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marsh supermarkets 10-K for year ended 03 - Corporate Financials

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									                 Marsh Supermarkets: 10-K for Year ended 03/28/98
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                    For the fiscal year ended March 28, 1998

                         Commission File Number: 0-1532

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

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

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

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

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
         Class A Common Stock
         Class B Common Stock
         7% Convertible Subordinated Debentures, due 2003

       Registrant (1) has filed all reports required to be filed by
Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months,
and (2) has been subject to such filing requirements for the past 90
days.

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

       Aggregate market value of Class A Common Stock held by non-
affiliates
of the Registrant as of June 1, 1998: $44,802,371. This calculation
assumes all
shares of Common Stock beneficially held by officers and members of the
Board of
Directors of the Registrant are owned by "affiliates", a status which
each of
the officers and directors individually disclaims.

       At June 1, 1998, there were 3,943,963 shares of Class A Common
Stock
and 4,484,830 shares of Class B Common Stock outstanding.

       Portions of the 1998 Annual Report to Shareholders for the year
ended
March 28, 1998 are incorporated by reference into Part I.

       Portions of the Proxy Statement for the Annual Shareholders'
Meeting to
be held August 4, 1998 are incorporated by reference into Part III.




                                     PART I

ITEM 1.   BUSINESS

GENERAL
At March 28, 1998, Marsh Supermarkets, Inc. (the "Company" or "Marsh")
operated
89 supermarkets and 181 Village Pantry convenience stores in central
Indiana and
western Ohio. The Company believes that Marsh supermarkets have one of
the
largest market shares of supermarket chains operating in its market area
and
Village Pantry has one of the largest market shares of convenience stores
in its
market area. Marsh owns and operates a specialized convenience store
distribution business which serves its Village Pantry stores as well as
over
1,290 unaffiliated convenience stores in a seven state area. Marsh also
owns and
operates a food services division which provides upscale catering,
vending,
concession and business cafeteria management services.

SUPERMARKETS
At March 28, 1998, the Company operated 75 supermarkets in central
Indiana and
14 in western Ohio. The 37 stores in the Indianapolis metropolitan market
area
constitute the Company's major market. The remaining supermarkets operate
in 37
other communities. Revenues from supermarket operations represent
approximately
68% of the Company's fiscal 1998 consolidated sales and other revenues.

The Company's supermarket merchandising strategy emphasizes service,
quality and
convenient one-stop shopping at competitive prices. Of the Company's
supermarkets, 53 are open 24 hours a day and 12 are open until midnight,
with
the remainder having various other schedules. All stores are open seven
days a
week.

The Company believes providing quality merchandise is an important factor
in
maintaining and expanding its customer base. In recent years, the Company
has
devoted a greater proportion of new and remodeled stores to fresh, high
quality
perishables, such as produce, delicatessen items, baked goods, prepared
foods,
seafood and floral items. The Company believes fresh produce is an
important
customer draw; therefore, it focuses on buying premium quality produce
worldwide. The geographic concentration of the Company's supermarkets
enables
the Company to deliver fresh items to its stores quickly and frequently.
An
extension of this theme is convenient, high quality, ready to eat meals.
The
"Chef Fresh" program offers take-home items for immediate consumption in
36
stores. These products are prepared in the Company's central kitchen,
which is
now a shared facility, providing fresh items to most of the Company's
divisions.

The Company's new and expanded large superstore format offers customers
convenient one-stop shopping. Its Marsh supermarkets feature an extended
line of
traditional grocery store items as well as service and specialty
departments
such as delicatessens, bakeries, prepared foods, prime cut meats, fresh
seafood,
floral and video rental. The Company features nationally advertised and
distributed merchandise along with products under its own trademarks,
service
marks and trade names. Service and specialty departments included in
Marsh
supermarkets include delicatessens (89 stores), hot prepared foods (57),
bakeries (89), prime cut service meat (58), fresh seafood (60), floral
shops
(58), imported cheese shops (51), wines and beer (84), salad bars (31),
video
rental (66), cosmetic counters (12) and shoe repair (19). Twenty-five of
the
Company's supermarkets include pharmacies in food and drug combination
stores.
To combat increasing competition from other retail formats, such as
wholesale
clubs, 38 of the Company's supermarkets also include warehouse-type
sections
offering large size and multi-pack products typically featured by
wholesale
clubs, priced competitively with club prices. In addition, banks or
savings
institutions operate branch facilities in 34 of the Company's stores, and
37
stores offer ATM machines. Home delivery of orders placed by customers
via
telephone, fax or the Internet is offered to the Indianapolis
metropolitan
market.

The Company's superstore format is in excess of 75,000 square feet, and
its
modern conventional supermarket format is approximately 55,000 to 65,000
square
feet. The Company currently operates five superstores and 8 modern
conventional
supermarkets. Approximately one-third of the sales area in these stores
is
devoted to merchandising fresh, high quality perishable products such as
delicatessens, bakeries, prepared foods and produce, and approximately
5,000
square feet are devoted to warehouse-type merchandising of bulk club pack
merchandise.




The Company has developed a smaller, low-price supermarket format with
limited
service and specialty departments as an alternative to the large, full
service
Marsh supermarket. As of March 28, 1998, the Company operated 16 of its
supermarkets under this concept. Subsequent to March 28, 1998, a
conventional
Marsh supermarket was converted to this format. The stores operate under
the
trade name LoBill Foods. There is an ongoing development program to
remodel
selected Marsh supermarkets to the LoBill format. The Company believes
the
LoBill format offers an opportunity to maximize its market area by
expanding
into smaller communities and inner city metropolitan areas that can be
better
served by that format and to appeal to the price motivated consumer in
markets
currently serviced by traditional Marsh stores.

The Company's supermarkets range in size from 15,000 to 81,500 square
feet. The
average size is approximately 38,100 square feet. The Company has an
ongoing
development program of constructing larger Marsh supermarkets within its
market
area and remodeling, enlarging and replacing existing supermarkets.
Future
development will continue to focus on a food and drug combination store
format
of approximately 55,000 to 65,000 square feet, with superstores in excess
of
75,000 square feet in select locations. The Company believes a larger
store
format enables it to offer a wider variety of products and expanded
service and
specialty departments, thereby strengthening its competitive position.
The
following summarizes the number of stores by size categories:

                                                               Number
         Square Feet                                          of Stores
         -----------                                          ---------
                  More than 75,000 .................................
5
         55,000 - 75,000 ..................................       8
         45,000 - 55,000 ..................................       7
         35,000 - 45,000 ..................................      21
         25,000 - 35,000 ..................................      42
         Less than 25,000 .................................       6
                                                                 --
                                                                 89
                                                                 ==

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

CONVENIENCE STORES
At March 28, 1998, the Company operated 181 convenience stores under the
Village
Pantry trade name. These self-service stores offer a broad selection of
grocery,
bakery, dairy and delicatessen items, including fresh pastry products and
sandwiches prepared in the stores. Approximately 52% of the stores also
offer
petroleum products. Revenues from the convenience stores represented
approximately 12% of the Company's fiscal 1998 consolidated sales and
other
revenues. Carry-out cold beer, a high-volume item typically found in
convenience
stores in other states, may be sold only by package liquor stores and
taverns in
Indiana; accordingly, it is not sold in the Company's convenience stores
in
Indiana. In Indiana, all but 12 of the Company's convenience stores are
open 24
hours a day; the remaining stores close at 11:00 P.M. or midnight. All
stores
are open seven days a week.

The Company has added higher margin food and beverage products, such as
store-prepared pizza (37 stores), chicken (42), and self-service fountain
drinks, as well as sit-down eating areas in 45 stores. The Company is a
Taco
Bell Express franchisee in three stores which increases the variety of
available
fast food. These stores include drive-thru service. The Company has also
partnered with Shell Oil Company in the Kokomo, Indiana and Anderson,
Indiana
markets whereby the Company receives a fixed fee and a commission based
on fuel
sales above a base level without investing capital in the fuel inventory
or
dispensing equipment. The Company also added drive-thru car washes at
three
store locations.

The Company has an ongoing program of remodeling, upgrading and replacing
existing Village Pantry stores with particular emphasis on developing
locations
that will yield a high volume of gasoline sales. New stores generally
average
3,700-4,500 square feet, compared to 1,800-2,500 square feet for older
stores.
The larger size accommodates the aforementioned new food products. In
constructing new stores, and remodeling and expanding existing stores,
the
Company tailors the format to each specific market, with heavy emphasis
on food
service in areas which the Company believes to be less susceptible to
intense
competition from major fast food operators, such as smaller towns and
high
density neighborhoods.

CONVENIENCE STORE DISTRIBUTING COMPANY ("CSDC")



CSDC serves the Company's Village Pantry stores and over 1,290
unaffiliated
stores in a seven state area. CSDC distributes a wide range of products
typically sold in convenience stores, including groceries, cigarette and
other
tobacco products, snack items, housewares and health and beauty care
products.
Customers have the opportunity to order most product lines in single
units. CSDC
owns a 210,000 square foot warehouse and distribution facility in
Richmond,
Indiana, which the Company estimates is operating at 70% of capacity.
CSDC
utilizes its own trucks and drivers for its transportation needs. The
CSDC sales
and marketing staff of approximately 43 employees services existing
customers
and actively solicits new customers. CSDC accounted for approximately 18%
of the
Company's fiscal 1998 consolidated sales and other revenues.

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

The combination of these operations has created a unique range of
services,
products and facilities. The Company's banquet hall facilities include
the
Crystal Yacht Club, the Indiana Roof Ballroom and the Murat Shrine
Centre. The
Company does special event catering at the Indianapolis Motor Speedway,
Conner
Prairie Museum, Indianapolis Museum of Art, the Eiteljorg Western Museum
of Art,
the RCA Tennis Championships and the Horizon Convention Center in Muncie,
Indiana. The Company also provides concession services at the
Indianapolis Zoo,
Conner Prairie, the Indiana State Fairgrounds and Prairie View Golf Club,
and
cafeteria management to 10 major employers and vending services to over
100
clients throughout the greater Indianapolis area. The Company's food
service
operation also provides meals at the child development centers for Marsh
and Eli
Lilly and Company in Indianapolis.

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

The Company's distribution centers are modern and highly automated.
Merchandise
is controlled through an on-line computerized buying and inventory
control
system. In fiscal 1997, the perishable products facility was expanded by
approximately 67,000 square feet to provide additional capacity. The
receiving
dock was modified to enhance product flow. Also, new state-of-the-art
banana
rooms were added to ensure high quality bananas with consistent color.
The
Company believes its distribution centers are adequate for its needs for
the
foreseeable future without major additional capital investment. The
Company
estimates the supermarket distribution centers currently operate at
approximately 75% of capacity. Approximately 80% of the delivery trips
from
distribution centers to supermarkets are 75 miles or less. The Company
also
operates a commissary and a central kitchen to produce products sold
through the
delicatessen departments of its supermarkets and convenience stores and
to third
parties through CSDC. The Company believes centralized direct buying from
major
producers and growers and its purchasing and distribution functions
provide it
with advantages compared to purchasing from a third-party wholesaler.
Direct
buying, centralized purchasing, and controlled distribution reduce
merchandise
cost by allowing the Company to minimize purchases from wholesalers and
distributors and to take advantage of volume buying opportunities and
forward
purchases of merchandise. Centralized purchasing and distribution promote
a
consistent merchandising strategy throughout the Company's supermarkets.
Rapid
inventory turnover at the warehouse permits the Company's stores to offer
consistently fresh, high-quality products. Through frequent deliveries to
the
stores, the Company is able to reduce in-store stockroom space and
increase
square footage available for retail selling.

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

CSDC supplies grocery, produce, housewares, health and beauty care, and
cigarette and tobacco products to the Company's convenience stores. Also,
CSDC
supplies cigarette and tobacco products to the Company's supermarkets.
The Company's supermarket transportation function is performed through a
subsidiary which leases most of its tractor/trailer fleet under long
term, full
service leases with by Ruan Transportation Management Systems ("Ruan"),
an
unaffiliated


transportation management and equipment leasing company. This service is
provided under a seven year contract, dated September 18, 1987, which is
automatically renewed for successive one year terms unless canceled by
Ruan or
the Company at least 60 days prior to the anniversary date, subject to
early
cancellation in stages under certain conditions. Under the arrangement,
Ruan
employs the drivers, dispatchers and maintenance personnel who perform
the
Company's distribution function.

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

The Company utilizes in-store micro-computers in the supermarkets to
automate
various tasks, such as electronic messaging, processing the receiving and
billing of vendor direct-store-delivered (DSD) merchandise, processing of
video
rentals, processing pharmacy records in the 25 food and drug combination
stores,
and time keeping for payroll processing. Future supermarket applications
currently under development include computer-assisted reordering and an
electronic shelf tag program. All convenience stores are equipped with
micro-computers for electronic transmission of accounting and
merchandising data
to headquarters, electronic messaging and processing DSD merchandise
receiving
and billing.

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




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

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

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

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

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

EMPLOYEES
The Company has approximately 12,800 employees. Approximately 7,360
employees
are employed on a part-time basis. All employees are non-union, except
approximately 200 supermarket distribution facility employees who are
unionized
under two three-year collective bargaining agreements which extend to
May, 2001.
The Company considers its employee relations to be excellent.

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

REGULATORY MATTERS
As a retailer of alcoholic beverages, tobacco products and gasoline, the
Company
is subject to federal and state statutes, ordinances and regulations
concerning
the storage and sale of these products. The Company is aware of the
existence of
petroleum contamination at 23 Village Pantry locations and has commenced
remediation at each of these sites. The cost of remediation varies
significantly
depending on the extent, source and location of the contamination,
geological
and hydrological conditions and other factors.




ITEM 2.   PROPERTIES

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

                                         Per Store
                     Footage Operated     Average           0-5 Years      5-10
Years    Over 10 Years
                     ----------------        -------        ---------      ----
------    -------------
Supermarkets            3,397,000            38,100            35%
33%            32%
Convenience Stores        510,000            2,800             18%
38%            44%
                        ---------
                        3,835,000
                        =========

Owned and leased retail facilities are summarized as follows:

                                                                  Convenience
                                                Supermarkets        Stores
                                                ------------        ------
                       Owned                                    34
128
           Leased:
             Fixed rentals only                        28             27
             Fixed plus contingent rentals             27             26
                                                      ---            ---
                                                       55             53
                                                      ---            ---
                                                       89            181
                                                 ===             ===

All leases, except for three supermarkets and 18 Village Pantry stores,
have one
to four renewal options for periods of two to five years each. The
majority of
leases provide for payment of property taxes, maintenance and insurance
by the
Company. In addition, the Company is obligated under leases for 11 closed
stores, of which eight were subleased at March 28, 1998.

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

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

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

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

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

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

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




ITEM 3.   LEGAL PROCEEDINGS

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

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

No matters were submitted to a vote of the security holders during the
fourth
quarter of fiscal 1998.

EXECUTIVE OFFICERS OF REGISTRANT

Information required by Item 10 with respect to the Registrant's
executive
officers is set forth below. Each officer has been elected for a term to
expire
in August 1998 or upon election of the officer's successor by the Board
of
Directors.

      NAME                                         POSITION
AGE          FAMILY RELATIONSHIP
     ----                                          --------
---        -------------------
DON E. MARSH                        Chairman of the Board, President
60      Son of Garnet R. Marsh,
                                    and Chief Executive Officer
brother of C. Alan Marsh

and of William L. Marsh

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

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

C. ALAN MARSH                      Vice Chairman of the Board and
56     Son of Garnet R. Marsh,
                                    Senior Vice President-Corporate
brother of Don E. Marsh
                                    Development
and William L. Marsh

Mr. C. Alan Marsh has held his current position for more than the past
five
years. Prior thereto, he served as President and Chief Operating Officer,
Marsh
Village Pantries, Inc. He has been employed by the Company in various
supervisory and executive capacities since 1965.

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

FRANK J. BRYJA                     President and Chief Operating
56                 None
                                    Officer, Supermarket Division

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

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

P. LAWRENCE BUTT                   Senior Vice President, Counsel
56                 None
                                    and Secretary

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

- -----------------------------------------------------------------------
---------
DOUGLAS W. DOUGHERTY                 Senior Vice President, Chief
Financial    54               None
                                     Officer and Treasurer

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

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



WILLIAM L. MARSH                     Senior Vice President - Property
54     Son of Garnet R. Marsh,
                                     Management
brother of Don E. Marsh

and C. Alan Marsh


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

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

RONALD R. WALICKI                    President and Chief Operating
60                  None
                                     Officer, Village Pantry Division

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

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

THEODORE R. VARNER                   President and Chief Operating
62                 None
                                      Officer, Convenience Store
                                      Distributing Company Division

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

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

JACK J. BAYT                         President and Chief Operating
41                   None
                                      Officer, Crystal Food Services
Division

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

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

MARK A. VARNER                       Corporate Controller
48                    None

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

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

                                       PART II

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

Information on Common Stock and Shareholder Matters on pages 17 and 36 of
the 1998 Annual Report to Shareholders for the year ended March 28, 1998
is
incorporated herein by reference.
ITEM 6.   SELECTED FINANCIAL DATA

Selected Financial Data on page 16 of the 1998 Annual Report to
Shareholders is
incorporated herein by reference.

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

Management's Discussion and Analysis of Financial Condition and Results
of
Operations on pages 18 through 21 of the 1998 Annual Report to
Shareholders for
the year ended March 28, 1998 is incorporated herein by reference.




ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and notes thereto on pages 23 to 35
of the
1998 Annual Report to Shareholders are incorporated herein by reference.

Quarterly Financial Data on page 17 of the 1998 Annual Report to
Shareholders is
incorporated herein by reference.

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

None.
                                     PART III

In accordance with Instruction G(3), except as indicated in the following
sentence, the information called for by Items 10, 11, 12 and 13 is
incorporated
by reference from the Registrant's definitive Proxy Statement pursuant to
Regulation 14A, to be filed with the Commission not later than 120 days
after
March 28, 1998, the end of the fiscal year covered by this report. As
permitted
by instruction G(3), the information on executive officers called for by
Item 10
is included in Part I of this Annual Report on Form 10-K under the
caption
"Executive Officers of Registrant".

                                      PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)       (1)       The following consolidated financial statements of
Marsh
                    Supermarkets, Inc. and subsidiaries, included in the
1998
                    Annual Report to Shareholders for the year ended March
28,
                    1998 are incorporated by reference in Item 8:

                    Consolidated Balance Sheets as of March 28, 1998 and
March 29,
                    1997.

                    Consolidated Statements of Income for each of the three
years
                    in the period ended March 28, 1998.

                    Consolidated Statements of Changes in Shareholders'
Equity for
                    each of the three years in the period ended March 28,
1998.

                    Consolidated Statements of Cash Flows for each of the
three
                    years in the period ended March 28, 1998.

                    Notes to consolidated financial statements.

                    Report of Independent Auditors.

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

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

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

Exhibit 3 (a)   -     Restated Articles of Incorporation, as amended as of
May
                      15, 1991 - Incorporated by reference to Form 10-K for
the
                      year ended March 30, 1991.

          (b)   -     By-Laws as amended as of November 26, 1997 -
Incorporated
                       by reference to Form 10-Q for the quarter ended
January 3,
                       1998.

Exhibit 4 (a)      -   Articles V, VI and VII of the Company's Restated
Articles
                       of Incorporation, as amended as of May 15, 1991 -
                       Incorporated by reference to Form 10-K for the year
ended
                       March 30, 1991.

             (b)   -   Articles I and IV of the Company's By-Laws, as
amended as
                       of August 7, 1990 Incorporated by reference to Form
10-Q for
                       the quarter ended January 5, 1991.

             (c)   -   Agreement of the Company to furnish a copy of any
agreement
                       relating to certain long-term debt and leases to the
                       Securities and Exchange Commission upon its request
                       Incorporated by reference to Form 10-K for the year
ended
                       March 27, 1987.


           (d)     -   Note Agreement, dated as of May 1, 1988, for
$25,000,000
                       9.48% Senior Notes due June 30, 2003 - Incorporated
by
                       reference to Form 10-Q for the quarter ended June 25,
1988.

             (e)   -   Rights Agreement, dated as of August 1, 1989, between
                       Marsh Supermarkets, Inc. and National City Bank, as
                       successor to Merchants National Bank and Trust
Company of
                       Indianapolis - Incorporated by reference to Form 10-Q
for
                       the quarter ended October 14, 1989.

             (f)   -   Amendment No. 1, dated as of May 1, 1991, to Rights
                       Agreement, dated as of August 1, 1989 - Incorporated
by
                       reference to Form 10-K for the year ended March 30,
1991.

             (g)   -   Note Agreement, dated as of October 15, 1992, for
                       $35,000,000 8.54% Senior Notes, Series A, due
December 31,
                       2007, and $15,000,000 8.13% Senior Notes, Series B,
due
                       December 31, 2004 - Incorporated by reference to
                       Registration Statement on Form S-2 (File No. 33-
56738).

             (h)   -   Indenture, dated as of February 15, 1993, between
Marsh
                       Supermarkets, Inc. and Society National Bank, as
trustee,
                       including form of Indenture, for $17,500,000 7%
Convertible
                       Subordinated Debentures, due 2003 - Incorporated by
                       reference to Registration Statement on Form S-2 (File
No.
                       33-56738).

             (i)   -   Amendment to Note Agreements and Assumption
Agreement,
                       dated March 29, 1997, for $35,000,000 8.54% Senior
Notes,
                       Series A, due December 31, 2007, and $15,000,000
8.13%,
                       Series B, due December 31, 2004 - Incorporated by
reference
                       to form 10-K for the year ended March 29, 1997.

             (j)   -   Amendment to Note Agreements and Assumption
Agreement,
                       dated March 29, 1997, for $25,000,000 9.48% Senior
Notes,
                       due June 20, 2003 - Incorporated by reference to Form
10-K
                       for the year ended March 29, 1997.

           (k)     -   Indenture, dated August 5, 1997, between Marsh
Supermarkets,
                       Inc. and certain of its subsidiaries and State Street
Bank
                       and Trust Company, as trustee, for $150,000,000 8-
7/8%
                       Senior Subordinated Notes, due 2007 - Incorporated by
                       reference to Registration Statement on Form S-4 (File
No.
                       333-34855).

           (l)     -   First Supplemental Indenture between Marsh
Supermarkets,
                       Inc. and certain of its subsidiaries and State Street
Bank
                       and Trust Company, as trustee, dated December 31,
1997.

Exhibit 10 (a)     -   Agreements between Ruan Leasing Company and Marsh
                       Supermarkets, Inc., dated September 18, 1987 -
Incorporated
                       by reference to Registration Statement on Form S-2
(File No.
                       33-17730).

             (b)   -   Lease agreements relating to warehouse located at 333
                       South Franklin Road, Indianapolis, Indiana -
Incorporated by
                       reference to Registration Statement on Form S-2 (File
No.
                       33-17730).

                       Management Contracts and Compensatory Plans.

             (c)   -   Marsh Supermarkets, Inc. 1987 Stock Option Plan -
                       Incorporated by reference to Registration Statement
on Form
                       S-8 (File No. 33-33427).

             (d)   -   Amendment to the Marsh Supermarkets, Inc. 1987 Stock
                       Option Plan - Incorporated by reference to Proxy
Statement,
                       dated March 22, 1991, for a Special Meeting of
Shareholders
                       held May 1, 1991.

           (e)     -   Amended and Restated Employment and Severance
Agreements,
                       dated December 3, 1992 - Incorporated by reference to
                       Registration Statement on Form S-2 (File No. 33-
56738).

             (f)   -   Marsh Supermarkets, Inc. 1980 Marsh Stock Plan -
                       Incorporated by reference to Registration Statement
on Form
                       S-8 (File No. 2-74859).

             (g)   -   Amendment to the Marsh Supermarkets, Inc. 1980 Marsh
Stock
                       Plan - Incorporated by reference to Proxy Statement,
dated
                       March 22, 1991, for a Special Meeting of Shareholders
held
                       May 1, 1991.

             (h)   -   Supplemental Retirement Plan of Marsh Supermarkets,
Inc.
                       and Subsidiaries Incorporated by reference to
Registration
                       Statement on Form S-2 (File No. 33-17730).

           (i)     -   Indemnification Agreements - Incorporated by
reference to
                       Form 10-Q for quarter ended January 6, 1990.
             (j)   -   Marsh Supermarkets, Inc. 1991 Employee Stock
Incentive
                       Plan - Incorporated by reference to Proxy Statement,
dated
                       March 22, 1991, for a Special Meeting of Shareholders
held
                       May 1, 1991.



             (k)   -   Marsh Supermarkets, Inc. Executive Life Insurance
Plan -
                       Incorporated by reference to Form 10-K for the year
ended
                       March 30, 1991.

             (l)   -   Marsh Supermarkets, Inc. Executive Supplemental Long-
Term
                       Disability Plan Incorporated by reference to Form 10-
K for
                       the year ended March 30, 1991.

             (m)   -   Marsh Supermarkets, Inc. 1992 Stock Option Plan for
                       Outside Directors - Incorporated by reference to
Proxy
                       Statement, dated June 25, 1992, for the Annual
Meeting of
                       Shareholders held August 4, 1992.

          (n)      -   Employment contracts, dated January 1, 1995 -
Incorporated
                       by reference to Form 10-Q for the quarter ended
January 7,
                       1995.

             (o)   -   Amendment to Marsh Supermarkets, Inc. 1991 Employee
Stock
                       Incentive Plan Incorporated by reference to Proxy
Statement,
                       dated June 22, 1995, for Annual Meeting of
Shareholders held
                       August 1, 1995.

             (p)   -   Severance Benefits Agreements, dated as of January 1,
1996
                       - Incorporated by reference to Form 10-K for the year
ended
                       March 29, 1997.

             (q)   -   Form of Split Dollar Insurance Agreement for the
benefit
                       of Don E. Marsh - Incorporated by reference to Form
10-K for
                       the year ended March 29, 1997.
             (r)    -   Form of Restricted Stock Agreement, dated as of
September
                        15, 1997 - Incorporated by reference to Form 10-Q for
the
                        quarter ended October 11, 1997.

             (s)    -   Form of Employment Contract, dated as of June 1, 1997
                        --Incorporated by reference to Form 10-Q for the
quarter
                        ended October 11, 1997.

             (t)    -   Marsh Supermarkets, Inc. Outside Directors' Stock
Plan, as
                        adopted November 26, 1997 Incorporated by reference
to Form
                        10-Q for the quarter ended January 3, 1998.

       Exhibit 13   -   1998 Annual Report to Shareholders (only portions
                        specifically incorporated by reference are included
herein).

       Exhibit 21   -   Subsidiaries of the Registrant.

       Exhibit 23   -   Consent of Independent Auditors.

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

    Exhibit 27 (b) -     Financial Data Schedule for the year ended March
29, 1997
                         (for SEC use only).

    Exhibit 27 (c) -     Financial Data Schedule for the year ended March
30, 1996
                         (for SEC use only).

 (b)       Reports on Form 8-K:
           There were no reports on Form 8-K filed by the Registrant with
respect
to the fourth quarter of its fiscal year ended March 28, 1998.




                                       SIGNATURES

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


June 25, 1998                                By: /s/ Don E. Marsh
                                                 ------------------------
---
                                                 Don E. Marsh, President
and
                                                 Chief Executive Officer

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


June 25, 1998                                                       /s/ Don
E. Marsh
                                                           --------------
---------------------
                                                           Don E. Marsh,
Chairman of the Board,
                                                           President and
Chief Executive Officer
                                                           and Director

June 25, 1998                                                      /s/
Douglas W. Dougherty
                                                           --------------
---------------------
                                                           Douglas W.
Dougherty, Senior Vice President,
                                                           Chief
Financial Officer and Treasurer

June 25, 1998                                                      /s/ Mark
A. Varner
                                                           --------------
---------------------
                                                           Mark A.
Varner, Corporate Controller

June 25, 1998                                                      /s/ C.
Alan Marsh
                                                           --------------
---------------------
                                                           C. Alan Marsh,
Vice Chairman of the Board and
                                                           Senior Vice
President-Corporate Development,
                                                           and Director
June 25, 1998                                /s/
William L. Marsh
                                        --------------
---------------------
                                        William L.
Marsh, Senior Vice President-Property
                                        Management,
and Director

June 25, 1998                                /s/
Garnet R. Marsh
                                        --------------
---------------------
                                        Garnet R.
Marsh, Director

June 25, 1998                                /s/ J.
Michael Blakley
                                        --------------
---------------------
                                        J. Michael
Blakley, Director

June 25, 1998                                 /s/
Charles R. Clark
                                        --------------
---------------------
                                        Charles R.
Clark, Director

June 25, 1998                                 /s/
Stephen M. Huse
                                        --------------
---------------------
                                        Stephen M.
Huse, Director

June 25, 1998                               /s/
Catherine A. Langham
                                        --------------
---------------------
                                        Catherine A.
Langham, Director

June 25, 1998                                /s/
James K. Risk
                                        --------------
---------------------
                                        James K. Risk,
III, Director

June 25, 1998                                 /s/ K.
Clay Smith
                                                              --------------
---------------------
                                                              K. Clay Smith,
Director




                                    Exhibit Index
Page No.
                                    -------------
--------
Exhibit 3    (a)   -   Restated Articles of Incorporation, as amended as of
May
                       15, 1991 - Incorporated by reference to Form 10-K for
the
                       year ended March 30, 1991.

           (b)     -   By-Laws as amended as of November 26, 1997 -
Incorporated
                       by reference to Form 10-Q for the quarter ended
January 3,
                       1998.

Exhibit 4    (a)   -   Articles V, VI and VII of the Company's Restated
Articles
                       of Incorporation, as amended as of May 15, 1991 -
                       Incorporated by reference to Form 10-K for the year
ended
                       March 30, 1991.

             (b)   -   Articles I and IV of the Company's By-Laws, as
amended as
                       of August 7, 1990 Incorporated by reference to Form
10-Q for
                       the quarter ended January 5, 1991.

             (c)   -   Agreement of the Company to furnish a copy of any
agreement
                       relating to certain long-term debt and leases to the
                       Securities and Exchange Commission upon its request
                       Incorporated by reference to Form 10-K for the year
ended
                       March 27, 1987.

           (d)     -   Note Agreement, dated as of May 1, 1988, for
$25,000,000
                       9.48% Senior Notes due June 30, 2003 - Incorporated
by
                       reference to Form 10-Q for the quarter ended June 25,
1988.

             (e)   -   Rights Agreement, dated as of August 1, 1989, between
                       Marsh Supermarkets, Inc. and National City Bank, as
                       successor to Merchants National Bank and Trust
Company of
                       Indianapolis - Incorporated by reference to Form 10-Q
for
                       the quarter ended October 14, 1989.

             (f)   -   Amendment No. 1, dated as of May 1, 1991, to Rights
                       Agreement, dated as of August 1, 1989 - Incorporated
by
                       reference to Form 10-K for the year ended March 30,
1991.

             (g)   -   Note Agreement, dated as of October 15, 1992, for
                       $35,000,000 8.54% Senior Notes, Series A, due
December 31,
                       2007, and $15,000,000 8.13% Senior Notes, Series B,
due
                       December 31, 2004 - Incorporated by reference to
                       Registration Statement on Form S-2 (File No. 33-
56738).

             (h)   -   Indenture, dated as of February 15, 1993, between
Marsh
                       Supermarkets, Inc. and Society National Bank, as
trustee,
                       including form of Indenture, for $17,500,000 7%
Convertible
                       Subordinated Debentures, due 2003 - Incorporated by
                       reference to Registration Statement on Form S-2 (File
No.
                       33-56738).

             (i)   -   Amendment to Note Agreements and Assumption
Agreement,
                       dated March 29, 1997, for $35,000,000 8.54% Senior
Notes,
                       Series A, due December 31, 2007, and $15,000,000
8.13%,
                       Series B, due December 31, 2004 - Incorporated by
reference
                       to form 10-K for the year ended March 29, 1997.

             (j)   -   Amendment to Note Agreements and Assumption
Agreement,
                       dated March 29, 1997, for $25,000,000 9.48% Senior
Notes,
                       due June 20, 2003 - Incorporated by reference to Form
10-K
                       for the year ended March 29, 1997.

           (k)     -   Indenture, dated August 5, 1997, between Marsh
Supermarkets,
                       Inc. and certain of its subsidiaries and State Street
Bank
                       and Trust Company, as trustee, for $150,000,000 8-
7/8%
                       Senior Subordinated Notes, due 2007 - Incorporated by
                       reference to Registration Statement on Form S-4 (File
No.
                       333-34855).

           (l)     -   First Supplemental Indenture between Marsh
Supermarkets,
                       Inc. and certain of its subsidiaries and State Street
Bank
                       and Trust Company, as trustee, dated December 31,
1997.

Exhibit 10 (a)     -   Agreements between Ruan Leasing Company and Marsh
                       Supermarkets, Inc., dated September 18, 1987 -
Incorporated
                       by reference to Registration Statement on Form S-2
(File No.
                       33-17730).

             (b)   -   Lease agreements relating to warehouse located at 333
                       South Franklin Road, Indianapolis, Indiana -
Incorporated by
                       reference to Registration Statement on Form S-2 (File
No.
                       33-17730).

                       Management Contracts and Compensatory Plans.

             (c)   -   Marsh Supermarkets, Inc. 1987 Stock Option Plan -
                       Incorporated by reference to Registration Statement
on Form
                       S-8 (File No. 33-33427).

             (d)   -   Amendment to the Marsh Supermarkets, Inc. 1987 Stock
                       Option Plan - Incorporated by reference to Proxy
Statement,
                       dated March 22, 1991, for a Special Meeting of
Shareholders
                       held May 1, 1991.

           (e)     -   Amended and Restated Employment and Severance
Agreements,
                       dated December 3, 1992 - Incorporated by reference to
                       Registration Statement on Form S-2 (File No. 33-
56738).



             (f)   -   Marsh Supermarkets, Inc. 1980 Marsh Stock Plan -
                       Incorporated by reference to Registration Statement
on Form
                       S-8 (File No. 2-74859).

             (g)   -   Amendment to the Marsh Supermarkets, Inc. 1980 Marsh
Stock
                       Plan - Incorporated by reference to Proxy Statement,
dated
                       March 22, 1991, for a Special Meeting of Shareholders
held
                       May 1, 1991.

             (h)   -   Supplemental Retirement Plan of Marsh Supermarkets,
Inc.
                       and Subsidiaries Incorporated by reference to
Registration
                       Statement on Form S-2 (File No. 33-17730).

           (i)     -   Indemnification Agreements - Incorporated by
reference to
                       Form 10-Q for quarter ended January 6, 1990.

             (j)   -   Marsh Supermarkets, Inc. 1991 Employee Stock
Incentive
                       Plan - Incorporated by reference to Proxy Statement,
dated
                       March 22, 1991, for a Special Meeting of Shareholders
held
                       May 1, 1991.

             (k)   -   Marsh Supermarkets, Inc. Executive Life Insurance
Plan -
                       Incorporated by reference to Form 10-K for the year
ended
                       March 30, 1991.

             (l)   -   Marsh Supermarkets, Inc. Executive Supplemental Long-
Term
                       Disability Plan Incorporated by reference to Form 10-
K for
                       the year ended March 30, 1991.

             (m)   -   Marsh Supermarkets, Inc. 1992 Stock Option Plan for
                       Outside Directors - Incorporated by reference to
Proxy
                       Statement, dated June 25, 1992, for the Annual
Meeting of
                       Shareholders held August 4, 1992.

           (n)     -   Employment contracts, dated January 1, 1995 -
Incorporated
                       by reference to Form 10-Q for the quarter ended
January 7,
                       1995.
             (o)    -   Amendment to Marsh Supermarkets, Inc. 1991 Employee
Stock
                        Incentive Plan Incorporated by reference to Proxy
Statement,
                        dated June 22, 1995, for Annual Meeting of
Shareholders held
                        August 1, 1995.

             (p)    -   Severance Benefits Agreements, dated as of January 1,
1996
                        - Incorporated by reference to Form 10-K for the year
ended
                        March 29, 1997.

             (q)    -   Form of Split Dollar Insurance Agreement for the
benefit
                        of Don E. Marsh - Incorporated by reference to Form
10-K for
                        the year ended March 29, 1997.

             (r)    -   Form of Restricted Stock Agreement, dated as of
September
                        15, 1997 - Incorporated by reference to Form 10-Q for
the
                        quarter ended October 11, 1997.

             (s)    -   Form of Employment Contract, dated as of June 1, 1997
                        --Incorporated by reference to Form 10-Q for the
quarter
                        ended October 11, 1997.

             (t)    -   Marsh Supermarkets, Inc. Outside Directors' Stock
Plan, as
                        adopted November 26, 1997 Incorporated by reference
to Form
                        10-Q for the quarter ended January 3, 1998.

       Exhibit 13   -   1998 Annual Report to Shareholders (only portions
                        specifically incorporated by reference are included
herein).

       Exhibit 21   -   Subsidiaries of the Registrant.

       Exhibit 23   -   Consent of Independent Auditors.

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

    Exhibit 27 (b) -     Financial Data Schedule for the year ended March
29, 1997
                         (for SEC use only).
    Exhibit 27 (c) -   Financial Data Schedule for the year ended March
30, 1996
                       (for SEC use only).


REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL REPORTING

The management of Marsh Supermarkets, Inc. is responsible for the
preparation
and integrity of the consolidated financial statements included in this
annual
report. The financial statements were prepared in accordance with
generally
accepted accounting principles and necessarily include some amounts based
on
management's best estimates and judgment. All financial information
appearing in
this annual report is consistent with that in the financial statements.

The Company maintains a system of internal controls designed to provide
reasonable assurance, on a cost-effective basis, that assets are
safeguarded and
transactions are properly authorized and recorded accurately in the
financial
records. The Company believes its control system is enhanced by its
long-standing emphasis on conducting business in accordance with the
highest
standards of conduct and ethics.

Independent auditors, Ernst & Young LLP, have audited the accompanying
financial
statements. Their report is included herein. Their audits, conducted in
accordance with generally accepted auditing standards, included the
review and
evaluation of selected internal accounting controls for purposes of
designing
their audit tests.

The Audit Committee of the Board of Directors meets periodically with the
independent auditors to discuss the scope and results of their audit
work, their
assessment of internal controls, and the quality of financial reporting.
The
independent auditors are engaged by the Board of Directors, upon
recommendation
of the Audit Committee.




Don E. Marsh               Douglas Dougherty               Mark Varner
Chairman of the Board,     Senior Vice President,          Corporate
Controller
President and              Chief Financial Officer and
Chief Executive Officer    Treasurer




REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

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

We have audited the accompanying consolidated balance sheets of Marsh
Supermarkets, Inc. and subsidiaries as of March 28, 1998 and March 29,
1997, and
the related consolidated statements of income, changes in shareholders'
equity
and cash flows for each of the three years in the period ended March 28,
1998.
These financial statements are the responsibility of the Company's
management.
Our responsibility is to express an opinion on these financial statements
based
on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in
all material respects, the consolidated financial position of Marsh
Supermarkets, Inc. and subsidiaries at March 28, 1998 and March 29, 1997,
and
the consolidated results of their operations and their cash flows for
each of
the three years in the period ended March 28, 1998, in conformity with
generally
accepted accounting principles.
                                                               Ernst &
Young LLP

Indianapolis, Indiana
May 15, 1998




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

YEAR ENDED
March 28, 1998    March 29, 1997     March 30, 1996
- -----------------------------------------------------------------------
-------------------------------------------------------
Sales and other revenues ...............................................
$ 1,505,133       $ 1,451,730         $1,390,543
Cost of merchandise sold, including warehousing and transportation .....
1,132,296         1,096,586          1,047,193

-----------       -----------         ----------
Gross profit ...........................................................
372,837           355,144            343,350
Selling, general and administrative expenses ...........................
321,977           318,634            297,022
Depreciation and amortization ..........................................
20,019            23,729             18,957

-----------       -----------         ----------
Operating profit .......................................................
30,841            12,781             27,371
Interest and debt expense amortization .................................
17,745            13,030             13,087

-----------       -----------         ----------
Income (loss) before income taxes and extraordinary item ...............
13,096              (249)            14,284
Income taxes (credit) ..................................................
3,651                (5)             5,251

-----------       -----------         ----------
Income (loss) before extraordinary item ................................
9,445              (244)             9,033
Extraordinary item, net of tax .........................................
(3,278)               --                 --

-----------       -----------         ----------
       NET INCOME (LOSS) ...............................................
$     6,167       $      (244)        $    9,033
===========       ===========         ==========

Earnings (loss) per common share
  Before effect of extraordinary item ..................................
$      1.13       $      (.03)        $     1.07
  Extraordinary item ...................................................
(.39)               --                  --

-----------       -----------         ----------
  Net income (loss) per common share ...................................
$       .74       $      (.03)        $     1.07

===========       ===========         ==========

Earnings (loss) per common share - assuming dilution
  Before effect of extraordinary item ..................................
$      1.07       $      (.03)        $     1.02
  Extraordinary item ...................................................
(.34)               --                  --

-----------       -----------         ----------
  Net income (loss) per common share ...................................
$       .73       $      (.03)        $     1.02

===========       ===========         ==========

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

===========       ===========         ==========




See Notes to Consolidated Financial Statements.




CONSOLIDATED BALANCE SHEETS   (in thousands)

ASSETS
March 28, 1998 March 29, 1997
- -----------------------------------------------------------------------
-------------------------------------
Current Assets
   Cash and equivalents
....................................................    $ 33,546        $
12,529
   Accounts receivable, less allowances $1,053 in 1998, and $848 in 1997
...      27,315          25,634
   Inventories
.............................................................       98,828
88,262
   Prepaid expenses
........................................................        4,477
5,362
   Recoverable income taxes
................................................       3,867
941
   Deferred income taxes
...................................................           --
650

--------        --------
       TOTAL CURRENT ASSETS
................................................       168,033
133,378

Property and Equipment
  Land
.....................................................................
52,799          48,565
  Buildings
................................................................
147,500         144,201
  Fixtures and equipment
...................................................     117,300
103,220
  Leasehold improvements
...................................................      50,402
47,910
  Construction in progress
.................................................       7,650
2,430
  Property under capital leases
............................................      12,139           9,214

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

387,790         355,540
  Allowances for depreciation and amortization
.............................     138,995          122,859

--------        --------
       TOTAL PROPERTY AND EQUIPMENT
........................................     248,795             232,681

Other Assets
...............................................................
43,211          29,572

--------        --------
$460,039         $395,631

========         ========




See Notes to Consolidated Financial Statements.




LIABILITIES AND SHAREHOLDERS' EQUITY                               March
28, 1998   March 29, 1997
- -----------------------------------------------------------------------
---------------------------
Current Liabilities
   Notes payable to banks .......................................   $
--         $ 10,755
   Accounts payable .............................................
60,503            54,132
   Employee compensation and other liabilities ..................
13,563            11,957
   State and local taxes ........................................
10,852            10,786
   Other accounts payable and accrued expenses ..................
19,259            18,474
   Dividends payable ............................................
933               923
   Deferred income taxes ........................................
687                --
   Current maturities of long-term liabilities ..................
2,806             7,097
                                                                    -----
----         ---------
         TOTAL CURRENT LIABILITIES ..............................
108,603           114,124

Long-term Liabilities
   Long-term debt ...............................................
206,004           141,264
   Capital lease obligations ....................................
6,457             4,165
                                                                      -----
----           ---------
           TOTAL LONG-TERM LIABILITIES ............................
212,461             145,429

Deferred Items
   Income taxes .................................................
10,219             7,865
   Other ........................................................
12,677            12,765
                                                                     -----
----          ---------
          TOTAL DEFERRED ITEMS ...................................
22,896             20,630

Shareholders' Equity
   Series A Junior Participating Cumulative Preferred stock:
       Authorized: 5,000,000 shares; Issued: None
   Class A Common Stock, no par value:
       Authorized: 15,000,000 shares; Issued: 4,695,253 ..........
8,552              8,552
   Class B Common Stock, no par value:
         Authorized: 15,000,000 shares; Issued: 5,265,158 ........
16,232             16,232
   Retained earnings ............................................
100,917             98,474
   Cost of Common Stock in treasury
       Class A: 1998 - 750,866; 1997 - 844,662 shares ...........
(2,620)            (3,977)
       Class B: 1998 - 780,057; 1997 - 720,586 shares ...........
(4,648)            (3,511)
   Deferred cost - restricted stock .............................
(2,022)                --
   Notes receivable - stock options .............................
(332)              (322)
                                                                     -----
----          ---------
          TOTAL SHAREHOLDERS' EQUITY .............................
116,079            115,448
                                                                     -----
----         ---------
                                                                     $
460,039          $ 395,631

=========         =========




CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)
                                                           Class A
Class B                  Cost of
                                                           Common
Common      Retained     Stock in
                                                              Stock
Stock       Earnings      Treasury     Other        Total
- -----------------------------------------------------------------------
---------------------------------------------------------
Balance at April 1, 1995 ................................ $ 8,552
$15,974     $ 97,078       $(6,978)    $ (312)     $ 114,314
   Net income ............................................
9,033                                   9,033
   Cash dividends declared ...............................
(3,696)                                 (3,696)
   Issuance of shares - Martz & Associates acquisition ...
258                        198                       456
   Repurchase of 62,250 shares ...........................
(696)                       (696)
   Additional minimum pension liability ..................
(1,258)         (1,258)
   Other .................................................
(1)                        6             5
                                                             -------  ---
----     ---------      -------     -------     ---------
Balance at March 30, 1996 ...............................      8,552
16,232       102,414       (7,476)     (1,564)      118,158
   Net loss ..............................................
(244)                                   (244)
   Cash dividends declared ...............................
(3,694)                                 (3,694)
   Restricted stock grant of 500 shares ..................
(2)           2                         --
   Repurchase of 2,390 shares ............................
(28)                        (28)
   Exercise of stock options - 1,500 shares ..............
14                          14
   Minimum pension liability reversal ....................
1,258           1,258
   Other .................................................
(16)            (16)
                                                             -------  ---
----     ---------      -------     -------     ---------
Balance at March 29, 1997 ...............................      8,552
16,232        98,474       (7,488)       (322)      115,448
   Net income ............................................
6,167                                   6,167
   Cash dividends declared ...............................
(3,724)                                 (3,724)
   Restricted stock grant of 150,750 shares ..............
2,336       (2,022)           314
   Repurchase of 205,150 shares ..........................
(3,189)                     (3,189)
   Exercise of stock options - 88,725 shares .............
1,073                       1,073
  Other .................................................
(10)          (10)
                                                           -------    ---
----    ---------     -------     -------     ---------
Balance at March 28, 1998 ............................... $ 8,552
$16,232    $ 100,917     $(7,268)    $(2,354)    $ 116,079
                                                           =======
=======    =========     =======     =======     =========




See Notes to Consolidated Financial Statements.




CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

YEAR ENDED
March 28, 1998   March 29, 1997 March 30, 1996
- -----------------------------------------------------------------------
------------------------------------------------
OPERATING ACTIVITIES
   Net income (loss) ................................................
$   6,167         $    (244)       $ 9,033
   Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
       Depreciation and amortization ................................
20,019           23,729           18,957
       Amortization of other assets .................................
4,743            5,343            5,488
       Increase (decrease) in deferred income taxes .................
3,691           (1,724)             219
       Debt extinguishment costs ....................................
3,278                --              --
       Changes in operating assets and liabilities:
         Accounts receivable ........................................
(1,681)          (1,844)          (5,673)
         Inventories ................................................
(10,565)           1,484           (7,338)
         Prepaid expenses and recoverable income taxes ..............
(2,041)          (1,178)             916
         Accounts payable and accrued expenses ......................
8,828            5,895            5,148
       Other operating activities ...................................
(673)           1,085            1,432
---------         --------         --------
       NET CASH PROVIDED BY OPERATING ACTIVITIES ....................
31,766           32,546           28,182

INVESTING ACTIVITIES
   Acquisition of property, equipment and land held for expansion ...
(42,450)         (33,594)         (22,736)
   Disposition of property, equipment and land held for expansion ...
7,653            1,673              959
   Other investing activities .......................................
(9,987)          (3,400)          (4,397)

---------         --------         --------
       NET CASH USED FOR INVESTING ACTIVITIES .......................
(44,784)         (35,321)         (26,174)

FINANCING ACTIVITIES
   Proceeds (repayments) of short-term borrowings ...................
(10,755)          (4,245)           8,000
   Proceeds of long-term borrowings .................................
172,000           47,580           68,200
   Payments of long-term debt and capital lease obligations .........
(112,183)         (37,141)         (76,357)
   Debt acquisition costs ...........................................
(5,918)               --              --
   Debt extinguishment costs ........................................
(3,278)               --              --
   Purchase of Class A and Class B Common Stock for treasury ........
(3,189)              (28)           (696)
   Cash dividends paid ..............................................
(3,715)          (3,697)          (3,699)
   Stock options exercised ..........................................
1,073                --              --
   Other financing activities .......................................
--               13               --

---------         --------         --------
       NET CASH PROVIDED BY (USED FOR)
            FINANCING ACTIVITIES ....................................
34,035            2,482           (4,552)

INCREASE (DECREASE) IN CASH AND EQUIVALENTS .........................
21,017             (293)          (2,544)
Cash and equivalents at beginning of year ...........................
12,529           12,822           15,366

---------         --------         --------
CASH AND EQUIVALENTS AT END OF YEAR .................................
$ 33,546          $ 12,529         $ 12,822

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




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


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

FISCAL YEAR
The Company's fiscal year ends on Saturday of the thirteenth week of each
calendar year. All references herein to "1998", "1997" and "1996" relate
to the
fiscal years ended March 28, 1998, March 29, 1997, and March 30, 1996,
respectively.

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Marsh
Supermarkets, Inc. and all majority-owned subsidiaries ("the Company").
Investments in partnerships are accounted for by the equity method.
Significant
intercompany accounts and transactions have been eliminated. The Company
is
principally involved in a single significant business segment: the
distribution
and retail sale of food and related products through supermarkets,
convenience
stores and food services.

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

INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
by the
last-in, first-out ("LIFO") method for the principal components of
inventories,
and by the first-in, first-out ("FIFO") method for the remainder (see
Note B).
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, including a provision for
capitalized
interest. For financial reporting purposes, depreciation is computed by
the
straight-line method over the estimated useful lives of the assets. For
income
tax purposes, accelerated methods and statutory lives are used to compute
depreciation.

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

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

EXCISE TAXES
Sales and cost of merchandise sold include state and federal excise taxes
on
tobacco, gasoline and alcohol products of approximately $100 million, $97
million and $91 million in 1998, 1997 and 1996, respectively.

ADVERTISING COSTS
Advertising communication costs are expensed in the period incurred and
production costs are expensed the first time the advertising is
distributed.
Advertising expenses in the amounts of $16.4 million, $16.0 million, and
$16.6
million were recorded for 1998, 1997 and 1996, respectively.




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

RECLASSIFICATIONS
Certain items in the 1997 and 1996 consolidated financial statements were
reclassified to conform with the 1998 presentation.

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




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

Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement
No. 130,
"Reporting Comprehensive Income" (FAS 130), and Statement No. 131,
"Disclosure
About Segments of an Enterprise and Related Information" (FAS 131). Both
statements are effective for the Company in 1999. FAS 130 requires
separate
reporting of certain items already disclosed by the Company. FAS 131
establishes
requirements for reporting information about operating segments in annual
and
interim reports. FAS 131 may require a change in the Company's financial
reporting, however, the extent of the change, if any, has not been
determined.

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

Current environmental laws and regulations require the removal or
abandonment of
USTs at 19 Village Pantry locations by December 1998. Earlier removal or
abandonment is required in the event any UST fails any leak detection
test,
which the Company performs at least annually. All USTs at these locations
passed
the most recent leak detection tests in calendar 1997, which results were
consistent with data from the Company's established petroleum product
inventory
control program.

The Company is aware of the existence of petroleum contamination at 23
Village
Pantry locations and has commenced remediation at each of these sites.
The
Company currently estimates the maximum aggregate cost to be incurred in
connection with compliance with existing environmental laws and
regulations
applicable to USTs will not exceed approximately $0.9 million and has
charged
this amount to earnings.

NOTE B -- INVENTORIES
Inventories valued by the LIFO method represented approximately 75% and
76% of
consolidated inventories at March 28, 1998 and March 29, 1997,
respectively.
Current inventory cost exceeded the carrying amount of LIFO inventories
by $15.1
million at March 28, 1998, and $17.6 million at March 29, 1997.



NOTE C -- DEBT ARRANGEMENTS

Long-term debt consisted of the following:

                                                  1998              1997
                                               ---------         --------
-
8 7/8% Senior Subordinated Notes .........    $ 150,000          $        -
-
  Less discount ..........................        (1,144)                 -
-
Notes payable to insurance companies:
       8.54% Senior Notes, unsecured ......           --
35,000
       8.13% Senior Notes, unsecured ......           --
10,909
       9.48% Senior Notes, unsecured ......           --
17,500
     10.05% notes ........................        18,116
18,897
       9.05% notes ........................       18,882
19,630
7% convertible subordinated debentures ...        19,909
19,909
Revolving credit agreements ..............            --
20,000
Other ....................................        2,391
5,661
Less current maturities ..................        (2,150)
(6,242)
                                               ---------         --------
-
                                               $ 206,004         $
141,264
                                               =========
=========
The 8 7/8% Senior Subordinated Notes were issued in August 1997. Proceeds
from
the issuance were used to prepay the 8.54%, 8.13% and 9.48% senior notes
and
related prepayment penalties, and amounts outstanding under existing
revolving
credit agreements. Interest is payable semi-annually and the principal
matures
in August 2007. The discounted effective interest rate is 9.0%.

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

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

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

A portion of the proceeds from the issuance of the 8 7/8% Senior
Subordinated
Notes was used to repay $60.9 million in principal amount of senior
unsecured
indebtedness and $5.0 million in related prepayment penalties. The
prepayment
penalties, plus $0.2 million in unamortized debt acquisition costs, were
charged
to income as an extraordinary item during the second quarter of 1998. The
after
tax charge of $3.3 million represents $.34 per diluted share.

Land and buildings with a net carrying amount of approximately $39.0
million are
pledged as collateral to the 10.05% notes and the 9.05% notes. Subsequent
to
March 28, 1998, a lender released the Company's guarantee of a $1.5
million
portion of two mortgages for a 25% owned, unconsolidated subsidiary.

At March 28, 1998, the fair market value of the Company's long-term debt
was
approximately $217.5 million. The fair market value was estimated using
quoted
market rates for publicly traded debt and current incremental borrowing
rates
for non-public debt.

Several of the loan agreements require maintenance of minimum working
capital
and limit cash dividends, repurchases of common stock, future
indebtedness,
lease obligations, investments, and disposition of assets. Under the most
restrictive covenant, the amount available for payment of dividends and
purchases of treasury shares was approximately $5 million at March 28,
1998.

The Company's revolving credit agreements permit borrowings up to $50
million.
Interest is based on various money market rates selected by the Company
at the
time of borrowing. The Company pays commitment fees of from 0.15% to
0.25% on
unused amounts. No amounts were borrowed at March 28, 1998.

The Company has commitments from various banks for short-term borrowings
of up
to $20 million at rates at or below the prime rates of the committed
banks. At
March 29, 1997, $11.0 million was utilized, at an average rate of 6.2%.
No
amounts were borrowed at March 28, 1998.

Aggregate principal payments of long-term debt outstanding at March 28,
1998 for
the succeeding five years and thereafter are:

                      1999 ........................       $   2,150
           2000 ........................         2,225
           2001 ........................         2,209
           2002 ........................         2,426
           2003 ........................         2,675
           Thereafter ..................       196,469

Interest expense consisted of:

                                     1998        1997              1996
                                   -------      -------          -------
Long-term debt .................   $16,802      $12,141          $12,016
Capital lease obligations ......       543          641              991
Other ..........................       400          248               80
                                   -------      -------          -------
Total interest expense .........   $17,745      $13,030          $13,087
                                   =======      =======          =======

Interest capitalized ...........   $   413      $   528          $    714
                                    =======      =======        =======

Cash payments for interest .....   $17,004      $13,511        $13,632
                                   =======      =======        =======




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

Summarized combined financial information (in accordance with Rule 1-
02(bb) of
Regulation S-X) for 1998, 1997 and 1996 for the Guarantors is set forth
below:

                                1998            1997
                              --------        --------
Current assets ...........    $164,316        $132,964
Current liabilities ......     104,486         110,892
Noncurrent assets ........     244,400         216,590
Noncurrent liabilities ...      49,188          45,152

                                 1998            1997              1996
                             ----------       ----------        ---------
-
Total revenues ..........    $1,498,045       $1,445,870
$1,383,720
Gross profit ............      365,749          349,284
336,527
Income before
  extraordinary item ....       10,549              534
9,285
Net income ..............          7,271             534
9,285

NOTE E -- LEASES
Of the Company's 270 retail stores, 108 are leased under commercial lease
agreements providing for initial terms generally from 15 to 20 years with
options to extend the initial terms up to an additional 20 years. The
Company
also leases a portion of its transportation and store equipment for
periods
from three to eight years plus renewal and purchase options.

Capitalized lease property consisted of store facilities having a net
carrying
cost of $5.6 million at March 28, 1998 and $3.1 million at March 29,
1997.

Future minimum lease payments for capital and operating leases with terms
in
excess of one year, and the present value of capital lease obligations,
at March
28, 1998, were as follows:

                                                    Capital    Operating
                                                    Leases      Leases
                                                    ------     -------
1999...........................................    $ 1,220     $17,647
2000...........................................      1,332      14,199
2001...........................................      1,152      11,113
2002...........................................        912       7,553
2003...........................................        912       4,990
Later years....................................      6,840      11,102
                                                   -------     -------
                                                    12,368     $66,604
                                                               =======
Less:
   Estimated executory costs...................         42
   Amounts representing interest...............      5,213
                                                   -------
Present value of net minimum
   lease payments..............................   $ 7,113
                                                  =======

Minimum annual lease payments will be reduced by $4.6 million from future
sublease rentals due over the term of the subleases.

Rental expense consisted of:

                                 1998            1997            1996
                               --------        --------         --------
Minimum rentals .........      $ 20,900        $ 21,719         $ 22,017
Contingent rentals ......           125             151              147
Sublease rental income ..        (1,895)         (1,715)          (2,217)
                               --------        --------         --------
                               $ 19,130        $ 20,155         $ 19,947
                               ========        ========         ========


NOTE F -- RETIREMENT PLANS
Historically, the Company provided a qualified defined benefit pension
plan
covering the majority of its non-union employees and an unfunded
supplemental
retirement plan for corporate officers designated by the Board of
Directors. The
benefit formula under the qualified plan is based upon years of service
and the
highest consecutive four years of earnings during the last ten years
worked. The
benefits under both plans are similar; however, the supplemental plan
takes into
consideration compensation in excess of amounts that can be recognized
under the
qualified plan.

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

The Company's funding policy with regard to the qualified defined benefit
pension plan is consistent with federal laws and regulations. The Company
contributed $1.0 million and $2.2 million to the plan in 1998 and 1997,
respectively. Plan assets consist principally of listed stocks, corporate
and
government notes and bonds, and 92,675 shares each of Class A and Class B
Common
Stock of the Company. At March 28, 1998, the Company's Common Stock in
the
qualified plan had a market value of $2.9 million. The supplemental plan
is
unfunded. The actuarial present value of the projected benefit obligation
under
the supplemental plan was $5.5 million and $4.9 million at March 28, 1998
and
March 29, 1997, respectively.



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

                                              1998              1997
                                             --------         --------
Actuarial present value of obligations:
   Vested benefits .......................   $ 44,124         $ 38,962
   Nonvested benefits ....................         2,993              2,083
                                                --------           --------
Accumulated benefit obligation ...........        47,117             41,045
Effect of future salary increases ........         2,334              2,016
                                                --------           --------
Projected benefit obligation .............        49,451             43,061
Plan assets at fair value ................        46,324             38,649
                                                --------           --------
   Funded status .........................        (3,127)            (4,412)
Unrecognized net gain from past
  experience different from assumed ......       (1,008)               (637)
Unrecognized net obligation
   at adoption ...........................         52                    89
Unrecognized prior service cost ..........      1,106                 1,238
                                             --------              --------
Accrued pension cost .....................   $ (2,977)             $ (3,722)
                                             ========              ========


The components of net pension expense included:

                                                         1998               1997
1996
                                                      -------           ------
-         -------
Service cost of benefits earned ..............       $      192         $
1,510         $ 1,784
Interest on projected benefit
  obligation .................................           3,312
3,267           3,154
Actual return on plan assets .................        (8,515)
(3,590)         (5,161)
Net amortization and deferral ................           5,253
606           2,703
                                                      -------           ------
-         -------
Net pension expense...........................       $      242         $
1,793         $ 2,480
                                                      =======
=======         =======

The following actuarial assumptions were used to compute net pension
expense and
funded status of the plans:

                                         1998             1997          1996
                                         ----             ----          ----
Discount rate ......................     7.00%            8.00%         7.65%
Rate of increase in compensation ...     3.50             3.50          3.50
Expected long-term rate of return
   on assets .......................     9.00               9.00        9.00

The 1.00% change in discount rate increased the projected benefit
obligation at
March 28, 1998 by approximately $5.2 million.

The Company participates in a multi-employer plan that provides defined
benefits
to its union employees. The Company expense for this plan amounted to
$0.7
million in both 1998 and 1997, and $0.6 million in 1996.

The Company provides two defined contribution savings plans. These plans
allow
401(k) contributions covering employees who work a minimum of 1,000 hours
per
year, are age 21 or older and elect to participate. The plans provide the
opportunity for additional financial security during retirement by
offering
employees an incentive to make tax advantaged contributions to a savings
plan.
The Company expense for these plans was $3.4 million in 1998, $1.3
million in
1997 and $1.3 million in 1996. The $2.1 million increase in 1998 is the
estimated Company discretionary contribution to the plan amended
concurrent with
the December 1996 benefit freeze under the defined benefit plan.

NOTE G -- POSTRETIREMENT HEALTH BENEFITS
The Company provides certain post retirement health care benefits for its
non-union retirees and their eligible spouses. The plans are contributory
with
retiree contributions adjusted annually and certain other cost sharing
features,
such as deductibles and co-insurance. Eligibility for these benefits is
generally limited to retirees, who are at least age 55 and less than age
65,
with ten or more years of vested service. Optional spousal coverage
continues
for the lesser of five years after retirement or until the spouse reaches
age
65. Benefits generally cease after reaching age 65, at which time the
retiree or
spouse is generally eligible for Medicare.



The amounts recognized in the consolidated balance sheets for the
Company's
contributory defined benefit postretirement plans were as follows:

                                                     1998             1997
                                                    ------           ------
Accumulated participants benefit obligation:
   Current retirees ............................   $ 622         $      534
   Fully eligible active plan participants .....    1,051               915
   Other active plan participants ..............    1,066               810
                                                   ------            ------
     Total benefit obligation ..................       2,739        2,259
Unrecognized gain ..............................         717        1,144
                                                      ------       ------
Accrued postretirement benefit cost ............      $3,456       $3,403
                                                      ======       ======

Net postretirement benefit expense included:

                                      1998            1997         1996
                                     -----           -----         -----
Service cost of benefits earned
  during the year ................   $ 215           $ 215          185
Interest cost on projected
  benefit obligation .............     169             161           167
Net amortization and deferral ....     (89)            (73)          (68)
                                     -----           -----         -----
                                     $ 295           $ 303         $ 284
                                     =====           =====         =====

For measurement purposes, the weighted average discount rate used in
determining
the accumulated postretirement benefit obligation and related expense was
7.00%
for 1998, 8.00% for 1997 and 7.65% for 1996. The Company's assumed
healthcare
cost trend rate is 11.00% for 1999, decreasing gradually to 6.00% by
2013, and
thereafter. If these trend rates increased by one percentage point each
year,
the accumulated postretirement benefit obligation and expense would have
increased by approximately 9.00% and 11.00%, respectively.

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

                                                 1998            1997
                                               --------        --------
Deferred tax assets:
   Compensation and benefit accruals ..        $  3,565        $  3,406
   Self insurance reserves ............           1,967           2,593
   Other ..............................           2,873           2,757
                                               --------        --------
      Total deferred tax assets .......           8,405           8,756
Deferred tax liabilities:
   Property and equipment, including
      leased property .................        (14,764)         (12,330)
   Inventory ..........................         (2,531)          (3,023)
   Other ..............................         (2,016)            (617)
                                              --------         --------
      Total deferred tax liabilities ..        (19,311)         (15,970)
                                              --------         --------
Net deferred tax liability ............       $(10,906)        $ (7,214)
                                              ========         ========
Income tax expense (credit) consisted of the following:

                            1998           1997            1996
                          -------         -------         -------
Current  - Federal ....   $ (230)         $   526         $ 4,209
           State ......       189             445             887
Deferred - Federal ....     4,431            (849)            158
           State ......      (739)           (127)             (3)
                          -------         -------         -------
                          $ 3,651         $    (5)        $ 5,251
                          =======         =======         =======

Cash payments .........   $ 1,340         $ 1,807         $ 5,428
                          =======         =======         =======

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

                                             1998          1997
1996
                                           -------         -----
-------
Federal statutory tax rate ............   $ 4,584          $ (96)
$ 4,999
State and local, net of federal tax ...       (357)            206
575
Other .................................       (576)        (115)
(323)
                                           -------         -----
-------
Total income tax expense (credit) .....   $ 3,651          $   (5)
$ 5,251
                                           =======         =====
=======



NOTE I - EARNINGS PER SHARE
In 1997, the Financial Accounting Standards Board issued FAS 128,
"Earnings per
Share". FAS 128 simplifies the standards for computing earnings per share
by
replacing primary and fully diluted earnings per share with basic and
diluted
earnings per share. Unlike primary earnings per share, basic earnings per
share
excludes any dilutive effects of options, warrants and convertible
securities.
Diluted earnings per share is very similar to the previously reported
fully
diluted earnings per share. All earnings per share amounts presented on
the
income statement conform to
FAS 128.
The following table sets forth the computation of the numerators and
denominators used in the computation of basic and diluted earnings per
share
(amounts in thousands):

                                             1998              1997
1996
                                           -------         -------
------
Numerator for basic EPS -
  net income (loss) ...................    $ 6,167         $   (244)
$9,033
Effect of convertible debentures ......        999                --
882
                                           -------         -------
------
Numerator for diluted EPS - income
 (loss) after assumed conversions .....    $ 7,166         $   (244)
$9,915
                                           =======         =======
======

Weighted average shares outstanding ...     8,438              8,395
8,403
   Non-vested restricted shares ........      (80)                --
--
                                           -------         -------
------
Denominator for basic EPS .............     8,358              8,395
8,403
Effect of dilutive securities:
   Employee stock options ..............      117                 37
37
   Convertible debentures ..............    1,290                 --
1,290
                                           -------         -------
------
Denominator for diluted EPS -
  adjusted weighted average shares ....     9,765              8,432
9,730
                                           =======         =======
======

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

NOTE J -- SHAREHOLDERS' EQUITY AND EMPLOYEE STOCK PLANS

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




STOCK OPTION PLANS AND SHARES RESERVED
The 1991 Employee Stock Incentive Plan (as amended in May 1995) reserves
750,000
shares of common stock, in any combination of Class A and Class B, for
the grant
of stock options, stock appreciation rights, restricted stock, deferred
stock,
stock purchase rights and/or other stock-based awards. Grants of options
made
under this plan are non-qualified. Substantially all grants were at the
market
value of the underlying common stock at date of grant. They become
exercisable
pro-rata over a four year period beginning one year from date of grant
and
expire 10 years from date of grant.

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

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

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

                                     Class A shares              Class B
shares
                                     -------------------         ---------
---------
                                     Price       Options         Price
Options
                                     -----       -------         -----
-------
Outstanding at April 1, 1995 ...     $12.71           163        $12.10
458
Granted ........................     13.50            355         12.25
5
                                                      ---
---
Outstanding at March 30, 1996 ..     13.26            518         12.10
463
Granted ........................      13.50            10         10.50
4
Exercised ......................         --            --            9.50
(2)
Forfeited ......................     12.86            (33)        12.73
(53)
                                                      ---
---
Outstanding at March 29, 1997 ..     13.28            495         12.01
412
Granted ........................         --            --         14.75
2
Exercised ......................      10.91           (35)        10.40
(54)
Forfeited ......................     13.50            (18)        11.35
(3)
                                                      ---
---
Outstanding at March 28, 1998 ..     $13.46           442        $12.27
357
                                                      ===
===

Related stock option information is as follows (options are in
thousands):
                                           1998         1997
1996
                                       -------         -------       ----
---
Exercisable at the end of the year
    Class A shares .................         272          227
163
    Class B shares .................         328           345
361
Weighted average exercise price
    Class A shares .................   $ 13.44         $ 13.03      $
12.71
    Class B shares .................       12.48        12.47
12.79
Weighted average exercise price
    of options granted during
       the year
    Class A shares .................   $          --   $ 13.50       $
13.50
    Class B shares .................       14.75        10.50
12.25



At March 28, 1998, the range of option exercise prices for Class A shares
was
$12.75 to $13.81 and for Class B shares was $9.50 to $15.50 and the
weighted-average remaining contractual life of those options for Class A
and
Class B shares was 6.2 years and 4.0 years, respectively.

The Company has adopted the disclosure only provisions of FAS 123,
"Accounting
for Stock Based Compensation". In accordance with the provisions of FAS
123, the
Company applies APB Opinion 25 and related interpretations in accounting
for its
stock option plans and, accordingly, does not recognize compensation cost
if the
exercise price of the options granted is equal to the market price of the
underlying common stock at the date of grant. If the Company had elected
to
recognize compensation cost based on the fair value of the options
granted at
grant date as prescribed by FAS 123, net income would have been reduced
by
$234,000 in 1998, $201,000 in 1997 and $79,000 in 1996. Earnings per
share would
have been reduced by $.03 in 1998, $.02 in 1997 and $.01 in 1996. Diluted
earnings per share would have been reduced $.02 in 1998 and 1997, and
$.01 in
1996. The fair value of options granted were estimated using a Black-
Scholes
option pricing model with the following assumptions for 1998, 1997 and
1996; a
risk-free interest rate of 6.8%; dividend yield of 3.3%, a volatility
factor of
the expected market price of the Company's common stock of .26; and a
weighted-average expected life of the options of nine years. Because the
Company's employee stock options have characteristics significantly
different
from those typically valued using the Black-Scholes option pricing model,
and
changes in the subjective input assumptions can materially affect the
fair
market estimate, in management's opinion, the existing models do not
necessarily
provide a reliable single measure of the fair value of its employee stock
options.

The Company presently holds notes receivable totaling $332,000 from three
employees of the Company. The notes arose when the Company loaned the
employees
money to exercise stock options under the 1987 plan and an expired 1980
plan.
The notes under the 1980 plan bear interest at 6% per annum, are due on
May 28,
2000, and are collateralized by the shares. The amount of the receivable
is
shown on the balance sheet as a reduction of equity.

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

As of March 28, 1998, a total of 1,290,323 shares of Class B Common Stock
is
reserved for conversion of debentures, 4,425 shares in any combination of
Class
A and Class B are reserved for future awards under the 1991 Plan, and
27,000
shares of Class B are reserved under the Stock Option Plan for Outside
Directors.


CHANGES IN SHARES OUTSTANDING
Changes in shares issued and treasury shares during the three years ended
March
28, 1998, were as follows:

Issued shares:                             Class A             Class B
- --------------                             ---------           --------
-
Balance at March 30, 1996, March 29,
  1997 and March 28, 1998 ..............    4,695,253          5,265,158

Treasury shares:
- ----------------
Balance at April 1, 1995 ...............      817,530            728,494
  Acquisition of shares ................       27,025             35,225
  Issuance of shares -
   Martz & Associates acquisition ......           --            (43,416)
                                           ----------         ----------
Balance at March 30, 1996 ..............      844,555            720,303
  Acquisition of shares ................          107              2,283
  Stock options exercised ..............           --             (1,500)
  Restricted stock grant ...............           --               (500)
                                           ----------         ----------
Balance at March 29, 1997 ..............      844,662            720,586
  Acquisition of shares ................       91,604            113,546
  Stock options exercised ..............      (34,650)           (54,075)
  Restricted stock grant ...............     (150,750)                --
                                           ----------         ----------
Balance at March 28,1998 ...............      750,866            780,057
                                           ----------         ----------
Net outstanding at March 28, 1998 ......    3,944,387          4,485,101
                                           ==========         ==========

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

In addition, if the Company is involved in a merger or other business
combination transaction with another person in which its common stock is
changed
or converted, or sells 50% or more of its assets or earning power to
another
person, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, common shares of such other person having a
value
of twice the Right's exercise price.

The Company will generally be entitled to redeem the rights at $.01 per
Right,
at any time until the 15th day following public announcement that a 20%
position
has been acquired. The Rights expire on July 31, 1999.

NOTE K -- ACQUISITIONS
On January 1, 1995, the Company purchased the assets of Crystal Catering
and its
affiliated companies, the largest caterer in Indianapolis. The purchase
price of
$4.8 million included: (i) $2.4 million cash, (ii) a $1.4 million note
payable
to Crystal, and (iii) issuance of 97,810 shares of Class B Common Stock,
valued
at $1.0 million. Additionally, a $1.0 million adjustment earned based on
the
catering division achieving specified profitability levels for 1996, 1997
and
1998 was treated as a purchase price adjustment. Goodwill, resulting from
this
acquisition in the amount of $5.0 million, is being amortized using the
straight-line method over a twenty year life.

On May 1, 1995, the Company purchased the assets of Martz & Associates
Food
Services, an Indianapolis vending and cafeteria management services firm.
The
purchase price included $1.0 million cash and 43,416 shares of Class B
Common
Stock, valued at $456,000. Goodwill resulting from this acquisition in
the
amount of $568,000 is being amortized using the straight-line method over
a
twenty year life.
EXHIBIT 4 (L)

                         FIRST SUPPLEMENTAL INDENTURE
                                    BETWEEN
                           MARSH SUPERMARKETS, INC.
                        AND CERTAIN OF ITS SUBSIDIARIES
                                      AND
                STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE




                     MARSH SUPERMARKETS, INC., as Issuer,

                              MARSH DRUGS, INC.,
                         MARSH VILLAGE PANTRIES, INC.
                              MUNDY REALTY, INC.,
                            MAR PROPERTIES, INC.,
                                MARLEASE, INC.,
                          MARSH INTERNATIONAL, INC.,
                           MARAINES GREENERY, INC.,
                            LIMITED HOLDINGS, INC.,
                    CONVENIENCE STORE DISTRIBUTING COMPANY,
                               MARSH P.Q., INC.,
                                 S.C.T., INC.,
                     NORTH MARION DEVELOPMENT CORPORATION,
                           CONTRACT TRANSPORT, INC.,
                          CRYSTAL FOOD SERVICES, LLC,
                              LOBILL FOODS, LLC,
                           CONTRACT TRANSPORT, LLC,
                           MARSH SUPERMARKETS, LLC,
                             VILLAGE PANTRY, LLC,
                               MARSH DRUGS, LLC,
                           TRADEMARK HOLDINGS, INC.,
                           MARSH CLEARING HOUSE, LLC
                            as Existing Guarantors

                 CONVENIENCE STORE DISTRIBUTING COMPANY, LLC,
                CONVENIENCE STORE TRANSPORTATION COMPANY, LLC,
                   CRYSTAL FOOD MANAGEMENT SERVICES, LLC and
                            BUTTERFIELD FOODS, LLC
                         as Additional Guarantors, and

                STATE STREET BANK AND TRUST COMPANY, as Trustee

                                  ----------

                         FIRST SUPPLEMENTAL INDENTURE

                         Dated as of December 31, 1997
                                  $150,000,000

                    8 7/8% Senior Subordinated Notes due 2007




         FIRST SUPPLEMENTAL INDENTURE, dated as of December 31, 1997,
among
Marsh Supermarkets, Inc., an Indiana corporation (the "Company"), Marsh
Drugs,
Inc., an Indiana corporation, Marsh Village Pantries, Inc., an Indiana
corporation, Mundy Realty, Inc., an Indiana corporation, Mar Properties,
Inc.,
an Indiana corporation, Marlease, Inc., an Indiana corporation, Marsh
International, Inc., an Indiana corporation, Maraines Greenery, Inc., an
Indiana
corporation, Limited Holdings, Inc., an Indiana corporation, Convenience
Store
Distributing Company, an Ohio partnership, Marsh P.Q., Inc., an Indiana
corporation, S.C.T., Inc., an Indiana corporation, North Marion
Development
Corporation, an Indiana corporation, Contract Transport, Inc., an Indiana
corporation, Crystal Food Services, LLC, an Indiana limited liability
company,
LoBill Foods, LLC, an Indiana limited liability company, Contract
Transport,
LLC, an Indiana limited liability company, Marsh Supermarkets, LLC, an
Indiana
limited liability company, Village Pantry, LLC, an Indiana limited
liability
company, Marsh Drugs, LLC, an Indiana limited liability company,
Trademark
Holdings, Inc., a Delaware corporation, and Marsh Clearing House, LLC, an
Indiana limited liability company, (collectively, the "Existing
Guarantors"),
and Convenience Store Distributing Company, LLC, an Indiana limited
liability
company, Convenience Store Transportation Company, LLC, an Indiana
limited
liability company, Crystal Food Management Services, LLC, an Indiana
limited
liability company and Butterfield Foods, LLC, an Indiana limited
liability
company (collectively, the "Additional Guarantors"), and State Street
Bank and
Trust Company, a Massachusetts trust company, as trustee (the "Trustee").

         WHEREAS, the Company and the Existing Guarantors executed and
delivered
to the Trustee the Indenture dated August 5, 1997 among the Company, the
Existing Guarantors and the Trustee (the "Indenture"; each capitalized
terms
used herein which is not defined in this First Supplemental Indenture
shall have
the meanings given to them in the Indenture);

         WHEREAS, each of the Additional Guarantors has become a
Restricted
Subsidiary since the date of the Indenture;

         WHEREAS, certain of the Existing Guarantors desire to transfer
certain
of their assets to certain of the Additional Guarantors;

         WHEREAS, Section 1015 of the Indenture permits a Guarantor to
transfer
its assets to a Restricted Subsidiary if the Restricted Subsidiary
transferee is
a Guarantor or simultaneously executes and delivers a supplemental
indenture to
the Indenture providing for a Guarantee of the payment of the Securities
by such
Restricted Subsidiary on a senior subordinated basis;

         WHEREAS, each of the Additional Guarantors desires to become a
Guarantor under the Indenture, as amended and supplemented hereby;

         WHEREAS, Section 901 of the Indenture provides for the
circumstances
pursuant to which the Indenture may be amended without the consent of the
holders of the Securities and the Guarantee;

         WHEREAS, Section 901 of the Indenture provides that the
Indenture may
be amended without the consent of the holders of the Securities and the
Guarantee in order to correct or supplement any provision which may be
defective
or inconsistent with any other provision of the Indenture or in the
Securities
or any Guarantee, or to make any other provisions with respect to




matters or questions arising under the Indenture, the Securities or the
Guarantees, provided that such provision shall not adversely affect the
interest
of the Holders;

         WHEREAS, the Prospectus for the Securities, describing
amendments to
the Indenture permitted without the consent of the holders of the
Securities,
includes "to add a Guarantor under the Indenture";

         WHEREAS, the addition of additional Guarantors under the
Indenture will
not adversely affect the interest of the Holders;

         WHEREAS, all things necessary to make this First Supplemental
Indenture
a valid agreement of the Company, the Existing Guarantors, the Additional
Guarantors and the Trustee have been done;

         NOW THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH,
that,
for and in consideration of the premises, the Company, the Existing
Guarantors
and the Additional Guarantors agree with the Trustee as follows:

                                      ARTICLE ONE

                             AMENDMENT TO INDENTURE

Section 101. Amendment of Section 901
             ------------------------

         Section 901 of the Indenture is amended to delete the words
"pursuant
to the requirements of Section 1014".

                                      ARTICLE TWO

                        DELIVERY OF ADDITIONAL GUARANTIES

Section 201. Execution of Guaranty.
             ----------------------

         Simultaneously with the execution and delivery of this First
Supplemental Indenture, each of the Additional Guarantors shall execute
and
deliver to the Trustee a Guarantee in the form described in Section 205
of the
Indenture.

Section 202. Additional Guarantors are Guarantors Under Indenture and
             --------------------------------------------------------
Securities.
- -----------

         Each of the Additional Guarantors hereby expressly assumes each
of the
obligations of a Guarantor, and upon execution of the Guarantee described
above
and this First Supplemental Indenture, the defined term "Guarantor" in
the
Indenture shall include each Additional Guarantor and the defined term
"Guarantee" in the Indenture shall include the guarantee executed
pursuant to
Section 201 of this First Supplemental Indenture.




                                  ARTICLE THREE

                                  MISCELLANEOUS

Section 301. Counterpart Originals.
             ----------------------

         The parties may sign any number of copies of this First
Supplemental
Indenture. Each signed copy shall be an original, but all of them
together
represent the same agreement.

Section 302. Governing Law.
             --------------

         THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS
OF LAWS PRINCIPLES THEREOF.

Section 303. Effectiveness.
             --------------

         The provisions of this First Supplemental Indenture will take
effect
immediately upon its execution and delivery to the Trustee.

         IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date and year
first
written above.

                                      MARSH DRUGS, INC.
                                      MUNDY REALTY, INC.
                                      MAR PROPERTIES, INC.
                                      MARLEASE, INC.
                                      MARSH INTERNATIONAL, INC.
                                      MARAINES GREENERY, INC.
                                      LIMITED HOLDINGS, INC.
                                      MARSH P.Q., INC.
                                      S.C.T., INC.
                                      NORTH MARION DEVELOPMENT
           CORPORATION
         CONTRACT TRANSPORT, INC.
         TRADEMARK HOLDINGS, INC.

         By: /s/ Don E. Marsh
             --------------------------------
------
                 Name: Don E. Marsh
                 Title: President

         CRYSTAL FOOD SERVICES, LLC
         By:   Marsh Supermarkets, Inc., its
               Chief Operating Officer




         LOBILL FOODS, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         CONTRACT TRANSPORT, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         MARSH SUPERMARKETS, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         VILLAGE PANTRY, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         MARSH DRUGS, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         MARSH CLEARING HOUSE, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         CONVENIENCE STORE DISTRIBUTING
         COMPANY, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer

         CONVENIENCE STORE TRANSPORTATION
         COMPANY, LLC
         By: Marsh Supermarkets, Inc., its
              Chief Operating Officer
                                       CRYSTAL FOOD MANAGEMENT SERVICES,
LLC
                                       By:   Marsh Supermarkets, Inc., its
                                             Chief Operating Officer

                                       BUTTERFIELD FOODS, LLC
                                       By: Marsh Supermarkets, Inc., its
                                            Chief Operating Officer

                                       By: /s/ Don E. Marsh
                                           -------------------------------
------
                                                   Name: Don E. Marsh
                                                   Title: President and Chief
                                                          Executive Officer




                                         MARSH VILLAGE PANTRIES, INC.
                                         CONVENIENCE STORE DISTRIBUTING
                                              COMPANY
                                         By:     Marsh Village Pantries,
Inc., its
                                                   General Partner

                                         By: /s/ Don E. Marsh
                                             ------------------------------
-------
                                                   Name: Don E. Marsh
                                                   Title: Chief Executive
Officer


Attest:      /s/ P. Lawrence Butt
            ---------------------------------
            P. Lawrence Butt, Secretary
            Marsh Supermarkets, Inc.
            Marsh Drugs, Inc.
            Marsh Village Pantries, Inc.
            Mundy Realty, Inc.
            Mar Properties, Inc.
            Marlease, Inc.
            Marsh International, Inc.
            Maraines Greenery, Inc.
            Limited Holdings, Inc.
            Marsh Village Pantries, Inc., as
               general partner of Convenience
               Store Distributing Company
            Marsh P.Q., Inc.
            S.C.T., Inc.
            North Marion Development Corporation
             Contract Transport, Inc.
             Marsh Supermarkets, Inc.,
                as Chief Operating Officer of
                Crystal Food Services, LLC
                LoBill Foods, LLC
                Contract Transport, LLC
                Marsh Supermarkets, LLC
                Village Pantry, LLC
                Marsh Drugs, LLC
                Marsh Clearing House, LLC
                Convenience Store Distributing Company, LLC
                Convenience Store Transportation Company, LLC
                Crystal Food Management Services, LLC
                Butterfield Foods, LLC

Attest: /s/ P. Lawrence Butt
        ---------------------------------------
          P. Lawrence Butt, Assistant Secretary
          Trademark Holdings, Inc.




STATE STREET BANK & TRUST COMPANY,
as Trustee

By: /s/ Dennis Fisher
    -------------------------------------------
        Name: Dennis Fisher
        Title: Assistant Vice President




EXHIBIT 13

PORTIONS OF 1998 ANUAL REPORT TO SHAREHOLDERS INCORPORATED BY REFERENCE,
INCLUDING OPINION OF INDEPENDENT AUDITORS

FINANCIAL HIGHLIGHTS (in thousands, except per share amounts)

                                                      1998           1997
1996
                                                   ----------     -------
---        ----------
Sales and other revenues .................         $1,505,133
$1,451,730        $1,390,543
Income (loss) before extraordinary item ..           9,445
(244)            9,033
Extraordinary item, net of tax ...........           (3,278)
--                --
                                                ----------        -------
---        ----------
Net income (loss) ........................      $    6,167       $
(244)       $    9,033
                                                ==========
==========        ==========


Income (loss) per share before
    extraordinary item - assuming dilution      $      1.07       $
(.03)       $     1.02
Dividends per share ......................             .44
.44               .44

Total assets .............................      $   460,039      $
395,631        $ 387,294
Long-term liabilities ....................          212,461
145,429           135,066
Shareholders' equity .....................          116,079
115,448           118,158

Book value per share .....................      $    13.77       $
13.75        $    14.07

Number of shares outstanding at year end .            8,429
8,395             8,396

Net income (loss) as a percentage of:
    Sales and other revenues ..............              .4%
--%                .6%
    Average shareholders' equity ..........            5.3%
(0.2)%              7.7%
Stores open at year-end:
   Supermarkets ...........................              89
88                 90
   Convenience stores .....................            181
182                181

=========================================================================
=======

Marsh Supermarkets, Inc. was founded in 1931 with one store in Muncie,
Indiana.
In 1953, the Company went public with 16 stores. Today, it is a leading
regional
food retailer headquartered in Indianapolis, Indiana. The Company
operates 72
Marsh(R) Supermarkets, 17 LoBill Foods(R), 181 Village Pantry(R)
convenience
stores in Indiana and Ohio, Convenience Store Distributing Company
(CSDC(R))
serving 1,290 non-affiliated convenience stores in seven states, and
Crystal
Food Services(TM), the largest food service operator in Indianapolis.

The 12,800 Marsh employees serve two million customers each week.




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

                                                          March 28,
March 29,       March 30,      April 1,       April 2,
As of and for the year ended                                1998
1997            1996           1995           1994
- -----------------------------------------------------------------------
---------------------------------------------------------
Sales and other revenues ..........................     $1,505,133
$1,451,730      $1,390,543     $1,303,261     $1,263,191

Income (loss) before income taxes,
  extraordinary item and cumulative effect of
  changes in accounting principles ................             13,096
(249)         14,284         12,790         13,517

Income (loss) before extraordinary item and
   cumulative effect of changes in
   accounting principles ...........................             9,445
(244)           9,033          8,573          8,526
Extraordinary item, net of tax ....................             (3,278)
--               --             --             --
Cumulative effect of changes in
     accounting principles .........................                --
--               --             --          1,941
                                                            ----------    -
---------      ----------       ----------    ----------

Net income (loss) .................................        $     6,167    $
(244)     $    9,033     $    8,573     $   10,467
                                                            ==========
==========      ==========      ==========     ==========

Earnings (loss) per common share:
    Before extraordinary item and cumulative
     effect of changes in accounting principles ...         $    1.13     $
(.03)     $     1.07     $     1.02     $     1.01
    Net income (loss) .............................                .74
(.03)           1.07           1.02           1.24

Earnings (loss) per common share assuming dilution:
    Before extraordinary item and cumulative
        effect of changes in accounting principles       $       1.07         $
(.03)     $     1.02     $      .98     $      .97
    Net income (loss) .............................                .73
(.03)           1.02            .98           1.17

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

Total assets ......................................      $   460,039          $
395,631      $ 387,294      $ 378,471      $ 375,683
Long-term liabilities .............................          212,461
145,429         135,066        143,102        148,818
Total shareholders' equity ........................          116,079
115,448         118,158        114,314        109,794



Earnings per share amounts for 1994 through 1997 have been restated to
comply
with Statement of Financial Accounting Standard No. 128, "Earnings Per
Share".




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

                                           ------------------------------
------------   -----------------------------------------
                                                             1998
1997
                                             Fourth      Third           Second
First      Fourth     Third      Second      First
                                            --------    --------     --------
--------   --------   --------   --------    --------
Sales and other revenues ...............    $339,353    $356,206    $465,650
$343,924   $328,671   $338,116   $449,099    $335,844
Gross profit ...........................      86,257     87,932      114,871
83,777     82,565     82,153    109,180      81,246
Selling, general and administrative ....      73,196     76,072      100,446
72,263     71,063     71,391     95,444      80,736
Depreciation and amortization ..........       5,039      4,669           5,935
4,376      4,571      4,461      5,633       9,064
                                            --------    --------     --------
--------   --------   --------   --------    --------
Operating income (loss) ................       8,022      7,191            8,490
7,138      6,931      6,301      8,103      (8,554)
Interest and debt expense amortization .       4,406      4,454           5,822
3,063      3,200      2,992      3,824       3,014
                                            --------    --------     --------
--------   --------   --------   --------    --------
Income (loss) before income taxes and
  extraordinary item ...................       3,616          2,737       2,668
4,075      3,731      3,309      4,279     (11,568)
Income taxes (credit) ..................         856            776        843
1,176      1,608      1,303      1,540      (4,456)
                                            --------      --------    --------
--------   --------   --------    --------   --------

Income (loss) before extraordinary item         2,760         1,961       1,825
2,899      2,123      2,006      2,739       (7,112)
Extraordinary item, net of tax .........           --           --
(3,278)          --         --        --           --           --
                                             --------     --------    --------
--------   --------   --------    --------    --------

Net income (loss) ......................     $ 2,760      $ 1,961     $
(1,453)   $ 2,899    $ 2,123    $ 2,006      $ 2,739      $ (7,112)
                                             ========     ========    ========
========   ========   ========    ========    ========

Earnings (loss) per common share
  Before effect of extraordinary item ..     $   .33      $     .24   $    .22
$    .35   $    .25   $    .24   $    .33     $  (.85)
  Extraordinary item ...................           --           --
(.39)         --         --         --          --            --
                                           --------       --------    --------
--------   --------   --------   --------    --------
  Net income (loss) per common share ...   $     .33      $    .24    $
(.17)    $   .35   $    .25   $    .24   $     .33    $     (.85)
                                           ========       ========    ========
========   ========   ========   ========   ========

Earnings (loss) per common share -
  assuming dilution
   Before effect of extraordinary item ..    $   .31      $     .22   $    .21
$     .32   $    .24   $    .23   $    .31    $  (.85)
   Extraordinary item ...................          --           --
(.38)          --         --         --         --            --
                                           --------       --------    --------
--------   --------   --------   --------    --------
  Net income (loss) per common share ...   $     .31      $    .22    $
(.17)    $   .32   $    .24   $    .23   $     .31    $     (.85)
                                           ========       ========    ========
========   ========   ========   ========    ========


COMMON STOCK PRICES:
   Class A -   High ...................... $ 16.75        $   15.75   $   16.25
$ 14.88    $ 15.25    $ 14.37    $ 12.25    $ 13.00
               Low .......................    15.38           14.88       13.75
12.25      12.25      10.75      11.25      11.50


   Class B -   High .....................       16.13         16.50       17.00
14.38      14.37      11.75      11.75        13.12
                Low ......................      14.88          14.75       13.75
11.75       11.62       9.75       9.75       11.50

CASH DIVIDEND: Class A .................     $      .11    $     .11   $    .11
$    .11   $    .11   $    .11   $    .11     $      .11
               Class B .................            .11          .11         .11
.11        .11        .11        .11          .11


Cash dividends have been paid on the common stock during each quarter of
the
past 38 years.

Earnings per share amounts for 1997 and the first two quarters of 1998
have been
restated to comply with Statement of Financial Accounting Standard No.
128,
"Earnings Per Share".

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

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

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

Unusual or infrequently occurring items recognized in net income in the
quarterly results are as follows:

Fourth quarter 1998:       Income per diluted share increased $.12 from
sales of
                            surplus real estate.

Third quarter 1998:        Income per diluted share increased $.02 from
sales of
                            surplus real estate.

Second quarter 1998:       Income per diluted share increased $.03 from
sales of
                            surplus real estate.

Fourth quarter 1997:       Income per diluted share increased $.10 from
the sale
                            of a closed supermarket.

First quarter 1997:        Loss per diluted share included $.47 from
reducing
                            the carrying amounts of impaired assets and
$.15 from
                           curtailment of the defined benefit pension
plan.




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

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

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

                                                      Percentage of
Revenues
                                                              Year Ended
Percentage Change
                                                 ------------------------
----------   ---------------------
                                                 March 28,    March 29,
March 30,       1998       1997
                                                   1998         1997
1996        vs. 1997   vs. 1996
                                                 ---------    ---------
---------   --------     --------
Sales and other revenues ...................      100.0%       100.0%
100.0%        3.7%         4.4%
Gross profit ...............................      24.8         24.5
24.7         5.0          3.4
Selling, general and administrative expenses      21.4         21.9
21.4         1.0          7.3
Depreciation and amortization ..............        1.3          1.6
1.4       (15.6)        25.2
Operating income ...........................        2.0          0.9
2.0       141.3        (53.3)
Interest and debt amortization expense .....        1.2          0.9
0.9        36.2         (0.4)
Income (loss) before income taxes
  and extraordinary item ...................        0.9          0.0
1.0         n/m        (101.7)
Income taxes (credit) ......................        0.2          0.0
0.4         n/m        (100.1)
Income (loss) before extraordinary item ....        0.6          0.0
0.6         n/m        (102.8)
Extraordinary item, net of tax .............      (0.2)          0.0
0.0         n/m           --
Net income (loss) ..........................        0.4          0.0
0.6         n/m        (102.8)

n/m = not meaningful




SALES AND OTHER REVENUES
In 1998, consolidated sales and other revenues of $1,505.1 million
increased
$53.4 million, or 3.7%, from 1997, despite 1998 not including an Easter
holiday.
Consolidated sales and revenues for 1998 include gains from sales of real
estate
of $2.3 million, compared to $1.8 million from sales of real estate in
1997.
Supermarket, convenience store (Village Pantry), convenience wholesale
(CSDC),
and food service (Crystal Food Services) revenues accounted for 68%, 12%,
18%,
and 2%, respectively, of consolidated revenues. Revenues increased
approximately
$26.8 million from supermarkets, $30.6 million from CSDC, and $2.9
million from
Crystal Food Services, while Village Pantry revenues decreased $7.7
million.
Retail sales (excluding fuel sales) increased 2.0%. Sales in comparable
stores
(including replacement supermarkets and convenience stores and format
conversions) in 1998 increased 1.4% from 1997. Approximately two-thirds
of the
revenue increase in supermarkets was due to identical store gains, with
the
remainder attributable to new stores and format conversions. Of the
decrease in
Village Pantry revenues, approximately half resulted from lower retail
fuel
prices and the closing of 14 fuel operations beginning in the middle of
the
prior year, with the remaining decline due to competition from fast food
restaurants and other convenience stores. Half of the increase in CSDC
revenues
resulted from passing on cigarette manufacturer price increases to
customers. At
the end of 1998, CSDC served 1,290 non-related stores, compared to 1,400
at the
end of 1997. The decrease was due to the loss of a 160 store chain that
accounted for sales of $10.3 million in 1998 and $11.1 million in 1997.
The
increase in Crystal Food Services revenues resulted primarily from the
maturation of service sites added in the prior year.

In 1997, consolidated revenues increased $61.2 million, or 4.4%, from
1996.
Supermarket, Village Pantry, CSDC and Crystal Food Services revenues
accounted
for 69%, 13%, 17% and 1%, respectively, of 1997 consolidated revenues.
The
supermarket, Village Pantry, CSDC and Crystal Food Services operations
increased
revenues compared to 1996 by $20.1 million, $9.5 million, $28.6 million
and $4.9
million, respectively. Retail sales (excluding fuel sales) increased
2.3%. Sales
in comparable stores (including replacement supermarkets and convenience
stores
and format conversions) in 1997 increased 0.8% from 1996. The revenue
increases
in supermarkets and Village Pantry were due principally to stores opened
in
1996. CSDC sales increased due to new customers and volume increases from
existing customers. The increase in Crystal Food Services revenues was
attributable to the addition of two major venues and five lesser venues,
as well
as increases at existing service sites.
Comparable store sales for each of the past five quarters have increased
over
the respective year earlier quarter, in spite of competitive activity and
low
rates of food price inflation. With the pace of new competitive openings
slowing, the Company believes that current marketing and merchandising
programs
continue to be positioned to achieve improvement in the comparable store
sales
trend.

GROSS PROFIT
Gross profit is net of warehousing, transportation and promotional
expenses. In
1998, consolidated gross profit was $372.8 million and increased $17.7
million,
or 5.0%, compared to 1997. The increase was attributable to improvements
of
$12.7 million in supermarkets, $0.4 million in Village Pantry, $1.8
million in
CSDC and $2.4 million in Crystal Food Services. Expressed as a percentage
of
revenues, consolidated gross profit was 24.8% in 1998, an increase of
0.3% from
24.5% in 1997. The $17.7 million increase in gross profit resulted from
improvements in profit margin rates in all divisions and profits on
incremental
revenues.

In 1997, consolidated gross profit increased $11.8 million, or 3.4%, from
1996.
Expressed as a percentage of revenues, consolidated gross profit was
24.5% in
1997 and 24.7% in 1996. The 0.2% decrease was primarily attributable to
increases in Village Pantry fuel sales and CSDC sales, both of which have
gross
profit margins significantly lower than the average of the Company's
other
operations. Supermarket and Crystal Food Services gross margins, as a
percentage
of sales, improved in 1997, while Village Pantry and CSDC gross margins,
as a
percentage of sales, declined slightly due to higher sales of Village
Pantry
fuel and CSDC cigarettes at margin rates lower than food products.

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

Wages in identical stores increased 1.5% in 1998 from 1997, following a
2.1%
increase in 1997 from 1996. A tight labor market resulted in a shift to
more
full-time employees, wage increases and increased overtime. Retailers
generally
offset wage increases with higher gross margin rates, higher same store
sales,
and productivity gains. The Company expects the tight labor market to
continue,
but implemented labor productivity changes in 1998 and 1997 aimed at
reducing
the recent increases in wage costs, while continuing to maintain high
customer
service levels.

Selling, general and administrative expenses in 1997, compared to 1996,
increased $21.6 million, or 7.3%, to $318.6 million. Expressed as a
percentage
of revenues, selling, general and administrative expenses increased 0.5%
to
21.9% in 1997, from 21.4% in 1996. The increase was primarily
attributable to
selling expenses in supermarkets opened since July 1995, additional
Crystal Food
Services operating venues and the $6.8 million in charges not normally
recurring.

DEPRECIATION AND AMORTIZATION EXPENSE
Depreciation and amortization expense was $20.0 million, $23.7 million
and $19.0
million for 1998, 1997 and 1996, respectively. Depreciation and
amortization in
1997 included $4.9 million in FAS 121 charges primarily related to the
adjustment of building and equipment carrying costs of eight supermarkets
and 12
convenience stores. Expressed as a percentage of revenues, depreciation
and
amortization expense was 1.3% for 1998, 1.6% for 1997 and 1.4% for 1996.

INTEREST EXPENSE
Interest expense was $17.7 million in 1998   compared to $13.0 million in
1997.
The increase resulted from the issuance of   $150.0 million of 8 7/8%
Senior
Subordinated Notes (the "Notes") in August   1997. As a percentage of
revenues,
interest was 1.2% in 1998 compared to 0.9%   in both 1997 and 1996.




INCOME TAXES
The effective income tax rate was 27.9% for 1998 and was lower than the
statutory rate due to contributions, tax credits and the reversal of
deferred
tax accruals resulting from restructuring the Company's retail
operations. The
effective income tax rate for 1997 was not meaningful. The effective
income tax
rate for 1996 was 36.8%. The effective income tax rate for 1999 is
expected to
approximate 32.6%.

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM
Income before extraordinary item was $13.1 million, or 0.9% of revenues,
for
1998 compared to a $0.2 million loss for 1997. The $17.7 million increase
in
gross profit, combined with the $3.7 million decrease in depreciation and
amortization and the $6.8 million in selling, general and administrative
expenses in 1997 that did not recur in 1998, were reduced by $10.1
million in
increased selling, general and administrative expenses and $4.7 million
in
increased interest.

Income (loss) in 1997 was a $0.2 million loss and decreased from 1996
income of
$9.0 million due principally to the FAS 121 charges included in
depreciation and
amortization in 1997 and additional 1997 charges not normally recurring.

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

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

                                        1998      1997       1996
                                       -----     -----      -----
Capital expenditures (millions)        $42.5     $33.6      $22.7
                                       =====     =====      =====
Supermarkets
       New/acquired stores .....          2             1       3
       Closed stores ...........          1             3       1
       Major remodels/expansions          2             0       5
Convenience stores
       New/acquired stores .....          0             3       1
       Closed stores ...........          1             2       1

All years include land acquisitions for future store development.

During 1998, the Company opened the following stores:

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

During 1997, the Company opened the following stores:

                              SQUARE
TYPE / CATEGORY                FEET     LOCATION                  OPENED
- ---------------                ----     --------                  ----
--
Supermarket    Replacement   65,000     Muncie, IN             Nov. 8,
1996
LoBill         Conversion    32,000     Indianapolis, IN       Apr. 1,
1996
LoBill         Conversion    22,000     Portland, IN          Jul. 26,
1996
LoBill         Conversion    17,000     Union City, OH        Jul. 26,
1996
LoBill         Conversion    22,000     Indianapolis, IN       Sep. 26,
1996
Convenience    New             4,500    Cambridge C, IN       Jun. 13,
1996
Convenience    New             4,500    Albany, IN            Jul. 11,
1996
Convenience    New             4,500    Frankfort, IN          Oct. 25,
1996

In 1998, the Company began construction of a replacement supermarket in
Carmel,
Indiana and a new prototype convenience store in Cicero, Indiana,
acquired one
shopping center adjacent to its south Kokomo, Indiana supermarket,
installed
scale management software and equipment in the supermarket division and
began
implementation of new generation inventory procurement/distribution
software. In
1997, the Company expanded the square footage of the perishable products
facility in Yorktown, Indiana to 191,000 square feet from 124,000 square
feet
and constructed a central commissary in an existing storeroom in
Noblesville,
Indiana. In 1996, the Company purchased the assets of Martz & Associates
Food
Services and in January 1995, the Company purchased the assets of Crystal
Catering and its affiliated companies, the largest caterer in
Indianapolis.

Subsequent to March 28, 1998, the Company converted a supermarket in
Rushville,
Indiana to the LoBill format, opened a new convenience store in Cicero,
Indiana
and purchased a convenience store in Kokomo, Indiana. In 1999, the
Company plans
to remodel two supermarkets, open two replacement supermarkets and open
six new
convenience stores. The cost of these projects and other capital
commitments is
estimated to be $60 million. Of this amount, the Company plans to fund
$20
million through equipment leasing, and believes it can finance the
balance with
current cash balances and internally generated funds.




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

LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities during 1998 was $31.8 million,
a $0.8
million decrease from 1997. Working capital increased $40.2 million as
cash, net
of short-term amounts payable to banks, increased $31.8 million,
inventories,
net of accounts payable, increased $4.2 million and current maturities of
long-term obligations decreased $4.3 million. The increase in cash and
decreases
in current amounts due to banks and current portions of long-term
obligations
resulted from the issuance of the Notes. The increase in inventory net of
payables was primarily due to the build-up of inventory for the Easter
holiday
sales in April.

For 1998, investing activities consisted of $34.8 million in expenditures
for
acquisition of property, equipment and land for expansion, net of
dispositions,
and $10.0 million in other investing activities, primarily acquisition of
rental
video tapes and deferred costs associated with the new generation
inventory
procurement/distribution software project. The Company's capital
requirements
are traditionally financed through internally generated funds, long-term
borrowings and lease financings, including capital and operating leases.
The
Company anticipates continued access to such financing sources.

The Company's long-term debt and capital lease obligations, net of
current
maturities, amounted to $212.5 million at March 28, 1998, compared to
$145.4
million at March 29, 1997. All of the long-term debt and capital lease
obligations at March 28, 1998 were at fixed rates of interest with an
8.7%
weighted average rate.

In connection with the issuance of the 8 7/8% Senior Subordinated Notes
in
August 1997, the Company repaid $35.0 million borrowed on existing
revolving
credit facilities and short-term borrowing arrangements and entered into
new
$30.0 million and $20.0 million revolving credit facilities. As a result,
at
March 28, 1998, the Company had $50.0 million of availability under its
revolving credit facilities. Commitments from various banks for short-
term
borrowings provide an additional $20.0 million of available financing at
rates
based upon the then prevailing federal funds rate. At March 28, 1998, no
amounts
were outstanding on revolving credit facilities or short-term borrowing
arrangements.

The Company believes the remaining net proceeds of the offering of the
Notes,
borrowings under its revolving credit agreements and notes payable to
banks,
cash flows from operating activities and lease financings will be
adequate to
meet the Company's working capital needs, planned capital expenditures
and debt
service obligations for the foreseeable future.

YEAR 2000 ISSUE
The Company has reviewed its computer and other operating systems to
identify
those which could be affected by the "Year 2000" issue and is currently
addressing those systems. Management believes those changes will be made
in a
timely fashion and the Year 2000 issue will not pose significant
operational
problems for the Company. Moreover, management does not expect that Year
2000
associated costs will have a material adverse impact on the Company's
financial
condition or results of operations. It is management's understanding the
significant third parties with which the Company does business are now,
or will
be, Year 2000 compliant in a timely manner. However, if the Company or
one or
more significant third parties with whom it does business fails to
complete its
Year 2000 program in a timely manner, there can be no assurance that such
failure will not have a material adverse effect on the Company's
operations or
financial position.




REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL REPORTING

The management of Marsh Supermarkets, Inc. is responsible for the
preparation
and integrity of the consolidated financial statements included in this
annual
report. The financial statements were prepared in accordance with
generally
accepted accounting principles and necessarily include some amounts based
on
management's best estimates and judgment. All financial information
appearing in
this annual report is consistent with that in the financial statements.

The Company maintains a system of internal controls designed to provide
reasonable assurance, on a cost-effective basis, that assets are
safeguarded and
transactions are properly authorized and recorded accurately in the
financial
records. The Company believes its control system is enhanced by its
long-standing emphasis on conducting business in accordance with the
highest
standards of conduct and ethics.

Independent auditors, Ernst & Young LLP, have audited the accompanying
financial
statements. Their report is included herein. Their audits, conducted in
accordance with generally accepted auditing standards, included the
review and
evaluation of selected internal accounting controls for purposes of
designing
their audit tests.
The Audit Committee of the Board of Directors meets periodically with the
independent auditors to discuss the scope and results of their audit
work, their
assessment of internal controls, and the quality of financial reporting.
The
independent auditors are engaged by the Board of Directors, upon
recommendation
of the Audit Committee.




Don E. Marsh               Douglas Dougherty                   Mark Varner
Chairman of the Board,     Senior Vice President,              Corporate
Controller
President and              Chief Financial Officer and
Chief Executive Officer    Treasurer




EXHIBIT 21

                    MARSH SUPERMARKETS, INC. AND SUBSIDIARIES

                          SUBSIDIARIES OF THE REGISTRANT


                                                 State of
Name under which Business
Name as Specified                            Incorporation
Done if Different from
   in Charter                               or Organization
Name Specified in Charter
   ----------                                ---------------             ---
----------------------
Marsh Drugs, Inc.                                Indiana
Marsh Drugs
Marsh Village Pantries, Inc.                        Indiana
Village Pantry
Mundy Realty, Inc.                               Indiana
Mar Properties, Inc.                             Indiana
Marlease, Inc.                                   Indiana
Marsh International, Inc.                        Indiana
Maraines Greenery, Inc.                          Indiana
Floral Fashions
Limited Holdings, Inc.                           Indiana
Convenience Store
     Distributing Company                         Ohio
CSDC
Marsh P.Q., Inc.                                  Indiana
S.C.T., Inc.                                      Indiana
North Marion Development Corp.                    Indiana
Contract Transport, Inc.                          Indiana
Crystal Food Services, LLC                        Indiana
Crystal Food Services
LoBill Foods, LLC                                 Indiana
LoBill
Contract Transport, LLC                           Indiana
Marsh Supermarkets, LLC                           Indiana
Marsh
Village Pantry, LLC                               Indiana
Village Pantry
Marsh Drugs, LLC                                  Indiana
Marsh Drugs
Trademark Holdings, Inc.                          Delaware
Marsh Clearing House, LLC                         Indiana
Convenience Store
     Transportation Company, LLC                  Indiana
CSTC
Convenience Store Distributing Company, LLC       Indiana
CSDC
Crystal Food Management Services, LLC             Indiana
Butterfield Foods, LLC                            Indiana
Butterfield




EXHIBIT 23

                           CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form
10-K)
of Marsh Supermarkets, Inc. of our report dated May 15, 1998 included in
the
1998 Annual Report to Shareholders of Marsh Supermarkets, Inc.

We also consent to the   incorporation by reference in Registration
Statement
Number 2-74859 on Form   S-8 of the 1980 Marsh Stock Plan, dated December
2, 1981,
Registration Statement   Number 33-33427 on Form S-8 of the Marsh
Supermarkets,
Inc. 1987 Stock Option   Plan, dated February 12, 1990, Registration
Statement
Number 33-43817 on Form S-8 of the Marsh Employees' Monthly Stock
Investment
Plan - 1977, dated November 7, 1991, Registration Statement Number 33-
56630 on
Form S-8 of the 1991 Employee Stock Incentive Plan, dated December 31,
1992,
Registration Statement Number 33-56624 on Form S-8 of the 1992 Stock
Option Plan
for Outside Directors, dated December 31, 1992, and Registration
Statement
Number 33-56626 on Form S-8 of the Marsh Supermarkets, Inc. 401(k) Plan,
dated
December 31, 1992, of our report dated May 15, 1998, with respect to the
consolidated financial statements incorporated herein by reference in
this
Annual Report (Form 10-K) of Marsh Supermarkets, Inc.




                                                               Ernst &
Young LLP
Indianapolis, Indiana
June 23, 1998




THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARSH
SUPERMARKETS' 10-K FOR THE PERIOD ENDED MARCH 28, 1998 AND IS QUALIFIED
IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO.

S-X) AND (II) $321,977 OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(ITEM
5-03(B)4 OF REGULATION S-X).




THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARSH
SUPERMARKETS' 10-K FOR THE PERIOD ENDED MARCH 29, 1997 AND IS QUALIFIED
IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO.

S-X) AND (II) $318,634 OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(ITEM
5-03(B)4 OF REGULATION S-X).
ANTIDILUTIVE STOCK OPTIONS AND CONVERTIBLE SUBORDINATED DEBENTURES.




THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARSH
SUPERMARKETS' 10-K FOR THE PERIOD ENDED MARCH 30, 1996 AND IS QUALIFIED
IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO.

S-X) AND (II) $297,022 OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(ITEM
5-03(B)4 OF REGULATION S-X).

End

								
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