UNITED STATES SECURITIES and EXCHANGE COMMISSION Washington, D.C

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

FORM 10−K

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

For the fiscal year ended: December 28, 2002

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

For the Transition Period to .

Commission file number: 0−785

NASH−FINCH COMPANY (Exact name of Registrant as specified in its charter)

Delaware 41−0431960 (State of Incorporation) (I.R.S. Employer Identification No.)

7600 France Avenue South P.O. Box 355 Minneapolis, Minnesota 55440−0355 (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (952) 832−0534

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $1.662/3 per share Common Stock Purchase Rights

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, and (2) has been subject to such filing requirements for the past 90 days. Yes No X

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

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b−2 of the Act). Yes X No

The aggregate market value of the voting stock held by non−affiliates of the Registrant as of June 15, 2002 (the last business day of the Registrant's most recently completed second fiscal quarter) was $342,655,096, based on the last reported sale price of $29.50 on the NASDAQ National Market on the last trading day prior to such date.

As of April 30, 2003, 11,943,217 shares of Common Stock of the Registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None. Nash Finch Company

Index

Page No.

Part I

Item 1. Business 3

Item 2. Properties 11

Item 3. Legal Proceedings 12

Item 4. Submission of Matters to a Vote of Security Holders 13

Part II

Item 5. Market for Company's Common Equity and Related Stockholder Matters 14

Item 6. Selected Financial Data 15

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 16

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 32

Item 8. Financial Statements and Supplementary Data 33

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 66

Part III

Item 10. Directors and Executive Officers of the Registrant 66

Item 11. Executive Compensation 70

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 76

Item 13. Certain Relationships and Related Transactions 80

Item 14. Controls and Procedures 80

Part IV

Item 15. Exhibits, Financial Statement Schedules, and reports on Form 8−K 82

SIGNATURES 89

Nash Finch Company

PART I

Throughout this report, we refer to Nash Finch Company, together with its subsidiaries, as "we," "us," "Nash Finch" or "the Company."

This report, including the information that is or will be incorporated by reference into this report, contains forward−looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding the Company contained in this report that are not historical in nature, particularly those that utilize terminology such as "may," "will," "should," "likely," "expects," "anticipates," "estimates," "believes" or "plans," or comparable terminology, are forward−looking statements based on current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward−looking statements. Important factors known to us that could cause material differences are identified and discussed in this report, particularly in Part II, Item 7 under the caption "Cautionary Factors". You should carefully consider each cautionary factor and all of the other information in this report. We undertake no obligation to revise or update publicly any forward−looking statements. You are advised, however, to consult any future disclosures we make on related subjects in future reports to the Securities and Exchange Commission (the "SEC" or the "Commission").

We own or have the rights to various trademarks, trade names and service marks, including the following referred to in this report: AVANZA™, Buy•n•Save®, Econofoods®, Sun Mart®, Family Thrift Center™, Our Family®, Fame®, Value Choice™, Food Pride®, Fresh Place®, Kids Korner™ Performance Driven® and logo. The trademark IGA®, referred to in this report, is the registered trademark of another.

1 Explanatory Note

On November 18, 2002, we announced a delay in the filing of our Quarterly Report on Form 10−Q for the quarter ended October 5, 2002 because of a previously disclosed internal review of our practices and procedures with respect to certain promotional allowances provided to us that reduce the cost of sales. The review was focused on how we assess "count−recount" charges (see Item 1 of this report under the caption "Vendor Allowances and Credits"), which was also the subject of a previously disclosed informal inquiry then being conducted by the staff of the Division of Enforcement of the SEC (see Item 3 of this report under the caption "SEC Investigation").

As a result of this delay, we received a Nasdaq Staff Determination on November 26, 2002 indicating that our failure to timely file that Form 10−Q violated Nasdaq Marketplace Rules and caused our securities to be subject to delisting by Nasdaq. We requested and received a hearing before the Nasdaq Listing Qualifications Panel ("Nasdaq Panel"), which continued the listing of our securities subject to our filing the third quarter 2002 Form 10−Q by March 19, 2003, and this Annual Report on Form 10−K by March 28, 2003 (see Item 5 of this report). The delay in filing the Form 10−Q also resulted in a breach of a reporting covenant under the indenture for our 81/2% Senior Subordinated Notes due 2008 which, if unremedied, would have resulted in an event of default under both that indenture and our bank credit facility. We obtained amendments to both the indenture and the bank credit facility to extend the deadlines for us to file the third quarter 2002 Form 10−Q, this Annual Report, and our first quarter 2003 Form 10−Q (see Item 7 of this report under the caption "Liquidity and Capital Resources").

Effective January 28, 2003, Deloitte & Touche LLP resigned as our independent auditors (see Item 9 of this report and Exhibit 99.2). On February 4, 2003 we received a formal order of investigation from the SEC. After providing a written communication detailing the basis for the manner in which we assess and account for count−recount charges, and after meeting with members of the staff of the SEC's Office of the Chief Accountant and Division of Corporation Finance, we were informed by a letter dated March 7, 2003 that, based on our oral and written representations, the staffs of the SEC's Office of the Chief Accountant and Division of Corporation Finance would not object at that time to our accounting for the count−recount charges. The investigation by the SEC's Division of Enforcement is ongoing.

Effective March 11, 2003, our Audit Committee engaged Ernst & Young LLP as our independent auditors, and we sought a further extension of the filing deadlines from the Nasdaq Panel. On March 24, 2003, we were notified that the Nasdaq Panel had agreed to extend the filing deadlines for our third quarter 2002 Form 10−Q to May 15, 2003, for this Annual Report to May 30, 2003, and for our first quarter 2003 Form 10−Q to June 9, 2003. These filing deadlines are the same as or earlier than those established in the amendments to the indenture and the bank credit facility.

The third quarter 2002 Form 10−Q was filed with the SEC on May 15, 2003, and this Annual Report is being filed on May 15, 2003. We expect to file our first quarter 2003 Form 10−Q on or before the June 9, 2003 deadline.

2 ITEM 1. BUSINESS

A. GENERAL DEVELOPMENT OF BUSINESS.

Originally established in 1885 and incorporated in 1921, today we are one of the leading food distribution and retail companies in the United States, with approximately $3.9 billion in annual sales. Our business consists of three primary operating segments: food distribution, food retailing and military food distribution.

Our food distribution segment sells and distributes a wide variety of nationally branded and private label grocery products from 15 distribution centers to more than 1,500 grocery stores and institutional customers located in 24 states across the United States. We continue to implement operating initiatives to enhance productivity and expand profitability while providing a higher level of service to our distribution customers. We believe that in order to continue to grow our food distribution operations we must provide our customers with low prices, exceptional customer service and successful marketing and merchandising programs.

Our food retailing segment is made up of 109 corporate−owned stores located primarily in the Upper Midwest states of Colorado, Illinois, Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin. We believe that approximately 62% of our conventional grocery stores are #1 or #2 in their respective local markets, which includes all stores within the respective city limits in which our stores are located, based on sales. We are focused on becoming the leading grocery store chain in the Upper Midwest, as there are currently few national or multi−regional grocery store chains that have a significant presence in this market. Our corporate−owned stores, which range from conventional stores in rural trade areas to modern supermarkets in growing urban areas, principally operate under the following six banners: AVANZA, Buy•n•Save, Econofoods, Sun Mart, Family Thrift Center and Wholesale Food Outlet. During 2002, we opened our first two prototype Hispanic supermarkets in Denver, Colorado under the AVANZA trade name. Our AVANZA and existing Wholesale Food Outlet stores are designed to meet the specific tastes and needs of Hispanic shoppers which we believe are under−served by conventional grocery stores. We also opened three Buy•n•Save locations, converted two other existing stores to the Buy•n•Save format and closed an underperforming existing location to bring the total number of Buy•n•Save stores in operation to eight. These stores are designed to service low income, value conscious consumers.

Our military food distribution segment sells and distributes a wide variety of grocery products to approximately 100 domestic and European−based U.S. military commissaries. We primarily conduct our military distribution operations in the Mid−Atlantic region of the United States, consisting of the states along the border of the Atlantic Ocean from New York to North Carolina. We have two distribution centers in this region that exclusively provide products to U.S. military commissaries.

B. FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.

Financial information about our business segments for the most recent three fiscal years is contained in Part II, Item 8 of this report under Note (20)—"Segment Information" of Notes to Consolidated Financial Statements.

C. NARRATIVE DESCRIPTION OF THE BUSINESS.

Food Distribution Segment

Overview

Our food distribution segment, which operates 15 distribution centers, sells and distributes a wide variety of grocery products to approximately 1,500 grocery stores and institutional customers across the United States. Our customers are relatively diverse, with the largest customer consisting of a

3 consortium of stores representing approximately 11.8%, and three others representing approximately 3.8%, 3.6% and 3.1% of our fiscal 2002 food distribution sales. No other customer represents more than 3% of our food distribution business. Approximately 54% of our food distribution sales are generated through customers with whom we have long−term sales and service agreements. Several of our distribution centers also distribute products to military commissaries located in their geographic areas.

Our distribution centers are strategically located to efficiently serve our corporate−owned stores, our independent customer stores and other institutional customers. The distribution centers are equipped with modern materials handling equipment for receiving, storing and shipping goods and merchandise and are designed for high−volume operations at low unit costs. Our distribution centers are profitable, yet we believe that we have substantial capacity to serve additional customers without materially increasing our costs.

Depending upon the size of the distribution center and the profile of the customers served, our distribution centers typically carry a full line of national brand, private label and perishable products. Non−food items and specialty grocery products are distributed from a dedicated area of the distribution center located in Bellefontaine, Ohio, and from the distribution centers located in Sioux Falls, South Dakota. We currently have a modern fleet of 283 tractors and 709 semi−trailers, which deliver the vast majority of our products to our customers.

Our retailers order their inventory at regular intervals through direct linkage with our information systems. Our food distribution sales are made on a market price−plus−fee and freight basis, with the fee based on the type of commodity and quantity purchased. We promptly adjust our selling prices based on the latest market information, and our freight policy contains a fuel surcharge clause which allows us to partially mitigate the impact of rising fuel costs.

Products

We primarily sell and distribute nationally advertised branded products and a number of unbranded products, principally meat and produce, which we purchase directly from various manufacturers, processors and suppliers or through manufacturers' representatives and brokers. We also sell and distribute first quality private label products under the proprietary trademark Our Family, a long−standing private label of Nash Finch. During the year, we introduced AVANZA, a first quality private label, to address the tastes of our Hispanic customers. In addition, we sell and distribute a second label price brands program under the Fame and a new Value Choice line. Under our private label line of products, we offer over 2,500 SKUs of competitively priced high quality grocery products, which compete with national branded products and other value brand products.

Services

To further enhance our reputation and strengthen our relationships with our food distribution customers, we offer a wide variety of support services to help them develop and operate stores, as well as compete more effectively. These services include:

• promotional, advertising and merchandising programs;

• installation of computerized ordering, receiving and scanning systems;

• establishment and supervision of computerized retail accounting, budgeting and payroll systems;

• personnel management assistance and employee training;

• retail equipment procurement assistance;

• consumer and market research;

• remodeling and store development services;

• negotiating real estate transactions;

• securing existing grocery stores that are for sale or lease in the market areas we serve and, occasionally, acquiring or leasing existing stores for resale or sublease to these customers; and

• NashNet which provides supply chain efficiencies through internet services.

We also provide financial assistance to our food distribution customers primarily in connection with new store development or the upgrading and expansion of existing stores. As of December 28, 2002, we had approximately $43.8 million of loans outstanding to 97 of our food distribution customers, and guaranteed outstanding debt and lease obligations of other food distribution customers in the amount of $26.5 million. We typically enter into long−term supply agreements with independent customers, ranging from 2 to 20 years, representing more than 54% of food distribution revenues. These agreements may also contain provisions that give us the opportunity to purchase customers' independent retail businesses before any third party.

We distribute products to independent stores that carry our proprietary Food Pride banner and the IGA banner. We encourage our independent customers to join one of these banner groups to receive many of the same marketing programs and procurement efficiencies available to larger grocery store chains while allowing them to maintain their flexibility and autonomy as independents. To use either of these banners, these independents must comply with applicable program standards. As of December 28, 2002, we served approximately 83 retail stores under our Food Pride banner and 153 stores under the IGA banner. Retail Segment

Overview

Our food retailing segment is made up of our corporate−owned stores which range from conventional stores in rural trade areas to modern supermarkets in growing urban areas. These stores principally operate under the AVANZA, Buy•n•Save, Econofoods, Sun Mart, Family Thrift Center and Wholesale Food Outlet banners. Our stores are typically located close to our distribution centers in order to create certain operating and logistical efficiencies. As of December 28, 2002, we operated 109 corporate−owned stores, primarily in the Upper Midwest, including 94 conventional grocery stores, 3 Wholesale Food Outlet grocery stores, 8 Buy•n•Save grocery stores, 2 AVANZA grocery stores and 2 other retail stores. The Company continues to focus on operating and customer service initiatives to improve the financial performance of our retail stores.

Conventional Grocery Stores

Our conventional grocery stores offer a wide variety of high quality grocery products and services. Many have specialty departments such as fresh meat counters, delicatessens, bakeries, eat−in cafes, pharmacies, photo centers, dry cleaners, banks, floral and video rental departments. Kids Korner, which is offered in 15 store locations, is a secure, complimentary in−store supervised play area for children. Upon entering the play area, each child is given a wristband, which will trigger an alarm if the child leaves the area, and the parents are given a pager so that they can be immediately contacted if there are any problems with their child. Video monitors are also placed throughout the store so parents can monitor their children while shopping. We emphasize outstanding customer service. We have created our G.R.E.A.T. (Greet, React, Escort, Anticipate, Thank) Customer Service Program in order to train every associate (employee) on the core elements of providing exceptional customer service. A mystery shopper visits each store every two weeks to measure performance and we distribute the results to management and store personnel.

5 We continued the expansion of the "Fresh Place" concept within our conventional grocery stores. "Fresh Place" is an umbrella banner that emphasizes our conventional grocery stores' high−quality perishable products, such as fresh produce, deli, meats, seafood, baked goods, and takeout foods for today's busy consumer. Of our 94 conventional grocery stores, 32 carry the Fresh Place banner.

Hispanic Stores

Our Hispanic stores currently operate under the AVANZA and Wholesale Food Outlet banners and offer products designed to meet the specific tastes and needs of Hispanic shoppers, with a focus on the higher profit products most frequently purchased by Hispanic shoppers such as produce, meat, baked goods and imported products from Mexico. In addition to a vast selection of familiar Hispanic products, these stores have bilingual signs and product packaging, national magazines in both English and Spanish and Spanish−speaking personnel in a clean, festive environment. These stores also provide services such as check cashing, fax services, money wiring and phone cards. Our AVANZA and Wholesale Food Outlet stores are located in Colorado, Iowa, and Nebraska.

Extreme Value Stores

In addition to responding to the changing demographics in the United States, we have also responded to the shift in income disparity with our extreme value grocery stores operating under the Buy•n•Save banner. Buy•n•Save stores were designed to attract value−conscious shoppers, typically with household incomes under $35,000, for whom low prices are a critical factor in selecting a grocery store. These stores provide a limited assortment of Grade A quality products, consisting of approximately 20% national brands and 80% private label products, including our own proprietary labels, with savings up to 40% off comparable nationally branded items. As of December 28, 2002, we operated eight Buy•n•Save stores in Minnesota, Iowa and Nebraska.

Military Food Distribution Segment

Our military food segment distributes grocery products to U.S. military commissaries located predominately in the Mid−Atlantic region of the United States. We also distribute grocery products for use on U.S. military ships afloat and U.S. military bases located in Europe. We have two distribution centers which are located near the largest concentration of military bases in the United States and are exclusively dedicated to supplying products to commissaries. These distribution centers are located in Norfolk, Virginia and Baltimore, Maryland. We have consistently received the highest available service ratings from the Defense Commissary Agency, which performs monthly assessments of service to military commissaries. The ratings are based on service metrics which include fill rate, on−time delivery and handling of order adjustments. We have an outstanding reputation as a supplier to U.S. military commissaries, with fill rates among the highest in the industry.

Competition

Food Distribution Segment

Competition is intense among the top distributors in the food distribution segment as evidenced by the low margin nature of the business. Success in this segment will be measured by the ability to leverage scale in order to gain pricing advantages, to provide superior merchandising programs and services to the independent customer base and to utilize technology to increase distribution efficiencies. We compete with local, regional and national food distributors, as well as grocery store and supercenter chains that purchase directly from suppliers and self−distribute products to their stores. We face competition from these companies on the basis of price, quality, variety and availability of products, strength of private label brands, schedules and reliability of deliveries, and the range and quality of customer services.

6 Food Retailing Segment

Competition in the retail grocery business in our geographic markets is intense. We compete with many organizations of various sizes, ranging from national and regional chains utilizing a variety of formats (such as supercenters, supermarkets, extreme value food stores and membership warehouse club stores) to local grocery store chains and privately owned unaffiliated grocery stores. Although our target geographic areas have a relatively low presence of national and multi−regional grocery store chains, we are facing increasing competitive pressure from the expansion of national and regional supercenter chains. These competitive pressures, occurring in the context of a low margin industry, have contributed to the current trend toward consolidation in the retail grocery business. Depending upon the product and location involved, we compete based on price, quality and assortment, store appeal, including store location and format, sales promotions, advertising, service and convenience. We believe that by focusing on convenience, outstanding perishable execution and exceptional customer service, we can successfully compete.

Our AVANZA and Wholesale Food Outlet stores compete primarily with small independent Hispanic retailers, which we believe lack the scale to have a meaningful impact on our targeted markets, as well as with national grocery store chains and supercenters.

Military Food Distribution Segment

We face competition in our military food distribution business from large food distributors. We believe we compete effectively based on customer service, cost operating efficiencies and the location of our military distribution centers.

Vendor Allowances and Credits

We participate with our vendors in a broad menu of promotions to increase sales of products. These promotions fall into two main categories: off−invoice allowances and performance−based allowances. These promotional arrangements are often subject to negotiation with our vendors.

In the case of off−invoice allowances, discounts are typically offered by vendors with respect to certain merchandise purchased by us during a specified period of time. We use off−invoice allowances to support a variety of marketing programs such as reduced price offerings for specific time periods, food shows, pallet promotions and private label promotions. The discounts are either reflected directly on the vendor invoice, as a reduction from the normal wholesale prices for merchandise to which the allowance applies, or we are allowed to deduct the allowance as an offset against the vendor's invoice when it is paid.

In the case of performance−based allowances, the allowance or rebate is based on our completion of some specific activity, such as purchasing or selling product during a certain time period. This basic performance requirement may be accompanied by an additional performance requirement such as providing advertising or special in−store promotion, tracking quantities of product sold (as is the case with count−recount promotions discussed below), slotting (adding a new item to the system) and merchandising a new item, or achieving certain minimum purchase quantities. The billing for these performance−based allowances is normally in the form of a "bill−back" in which case we are invoiced at the regular price with the understanding that we may bill back the vendor for the requisite allowance when the performance is satisfied.

We collectively plan promotions with our vendors and arrive at the amount the respective vendor plans to spend on promotions with us. We and the vendors then monitor, review and discuss the results of such promotions, and resolve issues relating to promotions and billings. Each vendor has its own method for determining the amount of promotional funds budgeted to be spent with us during the period. In most situations, the vendor allowances are based on units we purchased from the vendor. In

7 other situations, the allowances are based on our past or anticipated purchases and/or the anticipated performance of the planned promotions.

We jointly negotiate with our vendors the promotional calendar that governs all promotions. Forecasting promotional expenditures is a critical part of our twice yearly planning sessions with our vendors. Most vendors work with us to project not just overall spending, but also spending on a category and regional basis. As individual promotions are completed and the associated billing is processed, the vendors track our promotional program execution and spend rate. The vendors discuss the tracking, performance and spend rate with us on a regular basis throughout the year. Depending upon the vendor arrangements, such discussions can occur on a weekly, monthly, quarterly or annual basis. These communications include future promotions, product cost, targeted retails and price points, anticipated volume, promotion expenditures, vendor maintenance, billing issues and procedures, new items/discontinued items, and trade spend levels relative to budget per event and per year, as well as the resolution of any issues that arise between the vendor and us. In the future, the nature and menu of promotional programs and the allocation of dollars among them may change as a result of ongoing negotiations and commercial relationships between vendors and us.

Count−Recount Charges

As discussed above, we participate with our vendors in a broad menu of promotions to increase sales of products. Certain promotions require us to track specific shipments of goods to retailers, or to customers in the case of our own retail stores, during a specified period. At the end of the promotional period, we invoice our vendors for the total promotional allowance based on the quantity of goods sold. This type of promotion, which is often referred to as "count−recount," requires wholesalers and retailers such as us to incur significant administrative and other costs to manage such programs.

As a result of the increased costs associated with count−recount program administration and implementation, we historically, but not uniformly, assessed an administrative fee to recoup our reasonable costs of performing the tasks associated with administering these promotions. In some instances this fee was separately identified on the invoice to the vendor and in other instances we raised the invoice amounts by adding additional cases to the quantity of goods sold reflected on the invoices to vendors. Although we attempted to standardize the latter practice at a range of between 15% and 20% on wholesale movement billings and approximately 12% on retail scan billings for our retail stores, the application of the practice was uneven across time and divisions. The aggregate fees charged to vendors, represented as a percent of total count−recount promotional dollars, were approximately 17% in fiscal 2000 and 23% in fiscal 2001 and 2002. Our costs associated with administering this program are estimated at approximately 20% of the total count−recount promotional dollars.

The count−recount practice described above was established against a backdrop of what we believe was a common industry practice, of which vendors generally were aware. We believe that our efforts to recapture count−recount costs by adding additional cases to the invoices in lieu of a separately delineated administrative fee were appropriate. The arrangements between us and our vendors did not separately address or provide for the addition of such charges in lieu of a separately invoiced administrative fee. Our conclusion that our accounting for such charges has been correct, that the charges were appropriately recognized as a reduction of cost of sales in the period the product was sold and in which the count−recount promotions were actually performed by us, is based on our overall relationship and method of doing business with our vendors.

Historical Accounting Treatment and Impact on Financial Statements

Count−recount allowances are recorded as a reduction to cost of sales as performance has been completed and as the related inventory is sold. Count−recount charges in lieu of administrative fees

8 were approximately $6.7 million in fiscal 2000, $8.6 million in fiscal 2001 and $6.7 million through November 17, 2002 when we, as a uniform practice across all divisions, began stating the administrative fee separately on the invoices to the vendor.

Communications with Vendors

In November 2002, we met with our vendors, and brokers representing vendors, collectively comprising approximately 88% of our purchases that were subject to count−recount charges in lieu of an administrative fee. In those meetings, we advised the vendors and brokers that (i) we had a historical practice of charging an administrative fee either separately or, in most instances, by adding amounts to actual quantities sold in the range of 15% to 20% in lieu of an administrative fee, (ii) such fee had not always been separately disclosed on invoices to vendors, (iii) we had attempted to standardize the practice in late 1999 at a range of 15% to 20%, (iv) we had not been successful in standardizing such practice in that in some situations the application of the practice had been uneven across time and divisions resulting in a move away from a fixed percentage and sometimes resulting in an uneven percentage being applied, and (v) in the future we will charge a flat fee set at a fixed percentage of sales, which would be separately itemized on invoices. In those meetings, substantially all the vendors acknowledged the fees previously charged and none indicated that they would seek any refund based upon the past practice. Subsequently, on November 26, 2002, we notified all of our vendors and brokers (including but not limited to those with whom we had met in person) in writing of its prior and current practices related to count−recount. As of the date of the filing of these financial statements, none of our vendors or brokers is requesting a return of any of the historical count−recount charges assessed, and none has indicated they will make a reduction in future promotional funding.

SEC Investigation

As previously disclosed, on October 9, 2002, we received a letter from the staff of the Division of Enforcement of the SEC indicating that they were conducting an informal inquiry into our process for assessing count−recount charges to our vendors and how we account for those charges. In response, we commenced an internal review of our practices in conjunction with the Audit Committee, special outside counsel and our prior and then−current auditors. We filed a written response to the inquiry on November 22, 2002.

On February 3, 2003, we provided the Office of the Chief Accountant of the SEC a written communication detailing the basis for the manner in which we assess and account for count−recount charges, advising that we believe these charges were properly accounted for in accordance with generally accepted accounting principles, seeking the SEC staff's concurrence with this conclusion, and requesting a meeting with the staff of the Office of Chief Accountant at which these matters could be discussed. On February 4, 2003, we were notified by the staff of the SEC's Division of Enforcement that the SEC had approved a formal order of investigation of Nash Finch.

Our representatives met with members of the staff of the SEC's Office of the Chief Accountant and Division of Corporation Finance on February 19, 2003. In a letter dated March 7, 2003, the staffs of the SEC's Office of the Chief Accountant and Division of Corporation Finance indicated that, based on our oral and written representations, they would not object at that time to our accounting for the count−recount charges. The investigation by the SEC's Division of Enforcement is, however, ongoing and the response by the staffs of the Office of the Chief Accountant and the Division of Corporation Finance does not preclude any further action by the Division of Enforcement.

Trademarks and Servicemarks

We own or license a number of trademarks, tradenames and servicemarks that relate to our products and services, including those mentioned in this report. We consider certain of these

9 trademarks, tradenames and servicemarks to be of material value to our business, and we actively defend and enforce such trademarks, tradenames and servicemarks.

Employees

As of December 28, 2002, we employed 10,621 persons, of whom 6,063 were employed on a full−time basis and 4,558 were employed on a part−time basis. We consider our employee relations to be good. Only 487 of our employees are represented by unions and consist primarily of the distribution center personnel and drivers in our Ohio and Michigan distribution centers.

Available Information

Our internet website is www.nashfinch.com. The references to our website in this report are inactive references only, and the information on our website is not incorporated by reference in this report. Through the Investor Relations portion of our website and a link to a third−party content provider (under the tab "SEC Filings"), you may access, free of charge, our annual reports on Form 10−K, quarterly reports on Form 10−Q, current reports on Form 8−K and amendments to such reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

10 ITEM 2. PROPERTIES

Our principal executive offices are located in Minneapolis, Minnesota, and consist of approximately 120,486 square feet of office space in a building that we own.

Food Retailing Segment

The table below sets forth, as of December 28, 2002, selected information regarding our 109 corporate−owned stores. We own 34 and lease 75 of these stores.

Number Areas Average Banner of Stores of Operation Square Feet

Econofoods 53 IA, IL, MN, SD, WI, WY 38,659 Sun Mart 35 NE, MN, ND, CO, KS 31,998 Buy•n•Save 8 MN, IA, NE 16,219 Family Thrift Center 6 SD 33,394 Wholesale Food Outlet 3 CO, NE, IA 28,784 AVANZA 2 CO 33,247 Other Stores 2 WI, MN 5,356

As of December 28, 2002, the aggregate square footage of our 109 retail grocery stores totaled 3,662,557 square feet.

Food Distribution Segment

The table below lists, as of December 28, 2002, the locations and sizes of our distribution centers primarily used in our food distribution operations. Unless otherwise indicated, we own each of these distribution centers.

Approx. Size Location (Square Feet)

Upper Midwest Region: Cedar Rapids, Iowa 351,900 St. Cloud, Minnesota(1) 340,400 Omaha, Nebraska 626,900 Fargo, North Dakota 288,800 Minot, North Dakota 185,200 Rapid City, South Dakota(3) 195,100 Sioux Falls, South Dakota(4) 303,400

Southeast Region: Statesboro, Georgia(2) 230,500 Lumberton, North Carolina(2) 368,900 Bluefield, Virginia 187,500

Central Region: Bellefontaine, Ohio(5) 706,600 Cincinnati, Ohio(6) 411,800 Bridgeport, Michigan(2) 604,500

Total Square Footage 4,801,500

(1) Includes 11,400 square feet that we lease.

(2) Leased facility.

(3) Includes 8,000 square feet that we lease.

(4) Includes 107,300 square feet that we lease. The Sioux Falls facility represents two distinct distribution centers, one that distributes limited variety and slow moving products, and the other that distributes general merchandise and health and beauty care products. (5) Includes 40,500 square feet that we lease. This facility includes two separate distribution operations, one that distributes dry groceries, frozen foods, fresh and processed meat products, and a variety of non−food products, and the other that distributes health and beauty care products, general merchandise and specialty grocery products. The general merchandise services distribution center uses approximately 254,000 square feet of the total owned and leased space.

(6) Includes 8,600 square feet that we lease.

Military Distribution Segment

The table below lists, as of December 28, 2002, the locations and sizes of our distribution centers exclusively used in our military distribution business. Unless otherwise indicated, we lease each of these distribution centers.

Approx. Size Location (Square Feet)

Baltimore, Maryland 375,800 Norfolk, Virginia(1) 737,600

Total Square Footage 1,113,400

(1) Includes 59,300 square feet that we own.

ITEM 3. LEGAL PROCEEDINGS

Shareholder Litigation

Between December 2002 and March 2003, seven class action lawsuits were filed against the Company and certain of its executive officers in the United States District Court for the District of Minnesota on behalf of purchasers of the Company's common stock during the period from February 23, 2000 through February 4, 2003. The complaints generally allege that the defendants violated the Securities Exchange Act of 1934 by issuing false statements, including false financial results in which the Company included income from vendor promotions to which the Company was not entitled, so as to maintain favorable credit ratings on its debt. Three derivative actions have also been filed in state court in Minnesota by shareholders alleging that certain officers and directors violated duties to the Company to oversee and administer the Company's accounting. These actions are directly tied to the allegations in the federal securities action. We believe that the lawsuits are without merit and intend to vigorously defend the actions. No damages have been specified. We are unable to evaluate the likelihood of prevailing in these cases at this early stage of the proceedings, but do not believe that the eventual outcome will have a material impact on our financial position or results of operations.

SEC Investigation

On October 9, 2002, we received a letter from the staff of the Division of Enforcement of the SEC indicating that they were conducting an informal inquiry into our process for assessing count−recount charges to our vendors and how we account for those charges. In response, we commenced an internal review of our practices in conjunction with the Audit Committee, special outside counsel and our prior and then−current auditors. We filed a written response to the inquiry on November 22, 2002.

12 On February 3, 2003, we provided the Office of the Chief Accountant of the SEC a written communication detailing the basis for the manner in which we assess and account for count−recount charges, advising that we believe these charges were properly accounted for in accordance with generally accepted accounting principles, seeking the SEC staff's concurrence with this conclusion, and requesting a meeting with the staff of the Office of Chief Accountant at which these matters could be discussed. On February 4, 2003, we were notified by the staff of the SEC's Division of Enforcement that the SEC had approved a formal order of investigation of Nash Finch.

USDA Inspection

In December 1999, the U.S. Department of Agriculture began an investigation of our Lumberton, North Carolina distribution center. We cooperated throughout the investigation and the inquiry culminated in an agreement between the Company and the United States on October 4, 2001. In accordance with that agreement, the Company appeared in Federal District Court for the Eastern District of North Carolina and entered a guilty plea to a misdemeanor charge of causing and permitting articles capable of use as human food to become exposed to dust, dirt and unsanitary conditions (the "causing" charge), and applied to a pre−trial diversion program with respect to a misdemeanor charge of selling adulterated meat and poultry products to a South Carolina salvage dealer (the "selling" charge).

On March 13, 2002, the Company was sentenced to pay a fine of $100,000 and to a probationary period of five years on the causing charge, with the probation subject to certain special conditions regarding establishment of a quality control program, employee training, documentation of disposal of unwholesome products, monthly inspections and reports to appropriate authorities by representatives of the Company's home office, and that this matter be disclosed in this report. The Company was accepted into the pre−trial diversion program on the selling charge and, as part of that program, donated 40,000 pounds of food to charitable organizations in North Carolina. Upon successful completion of this 18 month program, the Government will dismiss the selling charge.

We are also engaged from time to time in routine legal proceedings incidental to our business. We do not believe that any of the pending legal proceedings not discussed above will have a material impact on the business or financial condition of the Company and its subsidiaries, taken as a whole.

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

No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

13 PART II

ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is listed on the Nasdaq National Market and currently trades under the symbol NAFCE. On November 26, 2002, we received a Nasdaq staff determination stating that the delay in filing our Form 10−Q for the quarter ended October 5, 2002 violates Nasdaq Marketplace Rule 4310(c) (14) and that our common stock is subject to delisting from the Nasdaq National Market. In connection with this determination, the letter "E" was added to our stock symbol. The delay in filing was attributable to the previously described investigation of our practices and procedures with respect to count−recount charges. On January 22, 2003, we received a determination from the Nasdaq Listing Qualifications Panel ("Nasdaq Panel") that continued the listing of our securities on the Nasdaq National Market so long as we filed with the SEC and Nasdaq by March 19, 2003 our Quarterly Report on Form 10−Q for the quarter ended October 5, 2002 and by March 28, 2003 our Annual Report on Form 10−K for the fiscal year ended December 28, 2002. On March 24, 2003, the Nasdaq Panel agreed to extend the deadlines for the filing of our Quarterly Report on Form 10−Q for third quarter of fiscal 2002 until May 15, 2003, our Annual Report on Form 10−K for fiscal 2002 until May 30, 2003 and our Quarterly Report on Form 10−Q for the first quarter of fiscal 2003 until June 9, 2003. Satisfaction of the revised deadlines is a condition to the continued listing of our securities on the Nasdaq National Market.

The following table sets forth, for each of the calendar periods indicated, the range of high and low closing sales prices for our common stock as reported by the Nasdaq National Market, and the quarterly cash dividends paid per share of common stock. Prices do not include adjustments for retail mark−ups, mark−downs or commissions. At December 28, 2002 there were 2,797 stockholders of record.

Dividends 2002 2001 Per Share

High Low High Low 2002 2001

First Quarter $ 31.10 $ 25.22 $ 17.50 $ 11.81 $ 0.09 $ 0.09 Second Quarter 32.20 23.55 23.94 17.19 0.09 0.09 Third Quarter 33.18 12.50 35.54 19.88 0.09 0.09 Fourth Quarter 15.34 7.12 30.77 20.65 0.09 0.09 14

NASH FINCH COMPANY and SUBSIDIARIES Consolidated Summary of Operations Five years ended December 28, 2002 (not covered by Independent Auditors' Report)

(Dollar amounts in thousands except 2002 2001 2000 1999 1998 per share amounts) (52 weeks) (52 weeks) (52 weeks) (52 weeks) (52 weeks)

Sales(1) $ 3,874,672 $ 3,982,206 $ 3,839,499 $ 3,922,701 $ 3,966,621 Cost of sales including warehousing and transporation expenses(1) 3,408,409 3,529,124 3,409,778 3,535,066 3,615,752 Selling, general and adminstrative, and other operating expenses 347,418 335,886 322,448 296,733 268,037 Special charges (765) — — (7,045) 68,471 Interest expense 29,490 34,303 34,444 29,931 27,651 Depreciation and amortization 39,988 46,601 45,330 41,563 45,128 Provision for income taxes 19,552 15,025 11,659 11,216 (18,837)

Net earnings (loss) from continuing operations $ 30,580 $ 21,267 $ 15,840 $ 15,237 $ (39,581)

Earnings (loss) from discontinued operations, net of income tax (benefit) — — — — 426 Earnings (loss) on disposal of discontinued operations, net of income tax — — — 4,566 (16,913) Extraordinary charge from early extinguishment of debt, net of income tax — — (369) — (5,569) Cumulative effect of change in accounting principle, net of income tax(2) (6,960) — — — —

Net earnings (loss) $ 23,620 $ 21,267 $ 15,471 $ 19,803 $ (61,637)

Basic earnings (loss) per share: Earnings (loss) from continuing operations $ 2.59 $ 1.83 $ 1.38 $ 1.35 $ (3.50) Earnings (loss) from discontinued operations — — — 0.40 (1.46) Extraordinary charge from early extinguishment of debt — — (0.03) — (0.49) Cumulative effect of change in accounting principle(2) (0.59) — — — —

Basic earnings (loss) per share $ 2.00 $ 1.83 $ 1.35 $ 1.75 $ (5.45)

Diluted earnings (loss) per share: Earnings (loss) from continuing operations $ 2.52 $ 1.78 $ 1.38 $ 1.34 $ (3.50) Earnings (loss) from discontinued operations — — — 0.40 (1.46) Extraordinary charge from early extinguishment of debt — — (0.03) — (0.49) Cumulative effect of change in accounting principle(2) (0.57) — — — — Diluted earnings (loss) per share $ 1.95 $ 1.78 $ 1.35 $ 1.74 $ (5.45)

Cash dividends declared per common share $ .36 $ .36 $ .36 $ .36 $ .72

Pretax earnings (loss) from continuing operations as a percent of sales 1.29% 0.91% 0.72% 0.67% (1.47)% Net earnings (loss) as a percent of sales 0.61% 0.53% 0.40% 0.50% (1.55)% Effective income tax rate 39.0% 41.4% 42.4% 42.4% (32.2)% Current assets $ 468,281 $ 479,364 $ 433,539 $ 465,563 $ 467,108 Current liabilities $ 309,256 $ 383,624 $ 324,786 $ 327,327 $ 331,473 Net working capital $ 159,025 $ 95,740 $ 108,753 $ 138,236 $ 135,635 Ratio of current assets to current liabilities 1.51 1.25 1.33 1.42 1.41 Total assets $ 947,922 $ 970,245 $ 880,828 $ 862,443 $ 833,095 Capital expenditures $ 52,605 $ 43,924 $ 54,066 $ 52,282 $ 52,730

Long−term obligations (long−term debt and capitalized lease obligations) $ 405,376 $ 368,807 $ 353,664 $ 347,809 $ 327,947

Stockholders' equity $ 221,479 $ 203,408 $ 184,540 $ 172,674 $ 156,473 Stockholders' equity per share(3) $ 18.61 $ 17.43 $ 16.12 $ 15.22 $ 13.80 Return on stockholders' equity(4) 13.81% 10.46% 8.58% 8.82% (25.30)% Number of common stockholders of record at year−end 2,797 2,710 2,786 2,348 2,214 Common stock high price(5) $ 33.18 $ 35.54 $ 13.56 $ 14.50 $ 20.00 Common stock low price(5) $ 7.12 $ 11.81 $ 6.00 $ 5.88 $ 13.13

(1) See Item 8, Note 1 of this report under the caption "Revenue Recognition" regarding the reclassification of facilitated services.

(2) See Item 8, Note 1 of this report under the caption "New Accounting Standards" regarding the adoption of EITF No. 02−16.

(3) Based on average outstanding shares at year−end.

(4) Return based on continuing operations.

(5) High and low closing sales price on Nasdaq National Market.

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

RESULTS OF OPERATIONS

Fiscal 2002 vs. 2001

Sales

Sales for fiscal 2002 were $3,874.7 million compared to $3,982.2 million for fiscal 2001, a decrease of 2.7%. The decrease is due to increased competitive pressures and a weak economy for fiscal 2002. The distribution of sales by operating segment is as follows:

Operating Segments 2002 2001

Food distribution $ 1,825.8 47.1% $ 1,951.4 49.0% Retail 1,028.2 26.5% 1,035.1 26.0% Military 1,020.7 26.4% 995.7 25.0%

$ 3,874.7 100.0% $ 3,982.2 100.0%

Food distribution segment sales decreased 6.4% from fiscal 2001 to 2002 due to continued difficult economic conditions, soft sales and store closings because of increased competition in certain markets and the elimination of marginal accounts the Company chose to no longer service.

Retail segment sales decreased 0.7% from fiscal 2001 to fiscal 2002 as declines in same store sales were largely offset by the acquisition of U Save Foods Inc. (U Save) in the second half of fiscal 2001. Same store sales, which compares retail sales for stores which were in operation for the same number of weeks in the comparative years, declined by 5.3% from fiscal 2001 to fiscal 2002 and by 11.7% for the fourth quarter of fiscal 2002 relative to the fourth quarter of fiscal 2001. These declines primarily reflected the growth of supercenter competition in our retail territories and retail consumers trading down and/or purchasing less in conventional supermarket channels. As a result of the competitive environment, we expect the trend of declining same store sales to continue in fiscal 2003. During fiscal 2002, our corporate store count changed as follows:

Fiscal Year 2002

Number of stores at beginning of year 110 New stores 5 Acquired stores 1 Closed or sold stores (7)

Number of stores at end of year 109

We continued to actively respond to the increasingly competitive retail environment by expanding our two specialty store formats in fiscal 2002. The first format under the AVANZA banner is designed to service the Hispanic market, which we believe is under−served by conventional grocery stores. We opened our first two prototype Hispanic supermarkets in Denver, Colorado under the AVANZA trade name. The second format under the Buy•n•Save banner is designed to service low income, value conscious consumers. We opened three Buy•n•Save locations, converted two other existing stores to the Buy•n•Save format and closed an underperforming location, bringing the total number of Buy•n•Save stores in operation to eight compared to four stores in fiscal 2001. The expansion of these two new store formats is part of our strategy to differentiate ourselves in today's competitive retail markets.

Military segment sales increased 2.5% from fiscal 2001 to 2002. The increase is primarily attributed to higher year−over−year sales to bases overseas and U.S. military ships afloat. We expect the

16 deployment of military forces in and about the Middle East to temporarily benefit sales in our military segment.

Gross Profit

Gross profit for fiscal 2002 was 12.0% of sales compared to 11.4% for fiscal 2001. Gross profit was positively impacted by distribution efficiencies gained in our food distribution segment as well as more efficient use of promotional spending in our retail segment. In addition, gross profit was increased by a LIFO credit of $2.2 million in fiscal 2002 compared to a LIFO charge of $2.7 million, in fiscal 2001. The LIFO credit in fiscal 2002 is due to food price deflation and decreased inventory levels as a result of lower sales.

In the fourth quarter of fiscal 2002 we elected to early adopt the provisions of EITF No. 02−16 "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor," (See "New Accounting Standards" below for discussion) retroactive to the beginning of fiscal 2002. The impact of the adoption on gross profit in fiscal 2002, excluding the cumulative effect adjustment, was an increase of $1.4 million. In addition, the adoption resulted in a reclassification of $9.1 million of net cooperative advertising income from selling, general and administrative expenses to cost of sales.

Selling, General and Administrative

Selling, general and administrative expenses for fiscal 2002 were $347.4 million, or 9.0% of sales, compared to $335.9 million, or 8.4% of sales, for fiscal 2001, an increase of $11.5 million or 3.4%. Selling, general and administrative expense included a $6.6 million charge in fiscal 2002 for retail impairments compared to a $1.9 million charge recorded in fiscal 2001. The impairment charge for fiscal 2002 related to fifteen stores whose carrying values were impaired due to increased competition within the stores, respective market areas. The estimated undiscounted cash flows related to these facilities indicated that the carrying value of the assets may not be recoverable based on current expectations, causing these assets to be written down in accordance with SFAS No. 144. Selling, general and administrative expenses also included a $1.5 million charge for fiscal 2002 for closed store lease costs compared to a $1.1 million charge recorded in fiscal 2001. The closed store lease costs were recorded for non−cancelable lease costs related to closed corporate−owned and independent customer stores where we were obligated to assume the lease liability. Selling, general and administrative expenses were also impacted by an increase in bad debt expense from $4.8 million in fiscal 2001 to $9.0 million in fiscal 2002. The increase in bad debt expense is primarily due to a former customer that has filed for bankruptcy. The foregoing charges were partially offset by $3.8 million and $2.6 million in gains on the sale of real estate for fiscal 2002 and 2001, respectively. In addition, selling, general and administrative expenses were impacted by employee benefit costs which increased by $5.5 million in fiscal 2002 relative to fiscal 2001 as a result of rising health care costs, offset by overhead cost reductions attained through process improvements and cost savings initiatives. Finally, selling, general and administrative expenses were increased as a result of the reclassification of net cooperative advertising income of $9.1 million to cost of sales in accordance with EITF No. 02−16. (See Item 7 of this report under the caption "New Accounting Standards")

Special Charges

We recorded special charges totaling $31.3 million in fiscal 1997 and $71.4 million (offset by $2.9 million of fiscal 1997 charge adjustments) in fiscal 1998. These charges impacted our food distribution and retail segments as well as our produce growing and marketing business which was sold in fiscal 1999, and were also designed to redirect our technologies efforts. All actions contemplated by the charges are complete. At December 28, 2002, the remaining accrued liability is $2.6 million and consists primarily of lease commitments and pension and post−employment related obligations.

17 During fiscal 2002, we reversed $0.63 million and $0.13 million of our fiscal 1998 and fiscal 1997 special charges, respectively, due to an agreement reached to buyout the remaining lease for less than what we had originally estimated. In addition, during fiscal 2002 we recorded $0.9 million of pension benefits related to the distribution segment and $2.5 million in continuing lease and exit costs related to closed retail stores through our 1997 and 1998 special charge reserves.

Depreciation and Amortization Expense

Depreciation and amortization expense for fiscal 2002 was $40.0 million compared to $46.6 million for fiscal 2001, a decrease of $6.6 million or 14.2%. The decrease primarily reflects the elimination of goodwill amortization of $5.9 million resulting from the adoption of SFAS No. 142, at the beginning of fiscal 2002, which requires that goodwill no longer be amortized, but instead be tested at least annually for impairment.

Interest Expense

Interest expense for fiscal 2002 was $29.5 million compared to $34.3 million for fiscal 2001, a decrease of $4.8 million or 14.0%. The decrease primarily relates to a $4.3 million reduction in interest expense paid under the revolving credit facility as a result of a lower average borrowing rate, partially offset by an increase in the average borrowing level under the credit facility. The average borrowing rate under the credit facility was 4.5% in fiscal 2002 and 8.5% in fiscal 2001. The average borrowing level under the credit facility was $156.6 million in fiscal 2002 and $133.7 million in fiscal 2001.

Income Tax Expense

The effective tax rate for fiscal 2002 was 39.0% compared to 41.4% in fiscal 2001. The reduction in the effective rate is primarily attributed to changes in accounting rules relating to the elimination of goodwill amortization for financial reporting as well as a higher proportion of taxable income being generated in lower tax jurisdictions. Refer to the tax rate table in Part II, Item 8 of this report under Note (9)—"Income Taxes" of Notes to the Consolidated Financial Statements for the comparative components of these rates.

Cumulative Effect of Change in Accounting Principle

We adopted the provisions of EITF Issue No. 02−16, "Accounting by a Customer (Including a Reseller) for Cash Considerations Received From a Vendor" as of the beginning of fiscal 2002. The cumulative effect at the beginning of fiscal 2002 was a charge of $7.0 million, net of income taxes of $4.4 million. The cumulative effect of a change in accounting principle has been presented in our consolidated statement of income as of December 28, 2002 (See "Critical Accounting Polices" under the caption "Vendor Allowances and Credits" and "New Accounting Standards" in Part II, Item 7 of this report).

Net Earnings

Net earnings for fiscal 2002 were $23.6 million, or $1.95 per diluted share compared to $21.3 million, or $1.78 per diluted share, for fiscal 2001. Excluding the cumulative effect of change in accounting principle for fiscal 2002 due to the adoption of EITF No. 02−16 and excluding the goodwill

18 amortization in fiscal 2001, which was no longer required in fiscal 2002 upon the adoption of SFAS No. 142, net earnings are as follows:

December 28, December 29, 2002 2001

Reported net income: $ 23,620 21,267 Add back: Goodwill amortization net of income taxes — 4,690 Cumulative effect of change in accounting principle, net of income taxes 6,960 —

Adjusted net income $ 30,580 25,957

Diluted earnings per share: Reported earnings per share $ 1.95 1.78 Goodwill amortization Net of income taxes — 0.39 Cumulative effect of change in accounting principle, net of income taxes 0.57 —

Adjusted earnings per share $ 2.52 2.17

Fiscal 2001 vs. 2000

Sales

Sales for fiscal 2001 were $3,982.2 million compared to $3,839.5 million for fiscal 2000, an increase of 3.7%. The increase is attributed to new food distribution and military business we were able to capture in fiscal 2001. The distribution of total revenues by operating segment is as follows:

Operating Segments 2001 2000

Food distribution $ 1,951.4 49.0% $ 1,841.6 48.0% Retail 1,035.1 26.0% 1,029.0 26.8% Military 995.7 25.0% 968.9 25.2%

$ 3,982.2 100.0% $ 3,839.5 100.0%

Food distribution segment revenues for fiscal 2001 were $1,951.4 million compared to $1,841.6 million for fiscal 2000, an increase of 6.0%. The increase is primarily attributed to new food distribution customers as we continued to improve service to new and existing customers. In addition, food distribution revenues were improved by the transfer of revenues from the retail segment as a result of the sale of 18 corporate−owned retail stores, in North and South Carolina, to existing food distribution customers during fiscal 2001.

Retail segment revenues were $1,035.1 million for fiscal 2001 compared to $1,029.0 million for fiscal 2000, an increase of 0.6%. The improvement is largely due to the acquisition of 14 stores from U Save on August 13, 2001, offset by the sale of the corporate−owned stores in the Southeast. U Save, a privately held company, operates stores primarily in Nebraska. All of the stores acquired have been converted to ourprimarybanners. The sale of the Southeast stores allows us to focus our retail strategy on store operations in the upper Midwest.

Same store sales, which compares retail sales for stores which were in operation for the same number of weeks in the comparative years, declined by 1%, a direct result of reductions in promotional

19 activity compared to fiscal 2000 and competitive pressures in certain markets. During fiscal 2001, our corporate store count changed as follows:

Fiscal Year 2001

Number of stores at beginning of fiscal 2001 118 New stores 2 Acquired stores 15 Closed or sold stores (25)

Number of stores at end of fiscal 2001 110

Military segment revenues were $995.7 million for fiscal 2001 compared to $968.9 million for fiscal 2000, an increase of 2.8%. The improvement reflects an addition of new business in Europe and North Carolina, awarded to us in fiscal 2000 by a major manufacturer. The deployment of military forces in response to the September 11 terrorist attacks had a short−term negative impact, though not significant (0.9%), on military sales. The negative impact was a result of tighter security which prevented merchandise from reaching certain military bases as well as off−base personnel having limited access to shop on the base.

Gross Profit

Gross profit was 11.4% of sales for fiscal 2001, compared to 11.2% for fiscal 2000. The improvement is attributed to increased productivity, more efficient utilization of distribution facilities, improved sales mix of private label and value−added products in retail stores and increased procurement efficiencies. These increases were partially offset by a LIFO charge of $2.7 million, or .07% of sales, in fiscal 2001 compared to a LIFO credit of $1.1 million, or .03% of sales, which increased gross margins for fiscal 2000. The charge in fiscal 2001 is due to food price inflation and increased inventory levels to accommodate new business.

Selling, General and Administrative Expense

Selling, general and administrative expenses for fiscal 2001 were $335.9 million compared to $322.4 million for fiscal 2000, both representing 8.4% of sales, and an increase of $13.5 million, or 4.2%. Selling, general and administrative expenses in fiscal 2001 included retail store impairments of $1.9 million. The write−down of long−lived assets resulted from our intention to close two stores, as well as the write down of the carrying value of three additional stores due to increased competition within the respective market areas which resulted in declining market share, deterioration of operating performance and inadequate projected cash flows for these stores. There were no impairment charges recorded in fiscal 2000. Bad debt expense of $4.8 million was recorded in fiscal 2001 relative to $7.4 million in 2000. The decrease is primarily due to a variety of accounts experiencing financial difficulty in fiscal 2000. In addition, selling, general and administrative expense for 2001 and 2000 included gains from the sale of real estate in the amounts of $2.6 million and $3.0 million, respectively. Substantially all of the gain in fiscal 2001 relates to the sale of real estate associated with a distribution center closed as part of the 1998 revitalization plan. The fiscal 2000 real estate gains included $1.1 million from the sale of real estate associated with a distribution center closed as part of the 1997 revitalization plan, while the remainder primarily relates to the sale of retail stores. Lease related costs associated with stores closed in fiscal 2001 and fiscal 2000 were $1.1 million and $2.7 million, respectively.

Special Charges

All actions contemplated by the previously discussed special charges we recorded in fiscal 1997 and fiscal 1998 were complete at December 29, 2001. At December 29, 2001, the remaining accrued liability

20 was $6.8 million and consisted primarily of lease commitments and pension and post−employment related obligations.

During fiscal 2001, we recorded $0.7 million of pension benefits related to the distribution segment and $0.8 million in continuing lease and exit costs related to closed retail stores through our 1998 special charges reserve. In addition, we recorded $0.13 million and $0.19 million related to warehouse and retail closing through our 1997 special charge reserve.

Depreciation and Amortization Expense

Depreciation and amortization expense was $46.6 million for fiscal 2001 compared to $45.3 million for fiscal 2000, an increase of $1.3 million or 2.9%. The increase primarily reflects the addition of several new stores in fiscal 2000 and 2001 including the acquisition of U Save, offset by the sale of the Southeast stores.

Interest Expense

Interest expense for the year was relatively flat at $34.3 million for fiscal 2001 compared to $34.4 million for fiscal 2000. Higher interest costs under the revolving credit facility resulted from the Company fixing a rate under a swap agreement which expired on December 6, 2001. The average borrowing rate under the revolving credit facility, including the impact of the interest swap was 8.5% for fiscal 2001 compared to 8.0% for fiscal 2000. The rate difference was offset by an average revolving debt level that was $23.4 million lower relative to fiscal 2000.

Income Taxes

The effective income tax rate for fiscal 2001 was 41.4% compared to 42.4% for fiscal 2000. The rate reduction is attributed to a decrease in the ratio of nondeductible goodwill to pretax income. Refer to the tax rate tables in Part II, Item 8 of this report under Note (9)—"Income Taxes" of Notes to Consolidated Financial Statements for the comparative components of these rates.

Net Earnings

Net earnings for fiscal 2001 were $21.3 million, or $1.78 per diluted share, compared to $15.5 million, or $1.35 per diluted share, for fiscal 2000.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in applying certain critical accounting policies. Critical accounting policies are those that require the most subjective and complex judgments. We consider the following to be critical and could result in materially different amounts being reported under different conditions or using different assumptions:

Vendor Allowances and Credits

21 allowance applies, or we are allowed to deduct the allowance as an offset against the vendor's invoice when it is paid.

EITF Issue No. 02−16, "Accounting by a Customer (Including a Reseller) for Cash Consideration Received from a Vendor," addresses how a reseller of a vendor's products should account for cash consideration received from a vendor and how to measure that consideration in its income statement. We elected to early adopt the provisions of EITF No. 02−16 at the beginning of fiscal 2002, and recognized a charge of $7.0 million, net of income taxes of $4.4 million, that represents the cumulative effect of the deferral of consideration received from vendors as of the beginning of fiscal 2002. Excluding the cumulative impact, the adoption of EITF No. 02−16 on the year ended December 28, 2002 was an increase to net earnings of $0.8 million, net of income taxes of $0.6 million.

As is common in our industry, we use a third party service to undertake accounts payable audits on an ongoing basis. These audits examine vendor allowances offered to us during a given year as well as cash discounts, freight allowances and duplicate payments and establishes a basis for us to recover overpayments made to vendors. We reduce future payments to vendors based on the results of these audits, at which time we also establish reserves for commissions payable to the third party service as well as for amounts that may not be collected. Although our estimates of reserves do not anticipate changes in our historical payback rates, such changes could have considerable impact on our currently recorded reserves.

22 Customer Exposure and Credit Risk

Allowance for Doubtful Accounts—Methodology

We evaluate the collectability of our accounts and notes receivable based on a combination of factors. In most circumstances when we become aware of factors that may indicate a deterioration in a specific customer's ability to meet its financial obligations to us (e.g., reductions of product purchases, deteriorating store conditions, changes in payment patterns), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. In determining the adequacy of the reserves, we analyze factors such as the value of any collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the collectibility based on information considered and further deterioration of accounts. If circumstances change (i.e., further evidence of material adverse creditworthiness, additional accounts become credit risks, store closures), our estimates of the recoverability of amounts due us could be reduced by a material amount, including to zero. Refer to Part II, Item 8 of this report under Note (7)—"Accounts and Notes Receivable" of Notes to Consolidated Financial Statements for a discussion of these allowances.

Lease Commitments

We have historically leased store sites for sublease to qualified independent retailers, at rates that are at least as high as the rent paid by us. Under terms of the original lease agreements, we remain primarily liable for any commitments an independent retailer may no longer be financially able to satisfy. We also lease store sites for our retail segment. Should a retailer be unable to perform under a sublease or should we close underperforming corporate stores, we record a charge to earnings for costs of the remaining term of the lease, less any anticipated sublease income. Calculating the estimated losses requires that significant estimates and judgments be made by management. Our reserves for such properties can be materially affected by factors such as the extent of interested sublessees and their creditworthiness, our ability to negotiate early termination agreements with lessors, and general economic conditions and the demand for commercial property. More often than not, we have been able to re−sublease such locations to other qualified retailers with minimal interruption of sublease recoveries and cost to us. Should the number of defaults by sublessees or corporate store closures materially increase, the remaining lease commitments we must record could have a material adverse effect on operating results and cash flows. Refer to Part II, Item 8 of this report under Note (14)—"Leases" of Notes to Consolidated Financial Statements for a discussion of Lease Commitments.

Guarantees of Debt and Lease Obligations of Others

We have guaranteed the debt and lease obligations of certain of our food distribution customers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, we would be unconditionally liable for the outstanding balance of their debt and lease obligations ($26.5 million as of December 28, 2002), which would be due in accordance with the underlying agreements. In circumstances when we become aware of factors that indicate deterioration in a customer's ability to meet its financial obligations guaranteed by us, we record a specific reserve in the amount we reasonably believe we will be obligated to pay on the customer's behalf, net of any anticipated recoveries from the customer. In determining the adequacy of these reserves, we analyze factors such as those described above. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the obligations based on information considered and further deterioration of accounts. Triggering these guarantees would not, however, result in cross default of our debt, but could restrict resources available for general business initiatives.

23 Impairment of Long−lived Assets

Impairment losses are recognized when expected net future cash flows are less than the assets' carrying value. We consider historical performance and estimated future results in our evaluation of potential impairment. Future results are often influenced by assessments of changes in competition, merchandising strategies, human resources and general market conditions, which may result in not recognizing an impairment loss. No assurance can be given that these assessments and implementation of any resulting initiatives will result in profit margins sufficient to recover the carrying value of long lived assets.

Reserves for Self Insurance

We are primarily self−insured for workers' compensation, general and automobile liability and health insurance costs. It is our policy to record our self−insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported. Worker's compensation and general and automobile liabilities are actuarially determined on a discounted basis. We have purchased stop−loss coverage to limit our exposure to any significant exposure on a per claim basis. Any projection of losses concerning workers' compensation, general and automobile and health insurance liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns. Although our estimates of liabilities incurred do not anticipate significant changes in historical trends for these variables, such changes could have a considerable impact on future claim costs and currently recorded liabilities.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have financed capital needs through a combination of internal and external sources. These sources include cash flow from operations, short−term bank borrowings, various types of long−term debt and lease and equity financing.

Operating cash flows were $57.0 million during fiscal 2002 compared to $90.2 million in fiscal 2001 and $82.2 million in fiscal 2000. The decrease in operating cash flows in fiscal 2002 was primarily due to changes in operating assets and liabilities. Accounts payable decreased by approximately $48.7 million which was partially offset by a decrease in inventory balances of approximately $24.4 million. Both of the changes are the result of management's efforts to reduce inventory levels in conjunction with lower sales volume from the continued difficult economy. The changes in operating cash flows in fiscal 2001 were also due to changes in operating assets and liabilities. Accounts receivable increased by $36.3 million primarily due to the discontinuance of a receivables securitization program in December 2001, offset by increases in accounts payable of $26.2 million and accrued expenses of $17.1 million due to timing of payments and increased benefit costs, respectively.

Cash used for investing activities for fiscal 2002 was $34.6 million compared to $92.2 million in 2001 and $81.3 million in 2000. The reduction in cash used for investing activities in 2002 primarily relates to the level of acquisitions in fiscal 2001 and fiscal 2000 relative to fiscal 2002 and the reduction in loans extended to customers during fiscal 2002. Investing activities in fiscal 2002 included $3.4 million of business acquisitions and $4.5 million in net payments received from customer loan activity. In fiscal 2001, investing activities included business acquisitions of $47.7 million, primarily attributed to U Save, and loans to customers, net of payments received, totaling $9.9 million. Investing activities for 2000 included business acquisitions of $20.0 million, which consisted of the Hinky Dinky Supermarkets, Inc. acquisition in January of 2000 as well as three other stores, and loans to customers, net of payments received, totaling $14.9 million.

Cash used for financing activities for fiscal 2002 was $1.5 million compared to $10.9 million in cash provided by financing activities in fiscal 2001. In fiscal 2000, cash used for financing activities was

24 $15.8 million. Cash used in financing activities increased in fiscal 2002 compared to fiscal 2001 due to an increase in proceeds received from the revolving line of credit of $39.4 million which was offset by a decrease in outstanding checks of $30.7 million. In fiscal 2001, the proceeds from the revolving line of credit were $12.7 million and there was an increase in outstanding checks of $5.7 million. In fiscal 2000 the Company made a net payment on the revolving line of credit of $2.7 million after it had completed the refinancing of the agreement. In addition, the outstanding checks decreased by $2.9 million in fiscal 2000.

We have certain contractual obligations that extend beyond 2002. These commitments include long−term debt and capital and operating lease obligations, primarily related to store locations for the our retail segment, as well as store locations subleased to independent food distribution customers. The following summarizes these contractual cash obligations as of December 28, 2002:

Payments Due by Period

Contractual Obligations Less than Over 5 (in thousands) Total 1 Year 1−3 Years 4−5 Years Years

Long Term Debt(1) $ 362,785 $ 5,193 $ 183,382 $ 2,929 $ 171,281 Capital Lease Obligations(2)(3) 97,191 7,906 15,602 15,217 58,466 Operating Leases(2) 200,598 30,309 53,515 38,401 78,373

Total Contractual Cash Obligations $ 660,574 $ 43,408 $ 252,499 $ 56,547 $ 308,120

(1) The $183,382 shown as scheduled for payment in years 1−3 includes repayment of the revolving credit facility based on the current outstanding balance of $179,400. Typically, the Company is able to refinance the credit facility with a new agreement either before or upon maturity of the current agreement. Refer to Part II, Item 8 in this report under Note (8) —"Long−term Debt and Credit Facilities" in Notes to Consolidated Financial Statements to the discussion of covenant compliance below for additional information regarding long term debt.

(2) A discussion of lease commitments can be found Part II, Item 8 in this report under Note (14)—"Leases" in Notes to Consolidated Financial Statements and under the caption "Lease Commitments" under "Critical Accounting Policies," above.

(3) Includes amounts classified as imputed interest.

We also have made certain commercial commitments that extend beyond 2002. These commitments include standby letters of credit and guarantees of certain food distribution customer debt and lease obligations. The following summarizes these commitments as of December 28, 2002:

Commitment Expiration Per Period

Other Commercial Total Commitments Amounts Less than Over 5 (in thousands) Committed 1 Year 1−3 Years 4−5 Years Years

Standby Letters of Credit(1) $ 17,391 $ 2,122 $ 15,269 — — Guarantees(2) 26,493 68 724 $ 694 $ 25,007

Total Other Commercial Commitments $ 43,884 $ 2,190 $ 15,993 $ 694 $ 25,007

(1) Letters of credit relate primarily to supporting workers' compensation obligations and are renewable annually.

(2) Refer to Part II, Item 8 of this report under Note (15)—"Concentration of Credit Risk" of Notes to Consolidated Financial Statements and under the caption "Guarantees of Debt and Lease Obligations of Others" under "Critical Accounting Policies," above, for additional information regarding debt and lease guarantees.

In December 2000, we completed the refinancing of our revolving credit facility. The credit agreement has a five year term and provides a $100 million term loan and $150 million in revolving credit. Borrowings under the term loan bear interest at the Eurodollar rate plus a margin increase and a commitment commission on the unused portion of the revolver. The margin increase and the commitment commission are reset quarterly based on movement of a leverage ratio defined by the agreement. At December 28, 2002 the margin and commitment commission were 2.0% and 0.5%, respectively, compared to 1.75% and 0.375% at the end of 2001.

The credit agreement contains financial covenants which, among other matters, require us to maintain predetermined ratio levels related to interest coverage, fixed charges coverage, leverage and working capital based on EBITDA. Several of these financial covenants are based on EBITDA with some adjustments ("Adjusted EBITDA"). Adjusted EBITDA is defined in our credit agreement as earnings before interest, income taxes, depreciation and amortization, adjusted to exclude extraordinary gains or losses, gains or losses from sales of assets other than inventory in the ordinary course of business, and non−cash LIFO and other charges (such as closed store lease costs and retail impairments).

As of December 28, 2002, we were in compliance with all Adjusted EBITDA−based debt covenants as defined in our credit agreement. Adjusted EBITDA should not be considered an alternative measure of our net income, operating performance, cash flow or liquidity. The amount of Adjusted EBITDA is provided as additional information relative to compliance with our debt covenants. The following is a summary of the calculation of Adjusted EBITDA (in thousands) for 2002, 2001 and 2000:

2002 2001 2000

Earnings before income taxes, extraordinary charge and cumulative effect of change in accounting principle $ 50,132 36,292 27,499 Interest expense 29,490 34,303 34,444 Depreciation and amortization 39,988 46,601 45,330 LIFO (2,234) 2,661 (1,092) Closed store lease costs 1,454 1,105 2,722 Retail impairments 6,585 1,931 — Gains on sale of real estate (3,826) (2,647) (2,954) Special charge (765) — —

Total Adjusted EBITDA $ 120,824 120,246 105,949

Borrowings under the credit facility are collateralized by a security interest in substantially all assets of the Company and its wholly−owned subsidiaries that are not pledged under other debt agreements. The credit agreement also contains covenants that limit the Company's ability to incur debt (including guaranteeing the debt of others) and liens, acquire or dispose of assets, pay dividends on and repurchase its stock, make capital expenditures and make loans or advances to others, including customers.

On February 13, 2003 we were notified by the Trustee for our $165.0 million 8.5% Senior Subordinated Notes, due in 2008 that a default had occurred under the Indenture as a result of our failure to file our Form 10−Q for the third quarter ended October 5, 2002 with the SEC and that, unless remedied within the 30 day grace period, such failure would constitute an event of default under the Indenture. In addition, if the default was not remedied within the 30 days, an event of default would also occur under our bank credit facility.

On February 28, 2003 we announced that holders of more than 51% of our Senior Subordinated Notes agreed to waive the default under the Indenture. The waiver requires us to file our Form 10−Q for the third fiscal quarter of 2002 by May 15, 2003. Such holders also agreed to extend the time for us

26 to file our Form 10−K for our fiscal year ended December 28, 2002 until May 30, 2003 and our Form 10−Q for the first fiscal quarter ended March 22, 2003 until June 15, 2003. In consideration for the waiver, we paid a fee to the bondholders equal to 1.5% of the outstanding principal amount of the notes.

On March 26, 2003, we announced that the requisite number of bank lenders under our revolving credit facility had agreed to extend until June 15, 2003 the deadline for submission to the lenders of our audited fiscal 2002 financial statements. The credit agreement had originally called for us to provide to our lenders our audited financial statements for fiscal 2002 by March 28, 2003. In consideration for the amendment to the credit facility, we paid a fee to the bank lenders equal to 0.5% of the sum of our revolving loan commitments and aggregate outstanding term loans as of the effective date of the amendment.

For debt obligations, the following table presents principal cash flows, related weighted average interest rates by expected maturity dates and fair value as of December 28, 2002:

Fixed Rate Variable

(In thousands) Fair Value Amount Rate Fair Value Amount Rate

2003 $ 5,083 8.5% $ 110 3.7% 2004 1,863 8.5% 110 3.7% 2005 1,899 8.5% 179,510 1.9% 2006 2,081 8.5% 110 1.8% 2007 678 8.5% 60 1.8% Thereafter 171,221 8.5% 60 1.8%

$ 132,976 $ 182,825 $ 179,842 $ 179,960

We have market risk exposure to changing interest rates primarily as a result of our borrowing activities and commodity price risk associated with anticipated purchases of diesel fuel. Our objective in managing our exposure to changes in interest rates and commodity prices is to reduce fluctuations in earnings and cash flows. To achieve these objectives, we use derivative instruments, primarily interest rate and commodity swap agreements, to manage risk exposures when appropriate, based on market conditions. We do not enter into derivative agreements for trading or other speculative purposes, nor are we a party to any leveraged derivative instrument.

The interest rate swap and commodity swap agreements are designated as cash flow hedges and are reflected at fair value in our consolidated balance sheet and the related gains or losses on these contracts are deferred in stockholders' equity as a component of other comprehensive income. Deferred gains and losses are amortized as an adjustment to expense over the same period in which the related items being hedged are recognized in income. However, to the extent that any of these contracts are not considered to be perfectly effective in offsetting the change in the value of the items being hedged, any changes in fair value relating to the ineffective portion of these contracts are immediately recognized in income.

Interest rate swap agreements are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. At December 28, 2002, we had three outstanding interest rate swap agreements which commenced on December 6, 2001, July 26, 2002 and December 6, 2002, respectively. The agreements expire on June 6, 2003, September 25, 2004 and October 6, 2004 with notional amounts of $35 million, $50 million and $35 million, respectively. In addition, we are using a commodity swap agreement to reduce price risk associated with anticipated purchases of diesel fuel. The commodity swap agreement, with a notional amount of 3,500 barrels per month, or approximately 40% of our monthly fuel consumption, expires in August 2003.

27 The three interest rate swap agreements described above total $120.0 million in notional amounts, which are used to calculate the contractual cash flows to be exchanged under the contract. Interest rate swap agreements outstanding at year end and their fair value at that date are summarized as follows (in thousands):

2002 2001

Pay fixed / receive variable $ 120,000 $ 105,000 Fair value (2,315) (214) Average receive rate 1.4% 2.1% Average pay rate 3.0% 2.6%

We expect our capital expenditures for fiscal 2003 to approximate $60.0 million excluding acquisitions. Approximately $40.0 million of the 2003 capital budget has been identified for use in the Company's retail segment with the remaining balance relating to distribution maintenance, information technology and other corporate projects.

We believe that cash flows from operations, short−term bank borrowings, various types of long−term debt and lease and equity financing will be adequate to meet our working capital needs, planned capital expenditures and debt service obligations for the foreseeable future.

NEW ACCOUNTING STANDARDS

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long−Lived Assets", (SFAS No. 144). This statement addresses financial accounting and reporting for the impairment or disposal of long−lived assets. SFAS No. 144 retains and expands upon the fundamental provisions of existing guidance related to the recognition and measurement of the impairment of long−lived assets to be held and used and the measurement of long−lived assets to be disposed of by sale and broadens the financial reporting presentation of discontinued operations to include more disposal transactions. On December 30, 2001, we adopted SFAS No. 144. The standard did not have a significant effect on our consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections", (SFAS No. 145). SFAS No. 145 allows only gains and losses on the extinguishment of debt that meet the criteria of extraordinary items to be treated as such in the financial statements. SFAS No. 145 also requires sales−leaseback accounting for certain lease modifications that have economic effects that are similar to sales−leaseback transactions. Certain provisions of SFAS No. 145 are effective for transactions occurring after May 15, 2002, while the remaining provisions became effective for us on December 29, 2002. The standard did not and is not expected to have a significant effect on our consolidated financial statements.

28 with an exit activity that does not involve an entity newly acquired in a business combination or with a disposal activity covered by SFAS No. 144. The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock−Based Compensation Transition and Disclosure—an Amendment of FASB Statement No. 123", (SFAS No. 148). SFAS No. 148 provides two additional transition methods for entities adopting the fair value method of accounting for stock issued to employees and requires expanded disclosure regarding stock−based compensation in the Summary of Significant Accounting Polices in the Notes to the Consolidated Financial Statements. The adoption of the standard did not have a financial impact on the consolidated financial statements. The expanded disclosure will be required in our quarterly financial reports beginning the first quarter of 2003.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others", (FIN 45). FIN 45 elaborates on the existing disclosure requirements for most guarantees, including residual value guarantees issued in conjunction with operating lease agreements. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45 will have no impact on our historical financial statements as existing guarantees are not subject to the measurement provisions of FIN 45. Future guarantees, if issued, will be accounted for in accordance with this pronouncement.

Emerging Issue Task Force (EITF) Issue No. 01−09, "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of a Vendor's Products)", which codified EITF Issue Nos. 00−14, "Accounting for Certain Sales Incentives"; 00−22, "Accounting for Points and Certain Other Time−Based Sales and Incentive Offers"; and 00−25, "Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's Products" became effective for us on December 30, 2001. These issues address the accounting for consideration given by a vendor to a customer or a reseller of the vendor's products. EITF No. 01−09 did not have a significant effect on our consolidated financial statements.

EITF Issue No. 02−16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor", addresses how a reseller of a vendor's products should account for cash consideration received from a vendor and how to measure that consideration in its income statement.

In January 2003, the EITF concluded that new arrangements, including modifications of existing arrangements entered into after December 31, 2002 should apply the treatment outlined in EITF No. 02−16. If determinable, pro forma disclosure of the impact of the consensus on prior periods presented is encouraged. In March 2003, the EITF concluded that entities may elect to early adopt the provisions of EITF No. 02−16 as a cumulative effect of change in accounting principle. We elected to early adopt the provisions of EITF No. 02−16 at the beginning of fiscal 2002, and recognized a charge of $7.0 million, net of income taxes of $4.4 million, that represents the cumulative effect of a change in accounting principle as of the beginning of fiscal 2002. The impact of the adoption of EITF No. 02−16, on the year ended December 28, 2002, excluding the cumulative effect adjustment, was an increase to net earnings of $0.8 million, net of income taxes of $0.6 million.

29 The consolidation requirements apply to all variable interest entities created after January 31, 2003. For variable interest entities that existed prior to February 1, 2003 the consolidation requirements are effective for annual or interim periods beginning after June 15, 2003 (the third quarter of 2003 for us), regardless of when the variable interest was created. We are currently evaluating the impact the adoption of FIN No. 46 will have on the consolidated financial statements.

CAUTIONARY FACTORS

Nash Finch and its representatives may, from time to time, make written or oral forward−looking statements relating to developments, results, conditions or other events that the Company expects or anticipates will occur in the future. These forward−looking statements may involve a wide variety of topics, such as the Company's future financial performance or condition, its strategies, market or economic conditions or the competitive environment. Any forward−looking statements made are based on management's then current expectations and assumptions and, as a result, are subject to various risks and uncertainties that could cause actual results or conditions to differ materially from those predicted or projected.

The following cautionary factors are considered to be the more significant factors that could cause actual results to differ materially from those predicted or projected by any forward−looking statements, and are provided here as a readily available reference. These factors are in addition to any other cautionary statements, written or oral, which may be made or referred to in connection with any forward−looking statement, or contained elsewhere in this report.

Competitive Conditions

The wholesale food distribution and food retailing businesses are intensely competitive, characterized by high inventory turnover, narrow profit margins and increasing consolidation. Our food retailing business, focused on the Upper Midwest, has historically competed with traditional grocery stores and is increasingly competing with alternative store formats such as supercenters, warehouse clubs and extreme value food stores. Our distribution business competes not only with local, regional and national food distributors, but also with vertically−integrated national and regional chains utilizing a variety of formats, including supercenters, supermarkets and warehouse clubs. Some of our competitors are substantially larger and may have greater financial resources, lower merchandise acquisition costs and lower operating expenses than we do, intensifying price competition at the wholesale and retail levels. Industry consolidation and the expansion of alternative store formats, which have gained market share at the expense of traditional grocery stores, tend to produce even stronger competition for our food retail business and for the independent retailer customers of our distribution business. To the extent our independent customers are acquired by competitors or are not successful in competing with other retail chains and non−traditional competitors, sales by our distribution business will also be affected. If we fail to effectively implement strategies to respond to these competitive pressures, our operating results could be adversely affected by price reductions, decreased sales or margins, or loss of market share.

Economic Conditions

The food distribution and retailing industry is sensitive to national and regional economic conditions, particularly those that influence consumer confidence, spending and buying habits. Economic downturns or uncertainty may not only adversely affect overall demand and exacerbate price competition, but also cause consumers to "trade down" by purchasing lower priced, and often lower margin, items and to purchase less in traditional supermarket channels. These consumer responses, coupled with the impact of general economic factors such as prevailing interest rates, food price inflation or deflation, employment trends in our markets, and labor and energy costs, can also have a significant impact on the Company's operating results and performance with respect to forecasts.

30 Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude.

Credit Risk

In the ordinary course of business, we extend credit, including loans, to our food distribution customers, and provide financial assistance to some customers by guaranteeing their loan or lease obligations. We also lease store sites for sublease to independent retailers. Generally, our loans and other financial accommodations are extended to small businesses that are unrated and have limited access to conventional financing. Greater than expected losses from existing or future credit extensions, loans, guarantee commitments or sublease arrangements, particularly in times of economic difficulty or uncertainty, could negatively impact our financial condition and operating results.

Expansion and Acquisition

The growth strategy for our retail and distribution businesses includes new store openings, new affiliations and acquisitions. Expansion is subject to a number of risks, including the adequacy of our capital resources, the location of suitable store or distribution center sites and the negotiation of acceptable lease or purchase terms, the expansion into formats with which we have limited experience, and the ability to hire and train employees. Acquisitions entail certain additional risks such as identifying suitable candidates, effecting acquisitions at acceptable rates of return, timely and effectively integrating the operations, systems and personnel of the acquired business, and diversion of management's time and attention from other business concerns.

Indebtedness and Liquidity

Our current level of debt and covenants in the documents governing our outstanding debt could limit our operating and financial flexibility. Our ability to respond to market conditions and opportunities as well as capital needs could be constrained by the degree to which we are leveraged, by changes in the availability or cost of capital, and by contractual limitations on the degree to which we may, without the consent of our lenders, take actions such as engaging in mergers or acquisitions, incurring additional debt, making capital expenditures and making investments, loans or advances. If needs or opportunities were identified that would require financial resources beyond existing resources, obtaining those resources could increase the Company's borrowing costs, further reduce financial flexibility, require alterations in strategies and affect future operating results.

Other Factors

Other factors that could cause actual results to differ materially from those predicted include changes in federal, state and local laws and regulations; changes affecting the food distribution and retail industry generally, such as a shift in consumer preferences towards eating away from home, other changes in consumer buying and spending patterns, the growth of alternative store formats, and the manner in which vendors target their promotional dollars; the ability to attract and retain qualified employees; unanticipated problems with product procurement and changes in vendor promotions or allowances; adverse determinations or developments with respect to litigation, other legal proceedings or the SEC investigation of Nash Finch; the success or failure of new business ventures or initiatives; natural disasters and acts of terrorism.

The foregoing discussion of important factors is not exhaustive, and we do not undertake to revise any forward−looking statement to reflect events or circumstances that occur after the date the statement is made.

31 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure in the financial markets consists of changes in interest rates relative to our investment in notes receivable, the balance of debt obligations outstanding, and derivatives employed from time to time to time to hedge long term variable interest rate debt. In addition, we are using a commodity swap agreement to reduce price risk associated with anticipated purchases of diesel fuel.

We carry notes receivable because, in the normal course of business, we make long−term loans to certain retail customers. Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates. As a result, the carrying value of notes receivable approximates market value. (Refer to Part II, Item 8 of this report under Note 7—"Accounts and Notes Receivable" in Notes to Consolidated Financial Statements for more information). See disclosures set forth under Item 7 under the caption "Liquidity and Capital Resources."

32 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Nash Finch Company Report of Management

The consolidated financial statements are the responsibility of management and have been prepared in conformity with generally accepted accounting principles and include, where required, amounts based on management's best estimates and judgments. Financial information appearing throughout this Annual Report is consistent with that in the consolidated financial statements. In order to meet its responsibility, management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded and that all transactions are properly authorized and reflected in the financial records. The concept of reasonable assurance recognizes that the relative cost of a control procedure should not exceed the expected benefits. Management believes the selection and development of qualified personnel, the establishment and communication of accounting and administrative policies and procedures (including a code of conduct), and a program of internal audit are important elements of these control systems. The report of Ernst & Young LLP, the Company's independent accountants, covering their audit of the financial statements, is included in this Annual Report. Their independent audit of the Company's financial statements includes a review of the system of internal accounting controls to the extent they consider necessary to evaluate the system as required by auditing standards generally accepted in the United States. The Audit Committee of the Board of Directors, composed entirely of directors who are not employees of the Company and who are, in the opinion of the Board of Directors, free of any relationships that would interfere with the exercise of judgment independent of management, meets regularly with financial management, the independent auditors, and the director of internal audit to review accounting control, auditing and financial reporting matters. The internal and independent auditors have unrestricted access to the Audit Committee.

/s/ RON MARSHALL

Ron Marshall Chief Executive Officer

/s/ ROBERT B. DIMOND

Robert B. Dimond, Executive Vice President, Chief Financial Officer

33 REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders Nash Finch Company:

We have audited the accompanying consolidated balance sheets of Nash Finch Company and subsidiaries as of December 28, 2002 and December 29, 2001, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 28, 2002. Our audits also included the financial statement schedule listed in the Index at Item 15(2). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Nash Finch Company and subsidiaries at December 28, 2002 and December 29, 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 28, 2002, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, effective December 30, 2001, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

May 12, 2003 Minneapolis, Minnesota

34 NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Income

Fiscal years ended December 28, 2002, December 29, 2001 and December 30, 2000 2002 2001 2000 (In thousands, except per share amounts) (52 weeks) (52 weeks) (52 weeks)

Sales $ 3,874,672 $ 3,982,206 $ 3,839,499

Cost and expenses: Cost of sales 3,408,409 3,529,124 3,409,778 Selling, general and administrative 347,418 335,886 322,448 Special charges (765) — — Depreciation and amortization 39,988 46,601 45,330 Interest expense 29,490 34,303 34,444

Total cost and expenses 3,824,540 3,945,914 3,812,000

Earnings before income taxes, extraordinary charge and cumulative effect of change in accounting principle 50,132 36,292 27,499

Income tax expense 19,552 15,025 11,659

Earnings before extraordinary charge and cumulative effect of change in accounting principle 30,580 21,267 15,840

Extraordinary charge from early extinguishment of debt, net of income tax benefits of $271 — — (369) Cumulative effect of change in accounting principle, net of income tax benefits of $4,450 (6,960)

Net earnings $ 23,620 $ 21,267 $ 15,471

Basic earnings per share: Earnings before extraordinary charge and cumulative effect of change in accounting principle $ 2.59 $ 1.83 $ 1.38 Extraordinary charge from early extinguishment of debt, net of income tax benefit — — (0.03) Cumulative effect of change in accounting principle, net of income tax benefit (0.59)

Net earnings per share $ 2.00 $ 1.83 $ 1.35

Diluted earnings per share: Earnings before extraordinary charge and cumulative effect of change in accounting principle $ 2.52 $ 1.78 $ 1.38 Extraordinary charge from early extinguishment of debt, net of income tax benefit (0.03) Cumulative effect of change in accounting principle, net of income tax benefit (0.57) —

Net earnings per share $ 1.95 $ 1.78 $ 1.35

See accompanying notes to consolidated financial statements.

35 NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share amounts)

December 28, December 29, 2002 2001

Assets Current assets: Cash and cash equivalents $ 31,419 $ 10,467 Accounts and notes receivable, net 165,527 168,154 Inventories 245,477 274,995 Prepaid expenses 12,335 15,000 Deferred tax assets 13,523 10,748

Total current assets 468,281 479,364

Investments in affiliates 556 621 Notes receivable, net 32,596 40,867

Property, plant and equipment: Land 25,500 26,979 Buildings and improvements 155,865 157,159 Furniture, fixtures and equipment 323,201 319,378 Leasehold improvements 75,360 68,487 Construction in progress 7,169 4,309 Assets under capitalized leases 42,040 40,860

629,135 617,172 Less accumulated depreciation and amortization (360,615) (343,873)

Net property, plant and equipment 268,520 273,299

Goodwill, net 148,028 137,337 Investment in direct financing leases 14,463 13,490 Deferred tax asset, net 467 7,549 Other assets 15,011 17,718

Total assets $ 947,922 $ 970,245

Liabilities and Stockholders' Equity Current liabilities: Outstanding checks $ 27,076 $ 57,750 Current maturities of long−term debt and capitalized lease obligations 7,497 5,364 Accounts payable 170,542 217,822 Accrued expenses 94,068 90,869 Income taxes 10,073 11,819

Total current liabilities 309,256 383,624

Long−term debt 357,592 321,761 Capitalized lease obligations 47,784 47,046 Other liabilities 11,811 14,406 Commitments and Contigencies Stockholders' equity: Preferred stock—no par value Authorized 500 shares; none issued — — Common stock of $1.662/3 par value Authorized 50,000 shares, issued 12,012 and 11,831 shares, respectively 20,021 19,718 Additional paid−in capital 26,275 21,894 Restricted stock (894) — Accumulated other comprehensive income (7,507) (2,518) Retained earnings 184,645 165,317

222,540 204,411 Less cost of 70 and 73 shares of common stock in treasury, respectively (1,061) (1,003)

Total stockholders' equity 221,479 203,408

Total liabilities and stockholders' equity $ 947,922 $ 970,245

See accompanying notes to consolidated financial statements. 36 NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands)

2002 2001 2000

Operating activities: Net earnings $ 23,620 $ 21,267 $ 15,471 Adjustments to reconcile net income to net cash provided by operating activities: Special charges—non cash portion (765) — — Depreciation and amortization 39,988 46,601 45,330 Amortization of deferred financing costs 1,135 1,183 1,107 Amortization of rebatable loans 1,798 254 — Provision for bad debts 8,997 4,812 7,361 Deferred income tax expense 8,320 8,630 2,884 Gain on sale of property, plant and equipment (3,815) (2,608) (3,403) Cumulative effect of change in accounting principle 6,960 — — LIFO charge (credit) (2,234) 2,661 (1,092) Retail impairments 6,585 1,931 — Other 1,256 1,345 (44) Changes in operating assets and liabilities, net of effects of acquisitions Accounts and notes receivable (859) (36,255) 23,710 Inventories 24,448 3,033 133 Prepaid expenses 2,675 (2,890) (646) Accounts payable (48,718) 26,200 (6,457) Accrued expenses (8,265) 17,140 (10,673) Income taxes payable (1,309) (875) 8,594 Other assets and liabilities (2,777) (2,253) (102)

Net cash provided by operating activities 57,040 90,176 82,173

Investing activities: Disposal of property, plant and equipment 14,435 8,889 19,993 Additions to property, plant and equipment (52,605) (43,924) (54,066) Business acquired, net of cash (3,356) (47,680) (19,985) Loans to customers (5,551) (27,813) (27,656) Payments from customers on loans 10,042 17,936 12,751 Repurchase of receivables — — (7,970) Other 2,473 435 (4,342)

Net cash used in investing activities (34,562) (92,157) (81,275)

Financing activities: Proceeds from long−term debt — — 100,000 Proceeds (payments) of revolving debt 39,400 12,700 (102,700) Dividends paid (4,292) (4,204) (4,122) Payments of long−term debt (3,491) (3,378) (1,492) Payments of capitalized lease obligations (2,845) (1,620) (1,790) (Decrease) increase in outstanding checks (30,674) 5,708 (2,932) Other 376 1,708 (2,717)

Net cash (used in) provided by financing activities (1,526) 10,914 (15,753)

Net increase (decrease) in cash 20,952 8,933 (14,855) Cash and cash equivalents at beginning of year 10,467 1,534 16,389

Cash and cash equivalents at end of year $ 31,419 $ 10,467 $ 1,534

Supplemental disclosure of cash flow information: Non cash investing and financing activities Purchase of real estate under capital leases $ 3,789 $ 3,866 $ 16,049 Acquisition of minority interest 1,849 4,294

See accompanying notes to consolidated financial statements.

37 NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity

Accmulated other comprehensive income (loss) Common stock

Deferred Treasury stock Fiscal period ended December 28, 2002 Additional gain/ December 29, 2001 and December 30, 2000 paid−in Minimum (loss) on (In thousands, except per share amounts) Shares Amount capital Retained pension liab. hedging Shares Amount Total earnings adjustment activities Restricted stockholders' stock equity Balance at January 1, 2000 11,641 $ 19,402 $ 18,247 $ 136,905 $ — $ — $ (57) (231) $ (1,823) $ 172,674 Net earnings — — — 15,471 — — — — — 15,471 Dividend declared of $.36 per share — — — (4,122) — — — — — (4,122) Common stock issued for employee stock purchase plan 70 116 309 — — — — — — 425 Amortized compensation under restricted stock plan — — — — — — 4 — — 4 Repayment of notes receivable from holders of restricted stock — — — — — — 43 — — 43 Distribution of stock pursuant to performance awards — — 8 — — — — 5 37 45

Balance at December 30, 2000 11,711 19,518 18,564 148,254 — — (10) (226) (1,786) 184,540 Net earnings — — — 21,267 — — — — — 21,267 Other comprehensive income, net of tax Deferred loss on hedging activities — — — — — (128) — — — (128) Additional minimum pension liability — — — — (2,390) — — — — (2,390)

Comprehensive income — — — — — — — — — 18,749 Dividend declared of $.36 per share — — — (4,204) — — — — — (4,204) Treasury stock issued upon exercise of options — — 943 — — — — 102 523 1,466 Common stock issued upon exercise of options 28 46 264 — — — — — — 310 Common stock issued for employee stock purchase plan 92 154 655 — — — — — — 809 Amortized compensation under restricted stock plan — — — — — — 1 — — 1 Stock based deferred compensation — — 993 — — — — — — 993 Repayment of notes receivable from holders of restricted stock — — — — — — 9 — — 9 Distribution of stock pursuant to performance awards — — 475 — — — — 51 260 735

Balance at December 29, 2001 11,831 19,718 21,894 165,317 (2,390) (128) — (73) (1,003) 203,408 Net earnings — — — 23,620 — — — — — 23,620 Other comprehensive income, net of tax Deferred loss on hedging activities — — — — — (1,105) — — — (1,105) Additional minimum pension liability — — — — (3,884) — — — — (3,884)

Comprehensive income — — — — — — — — — 18,631 Dividend declared of $.36 per share — — — (4,292) — — — — — (4,292) Treasury stock issued upon exercise of options — — 73 — — — — 7 37 110 Common stock issued upon exercise of options 21 35 195 — — — — — — 230 Common stock issued for employee stock purchase plan 43 72 878 — — — — — — 950 Issuance of restricted stock 50 84 1,373 — — — (1,457) — — — Amortized compensation under restricted stock plan — — — — — 563 563 Stock based deferred compensation — — 248 — — — — — — 248 Forfeiture of restricted stock issued pursuant to performance awards — (61) — — — (5) (101) (162) Distribution of stock pursuant to performance awards 67 112 1,675 — — — — 1 6 1,793

Balance at December 28, 2002 12,012 $ 20,021 $ 26,275 $ 184,645 $ (6,274) $ (1,233) $ (894) (70) $ (1,061) $ 221,479

38 NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Fiscal Year

Nash Finch Company's fiscal year ends on the Saturday nearest to December 31. Fiscal years 2002, 2001, and 2000 each consisted of 52 weeks. The Company's interim quarters consist of 12 weeks except for the third quarter which has 16 weeks.

Principles of Consolidation

The accompanying financial statements include the accounts of Nash Finch Company (the "Company"), its majority−owned subsidiaries and the Company's share of net earnings of a 50% owned company. The equity method of accounting is applied to the investment as the ownership structure prevents Nash Finch from exercising a controlling influence over operating and financial policies of the business as a result of the voting interests of the members. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Cash and Cash Equivalents

In the accompanying financial statements and for purposes of the statements of cash flows, cash and cash equivalents include cash on hand and short−term investments with original maturities of three months or less.

Revenue Recognition

Revenues for food distribution and military segments are recognized when product orders placed by customers are shipped. Retail segment revenues are recognized at the point of sale.

The Company reclassified its treatment of facilitated services, which include invoicing and payment services, where it acts as processing agent for its independent retailers. Prior to the reclassification, amounts invoiced to independent retailers by the Company for facilitated services were recorded as sales and the related amounts due and paid by the Company to its vendors were recorded as costs of sales. The reclassification reduced sales and cost of sales by $117.9 million, $125.2 million and $116.3 million for fiscal years 2002, 2001 and 2000, respectively, but did not have an impact on gross profit, earnings before income taxes and extraordinary charge, net earnings, cash flows or financial position for any period or their respective trends.

Cost of sales

Cost of sales includes the cost of inventory sold during the period, including distribution costs and shipping and handling fees.

Vendor Allowances and Credits

The Company reflects vendor allowances and credits, which include allowances and incentives similar to discounts, as a reduction of cost of sales when the related inventory has been sold, based on the underlying arrangement with the vendor. These allowances primarily consist of promotional allowances, quantity discounts and payments under merchandising arrangements. Amounts received under promotional or merchandising arrangements that require specific performance are recognized when the performance is satisfied and the related inventory has been sold. Discounts based on the quantity of purchases from the Company's vendors or sales to customers are recognized as the product is sold. When payment is received prior to fulfillment of the terms, the amounts are deferred and

39 recognized according to the terms of the arrangement. (Refer to Part II, Item 8 of this report under Note 2, "Vendor Allowances and Credits").

Inventories

Inventories are stated at the lower of cost or market. At December 28, 2002 and December 29, 2001, approximately 81% of the Company's inventories were valued on the last−in, first−out (LIFO) method. During fiscal 2002, the Company recorded a LIFO credit of $2.2 million compared to a charge of $2.7 million in fiscal 2001 and a credit of $1.1 million in fiscal 2000. The remaining inventories are valued on the first−in, first−out (FIFO) method. If the FIFO method of accounting for inventories had been used, inventories would have been $45.5 million and $47.7 million higher at December 28, 2002 and December 29, 2001, respectively.

Capitalization, Depreciation and Amortization

Property, plant and equipment are stated at cost. Assets under capitalized leases are recorded at the present value of future lease payments or fair market value, whichever is lower. Expenditures which improve or extend the life of the respective assets are capitalized while maintenance and repairs are expensed as incurred. Interest costs primarily associated with construction projects and software development in the amount of $0.3 million, $0.1 million and $0.9 million have been capitalized during 2002, 2001 and 1999, respectively.

Property, plant and equipment are depreciated on a straight−line basis over the estimated useful lives of the assets which generally range from 10−40 years for buildings and improvements and 3−10 years for furniture, fixtures andequipment. Leasehold improvements and capitalized leases are amortized on a straight−line basis over the shorter of the term of the lease or the useful life of the asset.

Impairment of Long−lived Assets

An impairment loss is recognized whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. In applying Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long−Lived Assets, assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company has generally identified this lowest level to be individual stores; however, there are limited circumstances where, for evaluation purposes, stores could be considered with the distribution center they support. The Company allocates the portion of the profit retained at the servicing distribution center to the individual store when performing the impairment analysis in order to determine the store's total contribution to the Company. The Company considers historical performance and future estimated results in its evaluation of potential impairment. If the carrying amount of the asset exceeds expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value, generally measured by discounting expected future cash flows at the rate the Company utilizes to evaluate potential investments.

Reserves for Self Insurance

The Company is primarily self−insured for workers' compensation, general and automobile liability and Health insurance costs. It is the Company's policy to record its self insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported. Worker's compensation and general and automobile liabilities are actuarially determined on a discounted basis. The Company has purchased stop−loss coverage to limit its exposure to any significant exposure on a per claim basis. Any projection of losses concerning workers' compensation, general and automobile and health insurance

40 liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns.

Goodwill and Intangible Assets

Intangible assets, consisting primarily of goodwill resulting from business acquisitions, are carried at cost. Effective December 30, 2001, Nash Finch implemented SAS No. 142, "Goodwill and Other Intangible Assets." The Company re−evaluates the carrying value of intangible assets for impairment annually and/or when factors indicating impairment are present, using an undiscounted operating cash flow assumption.

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized but instead be tested for impairment at least annually. Separable intangible assets that are not deemed to have an indefinite life will continue to be amortized over their useful lives. The Company was required to apply the provisions of SFAS No. 142 at the beginning of 2002. The Company has performed the required impairment test of goodwill upon adoption and at December 28, 2002 and determined that no impairment issues exist. The Company had no intangible assets with indefinite useful lives as of December 28, 2002 or December 29, 2001. At December 28, 2002, the Company had $148.0 million of goodwill on its consolidated balance sheet of which $99.0 million related to the retail segment, $23.2 million related to the food distribution segment and $25.8 million related to the military segment. At December 29, 2001, the Company had $137.3 million of goodwill on its consolidated balance sheet of which $88.3 million related to the retail segment, $23.2 million related to the food distribution segment and $25.8 million related to the military segment.

In conjunction with SFAS No. 142 the following table provides a reconciliation of fiscal 2002, 2001 and 2000 reported net income excluding goodwill amortization (in thousands, except per share amounts):

December 28, December 29, December 30, 2002 2001 2000

Reported net income: $ 23,620 $ 21,267 $ 15,471 Add back: Goodwill amortization net of income taxes — 4,690 4,534

Adjusted net income $ 23,620 $ 25,957 $ 20,005

Basic earnings per share: Reported earnings per share $ 2.00 $ 1.83 $ 1.35 Goodwill amortization net of income taxes — 0.40 0.40

Adjusted earnings per share $ 2.00 $ 2.23 $ 1.75

Diluted earnings per share: Reported earnings per share $ 1.95 $ 1.78 $ 1.35 Goodwill amortization net of income taxes — 0.39 0.39

Adjusted earnings per share $ 1.95 $ 2.17 $ 1.74

41 Changes in the net carrying amount of goodwill were as follows (in thousands):

Goodwill as of December 30, 2000 $ 113,584 Fiscal 2001 amortization expense (5,915) Retail acquisitions 29,668

Goodwill as of December 29, 2001 $ 137,337 Retail acquisitions 10,691

Goodwill as of December 28, 2002 $ 148,028

Other intangible assets included in other assets on the consolidated balance sheets were as follows (in thousands):

December 28, 2002 December 29, 2001

Gross Net Gross Net Carrying Accum. Carrying Carrying Accum. Carrying Value Amort. Amount Value Amort. Amount

Service contracts $ 10,358 $ 5,303 $ 5,055 $ 10,358 $ 4,147 $ 6,211 Tradenames 3,300 792 2,508 3,300 660 2,640 Franchise agreements 2,703 644 2,059 2,703 533 2,170 Non−compete agreements 2,014 1,124 890 1,814 824 990 Leasehold interests 1,726 1,699 27 1,726 1,628 98 Consulting agreements and Other 823 761 62 823 703 120

Total $ 20,924 $ 10,323 $ 10,601 $ 20,724 $ 8,495 $ 12,229

Aggregate amortization expense recognized for fiscal 2002, 2001 and 2000 was $1.8 million, $2.1 million and $2.6 million, respectively. The aggregate amortization expense for each of the five succeeding fiscal years is expected to be approximate $1.2 million. Intangible assets with a definite life are amortized on a straight−line basis over estimated useful lives ranging from 4−25 years.

Income Taxes

Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Financial Instruments

The Company accounts for derivative financial instruments pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities as amended. SFAS No. 133 requires derivatives be carried at fair value on the balance sheet and provides for hedge accounting when certain conditions are met.

The Company has market risk exposure to changing interest rates primarily as a result of its borrowing activities and commodity price risk associated with anticipated purchases of diesel fuel. The Company's objective in managing its exposure to changes in interest rates and commodity prices is to reduce fluctuations in earnings and cash flows. To achieve these objectives, the Company uses derivative instruments, primarily interest rate and commodity swap agreements, to manage risk exposures when appropriate, based on market conditions. The Company does not enter into derivative agreements for trading or other speculative purposes, nor is it a party to any leveraged derivative instrument.

42 Stock Option Plans

As permitted by the provisions of SFAS No. 123, "Accounting for Stock−Based Compensation", the Company has chosen to continue to apply Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees and related interpretations in accounting for its stock option plans. As a result, the Company does not recognizecompensation costs if the option price equals or exceeds market price at date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock−Based Compensation", to stock−based employee compensation ($ in thousands, except per share amounts):

2002 2001 2000

Reported net income $ 23,620 $ 21,267 $ 15,471 Total stock−based employee compensation expense determined under fair value based method for all option awards, net of tax 1,157 657 325

Adjusted net income $ 22,463 $ 20,610 $ 15,146

Reported basic earnings per share $ 2.00 $ 1.83 $ 1.35

Adjusted basic earnings per share $ 1.90 $ 1.77 $ 1.32

Reported diluted earnings per share $ 1.95 $ 1.78 $ 1.35

Adjusted diluted earnings per share $ 1.85 $ 1.72 $ 1.32

Comprehensive Income

The Company reports comprehensive income in accordance with SFAS No. 130, "Reporting Comprehensive Income". Comprehensive income refers to revenues, expenses, gains and losses that are not included in net earnings, but rather are recorded directly in the Consolidated Statements of Stockholders' Equity.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

New Accounting Standards

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long−Lived Assets", (SFAS No. 144). This statement addresses financial accounting and reporting for the impairment or disposal of long−lived assets. SFAS No. 144 retains and expands upon the fundamental provisions of existing guidance related to the recognition and measurement of the impairment of long−lived assets to be held and used and the measurement of long−lived assets to be disposed of by sale and broadens the financial reporting presentation of discontinued operations to include more disposal transactions. On December 30, 2001, the Company adopted SFAS No. 144. The standard did not have a significant effect on the consolidated financial statements.

43 2002, while the remaining provisions became effective for the Company on December 29, 2002. The standard did not and is not expected to have a significant impact on the consolidated financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities", (SFAS No. 146). SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94−3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". SFAS No. 146 applies to costs associated with an exit activity that does not involve an entity newly acquired in a business combination or with a disposal activity covered by SFAS No. 144. The provisions of SFAS No. 146 are effective for exit or disposal activities that are initiated after December 31, 2002.

In December 2002, The FASB issued SFAS No. 148, "Accounting for Stock−Based Compensation Transition and Disclosure—an Amendment of FASB Statement No. 123", (SFAS No. 148). SFAS No. 148 provides two additional transition methods for entities adopting the fair value method of accounting for stock issued to employees and requires expanded disclosure regarding stock−based compensation in the Summary of Significant Accounting Polices in the Notes to the Consolidated Financial Statements. The adoption of the standard did not have a financial impact on the consolidated financial statements. The expanded disclosure will be required in the Company's quarterly financial reports beginning the first quarter of 2003.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others," (FIN 45). FIN 45 elaborates on the existing disclosure requirements for most guarantees, including residual value guarantees issued in conjunction with operating lease agreements. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The adoption of FIN 45 will have no impact on the Company's historical financial statements as existing guarantees are not subject to the measurement provisions of FIN 45. Future guarantees, if issued, will be accounted for in accordance with this pronouncement.

Emerging Issue Task Force (EITF) Issue No. 01−09, "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of a Vendor's Products)", which codified EITF Issue Nos. 00−14, "Accounting for Certain Sales Incentives"; 00−22, "Accounting for Points and Certain Other Time−Based Sales and Incentive Offers"; and 00−25, "Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's Products" became effective for the Company on December 30, 2001. These issues address the accounting for consideration given by a vendor to a customer or a reseller of the vendor's products. EITF No. 01−09 did not have a significant effect on the consolidated financial statements.

44 beginning of fiscal 2002, and recognized a charge of $7.0 million, net of income taxes of $4.4 million, that represents the cumulative effect of a change in accounting principle as of the beginning of fiscal 2002. The impact of the adoption of EITF No. 02−16 on the year ended December 28, 2002, excluding the cumulative effect adjustment, was an increase to net earnings of $0.8 million, net of income taxes of $0.6 million.

The approximate effect of the change in accounting principle impacts previously disclosed financial information for each quarter of 2002 as follows (in thousands):

Net earnings Net per diluted earnings share

First quarter $ 927 $ 0.08 Second quarter 1,430 0.12 Third quarter (809) (0.07) Fourth quarter (709) (0.06)

Total $ 839 $ 0.07

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities". FIN No. 46 states that companies that have exposure to the economic risks and potential rewards from another entity's assets and activities have a controlling financial interest in a variable interest entity and should consolidate the entity, despite the absence of clear control through a voting equity interest. The consolidation requirements apply to all variable interest entities created after January 31, 2003. For variable interest entities that existed prior to February 1, 2003 the consolidation requirements are effective for annual or interim periods beginning after June 15, 2003, regardless of when the variable interest was created. The Company is currently evaluating the impact the adoption of FIN No. 46 will have on the consolidated financial statements.

(2) Vendor Allowances and Credits

The Company participates with its vendors in a broad menu of promotions to increase sales of products. These promotions fall into two main categories: off−invoice allowances and performance− based allowances. These promotional arrangements are often subject to negotiation with the Company's vendors.

In the case of off−invoice allowances, discounts are typically offered by vendors with respect to certain merchandise purchased by the Company during a specified period of time. The Company uses off−invoice allowances to support a variety of marketing programs such as reduced price offerings for specific time periods, food shows, pallet promotions and private label promotions. The discounts are either reflected directly on the vendor invoice, as a reduction from the normal wholesale prices for merchandise to which the allowance applies, or we are allowed to deduct the allowance as an offset against the vendor's invoice when it is paid.

In the case of performance−based allowances, the allowance or rebate is based on the Company's completion of some specific activity, such as purchasing or selling product during a certain time period. This basic performance requirement may be accompanied by an additional performance requirement such as providing advertising or special in−store promotion, tracking quantities of product sold (as is the case with count−recount promotions discussed below), slotting (adding a new item to the system) and merchandising a new item, or achieving certain minimum purchase quantities. The billing for these performance−based allowances is normally in the form of a "bill−back" in which case the Company is invoiced at the regular price with the understanding that the Company may bill back the vendor for the requisite allowance when the performance is satisfied.

45 Collectively with its vendors, the Company plans promotions and arrives at the amount the respective vendor plans to spend on promotions with the Company. The Company and the vendors then monitor, review and discuss the results of such promotions, and resolve issues relating to promotions and billings. Each vendor has its own method for determining the amount of promotional funds budgeted to be spent with the Company during the period. In most situations, the vendor allowances are based on units the Company purchased from the vendor. In other situations, the allowances are based on its past or anticipated purchases and/or the anticipated performance of the planned promotions.

The Company jointly negotiates with its vendors the promotional calendar that governs all promotions. Forecasting promotional expenditures is a critical part of the Company's twice yearly planning sessions with its vendors. Most vendors work with the Company to project not just overall spending, but also spending on a category and regional basis. As individual promotions are completed and the associated billing is processed, the vendors track the Company's promotional program execution and spend rate. The vendors discuss the tracking, performance and spend rate with the Company on a regular basis throughout the year. Depending upon the vendor arrangements, such discussions can occur on a weekly, monthly, quarterly or annual basis. These communications include future promotions, product cost, targeted retails and price points, anticipated volume, promotion expenditures, vendor maintenance, billing issues and procedures, new items/discontinued items, and trade spend levels relative to budget per event and per year, as well as the resolution of any issues that arise between the vendor and the Company. In the future, the nature and menu of promotional programs and the allocation of dollars among them may change as a result of ongoing negotiations and commercial relationships between vendors and the Company.

(3) Count−Recount Charges

As discussed above, the Company participates with its vendors in a broad menu of promotions to increase sales of products. Certain promotions require the Company to track specific shipments of goods to retailers, or to customers in the case of the Company's own retail stores, during a specified period. At the end of the promotional period, the Company invoices its vendors for the total promotional allowance based on the quantity of goods sold. This type of promotion, which is often referred to as "count−recount," requires wholesalers and retailers such as the Company to incur significant administrative and other costs to manage such programs.

As a result of the increased costs associated with count−recount program administration and implementation, the Company historically, but not uniformly, assessed an administrative fee to recoup its reasonable costs of performing the tasks associated with administering these promotions. In some instances this fee was separately identified on the invoice to the vendor and in other instances the Company raised the invoice amounts by adding additional cases to the quantity of goods sold reflected on the invoices to vendors. Although the Company attempted to standardize the latter practice at a range of between 15% and 20% on wholesale movement billings and approximately 12% on retail scan billings for its retail stores, the application of the practice was uneven across time and divisions. The aggregate fees charged to vendors, represented as a percent of total count−recount promotional dollars, were approximately 17% in fiscal 2000 and 23% in fiscal 2001 and 2002. The Company's costs associated with administering this program are estimated at approximately 20% of the total count−recount promotional dollars.

The count−recount practice described above was established against a backdrop of what the Company believes was a common industry practice, of which vendors generally were aware. The Company believes that its efforts to recapture count−recount costs by adding additional cases to the invoices in lieu of a separately delineated administrative fee were appropriate. The arrangements between the Company and its vendors did not separately address or provide for the addition of such charges in lieu of a separately invoiced administrative fee. The Company's conclusion that its

46 accounting for such charges has been correct, that the charges were appropriately recognized as a reduction of cost of sales in the period the product was sold and in which the count−recount promotions were actually performed by the Company, is based on its overall relationship and method of doing business with our vendors.

Historical Accounting Treatment and Impact on Financial Statements

Count−recount allowances are recorded as a reduction to cost of sales as performance has been completed and as the related inventory is sold. Count−recount charges in lieu of administrative fees were approximately $6.7 million in fiscal 2000, $8.6 million in fiscal 2001 and $6.7 million through November 17, 2002 when the Company, as a uniform practice across all divisions, began stating the administrative fee separately on the invoices to the vendor.

Communications with Vendors

In November 2002, the Company met with its vendors, and brokers representing vendors, collectively comprising approximately 88% of its purchases that were subject to count−recount charges in lieu of an administrative fee. In those meetings, the Company advised the vendors and brokers that (i) the Company had a historical practice of charging an administrative fee either separately or, in most instances, by adding amounts to actual quantities sold in the range of 15% to 20% in lieu of an administrative fee, (ii) such fee had not always been separately disclosed on invoices to vendors, (iii) the Company had attempted to standardize the practice in late 1999 at a range of 15% to 20%, (iv) the Company had not been successful in standardizing such practice in that in some situations the application of the practice had been uneven across time and divisions resulting in a move away from a fixed percentage and sometimes resulting in an uneven percentage being applied, and (v) in the future the Company would charge a flat fee set at a fixed percentage of sales, which would be separately itemized on invoices. In those meetings, substantially all the vendors acknowledged the fees previously charged and none indicated that they would seek any refund based upon the past practice. Subsequently, on November 26, 2002, the Company notified all of its vendors and brokers (including but not limited to those with whom the Company had met in person) in writing of its prior and current practices related to count−recount. As of the date of these financial statements, none of its vendors or their brokers is requesting a return of any of the historical count−recount Charges assessed, and none has indicated they will make a reduction in future promotional funding.

SEC Investigation

On October 9, 2002, the Company received a letter from the staff of the Division of Enforcement of the SEC indicating that they were conducting an informal inquiry into the Company's process for assessing count−recount charges to the Company's vendors and how it accounts for those charges. In response, the Company commenced an internal review of its practices in conjunction with the Audit Committee, special outside counsel and its prior and then−current auditors. The Company filed a written response to the inquiry on November 22, 2002.

On February 3, 2003, the Company provided the Office of the Chief Accountant of the SEC a written communication detailing the basis for the manner in which it assesses and accounts for count−recount charges, advising that the Company believes these charges were properly accounted for in accordance with generally accepted accounting principles, seeking the SEC staff's concurrence with this conclusion, and requesting a meeting with the staff of the Office of Chief Accountant at which these matters could be discussed. On February 4, 2003, the Company was notified by the staff of the SEC's Division of Enforcement that the SEC had approved a formal order of investigation of the Company

Representatives of the Company met with members of the staff of the SEC's Office of the Chief Accountant and Division of Corporation Finance on February 19, 2003. In a letter dated March 7,

47 2003, the staffs of the SEC's Office of the Chief Accountant and Division of Corporation Finance indicated that, based on the Company's oral and written representations, they would not object at that time to the Company's accounting for the count−recount charges. The investigation by the SEC's Division of Enforcement is ongoing and the response by the staffs of the Office of the Chief Accountant and the Division of Corporation Finance does not preclude any action by the Division of Enforcement.

(4) Business Acquisitions

On March 5, 2002, the Company acquired two stores in Chilton and Kiel, Wisconsin through a cash purchase of 100% of the net assets. The acquisition of these stores resulted in goodwill of $1.9 million. Results of operations are included in the consolidated statements from the date of acquisition. The pro forma effects of the acquisition are immaterial for disclosure.

On August 13, 2001, the Company acquired U Save Foods, Inc. ("U Save"), through a cash purchase of 100% of U Save's outstanding capital stock. U Save was a privately held retail grocery store chain operating 14 stores, primarily in Nebraska, with annual sales of approximately $145 million. The acquisition resulted in goodwill of $35.6 million which is not required to be amortized in accordance with SFAS No. 142. Results of operations are included in the consolidated statements from the date of acquisition. The pro forma effects of the acquisition are immaterial for disclosure.

On January 30, 2000 the Company acquired Hinky Dinky Supermarkets, Inc. ("Hinky Dinky") through a cash purchase of all of Hinky Dinky's outstanding capital stock. Hinky Dinky was a majority owner of twelve supermarkets located in Nebraska with annualized sales of approximately $90 million. Assets and liabilities assumed have been recorded at their fair values at the date of acquisition resulting in goodwill of $14.2 million, which is not required to be amortized in accordance with SFAS No. 142. Results of operations are included in the consolidated statements from the date of acquisition. The pro forma effects of the acquisition are immaterial for disclosure.

(5) Special Charges

The Company recorded special charges totaling $31.3 million in 1997 and $71.4 million (offset by $2.9 million of 1997 charge adjustments) in 1998. These charges impacted the Company's food distribution and retail segments and the produce growing and marketing business which was sold in 1999, and were designed to redirect the Company's technologies efforts. All actions contemplated by the charges are complete. At December 28, 2002, the remaining accrued liability is $2.6 million and consists primarily of lease commitments and pension and post−employment related obligations.

During the third quarter of fiscal 2002, the Company reversed $0.63 million and $0.13 million of its 1998 and 1997 special charges, respectively, due to an agreement reached to buyout the remaining lease for less than what we had originally estimated. In addition, during fiscal 2002, the Company recorded $0.9 million of pension benefits related to the distribution segment and $2.5 million in continuing lease and exit costs related to closed retail stores through its 1997 and 1998 special charge reserves.

(6) Impairment Charges

Impairment charges of $6.6 million and $1.9 million were recorded for retail impairments in fiscal 2002 and 2001, respectively. These charges were recorded with respect to fifteen stores in fiscal 2002 and five stores in fiscal 2001 due to increased competition within the stores respective market areas. The estimated undiscounted cash flows related to these facilities indicated that the carrying value of the assets may not be recoverable based on current expectations, therefore these assets were written down in accordance with SFAS No. 144.

48 (7) Accounts and Notes Receivable

Accounts and notes receivable at the end of fiscal years 2002 and 2001 are comprised of the following components (in thousands):

2002 2001

Customer notes receivable, current $ 14,571 $ 11,976 Customer accounts receivable 140,960 147,869 Other receivables 36,729 31,296 Allowance for doubtful accounts (26,733) (22,987)

Net current accounts and Notes receivable 165,527 168,154

Long−term customer notes receivable 29,261 45,299 Other noncurrent receivables 3,626 4,070 Allowance for doubtful accounts (291) (8,502)

Net long−term notes receivable $ 32,596 $ 40,867

Operating results include bad debt expense totaling $9.0 million, $4.8 million and $7.4 million during fiscal years 2002, 2001 and 2000, respectively. The increase in bad debt expense from fiscal 2001 to fiscal 2002 is primarily due to a former customer that has filed for bankruptcy. The decrease in bad debt expense from fiscal 2000 to fiscal 2001 is primarily due to a variety of accounts experiencing financial difficulty in fiscal 2000.

Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates. As a result, the carrying value of notes receivable approximates market value.

(8) Long−term Debt and Credit Facilities

Long−term debt at the end of the fiscal years 2002 and 2001 is summarized as follows (in thousands):

2002 2001

Revolving credit $ 79,400 $ 40,000 Term loan 100,000 100,000 Senior subordinated debt, 8.5% due in 2008 164,310 164,178 Industrial development bonds, 1.8% to 7.8% due in various installments through 2014 7,080 8,675 Notes payable and mortgage notes, 3% to 11.5% due in various installments through 2018 11,995 12,175

362,785 325,028 Less current maturities 5,193 3,267

$ 357,592 $ 321,761

In December 2000, the Company completed the refinancing of a revolving credit facility. The credit agreement has a five year term and provides a $100 million term loan and $150 million in revolving credit. Borrowings under the term loan bear interest at the Eurodollar rate plus a margin increase and a commitment commission on the unused portion of the revolver. The margin increase and the commitment commission are reset quarterly based on movement of a leverage ratio defined by the agreement. At December 28, 2002, the margin and commitment commission were 2.0% and 0.5%, respectively compared to 1.75% and 0.375% at the end of 2001. The agreement contains financial

49 covenants which, among other matters require the Company to maintain predetermined ratio levels related to interest coverage, fixed charges, leverage and working capital.

The refinancing resulted in the write−off of deferred financing costs, associated with the previous facility, which have been classified as an extraordinary charge in fiscal 2000 of $0.4 million, or $0.03 per share, net of tax benefit of $0.2 million.

At December 28, 2002, the Company had three outstanding interest rate swap agreements which commenced on December 6, 2001, July 26, 2002 and December 6, 2002, respectively to manage interest rates on a portion of its long−term debt. The agreements expire on June 6, 2003, September 25, 2004 and October 6, 2004 with notional amounts of $35 million, $50 million and $35 million, respectively. The agreements call for an exchange of interest payments with the Company making payments based on fixed rates of 2.97%, 2.75% and 3.5% for the respective time intervals and receiving payments based on floating rates, without an exchange of the notional amount upon which the payments are based. Interest rate swap agreements are reflected at fair value in the Company's consolidated balance sheet and related losses of $1.2 million net of income taxes are deferred in stockholders' equity as a component of other comprehensive income.

In addition, the Company entered into an additional interest rate swap agreement commencing on June 6, 2003 and expiring on October 6, 2004, with a notional amount of $35 million. The agreement calls for an exchange of interest payments with the Company making payments based on a fixed rate of 3.97% and receiving payments based on a floating rate, without an exchange of the notional amount upon which the payments are based.

The Company has outstanding letters of credit in the amounts of $17.4 million and $18.7 million at December 28, 2002 and December 29, 2001, respectively, primarily supporting workers' compensation obligations.

At December 28, 2002, land in the amount of $1.8 million and buildings and other assets with a depreciated cost of approximately $7.1 million are pledged to secure outstanding mortgage notes and obligations under issues of industrial development bonds. In addition, borrowings under the credit facility are collaterized by a security interest in substantially all remaining assets not pledged under other debt agreements, including those of wholly owned subsidiaries.

Aggregate annual maturities of long−term debt for the five fiscal years after December 28, 2002 are as follows (in thousands):

2003 $ 5,193 2004 1,973 2005 181,409 2006 2,191 2007 738 Thereafter 171,281 Interest paid was $28.4 million, $32.4 million and $37.9 million, for fiscal years 2002, 2001 and 2000, respectively.

Based on borrowing rates currently available to the Company for long−term financing with similar terms and average maturities, the fair value of long−term debt, including current maturities, utilizing discounted cash flows is $312.8 million.

On February 13, 2003 the Company was notified by the Trustee for its $165.0 million 8.5% Senior Subordinated Notes, due in 2008, that a default had occurred under the Indenture as a result of the Company's failure to file its Form 10−Q for the third quarter ended October 5, 2002 with the SEC and that, unless remedied within the 30 day grace period, such failure would constitute an event of default

50 under the Indenture. In addition, if the default was not remedied within the 30 days, an event of default would also occur under the bank credit facility.

On February 28, 2003 the Company announced that holders of more than 51% of its Senior Subordinated Notes agreed to waive the default under the Indenture. The waiver requires the Company to file our Form 10−Q for the third fiscal quarter of 2002 by May 15, 2003. Such holders also agreed to extend the time for the Company to file its Form 10−K for its fiscal year ended December 28, 2002 until May 30, 2003 and its Form 10−Q for the first fiscal quarter ended March 22, 2003 until June 15, 2003. In consideration for the waiver, the Company paid a fee to the bondholders equal to 1.5% of the outstanding principal amount of the notes.

On March 26, 2003, the Company announced that the requisite number of bank lenders under its revolving credit facility had agreed to extend until June 15, 2003 the deadline for submission to the lenders of its audited fiscal 2002 financial statements. The credit agreement had originally called for the Company to provide to its lenders its audited financial statements for fiscal 2002 by March 28, 2003. In consideration for the amendment to the credit facility, the Company paid a fee to the bank lenders equal to 0.5% of the sum of its revolving loan commitments and aggregate outstanding term loans as of the effective date of the amendment.

(9) Derivative Instruments

Effective December 31, 2000, the Company adopted Financial Accounting Standard Board Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (Statement No.133) as amended. SFAS No. 133 requires derivatives be carried at fair value on the balance sheet and provides for hedge accounting when certain conditions are met.

The interest rate swap and commodity swap agreements are designated as cash flow hedges and are reflected at fair value in the Company's consolidated balance sheet and the related gains or losses on these contracts are deferred in stockholders' equity as a component of other comprehensive income. Deferred gains and losses are amortized as an adjustment to expense over the same period in which the related items being hedged are recognized in income. However, to the extent that any of these contracts are not considered to be perfectly effective in offsetting the change in the value of the items being hedged, any changes in fair value relating to the ineffective portion of these contracts are immediately recognized in income.

Interest rate swap agreements are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. At December 28, 2002, the Company had three outstanding interest rate swap agreements which commenced on December 6, 2001, July 26, 2002 and December 6, 2002, respectively to manage interest rates on a portion of its long−term debt. The agreements expire on June 6, 2003, September 25, 2004 and October 6, 2004 with notional amounts of $35 million, $50 million and $35 million, respectively. The agreements call for an exchange of interest payments with the Company making payments based on fixed rates of 2.97%, 2.75% and 3.5% for the respective time intervals and receiving payments based on floating rates, without an exchange of the notional amount upon which the payments are based.

51 In addition, at December 28, 2002, the Company had an outstanding commodity swap agreement, expiring in August 2003 with a notional amount of 3,500 barrels per month, or approximately 40% of the Company's monthly fuel consumption to manage the Company's commodity price risk associated with anticipated purchases of diesel fuel. Interest rate and commodity swap agreements are reflected at fair value in the Company's consolidated balance sheet and related losses of $1.2 million net of income taxes are deferred in stockholders' equity as a component of other comprehensive income. The Company expects $0.8 million of the losses deferred in other comprehensive income to reverse during fiscal 2003.

(10) Income Taxes

Income tax expense attributable to continued operations is made up of the following components (in thousands):

2002 2001 2000

Current: Federal $ 6,575 $ 10,643 $ 5,490 State 1,205 2,114 1,091 Tax credits (62) (11) (7) Deferred: 11,834 2,279 5,085

Total $ 19,552 $ 15,025 $ 11,659

Total income tax expense is allocated as follows:

2002 2001 2000

Income from continuing operations $ 19,552 $ 15,025 $ 11,659 Cumulative effect of change in accounting principle (4,450) — — Extraordinary item — — (271)

Total income tax expense $ 15,102 $ 15,025 $ 11,388

Income tax expense differed from amounts computed by applying the federal income tax rate to pre−tax income as a result of the following:

2002 2001 2000

Federal statutory tax rate 35.0% 35.0% 35.0% State taxes, net of federal income tax benefit 3.9 4.2 4.2 Non−deductible goodwill — 2.9 3.7 Other net 0.1 (0.7) (0.5)

Effective tax rate 39.0% 41.4% 42.4%

Income taxes paid (refunded) were $9.2 million, $4.6 million and $(0.4) million during fiscal years 2002, 2001 and 2000, respectively.

52 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 28, 2002 and December 29, 2001, are presented below (in thousands):

2002 2001

Deferred tax assets: Inventories $ 346 $ 954 Provision for obligations to be settled in future periods 34,917 33,841 Closed locations 2,099 2,000 Other 1,179 2,215

Total deferred tax assets 38,541 39,010

Deferred tax liabilities: Depreciation and amortization 13,723 8,527 Acquired asset adjustments for fair values 10,305 9,590 Accelerated tax deductions 523 1,437 Other — 1,159

Total deferred tax liabilities 24,551 20,713

Net deferred tax asset $ 13,990 $ 18,297

Temporary differences for obligations to be settled in the future consist of deferred compensation, vacation, health benefits and other expenses which are not deductible for tax purposes until paid.

The Company has determined a valuation allowance for the net deferred tax asset is not required since it is more likely than not the deferred tax asset will be realized through carryback to taxable income in prior years, future reversals of existing taxable temporary differences, future taxable income and tax planning strategies.

(11) Stockholder Rights Plan

Under the Company's 1996 Stockholder Rights Plan, one right is attached to each outstanding share of common stock. Each right entitles the holder to purchase, under certain conditions, one−half share of common stock at a priceof $30.00 ($60.00 per full share). The rights are not yet exercisable and no separate rights certificates have been distributed. All rights expire on March 31, 2006.

The rights become exercisable 20 days after a "flip−in event" has occurred or 10 business days (subject to extension) after a person or group makes a tender offer for 15% or more of the Company's outstanding common stock. A flip−in event would occur if a person or group acquires (1) 15% of the Company's outstanding common stock, or (2) an ownership level set by the Board of Directors at less than 15% if the person or group is deemed by the Board of Directors to have interests adverse to those of the Company and its stockholders. The rights may be redeemed by the Company at any time prior to the occurrence of a flip−in event at $.01 per right. The power to redeem may be reinstated within 20 days after a flip−in event occurs if the cause of the occurrence is removed.

Upon the rights becoming exercisable, subject to certain adjustments or alternatives, each right would entitle theholder (other than the acquiring person or group, whose rights become void) to purchase a number of shares of the Company's common stock having a market value of twice the exercise price of the right. If the Company is involved in a merger or other business combination, or certain other events occur, each right would entitle the holder to purchase common shares of the acquiring company having a market value of twice the exercise price of the right. Within 30 days after the rights become exercisable following a flip−in event, the Board of Directors may exchange shares of Company common stock or cash or other property for exercisable rights.

53 (12) Stock−Based Compensation Plans

The Company follows APB 25 and related interpretations in accounting for its employee stock options. Under APB 25, when the exercise price of employee stock options equals the market price of the underlying stock on the date of the grant, no compensation expense is recognized.

The Company has four stock incentive plans under which incentive stock options, non−qualified stock options and other forms of stock−based compensation have been, or may be, granted primarily to key employees and non−employee members of the Board of Directors. Under the 1995 Director Stock Option Plan ("1995 Plan"), each non−employee director receives an annual grant of a non−qualified stock option covering 5,000 shares of the Company's common stock. Each option has an exercise price equal to the fair market value of a share of the Company's stock on the date of grant, becomes fully exercisable six months after the date of grant, and has a five year term. The Company also maintains the 1997 Non−Employee Director Stock Compensation Plan under which each non−employee director receives one−half of his or her annual retainer in shares of Company common stock. Each director may also defer receipt of those shares as well as some or all of the balance of his or her annual director compensation until his or her service as a director has ended, and may elect payout of the cash amounts deferred in shares of Company common stock.

Under the 1994 Stock Incentive Plan ("1994 Plan"), employees of the Company could be awarded stock options, shares of restricted stock or performance units payable in cash, stock or both. An award under the 1994 Plan was generally an incentive stock option that had an exercise price equal to the fair market value of a share of the Company's stock on the date of grant, that became exercisable as to 20% of the shares covered by the option on the grant date and 12, 24, 36 and 48 months thereafter, and that had a term no longer than 10 years. No further awards of any kind may be made under the 1994 Plan.

Under the 2000 Stock Incentive Plan ("2000 Plan"), employees, non−employee directors and consultants may be awarded incentive or non−qualified stock options, shares of restricted stock, stock appreciation rights, performance units or stock bonuses. To date, only employees have received awards under the 2000 Plan, and those awards have commonly been non−qualified stock options with terms comparable to those of options granted under the 1994 Plan, except that any option is first exercisable six months after the date of the grant. Awards of restricted stock in lieu of cash have been made under the 2000 Plan to certain employees in connection with the Company's annual bonus program for executives, with such shares subject to a one−year vesting period. In addition, an award of 50,000 restricted shares was made to the Company's CEO in February 2002, with 20% of such shares vesting on each of the first five anniversaries of the grant date. Under terms of the award, he has voting power over all of the shares, and is entitled to receive ordinary cash dividends paid generally to shareholders. The award also provides for a cash payment on each vesting date in an amount equal to forty percent of the fair market value of the shares vesting at that time to partially offset the taxes due upon vesting. Compensation expense is recognized over the periods during which the restrictions lapse. Performance units have also been granted to three executives in exchange for phantom stock units those executives had accrued under a now discontinued bonus and deferred compensation plan.

The Company also maintains the 1999 Employee Stock Purchase Plan under which Company employees may purchase shares of Company common stock at the end of each offering period at a price equal to 85% of the lesser of the fair market value of a share of the Company's common stock at the beginning or end of such offering period. An offering period under the plan is typically six months, although the Board of Directors extended the offering period that commenced July 1, 2002 until June 30, 2003. Employees purchased 43,026, 92,253 and 69,170 shares in fiscal 2002, 2001 and 2000, respectively, under this plan. At December 28, 2002 179,519 shares of additional common stock were available for purchase under the plan.

54 Changes in outstanding options under the 1995 Plan, the 1994 Plan and the 2000 Plan during the three fiscal years ended December 28, 2002 are summarized as follows:

Weighted Average Option Price Shares Per Share

(in thousands)

Options outstanding January 1, 2000 613 $ 13.15 Exercised — — Forfeited (188) 9.72 Granted 519 9.01

Options outstanding December 30, 2000 944 11.56 Exercised (130) 13.63 Forfeited (137) 13.96 Granted 469 21.36

Options outstanding December 29, 2001 1,146 15.04 Exercised (29) 11.94 Forfeited (126) 21.22 Granted 354 29.93

Options outstanding December 28, 2002 1,345 $ 18.45

Stock options totaling 734,474 and 454,684 were exercisable at December 28, 2002 and December 29, 2001, respectively.

The following tables summarize information concerning currently outstanding and exercisable stock options at December 28, 2002:

Options Outstanding

Weighted Average Weighted Remaining Average Number Contractual Exercise Ranges of Exercise Prices Outstanding Life Price

$ 7.25 − 14.50 486,250 2.51 $ 9.15 14.50 − 21.75 247,224 3.73 16.73 21.75 − 29.00 351,050 3.59 22.84 29.00 − 36.25 260,000 4.50 31.52

1,344,524 3.40 $ 18.45

Options Exercisable

Weighted Average Number Exercise Ranges of Exercise Prices Exercisable Price

$ 7.25 − 14.50 296,950 $ 8.93 14.50 − 21.75 244,824 16.71 21.75 − 29.00 147,500 22.49 29.00 − 36.25 45,200 31.19

734,474 $ 15.62

The weighted average fair value of options granted during 2002, 2001 and 2000 are $8.42, $6.81 and $1.99 respectively. The fair value of each option grant is estimated as of the date of grant using the

55 Black−Scholes single option pricing model assuming a weighted average risk−free interest rate of 2.74%, an expected dividend yield of 4.66%, expected lives of two and one−half years and volatility of 55%. Pro forma compensation cost for the stock incentive plans would reduce our net income as described in the "Summary of Significant Accounting Policies" as required by SFAS No. 148.

(13) Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for continuing operations (in thousands, except per share amounts):

2002 2001 2000

Numerator: Earnings before extraordinary charge and cumulative effect of change in accounting principle $ 30,580 $ 21,267 $ 15,840

Denominator: Denominator for basic earnings per share (weighted−average shares) 11,796 11,624 11,443 Effect of dilutive options and awards 318 335 52

Denominator for diluted earnings per share (adjusted weighted−average shares) 12,114 11,959 11,495

Basic earnings per share $ 2.59 $ 1.83 $ 1.38

Diluted earnings per share $ 2.52 $ 1.78 $ 1.38

(14) Leases

A substantial portion of the store and warehouse properties of the Company are leased. The following table summarizes assets under capitalized leases (in thousands):

2002 2001

Buildings and improvements $ 42,040 $ 40,860 Less accumulated amortization (15,374) (13,334)

Net assets under capitalized leases $ 26,666 $ 27,526

Total future minimum sublease rents receivable related to operating and capital lease obligations as of December 28, 2002 are $71.2 million and $31.8 million, respectively. Future minimum payments for operating and capital leases have not been reduced by minimum sublease rentals receivable under

56 non−cancelable subleases. At December 28, 2002, future minimum rental payments under non−cancelable leases and subleases are as follows (in thousands):

Operating Capital leases leases

2003 $ 30,309 $ 7,906 2004 28,382 7,867 2005 25,134 7,734 2006 20,510 7,627 2007 17,890 7,591 Thereafter 78,373 58,466

Total minimum lease payments $ 200,598 $ 97,191

Less imputed interest (rates ranging from 7% to 24.6%) 47,103

Present value of net minimum lease payments 50,088 Less current maturities (2,304)

Capitalized lease obligations $ 47,784

Total rental expense under operating leases for fiscal years 2002, 2001 and 2000 is as follows (in thousands):

2002 2001 2000

Total rentals $ 43,858 $ 45,648 $ 43,431 Less real estate taxes, insurance and other occupancy costs (3,805) (3,378) (2,692)

Minimum rentals 40,053 42,270 40,739 Contingent rentals (175) (175) 51 Sublease rentals (14,092) (15,687) (15,575)

$ 25,786 $ 26,408 $ 25,215

Most of the Company's leases provide that the Company pay real estate taxes, insurance and other occupancy costs applicable to the leased premises. Contingent rentals are determined on the basis of a percentage of sales in excess of stipulated minimums for certain store facilities. Operating leases often contain renewal options. Management expects that, in the normal course of business, leases that expire will be renewed or replaced by other leases.

(15) Concentration of Credit Risk

The Company provides financial assistance in the form of loans to some of its independent retailers for inventories, store fixtures and equipment and store improvements. Loans are generally secured by liens on real estate, inventory and/or equipment, personal guarantees and other types of collateral, and are generally repayable over a period of five to seven years. The Company establishes allowances for doubtful accounts based upon periodic assessments of the credit risk of specific customers, collateral value, historical trends and other information. The Company believes that adequate provisions have been recorded for any doubtful accounts. In addition, the Company may guarantee lease and debt obligations of retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements.

57 As of December 28, 2002, one retailer comprises 29.9% of the Company's notes receivable balance. In addition, the Company has guaranteed outstanding debt and lease obligations of a number of retailers in the amount of $26.5 million, including $13.5 million in loan guarantees to two larger retailers.

(16) Fair Value of Financial Instruments

The estimated fair value of notes receivable approximates the carrying value at December 28, 2002 and December 29, 2001. Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates.

The estimated fair value of the Company's long−term debt, including current maturities, was $312.8 million and $316.0 million at December 28, 2002 and December 29, 2001, respectively, utilizing discounted cash flows.

The estimated fair value of the Company's interest rate swap agreements is the estimated amount the Company would have to pay or receive to terminate the agreements based upon quoted market prices as provided by the financial institutions which are counter parties to the agreements.

The estimated fair value of the Company's commodity fuel hedge agreement is the estimated amount the Company would have to pay or receive to terminate the agreement based upon quoted market prices as provided by the financial institution which is the counterparty to the commodity agreement.

(17) Commitments and Contingencies

Shareholder Litigation

Between December 2002 and March 2003, seven class action lawsuits were filed against the Company and certain of its executive officers in the United States District Court for the District of Minnesota on behalf of purchasers of the Company's common stock during the period from February 23, 2000 through February 4, 2003. The complaints generally allege that the defendants violated the Securities Exchange Act of 1934 by issuing false statements, including false financial results in which the Company included income from vendor promotions to which the Company was not entitled, so as to maintain favorable credit ratings on its debt. Three derivative actions have also been filed in state court in Minnesota by shareholders alleging that certain officers and directors violated duties to the Company to oversee and administer the Company's accounting. These actions are directly tied to the allegations in the federal securities actions. The Company believes that the lawsuits are without merit and intends to vigorously defend the actions. No damages have been specified. The Company is unable to evaluate the likelihood of prevailing in the case at this early stage of the proceedings, but does not believe that the eventual outcome will have a material impact on its financial position or results of operations.

SEC Investigation

On October 9, 2002, the Company received a letter from the staff of the Division of Enforcement of the SEC indicating that they were conducting an informal inquiry into our process for assessing count−recount charges to the Company's vendors and how it accounts for those charges. In response, it commenced an internal review of its practices in conjunction with the Audit Committee, special outside counsel and its prior and then−current auditors. The Company filed a written response to the inquiry on November 22, 2002.

58 On February 3, 2003, the Company provided the Office of the Chief Accountant of the SEC a written communication detailing the basis for the manner in which it assesses and accounts for count−recount charges, advising that the Company believes these charges were properly accounted for in accordance with generally accepted accounting principles, seeking the SEC staff's concurrence with this conclusion, and requesting a meeting with the staff of the Office of Chief Accountant at which these matters could be discussed. On February 4, 2003, the Company was notified by the staff of the SEC's Division of Enforcement that the SEC had approved a formal order of investigation of the Company.

Representatives of the Company met with members of the staff of the SEC's Office of the Chief Accountant and Division of Corporation Finance on February 19, 2003. In a letter dated March 7, 2003, the staffs of the SEC's Office of the Chief Accountant and Division of Corporation Finance indicated that, based on our oral and written representations, they would not object at that time to the Company's accounting for the count−recount charges. The investigation by the SEC's Division of Enforcement is ongoing and the response by the staffs of the Office of the Chief Accountant and the Division of Corporation Finance does not preclude any action by the Division of Enforcement.

(18) Long−Term Compensation Plans

The Company has a profit sharing plan which includes a 401(k) feature, covering substantially all employees meeting specified requirements. Contributions, determined by the Board of Directors, are made to a noncontributory profit sharing trust based on profit performances. Profit sharing expense for 2002, 2001 and 2000 was $4.7 million, $4.9 million and $3.3 million, respectively. Effective January 1, 2003, the Company added a Company match feature to its 401(k) plan. The contribution expense for the 401(k) plan will be netted against the profit sharing plan before contributions are made to the noncontributory profit sharing trust.

On January 1, 2000, the Company adopted a Supplemental Executive Retirement Plan ("SERP") for key employees and executive officers. On the last day of the calendar year, each participant's SERP account is credited with an amount equal to 20% of the participant's base salary for the year. Benefits payable under the SERP vest based on years of participation in the SERP, ranging from 0% vested for less than five years of participation to 100% vested at 10 years' participation (or age 60 if that occurs sooner). Amounts credited to a SERP account, plus earnings, are distributed following the executive's termination of employment. Earnings are based on the quarterly equivalent of the average of the annual yield set forth for each month during the quarter in the Moody's Corporate Bond Yield Averages. Compensation expense related to the plan was $0.6 million, $0.5 million and $0.5 million in 2002, 2001 and 2000, respectively.

The Company also has an income deferral plan for a select group of management or highly compensated employees. The plan is an unfunded pension plan which permits eligible executives to defer receipt of a portion of the base salary or annual bonus that would otherwise be paid to them. The deferred amounts, plus earnings, are distributed following the executive's termination of employment. Earnings are based on the quarterly equivalent of the average of the annual yield set forth for each month during the quarter in the Moody's Corporate Bond Yield Averages.

(19) Pension and Other Post−retirement Benefits

The Company has a qualified non−contributory retirement plan to provide retirement income for certain eligible full−time employees who are not covered by a union retirement plan. Pension benefits under the plan are based on length of service and compensation. The Company contributes amounts necessary to meet minimum funding requirements. This plan has been curtailed and no new employees can enter the plan.

The Company provides certain health care benefits for retired employees not subject to collective bargaining agreements. Employees become eligible for those benefits when they reach normal

59 retirement age and meet minimum age and service requirements. Health care benefits for retirees are provided under a self−insured program administered by an insurance company.

The accumulated postretirement benefit obligation was reduced by $9.1 million in 2002 due to a plan amendment effective June 20, 2002. The amendment to the plan: (1) froze entry into the plan for employees hired after June 30, 2002, (2) eliminated coverage for employees whose age plus service were less than 50 as of June 30, 2002, and (3) capped the medical benefits to be provided effective July, 1, 2002 at $175 a month for pre−65 retirees and $70 a month for post−65 retirees.

The estimated future cost of providing post−retirement health costs is accrued over the active service life of the employees. The following table sets forth the benefit obligations and funded status of the curtailed pension plan and post−retirement benefits.

The actuarial present value of benefit obligations and funded plan status of December 28, 2002 and December 29, 2001 were (in thousands):

PENSION BENEFITS OTHER BENEFITS

2002 2001 2002 2001

Change in benefit obligation Benefit obligation at beginning of year $ (37,434) $ (35,634) $ (22,377) $ (22,400) Service cost (42) (61) (402) (1,122) Interest cost (2,759) (2,716) (737) (1,420) Amendment — — 9,050 (347) Participant contributions — — (808) (778) Actuarial (loss) gain (3,599) (1,696) 3,255 1,079 Benefits paid 2,720 2,673 2,820 2,611

Benefit obligation at end of year (41,114) (37,434) (9,199) (22,377)

Change in plan assets Fair value of plan assets at beginning of year 36,034 38,799 — — Actual return on plan assets (402) (92) — — Contributions to plan — — 2,820 2,611 Benefits paid (2,720) (2,673) (2,820) (2,611)

Fair value of plan assets at end of year 32,912 36,034 — —

Funded status (8,202) (1,400) (9,199) (22,377) Unrecognized actuarial loss (gain) 10,608 4,202 5,298 9,082 Unrecognized transition obligation — — — 2,719 Unrecognized prior service cost (76) (91) (4,788) 992

Prepaid (accrued) benefit cost $ 2,330 $ 2,711 $ (8,689) $ (9,584)

PENSION BENEFITS OTHER BENEFITS

2002 2001 2002 2001

Weighted−average assumptions Discount rate 6.75% 7.50% 6.75% 7.50% Expected return on plan assets 8.00% 8.00% — — Rate of compensation increase 4.00% 5.00% — — At December 28, 2002 the accumulated benefit obligation exceeded the plan assets. Accordingly, the Company recorded an additional minimum liability in the amount of $6.5 million, the offset of which is recorded, net of tax benefit of $2.6 million, as a reduction of comprehensive income. At December 29, 2001 the Company recorded an additional minimum liability in the amount of $4.0 million, the offset of which is recorded, net of a tax benefit of $1.6 million, as a reduction of comprehensive income.

60 The aggregate costs for the Company's retirement benefits included the following components (in thousands):

Components of net periodic benefit cost (income)

PENSION BENEFITS OTHER BENEFITS

2002 2001 2000 2002 2001 2000

Service cost $ 42 $ 61 $ 92 $ 402 $ 1,122 $ 887 Interest cost 2,759 2,716 2,675 737 1,420 1,509 Expected return on plan assets (2,448) (2,673) (2,900) — — — Amortization of prior service costs (15) (15) (15) — — — Recognized actuarial (gain) loss 43 — — — — — Amortization of unrecognized transition obligation — — — (22) 828 688 Amortization of unrecognized net (gain) loss — — (24) — — —

Net periodic benefit cost (income) $ 381 $ 89 $ (172) $ 1,117 $ 3,370 $ 3,084

Assumed health care cost trend rates have a significant effect on the 2002 amounts reported for the health care plans. The assumed annual rate of future increases in per capita cost of health care benefits was 10.0% in fiscal 2002 declining gradually to 5.5% in 2008 and thereafter. A one−percentage point change in assumed health care cost trend rates would have the following effects (in thousands):

1% 1% Increase Decrease

Effect on total of service and interest cost components $ 24 (22) Effect on post−retirement benefit obligation 207 (192) Approximately 4.6% of the Company's employees are covered by collectively−bargained pension plans. Contributions are determined in accordance with the provisions of negotiated union contracts and are generally based on the number of hours worked. The Company does not have the information available to reasonably estimate its share of the accumulated plan benefits or net assets available for benefits under the multi−employer plans. Amounts contributed to those plans were $2.3 million, $2.3 million and $2.5 million in 2002, 2001 and 2000, respectively.

(20) Segment Information

The Company and its subsidiaries sell and distribute products that are typically found in supermarkets. The Company has three reportable operating segments. The Company's food distribution segment consists of 15 distribution centers that sell to independently operated retail food stores, 109 corporate−owned retail food stores, and institutional customers. The retail segment consists of corporate−owned stores that sell directly to the consumer. The military distribution segment consists of two distribution centers that sell products exclusively to military commissaries.

Information presented below relates only to results of continuing segments. The Company evaluates segment performance and allocates resources based on profit or loss before income taxes, general corporate expenses, interest, restructuring charges and earnings from equity investments. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies except the Company accounts for inventory on a FIFO basis at the segment level compared to a LIFO basis at the consolidated level.

Inter−segment sales are recorded on a market price−plus−fee and freight basis. For segment financial reporting purposes, a portion of the operational profits recorded at the Company's distribution centers related to corporate−owned stores is allocated to the retail segment. Certain

61 revenues and costs from the Company's distribution centers are specifically identifiable to either the independent or corporate−owned stores that they serve. The revenues and costs that are specifically identifiable to corporate−owned stores are allocated to the retail segment. Those that are specifically identifiable to independent customers are recorded in the wholesale segment. The remaining revenues and costs that are not specifically identifiable to either the independent or corporate−owned stores are allocated to the retail segment as a percentage of corporate−owned store distribution sales to total distribution center sales. For fiscal 2002, 37% of such warehouse operational profits were allocated to the retail operations compared to 34% and 36% in 2001 and 2000, respectively. Prior year's segment information has been restated to reflect reclassifications of certain transactions from revenues to expense or cost of sales, changes in the method of allocating marketing revenues, and an allocation of a military management fee to the military segment.

Schedules

Year end December 28, 2002 Food (in thousands) Distribution Retail Military Total

Revenue from external customers $ 1,825,788 $ 1,028,174 $ 1,020,710 $ 3,874,672 Inter−segment revenue 553,287 — — 553,287 Interest revenue (454) (338) — (792) Interest expense (includes capital lease interest) (443) 3,302 — 2,859 Depreciation and amortization expense 10,507 12,851 1,420 24,778 Segment profit 61,493 33,738 30,336 125,567 Segment assets 379,166 160,673 132,170 672,009 Expenditures for long−lived assets 8,126 22,894 1,604 32,624

Year end December 29, 2001 Food (in thousands) Distribution Retail Military Total

Revenue from external customers $ 1,951,384 $ 1,035,154 $ 995,668 $ 3,982,206 Inter−segment revenue 575,301 — — 575,301 Interest revenue (741) (339) — (1,080) Interest expense (includes capital lease interest) (724) 2,847 — 2,123 Depreciation and amortization expense 12,427 12,771 1,373 26,571 Segment profit 60,717 38,751 31,366 130,834 Segment assets 386,088 169,051 133,223 688,362 Expenditures for long−lived assets 20,484 8,909 1,721 31,114

Year end December 30, 2000 Food (in thousands) Distribution Retail Military Total

Revenue from external customers $ 1,841,653 $ 1,028,961 $ 968,885 $ 3,839,499 Inter−segment revenue 584,216 — — 584,216 Interest revenue (2,724) (349) — (3,073) Interest expense (includes capital lease interest) (221) 2,469 — 2,248 Depreciation and amortization expense 14,990 12,215 1,888 29,093 Segment profit 47,783 33,290 28,637 109,710 Segment assets 402,234 164,202 139,329 705,765 Expenditures for long−lived assets 11,273 33,931 875 46,079

62 Reconciliation (In thousands)

2002 2001 2000

Revenues Total external revenue for segments $ 3,874,672 $ 3,982,206 $ 3,839,499 Inter−segment revenue from reportable segments 553,287 575,301 584,216 Elimination of intra−segment revenue (553,287) (575,301) (584,216)

Total consolidated revenues $ 3,874,672 $ 3,982,206 $ 3,839,499

Profit or Loss Total profit for segments $ 125,567 $ 130,834 $ 109,710 Unallocated amounts: Adjustment of LIFO to inventory 2,234 (2,661) 1,092 Unallocated corporate overhead (78,434) (91,881) (83,303) Special charges 765 — —

Income before income taxes $ 50,132 $ 36,292 $ 27,499

Assets Total assets for segments $ 672,009 $ 688,362 $ 705,765 Unallocated corporate assets 328,643 338,907 226,959 Accumulated LIFO reserves (45,519) (47,753) (45,092) Elimination of intercompany receivables (7,141) (9,271) (6,804)

Total consolidated assets $ 947,992 $ 970,245 $ 880,828

Other Significant Items—2002

Segment Consolidated Totals Adjustments Totals

Depreciation and amortization expense $ 24,778 $ 15,210 $ 39,988 Interest expense 2,859 26,631 29,490 Expenditures for long−lived assets 32,624 19,981 52,605

Other Significant Items—2001

Segment Consolidated Totals Adjustments Totals

Depreciation and amortization expense $ 26,571 $ 20,030 $ 46,601 Interest expense 2,123 32,180 34,303 Expenditures for long−lived assets 31,114 12,810 43,924

Other Significant Items—2000

Segment Consolidated Totals Adjustments Totals

Depreciation and amortization expense $ 29,093 $ 16,237 $ 45,330 Interest expense 2,248 32,196 34,444 Expenditures for long−lived assets 46,079 7,987 54,066

63 The reconciling items to adjust expenditures for depreciation, interest revenue, interest expense and expenditures for long−lived assets are for unallocated general corporate activities. All revenues are attributed to and all assets are held in the United States. The Company's market areas are in the Midwest, Mid−Atlantic and Southeast United States.

(21) Subsidiary Guarantees

The following table presents summarized combined financial information for certain wholly owned subsidiaries which guarantee on a full unconditional and joint and several basis, $165.0 million of senior subordinated notes due May 1, 2008, which were offered and sold by the Company on April 24, 1998:

Summarized financial information for the year ended December 28, 2002 (in thousands):

Nash Guarantor Finch Subsidiaries Elimination Consolidated

Current assets $ 331,992 $ 141,829 $ (5,540) $ 468,281 Non−current assets 655,153 47,041 (222,553) 479,641 Current liabilities 279,120 37,450 (7,314) 309,256 Non−current liabilities 410,654 23,542 (17,009) 417,187 Sales 3,027,101 1,057,740 (210,169) 3,874,672 Operating expenses 2,983,286 1,051,423 (210,169) 3,824,540 Operating profit 43,815 6,317 — 50,132 Net earnings 19,826 3,794 — 23,620 Summarized financial information for the year ended December 29, 2001 (in thousands):

Nash Guarantor Finch Subsidiaries Elimination Consolidated

Current assets $ 333,721 $ 145,507 $ 136 $ 479,364 Non−current assets 659,269 57,606 (225,994) 490,881 Current liabilities 348,358 48,150 (12,884) 383,624 Non−current liabilities 371,163 23,901 (11,851) 383,213 Sales 3,084,317 1,082,307 (184,418) 3,982,206 Operating expenses 3,065,258 1,065,074 (184,418) 3,945,914 Operating profit 20,099 16,193 — 36,292 Net earnings 11,495 9,772 — 21,267 Summarized financial information for the year ended December 30, 2000 (in thousands):

Nash Guarantor Finch Subsidiaries Elimination Consolidated

Current assets $ 282,800 $ 146,946 $ 3,793 $ 433,539 Non−current assets 554,965 106,331 (214,007) 447,289 Current liabilities 293,911 42,764 (11,889) 324,786 Non−current liabilities 334,370 44,944 (7,812) 371,502 Sales 2,897,595 1,099,719 (157,815) 3,839,499 Operating expenses 2,883,084 1,086,731 (157,815) 3,812,000 Operating profit 15,655 11,844 — 27,499 Net earnings 8,664 6,807 — 15,471 64

NASH FINCH COMPANY AND SUBSIDIARIES Quarterly Financial Information (Unaudited)

First Quarter 12 Weeks A summary of quarterly financial information is presented. Second Quarter Third Quarter Fourth Quarter (In thousands, except per share amounts) 2002 2001 2002 12 Weeks 2001 2002 16 Weeks 2001 2002 12 Weeks 2001

Sales(1) $ 894,575 $ 877,595 $ 908,266 $ 919,235 $ 1,191,072 $ 1,235,398 $ 880,759 $ 949,978 Cost of sales(1) 788,639 776,604 796,797 813,946 1,052,278 1,099,347 770,695 839,227 Earnings before income taxes and cumulative effect of change in accounting principle 11,291 5,554 15,795 9,016 10,508 10,320 12,538 11,402 Income taxes 4,505 2,299 6,302 3,733 3,854 4,272 4,891 4,721 Net earnings before cumulative effect of change in accounting principle 6,786 3,255 9,493 5,283 6,654 6,048 7,647 6,681 Cumulative effect of change in accounting principle, net of income tax benefit(2) (6,960) — — — — — — — Net earnings(2) (174) 3,255 9,493 5,283 6,654 6,048 7,647 6,681 Percent to sales and revenues(2) (0.02) 0.37 1.05 0.57 0.56 0.49 0.87 0.70 Basic earnings per share Earnings before cumulative accounting change $ 0.58 $ 0.28 $ 0.80 $ 0.46 $ 0.56 $ 0.52 $ 0.65 $ 0.57 Net earnings $ (0.01) $ 0.28 $ 0.80 $ 0.46 0.56 $ 0.52 $ 0.65 $ 0.57 Diluted earnings per share Earnings before cumulative accounting charge $ 0.56 $ 0.28 $ 0.78 $ 0.44 $ 0.55 $ 0.50 $ 0.64 $ 0.55 Net earnings $ (0.01) 0.28 $ 0.78 $ 0.44 $ 0.55 $ 0.50 $ 0.64 $ 0.55 (1) Commencing with the 3rd quarter of fiscal 2002, previously reported sales and cost of sales have been revised for all prior periods by reclassifying cost of sales against sales for facilitated services provided to independent retailers. The reclassification did not have an impact on gross profit, earnings before income taxes and extraordinary charge, net earnings, cash flows or financial position for any period or their respective trends. Refer to Note (1) under the caption "Revenue Recognition" for additional information.

(2) In the fourth quarter of fiscal 2002, the Company elected to early adopt the provisions of EITF 02−16, "Accounting by a Reseller for Cash Consideration Received from a Vendor," effective as of the beginning of fiscal 2002, and restated its results of operations for fiscal 2002 (see Note (1) Summary of Significant Accounting Policies under the caption "New Accounting Standards"). Net earnings for the Fiscal 2002 first quarter includes ($6,960) or ($0.59) per basic share and ($0.57) per diluted share, net of income taxes, for the cumulative effect of the adoption of EITF 02−16. Quarterly financial data for Fiscal 2002 as previously reported, prior to restatement for the adoption of EITF 02−16 is as follows:

First Second Third Quarter Quarter Quarter 2002 2002 2002

Sales $ 894,575 $ 908,266 $ 1,191,072 Cost of sales 792,389 801,288 1,053,610 Earnings before income taxes and cumulative effect of change in accounting principle 9,749 13,415 11,891 Income taxes 3,890 5,352 4,429 Net earnings before cumulative effect of change in accounting principle 5,859 8,063 7,462 Cumulative effect of change in accounting principle, net of income tax benefit — — — Net earnings 5,859 8,063 7,462 Basic earnings per share $ 0.50 $ 0.68 $ 0.63 Diluted earnings per share $ 0.48 $ 0.66 $ 0.61 65

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

Information regarding changes in our principal independent accountants during fiscal 2002 and the first fiscal quarter of 2003 is incorporated herein by reference to Exhibit 99.2.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A. DIRECTORS OF THE REGISTRANT.

Information Regarding Directors

The following information is provided concerning the directors of Nash Finch as of April 30, 2003:

Three−year terms expiring in 2003:

Jerry L. Ford Mr. Ford has been an independent business consultant since March 2000. Mr. Ford previously served as the Chief Development Officer of Jetways, Inc., a business aircraft management firm, from April 1, 1999 Director since 1997 through March 2000; as a consultant to Jetways, Inc. from November 1, 1998 until March 31, 1999; and Age 62 as Executive Vice President and Chief Operating Officer for Comdisco Network Services, a division of Comdisco, Inc., a computer network implementation and management firm, from June 30, 1994 until April 15, 1998. He also served in various management and officer positions with The Pillsbury Company and General Mills, Inc. Mr. Ford is a director of Western Horizons Resorts, Inc.

Robert F. Nash Mr. Nash retired in January 1996 as Vice President and Treasurer of Nash Finch, a position he had held for more than five years. Mr. Nash is retiring from the Board of Directors and will not stand for Director since 1968 re−election at the Annual Meeting of stockholders on July 8, 2003. Age 69

John E. Stokely Mr. Stokely has been an independent business consultant since August 1999. Mr. Stokely previously served as Chairman of the Board, President and Chief Executive Officer of Richfood Holdings, Inc., a Director since 1999 wholesale and retail food distributor, from 1998 to August 1999, after holding various senior executive Age 50 positions at Richfood between 1991 and 1999, including President from 1995 until August 1999, and Chief Executive Officer from 1996 until August 1999. Mr. Stokely also serves as a director of Performance Food Group Company, SCP Pool Corporation and Transaction Systems Architects, Inc.

Three year terms expiring in 2004:

Allister P. Graham Mr. Graham retired in September 1998 as the Chief Executive Officer of The Oshawa Group Limited, a food distributor in Canada, a position he held for more than five years. He retired in February 1999 as the Director since 1992 Chairman and a director of The Oshawa Group Limited as a result of a change of control. Mr. Graham Age 67 also serves as a director of Manulife Financial of Toronto, Canada.

66 Ron Marshall Mr. Marshall has served as the Chief Executive Officer of Nash Finch since June 1998, and served as the President of Nash Finch from June 1998 to September 2002. Mr. Marshall previously served as Executive Director since 1998 Vice President and Chief Financial Officer of Pathmark Stores, Inc., a retail grocery store chain, from Age 49 September 1994 to May 1998.

Laura Stein Ms. Stein has served as Senior Vice President and General Counsel of H. J. Heinz Company, a global marketer and manufacturer of branded food products, since January 2000. She previously served in Director since 2001 various positions in the Legal Services Department of The Clorox Company, a global manufacturer of Age 41 branded household products, from May 1992 to December 1999, last holding the position of Assistant General Counsel—Regulatory Affairs.

Three year terms expiring in 2005:

Carole F. Bitter Dr. Bitter has served as the President and Chief Executive Officer of Harold Friedman, Inc., an operator of retail supermarkets, since 1976. Director since 1993 Age 57

John H. Grunewald Mr. Grunewald retired in January 1997 as Executive Vice President, Finance and Administration of Polaris Industries, Inc., a manufacturer of recreational equipment, a position he had held since September Director since 1992 1993. Mr. Grunewald also serves as a director of Renaissance Learning, Inc. Age 66

William R. Voss Mr. Voss has served as Managing Director of Lake Pacific Partners, LLC, a private equity investment firm, since January 2000. From June 1999 to December 1999, he was an independent business consultant. Director since 1998 He previously served as Chairman of the Board, President and Chief Executive Officer of Natural Age 49 Nutrition Group, Inc., a manufacturer of organic and natural food products, from August 1995 until May 1999. Mr. Voss also serves as a director of Interphase Corporation.

William H. Weintraub Mr. Weintraub is currently an adjunct professor in the School of Journalism and Mass Communications at the University of Colorado at Boulder. He is also a frequent guest lecturer at several other universities and Director since 2002 he is Executive−in−Residence at the University of Colorado's Leeds School of Business. He was the Age 60 Senior Vice President of Marketing of the Coors Brewing Company from 1993 to 2002. His professional career also includes 15 years at Procter & Gamble Company, as well as chief marketing officer positions at Kellogg Company and Tropicana, Inc. Audit Committee Financial Experts

The Nash Finch Board of Directors has determined that four members of the Audit Committee, John E. Stokely, John H. Grunewald, Robert F. Nash and William R. Voss, qualify as "audit committee financial experts" as defined in Item 401(h) of Regulation S−K, and that each of those individuals is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act.

67 Code of Ethics

On April 15, 2003, the Nash Finch Board of Directors adopted a Code of Ethics for Senior Financial Management, which is applicable to its Chief Executive Officer, Executive Vice President and Chief Financial Officer, and Vice President and Corporate Controller. This document has been filed as Exhibit 14.1 to this report. This Code of Ethics supplements the Nash Finch Code of Ethics and Business Conduct applicable to all employees, including the three officers previously mentioned.

B. EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table sets forth information about our executive officers as of March 31, 2003:

Year First Elected or Appointed as an Name Age Executive Officer Title

Ron Marshall 49 1998 Chief Executive Officer Jerry L. Nelson 56 2000 President and Chief Operating Officer Christopher A. Brown 40 1999 Executive Vice President, Merchandising Robert B. Dimond 41 2000 Executive Vice President, Chief Financial Officer and Treasurer David J. Bersie 52 2002 Sr. Vice President, Food Distribution Bruce A. Cross 51 1998 Sr. Vice President, Business Transformation James R. Dorcy 43 2001 Sr. Vice President, Retail Kathleen E. McDermott 53 2002 Sr. Vice President, General Counsel and Secretary Rose M. Bailey 52 2001 Vice President, Human Resources William F. Harbecke 58 2002 Vice President, Real Estate and Construction Jeffrey E. Poore 44 2001 Vice President, Distribution and Logistics LeAnne M. Stewart 38 1999 Vice President and Corporate Controller

There are no family relationships between or among any of our executive officers or directors. Our executive officers are elected by the Board of Directors for one−year terms, commencing with their election at the first meeting of the Board of Directors immediately following the annual meeting of stockholders and continuing until the next such meeting of the Board of Directors.

Ron Marshall has served as our Chief Executive Officer and a director since June 1998 and as our President from June 1998 to September 2002. Mr. Marshall previously served as Executive Vice President and Chief Financial Officer of Pathmark Stores, Inc., a grocery store chain, from September 1994 to May 1998.

Jerry L. Nelson has served as our President and Chief Operating Officer since September 2002. He previously served as our Executive Vice President, Food Distribution from October 2000 to September 2002, as our Senior Vice President, Midwest Region, from April 2000 to October 2000, and as Vice President, Midwest Region, from November 1999 to April 2000. Prior to joining us, he served as Executive Vice President of Hagemeyer N.A., a specialty food distributor, from March 1997 to June 1999. From March 1995 to August 1996, he served as Operating Group President of Fleming Companies Inc., a food wholesaler and retailer.

Christopher A. Brown has served as Executive Vice President, Merchandising since October 1999. Prior to joining us, Mr. Brown was employed for over five years by Richfood Holdings, Inc., a food wholesaler and retailer. At Richfood Holdings, Inc., he served in various executive positions, including Executive Vice President, Procurement and Merchandising of the Farm Fresh Division from

68 October 1998 to October 1999, Executive Vice President, Procurement for Richfood Holdings, Inc. from April 1997 to October 1998, Senior Executive Vice President of Super Rite Foods division from March 1996 to April 1997 and President and Chief Operating Officer of Rotelle, Inc., a subsidiary, from August 1994 to March 1996.

Robert B. Dimond has served as our Executive Vice President since May 2002, as Treasurer since May 2001, as our Chief Financial Officer since October 2000 and as our Senior Vice President from October 2000 to May 2002. Mr. Dimond previously served as Group Vice President and Chief Financial Officer for the western region of Kroger Co., a grocery store chain, from March 1999 to September 2000. From February 1992 until March 1999, he served as Group Vice President, Administration and Controller, for Smith's Food & Drug Centers, Inc., a grocery store chain.

David J. Bersie has served as our Senior Vice President, Food Distribution since September 2002. He previously served as our Vice President of the Midwest Region from October 2000 to September 2002 and as Division Manager of the Cincinnati and Cedar Rapids Distribution Centers from October 1999 to October 2000. Prior to joining us, he served in various positions with Fleming Companies, including Division President—Peoria Division, Director of Merchandising and Director of Grocery—Minneapolis Division, from 1977 to 1999.

Bruce A. Cross has served as our Senior Vice President, Business Transformation since May 2000. He served as Senior Vice President and Chief Information Officer from September 1998 to May 2000. Mr. Cross previously served as Senior Project Executive for IBM Global Services, a strategic technical outsourcing and business consulting firm, from January 1995 to September 1998.

James R. Dorcy has served as our Senior Vice President, Corporate Retail since November 2001. He previously served as Vice President, Marketing and Advertising from February 2000 to November 2001. From December 1998 to November 1999, Mr. Dorcy served as Vice President, Advertising and Marketing for Farm Fresh Inc., a grocery store chain. From November 1994 to December 1998, he served as Vice President, Advertising and Marketing for Bozzuto's, Inc., a food wholesaler and retailer.

Kathleen E. McDermott has served as our Senior Vice President, General Counsel and Secretary since March 2002. She previously served as a Partner with Collier Shannon Scott, PLLC, a law firm, from January 2001 to March 2002. From June 1993 to June 1996, she served as Executive Vice President and Chief Legal Officer at American Stores Company. From 1980 to 1993, she served as a Partner with the Collier, Shannon, Rill & Scott law firm.

Rose M. Bailey has served as our Vice President, Human Resources since February 2001. She previously served as Director of Human Resource Programs for Arcadia Financial, a buyer and servicer of automobile loans, from February 1998 to January 2001. From March 1979 to January 1997, she served as Vice President of Human Resources for County Seat Stores, Inc., a retailer of specialty clothing.

William F. Harbecke has served as our Vice President, Real Estate and Construction since May 2002. He previously served as Regional Vice President of Real Estate for Albertson's Inc. from 1999 to 2002. From 1986 to 1999 he served in various positions with American Stores Company ranging from Director of Real Estate in Anaheim, CA and Oakbrook, IL to Senior Vice President of Real Estate in Salt Lake City, UT.

Jeffrey E. Poore has served as our Vice President, Distribution and Logistics since May 2001. Since 1996 Mr. Poore served in various positions with SuperValu Inc., a food wholesaler and retailer, most recently as Vice President, Logistics from January 1999 to April 2001. Before joining SuperValu, Mr. Poore served as the Director of Logistics for SUN TV & Appliance, Inc. from December 1995 to September 1996.

69 LeAnne M. Stewart has served as our Vice President since July 1999, as Controller since April 2000, and served as Treasurer from May 2000 to May 2001. Prior to her election as Controller, Ms. Stewart served as our Vice President, Financial Planning and Analysis. Prior to joining us, she served as Manager, Corporate Finance for Enron Europe Limited, an international energy company, from August 1997 to March 1999. From December 1987 to July 1995, she served in various positions ranging from staff accountant to senior manager at Ernst & Young LLP.

C. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and all persons who beneficially own more than 10% of our outstanding shares of common stock to file with the SEC reports of initial ownership and reports of changes in ownership in Nash Finch securities. We provide assistance to our directors and executive officers in complying with Section 16(a), including preparing the reports and forwarding them to the SEC for filing.

To our knowledge, based upon a review of the copies of reports filed and written representations, all filing requirements applicable to directors and executive officers were complied with during the fiscal year ended December 28, 2002 except for the following:

• Due to administrative error, we failed to file reports on Form 4 on behalf of certain directors with respect to two quarterly acquisitions of phantom stock units resulting from the deferral of director compensation. This affected Carole F. Bitter, Jerry L. Ford, Allister P. Graham, Robert F. Nash, Laura Stein, William Voss and William Weintraub. The acquisition of these units was subsequently reported by each individual on a Form 5.

• We inadvertently failed to include on a Form 4 filed for Allister P. Graham the exercise of a stock option that was subsequently reported on an amended Form 4.

• As a result of delays in communications, we filed a late Form 4 for John H. Grunewald on two occasions, each covering a single transaction, a late Form 4 for Jeffrey E. Poore reporting a stock option grant, and a late Form 3 for David J. Bersie.

ITEM 11. EXECUTIVE COMPENSATION

A. COMPENSATION OF DIRECTORS

Directors' Fees. Directors who are not full−time employees of Nash Finch, otherwise known as our outside directors, receive compensation for serving as a director and are reimbursed for out−of−pocket traveling expenses incurred in attending Board and committee meetings.

Each outside director is entitled to receive $1,500 for each Board meeting attended and $750 for each committee meeting attended. Each outside director, other than the Board Chair, is also entitled to receive a retainer of $1,833 per month ($22,000 annually) for serving as a director. Since March 1, 2002, outside directors have received an additional retainer of either $208 per month ($2,500 annually) for serving as a member of a committee of the Board or $416 per month ($5,000 annually) for serving as chair of a committee of the Board. Prior to March 1, 2002, the committee and committee chair retainers were $125 per month ($1,500 annually) and $250 per month ($3,000 annually), respectively. The Board Chair receives a retainer of $5,500 per month ($66,000 annually).

1997 Non−Employee Director Stock Compensation Plan. The 1997 Non−Employee Director Stock Compensation Plan provides outside directors with (i) 50% of their annual retainer either in shares of common stock or units credited to a phantom stock account, and (ii) the opportunity to defer the receipt of the remainder of their director compensation either through units credited to a phantom stock account or dollar denominated credits to an interest bearing cash account. Amounts deferred to the phantom stock account will be credited with additional units representing the deemed reinvestment

70 of dividend equivalents, and distributions from the phantom stock account are made only in shares of common stock. Amounts deferred to the cash account are payable only in cash. In each case, the amounts deferred are payable upon termination of service as a director.

1995 Director Stock Option Plan. The 1995 Director Stock Option Plan currently provides for an annual grant of an option to purchase 5,000 shares of common stock to each outside director, effective immediately following each annual meeting of stockholders of Nash Finch while the plan is in effect. The options have an exercise price equal to the fair market value of a share of Nash Finch common stock on the date of grant, become exercisable six months after the date of grant and have five−year terms. According to the terms of the plan, each outside director was granted an option under the 1995 Director Stock Option Plan on May 14, 2002.

Outside directors are also eligible to participate in the 2000 Stock Incentive Plan. However, no awards have been granted to outside directors under that plan.

A director who is a current employee of Nash Finch receives no additional compensation for serving as a director.

B. EXECUTIVE COMPENSATION AND OTHER BENEFITS

Summary of Cash and Certain Other Compensation

The following table sets forth the cash and non−cash compensation earned during the fiscal years ending December 28, 2002, December 29, 2001 and December 30, 2000 by our Chief Executive Officer and our four other most highly compensated executive officers, otherwise known as our "named executive officers."

Summary Compensation Table

Long Term Compensation Annual Compensation Awards

Name and Restricted Stock Securities Underlying All Other Principal Position Year Salary($) Bonus($)(a)(b) Awards ($)(c) Options (#) Compensation ($)

Ron Marshall 2002 $ 673,149 $ 507,303 $ 1,456,750 40,000(d)$ 148,147(e) Chief Executive Officer 2001 655,889 750,000 — 85,000 137,557 2000 582,533 297,750 — 75,000 120,421

Jerry L. Nelson 2002 $ 350,191 $ 252,805 $ 1,795 25,000 $ 78,977(f) President and Chief 2001 288,246 275,000 — 25,000 60,455 Operating Officer 2000 205,876 107,549 — 60,000 63,011

Christopher A. Brown 2002 $ 359,109 $ 289,205 — 25,000 $ 80,262(g) Executive Vice President, 2001 349,040 350,000 — 25,000 69,808 Merchandising 2000 307,807 150,000 — 30,000 285,460

Robert B. Dimond 2002 $ 284,506 $ 210,707 $ 4,488 25,000 $ 60,840(h) Executive Vice President, 2001 247,742 240,000 — 15,000 78,598 Chief Financial Officer and 2000 69,041 36,923 — 75,000 78,420 Treasurer

Bruce A. Cross 2002 $ 254,300 $ 168,565 — 7,500 $ 59,391(i) Sr. Vice President, Business 2001 247,742 192,000 — 15,000 55,927 Transformation 2000 229,561 83,370 — 25,000 47,343

(a) Bonuses for services rendered have been included as compensation for the year earned, even though bonuses were actually paid in the following year. For fiscal 2002, each executive officer was

entitled to elect to receive some or all of his or her bonus in shares of Nash Finch common stock, valued at the fair market value of such stock on May 12, 2003, the date the Compensation Committee approved the bonus payouts. To the extent a recipient elected to receive shares of common stock as part of a bonus payout, the recipient would also receive shares of restricted common stock equal in amount to 15% of the unrestricted shares received. The bonus amounts shown in the table for 2002 include the value of the shares of unrestricted common stock received in 2003, but the value of the additional restricted shares received in 2003 is reported under "Restricted Stock Awards." The following named executive officers elected to receive a portion of their 2002 bonuses in shares of common stock:

Amount of 2002 No. Unrestricted Name Bonus Paid in Shares Shares Issued

Jerry L. Nelson $ 11,994 1,069 Robert B. Dimond $ 29,991 2,673

(b) For fiscal 2001 and 2000, the amount of each bonus shown was paid 50% in cash and 50% in restricted shares of common stock. The number of restricted shares received was determined utilizing the fair market value of Nash Finch common stock on the date the Compensation Committee approved the bonus payouts. Restricted shares awarded vested one year after the date of grant. Restricted share awards to the named executive officers in payment of 50% of the bonuses approved for 2001 and 2000 are summarized as follows:

Restricted Shares Awarded in Payment of 50% of Bonus

Name 2001 2000

Ron Marshall 12,818 9,925 Jerry L. Nelson 4,700 3,584 Christopher A. Brown 5,981 5,000 Robert B. Dimond 4,101 1,230 Bruce A. Cross 3,281 2,779

(c) The amount shown for Mr. Marshall for 2002 reflects the value of an award of 50,000 shares of restricted stock under the 2000 Stock Incentive Plan effective February 19, 2002. Of the 50,000 shares of restricted stock subject to this award, 20% vest annually beginning one year after the date of grant. On each vesting date, Mr. Marshall also receives a cash payment in an amount equal to 40% of the fair market value of the shares that vest on that date to partially offset taxes due. The amounts shown for Messrs. Nelson and Dimond reflect the value of awards of 160 and 400 restricted shares, respectively, on May 12, 2003, the date that bonus payments for 2002 were approved. Those shares vest in full two years after the date they were awarded. Cash dividends are paid on restricted stock if, and to the extent, dividends are paid on common stock generally. The aggregate unvested restricted stock holdings of the named executive officers on December 28, 2002, and the value of those holdings on that date (based on the fair market value of Nash Finch common stock), were as follows:

Restricted Shares Name at 12/28/02 Value at 12/28/02

Ron Marshall 62,818 $ 471,763 Jerry L. Nelson 4,700 35,279 Christopher A. Brown 5,981 44,917 Robert B. Dimond 4,101 30,799 Bruce A. Cross 3,281 24,640 72

(d) Non−qualified stock option awarded on May 12, 2003 in connection with the decision by the Compensation Committee to make a discretionary reduction in the cash bonus payable for 2002 under the Performance Incentive Plan. The exercise price of the option is equal to the fair market value of Nash Finch common stock on the grant date. The option has a term of five years and becomes exercisable as to 20% of the shares six months after the grant date and on each of the first four anniversaries of the grant date.

(e) Includes a credit of $134,630 to Nash Finch's Supplemental Executive Retirement Plan (SERP), above−market interest of $6,124 accrued during fiscal 2002 on SERP and deferred compensation balances, and a contribution of $7,393 to the Nash Finch Profit Sharing Plan.

(f) Includes a credit of $70,038 to the SERP, above−market interest of $1,546 accrued during fiscal 2002 on SERP and deferred compensation balances, and a contribution of $7,393 to the Nash Finch Profit Sharing Plan.

(g) Includes a credit of $71,822 to the SERP, above−market interest of $1,047 accrued during fiscal 2002 on SERP and deferred compensation balances, and a contribution of $7,393 to the Nash Finch Profit Sharing Plan.

(h) Includes a credit of $56,901 to the SERP, above−market interest of $1,174 accrued during fiscal 2002 on SERP and deferred compensation balances, and a contribution of $2,765 to the Nash Finch Profit Sharing Plan.

(i) Includes a credit of $50,860 to the SERP, above−market interest of $1,168 accrued during fiscal 2002 on SERP and deferred compensation balances, and a contribution of $7,393 to the Nash Finch Profit Sharing Plan.

Option Grants During Fiscal 2002

The following table summarizes the options granted to the named executive officers during fiscal 2002.

Individual Grants Potential Realizable % of Total Value at Assumed Annual Rates of Stock Number of Options Granted to Price Appreciation for Name Securities Exercise Expiration Option Term(b) Underlying Employees Options(a) during Fiscal Price ($/sh) Date — Year 2002 5% ($) 10% ($)

Ron Marshall — — — — — —

Jerry L. Nelson 25,000 7.1% 31.60 7/7/07 $ 218,262 $ 482,303

Christopher A. Brown 25,000 7.1% 31.60 7/7/07 $ 218,262 $ 482,303

Robert B. Dimond 25,000 7.1% 31.60 7/7/07 $ 218,262 $ 482,303

Bruce A. Cross 7,500 2.0% 31.60 7/7/07 $ 65,479 $ 144,691

(a) Reflects grants of stock options under the 2000 Stock Incentive Plan on July 8, 2002, each at an exercise price equal to the fair market value of our common stock on that date. Each option has a five−year term, and vests in 20% increments beginning six months after the date of grant and, thereafter, on each of the first four anniversaries of the date of grant.

(b) Potential realizable value is calculated based on an assumption that the price of our common stock will appreciate at the assumed annual rates shown (5% and 10%), compounded annually from the date of grant of the option until the end of the option term. These assumed annual rates are applied according to Securities and Exchange Commission ("SEC") rules and therefore are not

intended to forecast possible future appreciation, if any, of our common stock. Actual gains, if any, on stock option exercises are dependent on the future performance of our common stock, overall market conditions and the continued employment of the named executive by Nash Finch. There can be no assurance that the amounts reflected in this table will be realized.

Option Exercises in Fiscal 2002/Fiscal Year−End Option Values

The following table summarizes the number of shares acquired upon exercise of stock options by our named executive officers during fiscal year 2002 and the number of their outstanding stock options at the end of the fiscal year and the value of such options for which the fair market value of our common stock on that date exceeded the exercise price.

Number of Securities Underlying Unexercised Value of Unexercised In−the− Options at 12/28/02 Money Options at 12/28/02(a)

Shares Acquired on Value Exercisable Unexercisable Exercisable Unexercisable Name Exercise (#) Realized (#) (#) ($) ($)

Ron Marshall — — 279,000 81,000 — —

Jerry L. Nelson — — 56,000 69,000 $ 790 $ 198

Christopher A. Brown — — 73,000 67,000 $ 11,700 $ 3,900

Robert B. Dimond — — 51,000 64,000 — —

Bruce A. Cross — — 46,000 26,500 — —

(a) Represents the difference between the fair market value of common stock on December 28, 2002 ($7.51) and the exercise price of the in−the−money options, before payment of applicable income taxes.

Supplemental Executive Retirement Plan

The Nash Finch Supplemental Executive Retirement Plan ("SERP") is an unfunded plan designed to provide retirement income to eligible participants to supplement amounts available from other sources. The plan is administered by the Compensation Committee, which selects participants from among Nash Finch's management or highly compensated employees, including the named executive officers.

Under the SERP, each participant who is actively employed by, or on an approved leave of absence from, Nash Finch or an affiliated entity on the last day of a calendar year will be credited with an amount equal to 20% of his or her base salary for that year. On the last day of each calendar quarter, the Compensation Committee will credit each participant's SERP account with earnings on the average daily account balance for the quarter equal to the quarterly equivalent of the average annual corporate bond yield for each month during the quarter, as reported by Moody's Investor's Service, Inc.

Participants become fully vested in their SERP contribution account and the related earnings upon attaining age 65. Participants also become fully vested in their SERP accounts upon death or disability during the term of their employment. If a participant's employment terminates prior to any of the foregoing events, the degree of vesting will be determined on the basis of his or her years of participation in the SERP, ranging from 0% for less than five years' participation to full vesting for ten or more years' participation. The entire balance of a participant's SERP account will be forfeited if the participant competes with Nash Finch while the participant is employed by Nash Finch or an affiliated entity or is receiving distributions under the SERP, or if the participant's employment is terminated for dishonesty or criminal conduct. 74 Distributions under the SERP begin the first month of the next calendar year following a participant's termination of employment. Payments will be made in 120 monthly installments, determined in each case by dividing the participant's vested account balance by the number of remaining payments due. Prior to commencement of a participant's distributions, the Compensation Committee may elect to make the distribution in any alternative form, subject to certain conditions set forth in the SERP.

We credited the SERP accounts of the named executive officers with respect to fiscal year 2002 as shown in the Summary Compensation Table above.

Change in Control and Severance Arrangements

We have entered into change in control agreements with certain executive officers and key employees of Nash Finch and its subsidiaries, including the executive officers named in the Summary Compensation Table. Absent a "change in control," these agreements do not require Nash Finch to retain the executives or to pay them any specified level of compensation or benefits.

Each agreement provides that if an employee is terminated within 24 months of a change in control of Nash Finch (or, in limited circumstances, prior to such a change in control) for any reason other than death, disability, retirement or cause, or if the employee terminates within 24 months of a change in control for "good reason," then the employee is entitled to receive a lump sum payment equal to the employee's highest monthly compensation during the 36 months prior to the termination multiplied by either 12, 24 or 36 months. The employee is also entitled to the continuation of certain benefit plans (including health, life, dental and disability) for the employee and his or her dependents for 12, 24 or 36 months. The multiple referred to above is 36 months for Mr. Marshall, 24 months for Mr. Brown, Mr. Nelson, Mr. Cross and Mr. Dimond, and either 24 months or 12 months for all other designated employees. In addition, if the employee is required to pay any federal excise tax or related interest or penalties on the payments associated with the change in control, an additional payment ("gross−up") is required in an amount such that after the payment of all taxes, income and excise, the employee will be in the same after−tax position as if no such excise tax had been imposed.

For purposes of these agreements, "good reason" generally includes reductions in compensation or benefits, demotions, relocation and any termination for reasons other than death, disability or retirement within 6 months of a change in control. A "change in control" is generally deemed to have occurred if: (a) a majority of Nash Finch's Board is no longer comprised of individuals who were directors at the time these agreements were entered into or who became directors with the approval of a majority of the "incumbent directors"; (b) another party becomes the beneficial owner of at least 30% of Nash Finch's outstanding voting stock; (c) Nash Finch sells or otherwise disposes of all or substantially all of its assets, or is liquidated or dissolved; or (d) a change in control of the type required to be reported in response to item 1(a) of Form 8−K under the Securities Exchange Act occurs.

Similar events, which specifically include certain mergers or consolidations and a third party becoming the beneficial owner of varying percentages of Nash Finch's outstanding voting stock, also constitute a change in control under other compensation and benefit plans maintained by Nash Finch and in which the executive officers named in the Summary Compensation Table participate. Under the terms of the 1994 Stock Incentive Plan and the 2000 Stock Incentive Plan and the agreements evidencing stock options awarded under these plans, upon a change in control, the Compensation Committee may (a) provide that the options will become immediately exercisable upon the change in control, or (b) provide that the optionee will receive, as of the effective date of the change in control, cash in an amount equal to the "spread" between the fair market value of the option shares immediately prior to the change in control and the exercise price of the option shares.

75 Under the terms of the 2000 Stock Incentive Plan and award agreements thereunder, if a change in control of Nash Finch occurs, all restricted stock awards that have been outstanding at least six months will immediately and fully vest, and the forfeiture provisions relating to the shares underlying all performance units will lapse and the units will immediately be settled and the underlying shares distributed, unless the named executive (or his designee) waives the right to acceleration.

Under the terms of deferred compensation plans applicable to directors and officers of Nash Finch, upon a change in control, Nash Finch must transfer to a benefit protection trust to be established in connection with each such plan an amount of assets sufficient to bring the value of trust assets to at least 125% of the aggregate balance of all participant accounts in each such plan as of the last day of the month immediately preceding the change in control.

Under the terms of the Nash Finch Employee Stock Purchase Plan, the Compensation Committee may accelerate the end of an offering period upon a change in control and either provide for the immediate exercise of all outstanding options under that plan or terminate such options and refund all payroll deductions to plan participants.

Under the terms of their employment offer letters, Mr. Brown and Mr. Dimond are both entitled to payment of twelve months of severance compensation in the event that their employment is terminated by the Company, other than for cause or by reason of a change in control.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

A. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information regarding beneficial ownership of our common stock as of April 30, 2003 for each stockholder who we know owns beneficially more than five percent of the outstanding shares of common stock on that date.

Name and Address of Percent the Beneficial Owner Amount of Class(a)

Barclay's Global Investors, N.A. 894,330(b) 7.5% Barclay's Global Fund Advisors 45 Fremont Street San Francisco, CA 94105

Dimensional Fund Advisors, Inc. 860,992(c) 7.2% 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401

Franklin Resources, Inc., 800,000(d) 6.7% Charles B. Johnson, Rupert H. Johnson, Jr. One Franklin Parkway San Mateo, CA 94403; Franklin Advisory Services, LLC th One Parker Plaza, 16 Floor, Fort Lee, NJ 07024

(a) Based upon 11,943,217 shares of common stock outstanding as of April 30, 2003.

(b) The amount of shares is based upon a Schedule 13G dated February 10, 2003 reporting beneficial ownership as of December 31, 2002. Barclay's Global Investors, N.A. reported that it has sole voting and investment power over 718,524 shares. Barclay's Global Fund Advisors reported that it

has sole voting and investment power over 176,076 shares. All such shares are held in trust accounts for the economic benefit of the beneficiaries of those accounts.

(c) The amount of shares is based upon a Schedule 13G dated February 3, 2003 reporting beneficial ownership as of December 31, 2002. Dimensional Fund Advisors, Inc. ("DFA") reported that it is an investment advisor or manager for certain investment companies, trusts and accounts ("funds"), and as such possesses sole voting and investment power over the 860,992 Nash Finch shares that are owned by such funds. None of these funds, to the knowledge of DFA, owns more than 5% of the class. DFA disclaims beneficial ownership of such securities.

(d) The amount of shares is based upon a Schedule 13G dated February 12, 2003 reporting beneficial ownership of common stock by such persons as of December 31, 2002. Franklin Advisory Services, LLC ("FAS") reported that it is an investment advisor for investment companies and other managed accounts ("funds"), and as such possesses sole voting and investment power over the 800,000 Nash Finch shares owned by such funds. One of these funds, Franklin Balance Sheet Investment Company, a series of the registered investment company Franklin Value Investment Trust, is reported to have an interest in more than 5% of the common stock of Nash Finch. The Schedule 13G also reports that Franklin Resources, Inc. ("FRI"), as the parent company of FAS, and the individuals named, as principal shareholders of FRI, are deemed the beneficial owners of the securities held by persons and entities advised by FAS.

B. SECURITY OWNERSHIP OF MANAGEMENT

The table below sets forth information regarding beneficial ownership of our common stock as of April 30, 2003 for: • each of our directors;

• each of our executive officers named in the Summary Compensation Table in Item 11 above, otherwise known as our "named executive officers;" and

• all of our directors and executive officers as a group.

For the purpose of calculating the percentage of the class beneficially owned, the number of shares of common stock outstanding includes:

• 11,943,217 shares of common stock outstanding as of April 30, 2003; and

• shares of common stock subject to options held by the person or group that are currently exercisable or exercisable within 60 days from April 30, 2003, or shares of common stock that the person or group may have the right to acquire through other means within 60 days from April 30, 2003.

Except as indicated in the footnotes to this table and subject to any applicable community property laws, the persons in the following table have sole voting and investment power with respect to all shares listed as beneficially owned by them.

Total Shares of Common Stock Beneficially Owned Number of Share Units(a) Number of Number of / Performance Percent of Name of Beneficial Owner Shares Options Units(b) Amount Class

Carole F. Bitter 4,000(c) 11,000 21,724 36,724 * Jerry L. Ford 8,500(d) 11,000 6,782 26,282 * Allister P. Graham 17,000 11,000 30,917 58,917 * John H. Grunewald 10,569(e) 8,000 16,253 34,822 * Robert F. Nash 80,253(f) 11,000 7,532 98,785 * Laura Stein 300 7,500 3,220 11,020 * John E. Stokely 7,765 10,000 — 17,765 * William R. Voss 2,043 10,500 16,317 28,860 * William H. Weintraub 1,500 — 887 2,387 * Ron Marshall 91,180(g) 279,000 8,175 378,355 3.1% Christopher A. Brown 24,774 78,000 1,132 103,906 * Jerry L. Nelson 9,284 61,000 — 70,284 * Bruce A. Cross 14,060 47,500 3,342 64,902 * Robert B. Dimond 5,331 56,000 — 61,331 *

All Directors and Executive Officers as a Group (21 persons) 299,520(h) 671,500 116,281 1,087,301 8.5%

* Less than 1%.

(a) Share Units represent phantom shares of common stock payable in shares of common stock to non−employee directors upon termination of service on the Board under the 1997 Non−Employee Directors Stock Compensation Plan.

(b) Reflects shares that may be issued upon settlement of 50% of the total Performance Units held by the named executive officer if the officer voluntarily terminates employment with the Company before reaching age 60. As of April 30, 2003, the total Performance Units held by Mr. Marshall, Mr. Brown and Mr. Cross related to 16,349, 2,264 and 6,684 shares of common stock, respectively. Each named executive officer will have the right to settlement of 100% of the Performance Units if his employment ends before age 60 due to death, disability or termination by the Company without cause, or if his employment ends after age 60 for any reason other than termination for cause. If he is terminated for cause before age 65, he forfeits all Performance Units unless the Compensation Committee determines otherwise.

(c) Includes 1,000 shares owned beneficially by a trust for the benefit of Dr. Bitter's husband, but as to which she disclaims any beneficial interest.

(d) Includes 500 shares owned by Mr. Ford's wife, but as to which he disclaims any beneficial interest.

(e) Includes 500 shares held by a trust for which Mr. Grunewald's wife serves as a trustee, but as to which he disclaims any beneficial interest.

(f) Includes 29,082 shares held by a residuary trust resulting from the estate of Mr. Nash's wife, as to which Mr. Nash is both a trustee and a primary beneficiary of the trust, and as to which Mr. Nash shares voting and investment power. 78

(g) Includes 6,100 shares owned beneficially by Mr. Marshall's wife and children, but as to which he disclaims any beneficial interest. Also includes 40,000 shares of unvested restricted stock as to which he has sole voting power; investment power, however, will vest in 10,000 share increments on February 19 of the years 2004 through 2007.

(h) Includes 37,182 shares as to which voting and investment power are shared or may be deemed to be shared, and 40,000 shares of unvested restricted stock as discussed in note (g).

C. EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about Nash Finch common stock that may be issued upon the exercise of stock options, the payout of share units or performance units, or the granting of other awards under all of Nash Finch's equity compensation plans in effect as of December 28, 2002:

Equity Compensation Plan Information

Number of securities Number of securities remaining available for to be issued upon Weighted−average exercise future issuance under equity exercise of price of outstanding compensation plans (exclud− outstanding options, options, warrants and ing securities reflected in warrants and rights rights column (a)) Plan category (a) (b) (c)

Equity compensation plans approved by security holders 1,267,433(1) $ 18.73(2) 786,060(3)

Equity compensation plans not approved by security holders 200,000(4) $ 16.84 —

Total 1,467,433 $ 18.45 786,060

(1) Includes stock options awarded under the 2000 Stock Incentive Plan ("2000 Plan"), the 1994 Stock Incentive Plan ("1994 Plan") and the 1995 Director Stock Option Plan ("1995 Director Plan"), performance units acquired under the 2000 Plan, and phantom stock units acquired under the 1997 Non−Employee Director Stock Compensation Plan ("1997 Director Plan").

(2) Each phantom stock unit acquired through the deferral of director compensation under the 1997 Director Plan is payable in one share of Nash Finch common stock upon the individual's termination of service as a director, and each performance unit is payable in one share of Nash Finch common stock upon the executive's termination of employment after age 60. As they have no exercise price, the 97,713 phantom stock units and 25,196 performance units outstanding at December 28, 2002 are not included in the calculation of the weighted average exercise price.

(3) The following numbers of shares remained available for issuance under each of our equity compensation plans at December 28, 2002. Grants under each plan may be in the form of any of the types of awards noted:

Number of Plan Shares Type of Award

2000 Plan 386,329 Stock options, restricted stock, stock appreciation rights, performance units, stock bonuses

1995 Director Plan 139,500 Stock options

1997 Director Plan 80,712 Phantom stock units

Employee Stock Purchase Plan 179,519 Stock options (IRC §423 plan) No shares remain available for issuance and no future awards may be made under the 1994 Plan. Shares reserved for issuance in connection with awards outstanding under the 1994 Plan will, if those awards are forfeited, be added to the shares available for issuance under the 2000 Plan.

(4) Stock option award made to Ron Marshall, Chief Executive Officer, at the time he joined Nash Finch.

Description of Plan Not Approved by Shareholders Effective June 1, 1998, Mr. Marshall was granted an option to purchase 200,000 shares of Nash Finch common stock at an exercise price of $16.84 per share. The option became exercisable in 25% installments on each June 1 of the years 1999 − 2002. The option expires on May 31, 2007. If Mr. Marshall's employment ends due to his death, disability or retirement, the option will remain exercisable until the earlier of one year after the date his employment ends or May 31, 2007. If his employment ends for any other reason, the option will terminate unless the Compensation Committee of the Board causes it to remain exercisable. If a change in control of Nash Finch occurs, the Compensation Committee may cause the option to remain exercisable until May 31, 2007 regardless of whether Mr. Marshall remains employed by Nash Finch, or may cause Mr. Marshall to receive cash as of the effective date of the change in control in an amount equal to the "spread" between the fair market value of the option shares as of the date of the change in control and the aggregate exercise price of those shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There are no reportable relationships or transactions.

ITEM 14. CONTROLS AND PROCEDURES

In connection with the internal inquiry into our process for assessing count−recount charges to our vendors and how we account for those charges, we re−evaluated our system of internal controls and reporting processes as they relate to vendor allowances and credits generally. As a result of that re−evaluation, we have implemented a number of additional controls and reporting processes and established a vendor policy oversight committee that includes senior Company officers to improve consistency, oversight and reporting in this area. In addition, we have implemented a policy under which the administrative fee associated with count−recount charges will be set as a fixed percentage of sales and separately itemized on invoices.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the

80 design and operation of our disclosure controls and procedures, as defined in Rules 13a−14(c) and 15d−14(c) under the Securities Exchange Act of 1934, subsequent to the events described in the previous paragraph and as of a date within 90 days prior to the filing date of this Annual Report on Form 10−K. Based on this evaluation, our principal executive officer and principal financial officer have concluded that the our disclosure controls and procedures are effective to insure that information required to be disclosed by us in reports that are filed or submitted to the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Subsequent to the date of the most recent evaluation of our internal controls, and except as discussed in the first paragraph of this Item 14, there were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies or material weaknesses.

81 PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8−K

1. FINANCIAL STATEMENTS.

The following financial statements are included in this report on the pages indicated:

Report of Management—page 33

Independent Auditors' Report—page 34

Consolidated Statements of Income for the fiscal years ended December 28, 2002, December 29, 2001 and December 30, 2000—page 35

Consolidated Balance Sheets as of December 28, 2002 and December 29, 2001—page 36

Consolidated Statements of Cash Flows for the fiscal years ended December 28, 2002, December 29, 2001 and December 30, 2000—page 37

Consolidated Statements of Stockholders' Equity for the fiscal years ended December 28, 2002, December 29, 2001 and December 30, 2000—page 38

Notes to Consolidated Financial Statements—pages 39 to 64

2. FINANCIAL STATEMENT SCHEDULES.

The following financial statement schedule is included herein and should be read in conjunction with the consolidated financial statements referred to above:

Valuation and Qualifying Accounts—page 88

Other Schedules. Other schedules are omitted because the required information is either inapplicable or presented in the consolidated financial statements or related notes.

3. EXHIBITS.

Exhibit No. Description

3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10−K for the fiscal year ended December 28, 1985 (File No. 0−785) ).

3.2 Amendment to Restated Certificate of Incorporation of the Company, effective May 29, 1986 (incorporated by reference to Exhibit 19.1 to the Company's Quarterly Report on Form 10−Q for the quarter ended October 4, 1986 (File No. 0−785)).

3.3 Amendment to Restated Certificate of Incorporation of the Company, effective May 15, 1987 (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S−3 (File No. 33−14871)).

3.4 Amendment to Restated Certificate of Incorporation of the Company, effective May 13, 2002 (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 15, 2002 (File No. 0−785)).

3.5 Bylaws of the Company, as amended effective April 15, 2003 (filed herewith).

4.1 Stockholder Rights Agreement, dated February 13, 1996, between the Company and Norwest Bank Minnesota, National Association (incorporated by reference to Exhibit 4 to the Company's Current Report on Form 8−K dated February 13, 1996 (File No. 0−785)).

82 4.2 Amendment to Stockholder Rights Agreement dated as of October 30, 2001 (incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the Company's Registration Statement on Form 8−A (filed July 26, 2002) (File No. 0−785)).

4.3 Indenture dated as of April 24, 1998 between the Company, the Guarantors, and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S−4 filed May 22, 1998 (File No. 333−53363)).

4.4 Form of Company's 8.5% Senior Subordinated Notes due 2008 Series A (incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 20, 1998 (File No. 0−785)).

4.5 Form of Company's 8.5% Senior Subordinated Notes due 2008 Series B (incorporated by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 20, 1998 (File No. 0−785)).

4.6 First Supplemental Indenture of Trust dated as of June 10, 1999 between the Company, the Subsidiary Guarantors, Erickson's Diversified Corporation and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10−K for the fiscal year ended January 1, 2000 (File No. 0−785)).

4.7 Second Supplemental Indenture of Trust Dated as of January 31, 2000 between the Company, the Subsidiary Guarantors, Hinky Dinky Supermarkets, Inc., and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.6 to the Company's Annual Report on Form 10−K for the fiscal year ended December 29, 2001 (File No. 0−785)).

4.8 Third Supplemental Indenture of Trust dated as August 13, 2001 between the Company, the Subsidiary Guarantors, U Save Foods, Inc., and U.S. Bank Trust National Association (incorporated by reference to Exhibit 4.7 to the Company's Annual Report on Form 10−K for the fiscal year ended December 29, 2001(File No. 0−785)).

4.9 Fourth Supplemental Indenture of Trust, dated as of February 25, 2003, between the Company, the Subsidiary Guarantors and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8−K dated February 25, 2003 (File No. 0−785)).

10.1 Credit Agreement dated as of December 19, 2000 among the Company, Bankers Trust Company, as administrative agent, and various lenders (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10−K for the fiscal year ended December 30, 2000 (File No. 0−785)).

10.2 First Amendment, dated as of March 21, 2003, to Credit Agreement dated as of December 19, 2000 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8−K dated March 27, 2003. (File No. 0−785) ).

*10.3 Nash Finch Profit Sharing Trust Agreement (as restated effective January 1, 1994) (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10−K for the fiscal year ended January 1, 1994 (File No. 0−785)).

*10.4 Excerpts from minutes of the February 19, 2002 meeting of the Board of Directors regarding director compensation (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10−Q for the quarter ended March 23, 2002 (File No. 0−785)).

*10.5 Form of Change in Control Agreement (filed herewith).

83 *10.6 Nash Finch Income Deferral Plan (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10−K for the fiscal year ended January 1, 1994 (File No. 0−785)).

*10.7 Nash Finch 1994 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 14, 1997 (File No. 0−785)).

*10.8 Nash Finch 2000 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 15, 2002 (File No. 0−785)).

*10.9 Nash Finch 1995 Director Stock Option Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 15, 2002 (File N. 0−785)).

*10.10 Nash Finch 1997 Non−Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 14, 1997 (File No. 0−785)).

*10.11 Nash Finch 1999 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10−K for the fiscal year ended December 29, 2001 (File No. 0−785)).

*10.12 Declaration of Amendment to the Nash Finch 1999 Employee Stock Purchase Plan, dated as of March 28, 2003 (filed herewith).

*10.13 Nash Finch Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10−K for the fiscal year ended January 1, 2000 (File No. 0−785)).

*10.14 Non−Statutory Stock Option Agreement dated as of June 1, 1998 between Nash Finch and Ron Marshall (incorporated by reference to Exhibit 10.20 to the Company's Annual Report on Form 10−K for the fiscal year ended December 29, 2001 (File No. 0−785)).

*10.15 Restricted Stock Award Agreement between the Company and Ron Marshall, effective as of February 19, 2002 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10−Q for the quarter ended October 5, 2002 (File No. 0−785)).

*10.16 Nash Finch Performance Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10−Q for the quarter ended June 15, 2002 (File No. 0−785)).

14.1 Code of Ethics for Senior Financial Management (filed herewith).

21.1 Subsidiaries of the Company (filed herewith).

23.1 Consent of Ernst & Young LLP (filed herewith).

24.1 Power of Attorney (filed herewith).

99.1 Certification Under Section 906 of the Sarbanes−Oxley Act of 2002 (included herewith). This certification shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act or otherwise subject to the liability of that section, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act.

84 99.2 Excerpts from the Company's Current Reports on Form 8−K dated July 29, 2002, January 28, 2003 and March 11, 2003 (filed herewith).

A copy of any of these exhibits will be furnished at a reasonable cost to any person who was a stockholder of the Company as of April 30, 2003, upon receipt from any such person of a written request for any such exhibit. Such request should be sent to Nash Finch Company, 7600 France Avenue South, P.O. Box 355, Minneapolis, Minnesota, 55440−0355, Attention: Secretary.

* Items that are management contracts or compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(a)(3) of Form 10−K.

B. REPORTS ON FORM 8−K:

On April 1, 2003, the Company filed a Form 8−K reporting under "Item 5—Other Information and Regulation FD Disclosure":

The Company announced that an amendment to the credit agreement between the Company and its bank lenders became effective on March 27, 2003. The amendment extends from March 28, 2003 until June 15, 2003 the deadline for submission to the lenders of the Company's audited fiscal 2002 financial statements.

On March 25, 2003, the Company filed a Form 8−K reporting under "Item 5—Other Information and Regulation FD Disclosure":

The Company announced that the Nasdaq Listing Qualifications Panel has agreed to extend the deadlines for the filing by the Company of its periodic reports for the third quarter 2002, fiscal 2002 and first quarter 2003.

On March 14, 2003, the Company filed a Form 8−K reporting under "Item 4—Changes in Registrant's Certifying Accountants" and "Item 5—Other Information and Regulation FD Disclosure":

The Company announced that effective March 11, 2003, the Company's Audit Committee engaged Ernst & Young LLP as the principal accountant to audit the Company's financial statements beginning with its financial statements for the year ending December 28, 2002. In addition the Company announced that the staffs of the SEC's Office of the Chief Accountant and Division of Corporation Finance had indicated that, based on the Company's oral and written representation, they would not object at that time to the Company's accounting for count−recount charges.

On March 5, 2003, the Company filed a Form 8−K reporting under "Item 5—Other Information and Regulation FD Disclosure":

The Company announced that holders of more than 51% of the Company's $165 million 8 1/2% Senior Subordinated Notes due 2008 (the "Notes") had agree to waive the previously reported default under the Indenture for the Notes resulting from the Company's failure to file certain reports with the Securities and Exchange Commission.

On February 14, 2003, the Company filed a Form 8−K reporting under "Item 9—Regulation FD Disclosure":

The Company announced that it was notified on February 13, 2003 by the Trustee for the Company's $165,000,000 8.5% Senior Subordinated Notes due 2008, that a default had occurred under the Indenture as a result of the Company's failure to file certain financial reports with the Securities and Exchange Commission.

On February 4, 2003, the Company filed a Form 8−K reporting under "Item 4—Changes in Registrant's Certifying Accountant" and "Item 5—Other Events and Required FD Disclosure":

The Company announced that Deloitte & Touche LLP resigned as the independent accountants of the Company. In addition, the Company was notified by the staff of the Division of Enforcement of the Commission that the Commission had approved a formal order of investigation of the Company.

86 On January 22, 2003, the Company filed a Form 8−K reporting under "Item 5—Other Events and Regulation FD Disclosure":

The Company announced that it received a determination from the Nasdaq Listing Qualifications Panel to continue the listing of the Company's securities on the Nasdaq National Market.

On November 27, 2002, the Company filed a Form 8−K reporting under "Item 5—Other Events and Regulation FD Disclosure":

The Company announced that it received a Nasdaq Staff Determination, indicating that the Company's failure to comply with the Form 10−Q filing requirement for the quarter ended October 5, 2002 violates Nasdaq Marketplace Rule 431(c)(14), and that the Company's securities are subject to delisting from the Nasdaq National Market.

On November 21, 2002, the Company filed a Form 8−K reporting under "Item 5—Other Events and Regulation FD Disclosure":

The Company submitted the sworn statements of its Chief Executive Officer and Chief Financial Officer:

On November 18, 2002, the Company filed a Form 8−K reporting under "Item 5—Other Events and Regulation FD Disclosure":

The Company announced that it postponed it third quarter, 2002 earnings release conference call and would not file its Form 10−Q on November 19, 2002:

On November 8, 2002, the Company filed a Form 8−K reporting under "Item 5—Other Events and Regulation FD Disclosure":

The Company announced that it postponed its third quarter, 2002 earnings release conference call until November 18, 2002.

87 NASH FINCH COMPANY and SUBSIDIARIES Valuation and Qualifying Accounts Fiscal Years ended December 28, 2002, December 29, 2001 and January 1, 2000

Charged Balance at Charged to (credited) Balance beginning costs and to other at end Description of year expenses accounts Deductions of year

52 weeks ended December 30, 2000: Allowance for doubtful receivables(c) $ 30,430 $ 7,361 $ 23(a) $ 6,802(b)$ 31,012

Provision for losses relating to leases on closed locations 5,650 2,722 2,297(d) 6,075

$ 36,080 $ 10,083 $ 23 $ 9,099 $ 37,087

52 weeks ended December 29, 2001: Allowance for doubtful receivables(c) $ 31,012 $ 4,812 $ 1,083(a) $ 5,418(b)$ 31,489 Provision for losses relating to leases on closed locations 6,075 1,105 2,180(d) 5,000

$ 37,087 $ 5,917 $ 1,083 $ 7,598 $ 36,489

52 weeks ended December 28, 2002: Allowance for doubtful receivables(c) $ 31,489 $ 8,997 $ 956(a) $ 14,418(b)$ 27,024 Provision for losses relating to leases on closed locations 5,000 1,454 678(d) 5,776

$ 36,489 $ 10,451 $ 956 $ 15,096 $ 32,800

(a) Recoveries on accounts previously charged off

(b) Accounts charged off

(d) Payments of lease obligations

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 15, 2003 NASH−FINCH COMPANY

By /s/ RON MARSHALL

Ron Marshall Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on May 15, 2003 by the following persons on behalf of the Registrant and in the capacities indicated.

/s/ RON MARSHALL /s/ LEANNE M. STEWART

Ron Marshall, Chief Executive Officer (Principal LeAnne M. Stewart, Vice President and Corporate Executive Officer) and Director Controller (Principal Accounting Officer)

/s/ ROBERT B. DIMOND

Robert B. Dimond, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) /s/ CAROLE F. BITTER* /s/ WILLIAM H. WEINTRAUB*

Carole F. Bitter, Director William H. Weintraub, Director

/s/ JERRY L. FORD* /s/ JOHN H. GRUNEWALD*

Jerry L. Ford, Director John H. Grunewald, Director

/s/ ROBERT F. NASH* /s/ LAURA STEIN*

Robert F. Nash, Director Laura Stein, Director

/s/ JOHN E. STOKELY* /s/ WILLIAM R. VOSS*

John E. Stokely, Director William R. Voss, Director

/s/ ALLISTER P. GRAHAM*

Allister P. Graham, Director

*By /s/ KATHLEEN E. MCDERMOTT

Kathleen E. McDermott Attorney−in−fact

89 I, Ron Marshall, certify that:

1. I have reviewed this annual report on Form 10−K of Nash−Finch Company;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−14 and 15d−14) for the registrant and have:

(a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003 By: /s/ RON MARSHALL

Name: Ron Marshall Title: Chief Executive Officer

90 I, Robert B. Dimond, certify that:

1. I have reviewed this annual report on Form 10−K of Nash−Finch Company;

(b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

Date: May 15, 2003 By: /s/ ROBERT B. DIMOND

Name: Robert B. Dimond Title: Executive Vice President and Chief Financial Officer

91 NASH FINCH COMPANY EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10−K For Fiscal Year Ended December 28, 2002

Exhibit No. Description Method of Filing

3.1 Restated Certificate of Incorporation of the Company Incorporated by reference (IBR)

3.2 Amendment to Restated Certificate of Incorporation of the Company, effective May 29, IBR 1986

3.3 Amendment to Restated Certificate of Incorporation of the Company, effective May 15, IBR 1987

3.4 Amendment to Restated Certificate of Incorporation of the Company, effective March 16, IBR 2002

3.5 Bylaws of the Company, as amended effective April 15, 2002 Electronically (E)

4.1 Stockholder Rights Agreement, dated February 13, 1996, between the Company and IBR Norwest Bank Minnesota, National Association

4.2 Amendment to Stockholder Rights Agreement dated as of October 30, 2001 IBR

4.3 Indenture dated as of April 24, 1998 between the Company, the Guarantors, and U.S. IBR Bank Trust National Association

4.4 Form of Company's 8.5% Senior Subordinated Notes due 2008 Series A IBR

4.5 Form of Company's 8.5% Senior Subordinated Notes due 2008 Series B IBR

4.6 First Supplemental Indenture of Trust dated as of June 10, 1999 between the Company, IBR the Subsidiary Guarantors, Erickson's Diversified Corporation and U.S. Bank Trust National Association

4.7 Second Supplemental Indenture of Trust Dated as of January 31, 2000 between the IBR Company, the Subsidiary Guarantors, Hinky Dinky Supermarkets, Inc., and U.S. Bank Trust National Association

4.8 Third Supplemental Indenture of Trust Dated as August 13, 2001 between the Company, IBR the Subsidiary Guarantors, U Save Foods, Inc., and U.S. Bank Trust National Association

4.9 Fourth Supplemental Indenture of Trust Dated as February 25, 2003, between the IBR Company, the Subsidiary Guarantors and U.S. Bank Trust National Association

10.1 Credit Agreement dated as of December 19, 2000 among the Company, Bankers Trust IBR Company, as administrative agent, and various lenders

92 10.2 First Amendment, dated as of March 21, 2003, to the Credit Agreement dated as of IBR December 19, 2000

10.3 Nash Finch Profit Sharing Trust Agreement (as restated effective January 1, 1994) IBR

10.4 Excerpts from minutes of the February 19, 2002 meeting of the Board of Directors IBR regarding director compensation

10.5 Form of Change in Control Agreement E

10.6 Nash Finch Income Deferral Plan IBR

10.7 Nash Finch 1994 Stock Incentive Plan, as amended IBR

10.8 Nash Finch 2000 Stock Incentive Plan, as amended IBR

10.9 Nash Finch 1995 Director Stock Option Plan, as amended IBR

10.10 Nash Finch 1997 Non−Employee Director Stock Compensation Plan IBR

10.11 Nash Finch 1999 Employee Stock Purchase Plan IBR

10.12 Declaration of Amendment to Nash Finch Employee Stock Purchase Plan, dated as of E March 28, 2003

10.13 Nash Finch Supplemental Executive Retirement Plan IBR

10.14 Non−Statutory Stock Option Agreement dated as of June 1, 1998 between Nash Finch and IBR Ron Marshall

10.15 Restricted Stock Award Agreement between the Company and Ron Marshall, effective as IBR of February 19, 2002

10.16 Nash Finch Performance Incentive Plan IBR

14.1 Code of Ethics for Senior Financial Management E

21.1 Subsidiaries of the Company E

23.1 Consent of Ernst & Young LLP E

24.1 Power of Attorney E

99.1 Certification Under Section 906 of the Sarbanes−Oxley Act of 2002 E

99.2 Excerpts from Current Reports on Form 8−K E 93 QuickLinks

Nash Finch Company Index PART I

ITEM 1. BUSINESS

ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS PART II

ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS NASH FINCH COMPANY and SUBSIDIARIES Consolidated Summary of Operations Five years ended December 28, 2002 (not covered by Independent Auditors' Report)

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Income NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share amounts) NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) NASH FINCH COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity NASH FINCH COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NASH FINCH COMPANY AND SUBSIDIARIES Quarterly Financial Information (Unaudited)

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

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table Option Grants During Fiscal 2002 Option Exercises in Fiscal 2002/Fiscal Year−End Option Values

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8−K NASH FINCH COMPANY and SUBSIDIARIES Valuation and Qualifying Accounts Fiscal Years ended December 28, 2002, December 29, 2001 and January 1, 2000 SIGNATURES NASH FINCH COMPANY EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10−K For Fiscal Year Ended December 28, 2002 QuickLinks −− Click here to rapidly navigate through this document

Exhibit 3.5

NASH−FINCH COMPANY BY−LAWS Restated April 15, 2003

ARTICLE I STOCK

1. A certificate of stock shall be issued to each holder of fully paid stock, in numerical order, signed by the Chief Executive Officer, President or Executive Vice President, or by a Vice President, and by the Secretary or Assistant Secretary.

2. A transfer of stock shall be made only upon the books of the Company and before a new certificate is issued, the old certificate must be surrendered for cancellation.

3. Stock of the Company which shall have been purchased by it and held in the treasury shall be subject to disposal by the Board of Directors, but, while held by the Company, shall not be voted, nor shall it participate in the dividends or profits of the Company; provided that such stock may participate in any stock split in the form of a stock dividend.

ARTICLE II STOCKHOLDERS AND STOCKHOLDERS MEETINGS

1. The annual meeting of the stockholders of this Company for the election of directors and the transaction of such other business as may properly be brought before such meeting shall be held at such date, time and place, either within or outside the State of Delaware, as may be designated by resolution of the Board of Directors from time to time and stated in the notice of the meeting.

2. The holders of a majority of the stock issued and outstanding, and entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by law, by the certificate of incorporation or by these by−laws. If, however, such majority shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting, until the requisite amount of voting stock shall be present. At such adjourned meeting at which the requisite amount of voting stock shall be represented any business may be transacted which might have been transacted at the meeting as originally notified. Any question coming before a meeting at which a quorum is present shall be decided by a majority vote of the stock issued and outstanding and entitled to vote thereat, then present in person or represented by proxy, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

3. At any meeting of the stockholders each stockholder shall be entitled to one vote in person or by written proxy for each share of the capital stock having voting power held by such stockholder.

4. Written or printed notice of an annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote thereat at such address as appears on the stock ledger of the Company not less than 20 days nor more than 60 days before the date of meeting.

5. The officer who has charge of the stock ledger of the Company shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the

1 examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the county where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified in the notice of the meeting, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

6. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called at any time only by the Board Chair or the President or by an affirmative vote of two−thirds ( 2/3) of the full Board of Directors at any regular or special meeting of the Board of Directors called for that purpose.

7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

8. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of such meeting, to each stockholder entitled to vote at such meeting.

9. No action shall be taken by the stockholders except in an annual or special meeting as provided for in this Article II.

ARTICLE III DIRECTORS

1. The property and business of this Company shall be managed by its Board of Directors, not less than nine (9) nor more than seventeen (17) in number, which number shall be determined by the Board of Directors from time to time and no fewer than two (2) of whom are neither former officers nor present full−time employees of Nash−Finch Company and its subsidiaries. The directors shall be classified with respect to their terms of office by dividing them into three classes (Classes A, B and C) with each class being as nearly equal in number as possible. The terms of office of the directors initially classified as Class A shall expire at the annual meeting of stockholders to be held in 1986; the terms of those classified as Class B shall expire at the annual meeting of stockholders to be held in 1985; and the terms of those classified as Class C shall expire at the annual meeting of stockholders to be held in 1984. At each annual meeting of stockholders after such initial classification, directors of the class whose term is expiring will be elected to hold office until the third succeeding annual meeting (or, for terms of approximately three years). Directors shall hold office until the expiration of the terms for which they were elected and qualified; provided, however, that a director may be removed from office at any time but only (i) for cause, and (ii) then upon the affirmative vote of the holders of three−fourths ( 3/4) of all outstanding shares entitled to vote.

2. If the office of any director or directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, increase in the number of directors, or otherwise, a majority of the remaining directors, though less than a quorum, at a meeting called for that purpose, may choose a successor or successors, or new director or directors in the event of an increase in the number of directors, who shall hold office until the expiration of the term of the class for which appointed and until a successor shall be elected and shall qualify.

3. In addition to the powers and authorities by these by−laws expressly conferred upon it, the Board of Directors may exercise all such powers of the Company and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by−laws directed or required to be exercised or done by the stockholders.

4. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more directors of the

2 Company, which, to the extent provided in said resolution or resolutions, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Company, and may have power to authorize the seal of the Company to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

5. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect a director to serve as Board Chair. The director so elected shall not, by virtue of such election, be deemed to be an officer of the Company pursuant to Article VI hereof. An officer of the Company, elected by the Board of Directors under the provisions of said Article VI, however, may be elected to serve as the Board Chair. The Board Chair shall preside at all meetings of the stockholders and Board of Directors and otherwise shall have such duties and responsibilities as may be assigned from time to time by the Board of Directors. During the absence or disability of the Board Chair, the Board of Directors shall designate another director to discharge the duties of the Board Chair.

ARTICLE IV MEETINGS OF THE BOARD

1. Each newly elected Board of Directors shall hold its first and annual meeting immediately following the annual meeting of the stockholders at a place designated by the Board, or they may meet at such place and time as shall be fixed by the consent in writing of all the directors. No notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting; provided, however, that a majority of the whole Board shall be present.

2. Meetings of the Board of Directors other than the annual meeting, may be called at any time by the Board Chair, Chief Executive Officer, President or Secretary, or in their absence by the Executive Vice President, or by any Vice President or on the written request of any three directors; on one day's notice to each director, either personally or by mail or by telegram. Unless otherwise fixed by the Board, such meetings shall be held at the office of the Company in Edina, Minnesota.

3. At all meetings of the Board a majority of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation or by these by−laws.

4. Unless otherwise restricted by the certificate of incorporation or these by−laws, any actions required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting, if all members of the Board or the committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or the committee.

5. Unless otherwise restricted by the certificate of incorporation, the Board of Directors shall have the authority to fix the compensation of directors.

ARTICLE V INDEMNIFICATION

Section 1. Right to Indemnification.

Every person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation or for its

3 benefit as a director, officer, employee or agent of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, including any employee benefit plan, shall be indemnified and held harmless by the Corporation to the fullest extent legally permissible under the General Corporation Law of the State of Delaware in the manner prescribed therein, from time to time, against all expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection therewith. Similar indemnification may be provided by the Corporation to an employee or agent of the Corporation who was or is a party or is threatened to be made a party to or is involved in any such threatened, pending or completed action, suit or proceeding by reason of the fact that he is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation or for its benefit as a director, officer, employee, or agent of another corporation or as its representative in a partnership, joint venture, trust or other enterprise, including any employee benefit plan.

Section 2. Other Indemnification.

The rights of indemnification conferred by the Article shall not be exclusive of, but shall be in addition to, any other rights which such directors, officers, employees or agents may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any by−law, agreement, vote of stockholders, provisions or law or otherwise, as well as their rights under this Article.

Section 3. Indemnification Agreement.

The Company shall have the express authority to enter such agreements as the Board of Directors deems appropriate for the indemnification of present or future directors or officers of the Company in connection with their service to, or status with, the Company or any other corporation, entity or enterprise with whom such person is serving at the express written request of the Company.

ARTICLE VI OFFICERS

1. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect the corporate officers of the Company.

2. The corporate officers of the Company shall be a Chief Executive Officer, a President, as many Vice Presidents (some of whom may be designated Senior Vice Presidents) as may be deemed necessary, such Assistant Vice Presidents as may be deemed necessary, a Secretary and such Assistant Secretaries as may be deemed necessary, a Treasurer and such Assistant Treasurers as may be deemed necessary, and a Controller and such Assistant Controllers as may be deemed necessary.

3. The Board of Directors may elect such other corporate officers and agents as it shall deem necessary, including a Chief Operating Officer, one or more Executive Vice Presidents, and one or more operating officers (who may be designated Vice Presidents, but who shall not be corporate officers). Such other corporate and operating officers and agents shall hold their offices for such terms, shall exercise such powers and perform such duties as shall be determined from time to time by the Board; provided, however, that operating officers shall exercise only such powers and perform only such duties as may be determined by the Board and shall not have authority to exercise the powers or discharge the duties of any corporate officer. Unless expressly stated to the contrary, any reference in these By−Laws to officers, by title or otherwise, other than in this Paragraph 3 of Article VI, shall be deemed to mean corporate officers.

4. The Chief Executive Officer must be a director but no other officer need be a director. Any two offices may be held by the same person.

4 5. If the President is also the Chief Executive Officer of the corporation, he shall have general and active management of the business of the corporation, shall see that all orders and resolutions of the Board are carried into effect and shall perform such other duties as the Board shall prescribe. He shall possess power to sign all certificates, contracts and other instruments of the corporation. If the offices of President and Chief Executive Officer are not held by the same person, then the Chief Executive Officer shall have the foregoing responsibilities, duties and powers; and the President shall report to the Chief Executive Officer and shall exercise such powers and shall perform such duties as shall be determined from time to time by the Board.

6. During the absence of the Chief Executive Officer, the President (if a different person), and during the absence or disability of both of them, the Executive Vice Presidents in the order in which they have been nominated, shall exercise all the functions of the Chief Executive Officer. Each Executive Vice President shall have such powers and discharge such duties as may be assigned from time to time by the Board of Directors.

7. The Vice Presidents and Assistant Vice Presidents shall perform such duties as are prescribed and allotted to them by the Board of Directors, the Chief Executive Officer or the President.

8. The Secretary shall issue notices of all meetings, shall attend all meetings of the Board of Directors and all meetings of the stockholders, shall keep their minutes, shall have charge of the seal and the corporate books, shall sign with the Chief Executive Officer, President, Executive Vice Presidents or Vice Presidents, stock certificates and such other instruments as require such signature, and shall make such reports and perform such other duties as are incident to the office or are properly required of him by the Board of Directors.

9. The Assistant Secretary shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.

10. The Treasurer shall have the custody of all monies and securities of the Company. He shall sign or countersign such instruments as require his signature, and shall perform all duties incident to his office, or that are properly required of him by the Board. He shall render to the Chief Executive Officer and Board of Directors, whenever required, a report of his transactions as Treasurer and of the financial condition of the Company.

11. The Assistant Treasurers shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.

12. The Controller shall keep regular books of accounts and balance the same periodically. He shall keep full and accurate accounts of receipts and disbursements of the Company. He shall deposit all monies, and other valuable effects of the Company, in such depositories as may be designated. He shall disburse the funds of the Company as properly authorized on adequate supporting documents and shall render to the Chief Executive Officer and Board of Directors, whenever required, an accounting of all of his transactions as Controller and the financial condition of the Company.

13. The Assistant Controller shall, in the absence or disability of the Controller, perform the duties and exercise the powers of the Controller, and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.

ARTICLE VII DIVIDENDS

1. Dividends upon the capital stock of the Company, subject to the provisions of the certificate of incorporation, if any, may be declared by the Board of Directors at any regular or special meeting,

5 pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

2. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Company, or for such other purposes as the directors shall think conducive to the interest of the Company, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII FIXING RECORD DATE

1. In order that the Company may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

ARTICLE IX REGISTERED STOCKHOLDERS

1. The Company shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE X NOTICE

1. Whenever under the provision of the statutes or of the certificate of incorporation or of these by−laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, by depositing the same in the post office or letter box, in a postpaid sealed wrapper, addressed to such stockholder or director at such address as appears on the books of the Company, or, in default of other address, to such director or stockholder at the general post office in the City of Wilmington, Delaware, and such notice shall be deemed to be given at the time when the same shall be thus mailed. Notice to directors may also be given by telephone or telegram.

2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by−laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

6 ARTICLE XI SEAL

1. The corporate seal of the Company shall be of such design as may be decided upon by the officers of the Company.

ARTICLE XII AMENDMENTS

1. These by−laws may be amended, repealed or altered in whole or in part by the Board of Directors at any regular meeting or at any special meeting of the Board of Directors where such action has been announced in the call and notice of meeting.

ARTICLE XIII CONSTRUCTION

1. Masculine pronouns shall be construed as feminine or neuter pronouns and singular pronouns and verbs shall be construed as plural in any place or places herein in which the context may require such construction.

7 QuickLinks

NASH−FINCH COMPANY BY−LAWS Restated April 15, 2003 QuickLinks −− Click here to rapidly navigate through this document

Exhibit 10.5

Form of Change in Control Agreement

[Date]

«First_NameMiddle_Initial» «Last_Name» «Address»

Dear «MrMs» «Last_Name»:

You are presently the «Title» of Nash Finch Company, a Delaware corporation. The Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control may arise and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.

Accordingly, the Board has determined that appropriate steps should be taken to minimize the risk that Company management will depart prior to a Change in Control, thereby leaving the Company without adequate management personnel during such a critical period, and that appropriate steps also be taken to reinforce and encourage the continued attention and dedication of members of the Company's management to their assigned duties without distraction in circumstances arising from the possibility of a Change in Control. In particular, the Board believes it important, should Nash Finch Company or its stockholders receive a proposal of transfer of control, that you be able to continue your management responsibilities and assess and advise the Board whether such proposal would be in the best interests of Nash Finch Company and its stockholders and to take other action regarding such proposal as the Board might determine to be appropriate, without being influenced by the uncertainties of your own personal situation.

The Board recognizes that continuance of your position with the Company involves a substantial commitment to the Company in terms of your personal life and professional career and the possibility of foregoing present and future career opportunities, for which the Company receives substantial benefits. Therefore, to induce you to remain in the employ of the Company, this letter agreement, which has been approved by the Board, sets forth the benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated in connection with a Change in Control under the circumstances described below.

1 1. Definitions. The following terms will have the meaning set forth below unless the context clearly requires otherwise. Terms defined elsewhere in this Agreement will have the same meaning throughout this Agreement.

(a) "Agreement" means this letter agreement as amended, extended or renewed from time to time in accordance with its terms.

(b) "Board" means the board of directors of the Parent Corporation duly qualified and acting at the time in question.

(c) "Cause" means: (i) the willful and continued failure by you to substantially perform your duties with the Company (other than any such failure resulting from your Disability or incapacity due to bodily injury or physical or mental illness) after a demand for substantial performance is delivered to you by the chair of the Board which specifically identifies the manner in which such executive believes that you have not substantially performed your duties; or (ii) your conviction (including a plea of nolo contendere) of willfully engaging in illegal conduct constituting a felony or gross misdemeanor under federal or state law which is materially and demonstrably injurious to the Company. For purposes of this definition, no act, or failure to act, on your part will be considered "willful" unless done, or omitted to be done, by you in bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board (or a committee hereof) or based upon the advice of counsel for the Company will be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company. It is also expressly understood that your attention to matters not directly related to the business of the Company will not provide a basis for termination for Cause so long as the Board does not expressly disapprove in writing of your engagement on such activities either before or within a reasonable period of time after the Board knew or could reasonably have known that you engaged in those activities. Notwithstanding the foregoing, you will not be deemed to have been terminated for Cause unless and until there has been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the Board you were guilty of the conduct set forth above in clause (i) or (ii) of this definition and specifying the particulars thereof in detail.

(d) "Change in Control" means: (i) the sale, lease, exchange, or other transfer of all or substantially all of the assets of the Parent Corporation (in one transaction or in a series of related transactions) to a corporation that is not controlled by the Parent Corporation; (ii) the approval by the stockholders of the Parent Corporation of any plan or proposal for the liquidation or dissolution of the Parent Corporation; or (iii) a change in control of a nature that would be required to be reported (assuming such event has not been "previously reported") in response to Item 1(a) of the Current Report on Form 8−K, as in effect on the date hereof, pursuant to section 13 or 15(d) of the Exchange Act, whether or not the Parent Corporation is then subject to such reporting requirement; provided that, without limitation, such a Change in Control will be deemed to have occurred at such time as: (A) any Person is or becomes the "beneficial owner" (as defined in Rule 13d−3 under the Exchange Act), directly or indirectly, of thirty percent (30%) or more of the combined voting power of the Parent Corporation's outstanding securities ordinarily having the right to vote at elections of directors, or (B) individuals who constitute the Board on the date of this Agreement (the "Incumbent Board") cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date of this Agreement whose election, or nomination for election, by the Parent Corporation's stockholders, was approved by a vote of at least a majority of the directors comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Parent Corporation in which such person is named as a nominee for director, without objection to such nomination) will, for purposes of this clause (B), be deemed to be a member of the Incumbent Board.

2 (e) "Code" means the Internal Revenue Code of 1986, as amended.

(f) "Company" means the Parent Corporation, any Subsidiary and any Successor.

(g) "Confidential Information" means information which is proprietary to the Company or proprietary to others and entrusted to the Company, whether or not trade secrets. It includes information relating to business plans and to business as conducted or anticipated to be conducted, and to past or current or anticipated products or services. It also includes, without limitation, information concerning research, development, purchasing, accounting, marketing and selling. All information which you have a reasonable basis to consider confidential is Confidential Information, whether or not originated by you and without regard to the manner in which you obtain access to that and any other proprietary information.

(h) "Date of Termination" following a Change in Control (or prior to a Change in Control if your termination was either a condition of the Change in Control or was at the request or insistence of any Person (other than the Company) related to the Change in Control) means: (i) if your employment is to be terminated for Disability, thirty (30) calendar days after Notice of Termination is given (provided that you have not returned to the performance of your duties on a full−time basis during such thirty (30)−calendar−day period); (ii) if your employment is to be terminated by the Company for Cause or by you for Good Reason, the date specified in the Notice of Termination; (iii) if your employment is to be terminated by the Company for any reason other than Cause, Disability, death or Retirement, the date specified in the Notice of Termination, which in no event may be a date earlier than ninety (90) calendar days after the date on which a Notice of Termination is given, unless an earlier date has been expressly agreed to by you in writing either in advance of, or after, receiving such Notice of Termination; or (iv) if your employment is terminated by reason of death or Retirement, the date of death or Retirement, respectively. In the case of termination by the Company of your employment for Cause, if you have not previously expressly agreed in writing to the termination, then within thirty (30) calendar days after receipt by you of the Notice of Termination with respect thereto, you may notify the Company that a dispute exists concerning the termination, in which event the Date of Termination will be the date set either by mutual written agreement of the parties or by the judge or arbitrators in a proceeding as provided in Section 13 of this Agreement. During the pendency of any such dispute, the Company will continue to pay you your full compensation and benefits in effect just prior to the time the Notice of Termination is given and until the dispute is resolved in accordance with Section 13 of this Agreement.

(i) "Disability" means a disability as defined in the Company's long−term disability plan as in effect immediately prior to the Change in Control or, in the absence of such a plan, means permanent and total disability as defined in section 22(e)(3) of the Code.

(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(k) "Good Reason" means:

(i) an adverse change in your status or position(s) as an executive of the Company as in effect immediately prior to the Change in Control, including, without limitation, any adverse change in your status or position(s) as a result of a material diminution in your duties or responsibilities (other than, if applicable, any such change directly attributable to the fact that the Company is no longer publicly owned) or the assignment to you of any duties or responsibilities which, in your reasonable judgment, are inconsistent with such status or position(s), or any removal of you from or any failure to reappoint or reelect you to such position(s) (except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason);

3 (ii) a reduction by the Company in your rate of total compensation (including, without limitation, salary and bonuses) (or an adverse change in the form or timing of the payment thereof) as in effect immediately prior to the Change in Control;

(iii) the failure by the Company to continue in effect any Plan in which you (and/or your family) are participating at any time during the ninety (90)−calendar−day period immediately preceding the Change in Control (or Plans providing you (and/or your family) with at least substantially similar benefits) other than as a result of the normal expiration of any such Plan in accordance with its terms as in effect immediately prior to the ninety (90)−calendar−day period immediately preceding the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect your (and/or your family's) continued participation in any of such Plans on at least as favorable a basis to you (and/or your family) as is the case on the date of the Change in Control or which would materially reduce your (and/or your family's) benefits in the future under any of such Plans or deprive you (and/or your family) of any material benefit enjoyed by you (and/or your family) at the time of the Change in Control;

(iv) the Company's requiring you to be based anywhere other than where your office is located immediately prior to the Change in Control, except for required travel on the Company's business, and then only to the extent substantially consistent with the business travel obligations which you undertook on behalf of the Company during the ninety (90)−calendar−day period immediately preceding the Change in Control (without regard to travel related or in anticipation of the Change in Control);

(v) the failure by the Company to obtain from any Successor the assent to this Agreement contemplated by Section 6 of this Agreement.

(vi) any purported termination by the Company of your employment which is not properly effected pursuant to a Notice of Termination and pursuant to any other requirements of this Agreement, and for purposes of this Agreement, no such purported termination will be effective; or

(vii) any refusal by the Company to continue to allow you to attend to matters or engage in activities not directly related to the business of the Company which, at any time prior to the Change in Control, you were not expressly prohibited in writing by the Board from attending to or engaging in.

Notwithstanding anything in the foregoing to the contrary, your termination of employment with the Company for any reason other than death, Disability or Retirement within six (6) calendar months following a Change in Control will be conclusively deemed to be for Good Reason.

(l) "Highest Monthly Compensation" means one−twelfth ( 1/12) of the highest amount of your compensation for any twelve (12) consecutive calendar−month period during the thirty−six (36) consecutive calendar−month period prior to the month that includes the Date of Termination. For purposes of this definition, "compensation" means the amount reportable by the Company, for federal income tax purposes, as wages paid to you by the Company, increased by the amount of contributions made by the Company with respect to you under any qualified cash or deferred arrangement or cafeteria plan that is not then includable in your income by reason of the operation of section 402(a)(8) or section 125 of the Code, and increased further by any other compensation deferred for any reason, including, without limitation, amounts deferred (whether vested or nonvested) pursuant to the Company's Executive Incentive Bonus and Deferred Compensation Plan.

(m) "Notice of Termination" means a written notice which indicates the specific termination provision in this Agreement pursuant to which the notice is given. Any purported termination by the Company or by you following a Change in Control (or prior to a Change in Control if your termination was either a condition of the Change in Control or was at the request or insistence of any Person

4 (other than the Company) related to the Change in Control) must be communicated by written Notice of Termination.

(n) "Parent Corporation" means Nash Finch Company and any Successor.

(o) "Person" means and includes any individual, corporation, partnership, group, association or other "person", as such term is used in section 14(d) of the Exchange Act, other than the Parent Corporation, a wholly−owned subsidiary of the Parent Corporation or any employee benefit plan(s) sponsored by the Parent Corporation or a wholly−owned subsidiary of the Parent Corporation.

(p) "Plan" means any compensation plan (such as a stock option, restricted stock plan or other equity−based plan), or any employee benefit plan (such as a thrift, pension, profit sharing, medical, dental, disability, accident, life insurance, relocation, salary continuation, expense reimbursements, vacation, fringe benefits, office and support staff plan or policy) or any other plan, program, policy or agreement of the Company intended to benefit employees (and/or their families) generally, management employees (and/or their families) as a group or you (and/or your family) in particular (including, without limitation the Company's 1994 Stock Incentive Plan, 2000 Stock Incentive Plan, Profit Sharing Plan, Income Deferral Plan and Supplemental Executive Retirement Plan).

(q) "Retirement" means the day on which you attain the age of sixty−five (65).

(r) "Subsidiary" means any corporation at least a majority of whose securities having ordinary voting power for the election of directors is at the time owned by the Company and/or one (1) or more Subsidiaries.

(s) "Successor" means any Person that succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Parent Corporation's business directly, by merger, consolidation or other form of business combination, or indirectly, by purchase of the Parent Corporation's voting securities, all or substantially all of its assets or otherwise.

2. Term of Agreement. This Agreement is effective immediately and will continue in effect until December 31, 2003; provided, however, that commencing on January 1, 2003 and each January 1 thereafter, the term of this Agreement will automatically be extended for one (1) additional year beyond the expiration date otherwise then in effect, unless at least ninety (90) calendar days prior to any such January 1, the Company or you has been given notice that this Agreement will not be extended; and, provided, further, that this Agreement will continue in effect beyond the termination date then in effect for a period of twenty−four (24) calendar months following a Change in Control if a Change in Control has occurred during such term.

3. Benefits upon a Change in Control Termination. If your employment by the Company is terminated for any reason other than death, Cause, Disability or Retirement, or if you terminate your employment by the Company for Good Reason either within: (a) twenty−four (24) calendar months following a Change in Control; or (b) prior to a Change in Control if your termination was either a condition of the Change in Control or was at the request or insistence of a Person (other than the Company) related to the Change in Control, then:

(i) Cash Payment. Within five (5) business days following the Date of Termination, the Company will make a lump−sum cash payment to you in an amount equal to the product of (A) your Highest Monthly Compensation multiplied by (B) the lesser of (I) the number of full or partial calendar months remaining until your Retirement or (II) [thirty−six (36)] [twenty−four (24)] [twelve (12)].

(ii) Welfare Plans. The Company will maintain in full force and effect, for the continued benefit of you and your dependents for a period terminating on the earliest of (A) [thirty−six (36)] [twenty−four (24)] [twelve (12)] calendar months after the Date of Termination or (B) your Retirement, all insured and self−insured employee welfare benefit Plans (including, without

5 limitation, health, life, dental and disability plans) in which you were entitled to participate at any time during the ninety (90)−calendar−day period immediately preceding the Change in Control, provided that your continued participation is possible under the general terms and provisions of such Plans and any applicable funding media and without regard to any discretionary amendments to such Plans by the Company following the Change in Control (or prior to the Change in Control if amended as a condition or at the request or insistence of a Person (other than the Company) related to the Change in Control) and provided that you continue to pay an amount equal to your regular contribution under such Plans for such participation (based upon your level of benefits and employment status most favorable to you at any time during the ninety (90)−calendar−day period immediately preceding the Change in Control). If the [thirty−six (36)][twenty−four (24)] [twelve (12)]−month−period ends before you have reached Retirement and you have not previously received or are not then receiving equivalent benefits from a new employer (including coverage for any pre−existing conditions), the Company will arrange, at its sole cost and expense, to enable you to covert your and your dependents' coverage under such plans to individual policies or programs under the same terms as executives of the Company may apply for such conversions. In the event that you or your dependents' participation in any such Plan is barred, the Company, at its sole cost and expense, will arrange to have issued for the benefit of you and your dependents individual policies of insurance providing benefits substantially similar (on a federal, state and local income and employment after−tax basis) to those which you otherwise would have been entitled to receive under such Plans pursuant to this clause (ii) or, if such insurance is not available at a reasonable cost to the Company, the Company will otherwise provide you and your dependents equivalent benefits (on a federal, state and local income and employment after−tax basis). You will not be required to pay any premiums or other charges in an amount greater than that which you would have paid in order to participate in such Plans.

(iii) Tax Reimbursement.

(A) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payments or distributions by the Company, any person or entity whose actions result in a Change of Control or any person or entity affiliated with the Company or such person or entity, to or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement, any option agreement, restricted stock award agreement or otherwise, but determined without regard to any payments required under this Section 3(iii)) (collectively, the "Payments") would be subject to the excise tax imposed by Section 4999 of the Code or you incur any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then you shall be entitled to receive an additional payment (a "Gross−Up Payment") in an amount such that, after your payment of all taxes (and any interest or penalties imposed with respect to such taxes), including any income taxes and Excise Tax imposed upon the Gross−Up Payment, you retain an amount of the Gross−Up Payment equal to the Excise Tax imposed upon the Payments.

(B) Subject to the provisions of clause (D), below, all determinations required to be made under this Section 3(iii), including whether and when a Gross−Up Payment is required and the amount such Gross−Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company's external auditors, or, if such auditors are prohibited by law, rule or regulation from so serving, another accounting firm of national reputation selected by the Company (in either case, the "Accounting Firm"), which shall provide detailed supporting calculations both to you and to the Company within fifteen (15) business days of the receipt of notice from you that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control,

6 you shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the "Accounting Firm" hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross−Up Payment, as determined pursuant to this Section 3(iii), shall be paid by the Company to you within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with a written opinion that failure to report the Excise Tax on your applicable federal income tax return would not result in the imposition of a penalty. Any determination by the Accounting Firm shall be binding upon you and the Company.

(C) As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross−Up Payments which should have been made by the Company will not have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to clause (D) below and you thereafter are required to make a payment of any additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for your benefit.

(D) You shall notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of any Gross−Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after you know of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. You shall not pay such claim prior to the expiration of the thirty (30)−day period following the date on which you give such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies you in writing prior to the expiration of such period that it desires to contest such claim, you shall:

(1) give the Company any information reasonably requested by the Company relating to such claim;

(2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(3) cooperate with the Company in good faith in order to effectively contest such claim; and

(4) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you harmless, on an after−tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this clause (D), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct you to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company directs you to pay

7 such claim and sue for a refund, the Company shall: (i) to the extent not prohibited by law, rule or regulation, advance the amount of such payment to you on an interest−free basis; or (ii) to the extent any such advance is so prohibited, pay such amount directly; and, in either case, shall indemnify and hold you harmless, on an after−tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such payment or advance or with respect to any imputed income with respect to such payment or advance; and provided further that any extension of the statute of limitations relating to payment of taxes for your taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross−Up Payment would be payable hereunder and you shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(E) If, after your receipt of an amount advanced by the Company pursuant to clause (D), above, you become entitled to receive any refund with respect to such claim, you shall (subject to the Company's complying with the requirements of clause (D)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after your receipt of an amount advanced by the Company pursuant to clause (D), above, a determination is made that you shall not be entitled to any refund with respect to such claim and the Company does not notify you in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross−Up Payment required to be paid.

(iv) Non−Competition Obligations. As consideration for the Gross−Up Payment (which is hereby acknowledged by you as providing you with additional and sufficient benefit to support the following covenant), you agree that in the event your employment with the Company is terminated upon conditions entitling you to the payments and benefits provided for under Section 3 of the Agreement, you will not, without the prior written consent of the Company (given after the consummation of the Change in Control), alone or in any capacity (other than by way of holding shares of a publicly traded company in an amount not exceeding five percent (5%) of the outstanding class or series so traded) with any other person or entity, directly or indirectly engage in competition with the Company or any Subsidiary, in association with or as an officer, director, employee, principal, agent or consultant of or to Fleming Companies, Inc., SuperValu, Inc. or Spartan Stores, Inc. for a period ending one (1) year after such date of termination.

4. Indemnification. Following a Change in Control, the Company will indemnify and pay your expenses, as incurred, to the full extent permitted by law and the Company's certificate of incorporation and bylaws for damages, costs and expenses (including, without limitation, judgments, fines, penalties, settlements and reasonable fees and expenses of your counsel) incurred in connection with all matters, events and transactions relating to your service to or status with the Company or any other corporation, employee benefit plan or other entity with whom you served at the request of the Company.

5. Confidentiality. You will not use, other than in connection with your employment with the Company, or disclose any Confidential Information to any person not employed by the Company or not authorized by the Company to receive such Confidential Information, without the prior written consent of the Company; and you will use reasonable and prudent care to safeguard and protect and prevent the unauthorized disclosure of Confidential Information. Nothing in this Agreement will prevent you from using, disclosing or authorizing the disclosure of any Confidential Information: (a) which is or hereafter becomes part of the public domain or otherwise becomes generally available to the public through no fault of yours; (b) to the extent and upon the terms and conditions that the Company may

8 have previously made the Confidential Information available to certain persons; or (c) to the extent that you are required to disclose such Confidential Information by law or judicial or administrative process.

6. Successors. The Company will seek to have any Successor, by agreement in form and substance satisfactory to you, assent to the fulfillment by the Company of the Company's obligations under this Agreement. Failure of the Company to obtain such assent at least three (3) business days prior to the time a Person becomes a Successor (or where the Company does not have at least three (3) business days' advance notice that a Person may become a Successor, within one (1) business day after having notice that such Person may become or has become a Successor) will constitute Good Reason for termination by you of your employment.

7. Fees and Expenses. The Company, upon demand, will pay or reimburse you for all reasonable legal fees, court costs, experts' fees and related costs and expenses incurred by you in connection with any actual, threatened or contemplated litigation or legal, administrative, arbitration or other proceeding relating to this Agreement to which you are or reasonably expect to become a party, whether or not initiated by you, including, without limitation, your seeking to obtain or enforce any right or benefit provided by this Agreement; provided, however, you will be required to repay (without interest) any such amounts to the Company to the extent that a court issues a final and non−appealable order setting forth the determination that the position taken by you was frivolous or advanced by you in bad faith.

8. Binding Agreement. This Agreement inures to the benefit of, and is enforceable by, you, your personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you die while any amount would still be payable to you under this Agreement if you had continued to live, all such amounts, unless otherwise provided in this Agreement, will be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.

9. No Mitigation. You will not be required to mitigate the amount of any payments or benefits the Company becomes obligated to make or provide to you in connection with this Agreement by seeking other employment or otherwise. The payments or benefits to be made or provided to you in connection with this Agreement may not be reduced, offset or subject to recovery by the Company by any payments or benefits you may receive from other employment or otherwise.

10. No Setoff. The Company will have no right to setoff payments or benefits owed to you under this Agreement against amounts owed or claimed to be owed by you to the Company under this Agreement or otherwise.

11. Taxes. All payments and benefits to be made or provided to you in connection with this Agreement will be subject to required withholding of federal, state and local income, excise and employment−related taxes.

12. Notices. For the purposes of this Agreement, notices and all other communications provided for in, or required under, this Agreement must be in writing and will be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid and addressed to each party's respective address set forth on the first page of this Agreement (provided that all notices to the Company must be directed to the attention of the chair of the Board), or to such other address as either party may have furnished to the other in writing in accordance with these provisions, except that notice of change of address will be effective only upon receipt.

13. Disputes. Any dispute, controversy or claim for damages rising under or in connection with this Agreement may, in your sole discretion, be settled exclusively by such judicial remedies that you may seek to pursue or by arbitration in Minneapolis, Minnesota by three (3) arbitrators in accordance

9 with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators' award in any court having jurisdiction. The Company will be entitled to seek an injunction or restraining order in a court of competent jurisdiction (within or without the State of Minnesota) to enforce the provisions of Section 5 of this Agreement.

14. Jurisdiction. Except as specifically provided otherwise in this Agreement, the parties agree that any action or proceeding arising under or in connection with this Agreement must be brought in a court of competent jurisdiction in the State of Minnesota, and hereby consent to the exclusive jurisdiction of said courts for this purpose and agree not to assert that such courts are an inconvenient forum.

15. Related Agreements. To the extent that any provision of any other Plan or agreement between the Company and you shall limit, qualify or be inconsistent with any provision of this Agreement, then for purposes of this Agreement, while such other Plan or agreement remains in force, the provision of this Agreement will control and such provision of such other Plan or agreement will be deemed to have been superseded, and to be of no force or effect, as if such other agreement had been formally amended to the extent necessary to accomplish such purpose. Nothing in this Agreement prevents or limits your continuing or future participation in any Plan provided by the Company and for which you may qualify, and nothing in this Agreement limits or otherwise affects the rights you may have under any Plans or other agreements with the Company. Amounts which are vested benefits or which you are otherwise entitled to receive under any Plan or other agreement with the Company at or subsequent to the Date of Termination will be payable in accordance with such Plan or other agreement.

16. No Employment or Service Contract. Nothing in this Agreement is intended to provide you with any right to continue in the employ of the Company for any period of specific duration or interfere with or otherwise restrict in any way your rights or the rights of the Company, which rights are hereby expressly reserved by each, to terminate your employment at any time for any reason or no reason whatsoever, with or without cause.

17. Survival. The respective obligations of, and benefits afforded to, the Company and you which by their express terms or clear intent survive termination of your employment with the Company or termination of this Agreement, as the case may be, including, without limitation, the provisions of Sections 3, 4, 5, 6, 7, 10, 11, 12 and 13 of this Agreement, will survive termination of your employment with the Company or termination of this Agreement, as the case may be, and will remain in full force and effect according to their terms.

18. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and the chair of the Board. No waiver by any party to this Agreement at any time of any breach by another party to this Agreement of, or of compliance with, any condition or provision of this Agreement to be performed by such party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter to this Agreement have been made by any party which are not expressly set forth in this Agreement.

This Agreement and the legal relations among the parties as to all matters, including, without limitation, matters of validity, interpretation, construction, performance and remedies, will be governed by and construed exclusively in accordance with the internal laws of the State of Minnesota (without regard to the conflict of laws provisions of any jurisdiction), except to the extent that the provisions of the corporate law of Delaware may apply to the internal affairs of the Company. Headings are for purposes of convenience only and do not constitute a part of this Agreement. The parties to this Agreement agree to perform, or cause to be performed, such further acts and deeds and to execute and deliver, or cause to be executed and delivered, such additional or supplemental documents or

10 instruments as may be reasonably required by the other party to carry into effect the intent and purpose of this Agreement. The invalidity or unenforceability of all or any part of any provision of this Agreement will not affect the validity or enforceability of the remainder of such provision or of any other provision of this Agreement, which will remain in full force and effect. This Agreement may be executed in several counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument.

If this letter correctly sets forth our agreement on the subject matter discussed above, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject.

Sincerely,

NASH FINCH COMPANY.

By:

[Name] [Title]

Agreed to this day of , 2003.

«First_NameMiddle_Initial» «Last_Name»

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Form of Change in Control Agreement QuickLinks −− Click here to rapidly navigate through this document

Exhibit 10.12

Declaration of Amendment to the Nash Finch Employee Stock Purchase Plan

Pursuant to Section 13 of the of the Nash Finch Company 1999 Employee Stock Purchase Plan (the "Plan"), and the authorization and direction of the Nash Finch Company Board of Directors at its March 28, 2003 meeting, Sections 2.11 and 6 of the Plan are amended in their entirety to read as follows:

2.11 "Offering Period" means any of the offerings to Participants of Options under the Plan, each continuing for six months or such longer period as the Board or Committee may prescribe, as described in Section 6 of the Plan.

6. Offering Periods.

Options to purchase shares of Common Stock will be offered to Participants under the Plan through a continuous series of Offering Periods, each continuing for six months, and each of which will commence on January 1 and July 1 of each year, as the case may be, and will terminate on June 30 and December 31 of such year, as the case may be; provided, however, that the Board or the Committee may, in its sole discretion, extend any Offering Period for up to an additional six (6) months, in which event the Offering Period immediately following the extended Offering Period will be decreased by an equivalent period so that such subsequent Offering Period will terminate on the following June 30 or December 31, as the case may be.

In Witness Whereof, the Company has caused this instrument to be executed by its duly authorized officer as of March 28, 2003.

NASH FINCH COMPANY

By: /s/ KATHLEEN E. MCDERMOTT

Kathleen E. McDermott Senior Vice President

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Declaration of Amendment to the Nash Finch Employee Stock Purchase Plan QuickLinks −− Click here to rapidly navigate through this document

Exhibit 14.1

NASH FINCH COMPANY CODE OF ETHICS FOR SENIOR FINANCIAL MANAGEMENT April 15, 2003

Purpose. Nash Finch Company has adopted this Code of Ethics for Senior Financial Management to deter wrongdoing and to promote:

• honest and ethical conduct;

• full, fair, accurate, timely and understandable disclosure by the Company;

• compliance with applicable laws, rules and regulations;

• prompt reporting of violations of this Code; and

• accountability for adherence to this Code.

Applicability. This Code applies to the Company's Chief Executive Officer, Chief Financial Officer and Controller (the "Senior Financial Management"). The obligations of this Code supplement, but do not replace, the Company's Code of Ethics and Business Conduct applicable to all employees, including the Senior Financial Management.

Requirements. All members of the Senior Financial Management shall:

• Act honestly and ethically in the performance of their duties for the Company.

• Avoid actual or apparent conflicts of interest involving personal and professional relationships.

• Provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with or submits to the SEC, and in other public communications by the Company.

• Comply with laws and the rules and regulations of federal, state and local governments and other private and public regulatory agencies that affect the conduct of the Company's business and financial reporting.

• Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing the individual's independent judgment to be subordinated.

• Respect the confidentiality of Company information, except when authorized or legally obligated to disclose such information, and avoid the use of Company information for personal advantage.

• Share knowledge and maintain skills relevant to carrying out the individual's duties within the Company.

• Proactively promote ethical behavior among peers and employees under the individual's supervision at the Company.

• Achieve responsible use of and control over all assets and resources of the Company entrusted to the individual.

• Promptly report to the General Counsel and the Chair of the Audit Committee any information concerning violations of this Code, significant deficiencies in the design or operation of the Company's internal financial controls, or any fraud involving management or other employees who have a significant role in the Company's financial reporting, disclosures or internal controls.

Reporting Violations. Any person who has information concerning any violation of this Code by any member of the Senior Financial Management shall promptly bring such information to the attention of the Company's General Counsel. Alternatively, any person may report any violation of this Code by calling the Company's Compliance Hotline at 1−800−710−4848, which provides a means for making anonymous, confidential reports. Reports received by the Compliance Hotline will be forwarded to the General Counsel. The General Counsel will inform the Chair of the Company's Audit Committee of all reports alleging violations of this Code, who will determine, in consultation with the General Counsel, outside counsel and/or other members of the Audit Committee, the appropriate means by which any such report will be investigated. Sanctions. Violations of this Code may subject the officer to appropriate sanctions, including censure, suspension or termination. These sanctions shall be reasonably designed to deter wrongdoing and promote accountability for adherence to this Code.

Waivers and Amendments. Waivers of or amendments to the provisions of this Code may be granted or approved only by the Board of Directors of the Company. Any such waivers or amendments shall be promptly disclosed as required by law or Nasdaq rules.

Acknowledgements. Each member of the Senior Financial Management shall acknowledge in writing his or her obligation to fully comply with this policy.

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NASH FINCH COMPANY CODE OF ETHICS FOR SENIOR FINANCIAL MANAGEMENT April 15, 2003 QuickLinks −− Click here to rapidly navigate through this document

Exhibit 21.1

WHOLLY−OWNED SUBSIDIARIES OF NASH FINCH COMPANY

State of Subsidiary Corporation Incorporation

Erickson's Diversified Corporation Wisconsin Edina, Minnesota

GTL Truck Lines, Inc. Nebraska Omaha, Nebraska

Hinky Dinky Supermarkets, Inc. Nebraska Edina, Minnesota

Nash Finch Funding Corp. Delaware Edina, Minnesota

Piggly Wiggly Northland Corporation Minnesota Edina, Minnesota

Super Food Services, Inc. Delaware Dayton, Ohio

T.J. Morris Company Georgia Statesboro, Georgia

U−Save Foods, Inc. Nebraska Edina, Minnesota

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WHOLLY−OWNED SUBSIDIARIES OF NASH FINCH COMPANY QuickLinks −− Click here to rapidly navigate through this document

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statements Nos. 33−54487, 333−51508, 33−64313, 333−51512, 333−27563, 333−63756, 333−81441, 333−63754 and 333−51506 on Form S−8 of Nash Finch Company of our report dated May 12, 2003, with respect to the consolidated financial statements and related financial statement schedule of Nash Finch Company and subsidiaries as of December 28, 2002 and for each of the years in the three−year period ended December 28, 2002, included in the Annual Report on Form 10−K of Nash Finch Company for the fiscal year ended December 28, 2002.

/s/ Ernst & Young LLP

Minneapolis, Minnesota May 12, 2003

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EXHIBIT 24.1

POWER OF ATTORNEY

The undersigned, a director of Nash Finch Company (the "Company"), a Delaware corporation, does hereby constitute and appoint Ron Marshall, Robert B. Dimond and Kathleen E. McDermott, and each of them, as the undersigned's true and lawful attorneys−in−fact, with full power to each of them to act without the others, for and in the name of the undersigned to sign the Company's Annual Report on Form 10−K for the 52 weeks ended December 28, 2002 ("Annual Report"), and to file said Annual Report so signed with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended; and hereby grants to the attorneys−in−fact, and each of them, full power and authority to do and perform any and all acts and things necessary to be done in the exercise of the rights and powers granted herein as fully and to all intents and purposes as the undersigned might or could do in person; and hereby ratifies and confirms all that such attorneys−in−fact, or any of them, may lawfully do or cause to be done by virtue hereof.

In Witness Whereof, I have signed this Power of Attorney as of April 15, 2003.

/s/ CAROLE F. BITTER /s/ LAURA STEIN

Carole F. Bitter Laura Stein

/s/ JERRY L. FORD /s/ JOHN E. STOKELY

Jerry L. Ford John E. Stokely

/s/ ALLISTER P. GRAHAM /s/ WILLIAM R. VOSS

Allister P. Graham William R. Voss

/s/ JOHN H. GRUNEWALD /s/ WILLIAM H. WEINTRAUB

John H. Grunewald William H. Weintraub

/s/ ROBERT F. NASH

Robert F. Nash

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EXHIBIT 99.1

CERTIFICATION UNDER SECTION 906 OF THE SARBANES−OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes−Oxley Act of 2002, each of the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the Nash Finch Company.

/s/ RON MARSHALL

Ron Marshall Chief Executive Officer

/s/ ROBERT B. DIMOND

Robert B. Dimond Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Nash Finch Company and will be retained by the Nash Finch Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 99.2

Excerpts From the Company's Current Reports on Form 8−K Dated July 29, 2002, January 28, 2003 and March 11, 2003

July 29, 2002:

ITEM 4. Changes in Registrant's Certifying Accountants

Effective July 29, 2002, Nash Finch Company (the "Company") dismissed Ernst & Young LLP and engaged Deloitte & Touche LLP as the principal accountant to audit the Company's financial statements, beginning with its financial statements for the year ending December 28, 2002. The decision to change accountants was recommended by the Company's Audit Committee and approved by the Company's Board of Directors.

Neither of the reports of Ernst & Young LLP on the financial statements of the Company for the past two fiscal years contained an adverse opinion or disclaimer of opinion, nor was either qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements with Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, during the Company's two most recent fiscal years ending December 29, 2001 and each subsequent interim period preceding July 29, 2002 which, if not resolved to Ernst & Young LLP's satisfaction, would have caused Ernst & Young LLP to make reference to the subject matter of the disagreements(s) in connection with their reports. No "reportable events," as identified in Regulation S−K, Item 304 (a)(1)(v), occurred within the Company's two most recent fiscal years and each subsequent interim period preceding July 29, 2002.

The Company requested that Ernst & Young LLP furnish a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made by the Company, and, if not, stating the respects in which it does not agree. A letter from Ernst & Young LLP is included as Exhibit 16 to this report, stating their agreement with the statements made by the Company in this report.

During the Company's two most recent fiscal years and any subsequent interim period prior to July 29, 2002, Deloitte & Touche LLP had not been consulted by the Company either with respect to the application of accounting principles to a specific transaction, the type of audit opinion that might be rendered on the Company's financial statements or any "disagreement" or "reportable event" as described in Item 304 (a)(2)(ii) of Regulation S−K.

In January 2002, the Company engaged Deloitte & Touche LLP to provide consulting services associated with a financial system conversion. Total fees for the project are expected to approximate $1.2 million, of which approximately 56% were earned prior to July 2002. It is the Company's policy to limit the use of its external auditors for consulting services. The project is expected to be completed before the end of 2002.

January 28, 2003:

Item 4. Changes in Registrant's Certifying Accountant.

(a)(1)(i) Effective January 28, 2003, Deloitte & Touche LLP ("Deloitte") resigned as the independent accountants of Nash Finch Company (the "Company").

(ii) The Company appointed Deloitte as its independent accountants effective July 29, 2002. Deloitte has not reviewed, audited or rendered any report on any financial statements of the Company as of any date or for any period during the time it served as the Company's independent accountants.

1 (iv) During the period of Deloitte's engagement, there were no disagreements between the Company and Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of Deloitte, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report.

(v) As discussed below, during the period of Deloitte's engagement, certain information came to Deloitte's attention, that Deloitte determined if further investigated may materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements; or the financial statements issued or to be issued. However, due to Deloitte's resignation, Deloitte was not able to conclude what effect, if any, these matters have on the Company's previously issued or to be issued financial statements.

On October 9, 2002, the Securities and Exchange Commission (the "Commission") commenced an informal inquiry into the Company's practices relating to "Count−Recount" charges assessed to the Company's vendors. An investigation of the Company's practices and procedures relating to the Count−Recount charges was commenced by special outside counsel in conjunction with the Audit Committee of the Board of Directors (the "Audit Committee"). These charges have been recognized as a reduction of cost of sales during the period billed. Deloitte advised the Company and the Audit Committee that, as of the date of Deloitte's resignation, the Company had not provided Deloitte with sufficient evidence for it to conclude that the Company's accounting practices for Count−Recount charges were appropriate.

The Company and the Audit Committee will authorize Deloitte to respond fully to the inquiries of any successor accountant concerning these matters.

(a)(3) The Company has provided Deloitte with a copy of the disclosures it is making in this Current Report on Form 8−K and requested that Deloitte furnish it with a letter addressed to the Commission stating whether it agrees with the statements made by the Company and, if not, stating the respects in which it does not agree. Deloitte's response to the Company's disclosures is included as Exhibit 16.1 to this Current Report on Form 8−K.

March 11, 2003:

ITEM 4. Changes in Registrant's Certifying Accountants

Effective March 11, 2003, the Audit Committee of Nash Finch Company (the "Company") engaged Ernst & Young LLP ("Ernst & Young") as the principal accountant to audit the Company's financial statements, beginning with its financial statements for the year ending December 28, 2002.

As previously reported in a Current Report on Form 8−K filed by the Company on July 29, 2002, Ernst & Young had been engaged by the Company as the principal accountant to audit the Company's financial statements prior to July 29, 2002. In addition, after the October 9, 2002 commencement by the Division of Enforcement of the Securities and Exchange Commission ("SEC") of an investigation into the Company's practices relating to "count−recount" charges assessed to the Company's vendors in connection with certain types of promotional allowances, the Company consulted with Ernst & Young regarding the Company's accounting for these charges. Ernst & Young has concurred with the Company's conclusion that its accounting for these count−recount charges was in accordance with generally accepted accounting principles.

As previously reported in the Company's Current Report on Form 8−K filed on February 4, 2003, Deloitte & Touche LLP, who had been appointed as the independent accountants of the Company effective July 29, 2002, resigned the engagement effective January 28, 2003.

The Company has provided Ernst & Young with a copy of the disclosures it is making in Item 4 of this Current Report on Form 8−K, requested that Ernst & Young review the disclosures, and provided Ernst & Young the opportunity to furnish the Company a letter addressed to the SEC containing any new information, clarification of the Company's expression of Ernst & Young's views, or the respects in which Ernst & Young does not agree with statements made by the Company in these disclosures. Ernst & Young has indicated that it does not intend to submit such a letter.

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Excerpts From the Company's Current Reports on Form 8−K Dated July 29, 2002, January 28, 2003 and March 11, 2003

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