<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

     (Mark One)

     (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

     For the quarterly period (13 weeks) ended April 28, 2001.

     ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

     For the transition period from                    to
                                    ------------------    -------------------

     Commission file number 333-32825



                                SFW HOLDING CORP.
             (Exact name of registrant as specified in its charter)

            Delaware                                          52-2014682
-------------------------------                            -------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

              11840 Valley View Road, Eden Prairie, Minnesota 55344
              -----------------------------------------------------
               (Address of principal executive office) (Zip Code)

                                 (952) 828-4000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

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

At June 8, 2001 the registrant had 1,000 Common Stock. The common stock of SFW
Holding Corp. is not publicly traded.

The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this form with the reduced disclosure
format.
<PAGE>

                                     PART I

Item 1. Financial Statements

The consolidated financial statements of SFW Holding Crop. (the "Company") and
its wholly-owned subsidiary, Shoppers Food Warehouse Corp. ("Shoppers") included
herein have been prepared by the Company without audit (except for the
consolidated balance sheet as of January 27, 2001, which has been derived from
the audited consolidated balance sheet as of that date) pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted because they are not applicable or not required.

It is suggested that these consolidated financial statements are read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 27, 2001.
<PAGE>

                        SFW HOLDING CORP. AND SUBSIDIARY
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                                      April 28,        January 27,
                                                                                                        2001               2001
                                                                                                    --------------     -------------
                                                                  Assets
<S>                                                                                                 <C>                <C>
        Current assets:
            Cash and cash equivalents                                                               $      4,124       $      2,966
            Accounts receivable, net                                                                       9,432             20,120
            Merchandise inventories                                                                       35,165             38,065
            Other current assets                                                                           5,897              5,286
                                                                                                    --------------     -------------
                 Total current assets                                                                     54,618             66,437

        Property and equipment, net                                                                       88,159             88,400
        Goodwill, net                                                                                    297,714            297,725
        Lease rights, net                                                                                 26,419             26,706
        Note receivable, related party                                                                    47,953             46,897
        Other assets                                                                                         830                825

                                                                                                    --------------     -------------
                 Total assets                                                                       $    515,693       $    526,990
                                                                                                    ==============     =============

                                                   Liabilities and Stockholder's equity
        Current liabilities:
            Accounts payable                                                                        $      9,772       $      8,861
            Accrued expenses                                                                              24,906             23,388
            Due to affiliates                                                                             46,728             63,677
            Accrued income taxes                                                                          18,083             16,122
            Current maturities of capital lease obligations                                                  796                658
                                                                                                    --------------     -------------
                 Total current liabilities                                                               100,285            112,706

        Senior notes due 2004                                                                            177,416            178,370
        Capital lease obligations                                                                         26,319             26,619
        Other liabilities                                                                                  8,633              8,633
                                                                                                    --------------     -------------
                 Total liabilities                                                                       312,653            326,328
                                                                                                    --------------     -------------

        Stockholder's Equity:
            Class A common stock, voting, par value $0.01 per share, 1,000
                 shares authorized, issued and outstanding                                                     -                  -
            Additional paid-in capital                                                                   189,408            189,408
            Retained earnings                                                                             13,632             11,254
                                                                                                    --------------     -------------
                 Total stockholder's equity                                                              203,040            200,662
                                                                                                    --------------     -------------
                 Total liabilities and stockholder's equity                                         $    515,693       $    526,990
                                                                                                    ==============     =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>

                        SFW HOLDING CORP. AND SUBSIDIARY
             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                  April 28, 2001         April 29, 2000
                                                 ------------------     ------------------
                                                    (13 weeks)             (13 weeks)
<S>                                              <C>                    <C>
        Sales                                    $        235,900       $       214,636
        Cost of sales                                     177,474               161,223
                                                 ------------------     ------------------
            Gross profit                                   58,426                53,413

        Selling and administrative expenses                51,027                47,651
                                                 ------------------     ------------------

            Operating income                                7,399                 5,762

        Interest income                                     1,509                 1,021
        Interest expense                                    3,883                 3,554
                                                 ------------------     ------------------

            Net interest expense                            2,374                 2,533


        Earnings before income taxes                        5,025                 3,229

        Provision for income taxes                          2,647                 1,822
                                                 ------------------     ------------------

        Net earnings                             $          2,378       $         1,407
                                                 ==================     ==================
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>

                        SFW HOLDING CORP. AND SUBSIDIARY
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                    April 28, 2001    April 29, 2000
                                                                   ---------------    --------------
                                                                      (13 weeks)        (13 weeks)
<S>                                                                <C>                <C>
        Net cash provided by operating activities:                        20,461              4,730

        Cash flows used in investing activity:
          Capital expenditures                                            (2,192)            (3,899)


        Cash flows used in financing activities:
          Cash provided to affiliated companies                          (16,949)            (2,738)
          Principal payments under capital lease obligations                (162)              (402)

          Net cash used in financing activities                          (17,111)            (3,140)

        Net increase (decrease) in cash and cash equivalents               1,158             (2,309)
        Cash and cash equivalents, beginning of period                     2,966              3,390
                                                                   ---------------    --------------
        Cash and cash equivalents, end of period                   $       4,124      $       1,081
                                                                   ===============    ==============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>

NOTE 1 - GENERAL

General

The accompanying consolidated financial statements include the accounts of SFW
Holding Corp. (a Delaware corporation) and its subsidiaries, ("SFW" or the
"Company") for the 13 weeks ended April 28, 2001 ("first quarter 2002"), and the
13 weeks ended April 29, 2000 ("first quarter 2001"). All significant
intercompany accounts and transactions have been eliminated. Shoppers, the
Company's operating subsidiary, operates in one business segment. The Company is
an indirect wholly-owned subsidiary of SUPERVALU INC. ("SUPERVALU").

The accompanying consolidated financial statements of the Company as of April
28, 2001, and for first quarter 2002 and first quarter 2001, have not been
audited. Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted from the accompanying
consolidated financial statements.

In the opinion of the Company, the accompanying consolidated financial
statements reflect all adjustments (which include normal recurring adjustments)
necessary to present fairly the financial position of the Company as of April
28, 2001, and the results of its operations for first quarter 2002 and first
quarter 2001.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.

NOTE 2 - TRANSACTIONS WITH AFFILIATES

Transactions with SUPERVALU

The consolidated balance sheet includes $46.7 million and $63.7 million due to
affiliates at April 28, 2001 and January 27, 2001, respectively. The amounts
outstanding consist primarily of amounts due to SUPERVALU for the purchase of
bonds, capital spending, incomes taxes, inventory purchases and general and
administrative expenses.



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The Company's sole asset is its ownership of 100% of the outstanding common
stock of Shoppers. The Company's business is substantially the same as that of
Shoppers and is subject to all of the risks associated therewith. Therefore,
substantially all of the information set forth herein which pertains to the
operations of the Company's business and its financial condition references the
business and financial condition of Shoppers.

Forward Looking Statements

Statements in this report that are not historical in nature, including
references to beliefs, anticipations or expectations, are "forward-looking"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
are subject to a wide variety of risks and uncertainties that could cause actual
results to differ materially from those projected including, without limitation,
the ability of the Company to open new stores, the effect of regional economic
conditions, the effect of increased competition in the markets in which the
Company operates and other risks described from time to time in the Company's
filings with the Securities and Exchange Commission. The Company undertakes no
obligation and does not intend to update, revise or otherwise publicly release
any revisions to these forward-looking statements, which revisions may be made
to reflect any future events or circumstances, other than through its regular
quarterly and annual reports filed with the Securities and Exchange Commission
(the "SEC").
<PAGE>

Results of Operations

Sales were $235.9 million for first quarter 2002, compared to $214.6 million for
first quarter 2001, an increase of 9.9%. The sales increase was primarily due to
the opening of four new stores since first quarter 2001, as well as an increase
of 0.8% in comparable store sales.

Gross profit, as a percentage of sales, remained essentially flat at 24.8%
during first quarter 2002 and 24.9% during first quarter 2001.

Selling and administrative expenses, as a percentage of sales, decreased to
21.6% for first quarter 2002, compared to 22.2% for first quarter 2001. The
decrease is due to a focus on expense control combined with sales increases,
which resulted in favorable expense leverage as a percent of sales.

Operating income was $7.4 million for first quarter 2002, compared to $5.8
million for first quarter 2001. The increase was primarily due to the increase
in sales.

Interest income increased by approximately $0.5 million for first quarter 2002,
compared to first quarter 2001, due to an increase in the outstanding balance of
the notes receivable.

Interest expense increased approximately $0.3 million from $3.6 million during
first quarter 2001, to $3.9 million during first quarter 2002. The increase in
interest expense was due to the interest relating to capital leases for new
stores.

The effective income tax rate for first quarter 2002 was 52.7%, compared to
56.4% for first quarter 2001. The decrease is primarily attributable to
increased taxable earnings in relation to the fixed amount of non-deductible
goodwill associated with the SUPERVALU acquisition.

Net income was $2.4 million during first quarter 2002, compared to $1.4 million
during first quarter 2001, an increase of 69.0%.

Liquidity and Capital Resources

During first quarter 2002, operating activities generated net cash of $20.5
million, compared to generating $4.7 million during first quarter 2001. The
increase was primarily due to an increase in working capital of $12.7 million
for first quarter 2002, compared to first quarter 2001.

Investing activities used $2.2 million for capital expenditures during first
quarter 2002, compared to $3.9 million during first quarter 2001.

Financing activities primarily reflect the payment to affiliated companies of
$16.9 million in first quarter 2002, compared to $2.7 million during first
quarter 2001. The change was primarily due to the change in cash provided by
operating activities for first quarter 2002, compared to first quarter 2001.

The Company believes that cash flows from Shoppers' operations as well as cash
provided by affiliated companies will be adequate to meet its anticipated
requirements for working capital, debt service and capital expenditures.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The registrant's market risk exposure is not material. Interest on both the
Company's notes receivable and Senior Notes are at fixed rates. The market value
of the fixed rate notes is subject to change due to fluctuations in market
interest rates. The Company does not have any other financial instruments that
result in material exposure to interest rate risk.
<PAGE>

                           PART II - Other Information

Item 1.    Legal Proceedings

           None

Item 2.    Changes in Securities and Use of Proceeds

           Not Applicable

Item 3.    Defaults Upon Senior Securities

           Not Applicable

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

           Not Applicable

Item 5.    Other Information

           None

Item 6.    Exhibits and Reports on Form 8-K

           (A)      Exhibits
                    None

           (B)      Reports on Form 8-K
                    None
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       SFW HOLDING CORP.



  Date: June 12, 2001                  By: /s/ Pamela K. Knous
                                          -------------------------------------
                                          Pamela K. Knous
                                          Executive Vice President, Chief
                                          Financial Officer (authorized officer
                                          of the registrant and principal
                                          financial officer)
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{"company-data": {"conformed-name": "SFW HOLDING CORP", "cik": "0001043066", "assigned-sic": "5411", "irs-number": "522014682", "state-of-incorporation": "DE", "fiscal-year-end": "0131"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "333-32825-01", "film-number": "1659308"}, "business-address": {"street1": "3300 75TH AVENUE", "city": "LANDOVER", "state": "MD", "zip": "20785", "phone": "3013068600"}, "mail-address": {"street1": "4600 FORBES BLVD", "city": "LENHAM", "state": "MD", "zip": "20706"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

     (Mark One)

     (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

     For the quarterly period (13 weeks) ended April 28, 2001.

     ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

     For the transition period from                    to
                                    ------------------    -------------------

     Commission file number 333-32825

                                SFW HOLDING CORP.
             (Exact name of registrant as specified in its charter)

            Delaware                                          52-2014682
-------------------------------                            -------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

              11840 Valley View Road, Eden Prairie, Minnesota 55344
              -----------------------------------------------------
               (Address of principal executive office) (Zip Code)

                                 (952) 828-4000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

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

At June 8, 2001 the registrant had 1,000 Common Stock. The common stock of SFW
Holding Corp. is not publicly traded.

The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this form with the reduced disclosure
format.
PART I

Item 1. Financial Statements

The consolidated financial statements of SFW Holding Crop. (the "Company") and
its wholly-owned subsidiary, Shoppers Food Warehouse Corp. ("Shoppers") included
herein have been prepared by the Company without audit (except for the
consolidated balance sheet as of January 27, 2001, which has been derived from
the audited consolidated balance sheet as of that date) pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted because they are not applicable or not required.

It is suggested that these consolidated financial statements are read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
January 27, 2001.
SFW HOLDING CORP. AND SUBSIDIARY
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)
April 28,        January 27,
                                                                                                        2001               2001
                                                                                                    --------------     -------------
                                                                  Assets
Current assets:
            Cash and cash equivalents                                                               $      4,124       $      2,966
            Accounts receivable, net                                                                       9,432             20,120
            Merchandise inventories                                                                       35,165             38,065
            Other current assets                                                                           5,897              5,286
                                                                                                    --------------     -------------
                 Total current assets                                                                     54,618             66,437

        Property and equipment, net                                                                       88,159             88,400
        Goodwill, net                                                                                    297,714            297,725
        Lease rights, net                                                                                 26,419             26,706
        Note receivable, related party                                                                    47,953             46,897
        Other assets                                                                                         830                825

                                                                                                    --------------     -------------
                 Total assets                                                                       $    515,693       $    526,990
                                                                                                    ==============     =============

                                                   Liabilities and Stockholder's equity
        Current liabilities:
            Accounts payable                                                                        $      9,772       $      8,861
            Accrued expenses                                                                              24,906             23,388
            Due to affiliates                                                                             46,728             63,677
            Accrued income taxes                                                                          18,083             16,122
            Current maturities of capital lease obligations                                                  796                658
                                                                                                    --------------     -------------
                 Total current liabilities                                                               100,285            112,706

        Senior notes due 2004                                                                            177,416            178,370
        Capital lease obligations                                                                         26,319             26,619
        Other liabilities                                                                                  8,633              8,633
                                                                                                    --------------     -------------
                 Total liabilities                                                                       312,653            326,328
                                                                                                    --------------     -------------

        Stockholder's Equity:
            Class A common stock, voting, par value $0.01 per share, 1,000
                 shares authorized, issued and outstanding                                                     -                  -
            Additional paid-in capital                                                                   189,408            189,408
            Retained earnings                                                                             13,632             11,254
                                                                                                    --------------     -------------
                 Total stockholder's equity                                                              203,040            200,662
                                                                                                    --------------     -------------
                 Total liabilities and stockholder's equity                                         $    515,693       $    526,990
                                                                                                    ==============     =============
The accompanying notes are an integral part of these
                       consolidated financial statements.
SFW HOLDING CORP. AND SUBSIDIARY
             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                 (in thousands)
April 28, 2001         April 29, 2000
                                                 ------------------     ------------------
                                                    (13 weeks)             (13 weeks)
Sales                                    $        235,900       $       214,636
        Cost of sales                                     177,474               161,223
                                                 ------------------     ------------------
            Gross profit                                   58,426                53,413

        Selling and administrative expenses                51,027                47,651
                                                 ------------------     ------------------

            Operating income                                7,399                 5,762

        Interest income                                     1,509                 1,021
        Interest expense                                    3,883                 3,554
                                                 ------------------     ------------------

            Net interest expense                            2,374                 2,533

        Earnings before income taxes                        5,025                 3,229

        Provision for income taxes                          2,647                 1,822
                                                 ------------------     ------------------

        Net earnings                             $          2,378       $         1,407
                                                 ==================     ==================
The accompanying notes are an integral part of these
                       consolidated financial statements.
SFW HOLDING CORP. AND SUBSIDIARY
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
April 28, 2001    April 29, 2000
                                                                   ---------------    --------------
                                                                      (13 weeks)        (13 weeks)
Net cash provided by operating activities:                        20,461              4,730

        Cash flows used in investing activity:
          Capital expenditures                                            (2,192)            (3,899)

        Cash flows used in financing activities:
          Cash provided to affiliated companies                          (16,949)            (2,738)
          Principal payments under capital lease obligations                (162)              (402)

          Net cash used in financing activities                          (17,111)            (3,140)

        Net increase (decrease) in cash and cash equivalents               1,158             (2,309)
        Cash and cash equivalents, beginning of period                     2,966              3,390
                                                                   ---------------    --------------
        Cash and cash equivalents, end of period                   $       4,124      $       1,081
                                                                   ===============    ==============
The accompanying notes are an integral part of these
                       consolidated financial statements.
NOTE 1 - GENERAL

General

The accompanying consolidated financial statements include the accounts of SFW
Holding Corp. (a Delaware corporation) and its subsidiaries, ("SFW" or the
"Company") for the 13 weeks ended April 28, 2001 ("first quarter 2002"), and the
13 weeks ended April 29, 2000 ("first quarter 2001"). All significant
intercompany accounts and transactions have been eliminated. Shoppers, the
Company's operating subsidiary, operates in one business segment. The Company is
an indirect wholly-owned subsidiary of SUPERVALU INC. ("SUPERVALU").

The accompanying consolidated financial statements of the Company as of April
28, 2001, and for first quarter 2002 and first quarter 2001, have not been
audited. Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted from the accompanying
consolidated financial statements.

In the opinion of the Company, the accompanying consolidated financial
statements reflect all adjustments (which include normal recurring adjustments)
necessary to present fairly the financial position of the Company as of April
28, 2001, and the results of its operations for first quarter 2002 and first
quarter 2001.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.

NOTE 2 - TRANSACTIONS WITH AFFILIATES

Transactions with SUPERVALU

The consolidated balance sheet includes $46.7 million and $63.7 million due to
affiliates at April 28, 2001 and January 27, 2001, respectively. The amounts
outstanding consist primarily of amounts due to SUPERVALU for the purchase of
bonds, capital spending, incomes taxes, inventory purchases and general and
administrative expenses.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The Company's sole asset is its ownership of 100% of the outstanding common
stock of Shoppers. The Company's business is substantially the same as that of
Shoppers and is subject to all of the risks associated therewith. Therefore,
substantially all of the information set forth herein which pertains to the
operations of the Company's business and its financial condition references the
business and financial condition of Shoppers.

Forward Looking Statements

Statements in this report that are not historical in nature, including
references to beliefs, anticipations or expectations, are "forward-looking"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
are subject to a wide variety of risks and uncertainties that could cause actual
results to differ materially from those projected including, without limitation,
the ability of the Company to open new stores, the effect of regional economic
conditions, the effect of increased competition in the markets in which the
Company operates and other risks described from time to time in the Company's
filings with the Securities and Exchange Commission. The Company undertakes no
obligation and does not intend to update, revise or otherwise publicly release
any revisions to these forward-looking statements, which revisions may be made
to reflect any future events or circumstances, other than through its regular
quarterly and annual reports filed with the Securities and Exchange Commission
(the "SEC").
Results of Operations

Sales were $235.9 million for first quarter 2002, compared to $214.6 million for
first quarter 2001, an increase of 9.9%. The sales increase was primarily due to
the opening of four new stores since first quarter 2001, as well as an increase
of 0.8% in comparable store sales.

Gross profit, as a percentage of sales, remained essentially flat at 24.8%
during first quarter 2002 and 24.9% during first quarter 2001.

Selling and administrative expenses, as a percentage of sales, decreased to
21.6% for first quarter 2002, compared to 22.2% for first quarter 2001. The
decrease is due to a focus on expense control combined with sales increases,
which resulted in favorable expense leverage as a percent of sales.

Operating income was $7.4 million for first quarter 2002, compared to $5.8
million for first quarter 2001. The increase was primarily due to the increase
in sales.

Interest income increased by approximately $0.5 million for first quarter 2002,
compared to first quarter 2001, due to an increase in the outstanding balance of
the notes receivable.

Interest expense increased approximately $0.3 million from $3.6 million during
first quarter 2001, to $3.9 million during first quarter 2002. The increase in
interest expense was due to the interest relating to capital leases for new
stores.

The effective income tax rate for first quarter 2002 was 52.7%, compared to
56.4% for first quarter 2001. The decrease is primarily attributable to
increased taxable earnings in relation to the fixed amount of non-deductible
goodwill associated with the SUPERVALU acquisition.

Net income was $2.4 million during first quarter 2002, compared to $1.4 million
during first quarter 2001, an increase of 69.0%.

Liquidity and Capital Resources

During first quarter 2002, operating activities generated net cash of $20.5
million, compared to generating $4.7 million during first quarter 2001. The
increase was primarily due to an increase in working capital of $12.7 million
for first quarter 2002, compared to first quarter 2001.

Investing activities used $2.2 million for capital expenditures during first
quarter 2002, compared to $3.9 million during first quarter 2001.

Financing activities primarily reflect the payment to affiliated companies of
$16.9 million in first quarter 2002, compared to $2.7 million during first
quarter 2001. The change was primarily due to the change in cash provided by
operating activities for first quarter 2002, compared to first quarter 2001.

The Company believes that cash flows from Shoppers' operations as well as cash
provided by affiliated companies will be adequate to meet its anticipated
requirements for working capital, debt service and capital expenditures.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The registrant's market risk exposure is not material. Interest on both the
Company's notes receivable and Senior Notes are at fixed rates. The market value
of the fixed rate notes is subject to change due to fluctuations in market
interest rates. The Company does not have any other financial instruments that
result in material exposure to interest rate risk.
PART II - Other Information

Item 1.    Legal Proceedings

           None

Item 2.    Changes in Securities and Use of Proceeds

           Not Applicable

Item 3.    Defaults Upon Senior Securities

           Not Applicable

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

           Not Applicable

Item 5.    Other Information

           None

Item 6.    Exhibits and Reports on Form 8-K

           (A)      Exhibits
                    None

           (B)      Reports on Form 8-K
                    None
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       SFW HOLDING CORP.

  Date: June 12, 2001                  By: /s/ Pamela K. Knous
                                          -------------------------------------
                                          Pamela K. Knous
                                          Executive Vice President, Chief
                                          Financial Officer (authorized officer
                                          of the registrant and principal
                                          financial officer)