            $183           $181 
                                    8
Notes to Summary Financial Data
                  (Dollar Amounts In Thousands)

(1)  Includes amortization of deferred financing costs of $182, $1,152 and
     $1,549 for the four weeks ended January 29, 1995, 22 weeks ended January
     1, 1995, and 26 weeks ended January 30, 1994, respectively; and $2,950,
     $2,850, and $2,932 for the 1994, 1993 and 1992 fiscal years,
     respectively.

(2)  Based on 3,100,00 shares (the weighted average number of shares of
     Common Stock outstanding).

(3)  Net income per share of Common Stock is not meaningful prior to January
     1, 1995 due to the significant change in the capital structure in
     connection with the Restructuring. 

(4)  The Company's fiscal year is based on a 52/53 week fiscal year ending on
     the Sunday nearest to July 31.  Therefore, the 1992 fiscal year included
     53 weeks of operations.  The 1994 and 1993 fiscal years each had 52
     weeks of operations.

(5)  Total long-term debt includes long-term debt, current maturities of
     long-term debt, capital lease obligations and certain other debt.

(6)  Represents earnings before net interest expense (which includes
     amortization of deferred financing costs), provision for income taxes,
     depreciation and amortization, store closing and other costs,
     reorganization items, extraordinary items, and cumulative effect of
     change in accounting principle.  Operating cash flow (EBITDA) is
     presented here as a measure of the Company's debt service ability, and
     should not be construed as an alternative to operating income (as
     determined in accordance with generally accepted accounting principles)
     or to cash flows from operating activities (as determined on the
     Statements of Cash Flows in the Company's financial statements).

(7)  Capital expenditures consist of cash expenditures, additions to capital
     leases and, for the 1994, 1993 and 1992 fiscal years, amounts funded
     under the capital improvements revolving credit facility under the Old
     Credit Agreement (as defined in "The Restructuring").

(8)  Data relating to the number of stores is expressed in actual numbers.

(9)  Represents the average of the selling square footage of the Company's
     stores on the first and last day of the respective periods.  Selling
     square footage includes adjacent liquor stores, where applicable, but
     does not include backroom and receiving areas.

(10) Represents, for each of the respective periods, sales for such period
     divided by the sum of the number of weeks for which each of the
     Company's stores was open during such period.
                                    9
INVESTMENT CONSIDERATIONS

     An investment in the shares of Common Stock offered hereby involves a
high degree of risk.  Prospective investors should carefully consider the
following matters, in addition to the other information set forth in this
Prospectus, in connection with an investment in the Common Stock offered
hereby.

History of Net Losses; Reorganization 

     The Company experienced net losses for each of the last five fiscal
years.  The Company's statements of operations reflect a net loss of
approximately $37.9 million for the 1994 fiscal year, $11.9 million for the
1993 fiscal year, $7.3 million for the 1992 fiscal year, $39.0 million for
the 1991 fiscal year, and $25.6 million for the 1990 fiscal year.  See
"Selected Financial Information" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

     On November 9, 1994, the Company sought relief pursuant to a
"prepackaged" plan of reorganization under Chapter 11 of the U.S. Bankruptcy
Code to reduce its debt service requirements and overall level of
indebtedness, to realign its capital structure and to provide the Company
with greater liquidity.  See "The Restructuring."  There can be no assurance
that the Company will operate profitably in its reorganized form. 

Tax Considerations

     As a result of the Restructuring (as defined in "The Restructuring"), an
ownership change within the meaning of Code section 382(g) occurred with
respect to the Company on December 29, 1994 (the "Change Date"). 
Accordingly, the Company's ability to carry forward all of the net operating
losses (and "recognized built-in losses," if any), to taxable years beginning
after the Change Date within the meaning of Code section 382(j) (and a
portion of the taxable year which includes the Change Date) will become
subject to an annual limitation under Code sections 382 and 383.

     The Company intends to determine the annual limitation under the
provisions of Code section 382(l)(6), which deals with a loss corporation
that exchanges stock for debt and undergoes an ownership change in a
proceeding under Chapter 11.  The amount of income that may be offset by the
net operating loss carryovers should generally be limited to an amount
(subject to a proration rule for the taxable year that includes the Effective
Date) equal to the product of (i) the value of the stock of the Company,
determined immediately prior to the Restructuring but increased to take into
account the effect on such value of the issuance of Common Stock to the
holders of Old Subordinated Debentures (as defined in "The Restructuring")
and (ii) the long-term tax-exempt rate, within the meaning of Code section
382(f).  This annual limitation will be increased by "recognized built-in
gain," if any.  The 
                                    10
Annual limitation on the Company's ability to carry forward its net operating
losses (and "reorganized built-in losses," if any) may be substantial.

Highly Leveraged Position

     Even after the Restructuring, the Company remains highly leveraged.  As
of January 29, 1995, the Company had total long-term indebtedness (including
current maturities) of $240.2 million, including $144.1 million of aggregate
principal amount of New Senior Floating Rate Notes and New Senior Fixed Rate
Notes (as defined in "The Restructuring") (collectively, the "New Notes"),
which mature on February 1, 2003, $47.0 million of term loan and revolving
loan indebtedness under the New Credit Agreement (as defined in "The
Restructuring"), $33.6 million of indebtedness under mortgages maturing
between 1999 and 2003, and $15.6 million of capital lease and other
obligations.  Under the indentures governing the New Notes, the Company has
the option of paying interest in kind on the New Senior Floating Rate Notes
through August 1, 1995, and on the New Senior Fixed Rate Notes through
February 1, 1996.  The Company expects to exercise the payment-in-kind
option, which will increase the principal amount of the New Notes outstanding
by $16.9 million through February 1, 1996 (assuming a 9.0% annual interest
rate on the New Senior Floating Rate Notes and 11.5% on the New Senior Fixed
Rate Notes).  If future cash provided by operations is less than currently
expected, the Company may experience difficulty in meeting interest and
principal payments due on outstanding indebtedness and other obligations. 
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

     The degree to which the Company is leveraged could have important
consequences to holders of Common Stock of the Company, including the
following: (i) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired; (ii) a substantial
portion of the Company's cash flow from operations must be dedicated to the
payment of the principal of and interest on its existing indebtedness, which
materially decreases the funds available to the Company to finance its
working capital, capital expenditures and business operations generally;
(iii) certain of the Company's borrowings are at variable rates of interest,
which, in the absence of interest rate hedging arrangements, make the Company
vulnerable to increases in interest rates; (iv) the Company's indentures and
New Credit Agreement impose significant financial and operating restrictions
which, if violated, could permit the Company's creditors to accelerate
payments thereunder (see "Investment Considerations -- Restrictions Imposed
Under Indebtedness"); (v) the Company is more highly leveraged than its
principal competitors, which may place the Company at a competitive
disadvantage (see "Competition" below); and (vi) the Company's high degree of
leverage may make it vulnerable to economic downturns and may limit its
ability to withstand competitive pressures and adverse changes in government
regulation and to capitalize on significant business opportunities.
                                    11
Restrictions Imposed Under Indebtedness

     The New Credit Agreement (as defined in "The Restructuring") and the
indentures governing the New Notes contain numerous limitations, including
restrictions on the ability of the Company to (i) incur additional
indebtedness, (ii) place liens on assets, (iii) sell assets, (iv) engage in
mergers or consolidations, (v) pay dividends and (vi) engage in certain
transactions with affiliates.  The New Credit Agreement also requires the
Company to maintain compliance with certain financial covenants.  These
limitations and requirements may restrict the ability of the Company to
obtain additional financing for working capital, capital expenditures,
acquisitions, general corporate purposes or other purposes.

     The ability of the Company to comply with the covenants in its debt
agreements will be dependent on its future financial performance, which will
be subject to prevailing economic conditions and other factors, including
factors beyond the control of the Company.  Failure to comply with any of
these covenants could result in a default or event of default under the
relevant debt agreements, permitting lenders to accelerate the maturity of
the indebtedness under such agreements and to foreclose upon any collateral
securing such indebtedness.  Any such failure to comply or any default, event
of default or acceleration under any particular indebtedness could also
result in the acceleration of other debt of the Company under agreements that
contain cross-default or cross-acceleration provisions.

Fresh-Start Reporting Presentation

     The Company's Prepackaged Plan was confirmed by the U.S. Bankruptcy
Court on December 12, 1994, and consummated on December 29, 1994.  In
accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code," the Company adopted "fresh-start
reporting."  Accordingly, financial statements for periods subsequent to
December 29, 1994 have been prepared on a basis not comparable to prior
periods.  The application and impact of "fresh-start reporting" is set forth
in greater detail in the notes to the Company's financial statements, which
are included in this Prospectus.  See "Capitalization," "Selected Financial
Data," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the Company's financial statements, including the
notes thereto.

Competition

     The food retailing business is highly competitive.  The Company competes
with several national, regional and local supermarket chains, particularly
Publix, Winn-Dixie, Albertson's and Food Lion.  The Company is also in
competition with convenience stores, stores owned and operated or otherwise
affiliated with large food wholesalers, unaffiliated independent food stores,
merchandise clubs, discount drugstore chains and discount general merchandise
chains and supercenters.  
                                    12
The Company's principal competitors have greater financial resources
than the Company and could use those resources to take steps which could
adversely affect the Company's competitive position and financial
performance.  For example, operating results generally and sales growth in
particular were adversely affected by approximately 84 competitive
supermarket openings during the 1994, 1993, 1992 and 1991 fiscal years by
both established competitors and new entrants in the Company's market area. 
In fiscal 1995, the Company expects approximately 12 such competitive store
openings, and it is anticipated that these competitive store openings will
continue in the future.

     Another example of the highly competitive nature of the food retailing
business is the practice of competitors to reposition their pricing
structure.  Over the past several years, each of the Company's major
competitors has changed its pricing practices in a manner that has adversely
affected general retail pricing in the market.  Winn-Dixie discontinued
double coupons and introduced its every day low price program in the spring
of 1991.  In the spring of 1993, Publix began a campaign focused on
"surprisingly low prices," and Food Lion began a double coupon program which
has since been discontinued.  The Company has had to deal with each of these
changes in a manner that has, in some instances, adversely affected its
operating results and may continue to do so in the future.

     In addition, the Company's ability to compete may be adversely affected
by its high leverage and the limitations imposed by its debt agreements.  

Anti-Takeover Provisions

     The Company has adopted a preferred stock purchase rights plan (the
"Rights Plan").  See "Description of Capital Stock -- Certain Anti-Takeover
and Charter Provisions."  The Rights Plan is designed to assure that all
stockholders receive fair and equal treatment in the event of any proposed
takeover of the Company.  The Rights Plan could discourage certain potential
acquisition proposals and could delay or prevent a change in control of the
Company in certain circumstances.  The Rights Plan could diminish the
opportunities for a stockholder to participate in tender offers, including
tender offers at a price above the then current market value of the Common
Stock, or proxy contests, and may also inhibit fluctuations in the market
price of the Common Stock that could result from takeover attempts.  In
addition, the Board of Directors, without further stockholder approval, may
issue Preferred Stock with such terms as the Board of Directors may
determine, and which could have the effect of delaying or preventing a change
in control of the Company.  The issuance of such Preferred Stock could also
adversely affect the voting power of the holders of Common Stock.  See
"Description of Capital Stock -- Preferred Stock."  The Company is also
afforded the protections of Section 203 of the Delaware General Corporation
Law, which could delay or prevent a change in control of the Company or could
impede a merger, consolidation, takeover or other business combination
involving the Company or discourage a potential acquiror from making a tender
offer or otherwise attempting to obtain control of the Company.  See
"Description of Capital Stock -- Certain Anti-takeover and Charter
Provisions."
                                 13
Restrictions on Dividends

     The Company presently does not intend to pay dividends or make other
distributions with respect to the Common Stock for the foreseeable future. 
In addition, the New Credit Agreement and the indentures governing the New
Notes contain limitations on the ability of the Company to pay dividends. 
See "Market Price and Dividend Policy" and "Description of Capital Stock."

Limited Public Market

     On March 2, 1995 the Common Stock was listed for trading on the Nasdaq
Small Cap Market under the symbol "KASH."  Prior to such date, there was no
established public trading market for its Common Stock.  There is no
assurance that an active trading market in the Common Stock will continue. 
Accordingly, no assurance can be given as to the price at which any holder
may sell his Common Stock or whether a liquid market in the Common Stock will
exist at the time of any given sale.

                           THE COMPANY

     The Company is a Delaware corporation, formed as a vehicle for the
October 1988 leveraged acquisition of 121 food and 25 liquor stores in two
separate transactions from Lucky Stores, Inc., a subsidiary of American
Stores Company, and Superx Drugs Corporation, a subsidiary of The Kroger Co. 
The Company's original equity capitalization was provided by The Fulcrum III
Limited Partnership and The Second Fulcrum III Limited Partnership
(collectively, the "Fulcrum Partnerships") (the Fulcrum Partnerships are
investment funds managed by Gibbons, Goodwin, van Amerongen, L.P. ("GGvA")
(formerly known as Gibbons, Green, van Amerongen, L.P.)), certain affiliates
of Merrill Lynch & Co., Inc. and members of management.  In November 1991,
Green Equity Investors, L.P. ("GEI"), an investment fund managed by Leonard
Green & Partners, L.P., invested $27.7 million in cash in exchange for an
equity interest in the Company.  At the same time, the Fulcrum Partnerships
invested an additional $2.3 million and exchanged certain preferred stock of
the Company for common stock of the Company.  After the November 1991 equity
infusion, and until the Restructuring was consummated, GEI owned
approximately 60.9%, and the Fulcrum III Partnerships owned approximately
33.8%, of the outstanding Common Stock of the Company.

     The principal executive offices of the Company are located at 6422
Harney Road, Tampa, Florida 33610, and its telephone number is (813)
621-0200.  The Company's symbol for trading on the Nasdaq Small Cap Market is
"KASH."

                                    14
THE RESTRUCTURING

     On November 9, 1994 (the "Petition Date") the Company filed with the
U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court")
a voluntary petition for reorganization under Chapter 11 of the Bankruptcy
Code and a "prepackaged" plan of reorganization (the "Prepackaged Plan"). 
During the pendency of the bankruptcy case, the Company, with the approval of
the Bankruptcy Court, operated its business in the ordinary course, and paid
all pre-petition and post-petition claims of its general unsecured creditors,
trade creditors and employees in full.  The Prepackaged Plan was confirmed by
the Bankruptcy Court on December 12, 1994, and the Company emerged from
bankruptcy on December 29, 1994 (the "Effective Date").  

     Pursuant to the Prepackaged Plan, on the Effective Date:

     (1)  Each $1,000 principal amount of the Company's $85.0 million Senior
Floating Rate Notes due August 2, 1996 (the "Old Senior Floating Rate Notes")
was exchanged for (a) new Senior Floating Rate Notes due February 1, 2003
(the "New Senior Floating Rate Notes") in an original principal amount equal
to $1,000 plus 100% of the accrued interest under the Old Senior Floating
Rate Notes from and including February 3, 1994, through but not including the
Petition Date, or, at such holder's election, (b) new 11.5% Senior Fixed Rate
Notes due February 1, 2003 (the "New Senior Fixed Rate Notes") in the same
original principal amount, or, at such holder's election, (c) an amount of
New Senior Floating Rate Notes and an amount of New Senior Fixed Rate Notes
equal, in the aggregate, to 100% of such claim; 

     (2)  Each $1,000 principal amount of the Company's $50.0 million 12 3/8%
Senior Fixed Rate Notes due February 1, 1999 (the "Old Senior Fixed Rate
Notes") was exchanged for (a) New Senior Floating Rate Notes in an original
principal amount equal to $1,000 plus 100% of the accrued interest under the
Old Senior Fixed Rate Notes from and including February 2, 1994, through but
not including the Petition Date, or, at such holder's election, (b) New
Senior Fixed Rate Notes in the same original principal amount, or, at such
holder's election, (c) an amount of New Senior Floating Rate Notes and an
amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of
such claim;

     (3)  the Company's $105.0 million 14% Subordinated Debentures due
February 1, 2001 (the "Old Subordinated Debentures") were exchanged for the
aggregate amount of 2,635,000 shares of newly-issued Common Stock,
representing 85 percent of the Common Stock outstanding on the Effective
Date;

     (4)  GEI invested $10.0 million cash in exchange for 465,000 shares of
newly-issued Common Stock, representing 15 percent of the Common Stock
outstanding on the Effective Date; and

     (5)  all of the existing preferred stock, common stock, and options and
warrants to purchase common stock of the Company were extinguished.

                                    15
Pursuant to the Prepackaged Plan, the Company is required within four
months after the Effective Date, or such longer time as may be required to
prepare the necessary financial statements, to take the necessary steps to
register the newly-issued shares of Common Stock in a "shelf registration,"
to be effective for a period of three years, pursuant to the appropriate
requirements of the Securities and Exchange Commission.  The Registration
Statement, of which this Prospectus is a part, has been filed to satisfy that
requirement.

     Also pursuant to the Prepackaged Plan, the Company refinanced its
principal bank indebtedness on the Effective Date by entering into a new
Credit Agreement with The CIT Group/Business Credit, Inc., as administrative
agent for itself and certain other lenders (the "New Credit Agreement").  The
New Credit Agreement provides the Company with a 3-year $35.0 million term
loan facility and a 3-year $50.0 million revolving credit facility, and is
secured by liens upon substantially all of the Company's real and personal
property.  As a result of such refinancing, the obligations of the Company
under the Credit Agreement dated October 12, 1988, as restated on September
14, 1989, and thereafter amended, with Bank of America National Trust and
Savings Association (as successor by merger to Security Pacific National
Bank), as administrative agent, and certain other senior lenders (the "Old
Credit Agreement"), were satisfied, and the Old Credit Agreement was
terminated.  See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Financial Condition."

                MARKET PRICE AND DIVIDEND POLICY

     On March 2, 1995 the Common Stock was listed for trading on the Nasdaq
Small Cap Market under the symbol "KASH."  Prior to such date, there was no
established public trading market for its Common Stock.  For the period of
March 2, 1995 through April 26, 1995, the range of high and low bids for a
single share of Common Stock was $20 - $18.25, as quoted in the Nasdaq Small
Cap Market.  As of April 26, 1995, the average of the low bid and high ask
prices as quoted on the Nasdaq Small Cap Market was $19.25.  Such
over-the-market quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not necessarily represent actual
transactions.

     As of April 26, 1995, there were approximately 21 holders of record of
shares of Common Stock.

     The Company has not in the past paid cash dividends to its stockholders
and does not intend to pay any cash dividends in the foreseeable future.  The
Company's ability to declare cash dividends on its Common Stock is materially
limited by prohibitions or restrictions in the New Credit Agreement and the
indentures governing the New Senior Fixed Rate Notes and the New Senior
Floating Rate Notes.  See "Description of Capital Stock."

                                    16
CAPITALIZATION

     The following table sets forth the unaudited capitalization of the
Company as of January 29, 1995 on an actual basis after giving effect to the
transactions in connection with the Restructuring and the application of
fresh-start reporting.  This table should be read in conjunction with the
detailed information and financial statements and related notes appearing
elsewhere in this Prospectus.  
                                       As of January 29, 1995
                                       (dollars in thousands)

Current portion of long-term debt (1). . . .     $12,764    
                                                 =======
Long-term debt:
 Term Loan Facility. . . . . . . . . . . . .     $35,000    
 Revolving Loan Facility (2)   . . . . . . .      12,000    
 Mortgages payable, bearing interest
  at rates from 7.50% to 10.35%,
  in equal monthly installments of $355,
  with maturities from 1999 through 2003 . .      33,555    
 Capital lease obligations . . . . . . . . .       8,410    
 Senior Floating Rate Notes due 2003 . . . .      22,953    
 11.5% Senior Fixed Rate Notes Due 2003. . .     121,162    
 Other . . . . . . . . . . . . . . . . . . .       7,206    
  Less current portion . . . . . . . . . . .    (12,764)
                                                --------    
  Total long-term debt . . . . . . . . . . .    $227,522
                                                --------    
Stockholders' equity:
 Common Stock of $.01 par value:
  authorized 5,500,000 shares;
  outstanding 3,100,000 shares . . . . . . .          31    
 Capital in excess of par value. . . . . . .      46,464    
 Retained Earnings (3) . . . . . . . . . . .         807    
                                                --------    
  Total stockholders' equity . . . . . . . .      47,302    
                                                --------    
  Total capitalization . . . . . . . . . . .    $274,824    
                                                ========    
_______________

(1)  Includes term loan facility under the New Credit Agreement, $7.0
     million; mortgages payable, $.9 million; and capital lease obligations
     and other, $4.9 million.

(2)  The New Credit Agreement has a revolving credit facility with an
     individual sublimit of $25.0 million for letters of credit (of which
     $17.3 million were outstanding at January 29, 1995), with a maximum of
     the lesser of (i) 85% of eligible receivables and 80% of eligible
     inventories (as defined in the New Credit Agreement), or (ii) $50.0
     million permitted to be outstanding under the revolving credit facility
     at any one time.  

(3)  Reflects the application of fresh-start reporting.

                                    17
SELECTED FINANCIAL INFORMATION

     The following table presents selected financial information of the
Company as of and for each of the fiscal years ended on the Sunday nearest to
July 31, 1994, 1993, 1992, 1991 and 1990 and as of and for the periods ended
January 29, 1995, January 1, 1995 and January 30, 1994, and should be read in
conjunction with the financial statements and related notes thereto appearing
elsewhere in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."  

     The financial statements as of and for the periods ended January 29,
1995, January 1, 1995 and January 30, 1994 from which the selected financial
information has been derived, have not been audited by independent
accountants in accordance with generally accepted auditing standards, but, in
the opinion of management, the financial statements as of and for the period
ended January 30, 1994 include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the Company's financial
position and results of operations.  As discussed herein, the Company's
Prepackaged Plan was consummated on December 29, 1994 (the "Effective Date"). 
The financial statements as of and for the periods ended January 29, 1995 and
January 1, 1995 reflect the Company's emergence from Chapter 11 and were
prepared utilizing the principles of fresh-start reporting contained in the
American Institute of Certified Public Accountants' Statement of Position
90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code."  Operations during the period from the Effective Date through January
1, 1995 had no significant impact on the emergence transactions and as a
result have not been separately identified.  As a result of the
implementation of fresh-start accounting, certain of the selected financial
data as of and for the periods ended January 29, 1995 and January 1, 1995 is
not comparable to the selected financial data of prior periods due to the
change in reporting entity resulting from the application of fresh-start
accounting.  Therefore, selected financial data for the "Reorganized Company"
has been separately identified from that of the "Predecessor Company." 
Results for the periods ended January 29, 1995 or January 1, 1995 are not
necessarily indicative of the results for the full year.

     The selected store data have been derived from the Company's management
reporting records.

                                    18
Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,      January 1,   January 30,
                                 1995            1995           1994
                               (4 weeks)       (22 weeks)    (26 weeks)
                              (In Thousands, Except Per Share Amounts)
Statement of Operations Data
 Sales . . . . . . . . . . .      $86,354      $426,681       $534,801
 Cost of sales . . . . . . .       68,940       340,802        425,915 
                                  -------      --------        -------
 Gross profit. . . . . . . .       17,414        85,879        108,886 
 Selling, general and 
    administrative expenses        12,226        68,819         90,128 
 Depreciation and amortization      1,979        10,234         12,111 
 Store closing and other costs        --           --           11,016 
                                  -------      --------        -------
 Operating income (loss) . .        3,209         6,826         (4,369)
 Net interest expense (1). .        2,402        13,719         22,513 
                                  -------      --------        -------
 Income (loss) from operations before
    reorganization items, income taxes, 
    extraordinary items and change in 
    accounting principle              807        (6,893)       (26,882)
 Reorganization items. . . .           --          (219)          --  
 Extraordinary items - 
    gain on debt discharge             --        70,166           --  
 Cumulative effect of change in accounting
    principle. . . . . . . .           --        (2,000)          --  
                                  -------      --------        -------
 Net income (loss) . . . . .         $807       $61,054        $(26,882)
                                  =======      ========        ========
 Income per common share (2), (3)    $0.26         --             --
                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                            1994      1993       1992      1991       1990
Statement of Operations                     (In Thousands)
 Data Sales . . . . . . $1,065,165 $1,086,125 $1,071,038 $1,059,636 $1,039,209 
 Cost of sales . . . . . . 845,597    856,156    848,441    842,687    831,644 
                        ---------- ---------- ---------- ---------- ----------
 Gross profit. . . . . . . 219,568    229,969    222,597    216,949    207,565 
 Selling, general and 
  administrative expenses  176,945    175,177    164,897    159,359    151,970 
 Depreciation and 
   amortization             24,112     23,455     20,132     54,435     31,416 
 Store closing and other 
   costs                    11,016       --         --         --         --  
                        ---------- ---------- ---------- ---------- ----------
 Operating income. . . . .   7,495     31,337     37,568      3,155     24,179 
 Net interest expense (1).  45,390     43,257     44,869     45,610     50,692 
                        ---------- ---------- ---------- ---------- ----------
 Loss from operations before
   extraordinary items     (37,895)   (11,920)    (7,301)   (42,455)   (26,513)
                        ---------- ---------- ---------- ---------- ----------
 Extraordinary gain              0          0          0      3,427        943
 Net loss. . . . . . . . .$(37,895)  $(11,920)   $(7,301)  $(39,028)  $(25,570)
                        ========== ========== ========== ========== ==========
                                    19
Reorganized                 Predecessor
                                Company                       Company
                                             Period Ended
                               January 29,     January 1,    January 30,
                                 1995            1995           1994
                               (4 weeks)      (22 weeks)     (26 weeks)
                                     (Dollar Amounts In Thousands)
Balance Sheet Data
 Total assets. . . . . . . .   $381,751        $381,492       $408,154 
 Inventories . . . . . . . .     78,756          87,115         85,952 
 Property and equipment, net    143,813         144,979        165,518 
 Working capital . . . . . .      7,207           7,045         (367)
 Total long-term debt and capital 
  leases (including current 
  maturities)(5)                240,286         242,786        353,723 
 Preferred stock . . . . . .        --             --            4,650 
 Total stockholders' 
  equity (deficit)               47,302          46,495        (50,041)
Other Data
 Operating cash flow (EBITDA) (6) 5,188          17,060         18,758 
 Capital expenditures (7). .        162             665         10,606 
Store Data
 Food stores open at end of
   period (8). . . . . . . .         99              99            101 
 Avg. selling sq. ft. during period (in
   thousands) (9). . . . . .      2,903           2,903          3,096 
 Avg. sales per store week (10)    $218            $196           $190 

                                               Predecessor Company
                               Fiscal Year Ended Sunday Nearest July 31, (4)
                                  1994    1993     1992     1991     1990
                                          (Dollar Amounts in Thousands)
Balance Sheet Data
 Total assets. . . . . . .     $389,893 $423,208 $399,419 $401,860 $455,204 
 Inventories . . . . . . .       76,094   95,385   91,226   92,451   92,474 
 Property and equipment, net .  160,491  164,937  145,372  146,513  148,100 
 Working capital . . . . . . .  (12,747)  19,137   26,031   15,684   11,959 
 Total long-term debt and 
   capital leases (including 
   current maturities)(5)       360,121  351,890  316,220  342,826  337,861 
 Preferred stock . . . . . . .    4,650    4,650    4,650   45,991   45,991 
 Total stockholders' deficit    (61,054) (23,159) (11,239) (72,640) (33,609)

Other Data
 Operating cash flow(EBITDA)(6) $42,623  $54,792  $57,700  $57,590  $55,595 
 Capital expenditures (7). . .   15,471   37,703   15,385   15,672   16,079 

Store Data
 Food stores open at end of 
   period (8). . . . . . . . .      100      115      111      113      112 
 Avg. selling sq. ft. during 
   period (in thousands) (9) .    3,084    3,100    2,970    2,949    2,918 
 Avg. sales per store week(10)     $196     $183     $181     $180     $175 
                                    20
Notes to Selected Financial Information
                  (Dollar Amounts in Thousands)

(1)  Includes amortization of deferred financing costs of $182, $1,152 and
     $1,549 for the four weeks ended January 29, 1995, 22 weeks ended January
     1, 1995, and 26 weeks ended January 30, 1994, respectively; and $2,950,
     $2,850, $2,932, $3,017 and $6,346 for the 1994, 1993, 1992, 1991 and 1990
     fiscal years, respectively.  

(2)  Based on 3,100,00 shares (the weighted average number of shares of Common
     Stock outstanding).

(3)  Net income per share of Common Stock is not meaningful prior to January 1,
     1995 due to the significant change in the capital structure in connection
     with the Restructuring.

(4)  The Company's fiscal year is based on a 52/53 week fiscal year ending on
     the Sunday nearest to July 31.  Therefore, the 1992 fiscal year included
     53 weeks of operations.  The 1994, 1993, 1991 and 1990 fiscal years each
     had 52 weeks of operations.

(5)  Total long-term debt includes long-term debt, current maturities of
     long-term debt, capital lease obligations and certain other debt.

(6)  Represents earnings before net interest expense (which includes
     amortization of deferred financing costs), provision for income taxes,
     depreciation and amortization, store closing and other costs,
     reorganization items, extraordinary items, and cumulative effect of change
     in accounting principle.  Operating cash flow (EBITDA) is presented here
     as a measure of the Company's debt service ability, and should not be
     construed as an alternative to operating income (as determined in
     accordance with generally accepted accounting principles) or to cash flows
     from operating activities (as determined on the Statements of Cash Flows
     in the Company's financial statements).  

(7)  Capital expenditures consist of cash expenditures, additions to capital
     leases and, for the 1994, 1993 and 1992 fiscal years, amounts funded under
     the capital improvements revolving credit facility under the Old Credit
     Agreement (as defined in "The Restructuring").

(8)  Data relating to the number of stores is expressed in actual numbers.

(9)  Represents the average of the selling square footage of the Company's
     stores on the first and last day of the respective periods.  Selling
     square footage includes adjacent liquor stores where applicable but does
     not include backroom and receiving areas.

(10) Represents, for each of the respective periods, sales for such period
     divided by the sum of the number of weeks for which each of the Company's
     stores was open during such period.

                                    21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     This analysis should be read in conjunction with the financial
statements and related notes thereto included elsewhere in this document. 
The Company follows a 52/53 week fiscal year ending on the Sunday nearest to
July 31.  The fiscal year ended August 2, 1992 included 53 weeks of
operations.  Historical results of operations are given for the Company's
fiscal years ended July 31, 1994, August 1, 1993 and August 2, 1992
(respectively, the "1994, 1993 and 1992 Fiscal Years"), the four weeks ended
January 29, 1995 and the 22 weeks ended January 1, 1995 (combined, the "1995
Six-Month Period"), and the 26 weeks ended January 30, 1994 (the "1994
Six-Month Period").  On November 9, 1994, the Company filed a voluntary
petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code; on
December 12, 1994, the Bankruptcy Court confirmed the Company's "prepackaged"
plan of reorganization.  The Prepackaged Plan became effective on December
29, 1994, when the Company emerged from bankruptcy.  The financial statements
as of and for the periods ended January 29, 1995 and January 1, 1995 reflect
the Company's emergence from Chapter 11 proceedings and were prepared
utilizing the principles of fresh-start reporting contained in the American
Institute of Certified Public Accountants' Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code"
(the "SOP 90-7").  Operations during the three-day period from the Effective
Date through January 1, 1995 had no significant impact on the emergence
transactions and as a result have not been separately identified.  

     The Company acquired substantially all of its assets in October 1988. 
The acquisitions were accounted for as purchases and the assets were recorded
at fair market value based on independent appraisals, resulting in an
increase in the carrying value of the assets of approximately $215.4 million. 
The write-up was allocated to property and equipment ($22.6 million),
favorable lease interests ($26.2 million), depreciable intangible assets
($53.6 million), and excess of cost over net assets acquired ($113.0
million).  As a result, the Company has since incurred a significant amount
of noncash charges.  In addition, during the first quarter of 1994, the
Company recorded a non-recurring charge of $11.0 million, which reflects
expenses associated with a program of closing 12 underperforming stores,
reducing administrative staff, and expensing costs associated with
unsuccessful financing activities.  The financial statements as of and for
the periods ending January 29, 1995 and January 1, 1995 are not comparable to
the financial statements of prior periods due to the change in reporting
entity resulting from the application of fresh-start accounting.  For the
reasons outlined above, the Company believes that the most relevant measure
of its operating results is earnings before interest, taxes, depreciation and
amortization, store closing and other costs, reorganization items,
extraordinary items, and the cumulative effect of change in accounting
principle (operating cash flow):

                                    22
Four   Twenty-two
                   Weeks    Weeks  Twenty-six
                   Ended    Ended  Weeks Ended  Sunday Nearest July 31 
                 January  January  January 30,     Fiscal Year Ended
                 29, 1995 1, 1995     1994     1994  1993    1992    1991 
                                   (In Thousands)

Operating income
  (loss)         $3,209  $6,826   $(4,369)  $ 7,495 $31,337 $37,568 $3,155
Depreciation and 
  amortization    1,979  10,234    12,111    24,112  23,455  20,132 54,435
Store closing and 
  other costs       --    --       11,016    11,016    --      --     --
                 ------  ------   -------    ------  ------  ------ ------
Operating cash 
  flow           $5,188  $17,060  $18,758   $42,623 $54,792 $57,700 $57,590
                 ======  =======  =======   ======= ======= ======= =======

              Results of Operations of the Company

     The discussion below compares the results of operations for the 1995
Six-Month Period with the 1994 Six-Month Period.  Except as specifically
acknowledged below, management believes that the impact of the Restructuring
and the implementation of fresh-start reporting did not significantly affect
the results of operations for the 1995 Six-Month Period, and that the
operating results of the individual four-week period and 22-week period ended
January 29, 1995 and January 1, 1995, respectively, are indicative of the
results of operations for the 26-week period ended January 29, 1995.

     Operating cash flow for the 1995 Six-Month Period was $22.2 million
compared to $18.8 million for the 1994 Six-Month Period.  The increase in
operating cash flow was attributable to the factors indicated below.

 
     Sales                                      26 Weeks Ended
 
                                            January 29,  January 30,
                                               1995         1994

Sales (in millions). . . . . . . . . . . . . $513.0        $534.8
Change in same store sales . . . . . . . . . (0.22%)      (2.96%)
Average sales per store week (in thousands). $199          $190

     The Company closed 17 stores and opened two new stores over the last
year as part of an overall strategic consolidation of its store network.  The
Company was able to mitigate the sales impact of these store closings by
transferring a portion of the sales of the closed stores to operating stores;
therefore, there was not a substantial adverse impact on the Company's
operating cash flow.  In addition, sales have been positively impacted as a
result of a recently-initiated store remodelling program and aggressive sales
promotional activities.

                                    23
Gross Profit

     The Company had gross profit of $103.3 million, or 20.1% as a percentage
of sales, for the 1995 Six-Month Period; and gross profit of $108.9 million,
or 20.4% of sales, for the 1994 Six-Month Period.  The decrease in gross
margin as a percentage of sales was due to the effect of lower investment in
forward buy inventory and receipt of less promotional funds, offset by
improved perishable margins and increased efficiency in warehouse and
distribution operations.

  Selling, General and Administrative Expenses

     The Company had selling, general and administrative expenses of $81.0
million, or 15.8% as a percentage of sales, for the 1995 Six-Month Period and
$90.1 million, or 16.9% as a percentage of sales, for the 1994 Six-Month
Period.  The reduction of selling, general and administrative expenses was
due to lower store labor costs, reduced corporate overhead expenses and lower
advertising expenditures associated with a comprehensive operational
restructuring of the Company initiated during the year; and reduced operating
costs associated with stores that were closed during the last 12 months. 
These improvements were partially offset by an increase in workers'
compensation insurance reserves.

  Depreciation and Amortization

     The Company's depreciation and amortization expenses were $12.2 million
for the 1995 Six-Month Period compared to $12.1 million for the 1994
Six-Month Period.  The increase is primarily attributable to new stores and
major remodels, partially offset by the retirement of assets of stores
closed.

  Store Closing and Other Costs

     During the first quarter of fiscal 1994, the Company recorded a
non-recurring charge of $11.0 million.  This charge included $1.9 million of
costs associated with unsuccessful financing activities, $4.2 million of
favorable lease interests written off in connection with the closing of 12
underperforming stores, $4.0 million representing an adjustment to the
expected lease liability on closed stores, net of sublease income, and $.9
million of other store closing and related expenses.

  Interest Expense

     Interest expense for the 1994 Six-Month Period was primarily comprised
of interest under the Old Credit Agreement, the Old Senior Floating Rate
Notes, the Old Senior Fixed Rate Notes, the Old Subordinated Debentures, and
various mortgages and capital leases.  For the 

                                    24
1995 Six-Month Period, interest expense was reported on the Old Senior
Floating Rate Notes, the Old Senior Fixed Rate Notes, and the Old
Subordinated Debentures through the Petition Date; and interest expense was
reported on the New Senior Floating Rate Notes and the New Senior Fixed Rate
Notes from the Effective Date through January 29, 1995.  In accordance with
the Prepackaged Plan, no interest was due to the holders of the Old Senior
Floating Rate Notes, Old Senior Fixed Rate Notes, or Old Subordinated
Debentures for the period between the Petition Date and the Effective Date,
and therefore no interest expense allocable to such instruments was recorded
for this period.  As provided in the Prepackaged Plan, interest accrued from
and including February 2, 1994, in the case of the Old Senior Fixed Rate
Notes, and from and including February 3, 1994, in the case of the Old Senior
Floating Rate Notes, through the Petition Date, was paid by issuing
additional New Senior Floating Rate Notes and New Senior Fixed Rate Notes. 
Interest on the Old Subordinated Debentures accrued from and including
February 2, 1994 through the Petition Date was converted into stockholders'
equity.

  Reorganization Costs

      In accordance with SOP 90-7, income and costs directly related to the
reorganization have been segregated and are separately disclosed.  The major
components are restructuring costs, adjustments to fair value, professional
fees and other expenses.

  Gain on Debt Discharge

     The gain on debt discharge reflects the conversion of $105.0 million of
Old Subordinated Debentures, plus accrued interest from and including
February 2, 1994 through the Petition Date, into $39.5 million of
stockholders' equity, resulting in a $70.2 million gain.  The gain is
presented net of write-offs and costs associated with the repayment of
borrowings on the Effective Date.

                     1994, 1993 and 1992 Fiscal Years

      During the three year period ended July 31, 1994, the Company opened
seven new food stores, acquired one food store and three super warehouse food
stores (operating under the "Save 'n Pack" name), and completed major
expansion remodels on three existing food stores.  However, sales growth was
constrained primarily by the opening of 54 competitive supermarkets and the
closing of 24 of the Company's stores during this three year period.  The
Company experienced a net loss in each of the 1994, 1993 and 1992 Fiscal
Years primarily due to depreciation and amortization resulting from, and
interest costs associated with, financing the 1988 acquisition of the Kash n'
Karry and Superx stores.

     The following table sets forth certain items from the Company's
Statements of Operations as a percentage of sales for the periods indicated:
                                    25
52 Weeks     52 Weeks        52 Weeks
                               Ended        Ended           Ended
                          July 31, 1994 August 1, 1993  August 2, 1992

Sales                          100.00%     100.00%        100.00%
Gross profit                    20.6%       21.2%          20.8% 
Selling, general
   and administrative expenses  16.6%       16.1%          15.4% 
Depreciation and amortization    2.3%        2.2%           1.9% 
Interest expense                 4.3%        4.0%           4.2% 
Net loss                        -3.6%       -1.1%          -0.7% 
Operating cash flow (EBITDA)     4.0%        5.0%           5.4% 

     The Company generated operating cash flow of $42.6 million for the 52
weeks ended July 31, 1994, compared to operating cash flow of $54.8 million
for the 52 weeks ended August 1, 1993 and $57.7 million for the 53 weeks
ended August 2, 1992.

  Sales                       52 Weeks       52 Weeks       53 Weeks
                               Ended          Ended           Ended
                           July 31, 1994   August 1, 1993  August 2, 1992

Sales (in millions)             $1,065      $1,086          $1,071
Number of stores:
  Food stores opened or acquired     2           8               1
  Food stores closed                17           4               3
  Expansion remodels                 1           2              --
  Total food stores at period end  100          115             111
Average selling square feet during
    year (in thousands)          3,084        3,100           2,970
Average sales per store week 
    (in thousands)                $196         $183            $181

     The Company maintained a relatively stable level of sales during the
three year period. Sales were positively impacted by opening and acquiring
new stores, expanding and upgrading existing stores and increasing
promotional activities and advertising expenditures.  However, sales were
adversely affected by a weak economy, price deflation in certain commodities,
ongoing competitive new store and remodel activity, pricing and promotional
changes by certain competitors, and the closing of 24 of the Company's
stores.  Store closings adversely impacted sales, but did not cause a
substantial adverse impact on the Company's operating cash flow. 

                                    26
Gross Profit

     Gross profit as a percentage of sales was 20.6% in the 1994 Fiscal Year,
21.2% in the 1993 Fiscal Year, and 20.8% in the 1992 Fiscal Year.  The
decrease in gross profit as a percentage of sales from the 1993 Fiscal Year
to the 1994 Fiscal Year was attributable to the impact of eliminating
investment in forward buy inventory (estimated to be approximately 57 basis
points), receipt of fewer promotional funds, and generally lower retail
prices, partially offset by improved perishable margins and efficiencies in
product preparation and handling.  The improvement from the 1992 Fiscal Year
to the 1993 Fiscal Year was primarily attributable to the receipt of more
promotional funds and increased efficiencies in product acquisition and
warehousing and distribution operations, partially offset by low inflation
and the competitive factors mentioned above.

  Selling, General and Administrative Expenses

     Selling, general and administrative expenses of the Company, as a
percentage of sales, were 16.6% in the 1994 Fiscal Year, 16.1% in the 1993
Fiscal Year, and 15.4% in the 1992 Fiscal Year.  The increase of $1.8 million
from the 1993 Fiscal Year to the 1994 Fiscal Year was primarily the result of
increased occupancy costs and other expenses related to stores opened,
acquired or remodeled, and an increase in insurance reserves and advertising
expenses, offset by reduced operating costs due to store closings.  The
increase as a percentage of sales was attributable to operating costs of
comparable stores in the aggregate declining at a lesser rate than the rate
of sales decline in those stores.  The increase, as a percentage of sales,
for the 1993 Fiscal Year compared to the 1992 Fiscal Year was primarily
attributable to certain expenses, such as employee benefits, utilities, and
repairs and maintenance, which increased at a faster rate than the rate of
growth in sales, offset partially by lower average cost per hour and improved
labor productivity in the stores.

  Depreciation and Amortization

     The Company's depreciation and amortization expenses were $24.1 million,
or 2.3% of sales, for the 1994 Fiscal Year; $23.5 million, or 2.2% of sales,
for the 1993 Fiscal Year; and $20.1 million, or 1.9% of sales, for the 1992
Fiscal Year.  The increase in depreciation and amortization for the three
year period was attributable to the new stores and major remodels, and
accelerated amortization of favorable lease interests on certain stores
closed during the period.

                                    27
Interest Expense
                                       Fiscal Year ended Sunday Nearest 
                                                    July 31, 
                                         1994        1993       1992
                                               (In Thousands)
Interest expense, net. . . . . . . . . .$42,917    $41,211     $42,292
Amortization of deferred financing costs  2,950      2,850       2,932
Capitalized interest . . . . . . . . . . . (477)      (804)       (355)
                                        -------    -------     -------
      Interest expense, net. . . . . . .$45,390    $43,257     $44,869
                                        =======    =======     =======

     Interest expense for the 1994 Fiscal Year was primarily comprised of
interest under the Old Credit Agreement, the Old Senior Floating Rate Notes,
the Old Senior Fixed Rate Notes, the Old Subordinated Debentures, various
mortgages and capital leases.  The increase in interest expense for the 1994
Fiscal Year was primarily attributable to increased average borrowings under
the revolving credit facility under the Old Credit Agreement, additional
capital leases on store equipment, and slightly higher interest rates on bank
borrowings.

  Losses

     For the reasons set forth above, the Company experienced net losses of
$37.9 million for the 1994 Fiscal Year, $11.9 million for the 1993 Fiscal
Year, and $7.3 million for the 1992 Fiscal Year.

Financial Condition

     During the pendency of its bankruptcy case discussed above, the Company
operated its business in the ordinary course, and paid all pre-petition and
post-petition claims of the Company's general unsecured creditors, trade
creditors, and employees in full.  The provisions of the Prepackaged Plan,
which are discussed in footnote 1 to the accompanying condensed financial
statements, have had an immediate beneficial impact on the Company's
financial condition, primarily as a result of significantly deleveraging the
Company's balance sheet.

     Prior to the Petition Date, the Company's Old Credit Agreement provided
for a revolving credit facility with individual sublimits of $30.0 million
for working capital loans and $25.0 million for letters of credit, with a
maximum of $50.0 million outstanding under the total facility at any one
time.  During the weeks preceding the bankruptcy filing, the Company, with
the approval of its bank lenders, increased its cash position by fully
drawing the remaining availability under its working capital line.  On
November 9, 1994, the Bankruptcy Court approved the use of cash collateral
and a letter of credit facility of $17.7 million under the Old Credit
Agreement, and additional debtor-in-possession financing provided by
BankAmerica Business Credit, Inc. of $11.2 million, subject to certain terms
and conditions.  The outstanding 
                                    28
borrowings under those facilities were refinanced on the Effective Date, when
the Company entered into the New Credit Agreement with The CIT Group/Business
Credit Inc. and certain bank lenders to provide a 3-year $35.0 million term
loan facility and a 3-year $50.0 million revolving credit facility.

     Beginning August 1, 1994, the Company implemented a new short-term
business strategy to improve the Company's financial performance.  The focus
of this strategy is to conserve capital, reduce administrative and operating
expenses, and direct management attention toward the operation of existing
stores.  During the first six months of fiscal 1995 the Company significantly
improved its liquidity as a result of the payment moratorium on interest due
on the Old Senior Fixed Rate Notes, Old Senior Floating Rate Notes, and Old
Subordinated Debentures; managing working capital; and reducing operating
expenses and capital expenditures by $12.0 million on an annualized basis. 
In addition, the Company expects to exercise its option of paying interest in
kind under the New Senior Floating Rate Notes through August 1, 1995, and on
the New Senior Fixed Rate Notes through February 1, 1996, which will further
increase its liquidity through the first half of fiscal 1996.  The Company
also has an agreement in principle for a $28.0 million sale-leaseback
transaction on 11 of its fee-owned store properties.  The Company intends to
apply $13.0 million of the proceeds to reduce the term loan facility under
the New Credit Agreement, and $14.0 million of such proceeds to reduce its
mortgage obligations.  As a result of its increased liquidity, the Company
expects to invest $6.0 million in forward buy inventory in fiscal 1995, has
made prepayments totalling $7.0 million on its term loan facility, and
intends to repay the balance of the term loan facility under the New Credit
Agreement by the end of fiscal 1995.  As of April 21, 1995, the outstanding
principal balance under the term loan facility was $28.0 million, and the
Company had $7.4 million in borrowings and $12.6 million in letters of credit
outstanding under the revolving credit facility under the New Credit
Agreement.

     Consistent with its short-term business strategy, the Company does not
anticipate opening or acquiring any new stores during the current fiscal
year, but expects that capital expenditures of approximately $6.0 million
will be used to upgrade its existing store facilities, including minor
remodelling projects at 41 stores.  The Company's capital expenditure plans
through the end of fiscal 1996 include the completion of major remodelling
projects at 19 stores, minor remodelling projects at 25 additional stores and
the construction of two new stores.  

     The Company has entered into an interest rate swap through August 1995
to reduce its exposure to increases in short-term interest rates on the
majority of its floating rate debt.  The Company does not believe that there
would be any material impact on the accompanying financial statements as of
January 29, 1995 as a result of liquidating this contract.

     Based upon the Company's ability to generate working capital through its
operations and its new $50.0 million revolving credit facility, the Company
believes that it has the financial resources necessary to pay its capital
obligations and implement its business plan.

                                    29
Effects of Inflation

     The Company's primary costs, inventory and labor, are affected by a
number of factors that are beyond its control, including availability and
price of merchandise, the competitive climate and general and regional
economic conditions.  As is typical of the supermarket industry, the Company
has generally been able to maintain margins by adjusting its retail prices,
but competitive conditions may from time to time render it unable to do so
while maintaining its market share.

                              BUSINESS

                              General

     The Company is the third largest food retailer in west central Florida,
operating 92 multi-department supermarkets, five conventional supermarkets
and 33 liquor stores under the "Kash n' Karry" name and two super warehouse
stores under the "Save 'n Pack" name, all supported by a centrally-located
warehouse and distribution facility.  More than one-half of the Company's
stores are located in the Tampa-St. Petersburg area, which is Florida's
largest retail food sales market, with the balance located between
Gainesville, approximately 130 miles to the north, and Bonita Springs,
approximately 150 miles to the south.  The west central Florida area has a
diverse and growing economy, which includes high technology and financial
centers, an insurance industry presence, retirement communities, coastal
resorts and commercial agricultural activity.  The region's population is
estimated to be increasing at an annual rate of approximately 2%.

                      Company Store Profile

     The following table presents a profile of the Company's stores:

                                    Number of Stores At Fiscal Year End
                           Total Square
           Store Type        Footage(1)     1994  1993  1992  1991 1990
           ----------      ------------     ----  ----  ----  ---- ----
Kash n' Karry Food Stores  40,000--57,000    50    48    42    42   39
                           25,000--39,999    43(2) 55    57    57   58
                         less than 25,000     5     9    12    14   15
Save 'n Pack Super 
  Warehouse Stores         76,000--88,000     2     3    --    --   --
Kash n' Karry Liquor Stores 1,800-- 2,700    33    35    30    31   26

_______________

(1)  Includes selling and backroom areas.

(2)  Includes one store that was closed subsequent to July 31, 1994.

                                    30
Supermarket stores
     The Company currently operates 92 multi-department supermarkets, with an
average size of approximately 40,000 total square feet.  The Company also
operates five conventional supermarkets which average approximately 18,000
total square feet.  All of the Company's supermarket stores offer a wide
selection of items typically sold in grocery stores, including staple
groceries, fresh fruits and vegetables, bakery and dairy products,
delicatessen items, frozen foods and fresh meats.  Each of the Company's
supermarket stores also sells certain non-food items such as health and
beauty care items, paper and tobacco products, soaps and detergents, drugs,
sundries and housewares.  The Company's multi-department stores offer, in
addition, a wider variety of non-food items, including cosmetics and
toiletries, small hardware and a limited selection of soft goods.  Most of
the Company's multi-department stores also feature expanded perishable goods
departments, delicatessens and in-store bakeries, and many contain pharmacies
and full-service seafood, full-service floral and video rental departments. 
All of the Company's stores feature national brands and also carry a
selection of corporate brand merchandise.  Most of the Company's food stores
are located in shopping centers.  The Company's food stores are open seven
days a week, and most operate 24 hours a day.

  Super warehouse stores
     In 1993, the Company acquired three super warehouse stores (one of which
was subsequently closed) operating under the "Save 'n Pack" name.  The two
existing super warehouse stores, which are 76,000 and 88,000 square feet in
size, respectively, feature among the lowest prices on basic items carried by
supermarkets and are designed to cater to the needs of the low-income
household.  In its super warehouse store promotions, the Company encourages
consumers to verify the stores' tag line, "No One Has Lower Prices." The
assortment of packaged goods carried by the super warehouse stores is more
limited than that of a supermarket and is frequently augmented by one-time
purchases of specially priced products that may not be available on a regular
basis.  Store decor is austere compared to that of a traditional supermarket,
and product is displayed on warehouse racking and on floor pallets to enhance
productivity and promote a low-price impression.  The stores provide a full
complement of perishable departments, including meat, produce, bakery, deli
and fresh seafood, which also feature low prices and are frequently
self-service.  The super warehouse stores do not have certain specialty
departments such as pharmacies, video rental departments or full-service
floral departments and do not provide supermarket services such as grocery
bagging, carry-out service, check cashing services and electronic funds
transfer.  Because of reduced display, labor and advertising costs and the
more limited services, the Company is able to operate its super warehouse
stores successfully with lower gross margins than the Kash n' Karry
supermarket stores.  The super warehouse stores operate 24 hours a day, seven
days a week.

  Liquor stores

     Each of the Company's 33 liquor stores is located on property adjacent
to one of the Company's supermarket stores and is operated as a department of
such store, although, in 
                                    31
accordance with Florida law, each liquor store must maintain a separate
entrance.  Liquor stores complement the Company's core business, as they can
be advertised through existing media without incremental expense, pay
supermarket (as compared to shopping center) rents and benefit from operating
and marketing synergies with the adjacent supermarkets.  The liquor stores
offer a wide variety of wines, beers and hard liquors, as well as mixers,
soft drinks, snacks, ice and other party accessories and a limited number of
traditional grocery items.  Sales from the Company's liquor stores represent
approximately 2% of the Company's total sales.  The Company's liquor stores
range in size from 1,800 to 2,700 square feet, and most are open seven days
a week. 

                       Operations Strategy

     The Company believes that up-to-date, strategically located facilities,
well-trained associates and information management systems are key elements
to the Company's future success.  The Company operates a modern, 687,000
square foot warehouse, distribution and office facility in Tampa with
sufficient capacity to service anticipated store expansion for the
foreseeable future.  The warehouse enables the Company to reduce costs by
purchasing in large quantities, taking advantage of special promotional
prices offered by vendors and purchasing prior to impending price increases,
and reducing delivery costs through cross docking and backhauls.  The central
location of the warehouse facility to its stores also provides the Company
with operating efficiencies. 

     The Company relies on information technology to enhance operating
efficiency.  The Company recently entered into an agreement to outsource its
information systems development in order to minimize costs, accelerate the
implementation period for systems improvements, facilitate future software
upgrades, reduce personnel issues and eliminate equipment lease costs. 
Specifically, the agreement provides for the acquisition of new procurement,
billing, labor scheduling and accounts payable systems and new point-of-sale
equipment in the stores within the next 18 months.

                       Marketing Strategy

     The Company emphasizes competitive prices on everyday items, strong
weekly features, high quality perishables and a broad assortment of both
national and corporate brands.  The Company's food stores are open seven days
a week, with most operating 24 hours a day.  The Company seeks to be either
first or second among its competitors in assortment of branded merchandise,
stocking over 29,000 SKU's (stock keeping units) of national brand and
corporate brand items.  In addition to a full range of grocery and general
merchandise items, most of the Company's multi-department supermarkets also
feature expanded perishable goods departments, delicatessens and in-store
bakeries, and many contain pharmacies and full-service seafood, full-service
floral and video rental departments.

                                    32
In 1992, the Company introduced its own corporate brand merchandise. 
The Company's corporate brand strategy is to offer a product comparable in
quality to the best-selling national brand at a lower price.  The Kash n'
Karry brand item generally sells for approximately 10% less than the
competing best-selling national brand but generates a higher per unit gross
profit contribution to the Company.  Over 1,100 SKU's in a wide variety of
product categories carry the Kash n' Karry brand name.

                           Competition

     The food retailing business is highly competitive.  The Company operates
in an environment where more than 90% of sales are by chains.  The principal
competitive factors include store locations, product selection and quality,
price, cleanliness of stores, customer service and overall store image. 
Based on its marketing research, the Company believes that consumers perceive
the Company as having a favorable value image in the markets that it serves
and offering a wide variety of quality products and services in a pleasant
environment.  The Company believes that its competitive strengths include
desirable store locations combined with a strong consumer franchise and
efficient warehousing and distribution facilities.

     The Company competes with several national, regional and local
supermarket chains, particularly Publix, Winn-Dixie, Albertson's and Food
Lion.  The Company is also in competition with convenience stores, stores
owned and operated or otherwise affiliated with large food wholesalers,
unaffiliated independent food stores, merchandise clubs, discount drugstore
chains and discount general merchandise chains.  The Company's principal
competitors have greater financial resources than the Company and could use
those resources to take steps which could adversely affect the Company's
competitive position and financial performance.  For example, operating
results generally and sales growth in particular were adversely affected by
approximately eight, 21, 25 and 30 store openings by principal grocery
competitors during the 1994, 1993, 1992 and 1991 fiscal years, respectively. 
In the first six months of fiscal 1995, there were approximately four such
competitive store openings, and it is anticipated that competitive store
openings will continue.  Another example of the highly competitive nature of
the food retailing business is the practice of competitors to reposition
their pricing structure.  Over the past several years, each of the Company's
major competitors has changed its pricing practices in a manner that has
adversely affected general retail pricing in the market.  Winn-Dixie
discontinued double coupons and introduced its everyday low-price program in
the spring of 1991.  In the spring of 1993, Publix began a campaign focused
on "surprisingly low prices," and Food Lion began a double coupon program
which has since been discontinued.  The Company has had to deal with each of
these changes in a manner that has, in some instances, adversely affected its
operating results and may continue to do so in the future.  In addition, the
Company's ability to compete may be adversely affected by its high leverage
and the limitations imposed by the New Credit Agreement and other debt
agreements.

                                    33
Seasonality

      The Company's sales and related inventory levels tend to increase
during the winter months due to the holidays, increased tourism and the
influx of winter residents, and to decrease during the summer months. 
Typically, approximately 60% of the Company's operating cash flow is recorded
during the second and third quarters of its fiscal year.

                            Employees

     The Company currently employs approximately 3,700 full-time and 5,600
part-time associates, none of whom is covered by a collective bargaining
agreement.  The Company believes that it has good relations with its
associates.

                     Trademarks and Licenses

     The Company employs various trademarks, trade names and service marks in
its business, including the "Kash n' Karry" logo and trade name.  Except for
"Kash n' Karry" and its derivatives, and "So Much More to Pay Less For!,"
"Kash $aver," "$mart Buy," "Five Star Meat," "Nature Friendly" and "Save 'n
Pack," the Company does not believe that any of such trademarks or service
marks are material to the business of the Company.

     Certain governmental licenses and permits, including alcoholic beverage
licenses, health permits and various business licenses, are necessary in the
Company's operations.  The Company believes it has all material licenses and
permits necessary to enable it to conduct its business.

                           Properties

     The Company's 92 multi-department supermarkets and five conventional
supermarket stores have an aggregate selling area of approximately three
million square feet.  Thirteen of the food stores (comprising approximately
504,000 square feet) are owned by the Company.  The remaining 84 supermarket
stores are leased by the Company.  Six of the leased stores are operated
under long-term ground leases with the Company owning the improvements at
such locations.  Seventeen leases expire during the next five years, with the
Company having options to renew all but two.  Most of the Company's food
store leases have minimum rentals with additional rentals based on a
percentage of sales.  In March 1995, the Company entered into an agreement in
principle to sell 11 of its fee-owned stores to a third party, and to
simultaneously enter into long-term leases for those sites.  The Company
expects to consummate the sale-leaseback transaction before the end of the
1995 fiscal year.  

                                    34
The Company's two Save 'n Pack super warehouse stores have an aggregate
selling area of approximately 119,000 square feet.  One of the stores is
leased, with the remaining store operated under a long-term ground lease with
the Company owning the improvements at the location.  Neither of the leases
expires within the next five years.

     The Company's liquor stores have an aggregate selling area of
approximately 53,000 square feet.  Four of the liquor stores are owned by the
Company.  The remaining 29 liquor stores are leased by the Company.  Three of
the leases expire during the next five years, with the Company having an
option to renew.

     The Company's warehouse, distribution and office facility is located on
53.6 acres of land, which the Company owns.

                        Legal Proceedings

     For information regarding the Company's reorganization proceedings under
Chapter 11 of the U.S. Bankruptcy Code, see "The Restructuring" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

     On December 30, 1994, the Company's former chief executive officer,
Ronald J. Floto, filed a proof of claim in the bankruptcy proceeding seeking
payments allegedly owed to him in connection with his severance from the
Company.  The total principal amount of Mr. Floto's claim is less than $1.5
million.  On March 31, 1995, the Company filed an objection to the proof of
claim, and on April 29, 1995, Mr. Floto filed a response to the Company's
objection.  A hearing on the Company's objection is scheduled for May 18,
1995.

     The Company has been engaged in various other legal actions and claims
arising in the ordinary course of business.  Management believes, after
discussions with legal counsel, that the ultimate outcome of such litigations
and claims will not have a material adverse affect on the Company's financial
position.  

                                    35
MANAGEMENT

                       BOARD OF DIRECTORS

     Set forth below is certain information regarding each of the directors
of the Company as of April 24, 1995:

Name                                                      Age

Everett L. Buckardt. . . . . . . . . . . . . . . . .       61
John J. Delucca. . . . . . . . . . . . . . . . . . .       52
Jennifer Holden Dunbar . . . . . . . . . . . . . . .       32
Ben Evans. . . . . . . . . . . . . . . . . . . . . .       65
Thomas W. Harberts . . . . . . . . . . . . . . . . .       50
Ronald E. Johnson. . . . . . . . . . . . . . . . . .       45
Robert Spiegel . . . . . . . . . . . . . . . . . . .       58
Christopher V. Walker. . . . . . . . . . . . . . . .       48
Peter Zurkow . . . . . . . . . . . . . . . . . . . .       41

     Ms. Dunbar, Mr. Evans and Mr. Zurkow comprise the Company's Compensation
Committee, its Stock Option Committee, and its Nominating Committee, and Mr.
Buckardt, Ms. Dunbar, Mr. Evans and Mr. Harberts comprise the Company's Audit
Committee.

     Pursuant to an understanding among the Company, Green Equity Investors,
L.P. ("GEI") and the unofficial committee of the holders of the Old Senior
Fixed Rate Notes, the Old Senior Floating Rate Notes and the Old Subordinated
Debentures (the "Bondholder Committee"), as of December 29, 1994 the
Company's Board of Directors was reconstituted to consist of nine members
selected as follows: GEI selected Ms. Dunbar and Mr. Walker, the Bondholder
Committee selected Messrs. Buckardt, Delucca, Evans, Harberts, Spiegel and
Zurkow, and the Company selected its then acting Chief Executive Officer,
Anthony R. Petrillo.  No such understanding exists as to the election of
directors following the expiration of the terms of the incumbent directors,
or upon their resignation or removal as directors.  On March 9, 1995, Mr.
Petrillo resigned as a director and Mr. Johnson was appointed to succeed him.

                    Biographical Information

      Everett L. Buckardt has been a Director of the Company since December
29, 1994.  Mr. Buckardt has been Chairman and Chief Executive Officer of
Warehouse Club, Inc. since January 1993.  On February 3, 1995, Warehouse
Club, Inc. filed a voluntary petition for reorganization under Chapter 11 of
the U.S. Bankruptcy Code.  In 1992, Mr. Buckardt retired from a 33 year
career with Sears Roebuck and Company, where he served in various capacities,
most recently as President of Sears Catalog and Direct Marketing Division.

                                    36
John J. Delucca has been a Director of the Company since December 29,
1994.  Mr. Delucca has been the Senior Vice President and Treasurer of RJR
Nabisco since October 1993.  He served as Managing Director and Chief
Financial Officer of HASCO Associates, Inc., a Greenwich, Connecticut-based
private holding company, from May 1991 to October 1993, as President and
Chief Financial Officer of the Lexington Group, a workout and restructuring
advisory group, from January 1990 to May 1991, and as Senior Vice President
of Finance and Managing Director of the Trump Group from June 1988 to January
1990.  Mr. Delucca is a director of Edison Controls Corp. and Enzo Biochem,
Inc.

     Jennifer Holden Dunbar has been a Director of the Company since November
1991.  Ms. Dunbar has been a general partner of Leonard Green & Partners,
L.P. since 1994, and was a principal of Leonard Green & Partners, L.P. from
January 1992 to January 1994 and an associate of Leonard Green & Partners,
L.P. from November 1989.  Prior to that time, Ms. Dunbar was an associate of
Gibbons, Green, van Amerongen, L.P. and a financial analyst with Morgan
Stanley & Co., Incorporated in its mergers and acquisitions department.  Ms.
Dunbar is a director of Big 5 Holdings Inc., UMC Corporation, Thrifty
Payless, Inc., and Thrifty PayLess Holdings, Inc.

     Ben Evans has been a Director of the Company since December 29, 1994. 
Mr. Evans has been a consultant for the firm of Ernst & Young in its
financial advisory services group since 1989.  He is a director of Revco
D.S., Inc., Jamesway Corporation and Megafoods Stores, Inc.

     Thomas W. Harberts has been a Director of the Company since December 29,
1994.  Mr. Harberts is the owner of Cub Foods, a single outlet retail food
store in Oshkosh, Wisconsin.  From 1970 to 1994, he served in various
capacities for Byerly's, an upscale retail food chain based in Minnesota,
most recently as its Chief Executive Officer.

     Ronald E. Johnson has been Chairman of the Board of the Company since
March 1995 and has been its President and Chief Executive Officer since
January 1995.  Mr. Johnson served as Chief Operating Officer of Farm Fresh
from December 1993 to January 1995 and as its Senior Vice President of Store
Operations from 1990 to 1993.

     Robert Spiegel has been a Director of the Company since December 29,
1994.  Mr. Spiegel has served as Chairman and Chief Executive Officer of RJR
Drug Distributors, a Louisville, Kentucky franchisee of Drug Emporium, since
1984.  Mr. Spiegel is a director of Graham Field Health Products, Inc., and
Hoenig Group, Inc.

     Christopher V. Walker has been a Director of the Company since November
1991.  Mr. Walker also served as a Director of the Company from April 1988 to
July 1991, and from November 1991 to present.  Mr. Walker is a Managing
Director of Trust Company of the West.  He was a general partner of Leonard
Green & Partners, L.P. from November 1989 to March 1995, was a general
partner of Gibbons, Green, van Amerongen, L.P. from January 1989 to August
1989, and was a limited partner of Gibbons, Green, van Amerongen, L.P. from

                                    37
October 1985 to January 1989.  Mr. Walker is a director of Foodmaker, Inc.,
and Australian Resources and Mining Company NL.

     Peter Zurkow has been a Director of the Company since December 29, 1994. 
Mr. Zurkow has been a member of the High Yield Department of PaineWebber
Incorporated since August 1994.  He was an Associate Managing Director and
served as a portfolio manager in the risk arbitrage department of Wertheim
Schroder for more than five years prior to joining PaineWebber Incorporated.

     All Directors hold office until their successors are duly elected and
qualified or until their earlier resignation or removal.

                      Director Compensation

     Each member of the Board of Directors (excluding management) receives
$12,500 per year (payable quarterly), plus $2,500 for each Board meeting
attended in person, and $1,000 for each meeting of a committee to which such
director is a member attended in person.  In addition, each director is
reimbursed for reasonable and necessary out-of-pocket expenses incurred in
connection with attending such meetings in person.  The cash compensation
payable to directors affiliated with Leonard Green & Partners, L.P. ("LGP")
is credited against the annual management fee payable to LGP.  See "Certain
Relationships and Related Transactions."  As of April 24, 1995, Ms. Dunbar
and Mr. Walker are the only directors who are affiliated with LGP.  

     On March 9, 1995, the Company adopted the 1995 Non-Employee Director
Stock Option Plan (the "Director Plan"), and, pursuant to the Director Plan,
granted to certain of its directors options to purchase a total amount of
36,000 shares of Common Stock.  Messrs. Buckardt, Delucca, Evans, Harberts,
Spiegel and Zurkow each received options to purchase 3,000 shares of Common
Stock for $15.00 per share, vesting on July 30, 1995, and options to purchase
an additional 3,000 shares of Common Stock for $20.00 per share, vesting on
July 28, 1996.  All of such options expire on March 8, 2005, or earlier upon
the occurrence of certain events.  On the same date, in lieu of granting
options to Ms. Dunbar and Mr. Walker under the Director Plan, the Company
granted to Green Equity Investors, L.P. ("GEI") options to purchase 6,000
shares of Common Stock for $15.00 per share, vesting on July 30, 1995, and
options to purchase an additional 6,000 shares of Common Stock for $20.00 per
share, vesting on July 28, 1996.  GEI is a principal stockholder of the
Company.  See "Principal Stockholders."  The terms of the options granted to
GEI are substantially the same as the terms of the options granted under the
Director Plan.

                                    38
EXECUTIVE OFFICERS

     Set forth below is certain information regarding each of the executive
officers of the Company as of April 24, 1995.

Name                   Age   Position

Ronald E. Johnson. . .  45   Chairman of the Board, President and Chief
                             Executive Officer

Raymond P. Springer. .  44   Senior Vice President, Chief Financial Officer,
                             Treasurer and Secretary

Edward Kolodzieski . .  35   Senior Vice President, Operations

Gary M. Shell. . . . .  47   Senior Vice President, Marketing/Nonperishables

Clifford C. Smith Jr..  35   Senior Vice President, Marketing/Perishables

Richard D. Coleman . .  40   Vice President, Controller

                    Biographical Information

     See "-- Board of Directors; Biographical Information" for biographical
information concerning Ronald E. Johnson.

     Raymond P. Springer has been Senior Vice President, Chief Financial
Officer, and Treasurer of the Company since March 1995, and Secretary of the
Company since January 1995.  Mr. Springer served as Executive Vice President,
Administration of the Company from October 1988 to March 1995.  Mr. Springer
also served as a Director of the Company from October 1988 to July 1991, and
from November 1991 to December 1994. 

     Edward Kolodzieski has been Senior Vice President of Operations of the
Company since March 1995.  Mr. Kolodzieski served in various capacities with
the Company since October 1988, including Vice President, Operations and
Regional Manager.  

     Gary M. Shell has been Senior Vice President of Marketing of
Nonperishables of the Company since March 1995.  Mr. Shell served as Vice
President of Marketing and Merchandising of B. Green & Company, a food
wholesaler and retailer, from May 1991 to February 1995, and as Vice
President of Purchasing and Promotions of Rich Foods, Inc. from 1987 to 1991. 

                                    39
Clifford C. Smith Jr. has been Senior Vice President of Marketing of
Perishables of the Company since March 1995.  Mr. Smith served as the
Director of Deli, Bakery and Food Service for Harris-Teeter from 1992 to
March 1995, and as the Vice President of Deli, Bakery and Food Service for
Mayfair Supermarkets, Inc. from 1981 to 1992.  

     Richard D. Coleman has been Vice President and Controller of the Company
since October 1988, and Director of Risk Management of the Company since
January 1995.  From October 1988 to January 1995, Mr. Coleman also served as
Secretary of the Company.

               Compensation of Executive Officers

     Summary Compensation

     The following table sets forth compensation for the fiscal years ended
July 31, 1994, August 1, 1993 and August 2, 1992, respectively, awarded to,
earned by, or paid to the Chief Executive Officer and the acting Chief
Executive Officer of the Company during fiscal year 1994, and the individuals
who, in fiscal year 1994, were the other four most highly compensated
executive officers of the Company (collectively, the "Named Executive
Officers").

                                    40
Summary Compensation Table                            
                                                    Long-Term
                                                  Compensation
                               Annual Compensation   Awards
                                                             All Other
Name & Principal Position(1)  Year Salary(2) Bonus Options  Compensation
Ronald J. Floto
  Chairman of the Board,
  President and 
  Chief Executive Officer...1994 $346,056 $     0      0  $  8,978(3),(4)
                            1993  248,358  41,400      0   100,990
                            1992  358,270 267,720 39,485    24,265
Raymond P. Springer
  Executive Vice President,
  Administration............1994 $177,298 $     0      0  $ 11,910(3)
                            1993  131,233  15,000      0    51,832
                            1992  186,923  87,300 18,120    12,617
Dennis V. Carter
  Executive Vice President,
  Operations ...............1994 $133,356 $     0      0  $  7,514(3)
                            1993  123,250  17,000  4,162     8,764
                            1992  139,038  91,665 15,351     9,618
Thomas A. Whipple
  Executive Vice President,
  Marketing.................1994 $118,331 $     0      0  $  3,073(3)
                            1993   60,923       0      0       787
                            1992  186,923  87,300 12,165    12,962
Richard D. Coleman
  Vice President,
  Controller and Secretary..1994 $100,000 $     0      0  $  2,574(3)
                            1993   95,481   5,000      0     6,682
                            1992  103,846  27,160  4,515     6,948

____________________________

(1)  The principal position held by the Named Executive Officers as of July
     31, 1994 is given, except in the case of Mr. Floto.  Mr. Floto's
     employment with the Company terminated on July 29, 1994, and Anthony R.
     Petrillo was appointed to replace him on an interim basis on August 1,
     1994.  Since the Restructuring was consummated on December 29, 1994,
     Ronald E. Johnson joined the Company as Chairman of the Board, President
     and Chief Operating Officer, replacing Mr. Petrillo, Messrs. Carter and
     Whipple resigned from the Company, Mr. Springer's title was
     re-designated as Senior Vice President, Chief Financial Officer, and
     Edward Kolodzieski, Gary M. Shell and Clifford C. Smith Jr. became
     executive officers.  The current annual salaries of Messrs. Johnson,
     Kolodzieski, Shell and Smith are $325,000, $150,000, $130,000 and
     $130,000, respectively.  During his tenure as acting Chairman of the
     Board, President and Chief Executive Officer, Mr. Petrillo received a
     weekly salary of $13,462 and a bonus of $200,000.  Mr. Petrillo
     continues to serve as a consultant to the Company, for which he is
     compensated at the rate of $200 per hour. 
                                    41a
(2)  Includes amounts deferred at the election of the Named Executive
     Officers under the Company's Retirement Estates 401(k) Plan (the
     "Retirement Plan"), a trusteed defined contribution plan, and its
     nonqualified unfunded supplemental salary deferral plan (the
     "Supplemental Retirement Plan"). 

(3)  Represents (i) matching contributions by the Company under its
     Retirement Plan of $2,587 for the benefit of Mr. Floto, $1,292 for the
     benefit of Mr. Whipple, $1,321 for the benefit of Mr. Springer, $990 for
     the benefit of Mr. Carter and $741 for the benefit of Mr. Coleman; (ii)
     matching allocations by the Company under its Supplemental Retirement
     Plan of $5,175 for the benefit of Mr. Floto, $1,453 for the benefit of
     Mr. Whipple, $9,854 for the benefit of Mr. Springer, $6,075 for the
     benefit of Mr. Carter and $1,500 for the benefit of Mr. Coleman; and
     (iii) above-market interest recorded by the Company under its
     Supplemental Retirement Plan of $1,216 for the benefit of Mr. Floto,
     $328 for the benefit of Mr. Whipple, $735 for the benefit of Mr.
     Springer, $449 for the benefit of Mr. Carter and $333 for the benefit of
     Mr. Coleman.

                                    41b
(4)  Mr. Floto filed a proof of claim against the Company seeking payments
     allegedly owed to him in connection with his severance from the Company. 
     See "Business -- Legal Proceedings."  Due to the contingency of such
     claim, it is not reflected in this table. 

     Stock Option Grants in Last Fiscal Year

     Prior to the Restructuring, the Company administered two stock option
plans for the benefit of its executive officers and other valued employees --
the Restated 1988 Management Stock Option Plan and the 1991 Management Stock
Option Plan (the "Old Option Plans").  No options were granted in fiscal year
1994 under either of the Old Option Plans.  Pursuant to the Prepackaged Plan,
all of the outstanding options under the Old Option Plans were extinguished
on December 29, 1994.  

     In March 1995, the Company adopted the 1995 Key Employee Stock Option
Plan (the "New Option Plan"), which authorizes the issuance to eligible
participants of options to purchase up to 236,946 shares of Common Stock of
the Company.  (Capitalized terms not otherwise defined in this paragraph are
defined in the New Option Plan.)  Thereafter, the Stock Option Committee
granted to certain executive officers options to purchase the aggregate
amount of 125,240 shares of Common Stock under the New Option Plan (the
"Initial Options").  The Initial Options vest in serial increments in the
amount of 20% per year, on the last day of each of the 1995, 1996, 1997, 1998
and 1999 fiscal years of the Company.  However, upon the occurrence of a
Merger Event or a Change of Control, the Initial Options become 100% vested. 
In addition, upon the termination of Mr. Johnson's employment Without Cause
(as defined in his employment agreement), all of Mr. Johnson's Initial
Options become 100% vested.  The Initial Options expire, to the extent not
exercised, on the tenth anniversary of the date of grant.  However, upon
termination of an optionee's employment with the Company, all unvested
Initial Options lapse, and all vested Initial Options expire 180 days after
the termination of employment, if such termination is due to the death,
Disability or Retirement of the optionee, or 45 days after the termination of
employment, if such termination is due to any other reason, other than a
Termination for Cause.  If a Termination for Cause occurs, all vested and
unvested Initial Options expire immediately.  The following table sets forth
certain information with respect to the Initial Options:

              Number of Securities
               Underlying Options    Exercise Price
  Name                Granted        (Dollars/Share)    Expiration Date

Ronald E. Johnson     33,849            $15.00           March 8, 2005

Raymond P. Springer   30,464            $15.00           March 8, 2005

Edward Kolodzieski    20,309            $15.00           March 8, 2005

Gary M. Shell         20,309            $15.00           March 8, 2005

Clifford C. Smith Jr. 20,309            $15.00           March 25, 2005
                                    42
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End
Option Values

     None of the options granted under the Old Option Plans were exercised
before they were extinguished pursuant to the Prepackaged Plan on December
29, 1994.  The following table shows information concerning the value of the
unexercised options granted under the Old Option Plans held by the Named
Executive Officers as of July 31, 1994:
                                                     Value of
                                  Number of        Unexercised
Name                             Unexercised       In-the-Money
                                   Options at        Options at
                               Fiscal Year End    Fiscal Year End

                                Exercisable/       Exercisable/
                                Unexercisable      Unexercisable
Ronald J. Floto                    -0-/-0-             (1)
Thomas A. Whipple                1,877/12,349          (1)
Raymond P. Springer              1,877/18,304          (1)
Dennis V. Carter                 1,102/19,697          (1)
Richard D. Coleman                 610/4,569           (1)

(1)  As of July 31, 1994, the Company had reached an agreement in principle
     with the Unofficial Bondholders' Committee with respect to the
     Restructuring.  Accordingly, the fair market value of the Common Stock
     underlying the options was nil and none of the options were
     in-the-money.  On December 29, 1994, all of such options were
     extinguished pursuant to the Prepackaged Plan.

     Employment Contracts and Termination of Employment and Change-of-Control
     Arrangements

     Messrs. Johnson, Shell and Smith have each entered into employment
agreements with the Company for a three-year term.  Mr. Johnson's term
commenced in January 1995 and Messrs. Shell's and Smith's terms each
commenced in March 1995.  Under the employment agreements, the Company agrees
to pay a base salary and to allow the employee to participate proportionally
in all fringe benefit plans available to the most senior executive officers
of the Company from time to time during the term, including the Company's
current bonus plan.  Employment under the agreements may be terminated for
cause or without cause in certain circumstances, as defined therein,
including the employee's death or disability.  Upon a termination without
cause, the employee is entitled to continuation of salary and, in certain
circumstances, benefits and bonus, through the term of the employment
agreement.  Mr. Johnson's agreement also provides that options granted to him
under the New Option Plan will become fully vested upon a termination of his
employment without cause.  The agreements also 

                                    43
contain certain requirements of noncompetition, including a requirement of
noncompetition for a period of one year following a termination of
employment, other than a termination without cause.  

     The Company has severance pay agreements with certain members of its
senior management and other key employees.  The severance pay agreements
provide, among other things, that if the employee is terminated without Cause
(as defined therein) in connection with a Change of Control (as defined
therein) then such employee will be entitled to payment ranging from 50% to
100% of that employee's annual compensation.

     The Company maintains the Kash n' Karry Retirement Estates ("KKRE"), a
trusteed defined contribution retirement plan.  KKRE is a tax savings/profit
sharing plan maintained for the purpose of providing retirement income for
eligible employees of the Company.  KKRE is qualified under Section 401(a)
and Section 401(k) of the Internal Revenue Code of 1986, as amended. 
Generally, all employees who have attained the age of 21 years and complete
one year of participation service (as defined under KKRE) are eligible to
participate in KKRE.  During the 1994 fiscal year, each of the Named
Executive Officers participated in KKRE.

     Certain members of senior management and other key employees also
participate in the Kash n' Karry Executive Supplemental Retirement Plan
("KESP"), a non-qualified, unfunded salary deferral plan.  During the 1994
fiscal year, each of the Named Executive Officers participated in KESP. 
Prior to the beginning of each plan year, a participant may elect to defer an
amount not to exceed 15% of such participant's annual base compensation (as
defined under KESP).  The Company matches a certain portion of the amount
deferred by the participant, but the amount of the match may not exceed 6% of
such participant's annual base compensation.  The Company records income to
the participant's account at an annual rate as determined by the Board of
Directors, but the rate of such income shall not be less than 8% per annum. 
The vested percentage of the amounts recorded in the participant's account
will be paid to the participant upon the earlier of:  (i) such participant's
death, disability, retirement or other separation of service from the
Company; (ii) the date the Plan is terminated; or (iii) the date that a
change in control occurs (as defined under KESP).

     Compensation Committee Interlocks and Insider Participations

     The Board of Directors has established a Compensation Committee and a
Stock Option Committee.  The Compensation Committee approves compensation
payable to the executive officers and the Stock Option Committee administers
the Company's stock option plans.  Currently, Jennifer Holden Dunbar, Ben
Evans and Peter Zurkow comprise both such committees.  During the 1994 fiscal
year, Ronald J. Floto, Leonard I. Green, Christopher V. Walker and Edward W.
Gibbons (each of whom was a director during the 1994 fiscal year) performed
the functions of the Compensation Committee and Messrs. Floto, Green and
Gibbons served on the Stock Option Committee.

                                    44
Mr. Green and Ms. Dunbar are each controlling shareholders of general
partners of LGP, and Mr. Green is a former partner of Gibbons, Green, van
Amerongen, L.P. ("Gibbons, Green"), now known as Gibbons, Goodwin, van
Amerongen, L.P. ("GGvA").  Mr. Walker is a former general partner of LGP and
of Gibbons, Green.  Mr. Gibbons is a general partner of GGvA.  LGP is the
general partner of Green Equity Investors, L.P., which owned 60.9% of the
Company's common stock during the 1994 fiscal year, and which currently owns
27.7% of the Company's Common Stock.  See "Principal Stockholders."  GGvA is
the general partner of the Fulcrum Partnerships, which collectively owned
33.8% of the Company's common stock during the 1994 fiscal year.  The equity
interest of the Fulcrum Partnerships was extinguished in December 1994
pursuant to the Prepackaged Plan.  Gibbons, Green is a predecessor of GGvA. 
Mr. Floto was the Chairman of the Board, President and Executive Officer of
the Company until July 29, 1994.

     During fiscal 1994, as consideration for the provision of financial
advisory services, the Company agreed to pay an annual fee of $554,000, plus
related out-of-pocket expenses, to LGP and an annual fee of $232,000, plus
related out-of-pocket expenses, to GGvA.  From September 1993 through
December 1994, the Company did not pay the annual fees to LGP or GGvA, but
reimbursed them for out-of-pocket expenses billed to the Company.  Pursuant
to the Prepackaged Plan, on December 29, 1994 the Company entered into a
Management Services Agreement with LGP, pursuant to which LGP agreed to
provide management, consulting, financial planning and financial advisory
services for a two year term, in consideration for an annual fee of $200,000.

                                    45
Security Ownership of Management

     The following table sets forth as of April 24, 1995, the number and
percentage of all shares of Common Stock owned by each of the directors of
the Company, each of the Named Executive Officers, each of the current
executive officers of the Company, and all directors, Named Executive
Officers and current executive officers as a group.  

                                  Number of
    Name                        Shares Owned      Percent (1)
Everett L. Buckardt                 -0-              -0-

John J. Delucca                     -0-              -0-

Dennis V. Carter                    -0-              -0-

Richard D. Coleman                  -0-              -0-

Jennifer Holden Dunbar (2)        857,629           27.7

Ben Evans                           2,500             *

Ronald J. Floto                     -0-              -0-

Thomas W. Harberts                  -0-              -0-

Ronald E. Johnson                   -0-              -0-

Edward Kolodzieski                  -0-              -0-

Gary M. Shell                       -0-              -0-

Clifford C. Smith Jr.               -0-              -0-

Robert Spiegel                     10,000             *

Raymond P. Springer                 -0-              -0-

Christopher V. Walker (2)         857,378           27.7

Thomas A. Whipple                   -0-              -0-

Peter Zurkow                        -0-              -0-
All Directors, Named Executive Officers and
  current executive officers as a group
  (17 persons) (2). . . . . . . . 870,129           28.1
- ----------------------
*    Less than 1%
(1)  Based on 3,100,000 shares of Common Stock outstanding.
(2)  Includes 857,378 shares owned by Green Equity Investors, L.P., of which
     Leonard Green & Partners, L.P. ("LGP"), is the sole general partner. 
     Ms. Dunbar may be deemed to be the beneficial owner of such shares by
     reason of her being the controlling shareholder of a general partner of
     LGP, and Mr. Walker may be deemed to be the beneficial owner of such
     shares by reason of his being a former general partner of LGP. 
                                    46
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During fiscal 1994, 1993, and 1992, respectively, as consideration for
the provision of financial advisory services, the Company agreed to pay an
annual fee of $554,000, plus related out-of-pocket expenses, to Leonard Green
& Partners, L.P. ("LGP"), and an annual fee of $232,000, plus related out-of-
pocket expenses, to Gibbons, Goodwin, van Amerongen, L.P. ("GGvA").  From
September 1993 through December 1994, the Company did not pay the annual fees
to LGP or GGvA, but reimbursed them for out-of-pocket expenses billed to the
Company.  Pursuant to the Prepackaged Plan, on December 29, 1994 the Company
entered into a Management Services Agreement with LGP, pursuant to which LGP
agreed to provide management, consulting, financial planning and financial
advisory services for a two year term, in consideration for an annual fee of
$200,000.  

     LGP is the sole general partner of Green Equity Investors, L.P., which
owned approximately 60.9% of the Company's outstanding common stock
immediately prior to the consummation of the Prepackaged Plan.  GGvA is the
general partner of The Fulcrum III Limited Partnership and The Second Fulcrum
III Limited Partnership, which collectively owned 33.8% of the Company's
outstanding common stock immediately prior to the consummation of the
Prepackaged Plan.  Jennifer Holden Dunbar, who is a director of the Company,
is the controlling shareholder of a general partner of LGP.  Christopher V.
Walker, who is also a director of the Company, is a former general partner of
LGP and of GGvA.  

                                    47
PRINCIPAL STOCKHOLDERS

     The following table sets forth, as of April 24, 1995 (unless otherwise
specified), the name and address of each person known by the Company to be
the beneficial owner of more than five percent of the outstanding Common
Stock (the only class of voting securities of the Company):

Name and Address                     Number of Shares    Percent

American Express Company                  652,470(1)      21.1%
  American Express Tower
  World Financial Center
  New York, NY  10285

American Express Financial Corporation    652,470(1)      21.1 
  IDS Tower 10
  Minneapolis, MN  55440

Green Equity Investors, L.P.              857,378(2)      27.7 
  333 S. Grand Avenue
  Suite 5400
  Los Angeles, CA  90071

IDS Extra Income Fund                     552,090(1)      17.8 
  IDS Tower 10
  Minneapolis, MN  55440

The Prudential Insurance Company          435,384(3)      14.0 
  of America
  Prudential Plaza
  Newark, NJ  07102-3777

PaineWebber Incorporated                  402,568(4)      13.0 
  1285 Avenue of the Americas
  New York, NY  10019

(1)  Based upon information supplied by American Express Company, American
     Express Financial Corporation and IDS Extra Income Fund.  Represents
     shares over which each such person shares dispositive power, with
     respect to which American Express Company has advised the Company that
     it disclaims beneficial ownership.

(2)  Based upon information supplied by Green Equity Investors, L.P.

(3)  Based upon information supplied by The Prudential Insurance Company of
     America ("Prudential").  Includes 32,233 shares held for the benefit of
     clients of Prudential over which Prudential may have direct or indirect
     voting and/or investment discretion, with 

                                    48
respect to which Prudential has advised the Company that it disclaims
     beneficial ownership.

(4)  Based upon information supplied by PaineWebber Incorporated, as of April
     15, 1995.  PaineWebber Incorporated, a registered broker-dealer, makes
     a market in the Common Stock of the Company.

                  DESCRIPTION OF CAPITAL STOCK

Authorized Capital Stock

     The authorized capital stock of the Company consists of 5,500,000 shares
of Common Stock, par value $.01 per share, and 1,000,000 shares of Preferred
Stock, par value $.01 per share.  The authorized Preferred Stock includes
35,000 shares of Series A Junior Participating Preferred Stock (the "Series
A Preferred").  As of April 24, 1995, 3,100,000 shares of Common Stock and no
shares of Preferred Stock were outstanding, an additional 173,240 shares of
Common Stock were reserved for issuance pursuant to outstanding options
granted to GEI and to certain directors and executive officers pursuant to
the Director Plan and New Option Plan, and all 35,000 shares of Series A
Preferred were reserved for issuance to the holders of Rights.  See
"Management" and "-- Certain Anti-Takeover and Charter Provisions; Rights
Plan."  

     The following description of those terms and provisions of the capital
stock of the Company which are deemed material to an investment in the Common
Stock is intended to be a summary thereof and does not purport to be a
complete description of the terms and conditions of such capital stock. 
Reference is made to the Company's Restated Certificate of Incorporation, the
Certificate of Designations of the Series A Preferred, and the Rights
Agreement dated as of April 13, 1995 (the "Rights Agreement") between the
Company and Shawmut Bank Connecticut, N.A., as Rights Agent (the "Rights
Agent").  Copies of each of the foregoing documents have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.

Common Stock

     Each holder of Common Stock is entitled to one vote per share on all
matters to be voted on by the stockholders, including elections of directors,
and, except as otherwise provided by law or as may be provided with respect
to any series of Preferred Stock created by the Board of Directors from time
to time, the holders of such shares of Common Stock exclusively possess all
voting power.  See "Description of Capital Stock -- Preferred Stock." 
Holders of Common Stock are not entitled to cumulate their votes.

                                    49
Subject to certain preferential rights of any outstanding series of
Preferred Stock created by the Board of Directors from time to time, holders
of Common Stock are entitled to dividends and other distributions as and when
declared by the Board of Directors out of assets legally available therefor,
and upon the liquidation, dissolution or winding up of the Company, the
holders of Common Stock would be entitled to share equally in the
distribution of all of the Company's assets.  The holders of Common Stock
have no preemptive rights to purchase shares of Common Stock of the Company.

     The transfer agent and registrar for the Company's Common Stock is
Shawmut Bank Connecticut, N.A., of 777 Main Street, MSN 238, Hartford,
Connecticut  06115.

     The Common Stock is listed on the Nasdaq Small Cap Market under the
symbol "KASH."

Preferred Stock

     Blank check authority

     The Board of Directors has the authority, without action by the
stockholders, to issue shares of Preferred Stock in one or more series and,
within certain limitations, to determine the dividend rights, dividend rate,
rights and terms of redemption, liquidation preferences, sinking fund terms,
conversion rights and voting rights of any series of Preferred Stock, the
number of shares constituting any such series, the designation thereof, and
the price therefor.

     As of April 24, 1995, the Board of Directors has not authorized the
issuance of any Preferred Stock other than the Series A Preferred.  See "--
Series A Preferred."

     The Company believes that the ability of its Board of Directors to issue
one or more series of Preferred Stock will provide the Company with
flexibility in structuring possible future financings and acquisitions, and
in meeting other corporate needs which might arise.  The authorized shares of
Preferred Stock, as well as Common Stock, will be available for issuance
without further action by the Company's stockholders, unless such action is
required by applicable law or the rules of any exchange or automated
quotation system on which the Company's securities may be listed or traded.

     Series A Preferred

     There are 35,000 authorized shares of Series A Preferred.  As of April
24, 1995, none of the Series A Preferred is outstanding, but all of such
shares are reserved for issuance pursuant to an exercise of Rights.  See "--
Certain Anti-Takeover and Charter Provisions; Rights Plan."

                                    50
The Series A Preferred is not redeemable and has no sinking fund.  Each
share of Series A Preferred will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend equal to the dividends on 100 shares of Common Stock.  In
addition, each share of Series A Preferred will have a liquidation preference
of $100 per share but will be entitled to an aggregate payment of 100 times
the payment made per share of Common Stock.  Each share of Series A Preferred
will have 100 votes, voting together with the shares of Common Stock. 
Finally, in the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each share of Series A Preferred
will be entitled to receive 100 times the amount received per share of Common
Stock.  These rights are protected by customary anti-dilution provisions.

Restrictions on Dividends

     The indentures governing the New Senior Fixed Rate Notes and the New
Senior Floating Rate Notes (the "Indentures") provide that the Company will
not, directly or indirectly, (i) declare or pay any dividend on or make any
distributions in respect of the capital stock of the Company or any
Subsidiary thereof (except for (x) dividends or distributions payable solely
to the Company or any Subsidiary of the Company and (y) dividends or
distributions of a Subsidiary of the Company solely on the capital stock of
such Subsidiary), or purchase, redeem or retire for value, or make any
payment on account of the purchase, redemption or other acquisition or
retirement for value of, any capital stock or warrants, rights or options to
purchase such capital stock, (ii) make any principal payment on, or redeem,
repurchase or defease, or otherwise acquire or retire for value, Subordinated
Debt (as defined in the Indentures), prior to any scheduled principal
payment, scheduled sinking fund payment or maturity thereof, or (iii) make
any loan or advance to, or any other Investment (as defined in the
Indentures) in, any of its Affiliates other than a Subsidiary of the Company
(such payments or any other actions described in (i), (ii) and (iii),
collectively, "Restricted Payments") unless (1) at the time of and after
giving effect to the proposed Restricted Payment, no Event of Default (as
defined in the Indentures) or event that, after notice or lapse of time or
both would become an Event of Default, shall have occurred and be continuing,
and (2) at the time of and after giving effect to the proposed Restricted
Payment (the amount of any such payment, if other than cash, to be determined
by the Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution (as defined in the Indentures)) (A) the
Consolidated Net Worth (as defined in the Indentures) of the Company shall be
at least $75,000,000 and (B) the aggregate amount of all Restricted Payments
after January 29, 1995 shall not exceed 50% of Cumulative Net Available Cash
(as defined in the Indentures) of the Company and (C) the Fixed Charge
Coverage Ratio (as defined in the Indentures) calculated on a pro forma basis
for the full twelve-month period ending on the last day of the Company's
fiscal quarter immediately preceding such proposed Restricted Payment shall
be at least 1.50 to 1.  Notwithstanding the foregoing, this provision will
not prohibit the redemption, by the Company, of its common stock (on a fully
diluted basis) from time to time under the terms and conditions of management
equity subscription agreements or stock option agreements and related
exhibits, so long as such 

                                    51
redemption does not otherwise result in an Event of Default or event that,
after notice or lapse of time or both, would become an Event of Default.

     The foregoing provisions shall not be deemed to prohibit (1) the payment
of any dividend within 60 days after the date of declaration thereof, if at
such declaration date such declaration complied with the provisions of the
Indentures, or (2) the redemption, repurchase or other acquisition or
retirement (a "retirement") of any shares of any class of capital stock of
the Company or of any Subsidiary thereof in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the proceeds of a substantially concurrent issue
and sale (other than to a Subsidiary of the Company) of, other shares of
capital stock of the Company, or (3) the retirement of Subordinated Debt out
of the proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of capital stock of the Company or
issuance other than to a Subsidiary of the Company of new Indebtedness which
has a weighted average life to maturity at least as long as the Stated
Maturity of the New Notes and no sinking fund or scheduled principal payments
prior to the maturity of the New Notes and the payment of which is
subordinated in right of payment and otherwise to the New Notes at least to
the same extent as such Subordinated Debt, or (4) the payment of dividends or
the making of distributions on shares of capital stock of the Company solely
in shares of capital stock of the Company.

     The New Credit Agreement provides that the Company will not declare or
make any Dividend Payment (as defined in the New Credit Agreement) at any
time (other than Dividend Payments in respect of the Company's obligations to
repurchase capital stock or Equity Rights (as defined in the New Credit
Agreement) of the Company of retired, terminated or deceased directors,
officers or employees of the Company, provided that (a) the aggregated amount
of such payments in any fiscal year of the Company shall not exceed the sum
of (i) $500,000 plus (ii) for each fiscal year of the Company beginning after
the Effective Date, an amount equal to the excess (if any) of $500,000 over
the amount of such payments made by the Company in its immediately preceding
fiscal year and (b) no such Dividend Payments may be made after the
occurrence and during the continuance of any Default (as defined in the New
Credit Agreement)).

Certain Anti-Takeover and Charter Provisions

     Delaware General Corporation Law

     The Company is subject to Section 203 of the Delaware General
Corporation Law, as amended ("Section 203").  Section 203 provides that,
subject to certain exceptions specified therein, an "interested stockholder"
of a Delaware corporation shall not engage in any business combination,
including mergers or consolidations or acquisitions of additional shares of
the corporation, with the corporation for a three-year period following the
date that such stockholder becomes an "interested stockholder" unless (i)
prior to such date, the board of directors of the 
                                    52
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an "interested stockholder," (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
"interested stockholder," the interested stockholder owned at least 85% of
the voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares), or (iii) on or subsequent to such date,
the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of stockholders by
the affirmative vote of at least 66-2/3% of the outstanding voting stock
which is not owned by the "interested stockholder." Except as otherwise
specified in Section 203, an "interested stockholder" is defined to include
(x) any person that is the owner of 15% or more of the outstanding voting
stock of the corporation, or is an affiliate or associate of the corporation
and was the owner of 15% or more of the outstanding voting stock of the
corporation at any time within three years immediately prior to the relevant
date and (y) the affiliates and associates of any such person.

     Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions imposed
thereunder.  The Certificate of Incorporation does not exclude the Company
from the restrictions imposed under Section 203.  The provisions of Section
203 may encourage companies interested in acquiring the Company to negotiate
in advance with the Board of Directors, since the stockholder approval
requirement would be avoided if a majority of the directors then in office
approve either the business combination or the transaction which results in
the shareholder becoming an interested shareholder.  Such provisions also may
have the effect of preventing changes in the management of the Company.  It
is possible that such provisions could make it more difficult to accomplish
transactions which stockholders may otherwise deem to be in their best
interests.

     Severance arrangements

     Certain executive officers of the Company have severance arrangements
with the Company, which may have the effect of increasing the costs of
acquiring the Company in a hostile takeover.  See "Management -- Termination
of Employment and Change-of-Control Arrangements."

     Rights Plan

     On April 13, 1995, the Company adopted a preferred stock purchase rights
plan (the "Rights Plan").  Under the Rights Plan, the Board declared a
dividend in the form of one right (a "Right" and, collectively, the "Rights")
for each outstanding share of Common Stock.  The dividend was payable on
April 27, 1995 (the "Record Date") and was declared with respect to both the
shares then outstanding and shares that shall become outstanding between the
Record Date and the earliest of the Distribution Date (as defined below) and
the date on which the 

                                    53
Rights are redeemed or expire.  The certificates representing any such shares
of Common Stock so issued will bear a legend to the effect that the
certificates also evidence the Rights.

     Subject to adjustment upon the occurrence of certain events described
below, each Right entitles the holder thereof to purchase one one-hundredth
of a share of Series A Preferred (the "Preferred Shares") for $76.00 (the
"Purchase Price"), ten days after a person or group (an "Acquiring Person")
acquires 25% or more of the Company's Common Stock (or, subject to the terms
of the Rights Agreement, more than 29% in the case of Leonard Green &
Partners, L.P. ("LGP") or any person or entity which at any time purchases
all of the shares of Common Stock owned by LGP), or certain actions are taken
in respect of such acquisition.  The first date on which the right to
purchase Preferred Shares could be exercised is referred to herein as the
Distribution Date.  

     The Purchase Price payable, and the number of Preferred Shares or other
securities issuable, upon exercise of the Rights shall be adjusted in the
event (i) of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) of a grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for or purchase
Preferred Shares at a price, or securities convertible into Preferred Shares
with a conversion price, less than the then-current market price of the
Preferred Shares or (iii) of a distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular periodic
cash dividends paid out of earnings or retained earnings or dividends payable
in Preferred Shares) or of subscription rights or warrants (other than those
referred to above).

     The number of outstanding Rights and the number of one one-hundredths of
a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the shares of Common Stock or a
stock dividend on the shares of Common Stock payable in shares of Common
Stock or subdivisions, consolidations or combinations of shares of the Common
Stock occurring, in any such case, prior to the Distribution Date.

     In the event any person or group becomes an Acquiring Person, each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the right to
receive (subject to adjustment) upon exercise that number of shares of Common
Stock having a market value of two times the exercise price of the Right.  In
addition, if there is a merger or other business combination between the
Company and an Acquiring Person, or if certain other events occur involving
an Acquiring Person, each Right (if not previously exercised) would entitle
the holder to purchase that number of shares of common stock of the Acquiring
Person which at the time of such transaction will have a market value of two
times the exercise price of the Right.

     Prior to the Distribution Date, the Rights cannot be transferred apart
from the Common Stock and will be represented solely by the Common Stock
certificates.  If the Distribution Date occurs, separate certificates
representing the Rights will be mailed to holders of the Common 

                                    54
Stock as of such date, and the Rights could then begin to trade separately
from the Common Stock.

     At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Company may exchange the Rights
(other than Rights owned by an Acquiring Person, which will have become
void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a Preferred Share (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges), per Right (subject to adjustment).

     The Rights are redeemable by the Company at $.01 per Right at any time
prior to the occurrence of the Distribution Date.  In the event the Company
receives a written notice from the holder or holders of at least ten percent
of the shares of Common Stock then outstanding directing the Board of
Directors to submit to a vote of stockholders at the Company's next annual
meeting of stockholders a resolution authorizing the redemption of all the
then outstanding Rights at the Redemption Price (the "Resolution") and the
written notice complies with certain procedural requirements, then the Board
of Directors is required to take such actions as are necessary or desirable
to cause the Resolution to be so submitted to a vote of stockholders,
including by including a proposal relating to the adoption of the Resolution
in the Board of Directors' proxy materials relating to such annual meeting of
stockholders.  Subject to the requirements of applicable law, the Board of
Directors of the Company may take a position in favor of or opposed to the
adoption of the Resolution, or no position with respect to the Resolution, as
it deems appropriate.  If at the annual meeting the Resolution receives the
affirmative vote of a majority of the shares of Common Stock outstanding as
of the record date for such annual meeting, and provided that no person or
entity has become an Acquiring Person prior to the redemption date, then all
of the Rights will be redeemed by such stockholder action at the Redemption
Price, effective as of the close of business on the tenth business day
following the date on which the results of the vote on the Resolution at the
annual meeting are certified as official.  The Rights will automatically
expire on April 13, 2000 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company.

     The Rights will not have any voting rights and will not be entitled to
dividends.  The terms of the Rights may be amended without the consent of the
holders of the Rights, provided that after the Distribution Date the
amendment does not adversely affect the interest of the holders. 

     The Preferred Shares are not redeemable and have no sinking fund.  Each
Preferred Share will be entitled to a minimum preferential quarterly dividend
payment of $1 per share but will be entitled to an aggregate dividend equal
to the dividends on 100 shares of Common Stock.  In addition, each Preferred
Share will have a liquidation preference of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per share of
Common Stock.  

                                    55
Each Preferred Share will have 100 votes, voting together with the shares of
Common Stock.  Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each Preferred
Share will be entitled to receive 100 times the amount received per share of
Common Stock.  These rights are protected by customary anti-dilution
provisions.

     The Rights may have certain anti-takeover effects.  The Rights will
cause substantial dilution to any person or group which becomes an Acquiring
Person or if an Acquiring Person attempts to merge with, or engage in certain
other transactions with, the Company.  The Rights should not, however,
interfere with any merger or other business combination approved by the
Company's Board of Directors prior to the occurrence of a Distribution Date
because the Rights may be redeemed prior to such time.

Limitation of Liability of Directors

     The Certificate of Incorporation provides that a director of the Company
will not be personally liable to the Company or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware General Corporation Law, which concerns unlawful payments of
dividends, stock purchases or redemptions, or (iv) for any transaction from
which the director derived an improper personal benefit.

     While the Certificate of Incorporation provides directors with
protection from awards for monetary damages for breaches of their duty of
care, it does not eliminate such duty.  Accordingly, the Certificate of
Incorporation will have no effect on the availability of equitable remedies
such as an injunction or rescission based on a director's breach of his or
her duty of care.  The provisions of the Certificate of Incorporation
described above apply to an officer of the Company only if he or she is a
director of the Company and is acting in his or her capacity as director, and
do not apply to officers of the Company who are not directors.

                                    56
SELLING STOCKHOLDERS

     Certain holders of Common Stock (the "Selling Stockholders") may offer
such securities hereby on a continuous or delayed basis pursuant to Rule 415
promulgated under the Securities Act.  

     The following table sets forth certain information as of April 26, 1995
with respect to each Selling Stockholder for whose account Common Stock may
be sold pursuant to this Prospectus, which information has been furnished to
the Company by the Selling Stockholders and other sources that the Company
has not certified.  Because the Selling Stockholders may sell, pursuant to
this Prospectus, all or some part of the Common Stock that they hold, no
estimate can be given as to the amount of Common Stock that will be held by
the Selling Stockholders at any time subsequent to the date of this
Prospectus.  See "Plan of Distribution."  As of April 26, 1995, none of the
Selling Stockholders except Green Equity Investors, L.P. ("GEI") has had a
material relationship within the past three years with the Company, other
than as a result of the ownership of securities of the Company.  For a
discussion of the relationship between GEI and the Company, see "Certain
Relationships and Related Transactions."

                             Beneficial Ownership Prior      Beneficial
                                 to Offering (1)             Ownership
                                                             After
                           Number of Percentage  Shares      Offering
Name of Selling Stockholder  Shares  of Class Offered Hereby (1), (2)

American Express Company    652,470(3)  21.1   652,470       -0-

American Express Financial  
  Corporation               652,470(3)  21.1   652,470       -0-

Eugene Aspy and Helen
Breland, as joint tenants        10      *          10       -0-

William H. Bartman and          251      *         251       -0-
Margaret L. Bartman, as
Trustees u/a dated July 28,
1971

Wayne R. Bernhardt              125      *         125       -0-

Harold Buchhalter               501      *         502       -0-

Gino J. Caccanisi and           250      *         250       -0-
Barbara V. Caccanisi, as
joint tenants

Cede & Co.                3,076,283(4) 99.24 3,076,283       -0-

Jennifer Holden Dunbar          251       *        251       -0-

                                    57
Mary J. Eichhorn, as Trustee      502       *        502       -0-
u/a dated May 21, 1991 f/b/o
Walter J. Eichhorn, Sr.
Revocable Trust

Ruth E. Geniesse                   50       *         50       -0-

Green Equity Investors, L.P.  857,378     27.7   857,378       -0-

Paul J. Green & Joan Green,       125       *        125       -0-
as joint tenants

Florence T. Harlow and            251       *        251       -0-
Joseph E. Harlow, as joint
tenants

Letitia Haugen, as Trustee        250       *        250       -0-
u/a dated April 30, 1980
f/b/o Letitia Haugen Trust

IDS Extra Income Fund         552,090(3)     17.8    

Kray & Co.                      5,321       *      5,321       -0-

Lewis J. Lamm                   2,761       *      2,761       -0-

Malcom W. Morris, Jr.             176       *        176       -0-

Edward J. Mytkowicz and           627       *        627       -0-
Esther Mytkowicz, as trustee
f/b/o Edward J. Mytkowicz
and Esther Mytlowicz Family
Trust dated April 29, 1980

PaineWebber Incorporated      402,568(5)   13.0  402,568       -0-

Philadep & Co.                  1,004        *     1,004       -0-

The Prudential Insurance      435,384      14.0  435,384       -0-
Company of America

Richard H. Rohlwing and           627        *       627       -0-
Linda Rohlwing, as joint
tenants

George A. Shurick               6,526        *     6,526       -0-

Ellen M. Skaggs and Delois        125        *       125       -0-
V. Skaggs, as joint tenants

Geoffrey Skinner                2,000        *     2,000       -0-

                                    58
Raymond L. Valente, as            376         *      376       -0-
Trustee f/b/o Loretta S.
Valente Trust u/a dated July
12, 1990

* Less than 1%

(1)  Information with respect to beneficial ownership was obtained from the
     Selling Stockholders.  Except to the extent otherwise provided herein,
     the persons named in the table have sole voting and dispositive power
     with respect to all shares of Common Stock shown as beneficially owned
     by them.

(2)  Assumes sale of all, and no other purchases of, Common Stock.  See "Plan
     of Distribution."

(3)  Represents shares over which American Express Company, American Express
     Financial Corporation and IDS Extra Income Fund share dispositive power,
     and as to which American Express Company has indicated that it disclaims
     beneficial ownership.  

(4)  Includes 857,378 shares beneficially owned by Green Equity Investors,
     L.P., 652,470 shares beneficially owned by American Express Company,
     American Express Financial Corporation and IDS Extra Income Fund,
     435,384 shares beneficially owned by the Prudential Insurance Company of
     America, 402,568 shares beneficially owned by PaineWebber Incorporated,
     and 251 shares beneficially owned by Jennifer Holden Dunbar.

(5)  As of April 15, 1995.

     All of the shares offered hereby were acquired by the Selling
Stockholders (or their authorized assignors) pursuant to the Prepackaged
Plan.  The shares of Common Stock are being registered to satisfy a condition
set forth in the Prepackaged Plan.  Pursuant to the Prepackaged Plan, the
Company is required to use its best efforts to keep such Registration
Statement continuously effective until the third anniversary of its original
effectiveness.  However, there can be no assurance that the Selling
Stockholders will sell any or all of the shares of Common Stock which may be
offered pursuant to this Prospectus. 

                                    59
PLAN OF DISTRIBUTION

     The Company will not receive any of the proceeds from the sale by the
Selling Stockholders of the Common Stock offered by this Prospectus.  Any or
all of such Common Stock may be sold by the Selling Stockholders from time to
time (i) to or through underwriters or dealers, (ii) directly to one or more
other purchasers, (iii) through agents on a best-efforts basis, or (iv)
through a combination of any such methods of sale.  The Selling Stockholders
and any such underwriters, dealers or agents that participate in the
distribution of the Common Stock may be deemed to be underwriters within the
meaning of the Securities Act, and any profit on the sale of the Common Stock
by them, and any discounts, commissions or concessions received by them, may
be deemed to be underwriting discounts and commissions under the Securities
Act.  The Common Stock may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices.  Such prices
will be determined by the Selling Stockholders or by agreement between the
Selling Stockholders and underwriters or dealers.  Brokers or dealers acting
in connection with the sale of Common Stock contemplated by this Prospectus
may receive fees or commissions in connection therewith.

     At the time a particular offer of Common Stock is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter
for Common Stock purchased from the Selling Stockholders, any discounts,
commissions and other items constituting compensation from the Selling
Stockholders and/or the Company and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, including the proposed selling price
to the public.  Each supplement to this Prospectus and, if necessary, a
post-effective amendment to the Registration Statement of which this
Prospectus is a part, will be filed with the Commission to reflect the
disclosure of additional information with respect to the distribution of
Common Stock.

     The outstanding Common Stock is, and the Common Stock offered hereby
will be, listed on the Nasdaq Small Cap Market.

     Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of Common Stock may not simultaneously
engage in market making activities with respect to the Common Stock for a
period of nine business days prior to the commencement of such distribution. 
In addition and without limiting the foregoing, the Selling Stockholders and
any person participating in the distribution of the Common Stock will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of the Common
Stock by the Selling Stockholders or any such other person.

                                    60
In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered
or licensed brokers or dealers.  In certain states the Common Stock may not
be sold unless it has been registered or qualified for sale in such state, or
unless an exemption from registration or qualification is available. 

     The Registration Statement, of which the Prospectus is a part, is being
filed by the Company to satisfy a condition set forth in the Prepackaged
Plan.  Pursuant to the Prepackaged Plan, the Company is required to use its
best efforts to keep such Registration Statement continuously effective until
the third anniversary of its original effectiveness.  

     Pursuant to the Prepackaged Plan, the Company has paid or will pay any
and all expenses incident to the performance of or compliance with its
registration obligations, including, among other things, registration and
filing fees, fees and expenses incurred in connection with compliance with
securities or blue sky laws of the applicable states, fees and disbursements
of counsel and independent public accountants for the Company, but excluding
underwriting discounts and commissions, the fees and expenses of counsel to
the Selling Stockholders and transfer taxes, if any.

                          LEGAL MATTERS

     The validity of the Common Stock offered hereby will be passed upon by
Milbank, Tweed, Hadley & McCloy.

                             EXPERTS

     The financial statements of the Company as of July 31, 1994 and August
1, 1993 and for the 52 weeks ended July 31, 1994 and August 1, 1993 and the
53 weeks ended August 2, 1992, have been included herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP
("KPMG"), independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.

     On February 17, 1995, KPMG, the Company's independent accountants who
were previously engaged as the principal accountants to audit the Company's
financial statements, were dismissed.  KPMG's report on the financial
statements of the Company for the past two years contained no adverse opinion
or disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principles, except that KPMG's report
on the 1994 financial statements of the Company contained a separate
paragraph stating that "Kash n' Karry Food Stores, Inc. has suffered
recurring losses from operations and has a net capital deficiency.  As
discussed in note 1 to the financial statements, Kash n' Karry Food Stores,
Inc. filed a pre-packaged petition under Chapter 11 of the United 

                                    61
States Bankruptcy Code on November 9, 1994.  These matters raise substantial
doubt about its ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty."  The Company's plan of reorganization was approved by
the bankruptcy court on December 12, 1994 and became effective on December
29, 1994.   

     The decision to change accountants was approved by the Board of
Directors of the Company.  During the Company's two most recent fiscal years
and any subsequent interim period preceding the dismissal, there were no
disagreements between the Company and KPMG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of KPMG would have
caused KPMG to make reference to the subject matter of the disagreement in
connection with its report.  Also, during the aforementioned period, there
occurred no "reportable event" within the meaning of Item 304(a)(1)(v) of
Regulation S-K of the Commission.  

     On February 17, 1995, the Company engaged Coopers & Lybrand L.L.P. as
the principal accountants to audit the Company's financial statements for the
fiscal year ending July 30, 1995.  The Company did not consult with Coopers
& Lybrand, L.L.P. regarding accounting advice prior to its engagement.

                                    62
INDEX TO FINANCIAL STATEMENTS

                  UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

                                                                                
                                                                           Page

Condensed Balance Sheets as of January 29, 1995, and July 31, 1994 . . . .  F- 3

Condensed Statements of Operations for the four weeks ended
     January 29, 1995, the 22 weeks ended January 1, 1995,
     and the 26 weeks ended January 30, 1994 . . . . . . . . . . . . . . .  F- 5

Condensed Statements of Cash Flows for the four weeks ended
     January 29, 1995, the 22 weeks ended January 1, 1995,
     and the 26 weeks ended January 30, 1994 . . . . . . . . . . . . . . .  F- 7

Notes to Condensed Financial Statements. . . . . . . . . . . . . . . . . .  F- 9

                            AUDITED FINANCIAL STATEMENTS

                                                                                
                                                                           Page

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .  F-15

Balance Sheets as of July 31, 1994 and August 1, 1993. . . . . . . . . . .  F-16

Statements of Operations for the fiscal years ended July 31, 1994,
     August 1, 1993 and August 2, 1992 . . . . . . . . . . . . . . . . . .  F-17

Statement of Stockholders' Deficit for the fiscal years ended July 31, 1994,
     August 1, 1993 and August 2, 1992 . . . . . . . . . . . . . . . . . .  F-18

Statements of Cash Flows for the fiscal years ended July 31, 1994,
     August 1, 1993 and August 2, 1992 . . . . . . . . . . . . . . . . . .  F-19

Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . .  F-21

                                    F-1
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
                                                                                
                                                                           Page

Pro Forma Financial Information. . . . . . . . . . . . . . . . . . . . . . F-36

Unaudited Pro Forma Balance Sheet as of July 31, 1994. . . . . . . . . . . F-37

Notes to Unaudited Pro Forma Balance Sheet . . . . . . . . . . . . . . . . F-39

Unaudited Pro Forma Statement of Operations 
     for the fiscal year ended July 31, 1994 . . . . . . . . . . . . . . . F-40

Notes to Unaudited Pro Forma Statement of Operations . . . . . . . . . . . F-41

                                    F-2
KASH N' KARRY FOOD STORES, INC.
                                 BALANCE SHEETS
          (Dollar Amounts in Thousands, Except Per Share Amounts)

                                      ASSETS                                

                                                      Reorganized  Predecessor
                                                        Company      Company
                                                      ------------ -----------
                                                       January 29,   July 31,   
                                                              
                                                           1995        1994  
                                                      ------------ -----------
                                                       (Unaudited)
                                                         (Note 1)
Current assets:                                         
   Cash and cash equivalents                             $ 10,517    $  6,852
   Accounts receivable                                      6,701       8,084
   Inventories                                             78,756      76,094
   Prepaid expenses and other current assets                3,246      12,805
                                                         ---------   ---------
      Total current assets                                 99,220     103,835
Property and equipment, at cost, less
   accumulated depreciation                               143,813     160,491
Favorable lease interests, less accumulated
   amortization of $192 and $13,543                        29,762      12,312
Deferred financing costs, less accumulated
   amortization of $182 and $22,572                         4,043      12,630
Reorganization value in excess of amount allocable
   to identifiable assets, less accumulated
   amortization of $460 at January 29, 1995               102,059         --
Excess of cost over net assets acquired, less
   accumulated amortization of $16,288 at
   July 31, 1994                                              --       96,758
Other assets                                                2,854       3,867
                                                         ---------   ---------
      Total assets                                       $381,751    $389,893
                                                         =========   =========

               See accompanying notes to condensed financial statements. 

                                    F-3
KASH N' KARRY FOOD STORES, INC.
                                 BALANCE SHEETS
              (Dollar Amounts in Thousands, Except Per Share Amounts)

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                      Reorganized  Predecessor
                                                        Company      Company
                                                      ------------ -----------
                                                       January 29,   July 31,   
                                                              
                                                           1995        1994  
                                                      ------------ -----------
                                                       (Unaudited)
                                                         (Note 1)
Current liabilities:
   Current portion of long-term debt                     $ 12,764    $ 42,740
   Accounts payable                                        39,883      34,908
   Accrued payroll and benefits                             9,023       5,579
   Accrued interest                                         4,618      15,849
   Taxes, other than income                                 4,052       6,056
   Other accrued expenses                                  21,673      11,450
                                                         ---------   ---------
      Total current liabilities                            92,013     116,582

Long-term debt, less current obligations                  227,522     317,381 
Other long-term liabilities                                14,914      12,334
Old Series B Cumulative Preferred Stock of $.01 par 
   value and a stated value of $100 a share.  
   Authorized 50,000 shares; 38,750 shares 
   outstanding at July 31, 1994.                              --        3,875 
Old Series C Convertible Preferred Stock of 
   $.01 par value. Authorized 100,000 shares; 
   77,500 shares outstanding at July 31, 1994.                --          775 

Stockholders' equity (deficit):
   New Common Stock of $.01 par value.
      Authorized 5,500,000 shares; 3,100,000
      shares outstanding at January 29, 1995.                  31         --
   Old Common Stock of $.01 par value.   
      Authorized 4,000,000 shares; 2,819,589  
      shares outstanding at July 31, 1994.                    --           28 
   Capital in excess of par value                          46,464      77,695 
   Retained earnings (deficit)                                807    (138,740)
   Less cost of treasury stock - 2,437 shares
      at July 31, 1994                                        --          (37)
                                                         ---------   ---------
       Total stockholders' equity (deficit)                47,302     (61,054)
                                                         ---------   ---------
       Total liabilities & stockholders' equity          $381,751    $389,893 
                                                         =========   =========

               See accompanying notes to condensed financial statements. 

                                      F-4
KASH N' KARRY FOOD STORES, INC.
                        CONDENSED STATEMENTS OF OPERATIONS
                                  (In Thousands)
                                    (Unaudited)
                                   Reorganized          Predecessor
                                     Company              Company
                                   -----------    --------------------------
                                      Four          Nine          Thirteen
                                   Weeks Ended    Weeks Ended    Weeks Ended
                                   January 29,    January 1,     January 30,
                                      1995          1995            1994
                                   -----------    -----------    -----------
Sales                               $ 86,354       $186,535       $278,166
Cost of sales                         68,940        149,070        221,706
                                    ---------     -----------    ----------
   Gross profit                       17,414         37,465         56,460
Selling, general and 
   administrative expenses            12,226         28,319         45,300
Depreciation and amortization          1,979          4,161          6,220
                                    ---------      ---------     ----------
   Operating income                    3,209          4,985          4,940

Interest expense                       2,402          3,159         11,372
                                    ---------      ---------     ----------
Income (loss) before reorganization
   items, income taxes, extra-
   ordinary item and change in
   accounting principle                 807          1,826         (6,432)

Reorganization items                    --            (219)           -- 
                                    ---------      ---------     ----------
Income (loss) before income taxes,
    extraordinary item and change
    in accounting principle             807          1,607         (6,432)

Provision for income taxes              --             --             --
                                    ---------      ---------     ----------
Income (loss) before extra-
    ordinary item and change in
    accounting principle                807          1,607         (6,432)

Extraordinary item - gain on 
    debt discharge                      --          70,166            --
Cumulative effect of change in
    accounting principle -
    postretirement medical benefits     --          (2,000)           --
                                    ---------      ---------     ----------
Net income (loss)                   $   807        $69,773       $ (6,432)
                                    =========      =========     ==========

Net income per common share (A)(B)  $   0.26                             
                                    =========          
(A)  Based on a weighted average number of shares of common stock of 3,100,000 
     outstanding.
(B)  Net income per common share is not meaningful prior to January 1, 1995 
     due to the significant change in the capital structure in connection with 
     the Restructuring.
               See accompanying notes to condensed financial statements. 
                                    F-5
KASH N' KARRY FOOD STORES, INC.
                        CONDENSED STATEMENTS OF OPERATIONS
                                  (In Thousands)
                                    (Unaudited)
                                   Reorganized          Predecessor
                                     Company              Company
                                   -----------    --------------------------
                                      Four        Twenty-Two     Twenty-Six
                                   Weeks Ended    Weeks Ended    Weeks Ended
                                   January 29,    January 1,     January 30,
                                      1995          1995            1994
                                   -----------    -----------    -----------
Sales                               $ 86,354       $426,681       $534,801
Cost of sales                         68,940        340,802        425,915
                                    ---------     -----------    ----------
   Gross profit                       17,414         85,879        108,886
Selling, general and 
   administrative expenses            12,226         68,819         90,128
Depreciation and amortization          1,979         10,234         12,111 
Store closing and other costs            --             --          11,016
                                    ---------      ---------     ----------
   Operating income (loss)             3,209          6,826         (4,369)

Interest expense                       2,402         13,719         22,513
                                    ---------      ---------     ----------
Income (loss) before reorganization
   items, income taxes, extra-
   ordinary item and change in
   accounting principle                  807         (6,893)       (26,882)

Reorganization items                     --            (219)           --
                                    ---------      ---------     ----------
Income (loss) before income taxes,
    extraordinary item and change
    in accounting principle              807         (7,112)       (26,882)

Provision for income taxes               --             --             --
                                    ---------      ---------     ----------
Income (loss) before extra-
    ordinary item and change
    in accounting principle              807         (7,112)       (26,882)

Extraordinary item - gain on 
    debt discharge                       --          70,166            --
Cumulative effect of change in
    accounting principle -
    postretirement medical benefits      --          (2,000)           --
                                    ---------      ---------     ----------
Net income (loss)                   $    807       $ 61,054      $ (26,882)
                                    =========      =========     ==========
Net income per common share (A)(B)  $   0.26                             
                                    =========           
(A)  Based on a weighted average number of shares of common stock of 3,100,000 
     outstanding.
(B)  Net income per common share is not meaningful prior to January 1, 1995 
     due to the significant change in the capital structure in connection with 
     the Restructuring.
               See accompanying notes to condensed financial statements. 
                                    F-6
KASH N' KARRY FOOD STORES, INC.
                            STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)

                                          Reorganized       Predecessor
                                            Company           Company
                                          ------------ -----------------------
                                           Four Weeks  Twenty-Two  Twenty-Six
                                              Ended    Weeks Ended Weeks Ended
                                           January 29, January 1,  January 30, 
                                              1995        1995        1994
                                           ----------- ----------- -----------

Net cash flow from operating activities:          
   Net income (loss)                         $    807    $61,054    $(26,882)
   Adjustments to reconcile net income     
      (loss) to net cash provided (used)
      by operating activities:
      Depreciation and amortization, 
         excluding deferred financing costs     1,979     11,234      12,111
      Store closing and other costs               --         --       11,016
      Amortization of deferred financing costs    182      1,152       1,549
      Reorganization expense                      --       4,329         --
      Adjustment of accounts to fair value        --      (4,110)        --
      Change in accounting principle              --       2,000         --
      Write-off of transaction costs              --      12,989         --
      Gain on discharge of debt                   --     (70,166)        --
      (Increase) decrease in assets:
         Accounts receivable                     (939)     2,322         660
         Inventories                            8,358     (5,917)      9,433
         Prepaid expenses and other assets       (149)      (270)       (454)
      Increase (decrease) in liabilities:                                   
         Accounts payable                       3,175      1,800       1,652
         Accrued expenses and other                 
            liabilities                        (1,072)    (4,012)      2,697
                                             ---------   --------   ---------

            Net cash provided (used) by 
               operating activities            12,341     12,405      11,782
                                             ----------  --------   ---------

Cash used by investing activities:
   Additions to property and equipment           (162)      (665)     (6,194)
   Leased/financed asset additions                --         --       (4,412)
   Proceeds from sale of property and
      equipment                                   --         --          359
                                             ----------  --------   ---------

            Net cash used by investing 
               activities                        (162)      (665)    (10,247)
                                             ----------  --------   ---------

               See accompanying notes to condensed financial statements. 
                                    F-7
KASH N' KARRY FOOD STORES, INC.
                            STATEMENTS OF CASH FLOWS
                                  (Continued)
                                 (In Thousands)
                                   (Unaudited)

                                          Reorganized       Predecessor
                                            Company           Company
                                          ------------ -----------------------
                                           Four Weeks  Twenty-Two  Twenty-Six
                                              Ended    Weeks Ended Weeks Ended
                                           January 29, January 1,  January 30, 
                                              1995        1995        1994
                                           ----------- ----------- -----------

Cash provided (used) by financing activities:
   Borrowings under revolving loan facility   $  4,200   $    800   $  15,700
   Additions to obligations under 
      capital leases and notes payable             --         --          799
   Repayments on revolving loan facility        (6,700)   (18,000)     (9,100)
   Repayments on term loan facility                --      (3,098)     (2,925)
   Repayments of other long-term liabilities      (151)    (2,235)     (2,642)
   Sale of Common Stock                            --      10,000         --
   Other financing activities                      --      (5,070)       (512)
                                              ---------  ---------  ----------

            Net cash provided (used) by                                   
               financing activities             (2,651)   (17,603)      1,320
                                              ---------  ---------  ----------

Net increase (decrease) in cash 
   and cash equivalents                          9,528     (5,863)      2,855
Cash and cash equivalents at beginning 
   of period                                       989      6,852       2,145
                                              ---------  ---------  ----------

Cash and cash equivalents at end of period    $ 10,517   $    989   $   5,000
                                              =========  =========  ==========

               See accompanying notes to condensed financial statements. 

                                    F-8
KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)

1.   On September 3, 1994, the Company began to solicit acceptances of all 
impaired parties of a restructuring of the Company which would be implemented 
through the consummation of a "prepackaged" plan of reorganization under 
Chapter 11 of the United States Bankruptcy Code (the "Restructuring").  As a 
result of this solicitation, the voting requirements prescribed by Section 
1126 of the Bankruptcy Code were satisfied, and on November 9, 1994 (the 
"Petition Date") the Company filed with the Bankruptcy Court a voluntary 
petition for reorganization under Chapter 11 of the Bankruptcy Code.  On 
December 12, 1994, the Bankruptcy Court confirmed the plan of reorganization, 
and the Company emerged from bankruptcy on December 29, 1994 (the "Effective 
Date").  During the pendency of the bankruptcy case, the Company, with the 
Bankruptcy Court's approval, operated its business in the ordinary course, 
and paid all pre-petition and post-petition claims of the Company's general 
unsecured creditors, trade creditors and employees in full.  In connection 
with the Restructuring:

     (i)  Each $1,000 principal amount of the Company's Old Senior Floating 
Rate Notes was exchanged for (a) new Senior Floating Rate Notes due February 
1, 2003 (the "New Senior Floating Rate Notes") in an original principal 
amount equal to $1,000 plus 100% of the accrued interest under the Old Senior 
Floating Rate Notes from and including February 3, 1994, through but not 
including the Petition Date, or, at such holder's election, (b) new 11.5% 
Senior Fixed Rate Notes due February 1, 2003 (the "New Senior Fixed Rate 
Notes") in the same original principal amount, or, at such holder's election, 
(c) an amount of New Senior Floating Rate Notes and an amount of New Senior 
Fixed Rate Notes equal, in the aggregate, to 100% of such claim;

     (ii)  Each $1,000 principal amount of the Company's Old Senior Fixed 
Rate Notes was exchanged for (a) New Senior Floating Rate Notes in an 
original principal amount equal to $1,000 plus 100% of the accrued interest 
under the Old Senior Fixed Rate Notes from and including February 2, 1994, 
through but not including the Petition Date, or, at such holder's election, 
(b) New Senior Fixed Rate Notes in the same original principal amount, or, at 
such holder's election, (c) an amount of New Senior Floating Rate Notes and 
an amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of 
such claim;

     (iii)  the Old Subordinated Debentures were exchanged for newly-issued 
common stock of the Company representing 85 percent of the common stock 
outstanding on the Effective Date;

     (iv)  Green Equity Investors, L.P. invested $10,000 cash in exchange for 
newly-issued common stock of the Company representing 15 percent of the 
common stock outstanding on the Effective Date; 

     (v)  the Company entered into a new credit agreement with The CIT 
Group/Business Credit, Inc. as Administrative Agent, and the lenders under 
its old bank credit agreement; and 

                                    F-9
KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)

     (vi)  all of the existing preferred stock, common stock, and options and 
warrants to purchase common stock of the Company was extinguished.

2.   The condensed financial statements presented herein have been prepared 
in accordance with the instructions to Form 10-Q and do not include all of 
the information and note disclosures required by generally accepted 
accounting principles.  These statements should be read in conjunction with 
the fiscal 1994 Form 10-K filed by the Company.  The accompanying condensed 
financial statements have not been audited by independent accountants in 
accordance with generally accepted auditing standards, but in the opinion of 
management the condensed financial statements for the period ended January 
30, 1994 includes all adjustments, consisting only of normal recurring 
adjustments, necessary to summarize fairly the Company's financial position 
and results of operations.  

     The condensed financial statements as of and for the period ended 
January 29, 1995 reflect the Company's emergence from Chapter 11 and were 
prepared according to the principles of fresh start reporting contained in 
American Institute of Certified Public Accountants' Statement of Position 
90-7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy 
Code" ("SOP 90-7").  Operations during the period from the Effective Date 
through January 1, 1995 had no significant impact on the emergence 
transactions and as a result have not been separately identified.  As a 
result of the implementation of fresh start accounting, the Company's 
condensed financial statements are not comparable to the Company's condensed 
financial statements of prior periods.  Results for the periods ended January 
29, 1995 or January 1, 1995 are not necessarily indicative of the results for 
the full year.

     The total reorganization value assigned to the Company's assets was 
estimated by calculating projected cash flows before debt service 
requirements discounted back to present value using a discount rate of 13.3% 
(representing the estimated weighted cost of capital), as well as by 
analyzing market cash flow multiples applied to the Company's adjusted 
12-month trailing cash flows.  After extensive negotiations between 
independent investment banking firms representing the Company and an ad hoc 
committee of bondholders, the reorganization value was agreed to by the 
parties and confirmed by the Bankruptcy Court.  The excess of the 
reorganization value over the value of the identifiable assets is reported as 
"Reorganization Value in Excess of Amounts Allocable to Identifiable Assets" 
and is being amortized over twenty years.  Under the principles of fresh 
start accounting, the Company's total assets were recorded at this assumed 
reorganization value, with the reorganization value allocated to identifiable 
tangible and intangible assets on the basis of their estimated fair value.  
In addition, the Company's accumulated deficit was eliminated.                  
       

     The effect of the Restructuring and the implementation of fresh start 
accounting on the Company's condensed balance sheet as of January 1, 1995 was 
as follows:                               F-10
KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)
                                                                      Fresh
                                                                      Start 
                              Pre-Fresh                              Balance
                            Start Balance  Adjustments                Sheet
                            Sheet January       of       Fair Value  January 
                              1, 1995      Restructuring Adjustment  1, 1995
                                                (A)          (B)
                            -------------  ------------- ----------  --------
Cash and cash equivalents      $  9,166       $ (8,177)  $    --     $    989
Accounts receivable               5,762            --         --        5,762
Inventories                      82,011            --       5,104      87,115
Prepaid expenses and other 
   current assets                 3,088            --         --        3,088
                               ---------      ---------  ---------   --------
   Total current assets         100,027         (8,177)     5,104      96,954

Property and equipment, net     162,754            --     (17,775)    144,979
Favorable lease interests, net   11,673            --      18,280      29,953
Deferred financing costs         17,769         (7,456)    (6,088)      4,225
Reorganization value in 
   excess of amount alloc-
   able to identifiable 
   assets                           --             --     102,519     102,519
Excess of cost over net 
   assets acquired               95,560            --     (95,560)        --
Other assets                      3,790            --        (928)      2,862
                               ---------      ---------  ---------   --------
      Total assets             $391,573       $(15,633)  $  5,552    $381,492
                               =========     ==========  =========   ========
Current liabilities, excluding
    current portion of long- 
    term debt                  $ 82,983       $(12,617)  $  6,779    $ 77,145
Long-term debt, including 
    current obligations         366,231       (119,486)    (3,959)    242,786
Other long-term liabilities       6,226            --       8,840      15,066
Redeemable Preferred Stock        4,650         (4,650)       --          --
Stockholders' equity (deficit)  (68,517)       121,120     (6,108)     46,495
                               ---------      ---------  ---------   --------
      Total liabilities                                                      
         and stockholders' 
         equity                $391,573       $(15,633)  $  5,552    $381,492
                               =========     ==========  =========   ========

(A)  To record the transactions applicable to the Restructuring as outlined 
     in footnote 1 and eliminate the deficit in accumulated deficit.
(B)  To record the adjustments to state assets and liabilities at fair value, 
     and to record the cumulative effect of adopting SFAS No. 106 as of the 
     Effective Date.

3.   Inventories consist of merchandise held for resale and are stated at the 
lower of cost or market; cost is determined using average cost, which 
approximates the first-in, first-out (FIFO) method.  

                                    F-11
KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)

4.   The Company had a policy of classifying capital expenditures to be 
refinanced within one year as prepaid expenses and other current assets.  
These amounts have been classified as property and equipment at January 29, 
1995.  At July 31, 1994, prepaid expenses and other current assets included 
$9,987 of expenditures for construction in progress expected to be financed 
within one year.

5.  Long-term debt consists of the following:

                                        January 29,       July 31,
                                           1995             1994
                                        -----------       --------

New term loan and revolving 
   credit facilities (A)                 $ 47,000         $    --
Old bank term and revolving 
   credit facilities (A)                      --            59,629
New Senior Floating 
   Rate Notes (B)                          22,953              --
New Senior Fixed Rate 
   Notes (C)                              121,162              --
Old Senior Floating 
   Rate Notes (B)                             --            85,000
Old Senior Fixed 
   Rate Notes (C)                             --            50,000
Subordinated Debentures                       --           105,000
Mortgages payable                          33,555           34,368
Capital lease obligations                   8,410           13,877
Other                                       7,206           12,247
                                         ---------        ---------
Long-term debt including
    current portion                       240,286          360,121

Less current portion                      (12,764)         (42,740)
                                         ---------        ---------
Long-term debt                           $227,522         $317,381
                                         =========        =========

(A)   In connection with the Restructuring, the Company entered into a new 
term loan and revolving credit agreement (the "New Credit Agreement") on 
December 29, 1994.  At January 29, 1995, the Company's New Credit Agreement 
provides for borrowings of up to $35,000 under a term loan facility (with 
quarterly principal repayments of $1,750 and a $14,000 repayment due when the 
facility terminates on December 29, 1997) and a $50,000 revolving credit 
facility with a $25,000 sublimit for letters of credit.  At January 29, 1995, 
the Company had $12,000 in borrowings under the working capital line, and had 
$17,300 of letters of credit issued against the revolving credit facility.  
Amounts outstanding under the term facility bear interest (11.0% at January 
29, 1995) equal to the prime rate (as defined) plus 250 basis points.  
Amounts outstanding under the revolving credit facility bear interest (9.50% 
at January 29, 1995) equal to the prime rate plus 100 basis points.

                                    F-12
KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)

(B)   The New Senior Floating Rate Notes mature on February 1, 2003, and bear 
interest (7.31% at January 29, 1995) payable semiannually, at a rate equal to 
six-month LIBOR (as defined in the New Senior Floating Rate Note Indenture) 
plus 200 basis points.  The New Senior Floating Rate Notes are redeemable in 
whole or in part, at the option of the Company, on not less than 30 nor more 
than 60 days' prior notice in amounts of $1,000 or an integral multiple 
thereof, at 100% of the principal amount and unpaid interest, if any, to the 
redemption date.  Through August 1, 1995, all interest on the New Senior 
Floating Rate Notes may, at the option of the Company, be paid by issuing in 
lieu of cash additional New Senior Floating Rate Notes in an aggregate 
principal amount equal to the amount of interest due.  The Old Senior 
Floating Rate Notes bore interest (5.88% at July 31, 1994) payable 
semiannually, at a rate equal to six-month LIBOR plus 250 basis points.

(C)   The New Senior Fixed Rate Notes mature on February 1, 2003, and bear 
interest at 11.5% per annum, payable semiannually.  The New Senior Fixed Rate 
Notes are redeemable in whole or in part, at the option of the Company, on 
not less than 30 nor more than 60 days' prior notice in amounts of $1,000 or 
an integral multiple thereof, at 100% of the principal amount and unpaid 
interest, if any, to the redemption date.  Through February 1, 1996, all 
interest on the New Senior Fixed Rate Notes may, at the option of the 
Company, be paid by issuing in lieu of cash additional New Senior Fixed Rate 
Notes in an aggregate principal amount equal to the amount of interest due.  
The Old Senior Fixed Rate Notes bore interest, payable semiannually, at an 
annual rate of 12.375%.

6.  Reorganization items included in the condensed statements of operations 
consist of restructuring costs, adjustments to fair value, professional fees 
and other expenses.

7.   The Company has a retiree medical plan under which medical coverage is 
available to current retirees and those active employees who, on August 1, 
1993, had attained age 65 with at least 15 years of service.  In accordance 
with SOP 90-7, which the Company adopted on the Effective Date of the 
Restructuring, the provisions of Financial Accounting Standards Board 
Statement 106 "Employers' Accounting for Postretirement Benefits Other Than 
Pensions" were also adopted as of that date.    The following table sets 
forth the projected actuarial present value of unfunded postretirement 
benefit obligations for the plan at January 29, 1995:

     Accumulated postretirement
        benefit obligation:

           Retirees                               $1,915
           Fully eligible active
              plan participants                       85
                                                  -------
           Accrued postretirement
              benefit obligation                  $2,000
                                                  =======
                                    F-13
KASH N' KARRY FOOD STORES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (In Thousands)
                                 (Unaudited)

     The weighted average discount rate used in determining the accumulated 
postretirement benefit obligation was 8.0%.

8.   During the first quarter of fiscal 1994, the Company recorded a 
non-recurring charge of $11,016 which reflects expenses associated with a 
program of closing twelve underperforming stores and expensing costs 
associated with unsuccessful financing activities.

                                    F-14
Independent Auditors' Report

The Board of Directors
Kash n' Karry Food Stores, Inc.:

We have audited the accompanying balance sheets of Kash n' Karry
Food Stores, Inc. as of July 31, 1994 and August 1, 1993, and the
related statements of operations, stockholders' deficit, and cash
flows for the fifty-two weeks ended July 31, 1994 and August 1,
1993, and fifty-three weeks ended August 2, 1992.  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 audits 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 financial position of Kash n'
Karry Food Stores, Inc. at July 31, 1994 and August 1, 1993, and
the results of its operations and its cash flows for the fifty-two
weeks ended July 31, 1994 and August 1, 1993, and fifty-three weeks
ended August 2, 1992, in conformity with generally accepted
accounting principles.  

The accompanying financial statements have been prepared assuming
that Kash n' Karry Food Stores, Inc. will continue as a going
concern.  However, Kash n' Karry Food Stores, Inc. has suffered
recurring losses from operations and has a net capital deficiency. 
As discussed in Note 1 to the financial statements, Kash n' Karry
Food Stores, Inc. filed a pre-packaged petition under Chapter 11 of
the United States Bankruptcy Code on November 9, 1994 and these
matters raise substantial doubt about its ability to continue as a
going concern.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ KPMG Peat Marwick LLP
- -----------------------------------
Tampa, Florida
September 16, 1994, except with respect to
              Notes 1 and 5, which are as of November 9, 1994

                              F-15
KASH N' KARRY FOOD STORES, INC.
                                BALANCE SHEETS
              (Dollar Amounts in Thousands, Except Per Share Amounts)

                                    ASSETS
                                                  July 31,       August 1,
                                                    1994           1993
                                                  --------       ---------
Current assets:
   Cash and cash equivalents                      $  6,852       $  2,145
   Accounts receivable                               8,084         10,888
   Inventories                                      76,094         95,385
   Prepaid expenses and other current assets        12,805         13,151
                                                  --------       --------
      Total current assets                         103,835        121,569
Property and equipment, at cost, net               160,491        164,937
Favorable lease interests, less accumulated
   amortization of $13,543 and $7,506               12,312         18,349
Deferred financing costs, less accumulated
   amortization of $22,572 and $19,622              12,630         15,153
Excess of cost over net assets acquired, less
   accumulated amortization of $16,288 and $13,457  96,758         99,589
Other assets                                         3,867          3,611
                                                  --------       --------
      Total assets                                $389,893       $423,208
                                                  ========       ========
                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Current portion of long-term debt              $ 42,740       $ 22,628
   Accounts payable                                 34,908         42,561
   Accrued expenses                                 38,934         37,243
                                                  --------       --------
      Total current liabilities                    116,582        102,432

Long-term debt, less current portion               317,381        329,262
Other long-term liabilities                         12,334         10,023
Series B Cumulative Preferred Stock of $.01
   par value and a stated value of $100 a share.
   Authorized 50,000 shares; 38,750 shares
   outstanding.                                      3,875          3,875
Series C Convertible Preferred Stock of $.01
   par value. Authorized 100,000 shares; 77,500
   shares outstanding.                                 775            775
Stockholders' deficit:
   Common Stock of $.01 par value. Authorized
      4,000,000 and 3,200,000 shares; 2,819,589
      shares outstanding.                               28             28
   Capital in excess of par value                   77,695         77,695
   Accumulated deficit                            (138,740)      (100,845)
   Less cost of Treasury Stock - 2,437 shares          (37)           (37)
                                                  --------       --------
      Total stockholders' deficit                  (61,054)       (23,159)
                                                  --------       --------
      Total liabilities and stockholders' deficit $389,893       $423,208
                                                  ========       ========
               See accompanying notes to financial statements.
                                      F-16
KASH N' KARRY FOOD STORES, INC.
                                STATEMENTS OF OPERATIONS
                                     (In Thousands)

                                    Fifty-two      Fifty-two    Fifty-three
                                   Weeks Ended    Weeks Ended   Weeks Ended
                                  July 31, 1994 August 1, 1993 August 2, 1992
                                  ------------- -------------- --------------

Sales                              $1,065,165      $1,086,125     $1,071,038

Cost of sales                         845,597         856,156        848,441
                                   ----------      ----------     ----------

    Gross profit                      219,568         229,969        222,597

Selling, general and administrative
  expenses                            176,945         175,177        164,897
Depreciation and amortization          24,112          23,455         20,132
Store closing and other costs          11,016             --             --
                                   ----------      ----------     ----------
    Operating income                    7,495          31,337         37,568

Interest expense (net of interest
  income of $4, $1 and $25)            45,390          43,257         44,869
                                   ----------      ----------     ----------
    Net loss                          (37,895)        (11,920)        (7,301)
Undeclared dividends on
   Preferred Stock                        464             464            474
                                   ----------      ----------     ----------

    Loss attributable to
        Common Stock               $  (38,359)     $  (12,384)    $   (7,775)
                                   ==========      ==========     ==========

              See accompanying notes to financial statements.

                                     F-17
KASH N' KARRY FOOD STORES, INC.
                         STATEMENT OF STOCKHOLDERS' DEFICIT
                          Fiscal Years Ended July 31, 1994,
                          August 1, 1993 and August 2, 1992
                            (Dollar Amounts In Thousands)

                                   Capital
                                  in Excess
                           Common   of Par  Accumulated Treasury
                           Stock    Value     Deficit     Stock    Total
                           ------ --------- ----------- --------  ---------

Balance at July 28, 1991    $  9   $ 8,994   $(81,624)   $ (19)   $(72,640)

Purchase of 250 shares
   for Treasury               --       --         --        (3)         (3)

Reclassification of Series
   A Preferred Stock to       --    40,000        --       (11)     39,989
   Common Stock

Conversion of 11,250 shares
   of Series B Preferred
   Stock and 22,500 shares
   of Series C Preferred
   Stock to 22,500 shares
   of Common Stock            --     1,350        --        --       1,350

Sale of 1,859,531 shares
   of Common Stock for cash   19    27,347        --        --      27,366

Loss for period               --       --      (7,301)      --      (7,301)
                            ----   -------  ---------    -----    --------

Balance at August 2, 1992   $ 28   $77,691   $(88,925)   $ (33)   $(11,239)

Purchase of 2,713 shares
   for Treasury               --       --         --       (40)        (40)

Sale of 2,436 shares
   of Treasury Stock          --        4         --        36          40

Loss for period               --       --     (11,920)      --     (11,920)
                            ----   -------  ---------    -----    --------

Balance at August 1, 1993   $ 28   $77,695  $(100,845)   $ (37)   $(23,159)

Loss for period               --       --     (37,895)      --    $(37,895)
                            ----   -------  ---------    -----    --------

Balance at July 31, 1994    $ 28   $77,695  $(138,740)   $ (37)   $(61,054)
                            ====   =======  =========    =====    ========

                See accompanying notes to financial statements.

                                     F-18
KASH N' KARRY FOOD STORES, INC.
                               STATEMENTS OF CASH FLOWS
                                    (In Thousands)

                                     Fifty-two     Fifty-two    Fifty-three
                                    Weeks Ended   Weeks Ended   Weeks Ended
                                   July 31, 1994 August 1,1993 August 2, 1992
                                   ------------- ------------- --------------

Net cash flows from
   operating activities:
   Net loss                         $  (37,895)    $ (11,920)    $  (7,301)
   Adjustments to reconcile
      net loss to net cash
      provided by operating
      activities:
      Depreciation and amortization,
         excluding deferred
         financing costs                24,112        23,455        20,132
      Store closing and other costs     11,016           --            --
      Amortization of deferred
         financing costs                 2,950         2,850         2,932
      Senior Subordinated Extendible
         Reset Notes ("Reset Notes")
         issued in lieu of cash interest   --            --          2,222
      (Increase) decrease in assets:
         Accounts receivable             2,804        (3,778)       (2,090)
         Inventories                    19,291        (4,159)        1,225
         Prepaid expenses and
            other assets                  (278)       (5,426)         (842)
      Increase (decrease) in liabilities:
         Accounts payable               (7,653)        3,722          3,283
         Accrued expenses and
            other liabilities           (1,565)       (3,684)           822
                                     ---------     ---------       --------
            Net cash provided by
               operating activities     12,782         1,060         20,383
                                     ---------     ---------       --------

Cash provided (used) by investing
   activities:
   Additions to property and equipment (10,942)      (13,103)       (11,660)
   Leased asset additions               (4,529)      (24,600)        (3,725)
   Sale of property and equipment          504            91            570
                                     ---------     ---------       --------
         Net cash used by investing
            activities                 (14,967)      (37,612)       (14,815)
                                     ---------     ---------       --------

                                     F-19
KASH N' KARRY FOOD STORES, INC.
                             STATEMENTS OF CASH FLOWS
                                 (CONTINUED)
                                (In Thousands)

                                     Fifty-two     Fifty-two    Fifty-three
                                    Weeks Ended   Weeks Ended   Weeks Ended
                                   July 31, 1994 August 1,1993 August 2, 1992
                                   ------------- ------------- --------------

Cash provided (used) by financing
   activities:
   Borrowings under term and
      revolving loan facilities         17,700        38,100          16,000
   Additions to obligations under
      capital leases and notes payable   5,230        14,867           3,725
   Sale of Senior Notes                    --            --           49,750
   Sale of Common Stock (net of
      Treasury Stock transactions
      and transaction costs)               --            --           27,362
   Repurchase of Reset Notes               --            --          (32,426)
   Repayments of term and revolving
      loan facilities                   (5,488)      (12,881)        (62,497)
   Repayments of other long-term
      liabilities                       (9,212)       (4,415)         (3,632)
   Financing costs                      (1,338)       (1,453)         (3,160)
                                     ---------     ---------       ---------
         Net cash provided (used)
            by financing activities      6,892        34,218          (4,878)
                                     ---------     ---------       ---------

Net increase (decrease) in cash and
   cash equivalents                      4,707        (2,334)            690
Cash and cash equivalents at
   beginning of year                     2,145         4,479           3,789
                                     ---------     ---------       ---------

Cash and cash equivalents at
   the end of year                   $   6,852     $   2,145       $   4,479
                                     =========     =========       =========

              See accompanying notes to financial statements.

                                     F-20
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(1)  Subsequent Event.

On September 3, 1994, the Company began to solicit acceptances of all
impaired parties of a restructuring of the Company which would be implemented
through the consummation of a "prepackaged" plan of reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Plan").  As a result of
such solicitation, the voting requirements prescribed by Section 1126 of the
Bankruptcy Code were satisfied, and the Company filed with the Bankruptcy
Court a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code, and is seeking, as promptly as is practicable, confirmation
by the Bankruptcy Court of the Plan.  During the pendency of the bankruptcy
case, the Company intends to operate its business in the ordinary course, and
to pay all pre-petition claims of the Company's secured lenders, general
unsecured creditors, trade creditors and employees in full.  The Plan also
provides that:

     (i)  Each $1,000 principal amount of the Company's Old Senior Floating
Rate Notes would be exchanged for (a) new Senior Floating Rate Notes due
February 1, 2003 (the "New Senior Floating Rate Notes") in an original
principal amount equal to $1,000 plus 100% of the accrued interest under the
Old Senior Floating Rate Notes from and including February 3, 1994, through
but not including the petition date, or, at such holder's election, (b) new
11.5% Senior Fixed Rate Notes due February 1, 2003 (the "New Senior Fixed
Rate Notes") in the same original principal amount, or, at such holder's
election, (c) an amount of New Senior Floating Rate Notes and an amount of
New Senior Fixed Rate Notes equal, in the aggregate, to 100% of such claim.

     (ii)  Each $1,000 principal amount of the Company's Old Senior Fixed
Rate Notes would be exchanged for (a) New Senior Floating Rate Notes in an
original principal amount equal to $1,000 plus 100% of the accrued interest
under the Old Senior Fixed Rate Notes from and including February 2, 1994,
through but not including the petition date, or, at such holder's election,
(b) New Senior Fixed Rate Notes in the same original principal amount, or, at
such holder's election, (c) an amount of New Senior Floating Rate Notes and
an amount of New Senior Fixed Rate Notes equal, in the aggregate, to 100% of
such claim.

     (iii)  the Old Subordinated Debentures would be exchanged for
newly-issued common stock of the Company representing 85 percent of the
common stock to be outstanding on the effective date of the Plan (the
"Effective Date");

     (iv)  Green Equity Investors, L.P., would invest $10 million cash in
exchange for newly-issued common stock of the Company representing 15 percent
of the common stock to be outstanding on the Effective Date; and

     (v)  all of the existing preferred stock, common stock, and options and
warrants to purchase common stock of the Company would be extinguished.

See also Footnote 5 - "Long-Term Debt," Footnote 6 - "Redeemable Preferred
Stock," Footnote 7 - "Common Stock," Footnote 8 - "Stock Option Plans," and
Footnote 10 - "Income Taxes."
                                     F-21
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(2)  Summary of Significant Accounting Policies

     Fiscal Year End.  The Company follows a 52/53 week fiscal year ending on
the Sunday nearest July 31.  The fiscal year ended August 2, 1992 included 53
weeks of operations.

     Inventories.  Inventories consist of merchandise held for resale and are
stated at the lower of cost or market; cost is determined using average cost,
which approximates the first-in, first-out (FIFO) method.

     Prepaid Expenses and Other Current Assets.  Prepaid expenses and other
current assets include expenditures for construction in progress expected to
be financed  ($9,987 at July 31, 1994 and $9,246 at August 1, 1993) and
prepaid expenses to be recognized over the next twelve months.

     Depreciation, Amortization, and Maintenance and Repairs.  Depreciation
is provided principally using the composite method based on the estimated
useful lives of the respective asset groups.  Amortization of leasehold
improvements is based on the estimated useful lives or the remaining lease
terms, whichever is shorter.  Property under capital leases consists of
buildings and fixtures and equipment.  Interest costs of property under
development are capitalized during the development period.  Capitalized
amounts were $477, $804, and $355 for the fiscal years ended July 31, 1994,
August 1, 1993, and August 2, 1992, respectively.  The approximate annual
rates used to compute depreciation and amortization are:
                                                             Rate
                                                             ----
          Buildings and improvements                           5%
          Fixtures and equipment                              10%
          Transportation equipment                            25%
          Leasehold improvements                               8%

     Maintenance and repairs are charged to expense as incurred.  The Company
capitalizes expenditures for renewals and betterments.

     Favorable Lease Interests.  Favorable lease interests represent the
present value of the excess of current market rental rates over rents that
existed under the Company's operating leases of store locations as of October
12, 1988.  Such costs are amortized on the straight-line method over the
average life of the favorable leases, which was approximately 20 years.

     Deferred Financing Costs.  Deferred financing costs represent fees and
expenses related to various financing activities and are amortized on a
straight-line basis over the life of the related debt and classified as
interest expense.

     Excess of Cost Over Net Assets Acquired.  Excess of cost over net assets
acquired represents the excess of amounts paid over the fair value of net
assets acquired, and is being amortized over forty years.  As discussed in
Footnote 1, the Company filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code.  Management of the Company believes that,
based on the proposed restructuring, the excess of cost over net assets
acquired has not been permanently impaired, and that an appropriate valuation
of such amounts is reflected in the accompanying financial statements as of
July 31, 1994 and August 1, 1993.  F-22
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

     Costs of Opening and Closing Stores.  Preopening costs of new stores are
charged to expense in the year the store opens.  These costs are primarily
labor to stock the store, preopening advertising, store supplies and other
expendable items.  When operations are discontinued and a store is closed,
the remaining investment, net of realizable value, is charged against
earnings, and, for leased stores, a provision is made for the remaining lease
liability, net of expected sublease income.
     Store Closing and Other Costs.  During the first quarter of fiscal 1994
the Company recorded a non-recurring charge of $11,016.  This charge included
$1,900 of costs associated with unsuccessful financing activities, $4,159 of
favorable lease interests written off in connection with the closing of
twelve underperforming stores, $4,000 representing an adjustment to the
expected lease liability on closed stores, net of sublease income, and $957
of other store closing and related expenses.

     Income Taxes.  The Company is in a loss position for income tax
purposes, and, consequently, no income taxes have been provided.   The
Company adopted Statement of Financial Accounting Standards No. 109 ("SFAS
109") as of August 2, 1993.  No cumulative effect of this change in
accounting was required as of August 2, 1993 and prior years' financial
statements have not been restated to apply the provisions of SFAS 109.  The
effect on prior years' financial statements of retroactively implementing
SFAS 109 would be immaterial.
     Interest Rate Hedge Agreements.  The Company enters into interest rate
hedging agreements which involve the exchange of fixed and floating rate
interest payments periodically over the life of such agreements without the
exchange of the underlying principal amounts.  The differential to be paid or
received is accrued as interest rates change and is recognized over the life
of the agreements as an adjustment to interest expense.

     Cash and Cash Equivalents.  The Company considers all highly liquid
investment instruments with a maturity of three months or less when purchased
to be cash equivalents.  There were no cash equivalents at July 31, 1994 or
August 1, 1993.

     Cash interest paid (excluding financing costs) was $41,545, $41,675, and
$39,202, for the fiscal years ended July 31, 1994, August 1, 1993, and August
2, 1992, respectively.

 
                                   F-23
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(3)  Property and Equipment

     Property and equipment is summarized as follows:   July 31,    August 1,
                                                          1994          1993
                                                        --------    ---------

          Land                                          $ 19,543     $ 18,713
          Buildings and improvements                      63,517       56,421
          Fixtures and equipment                         100,717      104,686
          Transportation equipment                         2,593        2,595
          Leasehold improvements                          28,402       25,957
          Construction in progress                         4,115        4,275
                                                        --------     --------
                                                         218,887      212,647
             Less accumulated depreciation               (70,196)    (61,831)
                                                        --------     --------
                                                         148,691      150,816
          Property under capital leases
             (less accumulated amortization
             of $11,154 and $8,032)                       11,800       14,121
                                                        --------     --------
                                                        $160,491     $164,937
                                                        ========     ========

(4)  Accrued Expenses

     Accrued expenses consist of the following:         July 31,    August 1,
                                                          1994          1993
                                                        --------    ---------

          Accrued payroll and benefits                  $  5,579     $  4,492
          Accrued interest                                15,849       15,080
          Taxes, other than income                         6,056        5,708
          Accrued insurance reserves                       4,886        5,684
          Other accrued expenses                           6,564        6,279
                                                        --------     --------
                                                        $ 38,934     $ 37,243
                                                        ========     ========

 

                                     F-24
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(5)  Long-Term Debt

     Long-term debt consists of the following:          July 31,    August 1,
                                                          1994          1993
                                                        --------    ---------
          Bank term and revolving loan facilities (a)   $ 59,629     $ 47,417
          Senior Floating Rate Notes (b)                  85,000       85,000
          Senior Fixed Rate Notes (c)                     50,000       50,000
          Subordinated Debentures (d)                    105,000      105,000
          Mortgages payable, bearing interest at rates
              from 7.50% to 10.35%, in equal monthly
              installments of $355, with maturities
              from 1999 through 2003 (e)                  34,368       34,772
          Capital lease obligations                       13,877       16,999
          Other                                           12,247       12,702
                                                        --------     --------
          Long-term debt including current portion       360,121      351,890
          Less current portion (f)                       (42,740)    (22,628)
                                                        --------     --------
          Long-term debt                                $317,381     $329,262
                                                        ========     ========
     (a)  At July 31, 1994, the Bank Credit Agreement (as amended and
restated) provides for borrowings of up to $17,229 under a term loan facility
(with principal repayments varying from $1,463 to $4,409 per quarter until
the Bank Credit Agreement terminates in April 1996), and a revolving credit
facility with individual sublimits of $30,000 for working capital, $25,000
for letters of credit, and $13,700 for capital improvement loans, with a
maximum of $60,000 outstanding under the revolving credit facility at any
time.  At July 31, 1994, the Company had $28,700 in borrowings under the
working capital line, $13,700 in borrowings under the capital improvement
line, and had $16,358 of letters of credit issued against the revolving
credit facility.  On August 1, 1994, the outstanding balance of capital
improvement loans converted into a term loan amortizing to maturity in April
1996 (with principal repayments varying from $1,713 to $2,283 per quarter)
and the maximum borrowings under the revolving credit facility was reduced to
$50,000.

          Amounts outstanding under the Bank Credit Agreement bear interest
(8.36% at July 31, 1994) equal to the bank's prime rate plus 1.0%.  Prior to
December 15, 1993, amounts outstanding under the Bank Credit Agreement bore
interest (6.27% at August 1, 1993) equal to, at the Company's option, (1) the
bank's prime rate plus 1.0%, (2) the certificate of deposit rate plus 2.25%
or (3) the Eurodollar rate plus 2.0%.

     (b)  The Senior Floating Rate Notes mature on August 2, 1996, and bear
interest (5.88% at July 31, 1994 and August 1, 1993) payable semiannually, at
a rate equal to six-month LIBOR (as defined in the Senior Floating Rate Note
Indenture) plus 250 basis points.  The Senior Floating Rate Notes are
redeemable in whole or in part (subject to a minimum redemption of $9,000),
at the option of the Company, on any interest payment date at a redemption
price equal to 101% of the principal amount with accrued interest to the
redemption date.

                                     F-25
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

     (c)  The Senior Fixed Rate Notes mature on February 1, 1999, and bear
interest at 12.375% per annum, payable semiannually.  The Senior Fixed Rate
Notes will be subject to redemption, otherwise than through operation of the
sinking fund, at any time on and after February 1, 1996 or from time to time
thereafter, at the option of the Company, as a whole or in part, on not less
than 30 nor more than 60 days notice, at the following redemption prices
(expressed as percentages of the principal amount), if redeemed during the
12-month period beginning February 1, of the years indicated:

                                             Redemption
                              Year             Price
                              ----           ----------
                              1996            104.125%
                              1997            102.000%
                              1998            100.000%

and thereafter at 100% of the principal amount, together in the case of any
such redemption with accrued interest to the redemption date.  The Senior
Fixed Rate Notes are subject to redemption on February 1, 1998 through the
operation of a sinking fund, at a redemption price equal to the principal
amount and accrued interest at the redemption date.  The sinking fund
provides for the redemption in such year of $25,000 aggregate principal
amount of the Senior Fixed Rate Notes, calculated to retire 50% of the notes
prior to maturity.  Senior Fixed Rate Notes acquired or redeemed by the
Company (other than through the operation of the sinking fund) may be
credited against sinking fund requirements.  The Senior Fixed Rate Notes are
also subject to mandatory redemption upon a change in control of the Company
(as defined in the Senior Fixed Rate Note Indenture).

     (d)  The Subordinated Debentures will mature on February 1, 2001, and
bear interest, payable semiannually, at the rate of 14% per annum.  The
Subordinated Debentures are redeemable, in whole or in part, at the option of
the Company, at any time and from time to time on and after February 1, 1994
at the following redemption prices together with accrued interest to the date
of redemption:
                              Year           Redemption Price
                              ----           ----------------
                              1994                106.22%
                              1995                104.67%
                              1996                103.11%
                              1997                101.56%
                              1998                100.00%

Mandatory sinking fund payments on the Subordinated Debentures, commencing
February 1, 1999, are calculated to retire 50% of the original principal
amount prior to maturity.

     (e)  In September 1989, the Company completed a $17,000 mortgage
financing of its warehouse, distribution, and office facility; in November
1989, seven fee-owned store properties were mortgaged for $13,200; and in
January 1990, an additional fee-owned store property was mortgaged for
$2,000.  The net proceeds of these transactions were used to reduce existing
bank debt. Final payments of $12,529 and $13,895 are due October 1999 and
November 1999, respectively, on these mortgages.
                                     F-26
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

     (f)  Approximate principal payments for the next five fiscal years are:

                             Senior                Capital
Year Ending    Term Loans    Notes     Mortgages   Leases    Other     Total*
- -----------    ----------   -------    ---------   -------   ------   -------
   1995         $11,504     $   --      $ 1,260     $4,114   $2,162   $19,040
   1996          19,425         --          960      4,357      949    25,691
   1997             --       85,000       1,057      2,694      752    89,503
   1998             --       25,000       1,163        734      640    27,537
   1999             --       25,000       1,282        370      540    27,192

*  Does not include $28,700 outstanding under the working capital line at
July 31, 1994.  The revolving credit facility under the Bank Credit Agreement
requires the Company to pay down its outstanding working capital borrowings
for a 30 day period in each fiscal year to an average daily balance not to
exceed $5,000 with all such borrowings required to be repaid prior to
termination of the Bank Credit Agreement in April 1996.  Therefore, the
Company classifies any outstanding balance in excess of $5,000 as current
portion of long-term debt.  In August 1994, the outstanding balance of
capital improvement loans of $13,700 converted into a term loan amortizing to
maturity in April 1996, and these amounts are included as term loans in the
table above.
     The Bank Credit Agreement, which is secured by a pledge of substantially
all assets of the Company, requires the Company to maintain a minimum net
worth and to satisfy certain other financial ratios, and provides for certain
restrictions on nonstock distributions and certain other restrictions.  The
Senior Floating Rate Notes, the Senior Fixed Rate Notes, the Subordinated
Debentures, and certain other of the Company's indebtedness also contain
compliance covenants that are less restrictive than the covenants under the
Bank Credit Agreement.  Due to the non-recurring charges incurred during the
first quarter as well as its operating performance, the Company breached
several financial covenants under its Bank Credit Agreement for each of the
reporting periods during the fiscal year ended July 31, 1994.  The Company
has received all necessary waivers from the banks through the petition date
discussed in Note 1.  Additionally, the Company has not paid $2,511, $3,094,
and $7,350 in interest due on the Senior Floating Rate Notes, the Senior
Fixed Rate Notes, and the Subordinated Debentures, respectively.  These
amounts have been accrued on the accompanying financial statements, and as
provided in the plan of reorganization discussed in Footnote 1, all interest
on the Senior Floating Rate Notes and the Senior Fixed Rate Notes which is
accrued and unpaid as of the date the Company filed its voluntary petition
with the Bankruptcy Court shall be capitalized into New Senior Floating Rate
Notes or New Senior Fixed Rate Notes and all interest which is accrued and
unpaid on the Subordinated Debentures will be converted into equity.  Given
the automatic stay provisions of the Chapter 11 filing discussed in Note 1
the creditors discussed above are not able to declare these obligations in
default and currently due.  Therefore, certain portions of these obligations
have been classified as long-term debt in the July 31, 1994 balance sheet.

     The Company has entered into a series of interest rate hedging
transactions to reduce its exposure to fluctuations in short-term interest

                                     F-27
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

rates on the majority of its floating rate indebtedness.  Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
107 (SFAS 107), "Disclosures about Fair Value of Financial Instruments",
requires disclosure of estimated fair values of financial instruments, whether
recognized or not in the balance sheets, for which it is practical to
estimate such value.  In calculating the fair value of each material class of
financial instrument, the value is estimated by the Company to be the current
carrying value adjusted to estimate the cost to liquidate the financial
instruments.  The Company does not intend to dispose of a significant portion
of its financial instruments and thus any aggregate unrealized gains and
losses should not be interpreted as a forecast of future earnings or cash
flows.  The Company estimates the cost to liquidate its interest rate hedging
agreements to be approximately $2,600 at July 31, 1994.  Carrying value is
considered a reasonable estimate of the fair value of the remainder of the
Company's financial instruments.  Fair value estimates do not include the
value of nonfinancial instruments, such as fixed assets, the value of
customer relationships and various other factors.  As a result, these fair
values are not comprehensive and, therefore, do not reflect the underlying
value of the Company.

(6)  Redeemable Preferred Stock

     The Series B Preferred Stock shareholders are entitled to receive, when,
as, and if declared by the Board of Directors of the Company, cash dividends
at the rate of 12% per annum on the face amount per share, and such dividends
shall be cumulative and shall accrue whether or not earned or declared from
the date of issue or from the most recent preceding dividend payment date
through which dividends have been paid, as the case may be.  Cumulative
undeclared dividends are $2,562 from October 12, 1988 through July 31, 1994. 
Shares of Series B Preferred Stock are not entitled to any voting rights with
respect to matters voted on by stockholders of the Company, except as
otherwise required by Delaware law.

     The Series C Preferred Stock ranks junior to all classes and series of
stock of the Company other than Common Stock.  The holders of Common Stock
and Series C Preferred Stock are entitled to share equally in such dividends
(other than dividends in Common Stock) as may be declared by the Board of
Directors and paid by the Company out of funds legally available therefor. 
Upon the voluntary or involuntary liquidation, dissolution or winding up of
the Company, the holders of shares of Series C Preferred Stock shall be
entitled, before any payment is made in respect of the Common Stock, to be
paid a liquidation preference in cash equal to $4.00 per share.  After
payment of the liquidation preference to the holders of the Series C
Preferred Stock, the holders of shares of Common Stock then outstanding shall
be entitled to be paid an amount in cash equal to $4.00 per share, following
which each outstanding share of Series C Preferred Stock and Common Stock
shall share in the distribution of the remaining assets of the Company, each
share of Series C Preferred Stock being entitled to the amount it would have
received had it been converted to Common Stock immediately prior to such
distribution.  Except as otherwise provided by Delaware law, holders of
Series C Preferred Stock have no right to vote for the election of directors
or on any other matters that may be submitted to a vote of the Company's
stockholders except in the case of a proposal to merge or consolidate the
Company with or into another       F-28
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

entity, to sell, lease or exchange all or substantially all of the assets of
the Company as an entirety, to dissolve or liquidate the Company or to adopt
a plan to do any of the foregoing.  In any such event, holders of shares of
Series C Preferred Stock shall be entitled to one vote per share and shall
vote together as a class with the Common Stock and not as a separate class.

     The payment of cash dividends by the Company is prohibited by the terms
of the Bank Credit Agreement and restricted by the Indentures relating to the
Company's Senior Floating Rate Notes, Senior Fixed Rate Notes and
Subordinated Debentures.

     The Company has certain mandatory redemption requirements applicable to
the Series B Preferred Stock, and certain repurchase obligations on the
Series B Preferred Stock and Series C Preferred Stock, provided that such
redemption or repurchase does not, among other things, violate any terms of
an existing or future financing agreement.  The Company's current Bank Credit
Agreement and its current Indentures prohibit or significantly restrict the
redemption or repurchase by the Company of any shares of its capital stock. 
However, due to these redemption requirements, preferred stock has been
excluded from the stockholders' deficit section of the accompanying balance
sheets.  If or when such redemption or repurchase is allowed to occur, the
Company, at its option, may consummate the transaction in the form of cash or
by issuing subordinated notes.

(7)  Common Stock

     In November 1991, Green Equity Investors, L.P. ("GEI"), an investment
fund managed by Leonard Green & Partners, L.P. ("LGP"), purchased 1,716,967
newly issued shares of the Company's Common Stock, or approximately 55.4% on
a fully-diluted basis, for $27,700 in cash and The Fulcrum III Limited
Partnership and The Second Fulcrum III Limited Partnership (collectively, the
"Fulcrum Partnerships"), investment funds managed by Gibbons, Goodwin, van
Amerongen ("GGvA"), collectively purchased 142,564 newly issued shares of the
Company's Common Stock, or approximately 4.5% on a fully-diluted basis, for
$2,300 in cash.  Contemporaneously, a majority of the holders of the
Company's Series A Preferred Stock voted to amend the Company's Certificate
of Incorporation to reclassify each share of Series A Preferred Stock and all
cumulative and unpaid dividends thereon into one-tenth (1/10) of a share of
Common Stock.  As a result of the reclassification, all shares of Series A
Preferred Stock, together with all cumulative and unpaid dividends thereon,
were converted into an aggregate of 40,000 shares of Common Stock,
representing 1.3% of the Common Stock, on a fully-diluted basis.  In
addition, the Fulcrum Partnerships exchanged shares of the Company's Series B
Preferred Stock, and all cumulative and unpaid dividends thereon, and Series
C Preferred Stock for Common Stock.  As a result, cumulative undeclared
dividends as of the date of these transactions were reduced from $16,648 to
$1,304.

     In February 1994, GEI loaned the Company $2,000 in cash in exchange for
warrants to purchase 63,235 shares of Common Stock.  At the time of this
transaction, the warrant was deemed to have nominal value, and therefore no
adjustment was made to equity in the accompanying financial statements.

                                     F-29
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(8)  Stock Option Plans

     Certain key employees, including all executive officers, are eligible to
receive nonqualified stock options to purchase Common Stock under the
Restated 1988 Management Stock Option Plan (the "1988 Option Plan") and/or
the 1991 Management Stock Option Plan (the "1991 Option Plan" and, together
with the 1988 Option Plan, the "Option Plans").  Options granted under the
1988 Option Plan have an exercise price of the greater of 85% of fair market
value at the date of grant or $10 per share and options granted under the
1991 Option Plan have an exercise price of (a) $16.13 per share for options
granted within 30 days of the approval of the 1991 Option Plan by the
stockholders of the Company and (b) thereafter at 100% of the fair market
value at the date of grant.  The 1988 Option Plan terminates at the end of
the Company's 1995 fiscal year and the 1991 Option Plan terminates on
November 26, 2001.  A three-person committee of the Board of Directors (the
"Option Committee"), which includes one officer of the Company, administers
both Option Plans.  The Option Committee designates the class of employees
eligible to participate in the Option Plans and, during each fiscal year of
the Option Plans, designates eligible employees who will be granted options
and the number of shares subject to such options.  Members of the Option
Committee are eligible to receive options.

     The Option Plans provide for tenure-vesting based upon a participant's
employment with the Company and, in addition, the 1988 Option Plan provides
for performance-vesting based on the Company meeting certain earnings
targets.  Once exercised, the transfer of the shares subject to the options
will be restricted pursuant to the terms of a Restricted Stock Agreement to
be entered into among the Company and each holder.
     A summary of changes in the Option Plans for the fiscal years ended July
31, 1994, August 1, 1993, and August 2, 1992, are presented below:

                                           1988 Option Plan
                                               Fiscal Year
                                               -----------
                                    1994          1993           1992
                                    ----          ----           ----
Stock options outstanding
  at beginning of year             27,147        27,976         28,924
Granted                               --            --             --
Exercised                             --            --             --
Forfeited                           1,136           829            948

Outstanding at end
  of year                          26,011        27,147         27,976

Exercisable at end
  of year                          25,061        18,255         15,972

Average option price
  per share                        $11.45        $11.54         $11.50

Reserved for future
  grant                               --            --             --

                                     F-30
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

                                           1991 Option Plan
                                               Fiscal Year
                                               -----------
                                    1994          1993          1992
                                    ----          ----          ----

Stock options outstanding
  at beginning of year             118,597       110,722          --
Granted                                --          8,875       110,722
Exercised                              --           --            --
Forfeited                            1,000         1,000          --

Outstanding at
  end of year                      117,597       118,597       110,722

Exercisable at
  end of year                          --           --            --

Average option price
  per share                         $16.16        $16.16        $16.13

Reserved for future
  grant                              1,000         1,000         8,875

     For the 1988 Option Plan, compensation expense is determined based on
the difference between the fair market value (as determined by the Option
Committee) and exercise price upon performance-vesting, such compensation
expense to be recognized over the tenure-vesting period on a pro rata basis.

     For the 1991 Option Plan, options are granted at the fair market value
of Common Stock (as determined by the Option Committee) at the date of grant
and therefore no compensation expense will be recorded.

(9)  Leases

     The Company leases certain stores, other facilities and equipment under
leases that are not cancelable.  Such leases generally contain renewal
options exercisable at the Company's option.  In addition to minimum rental
payments, certain leases provide for payments of taxes, maintenance and
percentage rentals based upon sales in excess of stipulated amounts.  The
future minimum payments under leases that are not cancelable, as of July 31,
1994, are:

                                     F-31
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

                                                       Operating      Capital
       Year Ending in                                    leases       leases
       --------------                                  ---------     --------
            1995                                       $ 23,200      $ 5,430
            1996                                         22,900        5,238
            1997                                         21,800        3,163
            1998                                         20,600        1,030
            1999                                         20,400          965
          Thereafter                                    212,400        2,329
                                                       --------      --------
       Total minimum lease payments                    $321,300       18,155
                                                       ========
     Less portion representing interest                               (4,278)
     Present value of net minimum lease payments at                  --------
         July 31, 1994                                               $13,877
                                                                     ========
      Total rent expense was $26,642, $25,475, and $24,059 for the fiscal
years ended July 31, 1994, August 1, 1993, and August 2, 1992, respectively. 
Included in total rent expense are percentage rents totaling $241, $446, and
$534, for 1994, 1993, and 1992, respectively.

(10) Income Taxes

     The Company has reported a pretax loss for all fiscal years since
October 12, 1988, and, consequently, no income tax expense has been reported. 
Financial Accounting Standards Board Statement 109 (SFAS 109) was adopted by
the Company as of August 2, 1993.  There was no cumulative effect of this
change in accounting for income taxes determined as of August 2, 1993.  Prior
years' financial statements have not been restated to apply the provisions of
SFAS 109.  The effect on prior years' financial statements of retroactively
implementing SFAS 109 would be immaterial.

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of July
31, 1994 are presented as follows:

     Deferred tax assets:
        Inventory, principally due to reserves and
           additional costs inventoried for tax purposes
           pursuant to the Tax Reform Act of 1986          $    900
        Insurance and other reserves                          8,100
        Net operating loss carryforward                      35,000
        General business credit carryforward                  1,600
        Charitable contributions carryforward                 3,200
        Other, net                                            1,800
                                                           --------
                 Total gross deferred tax assets             50,600

           Less valuation allowance                         (50,600)
                                                           --------
              Net deferred tax assets                      $    --
                                                           ========
                                     F-32
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

     Upon adoption of SFAS 109, effective August 2, 1993, the Company
determined a valuation allowance requirement in the amount of $36,200. The
valuation allowance as of July 31, 1994 has been determined to be $50,600,
resulting in a change in the valuation allowance in the amount of $14,400.

     The Company has net operating loss ("NOL") carryforwards for federal
income tax purposes of $93,000 which are available to offset future taxable
income, if any, through the year 2009.  The Company has general business
credit carryforwards of $1,600 which are also available to reduce future
federal income taxes, if any, through the year 2009.  The Company anticipates
that, in connection with the restructuring discussed in Footnote 1, it will
undergo an ownership change pursuant to Internal Revenue Code Section 382
that will result in an annual limitation on the amount of the NOL and general
business credit carryforwards that the Company may utilize to offset future
federal taxable income.  In addition, should the Company fail to emerge from
bankruptcy by December 31, 1994, its NOL and general business credit
carryforwards will be eliminated to the extent of any income realized from
the cancellation of debt by the Company.

(11) Supplementary Statements of Operations Information

     Supplementary Statements of Operations information is as follows:

                                 Fifty-two      Fifty-two      Fifty-three
                                Weeks Ended    Weeks Ended     Weeks Ended
                               July 31, 1994  August 1, 1993  August 2, 1992
                              --------------  --------------  --------------
     Amortization of:
         Lease interests           $ 6,037        $ 2,576        $ 1,293
         Deferred financing costs    2,950          2,850          2,932
         Goodwill                    2,831          2,832          2,886
                                   -------        -------        -------
         Total amortization of
             intangible assets     $11,818        $ 8,258        $ 7,111
                                   =======        =======        =======

     Advertising costs             $14,099        $13,530        $12,428
                                   =======        =======        =======

(12)  Employee Benefit Plans

     Kash n' Karry Retirement Estates ("KKRE"), a trusteed defined
contribution retirement plan, was authorized by the Company's Board of
Directors in 1988.  KKRE is a tax savings/profit sharing plan maintained
primarily for the purpose of providing retirement income for eligible
employees of the Company.  KKRE is qualified under Section 401(a) and Section
401(k) of the Internal Revenue Code of 1986.  Generally, all employees who
have attained the age of 21 years and complete one year of participation

                                     F-33
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

service (as defined under KKRE) are eligible to participate in KKRE. 
Participants may, subject to certain federal limitations, elect to defer an
amount not to exceed 15% of their base compensation and have such amount
contributed to KKRE.  The Company may match all or a portion of the
participant's deferred compensation, but the amount of the matching
contribution may not exceed 3% of such participant's compensation. 
Additional non-matching contributions may be made to KKRE by the Company in
such amount as determined by the Company's Board of Directors based on the
Company's operating performance.  Funds that participants elect to defer are
invested, at the participant's option, into various investment accounts.  The
vested percentage of the amounts allocated to a participant's account will be
payable to the participant upon such participant's death, disability,
retirement, or other separation of service from the Company.  Plan expenses
were $573, $573, and $461, for the fiscal years ended July 31, 1994, August
1, 1993, and August 2, 1992, respectively.

     Kash n' Karry Executive Supplemental Retirement Plan ("KESP"), a non-
qualified, unfunded salary deferral plan, was authorized by the Company's
Board of Directors in November 1989.  Certain Key Employees (as defined under
KESP) of the Company as selected by its Board of Directors participate in
KESP. Currently, nineteen Key Employees participate in KESP.  Prior to the
beginning of each plan year, a participant may elect to defer an amount not
to exceed 15% of such participant's annual base compensation (as defined
under KESP).  The Company will match a certain portion of the amount deferred
by the participant, but the amount of the match may not exceed 6% of such
participant's annual base compensation.  The Company will record income to
the participant's account at an annual rate (11% for the 1994, 1993 and 1992
plan years) as determined by the Company's Board of Directors, but the rate
of such income shall not be less than 8% per annum.

     The vested percentage of the amounts recorded in the participant's
account will be paid to the participant upon the earlier of:  (i) such
participant's death, disability, retirement, or other separation of service
from the Company; (ii) the date the plan is terminated; or (iii) the date
that a change in control occurs (as defined under KESP).  Expense for this
plan was $135, $149, and $172, for the fiscal years ended July 31, 1994,
August 1, 1993, and August 2, 1992, respectively.

(13) Commitments and Contingencies

     The Company had letters of credit outstanding totaling $16,358 and
$19,118 at July 31, 1994 and August 1, 1993, respectively, which amounts have
been reflected as reductions of the available revolving loan facility as of
those dates.  These letters of credit primarily guarantee various insurance
and financing activities.

                                     F-34
KASH N' KARRY FOOD STORES, INC.
                          NOTES TO FINANCIAL STATEMENTS
             (Dollar Amounts In Thousands, Except Per Share Amounts)

(14) Related Party Transactions

     Leonard Green & Partners ("LGP"), the sole general partner of Green
Equity Investors, L.P., which owns approximately 55.4% of the Company's
Common Stock on a fully-diluted basis, received a closing fee on November 26,
1991 as compensation in connection with its equity investment in the Company
and was also reimbursed for its out-of-pocket expenses.  In addition, as
consideration for the provision of ongoing financial advisory services, the
Company agreed to pay LGP an annual fee plus related out-of-pocket expenses. 
Three of the Company's Directors are general partners of LGP. The Company has
made $143, $598 and $489 in such payments for the fiscal years ended July 31,
1994, August 1, 1993 and August 2, 1992, respectively.

     Gibbons, Goodwin, van Amerongen ("GGvA"), the sole general partner of
The Fulcrum III and The Second Fulcrum III Limited Partnerships, which
combined own approximately 30.7% of the Company's Common Stock on a
fully-diluted basis, received a closing fee on November 26, 1991 as
compensation in connection with its equity investment in the Company and was
also reimbursed for its out-of-pocket expenses. In addition, GGvA receives,
as consideration for the provision of ongoing financial advisory services, an
annual fee plus related out-of-pocket expenses.  One of the Company's
Directors is a general partner of GGvA.  The Company made total payments to
GGvA for on-going services of $42, $235, and $262, for the fiscal years ended
July 31, 1994, August 1, 1993, and August 2, 1992, respectively.

                                     F-35
KASH N' KARRY FOOD STORES, INC.
                         PRO FORMA FINANCIAL INFORMATION

     The following unaudited pro forma financial statements have been
prepared using the principles of "fresh-start" accounting pursuant to the
American Institute of Certified Public Accountants Statement of Position No.
90-7, entitled "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOS No. 90-7").  The unaudited pro forma statement of
operations of the Company for the fiscal year ended July 31, 1994 gives
effect to the Restructuring as if it had occurred on August 2, 1993.  The
unaudited pro forma balance sheet of the Company as of July 31, 1994 gives
effect to the Restructuring as if such Restructuring had occurred on July 31,
1994.  The pro forma data are not necessarily indicative of the financial
position or results of operations that would have been reported had the
Restructuring occurred on the dates referred to, nor are they necessarily
indicative of the financial position or results of operations to be expected
in the future.  KPMG Peat Marwick LLP, the Company's independent auditors,
have neither examined, reviewed nor compiled the pro forma information and,
consequently, do not express an opinion or any other form of assurance or
other association with respect thereto.

     The pro forma data should be read together with the other information
contained herein under the headings "Selected Financial Data," and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements of the Company and the notes
thereto.

                                     F-36
KASH N' KARRY FOOD STORES, INC.
                        UNAUDITED PRO FORMA BALANCE SHEET
                                As of July 31, 1994
                                   (In Thousands)

                                   ASSETS

                                            Pro Forma Adjustments
                                            ---------------------
                                   July 31,   Discharge     Fresh   Pro Forma
                                    1994    and Exchange    Start Reorganized
Current assets:                   --------- -------------- ------ -----------
  Cash and cash equivalents       $   6,852 $   (2,312)(a)$        $  5,600
                                                10,000 (b)
                                                (4,500)(c)
                                                (4,440)(d)
  Accounts receivable                 8,084                           8,084
  Inventories                        76,094               5,104(g)   81,198
  Prepaid expenses and
      other current assets           12,805                          12,805
                                  --------- ----------    -------- --------
        Total currents assets       103,835    (1,252)    5,104     107,687
Property and equipment,
   at cost, net                     160,491             (17,775)(g) 142,716
Favorable lease interest, net        12,312              18,280 (g)  30,592
Deferred financing costs, net        12,630   (10,717)(e)             4,225
                                                2,312 (a)
Excess of cost over fair value of
  net assets acquired, net           96,758             (96,758)(f)    -- 
Reorganization value in excess of
  amounts allocated to net assets       --              102,521 (g) 102,521
Other assets                          3,867                (928)(g)   2,939
                                  ---------  --------    --------   -------
         Total assets             $ 389,893  $ (9,657)   $10,444   $390,680
                                  =========  ========    ========  ========

                                     F-37
KASH N' KARRY FOOD STORES, INC.
                        UNAUDITED PRO FORMA BALANCE SHEET
                                As of July 31, 1994
                                    (Continued)
                                   (In Thousands)

                        LIABILITIES & STOCKHOLDERS' EQUITY

                                            Pro Forma Adjustments
                                            ---------------------
                                   July 31,   Discharge     Fresh   Pro Forma
                                    1994    and Exchange    Start Reorganized
                                  --------- -------------- ------ -----------
Current liabilities:
  Current portion of
    long-term debt                $  42,740 $    (940)(d)$         $  13,596
                                              (28,204)(h)
  Accounts payable                   34,908                           34,908
  Accrued expenses                   38,934    (7,350)(i)   5,838(g)  31,831
                                               (5,591)(j)
                                  --------- ----------   --------   --------
         Total current liabilities  116,582   (42,085)      5,838     80,335
Long-term debt,
   less current portion             317,381  (105,000)(i)            242,676
                                               28,204 (h)
                                                5,591 (j)
                                               (3,500)(d)
Other long-term liabilities          12,334                 8,840(g)  21,174
Series B preferred stock              3,875    (3,875)(k)                --
Series C preferred stock                775      (775)(k)                --
Stockholders' equity (deficit):
  Common stock, pre-restructuring        28       (28)(k)                --
  Common stock, post-restructuring       --        26 (i)                 31
                                                    5 (b)
  Capital in excess of par value     77,695   (77,695)(k)             46,464
                                              112,324 (i)
                                                9,995 (b)
                                               (4,500)(c)
                                                          (71,355)(g)
  Accumulated deficit              (138,740)   71,619 (l)                 --
                                                           67,121 (g)
    Less cost of treasury stock         (37)       37 (k)                 --
                                  ---------  ---------   --------    --------
         Total stockholders'
           equity (deficit)         (61,054)  111,783       4,606      46,495
                                  ---------  ---------   --------    --------
         Total liabilities and
           stockholders' equity
           (deficit)              $ 389,893  $ (9,657)   $ 10,444    $390,680
                                  =========  =========   ========    ========

                                     F-38
KASH N' KARRY FOOD STORES, INC.
                    NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
            (Dollar Amounts in Thousands, Except per Share Amounts)

     The following notes set forth an explanation of the assumptions used in
preparing the unaudited pro forma Balance Sheet.  The pro forma adjustments
are based on management's best estimates using information currently
available.

      The pro forma Balance Sheet has been prepared based on the
post-restructuring capital structure of the Company, which was 3,100,000
shares of $.01 common stock with an approximate market value of $15 per
share.  Market value is based on a multiple of projected operating cash flow
(which is the methodology most often used to value grocery businesses) less
the long-term debt of the Company, and was the approximate trading value of
the shares when they began trading publicly subsequent to December 29, 1994.

(a)  To reflect estimated transaction costs associated with the Company's New
     Bank Credit Agreement.

(b)  To reflect the purchase of 15.0% of the New Common Stock by GEI in
     exchange for $10,000 in cash.

(c)  To reflect estimated transaction costs associated with the
     Restructuring.

(d)  To repay certain notes on the Effective Date.

(e)  To reflect the elimination of net capitalized transaction costs
     associated with the $105,000 Old Subordinated Debentures, Old Credit
     Agreement, and the Old Senior Floating Rate Notes and Old Senior Fixed
     Rate Notes.

(f)  To reflect the elimination of pre-existing goodwill.

(g)  To record "fresh-start" accounting adjustments.

(h)  To reflect principal amortization adjustments between the New Bank 
     Credit Agreement and the Old Credit Agreement.  Adjustment reflects  
     current portions of the Old Credit Agreement of $35,204 and current 
     portions of the New Bank Credit Agreement of $7,000.

(i)  To reflect the conversion of $105,000 Old Subordinated Debentures, plus
     accrued interest totaling approximately $7,350 for 85.0% of the New
     Common Stock.

(j)  To reflect the conversion of Old Senior Floating Rate Notes totaling
     $85,000 and Old Senior Fixed Rate Notes totaling $50,000, along with
     accrued interest thereon totaling approximately $5,591, into New Senior
     Fixed Rate Notes.

(k)  To reflect the elimination of Old Equity Interests.

(l)  To reflect the net operating impact of discharge and exchange
     adjustments.

                                       F-39
KASH N' KARRY FOOD STORES, INC.
                    UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

                         Fifty-Two Weeks Ended July 31, 1994
                 (In Thousands, Except Share and Per Share Amounts)

                                         July 31,     Pro Forma     Pro Forma
                                           1994      Adjustments  Reorganized
                                        ----------   -----------  -----------

Sales                                   $1,065,165   $             $1,065,165
Cost of sales                              845,597                    845,597
                                        ----------   ---------     ----------
  Gross profit                             219,568                    219,568
Selling, general and
    administrative expenses                176,945                    176,945
Depreciation and amortization               24,112     (2,832)(a)      26,406
                                                        5,126 (b)
Store closing and other costs               11,016                     11,016
                                        ----------   ---------     ----------
  Operating income                           7,495                      5,201
Interest expense, net                       45,390    (14,700)(c)      34,386
                                                      (11,289)(d)
                                                       16,000 (e)
                                                       (2,423)(f)
                                                        1,408 (g)
                                        ----------   ---------     ----------
  Loss before income taxes                 (37,895)                  (29,185)
Income taxes                                   --                         --
                                        ----------   ---------     ----------
  Net loss                                 (37,895)                  (29,185)
Undeclared dividends on preferred stock       (464)       464 (h)         --
                                        ----------                 ----------
  Net loss attributable to common stock $  (38,359)                $ (29,185)
                                        ==========                 ==========
  Pro forma loss per common share                                  $   (9.41)
                                                                   ==========
  Weighted average common shares outstanding                        3,100,000
                                                                   ==========

                                     F-40
KASH N' KARRY FOOD STORES, INC.
               NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
                          (Dollar Amounts In Thousands)

     The following notes set forth an explanation of the assumptions used in
preparing the unaudited pro forma Statement of Operations.  The pro forma
adjustments are based on management's best estimates using information
currently available. 

     The pro forma Statement of Operations has been prepared based on the
post-restructuring capital structure of the Company, which was 3,100,000
shares of $.01 common stock with an approximate market value of $15 per
share.  Market value is based on a multiple of projected operating cash flow
(which is the methodology most often used to value grocery businesses) less
the long-term debt of the Company, and was the approximate trading value of
the shares when they began trading publicly subsequent to December 29, 1994.

(a)  To reflect the elimination of amortization on previously capitalized
     excess of cost over fair value of net assets acquired.

(b)  To reflect the amortization of reorganizational value in excess of
     amounts allocated to net assets totaling $102,521 over 20 years.

(c)  To reflect the elimination of interest expense occurred at 14% on the
     $105,000 Old Subordinated Debentures.

(d)  To reflect the elimination of interest expense on the Old Senior Fixed
     Rate Notes and Old Senior Floating Rate Notes.

(e)  To reflect interest expense on New Senior Fixed Rate Notes of $121,162
     at 11.5% and on New Senior Floating Rate Notes of $22,953 at 9.0%.

(f)  To reflect the elimination of amortization on deferred transaction costs
     related to the Old Credit Agreement and the $105,000 Old Subordinated
     Debentures and the Old Senior Floating Rate Notes and Old Senior Fixed
     Rate Notes.

(g)  To reflect the amortization of transaction costs related to the New Bank
     Credit Agreement.

(h)  To reflect the elimination of undeclared dividends on Old Equity
     Interests.

                                     F-41           
                                              20/WL/LWH/KNK.SEC/S1.95/FS.1
No dealer, salesperson or any other 
person has been authorized to give 
any information or to make any     
representations in connection with 
this offering other than those 
contained in this Prospectus, and,  
if given or made, such information  
or representations must not be 
relied upon as having been so                         [Logo]
authorized.  This Prospectus does 
not constitute an offer to sell or 
a solicitation of an offer to     
buy by anyone in any jurisdiction 
in which such offer or solicitation                KASH N' KARRY
is not authorized or in which such                FOOD STORES, INC.
person making such offer or solicitation 
is not qualified to do so or to any 
person to whom it is unlawful to        
make such offer or solicitation.  
Neither the delivery of this 
Prospectus nor any sale hereunder 
shall, under any circumstances, 
create any implication that there 
has been no change in the affairs 
of the Company since the date 
hereof or that the information 
contained herein is correct as of 
any time subsequent to its date.
                                                   Common Stock
        TABLE OF CONTENTS
                                     Page
Available Information. . . .          2 
Prospectus Summary . . . . .          3 
Investment Considerations. .         10 
The Company. . . . . . . . .         14 
The Restructuring. . . . . .         15 
Market Price and Dividend Policy     16 
Capitalization . . . . . . .         17 
Selected Financial Information       18 
Management's Discussion and Analysis               PROSPECTUS
  of Financial Condition and 
  Results of Operations              22 
Business . . . . . . . . . .         30 
Management . . . . . . . . .         36 
Certain Relationships and
  Related Transactions . . .         47 
Principal Stockholders . . .         48 
Description of Capital Stock         49 
Selling Stockholders . . . .         57 
Plan of Distribution . . . .         60 
Legal Matters. . . . . . . .         61 
Experts. . . . . . . . . . .         61 
Index to Financial Statements        F-1
                                                  ________________, 1995
PART II

             INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution

     The following table sets forth the fees and expenses payable in
connection with the sale of the Common Stock being registered.  The Company
will pay all such fees and expenses.  All amounts are estimates except for
the registration fee.

SEC Registration Fee . . . . . . . .     $20,577.59

Blue Sky fees and expenses . . . . .       *

Accounting fees and expenses . . . .       *

Legal fees and expenses  . . . . . .       *

Transfer agent fees and expenses . .       *

Printing and engraving fees and expenses   *

Miscellaneous fees and expenses  . .       *

     Total        . . . . . . . . . . .    *      

*    To be completed by amendment.

Item 14.  Indemnification of Directors and Officers

     Section 145 of the Delaware General Corporation Law ("DGCL") permits a
Delaware corporation to indemnify any person who is or was a director,
officer, employee and agent of the corporation, or who is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against actual and reasonable expenses
(including attorneys' fees) incurred by such person in connection with any
action, suit or proceeding if (i) he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and (ii) in the case of a criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.  Except as ordered by
a court, no indemnification shall be made in connection with any proceeding
brought by or in the right of the Company where the person involved is
adjudged to be liable to the Company.

     Article XV of the Bylaws of the Company provides for indemnification of
the officers and directors of the Company to the full extent permitted by
law, as now in effect or later amended.

                                    II-1
The Company has entered into indemnity agreements with each of its
directors and executive officers.  The indemnity agreements generally
indemnify such persons against liabilities arising out of their service in
their capacities as directors, officers, employees or agents of the Company. 
The Company may from time to time enter into indemnity agreements with
additional individuals who become officers and/or directors of the Company. 

     Section 145 of the DGCL further authorizes a corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation or enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would otherwise have the power to indemnify
him under Section 145.  The Company maintains policies insuring the Company's
directors and executive officers against certain liabilities for actions
taken in such capacities, including liabilities under the Securities Act.

     Article Seventh of the Company's Restated Certificate of Incorporation
limits under certain circumstances the liability of the Company's directors
for a breach of their fiduciary duty as directors.  These provisions do not
eliminate the liability of a director (i) for a breach of the director's duty
of loyalty to the Company or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL (relating to the declaration of
dividends and purchase or redemption of shares in violation of the DGCL), or
(iv) for any transaction from which the director derived an improper personal
benefit.

     At present, there is no pending litigation or proceeding involving a
director or officer of the Company as to which indemnification is being
sought nor is the Company aware of any threatened litigation that may result
in claims for indemnification by any officer, director or employee of the
Company.

Item 15.  Recent Sales of Unregistered Securities

     On November 9, 1994, the Company filed with the United States Bankruptcy
Court for the District of Delaware a "prepackaged" plan of reorganization
(the "Prepackaged Plan") pursuant to Chapter 11 of the U.S. Bankruptcy Code. 
The Prepackaged Plan was confirmed by the Bankruptcy Court on December 12,
1994.  Pursuant to the Prepackaged Plan, on December 29, 1994 the Company
issued 2,635,000 shares of Common Stock to the holders of its $105.0 million
14% Subordinated Debentures due February 1, 2001 (the "Old Subordinated
Debentures"), in exchange for the Old Subordinated Debentures, and issued
465,000 shares of its Common Stock to Green Equity Investors, L.P., its
former majority shareholder, in consideration for the sum of $10.0 million. 
In addition, holders of the Company's $85.0 million Senior Floating Rate
Notes due August 2, 1996 and its $50.0 million 12 3/8% Senior Fixed Rate
Notes due February 1, 1999, exchanged such notes for $23.0 million aggregate
principal amount of new Senior Floating Rate Notes due February 1, 2003 and
$121.1 million aggregate principal amount of new 11.5% Senior Fixed Rate
Notes due February 1, 2003 (collectively, the "New Senior Notes").

                                    II-2
The Common Stock and New Senior Notes issued pursuant to the Prepackaged
Plan were issued in reliance upon Section 1145(a) of the U.S. Bankruptcy Code
under an order confirming the Company's Prepackaged Plan.  This section
provides an independent exemption from the registration requirement for the
offer and sale of securities of a debtor issued under a plan of
reorganization.  The requirements for relying upon the exemption under
Section 1145(a) of the Bankruptcy Code -- i.e., (i) issuance of securities
under a plan of reorganization; (ii) issuance of securities by the debtor;
and (iii) issuance of securities in exchange or principally in exchange for
claims or interests -- have been satisfied and the Prepackaged Plan was
confirmed by the Bankruptcy Court.

Item 16.  Exhibits and Financial Statement Schedules

     (a)  The following exhibits are filed as part of this Registration
Statement:

Exhibit No.                   Description

2         First Amended Plan of Reorganization filed by the Company with the
          United States Bankruptcy Court of the District of Delaware on
          November 9, 1994, as amended by notices of technical modifications
          thereto filed on November 9, 1994, and December 12, 1994
          (previously filed as Exhibit 2 to the Company's Quarterly Report on
          Form 10-Q for the period ended October 30, 1994, which exhibit is
          hereby incorporated by reference).  

3(i)(a)   Restated Certificate of Incorporation filed with the Delaware
          Secretary of State on December 29, 1994 (previously filed as
          Exhibit 3(i) to the Company's Quarterly Report on Form 10-Q for the
          period ended January 29, 1995, which exhibit is hereby incorporated
          by reference).  

3(i)(b)   Certificate of Designations of Series A Junior Participating
          Preferred Stock filed with the Secretary of State of the State of
          Delaware on April 26, 1995 (filed herewith).  

3(ii)(a)  Bylaws adopted October 12, 1988 (previously filed as Exhibit
          3(ii)(a) to the Company's Quarterly Report on Form 10-Q for the
          period ended January 29, 1995, which exhibit is hereby incorporated
          by reference).  

3(ii)(b)  First Amendment to Bylaws adopted July 30, 1991 (previously filed
          as Exhibit 3(ii)(b) to the Company's Quarterly Report on Form 10-Q
          for the period ended January 29, 1995, which exhibit is hereby
          incorporated by reference).  

3(ii)(c)  Second Amendment to Bylaws adopted December 29, 1994 (previously
          filed as Exhibit 3(ii)(c) to the Company's Quarterly Report on Form
          10-Q for the period ended January 29, 1995, which exhibit is hereby
          incorporated by reference).  

                                    II-3
4.1       Indenture dated as of December 29, 1994, between the Company and
          Shawmut Bank Connecticut, N.A., as Trustee, relating to 11.5%
          Senior Fixed Rate Notes due 2003 (previously filed as Exhibit 4.1
          to the Company's Quarterly Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby incorporated by
          reference).  

4.2       Indenture dated as of December 29, 1994, between the Company and
          IBJ Schroder Bank & Trust Company, as Trustee, relating to Senior
          Floating Notes due 2003 (previously filed as Exhibit 4.2 to the
          Company's Quarterly Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby incorporated by
          reference).

4.3       Rights Agreement dated as of April 13, 1995 between the Company and
          Shawmut Bank Connecticut, N.A., as Rights Agent (previously filed
          as Exhibit 1 to the Company's Current Report on Form 8-K dated
          April 13, 1995, which exhibit is hereby incorporated by reference).

4.4       Specimen form of Common Stock certificate (filed herewith).

5         Opinion of Milbank, Tweed, Hadley & McCloy re: legality (to be
          filed by amendment).

10.1      Credit Agreement dated as of December 29, 1994, among the Company,
          certain lenders, The CIT Group/Business Credit, Inc., as
          administrative agent, and Bank of America National Trust and
          Savings Association, as co-agent (previously filed as Exhibit 10.1
          to the Company's Quarterly Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby incorporated by
          reference). 

10.2      Mortgage, Fixture Filing, Security Agreement and Assignment of
          Rents between the Company, as mortgagor, and Sun Life Insurance Co.
          of America, as mortgagee, dated as of September 7, 1989 (previously
          filed as Exhibit 28.1(a) to the Company's Quarterly Report on Form
          10-Q for the period ended October 29, 1989, which exhibit is hereby
          incorporated by reference).

10.3      Mortgage between the Company, as mortgagor, and Ausa Life Insurance
          Company, as mortgagee, dated as of November 21, 1989 (previously
          filed as Exhibit 28.2(a) to the Company's Quarterly Report on Form
          10-Q for the period ended October 29, 1989, which exhibit is hereby
          incorporated by reference).

10.4      Trademark License Agreement dated as of October 12, 1988 between
          the Company and Lucky Stores, Inc. (previously filed as Exhibit
          10.11 to the Company's Registration Statement on Form S-1,
          Registration No. 33-25621, which exhibit is hereby incorporated by
          reference).

10.5(a)   Services Agreement dated as of March 1, 1995 between the Company
          and GSI Outsourcing Corporation (filed herewith).

                                    II-4
10.5(b)   First Amendment to Services Agreement between the Company and GSI
          Outsourcing Corporation (filed herewith).

10.6      Form of Indemnity Agreement between the Company and its directors
          and certain of its officers (previously filed as Exhibit 10.3 to
          the Company's Registration Statement on Form S-1, Registration No.
          33-25621, which exhibit is hereby incorporated by reference).

10.7(a)   1995 Non-Employee Director Stock Option Plan adopted on March 9,
          1995 (filed herewith). 

10.7(b)   Form of Non-Qualified Stock Option Agreement entered into between
          the Company and certain directors, as optionees, pursuant to the
          1995 Non-Employee Director Stock Option Plan (filed herewith).

10.8      Non-Qualified Stock Option Agreement dated as of January 17, 1995,
          between the Company and Green Equity Investors, L.P. (filed
          herewith).

10.9      Management Services Agreement dated as of December 29, 1994, by and
          between the Company and Leonard Green & Partners (previously filed
          as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for
          the period ended January 29, 1995, which exhibit is hereby
          incorporated by reference).

10.10     Employment Agreement dated as of January 24, 1995, between the
          Company and Ronald Johnson (filed herewith).

10.11     Employment Agreement dated as of March 6, 1995, between the Company
          and Gary M. Shell (filed herewith).

10.12     Employment Agreement dated as of March 16, 1995, between the
          Company and Cliff Smith (filed herewith).

10.13     Incentive Compensation Plan adopted on October 26, 1994 (filed
          herewith).

10.14     Amended and Restated Kash n' Karry Retirement Estates and Trust
          (401(k) Plan) dated October 14, 1993, effective as of January 1,
          1992 (previously filed as Exhibit 10.5 to the Company's Annual
          Report on Form 10-K for the period ended August 1, 1993, which
          exhibit is hereby incorporated by reference).

10.15(a)  Form of Deferred Compensation Agreement dated as of December 21,
          1989 between the Company and key employees and a select group of
          management (KESP) (previously filed as Exhibit 28.3(a) to the
          Company's Quarterly Report on Form 10-Q for the period ended
          January 28, 1990, which exhibit is hereby incorporated by
          reference).

                                    II-5
10.15(b)  Master First Amendment to Deferred Compensation Agreements, dated
          as of November 11, 1991 between the Company and the key employees
          party thereto (previously filed as Exhibit 28.3 to the Company's
          Quarterly Report on Form 10-Q for the period ended November 3,
          1991, which exhibit is hereby incorporated by reference).

10.15(c)  Master Second Amendment to Deferred Compensation Agreements, dated
          as of December 30, 1993 between the Company and the key employees
          party thereto (previously filed as Exhibit 10.13(d) to the
          Company's Quarterly Report on Form 10-Q for the period ended
          January 30, 1994, which exhibit is hereby incorporated by
          reference).

10.15(d)  Master Third Amendment to Deferred Compensation Agreements, dated
          as of September 2, 1994, between the Company and the key employees
          party thereto (previously filed as Exhibit 10.2 to the Company's
          Quarterly Report on Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by reference).

10.16(a)  1995 Key Employee Stock Option Plan (filed herewith).

10.16(b)  Non-Qualified Stock Option Agreement dated March 9, 1995 between 
          the Company and Ronald E. Johnson (filed herewith).

10.16(c)  Form of Non-Qualified Stock Option Agreement entered into between
          the Company and certain key employees, as optionees, pursuant to
          the 1995 Key Employee Stock Option Plan (filed herewith).

16        Letter re change in certifying accountant (previously filed as
          Exhibit 16 to the Company's Current Report on Form 8-K dated
          February 17, 1995).

23.1      Consent of Milbank, Tweed, Hadley & McCloy (to be included in
          Exhibit 5).

23.2      Consent of KPMG Peat Marwick, L.L.P. (filed herewith).

24        Power of Attorney (included in signature page).

27        Financial Data Schedule (filed herewith).

                                    II-6
Item 17.  Undertakings

     1.   Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to its Certificate of Incorporation,
Bylaws or otherwise, the registrant has been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

     2.   The undersigned registrant hereby undertakes:

      (1)  To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;

         (i)  To include any prospectus required by Section 10(a)(3) of the
Securities Act;

        (ii)  To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;

       (iii)  To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;

     (2)  That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and

     (3)  To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering. 

                                    II-7
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tampa,
State of Florida, on April 30, 1995.

                         KASH N' KARRY FOOD STORES, INC.

                         /s/ Ronald E. Johnson
                         By:                                 
                            Ronald E. Johnson
                            Chairman of the Board,
                            President and Chief Executive Officer

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ronald E. Johnson and Raymond P. Springer, and
each or either of them, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments and post-effective amendments to this Registration Statement, and
to file the same with all exhibits thereto, unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
either of them or their substitutes, may lawfully do or cause to be done by
virtue thereof.

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

        Signature           Capacity                  Date

/s/ Ronald E. Johnson
Ronald E. Johnson     Chairman of the Board,       April 30, 1995
                  President and Chief Executive
                            Officer
                  (principal executive officer)

/s/ Raymond P. Springer
Raymond P. Springer   Senior Vice President,        April 28, 1995
                     Chief Financial Officer
                  (principal financial officer)
/s/ Richard D. Coleman    
Richard D. Coleman    Vice President, Controller    April 30, 1995
                    (principal accounting officer)

/s/ Everett L. Buckardt  
Everett L. Buckardt       Director                  April 30, 1995

/s/ John J. Delucca           
John J. Delucca           Director                  April 30, 1995

Jennifer Holden Dunbar    Director                  April ___, 1995

Ben Evans                 Director                  April ___, 1995

/s/ Thomas W. Harberts        
Thomas W. Harberts        Director                  April 28, 1995

/s/ Robert Spiegel            
Robert Spiegel            Director                  April 28, 1995

Christopher V. Walker     Director                  April ___, 1995

/s/ Peter Zurkow              
Peter Zurkow              Director                  April 28, 1995

20/LWH/KNK.SEC/S1.95/K10008s1.4
EXHIBIT INDEX               Sequentially
Exhibit                                                 Numbered
No.                 Description of Exhibit                Page    

2         First Amended Plan of Reorganization filed      
          by the Company with the United States
          Bankruptcy Court of the District of Delaware
          on November 9, 1994, as amended by notices of
          technical modifications thereto filed on
          November 9, 1994, and December 12, 1994
          (previously filed as Exhibit 2 to the
          Company's Quarterly Report on Form 10-Q for
          the period ended October 30, 1994, which
          exhibit is hereby incorporated by reference).

3(i)(a)   Restated Certificate of Incorporation filed     
          with the Delaware Secretary of State on
          December 29, 1994 (previously filed as Exhibit
          3(i) to the Company's Quarterly Report on Form
          10-Q for the period ended January 29, 1995,
          which exhibit is hereby incorporated by
          reference).

3(i)(b)   Certificate of Designations of Series           122
          A Junior Participating Preferred Stock filed
          with the Secretary of State of the State of
          Delaware on April 26, 1995.

3(ii)(a)  Bylaws adopted October 12, 1988 (previously     
          filed as Exhibit 3(ii)(a) to the Company's
          Quarterly Report on Form 10-Q for the period
          ended January 29, 1995, which exhibit is
          hereby incorporated by reference).

3(ii)(b)  First Amendment to Bylaws adopted               
          July 30, 1991 (previously filed as Exhibit
          3(ii)(b) to the Company's Quarterly Report on
          Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by
          reference).

3(ii)(c)  Second Amendment to Bylaws adopted              
          December 29, 1994 (previously filed as Exhibit
          3(ii)(c) to the Company's Quarterly Report on
          Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by
          reference).

4.1       Indenture dated as of December 29, 1994,        
          between the Company and Shawmut Bank
          Connecticut, N.A., as Trustee, relating to
11.5% Senior Fixed Rate Notes due 2003
          (previously filed as Exhibit 4.1 to the
          Company's Quarterly Report on Form 10-Q for
          the period ended January 29, 1995, which
          exhibit is hereby incorporated by reference).

4.2       Indenture dated as of December 29, 1994,        
          between the Company and IBJ Schroder Bank &
          Trust Company, as Trustee, relating to Senior
          Floating Rate Notes due 2003 (previously filed
          as Exhibit 4.2 to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby
          incorporated by reference).

4.3       Rights Agreement dated as of April 13, 1995     
          between the Company and Shawmut Bank
          Connecticut, N.A., as Rights Agent (previously
          filed as Exhibit 1 to the Company's Current
          Report on Form 8-K dated April 13, 1995, which
          exhibit is hereby incorporated by reference).

4.4       Specimen form of Common Stock certificate.      129

5         Opinion of Milbank, Tweed, Hadley & McCloy      
          re:  legality (to be filed by amendment).

10.1      Credit Agreement dated as of                    
          December 29, 1994, among the Company, certain
          lenders, The CIT Group/Business Credit, Inc.,
          as administrative agent, and Bank of America
          National Trust and Savings Association, as
          co-agent (previously filed as Exhibit 10.1 to
          the Company's Quarterly Report on Form 10-Q
          for the period ended January 29, 1995, which
          exhibit is hereby incorporated by reference). 

10.2      Mortgage, Fixture Filing, Security Agreement    
          and Assignment of Rents between the Company,
          as mortgagor, and Sun Life Insurance Co. of
          America, as mortgagee, dated as of September
          7, 1989 (previously filed as Exhibit 28.1(a)
          to the Company's Quarterly Report on Form 10-Q
          for the period ended October 29, 1989, which
          exhibit is hereby incorporated by reference).

10.3      Mortgage between the Company, as mortgagor,     
          and Ausa LifeInsurance Company, as mortgagee,
          dated as of November 21, 1989 (previously
          filed as Exhibit 28.2(a) to the Company's
          Quarterly Report on Form 10-Q for the period
          ended October 29, 1989, which exhibit is
          hereby incorporated by reference).
10.4      Trademark License Agreement dated as of         
          October 12, 1988 between the Company and Lucky
          Stores, Inc. (previously filed as Exhibit
          10.11 to the Company's Registration Statement
          on Form S-1, Registration No. 33-25621, which
          exhibit is hereby incorporated by reference).

10.5(a)   Services Agreement dated as of March 1, 1995    132
          between the Company and GSI Outsourcing
          Corporation.

10.5(b)   First Amendment to Services Agreement between   241
          the Company and GSI Outsourcing Corporation.

10.6      Form of Indemnity Agreement between the         
          Company and its directors and certain of its
          officers (previously filed as Exhibit 10.3 to
          the Company's Registration Statement on Form
          S-1, Registration No. 33-25621, which exhibit
          is hereby incorporated by reference).

10.7(a)   1995 Non-Employee Director Stock Option Plan    247
          adopted on March 9, 1995.

10.7(b)   Form of Non-Qualified Stock Option Agreement    261
          entered into between the Company and certain
          directors, as optionees, pursuant to the 1995
          Non-Employee Director Stock Option Plan.

10.8      Non-Qualified Stock Option Agreement dated      266
          as of January 17, 1995, between the Company
          and Green Equity Investors, L.P.

10.9      Management Services Agreement dated as of       
          December 29, 1994, by and between the Company
          and Leonard Green & Partners (previously filed
          as Exhibit 10.3 to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 29, 1995, which exhibit is hereby
          incorporated by reference).

10.10     Employment Agreement dated as of                272
          January 24, 1995, between the Company and
          Ronald Johnson.

10.11     Employment Agreement dated as of                295
          March 6, 1995, between the Company and Gary M.
          Shell.

10.12     Employment Agreement dated as of                322
          March 16, 1995, between the Company and Cliff
          Smith.
10.13     Incentive Compensation Plan adopted             349
          on October 26, 1994.

10.14     Amended and Restated Kash n' Karry              
          Retirement Estates and Trust (401(k) Plan)
          dated October 14, 1993, effective as of
          January 1, 1992 (previously filed as Exhibit
          10.5 to the Company's Annual Report on Form
          10-K for the period ended August 1, 1993,
          which exhibit is hereby incorporated by
          reference).

10.15(a)  Form of Deferred Compensation Agreement         
          dated as of December 21, 1989 between the
          Company and key employees and a select group
          of management (KESP) (previously filed as
          Exhibit 28.3(a) to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 28, 1990, which exhibit is hereby
          incorporated by reference).

10.15(b)  Master First Amendment to Deferred              
          Compensation Agreements, dated as of November
          11, 1991 between the Company and the key
          employees party thereto (previously filed as
          Exhibit 28.3 to the Company's Quarterly Report
          on Form 10-Q for the period ended November 3,
          1991, which exhibit is hereby incorporated by
          reference).

10.15(c)  Master Second Amendment to Deferred             
          Compensation Agreements, dated as of December
          30, 1993 between the Company and the key
          employees party thereto (previously filed as
          Exhibit 10.13(d) to the Company's Quarterly
          Report on Form 10-Q for the period ended
          January 30, 1994, which exhibit is hereby
          incorporated by reference).

10.15(d)  Master Third Amendment to Deferred              
          Compensation Agreements, dated as of September
          2, 1994, between the Company and the key
          employees party thereto (previously filed as
          Exhibit 10.2 to the Company's Quarterly Report
          on Form 10-Q for the period ended January 29,
          1995, which exhibit is hereby incorporated by
          reference).

10.16(a)  1995 Key Employee Stock Option Plan.            355

10.16(b)  Non-Qualified Stock Option Agreement            373
          dated March 9, 1995 between the Company and
          Ronald E. Johnson.
10.16(c)  Form of Non-Qualified Stock Option              378
          Agreement entered into between the Company and
          certain key employees, as optionees, pursuant
          to the 1995 Key Employee Stock Option Plan.

16        Letter re change in certifying accountant       
          (previously filed as Exhibit 16 to the
          Company's Current Report on Form 8-K dated
          February 17, 1995).

23.1      Consent of Milbank, Tweed, Hadley & McCloy      
          (to be included in Exhibit 5).

23.2      Consent of KPMG Peat Marwick, L.L.P.            383

24        Power of Attorney (included in                  
          signature page)

27        Financial Data Schedule                         384