10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended March 31, 2012.

OR

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                     to                     .

Commission File Number: 000-31127

SPARTAN STORES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Michigan	38-0593940
(State or Other Jurisdiction) of Incorporation or Organization)	(I.R.S. Employer Identification No.)
850 76th Street, S.W. P.O. Box 8700 Grand Rapids, Michigan	49518-8700
(Address of Principal Executive Offices)	(Zip Code)

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

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

Title of Class	Name of Exchange on which Registered
Common Stock, no par value	NASDAQ Global Select Market

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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

Indicate by a check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requirement to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Securities Exchange Act).

Large accelerated filer  ¨ Accelerated filer  x Non-accelerated filer  ¨ Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates based on the last sales price of such stock on the NASDAQ Global Select Market on September 10, 2011 (which was the last trading day of the registrant’s second quarter in the fiscal year ended March 31, 2012) was $345,915,556.

The number of shares outstanding of the registrant’s Common Stock, no par value, as of May 7, 2012 was 21,664,787, all of one class.

DOCUMENTS INCORPORATED BY REFERENCE

Part III, Items 10, 11, 12, 13 and 14 Proxy Statement for Annual Meeting to be held August 15, 2012

Forward-Looking Statements

The matters discussed in this Annual Report on Form 10-K include “forward-looking statements” about the plans, strategies, objectives, goals or expectations of Spartan Stores, Inc. (together with its subsidiaries, “Spartan Stores”). These forward-looking statements are identifiable by words or phrases indicating that Spartan Stores or management “expects,” “anticipates,” “plans,” “believes,” “estimates,” “intends,” or is “optimistic” or “confident” that a particular occurrence or event “will,” “may,” “could,” “should” or “will likely” result, occur or pursue or “continue” in the future, that the “outlook” or “trend” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus” or similarly stated expectations. Accounting estimates, such as those described under the heading “Critical Accounting Policies” in Item 7 of this Annual Report on Form 10-K, are inherently forward-looking. Our asset impairment and exit cost provisions are estimates and actual costs may be more or less than these estimates and differences may be material. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report.

In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission, there are many important factors that could cause actual results to differ materially. Our ability to achieve sales and earnings expectations; successfully conclude union contract negotiations; improve operating results; maintain and strengthen our retail-store performance; assimilate acquired stores; maintain or grow sales; respond successfully to competitors; maintain gross margin; effectively address food cost or price inflation or deflation; anticipate and successfully respond to openings of competitors; maintain and improve customer and supplier relationships; realize expected benefits of restructuring; realize growth opportunities; maintain or expand our customer base; reduce operating costs; sell on favorable terms assets held for sale; generate cash; continue to meet the terms of our debt covenants; continue to pay dividends, and successfully implement and realize the expected benefits of the other programs, systems, plans, priorities, strategies, objectives, goals or expectations described in this Annual Report, our other reports, our press releases and our public comments will be affected by changes in economic conditions generally or in the markets and geographic areas that we serve, adverse effects of the changing food and distribution industries and other factors including, but not limited to, those discussed in the “Risk Factors” discussion in Item 1A of this Annual Report.

This section and the discussions contained in Item 1A, “Risk Factors,” and in Item 7, subheading “Critical Accounting Policies” in this report, both of which are incorporated here by reference, are intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all of the economic, competitive, governmental, technological and other factors that could adversely affect our expected consolidated financial position, results of operations or liquidity. Additional risks and uncertainties not currently known to Spartan Stores or that Spartan Stores currently believes are immaterial also may impair our business, operations, liquidity, financial condition and prospects. We undertake no obligation to update or revise our forward-looking statements to reflect developments that occur or information obtained after the date of this Annual Report.

2

PART I

Item 1. Business

Overview

Spartan Stores is a leading regional grocery distributor and grocery retailer, operating principally in Michigan and Indiana. We operate two reportable business segments: Distribution and Retail. We believe that we are the tenth largest wholesale distributor to supermarkets in the United States and the largest wholesale distributor to supermarkets in Michigan. According to reports provided by Metro Market Studies, our distribution and retail operations hold a combined #1 or #2 market share in the Northern Michigan and Western Michigan markets we serve and a #3 market share in our other Michigan markets. For the fiscal year ended March 31, 2012 (“fiscal 2012”), we generated net sales of approximately $2.6 billion.

Established in 1917 as a cooperative grocery distributor, Spartan Stores converted to a for-profit business corporation in 1973. In January 1999, we began to acquire retail supermarkets in our focused geographic regions. In August 2000, our common stock became listed on the NASDAQ Stock Market under the symbol “SPTN.” With approximately 8,400 associates, Spartan Stores distributes a wide variety of products to approximately 375 independent grocery stores and operates 96 conventional supermarkets.

Spartan Stores’ hybrid business model supports the close functioning of its Distribution and Retail operations, optimizing the natural complements of each business segment. The model produces operational efficiencies, helps stimulate distribution product demand, and provides sharper market visibility and broader business growth options. In addition, the Distribution and Retail diversification provides added flexibility to pursue the best long-term growth opportunities in each segment.

Spartan Stores has established key management priorities that focus on the longer-term strategy of the Company, including establishing a well-differentiated market offering for our Distribution and Retail segments, and additional strategies designed to create value for our shareholders, retailers and customers. These priorities are:

• Retail sales growth: Continue refining our capital plan focusing on remodels, replacement stores, adjacent acquisitions, expansions and new stores to fill in existing markets, leverage investments in fuel centers and pharmacy operations to drive related supermarket customer traffic and continue to focus on category management initiatives, specifically focusing on fresh offerings. We also pursue prudent acquisitions to grow this segment.

• Distribution sales growth: Focus on increasing penetration of existing customers, attracting new in-market customers and adjacent-state customers, continue to share “best retail practices” with customers, provide a superior value-added relationship and pursue appropriate acquisitions.

• Margin optimization: Continued focus on increasing penetration of private brand programs, enhancing offerings in our fresh department, lowering the cost of merchandise through vendor partnerships, E-Sourcing, and improving retail shrink.

• Selling, general and administrative (“SG&A”) expense cost containment: Continue to focus on improving efficiency and general cost containment in all areas to allow us to remain cost competitive in the long-term and help offset recessionary impacts on our business in the short-term.

We believe significant progress has been made towards achieving these long-term priorities in recent years and we will continue to focus on these priorities.

Distribution Segment

Our Distribution segment provides a selection of approximately 45,000 stock-keeping units (SKU's), including dry groceries, produce, dairy products, meat, deli, bakery, frozen food, seafood, floral products, general merchandise, pharmacy and health and beauty care items to approximately 375 independent grocery stores and

3

our 96 corporate-owned stores. Also included are approximately 3,900 private brand grocery and general merchandise items. Total net sales from our Distribution segment, including shipments to our corporate-owned stores, which are eliminated in the consolidated financial statements, were approximately $1.8 billion for fiscal 2012.

Customers. Our Distribution segment supplies a diverse group of independent grocery store operators that range from a single store to supermarket chains with as many as 21 stores, as well as our corporate-owned stores. Pricing to our customers is generally based upon a “cost plus” model for grocery, frozen, dairy, pharmacy and health and beauty care items and a “variable mark-up” model for meat, deli, bakery, produce, seafood, floral and general merchandise products.

Our Distribution customer base is very diverse, with no single customer, excluding corporate-owned stores, exceeding 8% of consolidated net sales. Our five largest Distribution customers (excluding corporate-owned stores) accounted for approximately 17% of our fiscal 2012 Distribution net sales. In addition, approximately 75% of Distribution net sales, including corporate-owned stores, are covered under supply agreements with our Distribution customers or are directly controlled by Spartan Stores.

Distribution Functions. Our Distribution business utilized approximately 1.4 million square feet of warehouse, distribution and office space as of March 2012. We supply our independent Distribution customers and our corporate-owned stores from our distribution center located in Grand Rapids, Michigan. We believe that our distribution facility is strategically located to efficiently serve our customers. We are continually evaluating our inventory movement and assigning SKU’s to appropriate areas within our distribution center facilities to reduce the time required to stock and pick products in order to achieve additional efficiencies.

To supply our Distribution customers, we operate a fleet of approximately 105 tractors, 205 conventional dry trailers and 180 refrigerated trailers, substantially all of which are leased. In fiscal 2012, 30 tractors and 22 conventional dry trailers were replaced as a part of our on-going strategy to maintain the highest possible operating standards. This investment in our fleet also supports our sustainability initiatives by meeting new emission level requirements and provides us with industry-leading appearances on the road as we continue to introduce new and increased Spartan private brand logo visibility. We take pride in our "rolling billboards" that showcase over 30 different colorful designs of Spartan private brand products and create positive visual impressions to the consumer as the fleet travels approximately 12.5 million miles annually.

We continued to leverage our upgraded fleet management system and new dispatch software, as well as a new fuel management system that was deployed in the fourth quarter of fiscal 2012, to further improve the efficiency of the operation. The greater visibility and functionality provided by the new transportation software resulted in continued trends of increased outbound load density and reduced off-route and empty miles. Our satellite-based global positioning and communications hardware allows fleet supervisors to communicate directly with drivers and supports a fully automated delivery tracking system that provides retailers with real time estimated time of arrival visibility on every delivery. The trailer-tracking functionality also enabled the dispatch center to efficiently track the location of all trailers in the fleet as well as support the completion of chain of custody audits for product in transit. Continued integration with other supply chain systems will assist by improving resource utilization and lowering the fleet tractor to trailer ratio as we move through fiscal 2013. Furthermore, system supplied critical event and performance reporting has positively impacted the fleet accident frequency and severity rating, as we remain committed to continued improvement in safety and reduction of insurance and claims costs.

We remain committed to the ongoing investment required to maintain a best-in-class fleet while focusing on the lowest operating cost model. A comprehensive equipment replacement strategy has enabled the company to capitalize on seasonal business fluctuations, vehicle technology enhancements, increased trailer capacity, fleet right-sizing and manufacturer component warranty cycles. In fiscal 2012, we took delivery of 30 leased Kenworth tractors equipped with the new Cummins ISX 425 horsepower engine that met the latest federal emissions standards. These new trucks offer an industry leading solution with world-class low emissions and

4

greenhouse gases, while delivering outstanding horsepower, torque and improved fuel efficiency. The trucks reduce emissions to near-zero levels of nitrogen oxide and meet our continued commitment to reducing our carbon footprint. We also continue to invest in environmentally friendly equipment solutions such as improved aerodynamics, idling reduction systems, low roll resistant tires and tire inflation systems.

In Fiscal 2013, we will focus on completing the integration of a yard and dock management system with other transportation technology to automate and control the arrival/departure, yard location, yard movement and readiness of trailers in a full on-line environment. We will fully utilize the real time information from RF identification tags to track the location of equipment in the yard. The use of wireless communications for trailers will allow for improved control and monitoring of the distribution campus.

Additional Services. We also offer and provide many of our independent Distribution customers with value-added services, including:

•    Site identification and market analyses	•    Coupon redemption
•    Store planning and development	•    Product reclamation
•    Marketing, promotion and advertising	•    Printing
•    Technology and information services	•    Category management
•    Accounting, payroll and tax preparation	•    Real estate services
•    Human resource services	•    Construction management services

Retail Segment

Our neighborhood market strategy distinguishes our stores from supercenters and limited assortment stores by emphasizing convenient locations, demographically targeted merchandise selections, high-quality fresh offerings, customer service, value pricing and community involvement.

Our Retail segment operates 96 retail supermarkets predominantly in midsize metropolitan, tourist and lake communities of Michigan. Our retail supermarkets are operated under the banners Glen’s Markets, Family Fare Supermarkets, D&W Fresh Markets, VG’s Food and Pharmacy, and Valu Land.

Our 96 retail supermarkets typically offer dry groceries, produce, dairy products, meat, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products, delicatessen items and bakery goods. In 66 of our supermarkets, we also offer pharmacy services. In addition to nationally advertised products, the stores carry private brand items, including our flagship Spartan brand and Fresh Selections, Top Care, a health and beauty care brand, Valu Time, a value brand, Full Circle, a natural and organic brand and Paws, a pet supplies brand. These private brand items provide above-average retail margins and we believe they help generate increased customer loyalty. See “Merchandising and Marketing – Corporate Brands.” Our retail supermarkets range in size from approximately 20,300 to 65,800 total square feet and average approximately 42,000 total square feet per store.

We operate 27 fuel centers at our supermarket locations operating under the banners D&W Quick Stop, Family Fare Quick Stop, Glen’s Quick Stop, and VG’s Quick Stop. These fuel centers offer refueling facilities and in the adjacent convenience store, a limited variety of immediately consumable products. Our prototypical Quick Stop stores are approximately 1,100 square feet in size and are located adjacent to our supermarkets. We have experienced increases in supermarket sales upon opening fuel centers and initiating cross-merchandising activities. We are planning to continue to open additional fuel centers at certain of our supermarket locations each year over the next few years.

5

Our stores are primarily the result of acquisitions from January 1999 to December 2008. The following chart details the changes in the number of our stores over the last five fiscal years:

Fiscal Year	Number of Stores at Beginning of Fiscal Year		Stores Acquired or Added During Fiscal Year		Stores Closed or  Sold During Fiscal Year		Number of Stores at End of Fiscal Year
2008		87		20		8		99
2009		99		17		16		100
2010		100		—		4		96
2011		96		1		—		97
2012		97		—		1		96

During fiscal 2012, we completed seven major remodels of our stores as well as many other limited remodels and store resets. In addition, we converted one store to our new Valu Land banner and opened two new fuel centers.

We expect to continue making meaningful progress with our capital investment program during fiscal 2013 by completing construction of one new store (relocation of a store), opening four to six new Valu Land stores, completing six major remodels and opening two new fuel centers. We evaluate proposed retail projects based on demographics and competition within each market, and prioritize projects based on their expected returns on investment. Approval of proposed capital projects requires a projected internal rate of return that meets or exceeds our policy; however, we may undertake projects that do not meet this standard to the extent they represent required maintenance or necessary infrastructure improvements. In addition, the Company performs a post completion review of all major projects. We believe that focusing on such measures provides us with an appropriate level of discipline in our capital expenditures process.

Products

The Company offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. The Company’s consolidated net sales include the net sales of the Company’s corporate-owned stores and fuel centers and the net sales of the Company’s Distribution business, net of sales to affiliated stores.

The following table presents sales by type of similar product and services:

(Dollars in thousands)	2012				2011				2010
Non-perishables (1)	$	1,293,147	49	%	$	1,297,719	51	%	$	1,367,298	53	%
Perishables (2)		933,545	36			906,945	36			895,005	35
Fuel		219,903	8			123,262	5			95,937	4
Pharmacy		187,631	7			205,138	8			193,716	8
Consolidated net sales	$	2,634,226	100	%	$	2,533,064	100	%	$	2,551,956	100	%

(1) Consists primarily of general merchandise, grocery, beverages, snacks and frozen foods.

(2) Consists primarily of produce, dairy, meat, bakery, deli, floral and seafood.

Note—Fiscal 2012 had 53 weeks while both 2011 and 2010 had 52 weeks.

Reporting Segment Financial Data

More detailed information about our reporting segments may be found in Note 15 to the consolidated financial statements included in Item 8, which is herein incorporated by reference. All of our sales and all of our assets are in the United States of America.

6

Discontinued Operations

Certain of our retail and grocery distribution operations have been recorded as discontinued operations. Accordingly, for all years presented, all Consolidated Statements of Earnings information in this Annual Report on Form 10-K has been adjusted and the discontinued operations information is excluded, unless otherwise noted. Discontinued retail operations consist of certain stores that have been closed or sold. Discontinued Distribution operations consist of our Maumee, Ohio and Toledo, Ohio distribution centers that previously serviced retail stores which have been closed or sold.

Marketing and Merchandising

General. We continue to align our marketing and merchandising strategies with current consumer behaviors by providing initiatives centered on loyalty, value, and health and wellness. These strategies focus on consumer driven programs to effectively leverage the use of category management principles and satisfy the consumer’s needs.

Our over-arching focus on the consumer gives us insight about purchasing behavior and the flexibility to adapt to rapidly changing market conditions by making tactical adjustments to our marketing and merchandising programs that deliver more tangible value to our customers. We will continue to expand these offerings and partner with our independent customers over time to realize incremental benefits.

As we expand our service offerings, we believe that we differentiate ourselves from our competitors by offering a full set of services, from value added services in our distribution segment to the addition of fuel centers and Starbucks Coffee shops in some of our retail stores. To engender loyalty with our customers, we provide them with discounts on fuel purchases at our fuel centers. Fuel centers have proven to be effective traffic-builders for fuel-purchasing customers who wish to take advantage of cross-promotions between the stores and the Quick Stop fuel centers. Consumers are focusing on value in today's economy, and coupons such as the fuel reward savings program are helping us to meet that need.

We continue to evolve our Pharmacy Plus program by connecting with the consumer and focusing on health and wellness. As noted above, 66 of our supermarkets now offer pharmacy services. We believe the pharmacy service offering is an important part of the consumer experience. As a result, to provide excellent value on medications, we offer free medications (antibiotics, diabetic meds and pre-natal vitamins) along with generic drugs for $4 and $10 as well as food solutions for preventative health and education for our customers.

In fiscal 2012, we expanded our “YES” customer loyalty card program to include Family Fare and D&W Fresh Market and now have all of our conventional grocery stores linked with the same loyalty card. This program, which was first introduced in the Glen’s Markets banner late in the first quarter of fiscal 2010, is providing us with more sophisticated information to better understand our customers' purchasing behavior, which we are using to improve the effectiveness of our promotions, marketing and merchandising programs. We also expect the program will help solidify our long-term customer loyalty, improve our sales growth opportunities and further strengthen our market position. We expect to achieve these goals by knowing what’s important to our individual consumers and then by targeting relevant offers to these individuals.

We strive to be a health and wellness solution for our customers as well. Our Nutrition Guide tags are one way we do this—providing nutrition information for thousands of items throughout the store, right on the price tag—making it easy for our customers to purchase items that meet their health needs. We were also one of the first retailers in the country to begin to incorporate Food Marketing Institute’s “Facts Up Front” nutrition labeling on our Spartan and Spartan Fresh Selections private brand packages. We expect to be the first retailer in the country to have 100% of our private brand packaging to incorporate Facts Up Front on the label by the end of calendar 2012.

7

At Spartan Stores, we are committed to being a consumer driven retailer. In fiscal 2009, we implemented a new customer satisfaction program that gives consumers a new channel for communicating their store experiences. Retail customers are randomly selected via point-of-sale receipts and invited to give us feedback by taking an online survey. Results of these surveys help us assess overall customer satisfaction and identify several opportunities to focus on to drive consumer satisfaction and loyalty. From this program we have developed a fresh selection initiative to drive our competitive advantage. We value the opinions of our consumers and believe the best way to deliver a high quality shopping experience is to let customers tell us what they want and need. We believe this survey dialogue will better enable us to identify opportunities for continuous improvements for consistency and excellence in the overall consumer experience.

Over the past year we have been experimenting with a value store format, under the banner Valu Land, and converted three small store locations to this format. We opened our first net new Valu Land early in the first quarter of fiscal 2013. Over the remainder of fiscal 2013, we plan to open four to six additional new Valu Land locations. While we are still very early in the development and testing of this store format, we are excited about the potential organic growth opportunity it could provide in certain existing markets, as well as locations outside the state of Michigan.

Private Brands. We currently market and distribute over 3,900 private brand items including our flagship Spartan brand, Spartan Fresh Selections, Top Care, a health and beauty care brand, Valu Time, a value brand, Full Circle, a natural and organic brand, and Paws, a pet supplies brand. We believe that our private brand offerings are part of our most valuable strategic assets, demonstrated through customer loyalty and profitability. These product offerings are serving us particularly well as the consumer becomes more value orientated.

We have worked diligently to develop a premier private brand program. We have added more than 2,400 corporate brand products to our consumer offer in the past eight years, with approximately 500 products introduced in fiscal 2012. We plan to introduce approximately 400 new items in fiscal 2013. Our products are continually recognized for excellence, and this year marked the ninth consecutive year that we have been recognized for award-winning private brand products. These awards underscore our continued commitment to providing the consumer with quality products.

Additionally, we continue to focus on pursuing opportunities in the fresh department consumer offerings with Spartan Fresh Selections, which was launched in fiscal 2011 and included the addition of 92 new products followed by 60 new products in fiscal 2012.

Competition

Our Distribution and Retail segments operate in highly competitive markets, which typically result in low profit margins for the industry as a whole. We compete with, among others, regional and national grocery distributors, independently owned retail grocery stores, large chain stores that have integrated wholesale and retail operations, mass merchandisers, limited assortment stores and wholesale membership clubs, many of whom have greater resources than we do. The principal competitive factors in the retail grocery business include the location and image of the store; the price, quality and variety of the perishable products; and the quality and consistency of service.

We believe we have developed and implemented strategies and processes that allow us to remain competitive in our Retail segment. We monitor planned store openings by our competitors and have established proactive strategies to respond to new competition both before and after the competitive store opening. Strategies to combat competition vary based on many factors, such as the competitor’s format, strengths, weaknesses, pricing and sales focus. During the past three fiscal years, 12 competitor supercenters opened in markets in which we operate corporate-owned stores. No additional openings are expected to occur during fiscal 2013 against our corporate-owned stores. As a result of these openings we believe the majority of our supermarkets compete with one, if not multiple, supercenters.

8

The primary competitive factors in the distribution business include price, product quality, variety and service. We believe our overall service level, defined as actual units shipped divided by actual units ordered, is among industry leading performance in our Distribution segment.

Seasonality

Our sales and operating performance vary with seasonality. Our first and fourth quarters are typically our lowest sales quarters. Therefore, operating results are generally lower during these two quarters. Additionally, these two quarters can be affected by the timing of the Easter holiday, which results in a strong sales week. Many northern Michigan stores are dependent on tourism and therefore, are most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months. All quarters are 12 weeks, except for our third quarter, which is 16 weeks and includes the Thanksgiving and Christmas holidays. Fiscal 2012 contained 53 weeks; therefore, the fourth quarter of fiscal 2012 consisted of 13 weeks rather than 12 weeks.

Suppliers

We purchase products from a large number of national, regional and local suppliers of name brand and private brand merchandise. We have not encountered any material difficulty in procuring or maintaining an adequate level of products to serve our customers. No single supplier accounts for more than 12% of our purchases. We continue to develop strategic relationships with key suppliers. We believe this will prove valuable in the development of enhanced promotional programs and consumer value perceptions.

Intellectual Property

We own valuable intellectual property, including trademarks and other proprietary information, some of which are of material importance to our business.

Technology

Spartan continues to invest in technology as a means of maximizing the efficiency of our operations, improving service to our customers, and where possible deploying technology to provide a competitive advantage in the marketplace.

Supply Chain. During fiscal 2012, Spartan implemented a new handheld ordering system for use with our Distribution customers. This system provides an industry leading tool for the independent customer to order product and access product information from any location in their store. We made major enhancements to our web based product information system for use by our Distribution customers. We added the capability for the independent customer to track the delivery status of orders including the physical location of the truck in route to the customer location. In fiscal 2013, we will continue with the development of our web based product information system and also upgrade our voice selection technology within all warehouses to further improve order accuracy and efficiency. These projects are all designed to provide expanded and more timely information so our Distribution customers can make better decisions and more effectively compete in the marketplace.

Retail Systems. During fiscal 2012, Spartan implemented a major software revision to our point of sale systems. The first phase of our Pharmacy consumer web site was implemented to provide enhanced medical information for the consumer. The next phase of an enhanced cost accounting system for our corporate pharmacies was installed to support improved margin analysis and inventory management. Our loyalty marketing system was deployed in the remaining corporate owned retail banners and we continued making major enhancements to our customer loyalty marketing system. We completed the upgrade of our in-store item and price management system for our independent customers.

9

Financial Systems. During fiscal 2012, Spartan implemented additional management self service functions in its Human Resource and Payroll system. We implemented a new integrated project management and costing system for the Real Estate and IT departments.

Information Technology Infrastructure. A major storage system upgrade was completed at our primary and backup data centers. Additional processing capacity was added at our primary and backup data centers. Our security systems continue to be enhanced at our retail locations and our central processing sites.

Subsidiaries

Our Distribution segment consists primarily of our wholly owned subsidiary, Spartan Stores Distribution, LLC. We operate our Retail segment through our wholly owned subsidiary, Seaway Food Town, Inc. and its respective subsidiaries.

Associates

We currently employ approximately 8,400 associates, 4,000 of which are full-time and 4,400 of which are part-time. Unions represent approximately 8% of our associates.

We consider our relations with our union and non-union associates to be good and have not had any material work stoppages in over twenty years. The existing agreement with the union expires October 2012. We expect to enter into a new contract prior to the expiration of the current agreement.

Regulation

We are subject to federal, state and local laws and regulations covering the purchase, handling, sale and transportation of our products. Several of our products are subject to federal Food and Drug Administration regulation. We believe that we are in substantial compliance in all material respects with the Food and Drug Administration and other federal, state and local laws and regulations governing our businesses.

Forward-Looking Statements

The matters discussed in this Item 1 include forward-looking statements. See “Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K.

Available Information

The address of our web site is www.spartanstores.com. The inclusion of our website address in this Form 10-K does not include or incorporate by reference the information on or accessible through our website, and you should not consider information contained on or accessible through those websites as part of this Form 10-K. We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports (and amendments to those reports) filed or furnished pursuant to Section 13(a) of the Securities Exchange Act available on our web site as soon as reasonably practicable after we electronically file or furnish such materials with the Securities and Exchange Commission. Interested persons can view such materials without charge by clicking on “For Investors” and then “SEC Filings” on our web site. Spartan Stores is an “accelerated filer” within the meaning of Rule 12b-2 under the Securities Exchange Act.

Item 1A. Risk Factors

Our business faces many risks. If any of the events or circumstances described in the following risk factors occurs, our financial condition or results of operations may suffer, and the trading price of our common stock could decline. This discussion of risk factors should be read in conjunction with the other information in this Annual Report on Form 10-K. All of our forward-looking statements are affected by the risk factors discussed in this item and this discussion of risk factors should be read in conjunction with the discussion of forward-looking statements which appears at the beginning of this report.

10

We operate in an extremely competitive industry. Many of our competitors are much larger than we are and may be able to compete more effectively.

Our Distribution and Retail segments compete with, among others, regional and national grocery distributors, independently owned retail grocery stores, large chain stores that have integrated wholesale and retail operations, mass merchandisers, limited assortment stores and wholesale membership clubs, many of whom have greater resources than we do. Some of our distribution and retail competitors are substantially larger and have greater financial resources and geographic scope, lower merchandise acquisition costs and lower operating expenses than we do, intensifying competition at the wholesale and retail levels.

The effects of industry consolidation and the expansion of alternative store formats have resulted in, and continue to result in, market share losses for traditional grocery stores. These trends have produced even stronger competition for our retail business and for the independent customers of our distribution business. To the extent our independent customers are acquired by our competitors or are not successful in competing with other retail chains and non-traditional competitors, sales by our distribution business will be affected. If we fail to implement strategies to respond effectively to these competitive pressures, our operating results could be adversely affected by price reductions, decreased sales or margins, or loss of market share.

This competition may result in reduced profit margins and other harmful effects on us and the Distribution customers that we supply. Ongoing industry consolidation could result in our loss of customers that we currently supply and could confront our retail operations with competition from larger and better-capitalized chains in existing or new markets. We may not be able to compete successfully in this environment.

Government regulation could harm our business.

Our business is subject to extensive governmental laws and regulations including, but not limited to, employment and wage laws and regulations, regulations governing the sale of pharmaceuticals, alcohol and tobacco, minimum wage requirements, working condition requirements, public accessibility requirements, citizenship requirements, environmental regulation, and other laws and regulations. A violation or change of these laws could have a material effect on our business, financial condition and results of operations.

Like other companies that sell food and drugs, our stores are subject to various federal, state, local, and foreign laws, regulations, and administrative practices affecting our business. We must comply with numerous provisions regulating health and sanitation standards, facilities inspection, food labeling, and licensing for the sale of food, drugs, tobacco and alcoholic beverages.

We cannot predict the nature of future laws, regulations, interpretations, or applications, or determine what effect either additional government regulations or administrative orders, when and if promulgated, or disparate federal, state, local, and foreign regulatory requirements will have on our future business. They could, however, require that we recall or discontinue sale of certain products, make substantial changes to our facilities or operations, or otherwise result in substantial increases in operating expense. Any or all of such requirements could have an adverse effect on our results of operations and financial condition.

We are subject to state and federal environmental regulations.

Under various federal, state and local laws, ordinances and regulations, we may, as the owner or operator of our locations, be liable for the costs of removal or remediation of contamination at these current or our former locations, whether or not we knew of, or were responsible for, the presences of such contamination. The failure to properly remediate such contamination may subject us to liability to third parties and may adversely affect our ability to sell or lease such property or to borrow money using such property as collateral.

Compliance with existing and future environmental laws regulating underground storage tanks may require significant capital expenditures and increased operating and maintenance costs.

11

The remediation costs and other costs required to clean up or treat contaminated sites could be substantial. In the future, we may incur substantial expenditures for remediation of contamination that has not been discovered at existing or acquired locations. We cannot assure you that we have identified all environmental liabilities at all of our current and former locations; that material environmental conditions not known to us do not exist; that future laws, ordinances or regulations will not impose material environmental liability on us; or that a material environmental condition does not otherwise exist as to any one or more of our locations. In addition, failure to comply with any environmental laws, ordinances or regulations or an increase in regulations could adversely affect our operating results and financial condition.

Safety concerns regarding our products could harm our business.

It is sometimes necessary for us to recall unsafe, contaminated or defective products. Recall costs can be material and we might not be able to recover costs from our suppliers. Concerns regarding the safety of food products sold by us could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply for some or all of their food needs, even if the basis for concern is outside of our control. Any loss of confidence on the part of our customers would be difficult and costly to overcome. Any real or perceived issue regarding the safety of any food or drug items sold by us, regardless of the cause, could have a substantial and adverse effect on our business.

We may not be able to implement our strategy of growth through acquisitions.

Part of our growth strategy involves selected acquisitions of additional retail grocery stores, grocery store chains or distribution facilities. We may not be able to implement this part of our growth strategy or ultimately be successful. We may not be able to identify suitable acquisition candidates in the future, complete acquisitions or obtain the necessary financing.

Because we operate in the Distribution business, future acquisitions of retail grocery stores could result in us competing with our independent grocery store customers and could have adverse effects on existing business relationships with our distribution customers.

The success of our store acquisitions will depend, in part, on whether we achieve the business synergies and related cost savings that we anticipated in connection with these transactions and any future acquisitions. Accordingly, we may not achieve expected results and long-term business goals.

Our business is subject to risks from regional economic conditions, fuel prices, and other factors in our markets.

Our business is sensitive to changes in general economic conditions. In recent years, the United States economy and financial markets have declined and experienced volatility due to uncertainties related to energy prices, availability of credit, difficulties in the banking and financial services sector, the decline in the housing market, diminished market liquidity, falling consumer confidence and rising unemployment rates. Furthermore, most of our sales are to customers located in Michigan and Indiana and the Michigan economy in particular is dependent upon the automotive industry, which is still challenged. Michigan continues to have one of the highest unemployment rates in the country. These adverse economic conditions in our markets, potential reduction in the populations in our markets and the loss of purchasing power by residents in our markets could reduce the amount and mix of groceries purchased, adversely affecting our revenues and profitability. Further adverse developments in the automotive and auto supply industries in Michigan and Indiana could have an additional adverse affect on purchasing power of our customers and prospective customers in some markets served by our retail stores and those of our Distribution customers. This could lead to additional reductions in consumer spending, to consumers trading down to less expensive mix of products or to consumers trading down to discounters, all of which may affect our financial condition and results of operations.

12

Rising gasoline prices may affect consumer behavior and retail grocery prices. The impact of rising petroleum prices may prompt consumers to make different choices in how and where they shop due to the high price of gasoline. Additionally, the impact of higher fuel costs is passed through by manufacturers and distributors in the prices of goods and services provided, again potentially affecting consumer buying decisions. This could have adverse impacts on retail store traffic, basket size and overall spending at both our corporate and independent retail stores.

In addition, many of our retail grocery stores, as well as stores operated by our Distribution customers are located in areas of northern Michigan that are heavily dependent upon tourism. Unseasonable weather conditions and the economic conditions discussed above may decrease tourism activity and could result in decreased sales by our retail grocery stores and decreased sales to our Distribution customers, adversely affecting our business.

Economic downturns and uncertainty have adversely affected overall demand and intensified price competition, and have caused consumers to “trade down” by purchasing lower margin items and to make fewer purchases in traditional supermarket channels. Continued negative economic conditions affecting disposable consumer income such as employment levels, business conditions, changes in housing market conditions, the availability of credit, interest rates, volatility in fuel and energy costs, food price inflation or deflation, employment trends in our markets and labor costs, the impact of natural disasters or acts of terrorism, and other matters affecting consumer spending could cause consumers to continue shifting even more of their spending to lower-priced products and competitors. The continued general reductions in the level of discretionary spending or shifts in consumer discretionary spending to our competitors could adversely affect our growth and profitability.

Inflation and deflation may adversely affect our operating results.

In this uncertain economy, it is difficult to forecast whether fiscal 2013 will be a period of inflation or deflation. Food deflation could reduce sales growth and earnings, while food inflation, combined with reduced consumer spending, could reduce gross profit margins. If we experience significant inflation or deflation, especially in the context of continued lower consumer spending, then the Company’s financial condition and results of operations may be adversely affected.

We may be unable to retain our key management personnel.

Our success depends to a significant degree upon the continued contributions of senior management. The loss of any key member of our management team may prevent us from implementing our business plans in a timely manner. We cannot assure you that successors of comparable ability will be identified and appointed and that our business will not be adversely affected.

A number of our Distribution segment associates are covered by collective bargaining agreements.

Most of our warehouse associates in our Distribution business segment are covered by a collective bargaining agreement which expires in October 2012. We expect that rising health care, pension and other employee benefit costs, among other issues, will continue to be important topics of negotiation with the labor union. Upon the expiration of our collective bargaining agreement, work stoppages by the affected workers could occur if we are unable to negotiate an acceptable contract with the labor union. This could significantly disrupt our operations. Further, if we are unable to control health care and pension costs provided for in the collective bargaining agreement, we may experience increased operating costs and an adverse impact on future results of operations.

Unions may attempt to organize additional employees.

While we believe that relations with our employees are good, we may become the target of union organizing campaigns similar to those faced by our competitors. The potential for unionization could increase as any new related legislation is passed. We respect our employees’ right to unionize or not to unionize. However, the

13

unionization of a significant portion of our workforce could increase our overall costs at the affected locations and adversely affect our flexibility to run our business in the most efficient manner to remain competitive or acquire new business and could adversely affect our results of operations by increasing our labor costs or otherwise restricting our ability to maximize the efficiency of our operations.

Costs related to multi-employer pension plans and other postretirement plans could increase.

We contribute to the Central States Southeast and Southwest Pension Fund, a multi-employer pension plan, based on obligations arising under a collective bargaining agreement with Teamster local 406. The plan is not administered by or in any way controlled by us. We have relatively little control over the level of contributions we are required to make to the plan and it is currently underfunded. As a result, contributions are scheduled to increase and we expect that contributions to the plans may be subject to further increases. Benefit levels and related issues will continue to create collective bargaining challenges. The amount of any increase or decrease in our required contributions to the multi-employer pension plan will depend upon the outcome of collective bargaining, actions taken by trustees who manage the plan, governmental regulations, the actual return on assets held in the plan, the continued viability and contributions of other employers which contribute to the plan, and the potential payment of a withdrawal liability if we choose to exit a market, among other factors.

Under current law, an employer that withdraws or partially withdraws from a multi-employer pension plan may incur a withdrawal liability to the plan, which represents the portion of the plan’s underfunding that is allocable to the withdrawing employer under very complex actuarial and allocation rules. Withdrawal liabilities may be incurred under a variety of circumstances, including selling, closing or substantially reducing employment at a facility. Withdrawal liabilities could be material, and potential exposure to withdrawal liabilities may influence business decisions and could cause the company to forgo business opportunities.

We maintain a defined benefit retirement plan for substantially all of our employees that do not participate in multi-employer pension plans. This plan is a cash balance pension plan and was frozen as of January 1, 2011. Expenses associated with the defined benefit plans may significantly increase due to changes to actuarial assumptions or investment returns on plan assets that are less favorable than projected. In addition, changes in our funding status could adversely affect our financial position.

Risks associated with insurance plan claims could increase future expenses.

We use a combination of insurance and self-insurance to provide for potential liabilities for workers’ compensation, automobile and general liability, property insurance, director and officers’ liability insurance, and employee health care benefits. The liabilities that have been recorded for these claims represent our best estimate, using generally accepted actuarial reserving methods, of the ultimate obligations for reported claims plus those incurred but not reported for all claims incurred through March 31, 2012. Any actuarial projection of losses is subject to a high degree of variability. Changes in legal trends and interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, and changes in discount rates could all affect the level of reserves required and could cause future expense to maintain reserves at appropriate levels.

Costs related to associate healthcare benefits could increase.

We provide health benefits for a large number of associates. Our costs to provide such benefits continue to increase annually and recent legislative and private sector initiatives regarding healthcare reform are likely to result in significant changes to the U.S. healthcare system. At this time we are not able to determine the impact that healthcare reform will have on the Company-sponsored healthcare plans. In addition, we participate in various multi-employer health plans for our union associates, and we are required to make contributions to these plans in amounts established under collective bargaining agreements. The cost of providing benefits through such plans has escalated rapidly in recent years. The amount of any increase or decrease in our required contributions

14

to these multi-employer plans will depend upon many factors, many of which are beyond our control. If we are unable to control the costs of providing healthcare to associates, we may experience increased operating costs, which may adversely affect our financial condition and results of operations.

Changes in vendor promotions or allowances, including the way vendors target their promotional spending, and our ability to effectively manage these programs could significantly impact our margins and profitability.

We cooperatively engage in a variety of promotional programs with our vendors. As the parties assess the results of specific promotions and plan for future promotions, the nature of these programs and the allocation of dollars among them changes over time. We manage these programs to maintain or improve margins while at the same time increasing sales for us and for the vendors. A reduction in overall promotional spending or a shift in promotional spending away from certain types of promotions that we and our distribution customers have historically utilized could have a significant impact on profitability.

Threats to security or the occurrence of a health pandemic could harm our business.

Our business could be severely impacted by wartime activities, threats or acts of terrorism or a widespread health pandemic. Any of these events could adversely impact our business by disrupting delivery of products to our corporate stores or our independent retail customers, by affecting our ability to appropriately staff our stores and by causing customers to avoid public places.

We have large, complex information technology systems that are important to our business operations. Although we have implemented security programs and disaster recovery facilities and procedures, security could be compromised and systems disruptions, data theft or other criminal activity could occur. This could result in a loss of sales or profits or cause us to incur significant costs to restore our systems or to reimburse third parties for damages.

Severe weather and natural disasters could harm our business.

Severe weather conditions and natural disasters, whether a result of climate change or otherwise, could affect the suppliers from whom we purchase products and could cause disruptions in our operations. Unseasonably adverse climatic conditions that impact growing conditions and the crops of food producers may adversely affect the availability or cost of certain products.

Damage to our facilities could harm our business.

A majority of the product we supply to our retail stores and Distribution customers flows through our distribution center. While we believe we have adopted commercially reasonable precautions, insurance programs, and contingency plans, destruction of, or substantial damage to our distribution center due to natural disaster, severe weather conditions, accident, terrorism, or other causes could substantially compromise our ability to distribute products to our retail stores and Distribution customers. This could result in a loss of sales, profits and asset value.

Restrictive covenants imposed by our credit facility and other factors could adversely affect our ability to borrow.

Our ability to borrow additional funds is governed by the terms of our credit facilities. The credit facilities contain financial and other covenants that, among other things, limit the Company’s ability to draw down the full amount of the facility, incur additional debt outside of the credit facility, create new liens on property, make acquisitions, or pay dividends. These covenants may affect our operating flexibility and may require us to seek the consent of the lenders to certain transactions that we may wish to effect. We are not currently restricted by these covenants. Disruptions in the financial markets have in the past resulted in bank failures. One or more of the participants in our credit facility could become unable to fund our future borrowings when needed. We

15

believe that cash generated from operating activities and available borrowings under our credit facility will be sufficient to meet anticipated requirements for working capital, capital expenditures, and debt service obligations for the foreseeable future. However, there can be no assurance that our business will continue to generate cash flow at or above current levels or that we will maintain our ability to borrow under our credit facility. The Company may not be able to refinance its existing debt at similar terms.

Impairment charges for goodwill or other intangible assets would adversely affect our financial condition and results of operations.

The Company is required to test annually goodwill and intangible assets with indefinite useful lives, including the goodwill associated with past acquisitions and any future acquisitions, to determine if impairment has occurred. Additionally, interim reviews must be performed whenever events or changes in circumstances indicate that impairment may have occurred. If the testing performed indicates that impairment has occurred, the Company is required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets in the period the determination is made.

The testing of goodwill and other intangible assets for impairment requires the Company to make significant estimates about our future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including potential changes in economic, industry or market conditions, changes in business operations, changes in competition or changes in the Company’s stock price and market capitalization. Changes in these factors, or changes in actual performance compared with estimates of the Company’s future performance, may affect the fair value of goodwill or other intangible assets, which may result in an impairment charge. The Company cannot accurately predict the amount and timing of any impairment of assets. Should the value of goodwill or other intangible assets become impaired, the Company’s financial condition and results of operations may be adversely affected.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Distribution Segment Real Estate

The following table lists the current location, approximate size and ownership of the facilities used in our Distribution segment:

Facilities	Location		Total Square Feet		Ownership
Dry grocery		Grand Rapids, MI		585,492	Owned
Fresh (refrigerated)		Grand Rapids, MI		306,522	Owned
General merchandise		Grand Rapids, MI		232,700	Owned
General office (including print shop)		Grand Rapids, MI		127,323	Owned
Transportation and salvage		Grand Rapids, MI		78,760	Owned
Warehouse and office		Grand Rapids, MI		47,500	Leased
Total				1,378,297

The Company believes that its distribution facilities are generally well maintained, are generally in good operating condition, have sufficient capacity and are suitable and adequate to carry on the Company’s distribution business. In the fourth quarter of fiscal 2010, we began to transition the dry grocery operations at our former Plymouth, Michigan warehouse to Grand Rapids. The transition was completed in the first quarter of fiscal 2011 and, as such, the facility is no longer used in our operations. The lease on this facility expired in October 2010.

16

Retail Segment Real Estate

The following table lists the retail banner, number of stores, geographic region, approximate total square footage under the banner, average store size (in square feet) and ownership of our retail supermarkets:

Retail Banner	Number of Stores		Geographic Region	Total Square Feet		Average Store Size		Ownership
Family Fare Supermarkets		37	Western and Central Michigan		1,664,452		44,985	Leased
Glen’s Markets		29	Northern and Central Michigan		1,037,288		35,769	Leased
D&W Fresh Markets		9	Western Michigan		425,019		47,224	Leased
D&W Fresh Markets		2	Western and Central Michigan		84,458		42,229	Owned
Valu Land		3	Northern and Central Michigan		73,152		24,384	Leased
VG’s Food and Pharmacy		16	Eastern Michigan		759,809		47,488	Leased
Total		96			4,044,178		42,127

We also own one fuel center in Western Michigan that is not included in a supermarket location but is adjacent to our corporate headquarters.

Item 3. Legal Proceedings

Various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against Spartan Stores and its subsidiaries. While the ultimate effect of such lawsuits and claims cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the consolidated financial position, operating results or liquidity of Spartan Stores.

Item 4. Mine Safety Disclosure

Not Applicable

17

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

Spartan Stores common stock is traded on the NASDAQ Global Select Market under the trading symbol “SPTN.”

Stock sale prices are based on transactions reported on the NASDAQ Global Select Market. Information on quarterly high and low sales prices for Spartan Stores’ common stock appears in Note 16 to the consolidated financial statements and is incorporated here by reference. At May 7, 2012, there were approximately 475 shareholders of record of Spartan Stores common stock.

The Company paid a quarterly cash dividend of $0.05 per common share from the fiscal 2006 fourth quarter thru the fourth quarter of fiscal 2011. In May 2011, the Board of Directors approved an increase in the quarterly dividend rate to $.065 per common share beginning with the first quarter of fiscal 2012. Under its senior revolving credit facility, the Company is generally permitted to pay dividends in any fiscal year up to an amount such that all cash dividends, together with any cash distributions or share repurchases, do not exceed $30.0 million. Although we expect to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the board of directors to declare future dividends. Each future dividend will be considered and declared by the Board of Directors at its discretion. The ability of the Board of Directors to continue to declare dividends will depend on a number of factors, including our future financial condition and profitability and compliance with the terms of our credit facilities. In May 2011, the Board also approved a 5-year share repurchase program for up to $50 million of the Company’s stock. During fiscal 2012, the Company purchased 687,200 shares of its common stock for approximately $12.4 million.

The equity compensation plans table in Item 12 is here incorporated by reference.

The following table provides information regarding the Company's purchases of its own common stock on the open market during the fourth quarter. The Company had no transactions relating to associates under stock compensation plans. All transactions reported for the fourth quarter are from the Company’s stock repurchase program.

Spartan Stores, Inc. Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Program		Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs
January 1, 2012 – January 28, 2012
Employee Transactions		—	$	—
January 29, 2012 – February 25, 2012
Employee Transactions		—	$	—
Repurchase program (1)		97,000	$	17.77		97,000	$	48,276
February 26, 2011 – March 31, 2012
Employee Transactions		—	$	—
Repurchase program		590,200	$	18.03		590,200	$	37,635
Total for Fourth Quarter ended March 31, 2012		687,200	$	18.00		687,200	$	37,635

(1) On May 18, 2011 the Board of Directors authorized a stock repurchase plan of up to $50 million. The plan expires on May 18, 2016.

18

Performance Graph

Set forth below is a graph comparing the cumulative total shareholder return on Spartan Stores’ common stock to that of the Russell 2000 Total Return Index and the NASDAQ Retail Trade Index, over a period beginning March 30, 2007 and ending on March 31, 2012.

Cumulative total return is measured by the sum of (1) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment and (2) the difference between the share price at the end and the beginning of the measurement period, divided by the share price at the beginning of the measurement period.

The dollar values for total shareholder return plotted above are shown in the table below:

	March 30, 2007		March 28, 2008		March 27, 2009		March 26, 2010		March 26, 2011		March 31, 2012
Spartan Stores	$	100.00	$	76.58	$	57.71	$	55.92	$	58.95	$	72.01
Russell 2000 Total Return Index		100.00		86.54		55.53		88.88		108.96		111.41
NASDAQ Retail Trade		100.00		83.60		63.43		94.87		109.47		142.84

The information set forth under the Heading “Performance Graph” shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act, except to the extent that the registrant specifically requests that such information be treated as soliciting material or specifically incorporates it by reference into a filing under the Securities Act or the Exchange Act.

19

Item 6. Selected Financial Data

The following table provides selected historical consolidated financial information of Spartan Stores. The historical information was derived from our audited consolidated financial statements as of and for each of the five fiscal years ended March 29, 2008 through March 31, 2012. As noted elsewhere in this Form 10-K, for all years presented, Consolidated Statements of Earnings information in this Form 10-K has been adjusted for the reclassification of discontinued operations information, unless otherwise noted. See Note 14 to the consolidated financial statements in Item 8 for additional information on discontinued operations. For all years presented, Consolidated Balance Sheets and Consolidated Statements of Earnings information in this Form 10-K has been adjusted for the adoption of the provisions of Accounting Standards Codification (ASC) Subtopic 470-20 and for the adoption of updated provisions of ASC Topic 260. Fiscal 2012 consisted of 53 weeks. All other years presented consisted of 52 weeks.

	Year Ended
(In thousands, except per share data)	March 31, 2012			March 26, 2011			March 27, 2010			March 28, 2009			March 29, 2008
Statements of Operations Data:
Net sales	$	2,634,226		$	2,533,064		$	2,551,956		$	2,576,738		$	2,476,822
Cost of sales		2,078,116			1,976,549			1,993,306			2,040,625			1,981,854
Gross margin		556,110			556,515			558,650			536,113			494,968
Selling, general and administrative expenses		489,650			488,017			493,832			463,369			433,346
Restructuring, asset impairment and other (A)		(23	)		532			6,154			—			—
Operating earnings		66,483			67,966			58,664			72,744			61,622
Interest expense		15,037			15,104			16,394			14,138			13,842
Other, net		(110	)		(97	)		(138	)		(341	)		(287	)
Earnings before income taxes and discontinued operations		51,556			52,959			42,408			58,947			48,067
Income taxes		19,686			20,420			16,475			23,914			17,216
Earnings from continuing operations		31,870			32,539			25,933			35,033			30,851
Earnings (loss) from discontinued operations, net of taxes (B)		(112	)		(232	)		(375	)		1,838			1,795
Net earnings	$	31,758		$	32,307		$	25,558		$	36,871		$	32,646
Basic weighted average shares outstanding		22,791			22,606			22,406			22,102			21,847
Diluted weighted average shares outstanding		22,887			22,688			22,480			22,262			22,058
Basic earnings from continuing operations per share	$	1.40		$	1.44		$	1.16		$	1.59		$	1.41
Diluted earnings from continuing operations per share		1.39			1.43			1.15			1.57			1.40
Basic earnings per share		1.39			1.43			1.14			1.67			1.49
Diluted earnings per share		1.39			1.42			1.14			1.66			1.48
Cash dividends declared per share		0.26			0.20			0.20			0.20			0.20
Balance Sheet Data:
Total assets	$	763,473		$	751,396		$	753,481		$	723,311		$	609,395
Property and equipment, net		256,776			241,448			247,961			234,806			183,185
Working capital		24,684			47,300			15,739			20,969			20,499
Long-term debt and capital lease obligations		133,565			170,711			181,066			194,115			118,742
Shareholders’ equity		323,608			305,505			273,905			247,205			221,406

(A) See Note 4 to Consolidated Financial Statements

(B) See Note 14 to Consolidated Financial Statements

Historical data is not necessarily indicative of the Company’s future results of operations or financial condition. See discussion of “Risk Factors” in Part I, Item 1A of this report, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report, and the Consolidated Financial Statements and notes thereto in Part II, Item 8 of this Annual Report on Form 10-K.

20

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

Executive Overview

Spartan Stores is a leading regional grocery distributor and grocery retailer, operating principally in Michigan and Indiana.

We currently operate two reportable business segments: Distribution and Retail. Our Distribution segment provides a full line of grocery, general merchandise, health and beauty care, frozen and perishable items to approximately 375 independently owned grocery stores and our 96 corporate owned stores. Our Retail segment operates supermarkets in Michigan under the banners Glen’s Markets, Family Fare Supermarkets, D&W Fresh Markets, VG’s Food and Pharmacy, and Valu Land, and 27 fuel centers/convenience stores, included at our supermarket locations, under the banners Glen’s Quick Stop, Family Fare Quick Stop, D&W Fresh Markets Quick Stop, and VG’s Quick Stop. Our retail supermarkets have a “neighborhood market” focus to distinguish them from supercenters and limited assortment stores.

Our sales and operating performance vary with seasonality. Our first and fourth quarters are typically our lowest sales quarters and therefore operating results are generally lower during these two quarters. Additionally, these two quarters can be affected by the timing of the Easter holiday, which results in a strong sales week. Many northern Michigan stores are dependent on tourism and, therefore, are most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months. All quarters are typically 12 weeks, except for our third quarter, which is 16 weeks and includes the Thanksgiving and Christmas holidays. Fiscal 2012 contained 53 weeks; therefore, the fourth quarter of fiscal 2012 consisted of 13 weeks rather than 12 weeks.

We have established key management priorities that focus on the longer-term strategy of the Company, including establishing a well-differentiated market offering for our Distribution and Retail segments, and additional strategies designed to create value for our shareholders, retailers and customers. These priorities are:

• Retail sales growth: Continue refining our capital plan focusing on remodels, replacement stores, adjacent acquisitions, expansions and new stores to fill in existing markets, leverage investments in fuel centers and pharmacy operations to drive related supermarket customer traffic and continue to focus on category management initiatives, specifically focusing on fresh offerings. We also pursue acquisitions to grow this segment.

• Distribution sales growth: Focus on increasing penetration of existing customers, attracting new in-market customers and adjacent-state customers, continue to share “best retail practices” with customers, provide a superior value-added relationship and pursue appropriate acquisitions.

• Margin optimization: Continued focus on increasing penetration of private brand programs, enhancing offerings in our fresh department, lowering the cost of merchandise through vendor partnerships, E-Sourcing, and improving retail shrink.

• Selling, general and administrative expense cost containment: Continue to focus on improving efficiency and general cost containment in all areas to allow us to remain cost competitive in the long-term and help offset recessionary impacts on our business in the short-term.

We continued the execution of our capital investment program by completing seven major remodels of our stores as well as many other limited remodels and store resets. In addition, we converted one store to our new Valu Land banner and opened two new fuel centers. We also acquired two pharmacies while closing one pharmacy resulting in the total number of 66 stores with pharmacies.

At the beginning of the fourth quarter of fiscal 2010, we began implementing the conclusions of a comprehensive, multi-year supply chain optimization study. This was another important step in our ongoing

21

strategy of maintaining a low cost grocery distribution operation. We reached an agreement with the Teamsters Local 337 to transition our Plymouth, Michigan dry grocery distribution operation to our Grand Rapids, Michigan facility. The transition was substantially complete at the end of the fourth quarter of fiscal 2010 and finalized in the first quarter of fiscal 2011. During the past several years, we have prudently invested capital or entered lease commitments to upgrade our distribution system technology, expand our produce ripening operations, upgrade our entire fleet of trucks, and completed a major warehouse re-racking project at our Grand Rapids grocery distribution center that significantly increased warehouse capacity and improved space utilization. In addition to improved customer service through a centralized Grand Rapids facility, this decision along with our other cost reduction initiatives will also ensure better alignment between the current level of business activity and our cost structure.

We introduced almost 500 new private brand products during fiscal 2012, bringing the total to 3,900 products, of which the majority were in fresh food categories. The products in private brands are typically less expensive and produce higher gross margins than national brands and tend to be more frequently purchased by consumers in challenging economic times. In fiscal 2013, we plan to expand our private brand offerings and are targeting approximately 400 additional new items.

The Michigan economy is slowly improving. We believe that our sales trends will similarly continue to improve. We expect to experience a moderate level of overall product cost and retail price inflation, We anticipate a significant increase in LIFO expense for next year as a result of inflation and an increase in inventory levels.

The Company anticipates that the first quarter of fiscal 2013 financial results will likely fall slightly below the prior year’s results on an earnings per share from continuing operations basis. This expectation is the result of two store grand openings, the promotional costs associated with the YES campaign and the Company’s belief that the first half of the year will be challenging as Michigan jobs creation continues to lag the overall economic improvement. The Company will likely experience slightly negative quarterly comparable store sales early in fiscal 2013 as a result of slower jobs recovery in Michigan. The Company is optimistic the Michigan employment outlook and the economic environment will improve during the second half of the year generating a more positive sales trend. As a result of these sales expectations and continued expense management, the Company anticipates that its fiscal year 2013 financial performance will exceed the prior year’s earnings from continuing operations, excluding the impact of any unusual items that do not reflect the ongoing operating activities of the Company.

The matters discussed in this Item 7 include forward-looking statements. See “Forward-Looking Statements” at the beginning and “Risk Factors” in Item 1A of this Annual Report on Form 10-K.

22

Results of Operations

The following table sets forth items from our Consolidated Statements of Earnings as a percentage of net sales and the year-to-year percentage change in dollar amounts:

	Percentage of Net Sales						Percentage Change
	March 31, 2012		March 26, 2011		March 27, 2010		2012/2011			2011/2010
Net sales		100.0		100.0		100.0		4.0			(0.7	)
Gross margin		21.1		22.0		21.9		(0.1	)		(0.4	)
Selling, general and administrative expenses		18.6		19.3		19.4		0.2			(1.2	)
Restructuring, asset impairment and other		0.0		0.0		0.2		*			*
Operating earnings		2.5		2.7		2.3		(2.2	)		15.9
Other income and expenses		0.5		0.6		0.6		(0.5	)		(7.7	)
Earnings before income taxes and discontinued operations		2.0		2.1		1.7		(2.6	)		24.9
Income taxes		0.8		0.8		0.7		(3.6	)		23.9
Earnings from continuing operations		1.2		1.3		1.0		(2.1	)		25.5
(Loss) from discontinued operations, net of taxes		0.0		0.0		0.0		*			*
Net earnings		1.2		1.3		1.0		(1.7	)		26.4
*  Percentage change is not meaningful

Adjusted EBITDA

Consolidated Adjusted EBITDA is a non-GAAP operating financial measure that we define as net earnings from continuing operations plus depreciation and amortization, and other non-cash items including imputed interest, deferred (stock) compensation, the LIFO provision, as well as adjustments for unusual items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations, interest expense and the provision for income taxes to the extent deducted in the computation of Net Earnings.

We believe that Adjusted EBITDA provides a meaningful representation of our operating performance for the Company as a whole and for our operating segments. We consider Adjusted EBITDA as an additional way to measure operating performance on an ongoing basis. Adjusted EBITDA is meant to reflect the ongoing operating performance of all of our retail stores and wholesale operations; consequently, it excludes the impact of items that could be considered “non-operating” or “non-core” in nature, and also excludes the contributions of activities classified as discontinued operations. Because Adjusted EBITDA is a performance measure that management uses to allocate resources, assess performance against its peers and evaluate overall performance, we believe it provides useful information for our investors. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with us request our operating financial results in Adjusted EBITDA format.

Adjusted EBITDA is not a measure of performance under accounting principles generally accepted in the United States of America, and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. Our definition of Adjusted EBITDA may not be identical to similarly titled measures reported by other companies.

23

Following is a reconciliation of net earnings to adjusted EBITDA for fiscal years 2012, 2011 and 2010.

(In thousands)	2012			2011			2010
Net earnings	$	31,758		$	32,307		$	25,558
Add:
Discontinued operations		112			232			375
Income taxes		19,686			20,420			16,475
Interest expense		15,037			15,104			16,394
Other income and expenses		(110	)		(97	)		(138	)
Operating earnings		66,483			67,966			58,664
Add:
Depreciation and amortization		36,794			35,158			34,640
LIFO (income) expense		1,401			(4,185	)		(176	)
Restructuring, asset impairment and other		(23	)		532			6,154
Michigan Single Business Tax benefit		—			—			(100	)
Non-cash stock compensation and other		5,019			4,793			4,096
Adjusted EBITDA	$	109,674		$	104,264		$	103,278
Reconciliation of operating earnings to adjusted EBITDA by segment:
Retail:
Operating earnings	$	22,191		$	19,979		$	20,591
Add:
Depreciation and amortization		28,350			26,693			26,042
LIFO expense		1,864			954			185
Restructuring, asset impairment and other		14			267			1,948
Michigan Single Business Tax benefit		—			—			(50	)
Non-cash stock compensation and other		1,541			(123	)		(148	)
Adjusted EBITDA	$	53,960		$	47,770		$	48,568
Distribution:
Operating earnings	$	44,292		$	47,987		$	38,073
Add:
Depreciation and amortization		8,444			8,465			8,598
LIFO (income) expense		(463	)		(5,139	)		(361	)
Restructuring, asset impairment and other		(37	)		265			4,206
Michigan Single Business Tax benefit		—			—			(50	)
Non-cash stock compensation and other		3,478			4,916			4,244
Adjusted EBITDA	$	55,714		$	56,494		$	54,710

Results of Continuing Operations for the Fiscal Year Ended March 31, 2012 Compared to the Fiscal Year Ended March 26, 2011

Net Sales. Net sales for the 53 week fiscal 2012 increased $101.2 million, or 4.0%, from the 52 week $2,533.1 million sales in fiscal 2011, to $2,634.2. The sales increase was primarily driven by the 53^rd week, which accounted for $49.8 million as well as increases in both the Distribution and Retail segments.

Net sales on a 52 week basis in our Distribution segment, after intercompany eliminations, increased $25.9 million, or 2.4%, from $1,089.7 million to $1,115.6 million primarily due to new business sales.

Net sales on a 52 week basis in our Retail segment increased $25.4 million, or 1.8%, from $1,443.4 million to $1,468.8 million. The sales increase was primarily due to an increase in fuel center sales of $47.7 million and a

24

decrease in supermarket comparable store sales of $21.3 million. Total retail comparable store sales on a 52 week basis decreased approximately 1.6 percent in fiscal 2012 principally due to the weakened economic environment and competitive impacts. We define a retail store as comparable when it is in operation for 14 accounting periods (a period equals four weeks), and we include remodeled, expanded and relocated stores in comparable stores.

Gross Margin. Gross margin represents net sales less cost of sales, which include purchase costs and promotional allowances. Vendor allowances that relate to our buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for our merchandising costs, such as setting up warehouse infrastructure. Vendor allowances associated with product cost are recognized as a reduction in cost of sales when the product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms.

Gross margin decreased by $.4 million, or 0.1%, from $556.5 million to $556.1 million. As a percent of net sales, gross margin decreased from 22.0% to 21.1%. The gross margin rate decrease was principally due to a higher mix of fuel and distribution sales (which have a lower gross margin rate), incremental LIFO expense resulting from cycling the prior year inventory reductions from the warehouse consolidation initiative as well as higher inflation this year, and lower margins in both segments.

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and wages, employee benefits, warehousing costs, store occupancy costs, shipping and handling, utilities, equipment rental, depreciation and other administrative costs.

SG&A expenses increased $1.7 million, or 0.3%, from $488.0 million to $489.7 million, and were 18.6% of net sales compared to 19.3% last year. The net increase in SG&A is due primarily to the following:

• Increased SG&A as a result of the 53^rd week of $7.1 million

• Increased fuel costs of $1.5 million

• Unusal corporate professional fees of $1.2 million.

• Reductions in store labor of $4.3 million due to lower sales volumes and effeciency improvements

• Reductions in occupancy costs of $3.9 million driven by utilities , property taxes, CAM and rent.

• Reduction due to gain on sale of assets of $.4 million

• Other reductions in general and administrative expenses due to an overriding focus on cost containment initiatives.

Restructuring, Asset Impairment and Other. Fiscal 2011 restructuring and asset impairment costs includes $2.5 million in severance and other one-time costs directly related to the warehouse consolidation efforts initiated in fiscal year 2010 and $7.9 million in asset impairment charges related to assets at underperforming stores and abandoned development projects. The asset impairment charges were recorded due to the economic and competitive environment these stores operated in and its impact on their forecasted financial performance. (See note 4 to Financial Statements) These charges were substantially offset by a favorable lease termination adjustment of $5.9 million. Through an acquisition, Spartan assumed sublease liabilities for a closed store location and two operating store locations that were accounted for as capital leases. A bankruptcy judge terminated the underlying leases in December 2010. The closed store liability was reversed resulting in a gain and was partially offset by the remaining net value of the two capital leases also written off. (See note 4 to Financial Statements). Curtailment income of $4.0 million related to the pension plan freeze.

Interest Expense. Interest expense was flat between years at approximately $15 million and was 0.6% of net sales in both fiscal years 2012 and 2011. The slight decrease in interest expense is primarily due to lower net borrowings as a result of paying down the $45 million related to the termination of the Swap Agreement early in the 4^th quarter fiscal 2012 offset by increased non-cash interest related to our convertible debt facility.

25

Income Taxes. The effective tax rate is 38.2% and 38.6% for fiscal 2012 and fiscal 2011, respectively. The difference from the statutory rate is primarily due to State of Michigan income taxes, partially offset by tax credits. The effective tax rate decreased in fiscal 2012 due to an increase in tax credits and charitable product contributions. In addition, fiscal year 2012 tax included a $0.5 million charge for the write-off of net deferred tax assets and liabilities related to the Michigan Business tax that will no longer be realized as a result of the elimination of this tax, partially offset with a lower tax rate in Michigan effective with the new Corporate Income Tax on January 1, 2012.

Results of Continuing Operations for the Fiscal Year Ended March 26, 2011 Compared to the Fiscal Year Ended March 27, 2010

Net Sales. Net sales decreased $18.9 million, or 0.7%, from $2,551.9 million in fiscal 2010 to $2,533.1 million in fiscal 2011. The economic and competitive environments primarily drove the sales decrease, product price deflation in certain primary product categories and the closure or sale of four retail stores during fiscal 2010.

Net sales in our Distribution segment, after intercompany eliminations, decreased $1.6 million, or 0.1%, from $1,091.3 million to $1,089.7 million primarily due to lower sales to existing independent customers.

Net sales in our Retail segment decreased $17.3 million, or 1.2%, from $1,460.7 million to $1,443.4 million. The sales decrease was primarily due to a decrease in supermarket comparable store sales of $55.1 million and lost sales of $13.0 million relating to four stores that were closed during fiscal 2010 partially offset by increases related to one new store and new fuel center sales. Total retail comparable store sales decreased 4.1 percent in fiscal 2011 principally due to the weakened economic environment and competitive impacts. We define a retail store as comparable when it is in operation for 14 accounting periods (a period equals four weeks), and we include remodeled, expanded and relocated stores in comparable stores.

Gross Margin. Gross margin represents net sales less cost of sales, which include purchase costs and promotional allowances. Vendor allowances that relate to our buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for our merchandising costs, such as setting up warehouse infrastructure. Vendor allowances associated with product cost are recognized as a reduction in cost of sales when the product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms.

Gross margin decreased by $2.1 million, or 0.4%, from $558.6 million to $556.5 million. As a percent of net sales, gross margin increased from 21.9% to 22.0%. The gross margin rate increase was principally due to procurement gains and incremental LIFO income resulting from inventory reduction efforts.

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and wages, employee benefits, warehousing costs, store occupancy costs, utilities, equipment rental, depreciation and other administrative costs.

SG&A expenses decreased $5.8 million, or 1.2%, from $493.8 million to $488.0 million, and were 19.3% of net sales compared to 19.4% last year. The net decrease in SG&A is due primarily to the following:

• Reductions in store labor of $5.5 million due to lower sales volumes and efficiency improvements.

• Reductions in warehouse expenses of $3.3 due to the warehouse consolidation initiative.

• Reductions in occupancy costs of $2.1 million driven by utilities and rent.

• Increased incentive compensation of $5.5 million.

• Increased transportation and fuel costs of $1.5 million.

• Other reductions in general and administrative expenses due to an overriding focus on cost containment initiatives.

26

Restructuring, Asset Impairment and Other. Fiscal 2011 restructuring and asset impairment costs includes $2.5 million in severance and other one-time costs directly related to the warehouse consolidation efforts initiated in fiscal year 2010 and $7.9 million in asset impairment charges, assets at underperforming stores and abandoned development projects. These charges were substantially offset by a favorable lease termination adjustment of $5.9 million and curtailment income of $4.0 million related to the pension plan freeze.

Interest Expense. Interest expense decreased $1.3 million, or 7.9%, from $16.4 million to $15.1 million, and was 0.6% of net sales in both fiscal years 2011 and 2010. The decrease in interest expense is primarily due to lower net borrowings aided by the convertible note repurchases that occurred in the first quarter of fiscal 2011.

Income Taxes. The effective tax rate is 38.6% and 38.8% for fiscal 2011 and fiscal 2010, respectively. The difference from the statutory rate is primarily due to State of Michigan income taxes, partially offset by tax credits. The effective tax rate decreased in fiscal 2011 due to an increase in tax credits and charitable product contributions.

Discontinued Operations

Certain of our retail and grocery distribution operations have been recorded as discontinued operations. Results of the discontinued operations are excluded from the accompanying notes to the condensed consolidated financial statements for all periods presented, unless otherwise noted.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, assets held for sale, long-lived assets, income taxes, self-insurance reserves, restructuring costs, retirement benefits, stock-based compensation and contingencies and litigation. We base our estimates on historical experience and on various other assumptions and factors that we believe to be reasonable under the circumstances. Based on our ongoing review, we make adjustments we consider appropriate under the facts and circumstances. We have discussed the development, selection and disclosure of these policies with the Audit Committee of the Board of Directors.

We believe that the following represent the more critical estimates and assumptions used in the preparation of our consolidated financial statements.

Inventories. Inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method. If replacement cost had been used, inventories would have been $43.8 million and $42.4 million higher at March 31, 2012 and March 26, 2011, respectively. The replacement cost method utilizes the most current unit purchase cost to calculate the value of inventories. During fiscal years 2012, 2011 and 2010, certain inventory quantities were reduced. The reductions resulted in liquidation of LIFO inventory carried at lower costs prevailing in prior years, the effect of which decreased the LIFO provision in fiscal years 2012, 2011 and 2010 by $3.0 million, $7.7 million and $0.4 million, respectively. Spartan Stores accounts for its Distribution inventory using a perpetual system and utilizes the retail inventory method (“RIM”) to value inventory for center store products in the Retail segment. Under the retail inventory method, inventory is stated at cost with cost of sales and gross margin calculated by applying a cost ratio to the retail value of inventories. Fresh and pharmacy products are accounted for at cost in the Retail segment. We evaluate inventory shortages throughout the year based on actual physical counts in our facilities. We record allowances for inventory shortages based on the results of recent physical counts to provide for estimated shortages from the last physical count to the financial statement date.

Vendor Funds. We receive funds from many of the vendors whose products we buy for resale in our corporate-owned stores and to our independent retail customers. Given the highly promotional nature of the retail

27

supermarket industry, vendor allowances are generally intended to defray the costs of promotion, advertising and selling the vendor’s products. Vendor allowances that relate to our buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for our merchandising costs such as setting up warehouse infrastructure. The proper recognition and timing of accounting for these items are significant to the reporting of the results of our operations. Vendor allowances are recognized as a reduction in cost of sales when the related product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms.

Goodwill. Goodwill is reviewed for impairment on an annual basis (during the fourth quarter), or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Fair values are determined based on the discounted cash flows and comparable market values of each reporting segment. If the fair value of the reporting unit is less than its carrying value, the fair value of the implied goodwill is calculated as the difference between the fair value of the reporting unit and the fair value of the underlying assets and liabilities, excluding goodwill. An impairment charge is recorded for any excess of the carrying value over the implied fair value. Our goodwill impairment analysis also includes a comparison of the aggregate estimated fair value of each reporting segment to our total market capitalization. Therefore, a significant and sustained decline in our stock price could result in goodwill impairment charges. During times of financial market volatility, significant judgment is given to determine the underlying cause of the decline and whether stock price declines are short-term in nature or indicative of an event or change in circumstances. When testing goodwill for impairment, our retail stores represent components of our Retail operating segment. Stores have been aggregated and deemed a single reporting unit as they have similar economic characteristics.

Determining market values using a discounted cash flow method requires that we make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. Our judgments are based on historical experience, current market trends and other information. In estimating future cash flows, we rely on internally generated three-year forecasts for sales and operating profits, including capital expenditures and a 3% long-term assumed growth rate of cash flows for periods after the three-year forecast for the Retail segment and 2.5% for the Distribution segment. The future estimated cash flows were discounted using a rate of 10.4% and 11.5% for the Retail and Distribution segments, respectively. We generally develop these forecasts based on recent sales data for existing operations and other factors. While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, different assumptions could result in different outcomes. Based on our annual review during fiscal years 2012, 2011 and 2010, no goodwill impairment charge was required to be recorded. No goodwill impairment charge would be required even if the current estimate of future discounted cash flow was 10% lower. Furthermore, no goodwill impairment charge would be required if the discount rate was increased 1%. The reporting units are not at substantial risk of failing step one of the test.

Impairment of Long-Lived Assets Other Than Goodwill. Long-lived assets to be held and used are evaluated for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets are evaluated at the asset-group level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In fiscal 2012, fiscal 2011 and fiscal 2010 asset impairments for long-lived assets totaled $0.4 million, $7.9 million and $1.9 million respectively.

Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less cost to sell. Management determines fair values using independent appraisals, quotes or expected sales prices developed by internal real estate professionals. Estimates of expected sales prices are judgments based upon our experience, knowledge of market conditions and current offers received. Changes in market conditions, the economic environment and other factors can significantly impact these estimates. While we believe that the estimates and

28

assumptions underlying the valuation methodology are reasonable, different assumptions could result in a different outcome. If the current estimate of future discounted cash flows was 10% lower no additional impairment charge would be required.

Restructuring Costs. We record restructuring costs for closed stores that are subject to long-term lease commitments based upon the future minimum lease payments and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease rentals that could be reasonably expected to be obtained for the property. Future cash flows are based on contractual lease terms and knowledge of the market in which the closed store is located. These estimates are subject to multiple factors, including inflation, ability to sublease the property and other economic conditions. Internally developed estimates of sublease rentals are based upon the market in which the property is located, the results of previous efforts to sublease similar property and the current economic environment. Reserves may be adjusted in the future based upon the actual resolution of each of these factors. For any closed store reserves recorded as part of purchase accounting prior to the adoption of ASC 805, adjustments that decrease the liability are generally recorded as a reduction of goodwill. At March 31, 2012 restructuring costs for store lease and ancillary costs totaling $11.1 million are recorded net of approximately $0.2 million of existing sublease rentals. Based upon the current economic environment we do not believe that we will be able to obtain any additional sublease rentals. A 10% increase/decrease in future estimated ancillary costs there would be no additional impairment on these stores.

Insurance Reserves. We are primarily self-insured for costs related to workers’ compensation, general liability and health insurance. We record our self-insurance liabilities based on reported claims experience and an estimate of claims incurred but not yet reported. Workers’ compensation and general liability are actuarially determined on a discounted basis. We have purchased stop-loss coverage to limit our exposure to any significant exposure on a per claim basis. Our exposure for workers’ compensation and general liability is $0.5 million per claim and for health insurance our exposure is $0.3 million per associate per year.

Any projection of losses concerning workers’ compensation, general liability and health insurance is subject to a considerable degree of variability. Among the causes of variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, changing regulations, legal interpretations, benefit level changes and claim settlement patterns. Although our estimates of liabilities incurred do not anticipate significant changes in historical trends for these variables, such changes could have a material impact on future claim costs and currently recorded liabilities. The impact of many of these variables is difficult to estimate. As of March 31, 2012, a one percentage point decrease in the discount rate, or 100 basis points, for workers’ compensation and general liability would increase our liability less than $0.1 million and a one percentage point increase in the discount rate would decrease our liability by less than $0.1 million.

Pension. Accounting for defined benefit cash balance pension plans involves estimating the cost of benefits to be provided in the future, based on vested years of service, and attributing those costs over the time period each employee works. The significant factors affecting our pension costs are the fair values of plan assets and the selections of management’s key assumptions, including the expected return on plan assets, rate of compensation increases and discount rate used by our actuary to calculate our liability. We consider current market conditions, including changes in interest rates and investment returns, in selecting these assumptions. Our discount rate is based on current investment yields on high quality fixed-income investments and projected cash flow obligations. The discount rate used to determine fiscal 2012 pension expense was 5.0%. Expected return on plan assets is based on projected returns by asset class on broad, publicly traded equity and fixed-income indices, as well as target asset allocation. Our target allocation mix is designed to meet our long-term pension requirements. For fiscal 2012, our assumed rate of return was 7.75%. Over the ten-year period ended March 31, 2012, the average actual return was approximately 7.3%. While we believe the assumptions selected are reasonable, significant differences in our actual experience, plan amendments or significant changes in the fair value of our plan assets may materially affect our pension obligations and our future expense. A 25 basis point increase or decrease in the discount rate would have decreased/increased fiscal 2012 pension expense by less than $0.1 million. A 50 basis point decrease in the expected return on plan assets would have increased fiscal 2012 pension expense by less than $0.3 million.

29

The unfunded status of our defined benefit plans was $1.9 million and $3.1 million for 2012 and 2011, respectively. The decrease in the unfunded balance during fiscal 2012 is a result of market appreciation of plan assets and company contributions to the plan. Plan assets increased by 1.1% primarily due to market gains on assets and company contributions of $4.1 million, offset by benefit payments of $4.0 million. Pension expense was $0.6 million and $2.7 million in fiscal 2012 and fiscal 2011, respectively.

Income Taxes. The Company is subject to periodic audits by the Internal Revenue Service and other state and local taxing authorities. These audits may challenge certain of the Company’s tax positions such as the timing and amount of income credits and deductions and the allocation of taxable income to various tax jurisdictions. The Company evaluates its tax positions and establishes liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. These tax uncertainties are reviewed as facts and circumstances change and are adjusted accordingly. This requires significant management judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the Company’s effective tax rate and cash flows in future years. The Company recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which it expects the differences to reverse. Note 11 to the consolidated financial statements set forth in Item 8 of this report provides additional information on income taxes.

Liquidity and Capital Resources

The following table summarizes our consolidated statements of cash flows for fiscal years 2012, 2011 and 2010:

(In thousands)	March 31, 2012			March 26, 2011			March 27, 2010
Net cash provided by operating activities	$	93,754		$	89,756		$	91,702
Net cash (used in) investing activities		(43,800	)		(33,123	)		(58,028	)
Net cash (used in) financing activities		(67,206	)		(19,369	)		(27,896	)
Net cash (used in) discontinued operations		(76	)		(2,610	)		(3,127	)
Net (decrease) increase in cash and cash equivalents		(17,348	)		34,654			2,651
Cash and cash equivalents at beginning of year		43,824			9,170			6,519
Cash and cash equivalents at end of year	$	26,476		$	43,824		$	9,170

Net cash provided by operating activities increased during fiscal 2012 by approximately $4.0 million or 4.4%. This increase was due primarily to lower closed store payments and improved accounts payable leverage.

During fiscal 2012, 2011 and fiscal 2010, we did not pay any cash for Federal income taxes due to the application of prior years’ overpayments.

Net cash used in investing activities increased in fiscal 2012 due to increased capital expenditure activity. We also paid a total cash purchase price of $.5 million, $1.3 million and $6.4 million for acquisitions in fiscal years 2012, 2011 and 2010, respectively. Excluding the acquisitions, our Distribution and Retail segments utilized 22% and 78%, respectively, of our capital expenditure dollars for fiscal 2012. Expenditures in fiscal 2012 were primarily used for one new store, store remodels and refurbishments, two fuel centers and new equipment and software. Under the terms of our senior secured revolving credit facility, should our available borrowings fall below certain levels, our capital expenditures would be restricted each fiscal year. Our current available borrowings are approximately $143 million above these limits as of March 31, 2012 and we do not expect to fall below these levels. We expect capital expenditures to increase to a range of $42 million to $45 million in fiscal 2013, primarily for the construction of new stores, store remodels, fuel centers, new equipment and software.

Net cash used in financing activities includes cash paid and received related to our long-term borrowings, dividends paid, purchase of the Company’s common stock, tax benefits of stock compensation and proceeds from the issuance of common stock. The increase in cash used in financing activities in fiscal 2012 was primarily due

to the $45.0 million payment on our revolving credit facility, the $12.4 million purchase of the Company’s stock

30

under a repurchase program and the authorized dividend increase starting in May 2011. Although we currently expect to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the board of directors to declare future dividends. Each future dividend will be considered and declared by the board of directors in its discretion. Whether the board of directors continues to declare dividends depends on a number of factors, including our future financial condition and profitability and compliance with the terms of our credit facilities. Our current maturities of long-term debt and capital lease obligations at March 31, 2012 are $4.4 million. Our ability to borrow additional funds is governed by the terms of our credit facilities.

On January 2, 2009, Spartan Stores entered into an interest rate swap agreement. The interest rate swap was considered to be a cash flow hedge of interest payments on $45.0 million of borrowings under Spartan Stores’ senior secured revolving credit facility by effectively converting a portion of the variable rate debt to a fixed rate basis. Under the terms of the agreement, Spartan Stores agreed to pay the counterparty a fixed interest rate of 3.33% and the counterparty has agreed to pay Spartan Stores a floating interest rate based upon the 1-month LIBOR plus 1.25% on a notional amount of $45 million. The interest rate swap agreement was terminated early (at the end of the third quarter of fiscal 2012) but would have expired concurrently with its senior secured revolving credit facility on December 24, 2012. A swap termination charge of $0.8 million was recorded as interest expense in Q3 of fiscal 2012 due to the early payoff.

Net cash (used in) discontinued operations contains the net cash flows of our discontinued operations and consists primarily of insurance run-off claims and other liabilities.

Our principal sources of liquidity are cash flows generated from operations and our senior secured revolving credit facility which has maximum available credit of $255.0 million. Interest on our convertible senior notes is payable on May 15 and November 15 of each year. The revolving credit facility matures December 2012, and is secured by substantially all of our assets. As of March 31, 2012, our revolving credit facility had no outstanding borrowings, available borrowings of $162.7 million and maximum availability of $142.7 million, which exceeds the minimum excess availability levels, as defined in the credit agreement.

Available borrowings under the credit facility are based on stipulated advance rates on eligible assets, as defined in the credit agreement. The credit facility contains covenants that include a minimum fixed charge coverage ratio and maximum capital expenditures, as defined in the credit agreement. These covenants were not in place for fiscal 2012 as we maintained minimum excess availability levels, as defined in the credit agreement. The credit facility provides for the issuance of letters of credit, of which $0.6 million were outstanding and unused as of March 31, 2012. Borrowings under the revolving credit portion of the facility bear interest at the London InterBank Offered Rate (“LIBOR”) plus 1.25%, adjusted based upon availability levels, or the prime rate (weighted average interest rate of 3.25% at March 31, 2012).

Our current ratio decreased to 1.13:1.00 at March 31, 2012 from 1.29:1.00 at March 26, 2011 and our investment in working capital was $24.7 million at March 31, 2012 versus $47.3 million at March 26, 2011 as available cash was used to pay off the revolver balance. Our debt to total capital ratio decreased to 0.30:1.00 at March 31, 2012 versus 0.36:1.00 at March 26, 2011, primarily due to the revolver payoff and earnings realized.

Our total capital structure includes borrowings under our credit facility, convertible senior notes, various other debt instruments, leases and shareholders’ equity. Historically, we have financed our capital needs through a combination of internal and external sources. Management believes that cash generated from operating activities and available borrowings under the credit facility will be sufficient to meet anticipated requirements for working capital, capital expenditures, dividend payments, and debt service obligations for the foreseeable future. However, there can be no assurance that our business will continue to generate cash flow at or above current levels or that we will maintain our ability to borrow under our credit facility.

Total Net debt is a non-GAAP financial measure that is defined as long term debt and capital lease obligations plus current maturities of long-term debt and capital lease obligations less cash and cash equivalents. The Company believes investors find the information useful because it reflects the amount of long term debt obligations that are not covered by available cash and temporary investments.

31

Following is a reconciliation of long-term debt and capital lease obligations to total net long-term debt and capital lease obligations as of March 31, 2012 and March 26, 2011.

(In thousands)	March 31, 2012			March 26, 2011
Current maturities of long-term debt and capital lease obligations	$	4,449		$	4,205
Long-term debt and capital lease obligations		133,565			170,711
Total Debt		138,014			174,916
Cash and cash equivalents		(26,476	)		(43,824	)
Total net long-term debt	$	111,538		$	131,092

The table below presents our significant contractual obligations as of March 31, 2012 ⁽¹⁾:

	Payment Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(In thousands)
Long-term debt	$	89,150	$	41	$	88,934	$	61	$	114
Estimated interest on long-term debt (2)		6,953		3,323		3,589		24		17
Capital leases (3)		48,864		3,983		6,895		7,527		30,459
Interest on capital leases		32,680		3,890		7,013		5,888		15,889
Operating leases (3)		134,503		29,969		46,901		29,929		27,704
Lease and ancillary costs of closed stores, including imputed interest		12,015		3,543		6,164		2,308		—
Purchase obligations (merchandise) (4)		205,486		173,556		16,730		5,000		10,200
FIN 48 unrecognized tax liability		2,493		655		1,646		192		—
Self-insurance liability		6,430		4,747		919		304		460
Total	$	538,574	$	223,707	$	178,791	$	51,233	$	84,843

(1) Excludes funding of pension and other postretirement benefit obligations, which totaled approximately $4.4 million in fiscal 2011. Spartan Stores is not required to make a contribution to its defined benefit pension plan in fiscal 2012, however, we anticipate making a contribution of $4.0 million to move the plan closer to the fully funded status and reduce future pension expense. Also excludes contributions under various multi-employer pension plans, which totaled $8.2 million in fiscal 2011. For additional information, refer to Note 10 to the consolidated financial statements.

(2) Interest payments on long-term debt assume the remaining convertible subordinated notes are repurchased in whole on May 15, 2014 in accordance with the applicable terms. For additional information refer to Note 5 to the consolidated financial statements.

(3) Operating and capital lease obligations do not include common area maintenance, insurance or tax payments for which the Company is also obligated. In fiscal 2012, these charges totaled approximately $8.2 million.

(4) The majority of our purchases involve supply orders to purchase products for resale in the ordinary course of business. These contracts are typically cancelable and therefore no amounts have been included in the table above. Also excluded are contracts that do not contain minimum annual purchase commitments but include other standard contractual considerations that must be fulfilled in order to earn $3.3 million in advanced contract monies that has been received where recognition has been deferred on the Consolidated Balance Sheet. The purchase obligations shown in this table represent the amount of product we are contractually obligated to purchase to earn $8.5 million in advanced contract monies that are receivable under the contracts. At March 31, 2012, $2.8 million in advanced contract monies has been received under these contracts where recognition has been deferred on the Consolidated Balance Sheet. If we do not fulfill these purchase obligations, we would only be obligated to repay the unearned upfront contract monies.

32

Cash Dividends

We paid a quarterly cash dividend of $0.065 per common share in each quarter of fiscal year 2012, and $.05 in fiscal 2011 and 2010. Under our senior revolving credit facility, we are generally permitted to pay dividends in any fiscal year up to an amount such that all cash dividends together with any cash distributions or share repurchases do not exceed $30.0 million. Although we currently expect to continue to pay a quarterly cash dividend, adoption of a dividend policy does not commit the board of directors to declare future dividends. Each future dividend will be considered and declared by the board of directors, in its discretion. Whether the board of directors continues to declare dividends depends on a number of factors, including our future financial condition and profitability and compliance with the terms of our credit facilities.

Indebtedness and Liabilities of Subsidiaries

On May 30, 2007, the Company sold $110 million aggregate principal amount of 3.375% Convertible Senior Notes due 2027 (the “Notes”). The Notes are general unsecured obligations and rank equally in right of payment with all of the Company’s other existing and future obligations that are unsecured and unsubordinated. Because the Notes are unsecured, they are structurally subordinated to our subsidiaries’ existing and future indebtedness and other liabilities and any preferred equity issued by our subsidiaries. We rely in part on distributions and advances from our subsidiaries in order to meet our payment obligations under the notes and our other obligations. The Notes are not guaranteed by our subsidiaries. Many of our subsidiaries serve as guarantors with respect to our existing credit facility. Creditors of each of our subsidiaries, including trade creditors, and preferred equity holders, generally have priority with respect to the assets and earnings of the subsidiary over the claims of our creditors, including holders of the Notes. The Notes, therefore, are effectively subordinated to the claims of creditors, including trade creditors, judgment creditors and equity holders of our subsidiaries. In addition, our rights and the rights of our creditors, including the holders of the notes, to participate in the assets of a subsidiary during its liquidation or reorganization are effectively subordinated to all existing and future liabilities and preferred equity of that subsidiary. The Notes are effectively subordinated to our existing and future secured indebtedness to the extent of the assets securing such indebtedness and to existing and future indebtedness and other liabilities of our subsidiaries (including subsidiary guarantees of our senior credit facility).

The following table shows the indebtedness and other liabilities of our subsidiaries as of March 31, 2012:

Spartan Stores Subsidiaries Only

(In thousands)

	(unaudited) March 31, 2012
Current Liabilities
Accounts payable	$	107,633
Accrued payroll and benefits		35,660
Other accrued expenses		8,639
Current portion of restructuring costs		3,472
Current maturities of long-term debt and capital lease obligations		4,449
Total current liabilities		159,853
Long-term Liabilities
Postretirement benefits		12,714
Other long-term liabilities		14,672
Restructuring costs		7,630
Long-term debt and capital lease obligations		44,709
Total long-term liabilities		79,725
Total Subsidiary Liabilities		239,578
Operating Leases		124,773
Total Subsidiary Liabilities and Operating Leases	$	364,351

33

Ratio of Earnings to Fixed Charges

Our ratio of earnings to fixed charges was 2.97:1.00 and 3.01:1.00 for fiscal 2012 and fiscal 2011, respectively. For purposes of calculating the ratio of earnings to fixed charges, earnings consist of pretax earnings from continuing operations plus fixed charges (excluding capitalized interest). Fixed charges consist of interest costs, whether expensed or capitalized, the interest component of rental expense and amortization of debt issue costs, whether expensed or capitalized.

Off-Balance Sheet Arrangements

We had letters of credit of $0.6 million outstanding and unused at March 31, 2012. The letters of credit are maintained primarily to support payment or deposit obligations. We pay a commission of approximately 2% on the face amount of the letters of credit.

Recently Adopted Accounting Standards

In June 2009, the FASB issued guidance for the consolidation of variable interest entities (“VIE”). This guidance establishes new criteria for determining the primary beneficiary. It also requires an ongoing assessment to determine whether a company is the primary beneficiary of a VIE. The guidance was effective beginning in fiscal 2011. This guidance did not have a material impact on our consolidated financial statements.

In January 2010, the Financial Accounting Standards Board (“FASB”) issued guidance which amends and clarifies existing guidance related to fair value measurements and disclosures. This guidance requires new disclosures for (1) transfers in and out of Level 1 and Level 2 and reasons for such transfers; and (2) the separate presentation of purchases, sales, issuances and settlement in the Level 3 reconciliation. It also clarifies guidance around disaggregation and disclosures of inputs and valuation techniques for Level 2 and Level 3 fair value measurements. This guidance was effective for us for the first quarter of fiscal 2011, except for the new disclosures in the Level 3 reconciliation. The Level 3 disclosures are effective for the first quarter of fiscal 2012. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2011, the FASB amended its standards related to fair value measurements and disclosures. The objective of the amendment is to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. This amendment primarily changed the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. In addition, the amendment clarified the FASB’s intent about the application of existing fair value measurement requirements. The new standard also requires additional disclosures related to fair value measurements categorized within Level 3 of the fair value hierarchy and requires disclosure of the categorization in the hierarchy for items that are not recorded at fair value but as to which fair value is required to be disclosed. The new rules became effective for interim and annual periods beginning after December 15, 2011. The Company adopted this standard and it did not have a material impact on the financial statements for fiscal 2012.

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-09, Compensation—Retirement Benefits—Multi-employer Plans (Subtopic 715-80) (“ASU 2011-09”). This accounting standard provides guidance on disclosure requirements for employers participating in multi-employer pension and other postretirement benefit plans (multi-employer plans) to improve transparency and increase awareness of the commitments and risks involved with participation in multi-employer plans. The new guidance requires employers participating in multi-employer plans to provide additional quantitative and qualitative disclosures to provide users with more detailed information regarding an employer’s involvement in multi-employer plans. The Company adopted the standard effective March 31, 2011. Refer to Note 8, Commitments and Contingencies and Note 10, Associate Retirement Plans in the accompanying Notes to Consolidated Financial Statements for additional information on the Company’s participation in the multi-employer pension plan. The adoption of this new standard resulted in enhanced disclosures, but otherwise did not have an impact on the Company’s Consolidated Financial Statements.

34

In September 2011, the FASB amended its standards related to the testing of goodwill for impairment. The objective of this amendment is to simplify the annual goodwill impairment evaluation process. The amendment provides entities the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The two-step impairment test is now only required if an entity determines through this qualitative analysis that it is more likely than not that the fair value of the reporting unit is less than its carrying value. The new rules are effective for interim and annual periods beginning after December 15, 2011; however, entities were permitted to adopt the standards early. We continued to test our goodwill for impairment using the allowed two step test.

Recently Issued Accounting Standards

In June 2011, the FASB amended its rules regarding the presentation of comprehensive income. The objective of this amendment is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. Specifically, this amendment requires that all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new rules were to become effective for interim and annual periods beginning after December 15, 2011. In December 2011, the FASB deferred certain aspects of this standard beyond the December 15, 2011 effective date, specifically the provisions dealing with reclassification adjustments. Because the standards only affect the display of comprehensive income and do not affect what is included in comprehensive income, the standards will not have a material effect on our Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

We are exposed to industry related price changes on several commodities, such as dairy, meat and produce that we buy and sell in both our Distribution and Retail segments. These products are purchased for and sold from inventory in the ordinary course of business. We are also exposed to other general commodity price changes such as utilities, insurance and fuel costs.

There is no variable rate debt as of March 31, 2012. However, we will be exposed under new borrowings. The senior secured revolving credit facility currently bears interest at the LIBOR plus 1.25% or the prime rate (weighted average interest rate of 3.25% at March 31, 2012) on the revolving credit portion of the facility. The weighted average interest rates on outstanding debt including loan fee amortization for fiscal years 2012, 2011 and 2010 were 8.05%, 7.81% and 7.59%, respectively.

On January 2, 2009, Spartan Stores entered into an interest rate swap agreement, which has since been terminated. The interest rate swap was considered to be a cash flow hedge of interest payments on $45.0 million of borrowings under our senior secured revolving credit facility by effectively converting a portion of the variable rate debt to a fixed rate basis. Under the terms of the agreement, we agreed to pay the counterparty a fixed interest rate of 3.33% and the counterparty has agreed to pay Spartan Stores a floating interest rate based upon the 1-month LIBOR plus 1.25% on a notional amount of $45 million. The interest rate swap agreement was scheduled to expire concurrently with its senior secured revolving credit facility on December 24, 2012. However the interest rate swap agreement was terminated at the end of the third quarter of fiscal 2012. The Company incurred a swap termination charge of $0.8 million in fiscal 2012; therefore, variable rate debt outstanding at the end of fiscal 2012 was zero. We do not use financial instruments or derivatives for any trading or other speculative purposes.

At March 31, 2012 and March 26, 2011, the estimated fair value of our long-term debt, including current maturities, was lower than book value by approximately $4.7 million and $10.4 million, respectively. The estimated fair values were based on market quotes for similar instruments.

35

The following table sets forth the principal cash flows of our debt outstanding and related weighted average interest rates by year of maturity as of March 31, 2012:

	March 31, 2012					Aggregate Payments by Fiscal Year
(In thousands, except rates)	Fair Value		Total			2013			2014			2015			2016			2017			Thereafter
Fixed rate debt
Principal payable	$	93,000	$	97,740		$	—		$	—		$	97,740		$	—		$	—		$	—
Average interest rate				3.38	%		0	%		0	%		3.38	%		0	%		0	%		0	%

36

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Spartan Stores, Inc. and Subsidiaries

Grand Rapids, Michigan

We have audited the accompanying consolidated balance sheets of Spartan Stores, Inc. and subsidiaries (the "Company") as of March 31, 2012 and March 26, 2011, and the related consolidated statements of earnings, shareholders' equity, and cash flows for each of the three years in the period ended March 31, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Spartan Stores, Inc. and subsidiaries as of March 31, 2012 and March 26, 2011, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of March 31, 2012, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 22, 2012 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche LLP

Grand Rapids, MI

May 22, 2012

37

CONSOLIDATED BALANCE SHEETS

Spartan Stores, Inc. and Subsidiaries

(In thousands)

	March 31, 2012			March 26, 2011
Assets
Current assets
Cash and cash equivalents	$	26,476		$	43,824
Accounts receivable, net		58,637			56,344
Inventories, net		99,778			103,814
Prepaid expenses		9,478			6,006
Other current assets		13,686			1,402
Deferred taxes on income		1,582			1,526
Total current assets		209,637			212,916
Other assets
Goodwill		240,194			241,244
Other, net		56,866			55,788
Total other assets		297,060			297,032
Property and equipment
Land and improvements		23,456			21,866
Buildings and improvements		235,886			219,449
Equipment		298,028			306,993
Total property and equipment		557,370			548,308
Less accumulated depreciation and amortization		300,594			306,860
Property and equipment, net		256,776			241,448
Total assets	$	763,473		$	751,396
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	107,703		$	100,919
Accrued payroll and benefits		39,366			37,679
Accrued Income Taxes		12,352			—
Other accrued expenses		17,611			18,343
Current portion of restructuring costs		3,472			4,470
Current maturities of long-term debt and capital lease obligations		4,449			4,205
Total current liabilities		184,953			165,616
Long-term liabilities
Deferred income taxes		83,807			66,241
Postretirement benefits		13,618			14,222
Other long-term liabilities		16,292			18,269
Restructuring costs		7,630			10,832
Long-term debt and capital lease obligations		133,565			170,711
Total long-term liabilities		254,912			280,275
Commitments and contingencies (Note 8)
Shareholders’ equity
Common stock, voting, no par value; 50,000 shares authorized; 22,215 and 22,619 shares outstanding		155,134			162,086
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding		—			—
Accumulated other comprehensive loss		(13,793	)		(13,016	)
Retained earnings		182,267			156,435
Total shareholders’ equity		323,608			305,505
Total liabilities and shareholders’ equity	$	763,473		$	751,396

See notes to consolidated financial statements.

38

CONSOLIDATED STATEMENTS OF EARNINGS

Spartan Stores, Inc. and Subsidiaries

(In thousands, except per share data)

	Year Ended
	March 31, 2012			March 26, 2011			March 27, 2010
Net sales	$	2,634,226		$	2,533,064		$	2,551,956
Cost of sales		2,078,116			1,976,549			1,993,306
Gross margin		556,110			556,515			558,650
Operating expenses
Selling, general and administrative		489,650			488,017			493,832
Restructuring, asset impairment and other		(23	)		532			6,154
Total operating expenses		489,627			488,549			499,986
Operating earnings		66,483			67,966			58,664
Other income and expenses
Interest expense		15,037			15,104			16,394
Other, net		(110	)		(97	)		(138	)
Total other income and expenses		14,927			15,007			16,256
Earnings before income taxes and discontinued operations		51,556			52,959			42,408
Income taxes		19,686			20,420			16,475
Earnings from continuing operations		31,870			32,539			25,933
Earnings (loss) from discontinued operations, net of taxes		(112	)		(232	)		(375	)
Net earnings	$	31,758		$	32,307		$	25,558
Basic earnings per share:
Earnings from continuing operations	$	1.40		$	1.44		$	1.16
Earnings (loss) from discontinued operations		(0.01	)		(0.01	)		(0.02	)
Net earnings	$	1.39		$	1.43		$	1.14
Diluted earnings per share:
Earnings from continuing operations	$	1.39		$	1.43		$	1.15
Earnings (loss) from discontinued operations		—			(0.01	)		(0.01	)*
Net earnings	$	1.39		$	1.42		$	1.14
Weighted average shares outstanding:
Basic		22,791			22,606			22,406
Diluted		22,887			22,688			22,480

* Includes rounding.

See notes to consolidated financial statements.

39

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Spartan Stores, Inc. and Subsidiaries

(In thousands)

	Shares Outstanding			Common Stock			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
Balance – March 28, 2009		22,213		$	153,778		$	(14,151	)	$	107,578		$	247,205
Comprehensive income, net of tax:
Net earnings		—			—			—			25,558			25,558
Pension liability adjustment, net of taxes of $819		—			—			1,295			—			1,295
Change in fair value of interest rate swap, net of taxes of $74		—			—			(117	)		—			(117	)
Total comprehensive income		—			—			—			—			26,736
Dividends – $.20 per share		—			—			—			(4,483	)		(4,483	)
Stock-based employee compensation		—			4,629			—			—			4,629
Issuances of common stock and related tax benefit on stock option exercises		28			266			—			—			266
Issuances of restricted stock and related income tax benefits		293			478			—			—			478
Cancellations of restricted stock		(84	)		(926	)		—			—			(926	)
Balance – March 27, 2010		22,450			158,225			(12,973	)		128,653			273,905
Comprehensive income, net of tax:
Net earnings		—			—			—			32,307			32,307
Change in fair value of interest rate swap, net of taxes of $166		—			—			(265	)		—			(265	)
Pension liability adjustment, net of taxes of $1,682								2,664						2,664
Pension curtailment, net of taxes of $1,543		—			—			(2,442	)		—			(2,442	)
Total comprehensive income		—			—			—			—			32,264
Dividends – $.20 per share		—			—			—			(4,525	)		(4,525	)
Repurchase of equity component of convertible debt, net of tax of $246					(388	)								(388	)
Stock-based employee compensation		—			5,379			—			—			5,379
Issuances of common stock and related tax benefit on stock option exercises		33			428			—			—			428
Issuances of restricted stock and related income tax benefits		222			(295	)		—			—			(295	)
Cancellations of restricted stock		(86	)		(1,263	)		—			—			(1,263	)
Balance – March 26, 2011		22,619			162,086			(13,016	)		156,435			305,505
Comprehensive income, net of tax:
Net earnings		—			—			—			31,758			31,758
Change in fair value of interest rate swap, net of taxes of $119		—			—			211			—			211
Swap termination charge, net of taxes of $321								454						454
Pension liability adjustment, net of taxes of $911								(1,442	)					(1,442	)
Total comprehensive income		—			—			—			—			30,981
Dividends – $.26 per share		—			—			—			(5,926	)		(5,926	)
Share repurchase		(687	)		(12,381	)		—			—			(12,381	)
Stock-based employee compensation		—			5,048			—			—			5,048
Issuances of common stock and related tax benefit on stock option exercises		93			1,311			—			—			1,311
Issuances of restricted stock and related income tax benefits		255			(116	)		—			—			(116	)
Cancellations of restricted stock		(65	)		(814	)		—			—			(814	)
Balance – March 31, 2012		22,215		$	155,134		$	(13,793	)	$	182,267		$	323,608

See notes to consolidated financial statements.

40

CONSOLIDATED STATEMENTS OF CASH FLOWS

Spartan Stores, Inc. and Subsidiaries

(In thousands)

	Year Ended
	March 31, 2012			March 26, 2011			March 27, 2010
Cash flows from operating activities
Net earnings	$	31,758		$	32,307		$	25,558
Loss from discontinued operations		112			232			375
Earnings from continuing operations		31,870			32,539			25,933
Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash restructuring, asset impairment and other		(23	)		532			5,654
Non-cash convertible debt interest		3,745			3,462			3,533
Depreciation and amortization		36,767			35,273			34,895
LIFO income – warehouse consolidation		—			(3,450	)		—
LIFO (income) expense		1,401			(735	)		(176	)
Postretirement benefits expense		3,817			3,501			3,373
Deferred taxes on income		17,861			19,655			12,030
Stock-based compensation expense		5,048			5,372			4,627
Excess tax benefit on stock compensation		(237	)		(212	)		(344	)
Gain on repurchase of convertible notes		—			(69	)		—
(Gain) / Loss on disposal of assets		(399	)		100			138
Change in operating assets and liabilities:
Accounts receivable		(2,309	)		(1,855	)		(2,487	)
Inventories		2,635			17,885			(3,526	)
Prepaid expenses and other assets		(17,172	)		2,316			1,181
Accounts payable		8,841			(14,496	)		18,095
Accrued payroll and benefits		845			4,698			(3,436	)
Postretirement benefits		(6,746	)		(6,251	)		(6,032	)
Other accrued expenses and other liabilities		7,790			(8,509	)		(1,756	)
Net cash provided by operating activities		93,734			89,756			91,702
Cash flows from investing activities
Purchases of property and equipment		(42,518	)		(33,029	)		(50,472	)
Net proceeds from the sale of assets		678			41			77
Acquisitions		(478	)		(1,250	)		(6,375	)
Other		(1,482	)		1,115			(1,258	)
Net cash used in investing activities		(43,800	)		(33,123	)		(58,028	)
Cash flows from financing activities
Proceeds from revolving credit facility	$	4,933		$	143,179		$	504,690
Payments on revolving credit facility		(49,933	)		(143,179	)		(524,630	)
Share repurchase		(12,381	)		—			—
Repurchase of convertible notes		—			(10,724	)		—
Repayment of long-term borrowings		(5,318	)		(4,681	)		(4,007	)
Excess tax benefit on stock compensation		237			212			344
Proceeds from exercise of stock options		1,182			349			190
Dividends paid		(5,926	)		(4,525	)		(4,483	)
Net cash (used in) financing activities		(67,206	)		(19,369	)		(27,896	)
Cash flows from discontinued operations
Net cash used in operating activities		(76	)		(2,610	)		(3,145	)
Net cash provided by investing activities		—			—			18
Net cash (used in) discontinued operations		(76	)		(2,610	)		(3,127	)
Net (decrease) increase in cash and cash equivalents		(17,348	)		34,654			2,651
Cash and cash equivalents at beginning of year		43,824			9,170			6,519
Cash and cash equivalents at end of year	$	26,476		$	43,824		$	9,170
Supplemental Cash Flow Information:
Cash paid for interest	$	10,248		$	10,653		$	11,896
Cash paid for income taxes	$	202		$	509		$	884

See notes to consolidated financial statements.

41

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1

Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation: The consolidated financial statements include the accounts of Spartan Stores, Inc. and its subsidiaries (“Spartan Stores”). All significant intercompany accounts and transactions have been eliminated.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods might differ from those estimates.

Fiscal Year: Spartan Stores’ fiscal year ends on the last Saturday of March. The fiscal year ended March 31, 2012 consisted of 53 weeks. The fiscal years ended March 26, 2011 and March 27, 2010 each consisted of 52 weeks.

Revenue Recognition: The Retail segment recognizes revenues from the sale of products at the point of sale. Customer returns are immaterial. Discounts provided to customers by Spartan Stores at the time of sale are recognized as a reduction in sales as the products are sold. Spartan Stores does not recognize a sale when it sells gift cards and gift certificates; rather, a sale is recognized when the gift card or gift certificate is redeemed to purchase product. The Distribution segment recognizes revenues when products are delivered or ancillary services are provided. Sales and excise taxes are excluded from revenue.

Cost of Sales: Cost of sales includes purchase costs, freight, physical inventory adjustments, markdowns and promotional allowances. Vendor allowances that relate to our buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for our merchandising costs such as setting up warehouse infrastructure. Vendor allowances are recognized as a reduction in cost of sales when the related product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms. The distribution segment includes shipping and handling costs in the selling, general and administrative section of operating expenses on the Consolidated Statement of Earnings.

Cash and Cash Equivalents: Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase.

Accounts Receivable: Accounts receivable are shown net of allowances for credit losses of $0.9 million in fiscal 2012 and $1.4 million in fiscal 2011. Spartan Stores evaluates the adequacy of its allowances by analyzing the aging of receivables, customer financial condition, historical collection experience, the value of collateral and other economic and industry factors. Operating results include bad debt expense of $0.7 million, $0.9 million, and $1.3 million for fiscal years 2012, 2011 and 2010, respectively.

Inventory Valuation: Inventories are valued at the lower of cost or market using the last-in, first-out (“LIFO”) method. If replacement cost had been used, inventories would have been $43.8 million and $42.4 million higher at March 31, 2012 and March 26, 2011, respectively. The replacement cost method utilizes the most current unit purchase cost to calculate the value of inventories. During fiscal years 2012, 2011 and 2010, certain inventory quantities were reduced. The reductions resulted in liquidation of LIFO inventory carried at lower costs prevailing in prior years, the effect of which decreased the LIFO provision in fiscal years 2012, 2011 and 2010 by $3.0 million, $7.7 million and $0.4 million, respectively. Spartan Stores accounts for its Distribution inventory using a perpetual system and utilizes the retail inventory method (“RIM”) to value inventory for center store products in the Retail segment. Under the retail inventory method, inventory is stated at cost with cost of sales and gross margin calculated by applying a cost ratio to the retail value of inventories. Fresh and pharmacy

42

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

products are accounted for at cost in the Retail segment. We evaluate inventory shortages throughout the year based on actual physical counts in our facilities. We record allowances for inventory shortages based on the results of recent physical counts to provide for estimated shortages from the last physical count to the financial statement date.

Long-Lived Assets Other than Goodwill: Spartan Stores reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset’s carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less the cost to sell. Fair values are determined by independent appraisals or expected sales prices based upon market participant data developed by internal licensed real estate professionals. Estimates of future cash flows and expected sales prices are judgments based upon Spartan Stores’ experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, real estate market conditions and inflation.

Goodwill: Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in business combinations after amounts have been allocated to intangible assets. Goodwill is not amortized, but is reviewed for impairment during the fourth quarter of each year, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, using a discounted cash flow model and comparable market values of each reporting segment.

Other Assets: Included in Other assets are intangible assets and debt issuance costs. Intangible assets primarily consist of trade name, favorable lease agreements, prescription lists, non-compete agreements, liquor licenses and franchise fees. Favorable leases are amortized on a straight-line basis over the related lease terms. Prescription lists are amortized on a straight-line basis over the period of expected benefit. Non-compete agreements are amortized on a straight-line basis over the length of the agreements. Franchise fees are amortized on a straight-line basis over the term of the franchise agreement. Debt issuance costs are amortized over the term of the related financing agreement. The trade name and liquor licenses are not amortized as they have indefinite lives.

Property and Equipment: Property and equipment are recorded at cost and depreciated over the shorter of the estimated useful lives or lease periods of the assets. Expenditures for normal repairs and maintenance are charged to operations as incurred. Depreciation is computed using the straight-line method as follows:

Land improvements	15 years
Buildings and improvements	15 to 40 years
Equipment	3 to 15 years

Insurance Reserves: Spartan Stores is primarily self-insured for workers’ compensation and general liability costs. Losses are recorded when reported and consist of individual case estimates. Incurred but not reported losses are actuarially estimated based on available historical information. We have purchased stop-loss coverage to limit our exposure to any significant exposure on a per claim basis. Our exposure for workers’ compensation and general liability is $0.5 million per claim.

43

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of changes in Spartan Stores’ self-insurance liability is as follows:

(In thousands)	March 31, 2012			March 26, 2011			March 27, 2010
Beginning balance	$	2,843		$	4,049		$	3,848
Expense		2,527			1,838			2,762
Claim payments		(2,365	)		(3,044	)		(2,561	)
Ending balance		3,005			2,843			4,049

The current portion of the self-insurance liability is included in “Other accrued expenses” and the long-term portion is included in “Other long-term liabilities” in the Consolidated Balance Sheets.

Income Taxes: Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred and other tax assets and liabilities.

Earnings per share: Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by increasing the weighted average number of common shares outstanding by the dilutive effect of the issuance of common stock for options outstanding under Spartan Stores’ stock incentive plans. Unvested restricted stock awards contain non-forfeitable rights to dividends and, therefore, are considered participating securities and included in the computation of basic earnings per share pursuant to the two-class method.

The following table sets forth the computation of basic and diluted earnings per share for continuing operations:

(In thousands, except per share amounts)	March 31, 2012		March 26, 2011		March 27, 2010
Numerator:
Earnings from continuing operations	$	31,870	$	32,539	$	25,933
Denominator:
Weighted average shares outstanding – basic		22,791		22,606		22,406
Effect of dilutive stock options		96		82		74
Weighted average shares outstanding – diluted		22,887		22,688		22,480
Basic earnings per share from continuing operations	$	1.40	$	1.44	$	1.16
Diluted earnings per share from continuing operations	$	1.39	$	1.43	$	1.15

Weighted average shares issuable upon the exercise of stock options that were not included in the earnings per share calculations because they were anti-dilutive were 239,326 in fiscal 2012, 435,446 in fiscal 2011, and 571,008 in fiscal 2010.

44

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted stock units granted in fiscal 2010 were only issuable if certain performance criteria were met, making these shares contingently issuable under ASC Topic 260. Fiscal 2010 performance criteria was not met and, therefore, no shares were issued. In addition, no restricted stock units were granted in fiscal 2012 or 2011 and none are planned to be issued in fiscal 2013.

The senior subordinated convertible notes due 2027 will be convertible at the option of the holder, only upon the occurrence of certain events, at an initial conversion rate of 28.0310 shares of Spartan Stores common stock per $1,000 principal amount at maturity of the notes (equal to an initial conversion price of approximately $35.67 per share). Upon conversion, Spartan Stores will pay the holder the conversion value in cash up to the accreted principal amount of the note and the excess conversion value, if any, in shares of Spartan Stores common stock – unless Spartan Stores elects to satisfy its obligation under such conversion by delivering only shares of common stock. Therefore, the notes are not currently dilutive to earnings per share as they are only dilutive above the accreted value. (See Note 5.)

Stock-Based Compensation: All share-based payments to employees are recognized in the financial statements as compensation cost based on the fair value on the date of grant. Spartan Stores determines the fair value of stock option awards using the Black-Scholes option-pricing model. The grant date closing price per share of Spartan Stores stock is used to estimate the fair value of restricted stock awards and restricted stock units. The value of the portion of awards expected to vest is recognized as expense over the requisite service period.

Shareholders’ Equity: Spartan Stores’ restated articles of incorporation provide that the board of directors may at any time, and from time to time, provide for the issuance of up to 10 million shares of preferred stock in one or more series, each with such designations as determined by the board of directors. At March 31, 2012, there were no shares of preferred stock outstanding.

Comprehensive Income: Comprehensive income is net earnings adjusted for the net (loss) income on the interest rate swap agreement and the minimum pension liability, net of applicable income taxes.

(In thousands)	Interest Rate Swap Liability			Minimum Pension Liability			Accumulated Other Comprehensive Income (Loss)
Balance March 28, 2009		(283	)		(13,868	)		(14,151	)
Other comprehensive (loss) income		(117	)		1,295			1,178
Balance March 27, 2010		(400	)		(12,573	)		(12,973	)
Other comprehensive (loss) income		(265	)		2,664			2,399
Pension curtailment income		—			(2,442	)		(2,442	)
Balance March 26, 2011	$	(665	)	$	(12,351	)	$	(13,016	)
Other comprehensive (loss) income		211			(1,442	)		(1,231	)
SWAP Termination, net of tax		454			—			454
Balance March 31, 2012	$	—		$	(13,793	)	$	(13,793	)

Advertising Costs: Spartan Stores’ advertising costs are expensed as incurred and are included in selling, general and administrative expenses. Advertising expenses were $14.5 million, $14.2 million and $14.8 million in fiscal years 2012, 2011 and 2010, respectively.

45

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Adopted Accounting Standards

In June 2009, the FASB issued guidance for the consolidation of variable interest entities (“VIE”). This guidance establishes new criteria for determining the primary beneficiary. It also requires an ongoing assessment to determine whether a company is the primary beneficiary of a VIE. The guidance was effective beginning in fiscal 2011. This guidance did not have a material impact on our consolidated financial statements.

In January 2010, the Financial Accounting Standards Board (“FASB”) issued guidance which amends and clarifies existing guidance related to fair value measurements and disclosures. This guidance requires new disclosures for (1) transfers in and out of Level 1 and Level 2 and reasons for such transfers; and (2) the separate presentation of purchases, sales, issuances and settlement in the Level 3 reconciliation. It also clarifies guidance around disaggregation and disclosures of inputs and valuation techniques for Level 2 and Level 3 fair value measurements. This guidance was effective for us for the first quarter of fiscal 2011, except for the new disclosures in the Level 3 reconciliation. The Level 3 disclosures are effective for the first quarter of fiscal 2012. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2011, the FASB amended its standards related to fair value measurements and disclosures. The objective of the amendment is to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. This amendment primarily changed the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. In addition, the amendment clarified the FASB’s intent about the application of existing fair value measurement requirements. The new standard also requires additional disclosures related to fair value measurements categorized within Level 3 of the fair value hierarchy and requires disclosure of the categorization in the hierarchy for items that are not recorded at fair value but as to which fair value is required to be disclosed. The new rules became effective for interim and annual periods beginning after December 15, 2011. The Company adopted this standard and it did not have a material impact on the financial statements for fiscal 2012.

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-09, Compensation—Retirement Benefits—Multi-employer Plans (Subtopic 715-80) (“ASU 2011-09”). This accounting standard provides guidance on disclosure requirements for employers participating in multi-employer pension and other postretirement benefit plans (multi-employer plans) to improve transparency and increase awareness of the commitments and risks involved with participation in multi-employer plans. The new guidance requires employers participating in multi-employer plans to provide additional quantitative and qualitative disclosures to provide users with more detailed information regarding an employer’s involvement in multi-employer plans. The Company adopted the standard effective March 31, 2011. Refer to Note 8, Commitments and Contingencies and Note 10, Associate Retirement Plans in the accompanying Notes to Consolidated Financial Statements for additional information on the Company’s participation in the multi-employer pension plan. The adoption of this new standard resulted in enhanced disclosures, but otherwise did not have an impact on the Company’s Consolidated Financial Statements.

In September 2011, the FASB amended its standards related to the testing of goodwill for impairment. The objective of this amendment is to simplify the annual goodwill impairment evaluation process. The amendment provides entities the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The two-step impairment test is now only required if an entity determines through this qualitative analysis that it is more likely than not that the fair value of the reporting unit is less than its carrying value. The new rules are effective for interim and annual periods beginning after December 15, 2011; however, entities were permitted to adopt the standards early. We continued to test our goodwill for impairment using the allowed two step test.

46

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Standards:

In June 2011, the FASB amended its rules regarding the presentation of comprehensive income. The objective of this amendment is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. Specifically, this amendment requires that all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new rules were to become effective for interim and annual periods beginning after December 15, 2011. In December 2011, the FASB deferred certain aspects of this standard beyond the December 15, 2011 effective date, specifically the provisions dealing with reclassification adjustments. Because the standards only affect the display of comprehensive income and do not affect what is included in comprehensive income, the standards will not have a material effect on our Consolidated Financial Statements.

Note 2

Acquisitions of Assets

During fiscal 2010, Spartan Stores acquired certain assets of one fuel center/convenience store and three pharmacies in separate transactions for a total purchase price of $7.2 million. The purchased assets included inventory, customers lists, non-compete agreements, land, building, equipment and goodwill. The acquisitions were made to increase market share. Goodwill of $2.2 million and $0.4 million was assigned to the Retail and Distribution segments, respectively.

Note 3

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill were as follows:

(In thousands)	Retail			Distribution		Total
Balance at March 27, 2010:
Goodwill	$	242,023		$	92,493	$	334,516
Accumulated impairment charges		(86,600	)		—		(86,600	)
Goodwill, net		155,423			92,493		247,916
Acquisitions		450			—		450
Other (Note 4)		(7,122	)		—		(7,122	)
Balance at March 26, 2011:
Goodwill		235,351			92,493		327,844
Accumulated impairment charges		(86,600	)		—		(86,600	)
Goodwill, net		148,751			92,493		241,244
Other (Note 4)		(1,050	)		—		(1,050	)
Balance at March 31, 2012:
Goodwill		234,301			92,493		327,844
Accumulated impairment charges		(86,600	)		—		(86,600	)
Goodwill, net	$	147,701		$	92,493	$	240,194

47

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table reflects the components of amortized intangible assets, included in “Other, net” on the Consolidated Balance Sheets:

	March 31, 2012				March 26, 2011
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Non-compete agreements	$	3,504	$	2,616	$	3,422	$	2,273
Favorable leases		3,906		1,815		3,906		1,548
Customer lists		11,065		6,330		10,738		4,806
Franchise fees and other		625		242		599		200
Total	$	19,100	$	11,003	$	18,665	$	8,827

The weighted average amortization period for amortizable intangible assets is as follows:

Non-compete agreements	9.9 years
Favorable leases	14.6 years
Customer lists	7.1 years
Franchise fees and other	11.9 years

Amortization expense for intangible assets was $2.2 million, $2.1 million and $2.3 million for fiscal years 2012, 2011 and 2010, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows:

(In thousands)

Fiscal Year	Amortization Expense
2013	$	2,276
2014		2,001
2015		1,365
2016		964
2017		428

Indefinite-lived intangible assets that are not amortized consist primarily of a trade name and licenses for the sale of alcoholic beverages and amounted to $26.5 million as of March 31, 2012 and March 26, 2011.

48

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4

Restructuring, Asset Impairment and Other

The following table provides the activity of restructuring costs for fiscal years 2012, 2011 and 2010. Restructuring costs recorded in the Consolidated Balance Sheets are included in “Current portion of restructuring costs” in Current liabilities and “Restructuring costs” in Long-term liabilities based on when the obligations are expected to be paid.

(In thousands)	Lease and Ancillary Costs			Severance			Other			Total
Balance at March 28, 2009	$	44,545		$	—		$	—		$	44,545
Provision for lease and related ancillary costs, net of sublease income		1,111			—			—			1,111
Provision for severance and other costs		—			2,915			1,109			4,024
Changes in estimates (Note 3)		(4,860	)		—			—			(4,860	)(a)
Payments, net of interest accretion		(6,914	)		(859	)		(1,109	)		(8,882	)
Balance at March 27, 2010		33,882			2,056			—			35,938
Provision for severance and other costs		1,876			644			288			2,808
Reversal of reserve related to lease terminations and other reversals (Note 3)		(6,948	)		—			—			(6,948	)
Changes in estimates (Note 3)		(7,423	)		—			—			(7,423	)(a)
Payments, net of interest accretion		(6,085	)		(2,700	)		(288	)		(9,073	)
Balance at March 26, 2011		15,302			—			—			15,302
Changes in estimates (Note 3)		(1,318	)		—			—			(1,318	)
Payments, net of interest accretion		(2,882	)		—			—			(2,882	)
Balance at March 31, 2012	$	11,102		$	—		$	—		$	11,102

(a) Goodwill was reduced by $1.0 million, $7.1 million and $3.9 million in fiscal 2012, 2011 and 2010, respectively, as a result of these changes in estimates as the initial charges for certain stores were established in the purchase price allocations for previous acquisitions. In fiscal 2010, $0.1 million was included in discontinued operations. Through an acquisition, Spartan assumed sublease liabilities for a closed store location and two operating store locations that were accounted for as capital leases. The underlying leases were terminated by a bankruptcy judge in December 2010. In fiscal 2011 the closed store liability was reversed resulting in a gain of $6.9 million and was partially offset by $1.1 million representing the remaining net value of the two capital leases also written off.

49

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restructuring, asset impairment and other included in the Consolidated Statements of Earnings for the year ended March 26, 2011 consisted of the following:

(In thousands)	Retail			Distribution			Total
Asset impairment charges, assets at underperforming stores and abandoned development projects (Note A below)	$	7,502		$	357		$	7,859
Provision for severance and other costs related to warehouse closing (Note B below)		—			2,546			2,546
Net benefit related to favorable lease terminations (Note C below)		(5,888	)		—			(5,888	)
Pension curtailment income related to the freezing of the cash balance pension plan (Note 10) (Note D below)		(1,704	)		(2,281	)		(3,985	)
	$	(90	)	$	622		$	532

Note A: This charge relates to assets that required impairment and the values reflected in the Consolidated Balance Sheet were reduced. Therefore the adjustment is reflected in the Consolidated Balance Sheet and is not a component of the activity of restructuring costs on page 49. The asset impairment charges were recorded due to the economic and competitive environment these stores operated in and its impact on their forecasted financial performance.

Note B: The provision for severance and other costs has two components as broken out in the reconciliation included in our previous response. The first component is the $2.5 million reflected above and the second component is the $0.3 million related to changes in estimates for union sick pay and property taxes. The changes in estimates were reflected on the “changes in estimates” line totaling $7.4 million included in the table on page 49.

Note C: Through an acquisition, Spartan assumed sublease liabilities for a closed store location and two operating store locations that were accounted for as capital leases. A bankruptcy judge terminated the underlying leases in December 2010. The closed store liability was reversed resulting in a gain of $6.9 million and was partially offset by $1.1 million representing the remaining net value of the two capital leases also written off.

Note D: The offset to the recording of pension curtailment income related to the freezing of the cash balance pension plan, which is reflected in the table on page 50, is an adjustment to Accumulated Other Comprehensive Income (Loss) (AOCI) in the Consolidated Statements of Shareholders’ Equity. The taxes relating to curtailment income totaled $1.5 million bringing the net adjustment to AOCI of $2.4 million.

During the fourth quarter of fiscal 2010, Spartan Stores implemented the final stages of a comprehensive, multi-year supply chain optimization strategy. As a part of these optimization efforts the Plymouth, Michigan dry grocery distribution operation was transitioned to our Grand Rapids facility. The transition was completed in the first quarter of fiscal 2011. As a result of the closing of the warehouse facility and elimination of certain administrative positions, we incurred charges of $4.2 million for severance, asset impairment and other related one-time costs in the fourth quarter of fiscal 2010. In addition, in fiscal 2011 the Company incurred additional charges/adjustments related to its warehouse consolidation initiative. These charges consisted of warehouse closing expenses for lease payments and other related expenses, which were offset by a LIFO credit due to reduced inventory levels resulting in a year-to-date net $0.6 million after tax benefit.

Store lease obligations included in restructuring costs include the present value of future minimum lease payments, calculated using a risk-free interest rate, and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease income.

50

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5

Long-Term Debt

Spartan Stores’ long-term debt consists of the following:

(In thousands)	March 31, 2012		March 26, 2011
Senior secured revolving credit facility, due December 2012	$	—	$	45,000
Convertible subordinated notes, 3.375% due May 2027, net of unamortized debt discount		88,856		85,111
Capital lease obligations (Note 9)		48,864		44,436
Other, 7.00% – 9.25%, due fiscal 2013 – 2021		294		369
		138,014		174,916
Less current portion		4,449		4,205
Total long-term debt	$	133,565	$	170,711

Available borrowings under our $255.0 million revolving credit facility are based on stipulated advance rates on eligible assets, as defined in the credit agreement. The credit facility contains covenants that include a minimum fixed charge coverage ratio and maximum capital expenditures, as defined in the credit agreement. These covenants are not effective as long as Spartan Stores maintains minimum excess availability levels of $25.0 million with respect to the minimum fixed charge coverage ratio and $20 million with respect to maximum capital expenditures. Spartan Stores had available borrowings of $142.7 million at March 31, 2012 and excess availability of $162.7 million. Payment of dividends and repurchases of outstanding shares are permitted up to a total of $30.0 million per year, provided that excess availability of $20.0 million is maintained. The credit facility provides for the issuance of letters of credit, of which $0.6 million were outstanding and unused as of March 31, 2012. Borrowings under the revolving credit portion of the facility bear interest at LIBOR plus 1.25% or the prime rate (weighted average interest rate of 3.25% at March 31, 2012 (see Note 6).

On May 30, 2007, Spartan Stores issued $110 million in aggregate principal amount of unsecured 3.375% convertible senior notes due May 15, 2027. The notes are general unsecured obligations and rank equally in right of payment with all of our other existing and future unsecured and unsubordinated obligations. They are effectively subordinated to our existing and any future secured indebtedness to the extent of the assets securing such indebtedness. The notes are structurally subordinated to our subsidiaries’ indebtedness and other liabilities. The Notes are not guaranteed by our subsidiaries. The net proceeds from the sale of the notes after deducting selling discounts of 2.5% and offering expenses of $0.6 million were approximately $106.5 million, and were used to pay down amounts owed under our senior secured revolving credit facility and partially fund the Felpausch stores acquisition.

At the end of the 3^rd quarter of fiscal 2012 the Company terminated the interest rate swap agreement and recorded a charge of $0.8 million, which was recorded in interest expense. Early in the 4^th quarter of fiscal 2012 the Company repaid the entire outstanding balance of $45.0 million on its revolving credit facility.

Interest at an annual rate of 3.375% is payable semi-annually on May 15 and November 15 of each year. Contingent interest will be paid to holders of the notes during the period commencing May 20, 2012 and ending on November 14, 2012 and for any six-month period thereafter, if the average contingent interest trading price per $1,000 principal amount of the notes for the five-consecutive-trading-day-period ending on the third trading day immediately preceding the first day of such interest period equals 120% or more of the principal amount of the notes. Contingent interest payable with respect to any six-month period will equal 0.25% per annum of the average contingent interest-trading price of $1,000 principal amount of notes during the five-consecutive-trading-day measurement period described above.

51

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Spartan Stores may redeem the notes for cash in whole or in part, at any time or from time to time, on or after May 15, 2014 at 100% of the principal amount of the notes to be redeemed, and prior to that date on or after May 20, 2012 at a price equal to a specified percentage of the principal amount, plus, in each case, any accrued and unpaid interest. Holders may require Spartan Stores to repurchase their notes, in whole or in part, on May 15, 2014, May 15, 2017 and May 15, 2022 for a cash price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. In addition, upon certain fundamental change transactions, each holder would have the option, subject to certain conditions, to require Spartan Stores to repurchase for cash, in whole or in part, such holder’s notes. For the purposes of the notes, a “fundamental change” would include, among other events set forth in the Indenture governing the notes, the acquisition of 50% or more of our common stock by a person or group, a consolidation, merger, or sale of all or substantially all of our assets, certain changes in our board of directors, or a termination of trading of our common stock.

The notes will be convertible at the option of the holder only under certain circumstances summarized as follows:

1. If the closing sale price per share of Spartan Stores common stock is greater than 130% of the applicable conversion price for a specified period of time,

2. If the trading price of the notes was less than 98% of the product of the closing sale price per share of Spartan Stores common stock and the conversion rate in effect for the notes for a specified period of time,

3. If the notes are called for redemption,

4. At any time on or after February 15, 2027 until the close of business on the business day immediately preceding the maturity date,

5. Upon the occurrence of specified corporate transactions.

Upon conversion by the holder, the notes convert at an initial conversion rate of 28.0310 shares of Spartan Stores common stock per $1,000 principal amount of notes (equal to an initial conversion price of approximately $35.67 per share), subject to adjustments upon certain events. Upon a surrender of notes for conversion, Spartan Stores will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and the total conversion obligation, and shares of Spartan Stores common stock in respect of the remainder, if any, of the conversion obligation, unless Spartan Stores has elected to satisfy its obligation under such conversion by delivering only shares of common stock.

In connection with the closing of the sale of the notes, Spartan Stores entered into a registration rights agreement with the initial purchasers of the notes, pursuant to which Spartan Stores filed with the Securities and Exchange Commission (SEC) a shelf registration statement covering resale by security holders of the notes and the shares of Spartan Stores common stock issuable upon conversion of the notes. The SEC declared the registration statement effective on September 27, 2007.

The amount of interest expense recognized and the effective interest rate for Spartan Stores’ convertible senior notes were as follows:

(In thousands)	2012			2011			2010
Contractual coupon interest	$	3,353		$	3,333		$	3,712
Amortization of discount on convertible senior notes		3,745			3,462			3,533
Interest expense	$	7,098		$	6,795		$	7,245
Effective interest rate		8.125	%		8.125	%		8.125	%

52

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The debt and equity components recognized for Spartan Stores’ convertible senior notes were as follows:

(In thousands)	March 31, 2012			March 26, 2011
Principal amount of convertible senior notes	$	97,740		$	97,740
Unamortized discount		8,884	(1)		12,629
Net carrying amount		88,856			85,111
Common stock		16,032			16,032

⁽¹⁾  Will be recognized over a remaining period of 2.1 years.

The weighted average interest rates including loan fee amortization for fiscal 2012, 2011 and fiscal 2010 were 8.05%, 7.81% and 7.59%, respectively.

At March 31, 2012, long-term debt was due as follows:

(In thousands)

Fiscal Year
2013	$	4,449
2014		3,605
2015		92,155
2016		3,590
2017		3,915
Thereafter		30,301
	$	138,014

During the first quarter of fiscal 2011 the Company repurchased $12.3 million in principal amount of its outstanding convertible senior notes for approximately $10.7 million and recognized a resultant gain of $0.1 million. No additional repurchases were made in fiscal 2011 and 2012.

Note 6

Derivative Instruments

Spartan Stores has limited involvement with derivative financial instruments and uses them only to manage well-defined interest rate risk exposure when appropriate, based on market conditions. Spartan Stores’ objective in managing exposure to changes in interest rates is to reduce fluctuations in earnings and cash flows, and consequently, from time to time Spartan Stores uses interest rate swap agreements to manage this risk. Spartan Stores does not use financial instruments or derivatives for any trading or other speculative purposes.

On January 2, 2009, Spartan Stores entered into an interest rate swap agreement. The interest rate swap is considered to be a cash flow hedge of interest payments on $45.0 million of borrowings under Spartan Stores’ senior secured revolving credit facility by effectively converting a portion of the variable rate debt to a fixed rate basis. Under the terms of the agreement, Spartan Stores has agreed to pay the counterparty a fixed interest rate of 3.33% and the counterparty has agreed to pay Spartan Stores a floating interest rate based upon the 1-month LIBOR plus 1.25% on a notional amount of $45 million. The interest rate swap agreement was to expire concurrently with its senior secured revolving credit facility on December 24, 2012. However, the swap agreement was terminated in the third quarter of fiscal 2012, and included a $0.8 million termination charge which was recorded in interest expense.

53

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current earnings. There was no impact on earnings in fiscal 2012 and 2011 as the cash flow hedge is highly effective through its termination at the end of the third quarter of fiscal 2012.

The following table provides a summary of the fair value and balance sheet classification of the derivative financial instrument designated as an interest rate cash flow hedge:

Balance Sheet Classification	March 31, 2012		March 26, 2011
Other long-term liabilities	$	—	$	1,085

The following table provides a summary of the financial statement effect of the derivative financial instrument designated as an interest rate cash flow hedge for fiscal 2012 and 2011:

	Location in Consolidated Financial Statements	2012			2011
(Gain) Loss, net of taxes, recognized in other comprehensive income	Other comprehensive income	$	(665	)	$	265
Pre-tax loss reclassified from accumulated other comprehensive loss	Interest expense		646			833
Pre-tax swap termination charge	Interest expense		775			—

Note 7

Fair Value Measurements

Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the short-term nature of these financial instruments. At March 31, 2012 and March 26, 2011 the estimated fair value and the book value of our debt instruments were as follows:

(In thousands)	March 31, 2012		March 26, 2011
Book value of debt instruments:
Current maturities of long-term debt and capital lease obligations	$	4,449	$	4,205
Long-term debt and capital lease obligations		133,565		170,711
Equity component of convertible debt		8,884		12,629
Total book value of debt instruments		146,898		187,545
Fair value of debt instruments		144,374		177,112
Excess of book value over fair value	$	2,524	$	10,433

The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities (level 2 valuation technique).

54

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ASC 820 prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability, reflecting the reporting entity's own assumptions about the assumptions that market participants would use in pricing.

At March 26, 2011 the fair value of the interest rate swap liability was approximately $1.1 million and is included in other long-term liabilities in the accompanying consolidated balance sheets. The fair value measurements are classified within Level 2 of the hierarchy and are determined using prices from a financial institution that develops values based on observable inputs in active markets.

Long-lived assets totaling $0.2 million and $8.2 in fiscal years 2012 and 2011, respectively, were measured at a fair value of $0.1 and $1.6, respectively, on a nonrecurring basis using Level 3 inputs as defined in the fair value heirarchy. Our accounting and finance team management, who report to the chief financial officer, determine our valuation policies and procedures. The development and determination of the unobservable inputs for level 3 fair value measurements and fair value calculations are the responsibility of our accounting and finance team management and are approved by the chief financial officer. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. Spartan Stores estimates future cash flows based on experience and knowledge of the market in which the assets are located, and when necessary, uses real estate brokers. See Note 4 for discussion of long-lived asset impairment charges.

Note 8

Commitments and Contingencies

Spartan Stores subleases property at certain locations and received rental income of $1.9 million in fiscal 2012. In the event of the customer’s default, Spartan would be responsible for fulfilling these lease obligations. The future payment obligations under these leases are disclosed in Note 9.

Unions represent approximately 8% of Spartan Stores’ associates. These associates are covered by a collective bargaining agreement which expires in October 2012.

Various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against Spartan Stores. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the consolidated financial position, operating results or liquidity of Spartan Stores.

Spartan Stores contributes to the Central States multi-employer pension plan based on obligations arising from its collective bargaining agreement covering its warehouse union associates. This plan provides retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by employers and unions; however, Spartan Stores is not a trustee. The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plan

Based on the most recent information available to Spartan Stores, we believe that the present value of actuarial accrued liabilities in this multi-employer plan significantly exceeds the value of the assets held in trust

55

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to pay benefits. Because we are one of a number of employers contributing to this plan, it is difficult to ascertain what the exact amount of the under funding would be, although we anticipate that our contributions to this plan will increase each year. Spartan believes that funding levels have not changed significantly since year-end. To reduce this under funding we expect meaningful increases in expense as a result of required incremental multi-employer pension plan contributions over the years. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably determined.

Note 9

Leases

Most of the Company’s retail stores are operated in leased facilities. The Company also leases small ancillary warehouse facilities, its tractor and trailer fleet and certain other equipment. Most of the property leases contain renewal options of varying terms. Terms of certain leases contain provisions requiring payment of percentage rent based on sales and payment of executory costs such as property taxes, utilities, insurance and maintenance. Terms of certain leases of transportation equipment contain provisions requiring payment of percentage rent based upon miles driven. Portions of certain property are subleased to others.

Rental expense, net of sublease income, under operating leases consisted of the following:

(In thousands)	2012			2011			2010
Minimum rentals	$	32,204		$	32,464		$	33,706
Contingent payments		805			806			1,013
Sublease income		(1,899	)		(1,926	)		(2,064	)
	$	31,110		$	31,344		$	32,655

Total future lease commitments of Spartan Stores under capital and operating leases in effect at March 31, 2012 are as follows:

	Capital			Operating
(In thousands)	Used in Operations			Used in Operations		Subleased to Others		Total
Fiscal Year
2013	$	7,873		$	28,855	$	1,114	$	29,969
2014		7,233			24,779		881		25,660
2015		6,674			20,451		790		21,421
2016		6,697			17,522		467		17,989
2017		6,719			11,715		225		11,940
Thereafter		46,348			27,667		38		27,704
Total		81,544		$	130,989	$	3,515	$	134,503
Interest		(32,680	)
Present value of minimum lease obligations		48,864
Current portion		4,407
Long-term obligations	$	44,457

Amortization expense for property under capital leases was $3.6 million, $4.3 million and $4.1 million in fiscal years 2012, 2011 and 2010, respectively.

56

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets held under capital leases consisted of the following:

(In thousands)	March 31, 2012		March 26, 2011
Buildings and improvements	$	45,517	$	45,788
Equipment		6,704		3,924
		52,221		49,712
Less accumulated depreciation		19,934		16,627
Net property	$	32,287	$	33,085

One of Spartan Stores’ subsidiaries leases retail store facilities. Of the stores leased, several are owned and others were obtained through leasing arrangements and are accounted for as operating leases. A majority of the leases provide for minimum and contingent rentals based upon stipulated sales volumes and contain renewal options. Certain of the leases contain escalation clauses.

Owned assets, included in property and equipment, which are leased to others are as follows:

(In thousands)	March 31, 2012		March 26, 2011
Land and improvements	$	1,173	$	1,173
Buildings		5,942		5,942
		7,115		7,115
Less accumulated depreciation		4,043		3,803
Net property	$	3,072	$	3,312

Future minimum rentals to be received under operating leases in effect at March 31, 2012 are as follows:

(In thousands)

Fiscal Year	Owned Property		Leased Property		Total
2013	$	1,344	$	905	$	2,249
2014		689		656		1,345
2015		444		560		1,004
2016		430		426		856
2017		371		239		610
Thereafter		387		40		427
Total	$	3,665	$	2,826	$	6,491

Note 10

Associate Retirement Plans

Spartan Stores’ retirement programs include pension plans providing non-contributory benefits and salary reduction defined contribution plans providing contributory benefits. Substantially all of Spartan Stores’ associates not covered by collective bargaining agreements are covered by either a frozen non-contributory cash balance pension plan (“Company Plan”), a defined contribution plan or both. Associates covered by collective bargaining agreements are included in multi-employer pension plans.

57

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective January 1, 2011, the Cash Balance Pension Plan was frozen and, as a result, additional service credits are no longer added to each Associate’s account, however, interest credits will continue to accrue. Effective the same date, Company matching contributions to the Savings Plus 401k Plan were reinstated at a rate of 50% of pay deferral contributions up to 6% of each Associate’s qualified compensation. Additionally, a provision allowing for a discretionary annual profit sharing contribution was added to the Company’s 401k Plan.

In conjunction with this change to the Cash Balance Pension Plan, pretax curtailment income of $4.0 million was recognized in the third quarter of fiscal 2011 and is included in Restructuring, asset impairment and other on the Consolidated Statements of Earnings. No additional associates are eligible to participate in the Cash Balance Pension Plan after January 1, 2011.

Prior to the plan freeze, Spartan Stores’ Company Plan benefit formula utilized a cash balance approach. Under the cash balance formula, credits are added annually to a participant’s “account” based on a percent of the participant’s compensation and years of vested service at the beginning of each calendar year. At Spartan Stores’ discretion, interest credits were also added annually to a participant’s account based upon the participant’s account balance as of the last day of the immediately preceding calendar year. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act of 1976 (“ERISA”). Company Plan assets consist principally of common stocks and U.S. government and corporate obligations. The Company Plan does not hold any Spartan Stores stock.

Spartan Stores also maintains a Supplemental Executive Retirement Plan (“SERP”), which provides nonqualified deferred compensation benefits to Spartan Stores’ officers. Benefits under the SERP are paid from Spartan Stores’ general assets, as there is no separate trust established to fund benefits.

Expense for Company contributions made to defined contribution plans totaled $5.4 million, $2.5 million and $1.7 million in fiscal years 2012, 2011 and 2010, respectively. Fiscal 2012 and 2011 also include the addition of a discretionary profit sharing company contribution, which was added to the plan effective January 1, 2011.

Spartan Stores and certain subsidiaries provide health care benefits to retired associates who have at least 30 years of service or 10 years of service and have attained age 55, and who were not covered by collective bargaining arrangements during their employment (“covered associates”). Qualified covered associates that retired prior to March 31, 1992 receive major medical insurance with deductible and coinsurance provisions until age 65 and Medicare supplemental benefits thereafter. Covered associates retiring after April 1, 1992 are eligible for monthly postretirement health care benefits of $5 multiplied by the associate’s years of service. This benefit is in the form of a credit against the monthly insurance premium. The retiree pays the balance of the premium.

58

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the change in benefit obligation, change in plan assets, weighted average assumptions used in actuarial calculations and components of net periodic benefit costs for Spartan Stores’ pension and postretirement benefit plans excluding multi-employer plans. The accrued benefit costs are reported in Postretirement benefits in the Consolidated Balance Sheets.

(In thousands, except percentages)	Pension Benefits						SERP Benefits						Postretirement Benefits
	March 31, 2012			March 26, 2011			March 31, 2012			March 26, 2011			March 31, 2012			March 26, 2011
Change in benefit obligation
Benefit obligation at beginning of year	$	60,421		$	61,987		$	1,071		$	1,047		$	8,633		$	8,149
Service cost		—			2,622			—			45			192			193
Interest cost		2,893			3,077			51			52			424			420
Actuarial loss		508			1,351			(26	)		57			162			155
Benefits paid		(3,872	)		(5,691	)		(111	)		(59	)		(281	)		(283	)
Curtailment gain due to plan freeze		—			(2,925	)		—			(71	)		—			—
Benefit obligation at end of year	$	59,950		$	60,421		$	985		$	1,071		$	9,130		$	8,634
Change in plan assets
Plan assets at fair value at beginning of year	$	58,352		$	52,330		$	—		$	—		$	—		$	—
Actual return on plan assets		596			5,987			—			—			—			—
Company contributions		4,000			5,726			110			59			281			283
Benefits paid		(3,872	)		(5,691	)		(110	)		(59	)		(281	)		(283	)
Plan assets at fair value at measurement date	$	59,076		$	58,352		$	—		$	—		$	—		$	—
Unfunded status	$	(874	)	$	(2,069	)	$	(985	)	$	(1,071	)	$	(9,130	)	$	(8, 634	)
Components of net amount recognized in financial position:
Current liabilities	$	—		$	—		$	(90	)	$	(121	)	$	(313	)	$	(316	)
Noncurrent liabilities		(874	)		(2,069	)		(895	)		(950	)		(8,817	)		(8,318	)
	$	(874	)	$	(2,069	)	$	(985	)	$	(1,071	)	$	(9,130	)	$	(8,634	)
Amounts recognized in accumulated other comprehensive income:
Net actuarial loss	$	20,131		$	17,793		$	410		$	477		$	2,367		$	2,339
Prior service credit		—			—			—			—			(396	)		(450	)
	$	20,131		$	17,793		$	410		$	477		$	1,971		$	1,889
Weighted average assumptions at Measurement date
Discount rate		4.50	%		5.00	%		4.50	%		5.00	%		4.50	%		5.00	%
Expected return on plan assets		7.50	%		7.75	%		N/A			N/A			N/A			N/A
Rate of compensation increase		N/A			N/A			N/A			N/A			N/A			N/A

The benefit obligation for pension plans is measured as the projected benefit obligation; the benefit obligation for postretirement benefit plans is measured as the accumulated benefit obligation. The accumulated benefit obligation for both of the defined benefit pension plans was $60.9 million and $61.5 million at March 31, 2012 and March 26, 2011, respectively.

59

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Components of net periodic benefit cost

(In thousands)	Pension Benefits									SERP
	March 31, 2012			March 26, 2011			March 27, 2010			March 31, 2012		March 26, 2011		March 27, 2010
Service cost	$	—		$	2,621		$	2,949		$	—	$	45	$	82
Interest cost		2,893			3,077			3,605			51		52		57
Expected return on plan assets		(4,081	)		(4,265	)		(4,069	)		—		—		—
Amortization of prior service cost		—			(478	)		(637	)		—		—		—
Recognized actuarial net loss		1,656			1,557			658			40		41		42
Net periodic benefit cost	$	468		$	2,512		$	2,506		$	91	$	138	$	181

	Postretirement Benefits
	March 31, 2012			March 26, 2011			March 27, 2010
Service cost	$	192		$	193		$	133
Interest cost		424			420			439
Amortization of prior service cost		(54	)		(54	)		(54	)
Recognized actuarial net loss		133			124			21
Net periodic benefit cost	$	695		$	683		$	539

The net actuarial loss, prior service cost and transition obligation included in “Accumulated Other Comprehensive Income” and expected to be recognized in net periodic benefit cost during fiscal year 2013 are as follows:

(In thousands)	Pension Benefits		SERP Benefits		Postretirement Benefits
Net actuarial loss	$	1,278	$	33	$	137
Prior service credit		—		—		(54	)
	$	1,278	$	33	$	83

Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Actuarial gains and losses are amortized over the average remaining service life of active participants when the accumulation of such gains and losses exceeds 10% of the greater of the projected benefit obligation and the fair value of plan assets.

Spartan Stores has assumed an average long-term expected return on pension plan assets of 7.50% as of March 31, 2012. The expected return assumption was modeled by third-party investment portfolio managers, based on asset allocations and the expected return and risk components of the various asset classes in the portfolio. Determining projected stock and bond returns and then applying these returns to the target asset allocations of the plan assets developed the expected return. Equity returns were based primarily on historical returns of the S&P 500 Index. Fixed-income projected returns were based primarily on historical returns for the broad U.S. bond market. This overall return assumption is believed to be reasonable over a longer-term period that is consistent with the liabilities.

Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement plan. The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 8.00% for fiscal 2012, 8.50% for fiscal 2011 and 9.00% for fiscal 2010, decreasing .50% per year to 5.00%. A 1% increase in the assumed health care cost trend rate would increase the accumulated

60

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

postretirement benefit obligation by 0.23% and the periodic postretirement benefit cost by 0.79%. A 1% decrease in the assumed health care cost trend rate would decrease the accumulated postretirement benefit obligation by 0.23% and total service and interest cost by 1.00%.

Spartan Stores has an investment policy for the pension plan with a long-term asset allocation mix designed to meet the long-term retirement obligations. The asset allocation mix is reviewed annually and, on a regular basis, actual allocations are rebalanced to approximate the prevailing targets. The following table summarizes actual allocations as of March 31, 2012 and March 26, 2011:

				Plan Assets
	Target Range			March 31, 2012			March 26, 2011
Asset Category
Equity securities		55.0 -75.0	%		66.0	%		64.7	%
Fixed income		25.0 -45.0			34.0			35.3
Total		100.0	%		100	%		100.0	%

The investment policy emphasizes the following key objectives: (1) maintain the purchasing power of the current assets and all future contributions by producing positive real rates of return on plan assets; (2) maximize return within reasonable and prudent levels of risk in order to minimize contributions and (3) control costs of administering the plan and managing the investments.

The fair value of Spartan Stores’ pension plan assets at March 31, 2012 by asset category is as follows:

	Fair Value Measurements
(In thousands)	Total		Quoted prices in markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Mutual funds	$	52,222	$	52,222	$	—	$	—
Money market fund		2,763		—		2,763		—
Guaranteed annuity contract		4,025		—		—		4,025
Total fair value	$	59,010	$	52,222	$	2,763	$	4,025

The fair value of Spartan Stores’ pension plan assets at March 26, 2011 by asset category is as follows:

	Fair Value Measurements
(In thousands)	Total		Quoted prices in markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Mutual funds	$	48,388	$	48,388	$	—	$	—
Money market fund		5,771		—		5,771		—
Guaranteed annuity contract		4,193		—		—		4,193
Total fair value	$	58,352	$	48,388	$	5,771	$	4,193

61

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the beginning and ending balances for Level 3 assets for the fiscal year 2012 follows:

(In thousands)	Guaranteed Annuity Contract
Balance as of March 26, 2011	$	4,193
Purchases, sales, issuances and settlements (net)		(424	)
Realized gains		256
Balance as of March 31, 2012	$	4,025

A reconciliation of the beginning and ending balances for Level 3 assets for the fiscal year 2011 follows:

(In thousands)	Guaranteed Annuity Contract
Balance as of March 27, 2010	$	4,388
Purchases, sales, issuances and settlements (net)		(439	)
Realized gains		244
Balance as of March 26, 2011	$	4,193

See Note 7 for a discussion of the levels of the fair value hierarchy. The assets’ fair value measurement level above is based on the lowest level of any input that is significant to the fair value measurement.

The following is a description of the valuation methods used for the plan’s assets measured at fair value in the above tables:

• Cash & money market funds: The carrying value approximates fair value.

• Mutual Funds/Collective Trusts: These investments are publicly traded investments, which are valued using the net asset value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund’s liabilities, expressed on a per-share basis. The NAV is a quoted price in an active market and classified within level 1 of the fair value hierarchy of ASC 820.

• Guaranteed Annuity Contracts: The guaranteed annuity contract is an immediate participation contract held with an insurance company that acts as custodian of the pension plan’s assets. The guaranteed annuity contract is stated at contract value as determined by the custodian, which approximates fair value. We evaluate the general financial condition of the custodian as a component of validating whether the calculated contract value is an accurate approximation of fair value. The review of the general financial condition of the custodian is considered obtainable/observable through the review of readily available financial information the custodian is required to file with the Securities and Exchange Commission. The group annuity contract is classified within level 3 of the valuation hierarchy of ASC 820.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuations methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement.

62

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Spartan Stores made a contribution of $4.1 million in the third quarter to move the cash balance pension plan closer to a fully funded status and reduce future pension expense. Funding credit carry forward balances will likely be used to fund future quarterly contribution requirements until December 2012 when a contribution will likely be made to continue to move funding closer to a fully funded status.

The following estimated benefit payments are expected to be paid in the following fiscal years:

(In thousands)	Pension Benefits and SERP Benefits		Other Benefits
2013	$	5,077	$	313
2014		5,206		347
2015		4,767		371
2016		4,726		405
2017 to 2020		26,010		3,132

In addition to the plans described above, Spartan Stores participates in a multi-employer pension plan and other defined contribution plans for substantially all associates covered by collective bargaining agreements.

Expense is recognized in connection with these plans as contributions are funded, in accordance with accounting standards. The Company contributed $8.2, $7.3 and $7.5 million to these plans for fiscal years 2012, 2011 and 2010, respectively. The risks of participating in these multi-employer plans are different from the risks associated with single-employer plans in the following respects:

a. Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

c. If the Company chooses to stop participating in some multi-employer plans, or makes market exits or otherwise has participation in the plan drop below certain levels, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company’s participation in this plan is outlined in the tables below. The EIN/Pension Plan Number column provides the Employee Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status (“PPA”) available in 2012 and 2011 relates to the plans’ two most recent fiscal year-ends. The zone status is based on information that the Company received from the plan and is certified by each plan’s actuary. Among other factors, red zone status plans are generally less than 65 percent funded and are considered in critical status. The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented by the trustees of each plan.

Pension	EIN – Pension	Plan Month / Day End		Pension Protection Act Zone Status				FIP/RP Status Pending/		Contributions						Surcharges Imposed or Amortization
Fund	Plan Number	Date		2012		2011		Implemented		2012		2011		2010		Provisions
Central States, Southeast and Southwest Areas Pension Fund	366044243-001		12/31		Red		Red		Implemented	$	8,232	$	7,336	$	7,477		No

63

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table describes the expiration of the Company’s collective bargaining agreements associated with the significant multi-employer plans in which the Company participates:

Pension Fund	Total Collective Bargaining Agreements	Expiration Date		% of Associates under Collective Bargaining Agreement			Over 5% Contribution 2012
Central States, Southeast and Southwest Areas Pension Fund	1		10/8/2012		8.0	%		No

At the date the financial statements were issued, Forms 5500 were generally not available for the plan years ending in 2011.

See Note 8 for further information regarding Spartan’s participation in the Central States, Southeast and Southwest Areas Pension Fund.

Multi-employer Postretirement Benefit Plans Other than Pensions

The Company also makes contributions to the multi-employer health and welfare plan in amounts set forth in the related collective bargaining agreements. This plan provides medical, dental, pharmacy, vision, and other ancillary benefits to active employees and retirees as determined by the trustees of the plan. The vast majority of the Company’s contributions benefit active employees and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to separate contribution amounts to postretirement benefit plans from contribution amounts paid for active participants in the plan.

Note 11 Taxes on Income

The income tax provision for continuing operations is summarized as follows:

(In thousands)	March 31, 2012			March 26, 2011			March 27, 2010
Currently payable:
Federal	$	(191	)	$	(536	)	$	3,199
State		2,016			1,301			1,246
Total currently payable		1,825			765			4,445
Deferred:
Federal		15,734			16,644			10,424
State		2,127			3,011			1,606
Total deferred		17,861			19,655			12,030
Total	$	19,686		$	20,420		$	16,475

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

	2012			2011			2010
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal income tax benefit		5.2			5.3			4.5
Tax credits		(1.1	)		(1.1	)		(0.2	)
Charitable product donations		(0.7	)		(0.7	)		(0.4	)
Other		(0.2	)		0.1			(0.1	)
Effective income tax rate		38.2	%		38.6	%		38.8	%

64

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets and liabilities resulting from temporary differences as of March 31, 2012 and March 26, 2011 are as follows:

(In thousands)	2012			2011
Deferred tax assets:
Employee benefits	$	23,859		$	20,783
Accounts receivable		365			530
Asset impairment and closed store reserves		2,719			3,103
Deferred revenue		879			966
State taxes		146			1,182
All other		1,220			3,159
Total deferred tax assets		29,188			29,723
Deferred tax liabilities:
Employee benefits		8,784			7,418
Depreciation & Amortization		33,917			28,727
Inventory		6,424			7,016
Goodwill		39,693			31,833
Convertible debt interest		15,384			14,202
Leases		6,271			4,523
All other		940			719
Total deferred tax liabilities		111,413			94,438
Net deferred tax liability	$	(82,225	)	$	(64,715	)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(In thousands)	March 31, 2012			March 26, 2011
Balance at beginning of year	$	2,320		$	2,232
Gross increases — tax positions taken in prior years		74			10
Gross decreases — tax positions taken in prior years		(483	)		(447	)
Gross increases — tax positions taken in current year		589			540
Lapse of statute of limitations		(7	)		(15	)
Balance at end of year	$	2,493		$	2,320

In the fourth quarter of fiscal 2012 we elected to accelerate the recognition of certain revenues for tax purposes, which resulted in a $12.4 million increase in taxes payable and a related increase in other current assets at March 31, 2012. The majority of these amounts will reverse in the first quarter of fiscal 2013.

Spartan Stores anticipates that $0.7 million of the unrecognized tax benefits will be settled prior to March 31, 2013. Spartan Stores recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. Accrued interest and penalties are not material. As of March 31, 2012, the balance of unrecognized tax benefits included tax positions of $1.6 million that would reduce Spartan Stores’ effective income tax rate if recognized in future periods.

Spartan Stores files income tax returns with federal, state and local tax authorities within the United States. In October 2011, the Internal Revenue Service (IRS) completed its examination of Spartan Stores’ federal income tax returns for fiscal year 2007. With few exceptions, we are no longer subject to U.S. federal, state or local examinations by tax authorities for fiscal years before 2008.

65

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12

Stock-Based Compensation

Spartan Stores has two shareholder-approved 10-year stock incentive plans covering 4,200,000 shares of Spartan Stores' common stock: the Spartan Stores, Inc. 2001 Stock Incentive Plan (the "2001 Plan") and the Spartan Stores, Inc. Stock Incentive Plan of 2005 (the "2005 Plan"). The plans provide for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, and other stock-based awards to directors, officers and other key associates. Shares issued, as a result of stock option exercises, will be funded with the issuance of new shares. Holders of restricted stock and stock awards are entitled to participate in cash dividends and dividend equivalents. The 2001 plan expired on May 8, 2011 and no shares remained unissued as of that date. As of March 31, 2012, 962,938 shares remained unissued under the 2005 Plan.

Stock option awards were granted with an exercise price equal to the market value of Spartan Stores common stock at the date of grant, vest and become exercisable in 25 percent increments over a four-year service period and have a maximum contractual term of 10 years. Upon a “Change in Control”, as defined by the Plan, all outstanding options vest immediately. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is determined based upon a combination of historical volatility of Spartan Stores common stock and the expected volatilities of guideline companies that are comparable to Spartan Stores in most significant respects to reflect management’s best estimate of Spartan Stores’ future volatility over the option term. Due to certain events that are considered unusual and/or infrequent in nature, and that resulted in significant business changes during the limited historical exercise period, management does not believe that Spartan Stores’ historical exercise data will provide a reasonable basis upon which to estimate the expected term of stock options. Therefore, the expected term of stock options granted is determined using the “simplified” method as described in SEC Staff Accounting Bulletins that uses the following formula: ((vesting term + original contract term)/2). The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant, using U.S. constant maturities with remaining terms equal to the expected term. Expected dividend yield is based on historical dividend payments.

The following weighted average assumptions were used to estimate the fair value of stock options at the date of grant using the Black-Scholes option-pricing model. There were no stock options granted in fiscal 2012 or 2011.

	2010
Dividend yield	1.43%
Expected volatility	41.50% - 42.30%
Risk-free interest rate	2.28%
Expected life of option	6.25 years

66

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes stock option activity for the three years ended March 31, 2012:

	Shares Under Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life Years		Aggregate Intrinsic Value (In thousands)
Options outstanding at March 28, 2009		706,367		$	17.99		7.20	$	1,506
Granted		179,382			13.87
Exercised		(27,869	)		6.99				201
Cancelled		(26,031	)		20.62
Options outstanding at March 27, 2010		831,849		$	17.39		6.90	$	1,279
Granted		—			—
Exercised		(27,128	)		7.85				231
Cancelled		—			—
Options outstanding at March 26, 2011		804,721		$	17.71		6.02	$	1,243
Granted		—			—
Exercised		(84,630	)		11.64				572
Cancelled		(16,962	)		17.94
Options outstanding at March 31, 2012		703,129		$	18.43		5.53	$	1,926
Options exercisable at March 27, 2010		366,113		$	15.15		5.15	$	1,111
Options exercisable at March 26, 2011		519,733		$	16.94		5.19	$	1,095
Options exercisable at March 31, 2012		557,787		$	18.60		5.22	$	1,581
Vested and expected to vest in the future at March 31, 2012		697,589		$	18.44		5.52	$	1,911

The weighted average grant-date fair value of stock options granted during fiscal year 2010 was $5.26. Cash received from option exercises was $1.0 million, $0.2 million and $0.2 million during fiscal years 2012, 2011 and 2010, respectively.

Restricted shares awarded to employees vest ratably over a five-year service period (over a four year period for grants to associates in fiscal 2011 and one year for grants to the Board of Directors in fiscal 2011). Awards granted to directors prior to May 10, 2006 vest 100 percent after three years and awards granted on or after May 10, 2006 vest in one-third increments over a three-year service period. Awards are subject to certain transfer restrictions and forfeiture prior to vesting. All shares fully vest upon a “Change in Control” as defined by the Plan. Compensation expense, representing the fair value of the stock at the measurement date of the award, is recognized over the vesting period.

Historically, awards have been granted in the form of stock options and restricted stock. In fiscal 2010, Spartan Stores also granted restricted stock units (“RSU’s”) to certain executive employees of the Company. The RSU’s had a service condition and a performance condition that was to be met in order for the awards to vest. The performance condition was not met in fiscal 2010. In addition, no RSU’s were granted in fiscal 2011 or 2012 and none are planned to be issued in fiscal 2013.

67

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes restricted stock activity for the three years ended March 31, 2012:

	Shares			Weighted Average Grant-Date Fair Value
Outstanding and nonvested at March 28, 2009		590,693			19.12
Granted		333,746			13.88
Vested		(202,896	)		15.61
Forfeited		(102,821	)		14.06
Outstanding and nonvested at March 27, 2010		618,722			18.28
Granted		216,890			15.37
Vested		(280,437	)		18.21
Forfeited		(7,404	)		16.99
Outstanding and nonvested at March 26, 2011		547,771		$	16.99
Granted		222,848			16.06
Vested		(175,433	)		17.60
Forfeited		(14,293	)		15.67
Outstanding and nonvested at March 31, 2012		580,893		$	16.48

The total fair value of shares vested during fiscal years 2012, 2011 and 2010 was $2.8 million, $4.3 million and $3.2 million, respectively.

Share-based compensation expense recognized and included in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings and related tax benefits were as follows:

(In thousands)	2012			2011			2010
Stock options	$	1,238		$	929		$	1,067
Restricted stock		3,810			4,443			3,560
Tax benefits		(1,928	)		(2,081	)		(1,792	)
	$	3,120		$	3,291		$	2,835

As of March 31, 2012, total unrecognized compensation cost related to non-vested share-based awards granted under the stock incentive plans was $0.2 million for stock options and $6.1 million for restricted stock. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 0.8 years for stock options and 2.5 years for restricted stock.

Spartan Stores recognized tax deductions of $3.5 million, $4.6 million and $3.3 million related to the exercise of stock options and the vesting of restricted stock during fiscal years 2012, 2011 and 2010, respectively.

Spartan Stores has a stock bonus plan covering 300,000 shares of Spartan Stores common stock. Under the provisions of this plan, certain officers and key associates of Spartan Stores may elect to receive a portion of their annual bonus in common stock rather than cash and will be granted additional shares of common stock worth 30% of the portion of the bonus they elect to receive in stock. Compensation expense is recorded based upon the market price of the stock as of the measurement date. A total of 82,647 shares remained unissued under the plan at March 31, 2012.

68

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Spartan Stores has an associate stock purchase plan covering 200,000 shares of Spartan Stores common stock. The plan provides that associates of Spartan Stores and its subsidiaries may purchase shares at 95% of the fair market value. 19,755 shares had been issued under the plan at March 31, 2012,.

Note 13

Supplemental Cash Flow Information

Non-cash financing activities include the issuance of restricted stock to employees and directors of $3.6 million, $3.3 million and $4.6 million for fiscal years 2012, 2011 and 2010, respectively. Non-cash investing activities also include capital expenditures included in accounts payable of $3.3 million, $4.0 million and $2.3 million for fiscal years 2012, 2011 and 2010 respectively.

Note 14

Discontinued Operations

Certain of our retail and grocery distribution operations have been recorded as discontinued operations. Results of the discontinued operations are excluded from the accompanying notes to the condensed consolidated financial statements for all periods presented, unless otherwise noted.

The results of discontinued operations reported on the Consolidated Statements of Earnings are reported net of tax.

Discontinued operations did not have sales for fiscal years 2012, 2011 and 2010. Significant assets and liabilities of discontinued operations are as follows:

(In thousands)	March 31, 2012		March 26, 2011
Current assets	$	1,589	$	2,365
Property, net		4,001		5,001
Other long-term assets		1463		434
Current liabilities		268		1,490
Long-term liabilities		74		10

Note 15

Reporting Segment Information

Spartan Stores has two reportable segments. The Distribution segment supplies independent retail customers and its own retail stores with dry grocery, produce, dairy, meat, delicatessen, bakery, beverages, frozen food, seafood, floral, general merchandise, pharmacy and health and beauty care items. Sales to independent retail customers and inter-segment sales are recorded based upon a “cost plus” model for grocery, frozen, dairy, pharmacy and health and beauty care items and a “variable mark-up” model for meat, deli, bakery, produce, seafood, floral and general merchandise products. To supply its wholesale customers, Spartan Stores operates a fleet of tractors, conventional trailers and refrigerated trailers, substantially all of which are leased by Spartan Stores.

The Retail segment operates supermarkets in Michigan that typically offer dry grocery, produce, frozen, dairy, meat, beverages, floral, seafood, health and beauty care, delicatessen and bakery goods. Additionally, complementing these offerings, approximately 69% of the stores offer pharmacy services and 27 fuel centers were in operation as of March 31, 2012.

Identifiable assets represent total assets directly associated with the reporting segments. Eliminations in assets identified to segments include intercompany receivables, payables and investments.

69

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth information about Spartan Stores by reporting segment:

(In thousands)	Distribution		Retail		Total
Year Ended March 31, 2012
Net sales to external customers	$	1,138,739	$	1,495,487	$	2,634,226
Inter-segment sales		660,400		—		660,400
Depreciation and amortization		8,444		28,350		36,794
Operating earnings		44,292		22,191		66,483
Capital expenditures		9,375		33,143		42,518
Year Ended March 26, 2011
Net sales to external customers	$	1,089,689	$	1,443,375	$	2,533,064
Inter-segment sales		663,827		—		663,827
Depreciation and amortization		8,465		26,693		35,158
Operating earnings		47,987		19,979		67,966
Capital expenditures		8,800		24,229		33,029
Year Ended March 27, 2010
Net sales to external customers	$	1,091,285	$	1,460,671	$	2,551,956
Inter-segment sales		687,423		—		687,423
Depreciation and amortization		8,598		26,042		34,640
Operating earnings		38,073		20,591		58,664
Capital expenditures		7,347		43,125		50,472
(In thousands)	2012		2011		2010
Total Assets at Year End
Distribution	$	216,873	$	261,028	$	237,480
Retail		541,110		484,839		510,486
Discontinued operations		5,490		5,529		5,515
Total	$	763,473	$	751,396	$	753,481

Spartan Stores offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. The following table presents sales by type of similar product and services:

(Dollars in thousands)	2012				2011				2010
Non-perishables (1)	$	1,293,147	49	%	$	1,297,719	51	%	$	1,367,298	53	%
Perishables (2)		933,545	36			906,945	36			895,005	35
Fuel		219,903	8			123,262	5			95,937	4
Pharmacy		187,631	7			205,138	8			193,716	8
Consolidated net sales	$	2,634,226	100	%	$	2,533,064	100	%	$	2,551,956	100	%

(1) Consists primarily of general merchandise, grocery, beverages, snacks and frozen foods.

(2) Consists primarily of produce, dairy, meat, bakery, deli, floral and seafood.

70

SPARTAN STORES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16

Quarterly Financial Information (unaudited)

Earnings per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year. Common stock prices are the high and low sales prices for transactions reported on the NASDAQ Global Select Market for each period.

(In thousands, except per share data)	Full Year (53 weeks)			4th Quarter (13 weeks)		3rd Quarter (16 weeks)			2nd Quarter (12 weeks)			1st Quarter (12 weeks)
Fiscal 2012
Net sales	$	2,634,226		$	614,773	$	797,242		$	619,647		$	602,564
Gross margin		556,110			135,086		162,950			132,737			125,337
Restructuring, asset impairment and other		(23	)		114		(2	)		(135	)		—
Earnings from continuing operations before income taxes		51,556			16,369		7,752			16,611			10,824
Earnings from continuing operations		31,870			10,477		4,988			10,270			6,135
Discontinued operations, net of taxes		(112	)		23		(11	)		(18	)		(106	)
Net earnings		31,758			10,500		4,977			10,252			6,029
Earnings from continuing operations per share:
Basic	$	1.40		$	0.46	$	0.22		$	0.45		$	0.27
Diluted		1.39			0.46		0.22			0.45			0.27
Net earnings per share:
Basic	$	1.39		$	0.46	$	0.22		$	0.45		$	0.27
Diluted		1.39			0.46		0.22			0.45			0.26
Dividends	$	5,926		$	1,469	$	1,487		$	1,486		$	1,484
Common stock price – High		21.37			19.24		19.21			21.37			19.81
Common stock price – Low		14.01			16.95		14.01			14.06			14.35

(In thousands, except per share data)	Full Year (52 weeks)			4th Quarter (12 weeks)		3rd Quarter (16 weeks)			2nd Quarter (12 weeks)			1st Quarter (12 weeks)
Fiscal 2011
Net sales	$	2,533,064		$	571,471	$	782,300		$	602,056		$	577,237
Gross margin		556,515			129,821		164,807			135,198			126,689
Restructuring, asset impairment and other		532			192		(2,425	)		183			2,582
Earnings from continuing operations before income taxes		52,959			12,480		11,922			18,589			9,968
Earnings from continuing operations		32,539			7,649		7,470			11,345			6,075
Discontinued operations, net of taxes		(232	)		124		(162	)		(106	)		(88	)
Net earnings		32,307			7,773		7,308			11,239			5,987
Earnings from continuing operations per share:
Basic	$	1.44		$	0.34	$	0.33		$	0.50		$	0.27
Diluted		1.43			0.34		0.33			0.50			0.26
Net earnings per share:
Basic	$	1.43		$	0.34	$	0.32		$	0.50		$	0.27
Diluted		1.42			0.34		0.32			0.50			0.26
Dividends	$	4,525		$	1,131	$	1,133		$	1,131		$	1,130
Common stock price – High		17.80			17.75		17.80			14.94			17.22
Common stock price – Low		12.76			13.95		13.21			12.76			13.45

71

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

Not applicable.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of Spartan Stores’ disclosure controls and procedures (as currently defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) was performed as of March 31, 2012 (the “Evaluation Date”). This evaluation was performed under the supervision and with the participation of Spartan Stores’ management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). As of the Evaluation Date, Spartan Stores’ management, including the CEO and CFO, concluded that Spartan Stores’ disclosure controls and procedures were effective as of the Evaluation Date to ensure that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities and Exchange Act of 1934 is accumulated and communicated to management, including our principal executive and principal financial officers as appropriate to allow for timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

The management of Spartan Stores, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Spartan Stores’ internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores’ assets that could have a material effect on the financial statements.

Management of Spartan Stores conducted an evaluation of the effectiveness of its internal controls over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Through this evaluation, management did not identify any material weakness in the Company’s internal control. There are inherent limitations in the effectiveness of any system of internal control over financial reporting. Based on the evaluation, management has concluded that Spartan Stores’ internal control over financial reporting was effective as of March 31, 2012.

The registered public accounting firm that audited the consolidated financial statements included in this Form 10-K Annual Report has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of March 31, 2012 as stated in their report on the following page.

72

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Spartan Stores, Inc. and Subsidiaries

Grand Rapids, MI

We have audited the internal control over financial reporting of Spartan Stores, Inc. and subsidiaries (the "Company") as of March 31, 2012, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2012, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended March 31, 2012 of the Company and our report dated May 22, 2012 expressed an unqualified opinion on those consolidated financial statements,

/s/ Deloitte & Touche LLP

Grand Rapids, Michigan

May 22, 2012

73

Changes in Internal Controls Over Financial Reporting

During the last fiscal quarter, there was no change in Spartan Stores’ internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Spartan Stores’ internal control over financial reporting.

Item 9B. Other Information

None.

74

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is here incorporated by reference from the sections titled “The Board of Directors,” “Spartan Stores’ Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance Principles,” and “Transactions with Related Persons” in Spartan Stores’ definitive proxy statement relating to its annual meeting of shareholders to be held in 2012.

Item 11. Executive Compensation

The information required by this item is here incorporated by reference from the sections entitled “Executive Compensation,” “Potential Payments Upon Termination or Change in Control,” “Compensation of Directors,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in Spartan Stores’ definitive proxy statement relating to its annual meeting of shareholders to be held in 2012.

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

The information required by this item is here incorporated by reference from the section titled “Ownership of Spartan Stores Stock” in Spartan Stores’ definitive proxy statement relating to its annual meeting of shareholders to be held in 2012.

The following table provides information about Spartan Stores’ equity compensation plans regarding the number of securities to be issued under these plans, the weighted-average exercise prices of options outstanding under these plans and the number of securities available for future issuance as of the end of fiscal 2012.

EQUITY COMPENSATION PLANS

	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category	(a)		(b)		(c)
Equity compensation plans approved by security holders (1)		703,129	$	18.43		1,045,585
Equity compensation plans not approved by security holders		—		Not applicable		—
Total		703,129	$	18.43		1,045,585

(1) Consists of the Spartan Stores, Inc. 1991 Stock Option Plan, the Spartan Stores, Inc. 2001 Stock Incentive Plan, the Spartan Stores, Inc. 2001 Stock Bonus Plan, and the Stock Incentive Plan of 2005. Stock options may no longer be issued under the 1991 Stock Option Plan. The numbers of shares reflected in column (c) in the table above with respect to the Stock Incentive Plan of 2005 (1,136,758 shares), the 2001 Stock Incentive Plan (45,061 shares) and the 2001 Stock Bonus Plan (114,224 shares) represent shares that may be issued other than upon the exercise of an option, warrant or right. Each plan listed above contains customary anti-dilution provisions that are applicable in the event of a stock split or certain other changes in Spartan Stores’ capitalization.

75

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is here incorporated by reference from the section titled “Transactions with Related Persons” and the table captioned “Board of Directors Committee Membership” in Spartan Stores’ definitive proxy statement relating to its annual meeting of shareholders to be held in 2012.

Item 14. Principal Accountant Fees and Services

The information required by this item is here incorporated by reference from the section titled “Independent Auditors” in Spartan Stores’ definitive proxy statement relating to its annual meeting of shareholders to be held in 2012.

76

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Report:

1. Financial Statements.

A. In Item 8.

Reports of Independent Registered Public Accounting Firm of Deloitte & Touche LLP dated May 22, 2012

Consolidated Balance Sheets at March 31, 2012 and March 26, 2011

Consolidated Statements of Earnings for each of the three years in the period ended March 31, 2012

Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended March 31, 2012

Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2012

Notes to Consolidated Financial Statements

2. Financial Statement Schedules.

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

77

3. Exhibits.

Exhibit Number	Document
2.1	Asset Purchase Agreement dated October 13, 2008 by and among VG’s Food Center, Inc. and VG’s Pharmacy, Inc. as Seller and Family Fare, LLC as Purchaser. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K filed October 15, 2008. Here incorporated by reference. Exhibits and schedules to this agreement are listed and identified in the agreement. Omitted exhibits and schedules will be furnished supplementally to the Commission upon request.
3.1	Restated Articles of Incorporation of Spartan Stores, Inc. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ended January 1, 2011. Here incorporated by reference.
3.2	Bylaws of Spartan Stores, Inc., as amended. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ended September 10, 2011. Here incorporated by reference.
4.1	Indenture by and between Spartan Stores, Inc. and The Bank of New York Trust Company, N.A. as Trustee dated as of May 30, 2007. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed May 30, 2007. Here incorporated by reference.
4.2	Registration Rights Agreement among Spartan Stores, Inc. and Banc of America Securities LLC and Bear, Stearns & Co., Inc., as representatives of the Initial Purchasers named therein dated as of May 30, 2007. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed May 30, 2007. Here incorporated by reference.
4.3	Form of 3.375% Convertible Senior Note due 2027. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed May 30, 2007. Here incorporated by reference.
10.1	Purchase Agreement by and among Spartan Stores, Inc. and the Initial Purchasers named therein dated as of May 23, 2007. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 28, 2009. Here incorporated by reference.
10.2	Loan and Security Agreement dated December 23, 2003, by and among Spartan Stores, Inc. and certain subsidiaries as borrowers, Congress Financial Corporation (Central) as agent, the lenders named therein as lenders, and joined in by certain subsidiaries of Spartan Stores, Inc. as guarantors. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 28, 2009. Here incorporated by reference.
10.3	Amendment No. 2 to Loan and Security Agreement dated December 22, 2004, between Spartan Stores, Inc. and its subsidiaries and Congress Financial Corporation, Key Bank National Association, Fleet Capital Corporation, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 26, 2011. Here incorporated by reference.
10.4	Amendment No. 3 to Loan and Security Agreement dated December 9, 2005 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America Leasing & Capital, LLC, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 26, 2011. Here incorporated by reference.
10.5	Amendment No. 4 to Loan and Security Agreement dated March 17, 2006 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America Leasing & Capital, LLC, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 26, 2011. Here incorporated by reference.

78

Exhibit Number	Document
10.6	Amendment No. 5 to Loan and Security Agreement dated April 5, 2007 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America Leasing & Capital, LLC, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank.
10.7	Amendment No. 6 to Loan and Security Agreement dated May 22, 2007 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America N.A., National City Business Credit, Inc., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 28, 2009. Here incorporated by reference.
10.8	Amendment No. 7 to Loan and Security Agreement dated May 20, 2009 between Spartan Stores, Inc. and subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America N.A., National City Business Credit, Inc., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K filed May 22, 2009. Here incorporated by reference.
10.9	Amendment No. 8 to Loan and Security Agreement dated May 4, 2010 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America N.A., National City Business Credit, Inc., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K on May 7, 2010. Here incorporated by reference.
10.10	Amendment No. 9 to Loan and Security Agreement dated September 30, 2010 between Spartan Stores, Inc. and its subsidiaries and Wells Fargo Capital Finance, LLC, Key Bank National Association, Bank of America, N.A., PNC Bank N.A., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on October 5, 2010. Here incorporated by reference.
10.11	Amendment No. 10 to Loan and Security Agreement dated July 19, 2011 between Spartan Stores, Inc. and its subsidiaries and Wells Fargo Capital Finance, LLC, Wells Fargo Bank, N.A., Key Bank National Association, Bank of America, N.A., PNC Bank N.A., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on July 20, 2011. Here incorporated by reference.
10.12	Letter Agreement between Spartan Stores, Inc. and Wachovia Capital Finance Corporation (Central) as Agent for the Lenders, dated August 17, 2007. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed August 17, 2007. Here incorporated by reference.
10.13*	Spartan Stores, Inc. Executive Cash Incentive Plan of 2010 as amended. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K on August 12, 2010. Here incorporated by reference.
10.14*	Form of Long-Term Executive Incentive Plan Award for fiscal 2012. Previously filed as an exhibit to Spartan Stores' Quarterly Report on Form 10-Q for the quarter ended June 18, 2011. Here incorporated by reference.
10.15	Form of Amended and Restated Long-Term Executive Incentive Plan Award for fiscal 2011. Previously filed as an exhibit to Spartan Stores' Quarterly Report on Form 10-Q for the quarter ended June 18, 2011. Here incorporated by reference.
10.16*	Spartan Stores, Inc. Stock Incentive Plan of 2005, as amended. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 27, 2010. Here incorporated by reference.

79

Exhibit Number	Document
10.17*	Determination of Compensation Committee pursuant to the Spartan Stores, Inc. Stock Incentive Plan of 2005. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on August 3, 2009. Here incorporated by reference.
10.18*	Spartan Stores, Inc. Supplemental Executive Retirement Plan, as amended. Previously filed as an as an exhibit to Spartan Stores' Annual Report on Form 10-K for the year ended March 27, 2010. Here incorporated by reference.
10.19*	Spartan Stores, Inc. Supplemental Executive Savings Plan. Previously filed as an exhibit to Spartan Stores Form S-8 Registration Statement filed on December 21, 2001. Here incorporated by reference.
10.20*	Spartan Stores, Inc. Cash Incentive Plan of 2010 as amended. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ended June 19, 2010. Here incorporated by reference.
10.21*	Spartan Stores, Inc. 2001 Stock Incentive Plan. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 31, 2007. Here incorporated by reference.
10.22*	Form of Restricted Stock Award to officers, dated May 17, 2011. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 18, 2011. Here incorporated by reference.
10.23*	Form of Restricted Stock Award to non-employee directors, dated May 17, 2011. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 18, 2011. Here incorporated by reference.
10.24	Form of Stock Option Award to executive officers. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 20, 2009. Here incorporated by reference.
10.25	Form of Stock Option Award to non-employee directors. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 20, 2009. Here incorporated by reference.
10.26*	Form of Executive Employment Agreement between Spartan Stores, Inc. and certain executive officers, as amended
10.27*	Form of Executive Severance Agreement between Spartan Stores, Inc. and certain executive officers as previously amended
10.28*	Form of Amendment to Executive Severance Agreements. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on June 1, 2010. Here incorporated by reference.
12.1	Computation of Ratio of Earnings to Fixed Charges
21	Subsidiaries of Spartan Stores, Inc.
23	Consent of Independent Registered Public Accounting Firm.
24	Powers of Attorney.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release Number 33-8212.

80

Exhibit Number	Document
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* These documents are management contracts or compensation plans or arrangements required to be filed as exhibits to this Form 10-K.

81

SIGNATURES

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

	SPARTAN STORES, INC. (Registrant)
Date:  May 22, 2012	By	/S/    DENNIS EIDSON
		Dennis Eidson President and Chief Executive Officer (Principal 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 Spartan Stores, Inc. and in the capacities and on the dates indicated.

May 22, 2012	By	*
		M. Shân Atkins Director
May 22, 2012	By	/S/    DENNIS EIDSON
		Dennis Eidson President, Chief Executive Officer and Director (Principal Executive Officer)
May 22, 2012	By	*
		Dr. Frank M. Gambino Director
May 22, 2012	By	*
		Frederick S. Morganthall, II Director
May 22, 2012	By	*
		Elizabeth A. Nickels Director
May 22, 2012	By	*
		Timothy J. O’Donovan Director
May 22, 2012	By	*
		Craig C. Sturken Chairman and Director
May 22, 2012	By	*
		Wendy A. Beck Director
May 22, 2012	By	*
		Yvonne R. Jackson Director

1

May 22, 2012	By	/S/    DAVID M. STAPLES
		David M. Staples Executive Vice President and Chief Financial Officer (Principal Accounting Officer)
May 22, 2012	*By	/S/    DENNIS EIDSON
		Dennis Eidson Attorney-in-Fact

2

EXHIBIT INDEX

Exhibit Number	Document
2.1	Asset Purchase Agreement dated October 13, 2008 by and among VG’s Food Center, Inc. and VG’s Pharmacy, Inc. as Seller and Family Fare, LLC as Purchaser. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K filed October 15, 2008. Here incorporated by reference. Exhibits and schedules to this agreement are listed and identified in the agreement. Omitted exhibits and schedules will be furnished supplementally to the Commission upon request.
3.1	Restated Articles of Incorporation of Spartan Stores, Inc. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ended January 1, 2011. Here incorporated by reference.
3.2	Bylaws of Spartan Stores, Inc., as amended. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ended September 10, 2011. Here incorporated by reference.
4.1	Indenture by and between Spartan Stores, Inc. and The Bank of New York Trust Company, N.A. as Trustee dated as of May 30, 2007. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed May 30, 2007. Here incorporated by reference.
4.2	Registration Rights Agreement among Spartan Stores, Inc. and Banc of America Securities LLC and Bear, Stearns & Co., Inc., as representatives of the Initial Purchasers named therein dated as of May 30, 2007. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed May 30, 2007. Here incorporated by reference.
4.3	Form of 3.375% Convertible Senior Note due 2027. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed May 30, 2007. Here incorporated by reference.
10.1	Purchase Agreement by and among Spartan Stores, Inc. and the Initial Purchasers named therein dated as of May 23, 2007. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 28, 2009. Here incorporated by reference.
10.2	Loan and Security Agreement dated December 23, 2003, by and among Spartan Stores, Inc. and certain subsidiaries as borrowers, Congress Financial Corporation (Central) as agent, the lenders named therein as lenders, and joined in by certain subsidiaries of Spartan Stores, Inc. as guarantors. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 28, 2009. Here incorporated by reference.
10.3	Amendment No. 2 to Loan and Security Agreement dated December 22, 2004, between Spartan Stores, Inc. and its subsidiaries and Congress Financial Corporation, Key Bank National Association, Fleet Capital Corporation, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 26, 2011. Here incorporated by reference.
10.4	Amendment No. 3 to Loan and Security Agreement dated December 9, 2005 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America Leasing & Capital, LLC, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 26, 2011. Here incorporated by reference.
10.5	Amendment No. 4 to Loan and Security Agreement dated March 17, 2006 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America Leasing & Capital, LLC, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 26, 2011. Here incorporated by reference.

Exhibit Number	Document
10.6	Amendment No. 5 to Loan and Security Agreement dated April 5, 2007 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America Leasing & Capital, LLC, National City Business Credit, General Electric Capital Corporation, and Fifth Third Bank.
10.7	Amendment No. 6 to Loan and Security Agreement dated May 22, 2007 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America N.A., National City Business Credit, Inc., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 28, 2009. Here incorporated by reference.
10.8	Amendment No. 7 to Loan and Security Agreement dated May 20, 2009 between Spartan Stores, Inc. and subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America N.A., National City Business Credit, Inc., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K filed May 22, 2009. Here incorporated by reference.
10.9	Amendment No. 8 to Loan and Security Agreement dated May 4, 2010 between Spartan Stores, Inc. and its subsidiaries and Wachovia Capital Finance Corporation (Central), Key Bank National Association, Bank of America N.A., National City Business Credit, Inc., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K on May 7, 2010. Here incorporated by reference.
10.10	Amendment No. 9 to Loan and Security Agreement dated September 30, 2010 between Spartan Stores, Inc. and its subsidiaries and Wells Fargo Capital Finance, LLC, Key Bank National Association, Bank of America, N.A., PNC Bank N.A., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on October 5, 2010. Here incorporated by reference.
10.11	Amendment No. 10 to Loan and Security Agreement dated July 19, 2011 between Spartan Stores, Inc. and its subsidiaries and Wells Fargo Capital Finance, LLC, Wells Fargo Bank, N.A., Key Bank National Association, Bank of America, N.A., PNC Bank N.A., General Electric Capital Corporation, and Fifth Third Bank. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on July 20, 2011. Here incorporated by reference.
10.12	Letter Agreement between Spartan Stores, Inc. and Wachovia Capital Finance Corporation (Central) as Agent for the Lenders, dated August 17, 2007. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K, filed August 17, 2007. Here incorporated by reference.
10.13*	Spartan Stores, Inc. Executive Cash Incentive Plan of 2010 as amended. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K on August 12, 2010. Here incorporated by reference.
10.14*	Form of Long-Term Executive Incentive Plan Award for fiscal 2012. Previously filed as an exhibit to Spartan Stores' Quarterly Report on Form 10-Q for the quarter ended June 18, 2011. Here incorporated by reference.
10.15	Form of Amended and Restated Long-Term Executive Incentive Plan Award for fiscal 2011. Previously filed as an exhibit to Spartan Stores' Quarterly Report on Form 10-Q for the quarter ended June 18, 2011. Here incorporated by reference.
10.16*	Spartan Stores, Inc. Stock Incentive Plan of 2005, as amended. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 27, 2010. Here incorporated by reference.

Exhibit Number	Document
10.17*	Determination of Compensation Committee pursuant to the Spartan Stores, Inc. Stock Incentive Plan of 2005. Previously filed as an exhibit to Spartan Stores’ Current Report on Form 8-K on August 3, 2009. Here incorporated by reference.
10.18*	Spartan Stores, Inc. Supplemental Executive Retirement Plan, as amended. Previously filed as an as an exhibit to Spartan Stores' Annual Report on Form 10-K for the year ended March 27, 2010. Here incorporated by reference.
10.19*	Spartan Stores, Inc. Supplemental Executive Savings Plan. Previously filed as an exhibit to Spartan Stores Form S-8 Registration Statement filed on December 21, 2001. Here incorporated by reference.
10.20*	Spartan Stores, Inc. Cash Incentive Plan of 2010 as amended. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ended June 19, 2010. Here incorporated by reference.
10.21*	Spartan Stores, Inc. 2001 Stock Incentive Plan. Previously filed as an exhibit to Spartan Stores’ Annual Report on Form 10-K for the year ended March 31, 2007. Here incorporated by reference.
10.22*	Form of Restricted Stock Award to officers, dated May 17, 2011. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 18, 2011. Here incorporated by reference.
10.23*	Form of Restricted Stock Award to non-employee directors, dated May 17, 2011. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 18, 2011. Here incorporated by reference.
10.24	Form of Stock Option Award to executive officers. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 20, 2009. Here incorporated by reference.
10.25	Form of Stock Option Award to non-employee directors. Previously filed as an exhibit to Spartan Stores’ Quarterly Report on Form 10-Q for the quarter ending June 20, 2009. Here incorporated by reference.
10.26*	Form of Executive Employment Agreement between Spartan Stores, Inc. and certain executive officers, as amended.
10.27*	Form of Executive Severance Agreement between Spartan Stores, Inc. and certain executive officers, as amended.
10.28*	Form of Amendment to Executive Severance Agreements. Previously filed as an exhibit to Spartan Stores' Current Report on Form 8-K on June 1, 2010. Here incorporated by reference.
12.1	Computation of Ratio of Earnings to Fixed Charges
21	Subsidiaries of Spartan Stores, Inc.
23	Consent of Independent Registered Public Accounting Firm.
24	Powers of Attorney.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to 18 U.S.C. § 1350. This exhibit is furnished, not filed, in accordance with SEC Release Number 33-8212.

Exhibit Number	Document
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* These documents are management contracts or compensation plans or arrangements required to be filed as exhibits to this Form 10-K.

EX-10.6

Exhibit 10.6

[Execution]

AMENDMENT NO. 5 TO

LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT, dated as of April 5, 2007, by and among Spartan Stores, Inc., a Michigan corporation (“Lead Borrower”), Spartan Stores Distribution, LLC, a Michigan limited liability company (“Stores Distribution”), UWG Company, formerly known as United Wholesale Grocery Company, a Michigan corporation (“United”), Market Development Corporation, a Michigan corporation (“MDC”), Spartan Stores Associates, LLC, a Michigan limited liability company (“Associates”), Family Fare, LLC, a Michigan limited liability company (“Family Fare”), MSFC, LLC, a Michigan limited liability company (“MSFC”), Seaway Food Town, Inc., a Michigan corporation (“Seaway”), The Pharm of Michigan, Inc., a Michigan corporation(“Pharm”), Valley Farm Distributing Co., an Ohio corporation (“Valley Farm”), Gruber’s Food Town, Inc., a Michigan corporation (“Gruber Food Town”), Gruber’s Real Estate, LLC, a Michigan limited liability company (“Gruber RE”), Prevo’s Family Markets, Inc., a Michigan corporation (“Prevo”), Custer Pharmacy, Inc., a Michigan corporation (“Custer”), Buckeye Real Estate Management Co., an Ohio corporation (“Buckeye”), Spartan Stores Fuel, LLC, a Michigan limited liability company (“Spartan Fuel”, and together with Lead Borrower, Stores Distribution, United, MDC, Associates, Family Fare, MSFC, Seaway, Pharm, Valley Farm, Gruber Food Town, Gruber RE, Prevo, Custer and Buckeye, each individually a “Borrower” and collectively, “Borrowers”), Spartan Stores Holding, Inc., a Michigan corporation (“Holding”), SI Insurance Agency, Inc., a Michigan corporation (“SI”), JFW Distributing Company, a Michigan corporation (“JFW”), LLJ Distributing Company, a Michigan corporation (“LLJ”, and together with Holding, SI and JFW, each individually a “Guarantor” and collectively, “Guarantors”), the parties to the Loan Agreement (as hereinafter defined) from time to time as lenders (each individually, a “Lender” and collectively, “Lenders”) and Wachovia Capital Finance Corporation (Central), formerly known as Congress Financial Corporation (Central), an Illinois corporation, in its capacity as agent for Lenders (in such capacity, “Agent”).

W I T N E S S E T H :

WHEREAS, Borrowers and Guarantors have entered into financing arrangements with Agent and Lenders pursuant to which Lenders (or Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Loan and Security Agreement, dated December 23, 2003, by and among Borrowers, Guarantors, Agent and Lenders, as amended and supplemented by Amendment No. 1 to Loan and Security Agreement, dated as of July 29, 2004, and Amendment No. 2 to Loan and Security Agreement, dated as of December 22, 2004, Amendment No. 3 to Loan and Security Agreement, dated as of December 9, 2005 and Amendment No. 4 to Loan and Security Agreement, dated as of March 17, 2006 (as the same now exists and is amended and supplemented pursuant hereto and may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”) and the other Financing Agreements (as defined therein); and

WHEREAS, Lead Borrower has requested Agent and Lenders agree to certain amendments to the Loan Agreement, and Agent and Lenders are willing to agree to such amendments, subject to the terms and conditions herein; and

WHEREAS, by this Amendment No. 5, Borrowers, Guarantors, Agent and Lenders desire and intend to evidence such amendments;

NOW THEREFORE, in consideration of the foregoing, the mutual agreements and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions.

1.1 Additional Definitions.

(a) As used herein, the following terms shall have the meanings given to them below, and the Loan Agreement and the other Financing Agreements are hereby amended to include, in addition and not in limitation, the following definitions:

(i) “Amendment No. 5” shall mean this Amendment No. 5 to Loan and Security Agreement by and among Borrowers, Guarantors, Agent and Lenders, as it now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

(ii) “Amendment No. 5 Effective Date” shall mean the first date on which all of the conditions precedent to the effectiveness of Amendment No. 5 shall have been satisfied or waived in writing.

(iii) “Fixed Charge Coverage Ratio” shall mean, as to any Person, with respect to any period, the ratio of (a) the amount equal to EBITDA of such Person for such period to (b) the Fixed Charges of such Person for such period.

(iv) “Fixed Charges” shall mean, as to any Person, with respect to any period, the sum of, without duplication, (a) all Interest Expense during such period, plus (b) all Capital Expenditures during such period, plus (c) all regularly scheduled (as determined at the beginning of the respective period) principal payments in respect of Indebtedness for borrowed money (excluding payments in respect of Revolving Loans which do not result in a reduction of the Maximum Credit, but including principal payments in respect of the Term B-1 Loans) and Indebtedness with respect to Capital Leases (and without duplicating items (a) and (c) of this definition, the interest component with respect to Indebtedness under Capital Leases) during such period, plus (d) taxes paid during such period in cash, plus (e) the amount of reductions in the Fixed Asset Availability (without duplication in respect of any payments made as a result of such reduction) during such period.

(b) As used herein, the following terms shall have the meanings given to them below, and as of the Term B-1 Loan Funding Date, the Loan Agreement and the other Financing Agreements shall be amended to include, in addition and not in limitation, the following definitions:

2

(i) “Enforcement Action” shall mean the exercise by Agent (or its assignee or designee) of any of its material enforcement rights and remedies as a secured creditor hereunder or under the other Financing Agreements, applicable law or otherwise, in respect of any of the Collateral, at any time following the occurrence of an Event of Default (including, without limitation, the demand for the immediate payment of all or any portion of the Obligations, the solicitation of bids from third parties to conduct the liquidation or collection of any of the Collateral, the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers or other third parties for the purposes of valuing, marketing, promoting and selling any of the Collateral, making a motion seeking to lift the automatic stay in any bankruptcy or insolvency proceeding, or opposing the sale of assets constituting Collateral in any bankruptcy or insolvency proceeding, the commencement of any action to foreclose on the security interests or liens of Agent in all or any material portion of the Collateral or commencement of any legal proceedings or actions against Borrowers or with respect to all or any portion of the Collateral).

(ii) “Priority Event” shall mean the occurrence of any one or more of the following: (A) the occurrence and continuance of an Event of Default under Section 10.1(a)(i) of the Loan Agreement with respect to any Borrower’s failure to pay when due any of the Obligations arising pursuant to the Revolving Loans (including principal, interest, fees and expenses attributable thereto); (B) the occurrence and continuance of an Event of Default under Sections 10.1(e), 10.1(f) or 10.1(g) of the Loan Agreement; or (C) the occurrence of any other Event of Default and the acceleration of the payment of all or a material portion of the Obligations.

(iii) “Required Term B-1 Loan Lenders” shall mean, at any time, those Term B-1 Loan Lenders whose Pro Rata Shares aggregate fifty-one (51%) percent or more of the aggregate of the Term B-1 Loan Commitments of all Term B-1 Loan Lenders.

(iv) “Revolving Loan Commitment” shall mean, at any time, as to each Revolving Loan Lender, the principal amount set forth on Exhibit A to this Amendment No. 5 for such Lender or on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which any person becomes a Revolving Loan Lender after the Amendment No. 5 Effective Date in accordance with the provisions of Section 13.7 of the Loan Agreement, as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as “Revolving Loan Commitments”; provided, that, effective on the first day of each calendar month commencing with the first day of the month immediately following the Term B-1 Loan Funding Date, the Revolving Loan Commitment of each Revolving Loan Lender which also has a Term B-1 Loan Commitment shall be increased based on its Pro Rata Share so that the aggregate amount of the Revolving Loan Commitments equal the amount of the Revolving Loan Limit as so increased as of such day.

(v) “Revolving Loan Lender” shall mean a Lender with a Revolving Loan Commitment; sometimes being referred to herein collectively as “Revolving Loan Lenders”.

(vi) “Revolving Loan Limit” shall mean, at any time, the amount equal to the Maximum Credit minus the then outstanding Total Term B-1 Loan Commitments.

3

(vii) “Revolving Loans” shall mean the loans now or hereafter made by or on behalf of any Revolving Loan Lender or by Agent or the account of any Revolving Loan Lender on a revolving basis pursuant to the Credit Facility (involving advances, repayment and readvances) as set forth in Section 2.1 of the Loan Agreement.

(viii) “Term B-1 Loans” shall mean the term loans made by or on behalf of any Term B-1 Loan Lender or by Agent for the account of any Term B-1 Loan Lender as set forth in Section 2.1 of this Amendment No. 5.

(ix) “Term B-1 Loan Action Default” shall mean an Event of Default under Sections 10.1(a)(i), 10.1(d), 10.1(e), 10.1(f), 10.1(i), 10.1(l) or 10.1(m), or 10.1(a)(ii) and 10.1(a)(iii) of the Loan Agreement (to the extent arising as a result of the failure to comply with Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.17 or 9.18 of the Loan Agreement), in each case after giving effect to all applicable cure periods, if any.

(x) “Term B-1 Loan Commitment” shall mean, at any time, as to each Term B-1 Loan Lender, the principal amount set forth on Exhibit B to this Amendment No. 5 for such Lender or on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which any Lender becomes a Term B-1 Loan Lender (or increases its Term B-1 Loan Commitment) after the Amendment No. 5 Effective Date in accordance with the provisions of Section 13.7 of the Loan Agreement, as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as “Term B-1 Loan Commitments”; provided, that, effective on the first day of each calendar month commencing with the first day of the month immediately following the Term B-1 Loan Funding Date, the Term B-1 Loan Commitment of each Term B-1 Loan Lender shall be decreased by the principal payments made in respect of the Term B-1 Loans in accordance with Section 2.1(b) of this Amendment No. 5 based on its Pro Rata Share so that the aggregate amount of the Term B-1 Loan Commitments equal the principal amount of the Term B-1 Loans then outstanding.

(xi) “Term B-1 Loan Funding Date” shall mean the date on which the Term B-1 Loan Lenders make the Term B-1 Loans to Borrowers.

(xii) “Term B-1 Loan Interest Rate” shall mean a rate equal to two and one-half (2.50%) percent per annum in excess of the Adjusted Eurodollar Rate (as such rate is determined from time to time in accordance with the Loan Agreement), provided, that, the Term B-1 Loan Interest Rate shall be four and one-half (4.50%) percent per annum in excess of the Adjusted Eurodollar Rate, at the option of the Required Term B-1 Loan Lenders, after notice to Agent, for the period from and after the date of the occurrence of any Event of Default, and for so long as such Event of Default is continuing as determined by Agent, notwithstanding anything to the contrary contained herein, if any of the conditions described in Sections 3.3(b)(i), 3.3(b)(ii) or 3.3(b)(iii) of the Loan Agreement exist with respect to Eurodollar Rate Loans, or if the adoption of or any change in any law, treaty, rule or regulation or final, non-appealable determination of an arbitrator or a court or other Governmental Authority or in the interpretation or application thereof, in each case, occurring after the Amendment No. 5 Effective Date shall make it unlawful for a Term B-1 Loan Lender to make or maintain loans based on the Adjusted Eurodollar Rate, then such Term B-1 Loan Lender may, at its option, after notice to Agent, convert the interest rate on the Term B-1 Loan owing to it to one (1%) percent per annum in

4

excess of the Prime Rate (or at the option of such Term B-1 Loan Lender, after notice to Agent, for the period from and after the date of the occurrence of any Event of Default, and for so long as such Event of Default is continuing as determined by Agent, to three (3%) percent per annum in excess of the Prime Rate), and if at any time Agent does not receive a request from Lead Borrower for the Term B-1 Loans to continue as Eurodollar Rate Loans for an additional Interest Period in accordance with Section 3.1(b) of the Loan Agreement, such request shall be deemed made for an Interest Period of one (1) month duration.

(xiii) “Term B-1 Loan Lender” shall mean a Lender with a Term B-1 Loan Commitment; sometimes being referred to herein collectively as “Term B-1 Loan Lenders”.

(xiv) “Total Term B-1 Loan Commitments” shall mean, at any time, the aggregate amount of the Term B-1 Loan Commitments, not to exceed the amount of $25,000,000.

1.2 Amendment to Definitions.

(a) Each of the defined terms in the Loan Agreement or any of the other Financing Agreements set forth below shall be deemed to be amended and restated in their entirety to have the meaning as to such term set forth below:

(i) “Applicable Margin” means, at any time, as to the interest rate for Prime Rate Loans and the interest rate for Eurodollar Rate Loans the applicable percentage (on a per annum basis) set forth below if the Monthly Average Excess Availability for the immediately preceding calendar month is at or within the amounts indicated for such percentage:

Tier	Monthly Average Excess Availability	Applicable Prime Rate Margin	Applicable Eurodollar Rate Margin
1	$50,000,000 or more	0%	1 1/4 %
2	Greater than or equal to $30,000,000 and less than $50,000,000	0%	1 1/2 %
3	Greater than or equal to $15,000,000 and less than $30,000,000	1/4 %	1 3/4 %
4	Less than $15,000,000	1/2 %	2 %

provided, that, the Applicable Margin shall be calculated and established once each calendar month based on the Monthly Average Excess Availability for the immediately preceding calendar month and shall remain in effect until adjusted thereafter as of the first day of the next month. In the event that at any time after the end of a calendar month the Monthly Average Excess Availability for such calendar month used for the determination of the Applicable Margin

5

was greater than the actual amount of the Monthly Average Excess Availability for such calendar month, the Applicable Margin for such prior calendar month shall be adjusted to the applicable percentage based on such actual Monthly Average Excess Availability and any additional interest for the applicable period as a result of such recalculation shall be promptly paid to Agent.

(ii) “Commitment” shall mean, at any time, as to each Lender, the principal amount set forth on Exhibit C to this Amendment No. 5 for each Lender or on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which any person that becomes a Lender hereunder after the date hereof in accordance with the provisions of Section 13.7 of the Loan Agreement, as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as “Commitments”.

(iii) “Excess Availability” shall mean the amount, as determined by Agent, calculated at any date, equal to:

(A) the lesser of: the Borrowing Base and the Maximum Credit (in each case under (1) or (2) after giving effect to any Reserves other than any Reserves in respect of Letter of Credit Accommodations), minus

(B) the sum of: the amount of all then outstanding and unpaid Obligations of such Borrower (but not including for this purpose Obligations of such Borrower arising pursuant to any guarantees in favor of Agent and Lenders of the Obligations of the other Borrowers or on and after the Term B-1 Loan Funding Date, the then outstanding aggregate principal amount of the Term B-1 Loans or any outstanding Letter of Credit Accommodations), plus the amount of all Reserves then established in respect of Letter of Credit Accommodations, plus the aggregate amount of all then outstanding and unpaid trade payables and other obligations of such Borrower which are outstanding more than thirty (30) days past due as of such time (other than trade payables or other obligations being contested or disputed by such Borrower in good faith), plus without duplication, the amount of checks issued by such Borrower to pay trade payables and other obligations which are more than thirty (30) days past due as of such time (other than trade payables or other obligations being contested or disputed by such Borrower in good faith), but not yet sent.

(iv) “Fixed Asset Availability” shall mean the amount equal to the lesser of: (A) the Fixed Asset Availability Limit; or (B) the sum of: seventy (70%) percent of the fair market value of Eligible Real Property as set forth in the most recent acceptable appraisal (or acceptable updates of existing appraisals) of such Real Property received by Agent in accordance with Section 7.4 hereof, plus eighty-five (85%) percent of the forced liquidation value of the Eligible Equipment as set forth in the most recent acceptable appraisal (or acceptable updates of existing appraisals) of such Equipment received by Agent in accordance with Section 7.4 hereof, net of estimated liquidation expenses, costs and commissions; provided, that, commencing on May 1, 2007, the Fixed Asset Availability shall be reduced as of the first day of each month, commencing on May 1, 2007, by an amount equal to the Fixed Asset Availability Limit divided by one hundred and eighty (180).

6

(v) “Maximum Credit” shall mean the amount of $225,000,000; provided, that, at the request of Borrowers, Maximum Credit shall be increased to an amount not to exceed $275,000,000 upon the satisfaction of each of the following conditions as determined by Agent: (a) such financial institutions as are necessary to fund such increased Commitment (which financial institutions shall be satisfactory to Agent in its sole good faith discretion) have become Lenders in accordance with Section 13.7 hereof and Borrowers have paid such additional Lenders all closing and other fees associated therewith and (b) at the time of such request or increase, no Default or Event of Default shall exist or have occurred and be continuing.

(vi) “Prescription File Availability” shall mean the lesser of: eighty (80%) percent of the “net orderly liquidation value” of the Eligible Prescription Files based on the most recent acceptable appraisal thereof received by Agent using the average of the average recovery under each of the percent of script sales method, the dollars per average number of scripts filled per week method and the percent of past year script margin method (or such other methodology or methodologies as may be acceptable to Agent), net of estimated liquidation expenses, costs (such costs and expenses not to be duplicated with the liquidation expenses of the Inventory) and commissions, or $50,000,000.

(b) The definition of “EBITDA” is hereby amended by adding the words “or any replacement tax thereof” following the word “Treasury” in subsection (e) thereof.

(c) As of the Term B-1 Loan Funding Date, each of the defined terms in the Loan Agreement or any of the other Financing Agreements set forth below shall be deemed to be amended and restated in their entirety to have the meaning as to such term set forth below:

(i) “Lenders” shall mean, the financial institutions who are signatories to the Loan Agreement as Lenders and other persons made a party to the Loan Agreement as a Lender in accordance with Section 13.7 of the Loan Agreement, and their respective successors and assigns, including the Revolving Loan Lenders and the Term B-1 Loan Lenders, each sometimes being referred to individually as a “Lender”; except that for purposes of Sections 1.56, 1.74, 1.101, 2.1, 2.2, 3.1, 3.2, 3.3, 6.10, 12.8 and 13.1(c) of the Loan Agreement, all references to the term “Lenders” in such Sections shall be deemed and each such reference is hereby amended to mean the Revolving Loan Lenders only.

(ii) “Loans” shall mean the Revolving Loans and the Term B-1 Loans, sometimes referred to individually as a “Loan”, except that for purposes of Sections 1.29, 1.48, 1.74(c), 1.107, 1.118, 2.1(a), 3.1(a), 3.2, 6.3(b), 6.5, 6.6, 6.9, 6.10 and 12.8 of the Loan Agreement, all references to the term “Loans” in such Sections and each such reference is hereby amended to mean the Revolving Loans.

(iii) “Pro Rata Share” shall mean:

(A) with respect to a Revolving Loan Lender’s obligation to make Revolving Loans and to acquire interests in Letter of Credit Accommodations and receive payments of interest and principal with respect thereto and with respect to increases in the Revolving Loan Commitments as provided for herein, the fraction (expressed as a percentage) the numerator of which is such Revolving Loan Lender’s Revolving Loan Commitment and the

7

denominator of which is the aggregate amount of all of the Revolving Loan Commitments of Lenders, as adjusted from time to time in accordance with the provisions of Section 13.7 hereof; provided, that, if the Revolving Loan Commitments have been terminated, the numerator shall be the unpaid amount of such Revolving Loan Lender’s Revolving Loans and its interest in the Letter of Credit Accommodations and the denominator shall be the aggregate amount of all unpaid Revolving Loans and Letter of Credit Accommodations;

(B) with respect to a Term B-1 Loan Lender’s obligation to make Term B-1 Loans and receive payments of interest and principal with respect thereto and with respect to decreases in the Term B-1 Loan Commitments as provided for herein, the fraction (expressed as a percentage) the numerator of which is such Term B-1 Loan Lender’s Term B-1 Loan Commitment and the denominator of which is the aggregate amount of all of the Term B-1 Loan Commitments of Term B-1 Loan Lenders, as adjusted from time to time in accordance with the provisions of Section 13.7 hereof; and

(C) with respect to all other matters as to a particular Lender (including the indemnification obligations arising under Section 11.5 of the Loan Agreement and the voting rights set forth in Section 11.3 of the Loan Agreement), the fraction (expressed as a percentage) the numerator of which is the aggregate amount of all of such Lender’s Commitments and the denominator of which is the aggregate amount of all of the Commitments of all Lenders; provided, that, if the Revolving Loan Commitments have been terminated, the numerator shall be the unpaid amount of each Lender’s Loans (and in the case of Revolving Loan Lenders, its interest in the Letter of Credit Accommodations) and the denominator shall be the aggregate amount of all unpaid Revolving Loans, Letter of Credit Accommodations and Term B-1 Loans.

1.3 Interpretation. For purposes of this Amendment No. 5, unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings assigned to such terms in the Loan Agreement.

2. Term B-1 Loans.

2.1 Making of Term B-1 Loans.

(a) Subject to and upon the terms and conditions contained herein and in the Loan Agreement, each Term B-1 Loan Lender severally (and not jointly) agrees to make its Pro Rata Share of Term B-1 Loans to Borrowers upon the one-time request of Lead Borrower in accordance with Section 2.1(c)(ii) hereof on any Business Day on or prior to October 1, 2007 (or such later date as all of the Term B-1 Loan Lenders, Agent and Lead Borrower may agree in writing), in the aggregate principal amount equal to the Total Term B-1 Loan Commitments. Each Term B-1 Loan made in accordance with Section 2 hereof is (a) to be repaid, together with interest and other amounts, in accordance with the Loan Agreement, Amendment No. 5 and the other Financing Agreements and (b) secured by the Collateral. All of the Term B-1 Loans shall be made on the same date pursuant to a one-time advance in accordance with the terms herein

(b) The principal amount of the Term B-1 Loans shall be repaid in seventy-two (72) consecutive monthly installments (or earlier as provided herein) payable on the first day of each month commencing with the first day of the month immediately following the Term B-1

8

Loan Funding Date; provided, that, the entire unpaid principal amount of the Term B-1 Loans and all accrued and unpaid interest thereon shall be due and payable upon the effective date of termination or non-renewal of the Financing Agreements. The amount of each such monthly installment shall be equal to the amount of the Total B-1 Term Loan Commitments divided by seventy-two (72). Principal of Term B-1 Loans may be prepaid by Borrowers without premium or penalty. Each such prepayment shall be accompanied by the payment of accrued interest to the date of such payment on the amount prepaid and shall be applied to the remaining installments of principal in the inverse order of maturity. Any repayments of Term B-1 Loans may not be reborrowed.

(c) In addition to the conditions precedent set forth in set forth in Section 4.2 of the Loan Agreement, each of the following is an additional condition precedent to the making of the Term B-1 Loans: the fair market value of the Inventory of Borrowers as of the Term B-1 Loan Funding Date shall be not less than $130,000,000, Agent shall have received not less than two (2) Business Days’ prior written notice of the request of Lead Borrower for the Term B-1 Loans, such notice shall be irrevocable and on and after giving effect to the making of the Term B-1 Loans, the principal amount of all outstanding Revolving Loans shall not exceed the Revolving Loan Limit.

2.2 Term B-1 Loan Interest.

(a) Subject to Section 6.4 of the Loan Agreement, Borrowers shall pay to Agent, for the benefit of the Term B-1 Loan Lenders, interest on the outstanding principal amount of the Term B-1 Loans at the Term B-1 Loan Interest Rate. All interest accruing with respect to the Term B-1 Loans hereunder from and after (i) the effective date of termination or non-renewal of the Loan Agreement or (ii) the date of the occurrence of an Event of Default and for so long as such Event of Default is continuing shall be payable on demand in accordance with Section 6.4 of the Loan Agreement.

(b) Lead Borrower may from time to time request that the Adjusted Eurodollar Rate for the Term B-1 Loans continue for an additional Interest Period in accordance with Section 3.1(b) of the Loan Agreement.

(c) All interest charges related to the Term B-1 Loans shall be (i) calculated based upon the applicable Term B-1 Loan Interest Rate, (ii) calculated on the basis of a three hundred sixty (360) day year and actual days elapsed and (iii) paid monthly in arrears to Agent on the first day of each calendar month, or at Agent’s option, charged to any Borrower’s account(s) maintained by Agent as of the first day of each calendar month subject to Section 6.4 of the Loan Agreement.

(d) In no event shall charges constituting interest payable by Borrowers to Agent, for the benefit of Term B-1 Loan Lenders, exceed the maximum amount or the rate permitted under any applicable law or regulation, and if any such part or provision of this Amendment No. 5 or any of the other Financing Agreements is in contravention of any such law or regulation, such part or provision shall be deemed amended to conform thereto.

9

2.3 Term B-1 Loan Fee. In addition to all other fees and charges payable by any Borrower or Guarantor to Agent and Lenders under the Loan Agreement, Amendment No. 5 or any of the other Financing Agreements, in consideration of the Term B-1 Loan arrangements set forth herein, Borrowers shall pay to Agent, for the account of Term B-1 Loan Lenders, or Agent, at its option, may charge the loan account of Borrowers maintained by Agent, a funding fee in the amount of $60,000, which fee will be fully earned and payable as of the Term B-1 Loan Funding Date and shall constitute part of the Obligations.

2.4 Amendment No. 3 Term B Loans. None of the Term B Loans referenced in Amendment No. 3 have been made and any provisions for the making of such Term B Loans set forth in Amendment No. 3 are of no force and effect.

3. Letter of Credit Accommodations. Section 2.2(b) of the Loan Agreement is hereby amended by deleting the table therein and replacing it with the following:

Tier	Monthly Average Excess Availability	Applicable Letter of Credit Fee Margin
1	$50,000,000 or more	1 1/4%
2	Greater than or equal to $30,000,000 and less than $50,000,000	1 1/2%
3	Greater than or equal to $15,000,000 and less than $30,000,000	1 3/4%
4	Less than $15,000,000	2 %

4. Collection of Accounts. The second sentence of Section 6.3(b) of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

“For the purposes of calculating interest on the Obligations, such payments or other funds received will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt of immediately available funds by Agent in the Agent Payment Account provided such payments or other funds and notice thereof are received in accordance with Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit the applicable loan account on such day, and if not, then on the next Business Day.”

5. Payments.

5.1 As of the Term B-1 Loan Funding Date, Section 6.4(a) of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

(a) “(a) All Obligations shall be payable to the Agent Payment Account as provided in Section 6.3 or such other place as Agent may designate from time to time. Subject to

10

the other terms and conditions contained herein, Agent shall apply payments received or collected from any Borrower or for the account of any Borrower (including the monetary proceeds of collections or of realization upon any Collateral) as follows:

(i) first, to the payment in full of any fees, indemnities or expense reimbursements then due to Agent and Lenders from Borrowers;

(ii) second, to the payment in full of interest then due in respect of any Loans (and including any Special Agent Advances);

(iii) third, to the payment or prepayment in full of principal in respect of Special Agent Advances;

(iv) fourth, to the payment or prepayment in full of principal in respect of the Revolving Loans or to pay or prepay Obligations arising under or pursuant to any Interest Rate Protection Agreement of any Borrower that has been approved in writing by Agent (up to the amount of any then effective Reserve established in respect of such Obligations) on a pro rata basis;

(v) fifth, to the payment in full of principal in respect of the Term B-1 Loans then due;

(vi) sixth, to the payment or prepayment in full of any other Obligations whether or not then due, in such order and manner as Agent reasonably determines or to be held as cash collateral in connection with any Letter of Credit Accommodations or other contingent Obligations (but not including for purposes of this clause “sixth” any Obligations arising under or pursuant to any Interest Rate Protection Agreement);

(vii) seventh, to the payment or prepayment in full of any Obligations arising under or pursuant to Interest Rate Protection Agreements that have been approved in writing by Agent (other than to the extent provided for above) and any Obligations then due to any Affiliate of Agent arising from or in connection with any Interest Rate Protection Agreement, as to all of such Obligations on a pro rata basis.

Provided, that, in each instance set forth above in Section 6.4(a) above so long as no Priority Event has occurred and is continuing, this Section 6.4(a) shall not be deemed to apply to any payment by a Borrower specified by such Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under and in accordance with any provision of this Agreement.”

5.2 As of the Term B-1 Loan Funding Date, Section 6.4 is hereby amended by adding the following new subsections (c), (d) and (e):

“(c) Notwithstanding anything to the contrary contained in Section 6.4(a) above or otherwise herein, at any time on and after a Priority Event and for so long as the same is continuing, Agent shall apply payments received or collected from any Borrower or for the account of any Borrower (including the monetary proceeds of collections or of realization upon any Collateral) as follows:

11

(i) first, to the payment in full of any fees (other than the Early Termination Fee), indemnities or expense reimbursements then due to Agent and Lenders from Borrowers;

(ii) second, to the payment in full of interest then due in respect of any Revolving Loans (and including any Special Agent Advances);

(iii) third, to the payment or prepayment in full of principal in respect of Special Agent Advances;

(iv) fourth, to the payment or prepayment in full of principal in respect of the Revolving Loans or to the payment or prepayment in full of Obligations arising under or pursuant to any Interest Rate Protection Agreement of any Borrower that has been approved in writing by Agent (up to the amount of any then effective Reserve established in respect of such Obligations) on a pro rata basis;

(v) fifth, to be held as cash collateral in connection with any Letter of Credit Accommodations or other contingent Obligations (but not including for purposes of this clause “fifth” any Obligations arising under or pursuant to any Interest Rate Protection Agreement and as to Letter of Credit Accommodations only up to the amount provided for in Section 13.1(a) for such Obligations);

(vi) sixth, to the payment in full of interest then due in respect of Term B-1 Loans;

(vii) seventh, to the payment in full of principal in respect of the Term B-1 Loans then due;

(viii) eighth, to the payment or prepayment in full of any other Obligations whether or not then due (including the Early Termination Fee), in such order and manner as Agent reasonably determines;

(ix) ninth, to the payment or prepayment in full of any Obligations arising under or pursuant to Interest Rate Protection Agreements that have been approved in writing by Agent (other than to the extent provided for above) and any Obligations then due to any Affiliate of Agent arising from or in connection with any Interest Rate Protection Agreement, as to all of such Obligations on a pro rata basis.

(d) All references to “payment in full” or “payment or prepayment in full” in this Section 6.4 means all amounts owing in respect of the Obligations referred to, including any principal, interest, fees, costs, expenses and other amounts owed to Agent or any Lender which would accrue and become due but for the commencement of any case under the Bankruptcy Code or any similar statute, whether or not such amounts are allowed or allowable in whole or in part in such a case, but excluding (i) interest to the extent paid in excess of amounts based on the pre-default rates (but not any other interest) and (ii) fees paid in respect of the waiver of an Event of Default, in each case as to amounts under clause (i) and (ii) only to the extent that such amounts are disallowed in any case with respect to Borrowers under the Bankruptcy Code.

12

(e) Notwithstanding anything to the contrary contained in this Agreement, (i) unless so directed by Lead Borrower, or unless a Default or an Event of Default shall exist or have occurred and be continuing, Agent shall not apply any payments which it receives to any Eurodollar Rate Loans, except (A) on the expiration date of the Interest Period applicable to any such Eurodollar Rate Loans or (B) in the event that there are no outstanding Prime Rate Loans and (ii) to the extent any Borrower uses any proceeds of the Loans or Letter of Credit Accommodations to acquire rights in or the use of any Collateral or to repay any Indebtedness used to acquire rights in or the use of any Collateral, payments in respect of the Obligations shall be deemed applied first to the Obligations arising from Loans and Letter of Credit Accommodations that were not used for such purposes and second to the Obligations arising from Loans and Letter of Credit Accommodations the proceeds of which were used to acquire rights in or the use of any Collateral in the chronological order in which such Borrower acquired such rights in or the use of such Collateral.”

6. Sale of Assets.

6.1 Section 9.7(b)(viii)(A)(1) is hereby deleted in its entirety and the following substituted therefor: “Intentionally deleted”.

6.2 Section 9.7(b)(x) is hereby deleted in its entirety and the following substituted therefor: “Intentionally deleted”.

7. Dissolution. Section 9.7(c) of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

“(c) wind up, liquidate or dissolve, except that United, Custer, Gruber Food Town, JFW, LLJ and any other Guarantor (other than Parent) may wind up, liquidate and dissolve, provided, that, each of the following conditions is satisfied, (i) the winding up, liquidation and dissolution of such Borrower or Guarantor (as the case may be) shall not violate any law or any order or decree of any court or other Governmental Authority in any material respect and shall not conflict with or result in the breach of, or constitute a default under, any indenture, mortgage, deed of trust, or any other agreement or instrument to which any Borrower or Guarantor is a party or may be bound, (ii) such winding up, liquidation or dissolution shall be done in accordance with the requirements of all applicable laws and regulations, (iii) effective upon such winding up, liquidation or dissolution, all of the assets and properties of such Borrower or Guarantor (as the case may be) shall be duly and validly transferred and assigned to any other Borrower, free and clear of any liens, restrictions or encumbrances other than the security interest and liens of Agent (and Agent shall have received such evidence thereof as Agent may require) and Agent shall have received such deeds, assignments or other agreements as Agent may request to evidence and confirm the transfer of such assets of such Borrower or Guarantor (as the case may be) to such other Borrower, (iv) Agent shall have received all documents and agreements that any Borrower or Guarantor has filed with any Governmental Authority or as are otherwise required to effectuate such winding up, liquidation or dissolution, (v) no Borrower or Guarantor shall assume any Indebtedness, obligations or liabilities as a result of such winding up, liquidation or dissolution, or

13

otherwise become liable in respect of any obligations or liabilities of the entity that is winding up, liquidating or dissolving, unless such Indebtedness is otherwise expressly permitted hereunder, except that, upon the effectiveness of each such winding up, liquidation or dissolution of any of United, Custer or Gruber Food Town, each remaining Borrower hereby expressly (A) assumes and agrees to be directly and primarily liable in all respects for all Obligations of United, Custer or Gruber Food Town (as the case may be) under, contained in, or arising out of the Loan Agreement and the other Financing Agreements and (B) agrees to perform, comply with and be bound by all terms, conditions and covenants of the Loan Agreement and the other Financing Agreements applicable to all Borrowers and as applied to United, Custer or Gruber Food Town (as the case may be), (vi) Agent shall have received not less than ten (10) Business Days prior written notice of the intention of such Borrower or Guarantor (as the case may be) to wind up, liquidate or dissolve, (vii) in the case of the winding up, liquidation or dissolution of United, Custer or Gruber Food Town, after giving effect thereto, Excess Availability shall be not less than $20,000,000 and (viii) as of the date of such winding up, liquidation or dissolution and after giving effect thereto, no Default or Event of Default shall exist or have occurred; or”

8. Indebtedness. Section 9.9(b) of the Loan Agreement is hereby amended by (a) deleting the reference to “$10,000,000” contained therein and substituting “$50,000,000” therefor and (b) deleting the reference to “$25,000,000” contained therein and substituting “$150,000,000” therefor.

9. Loans, Investments, Etc. Section 9.10(h)(iii) of the Loan Agreement is hereby amended by (a) deleting the reference to “$5,000,000” contained therein and substituting “$15,000,000” therefor and (b) deleting the reference to “$20,000,000” contained therein and substituting “$50,000,000” therefor.

10. Transactions with Affiliates. Section 9.12 of the Loan Agreement is hereby amended by adding the following at the end of subsection (a) thereof:

“, provided further that, Parent may make charitable contributions to an Affiliate that is a foundation qualified under Section501(c)(3) of the Code so long as each of the following conditions is satisfied: (i) as of the date of any such charitable contribution and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing and (ii) the aggregate amount of all such charitable contributions made in any calendar year shall not exceed $2,500,000

11. Minimum EBITDA. Section 9.18 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefore: “Intentionally deleted”.

12. Cost and Expenses. Section 9.24 of the Loan Agreement is hereby amended by adding the following at the end of subsection (f) thereof:

“provided, that, so long as at the time such field examination is conducted (i) no Default or Event of Default shall exist or have occurred and be continuing and (ii) Excess Availability is equal to or greater than $40,000,000, Borrowers and Guarantors shall not be required to pay such costs, expenses and pier diem charges for more than one (1) such field examination in any twelve (12) month period (and any field examinations conducted

14

at such time as a Default or Event of Default shall exist or have occurred and be continuing or at such time when Excess Availability is less than $40,000,000 shall not be deemed to constitute a field examination for purposes of such limitation);”

13. Fixed Charge Coverage Ratio. Section 9 of the Loan Agreement is hereby amended by adding the following new Section 9.26 at the end thereof:

“9.26 Fixed Charge Coverage Ratio. Borrowers and Guarantors shall not permit, (a) for the period from the Amendment No. 5 Effective Date through and including the date that is the first anniversary of such date, the Fixed Charge Coverage Ratio of Borrowers (on a combined basis) to be less than .85:1.00, (b) for the period from the date that is the first anniversary of the Amendment No. 5 Effective Date through and including the date that is the second anniversary of the Amendment No. 5 Effective Date, the Fixed Charge Coverage Ratio of Borrowers (on a combined basis) to be less than .90:1.00, (c) for the period from the date that is the second anniversary of the Amendment No. 5 Effective Date through and including the date that is the third anniversary of the Amendment No. 5 Effective Date, the Fixed Charge Coverage Ratio of Borrowers (on a combined basis) to be less than .95:1.00 and (d) for the period from the date that is the third anniversary of the Amendment No. 5 Effective Date through and including the date that is the fourth anniversary of the Amendment No. 5 Effective Date and at all times thereafter, the Fixed Charge Coverage Ratio of Borrowers (on a combined basis) to be less than 1.00:1.00; provided, that, Borrowers and Guarantors shall not be required to comply with this covenant at any time during any period so long as the aggregate Excess Availability of Borrowers shall have been not less than $25,000,000.”

14. Remedies. Section 10.2(i) of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

“(i) Notwithstanding anything to the contrary contained herein, except as the Required Term B-1 Loan Lenders shall otherwise agree, Agent shall demand payment of the Obligations and commence and pursue such other Enforcement Actions as Agent in good faith deems appropriate within ninety (90) days (except with respect to Events of Default described in Sections 10.1(f) and 10.1(g), Agent shall take such Enforcement Actions as it deems appropriate under the circumstances promptly upon receipt of notice) after the date of the receipt by Agent of written notice executed and delivered by the Required Term B-1 Loan Lenders of a Term B-1 Loan Action Default, and requesting that Agent commence Enforcement Actions, provided, that, (i) such Term B-1 Loan Action Default has not been waived or cured, (ii) in the good faith determination of Agent, taking an Enforcement Action is permitted under the terms of this Agreement and applicable law, (iii) taking an Enforcement Action shall not result in any liability of Agent or Lenders to Borrower or any other person, and (iv) Agent shall be entitled to all of the benefits of Sections 12.2, 12.3 and 12.5 hereof.”

15. Amendments and Waivers. Section 11.3(e) of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

“(e) Notwithstanding anything to the contrary contained in Section 11.3(a), no

15

such amendment, waiver, discharge or termination shall provide for any such amendment, waiver, discharge or termination of any of the following to the extent provided below without the consent of Agent and Required Term B-1 Loan Lenders:

(i) the terms of Sections 9.18, 9.19, 9.20 or 9.26 hereof (or any definition with respect to financial terms used in such financial covenant in a manner which has the effect of reducing the amounts which Borrowers are required to maintain pursuant to such financial covenants);

(ii) the definitions of “Adjusted Eurodollar Rate”, “Borrowing Base” (but only to the extent such proposed change in the definition would increase the advance rates above those in effect on the date hereof), “Change of Control”, “Consolidated Adjusted Net Income”, “EBITDA”, “Eligible Accounts”, “Eligible Inventory”, “Eligible Transferee”, “Excess Availability”, “Material Adverse Effect”, “Net Recovery Percentage”, “Priority Event”, “Pro Rata Share”, “Term B-1 Loan”, “Term B-1 Loan Action Default”, or “Term B-1 Loan Interest Rate”;

(iii) the terms of Section 2 of Amendment No. 5;

(iv) any of the following Sections hereof in any material respect: 6.4, 7.7, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12(b), 9.16, 9.21, 10.2, 11.3, 12.8, 12.11, 13.1(a), or 13.7 hereof,

(v) an increase in the Maximum Credit or the Revolving Loan Limit or the outstanding principal amount of the Term B-1 Loans;

(vi) forgiveness, compromise or cancellation of any of the Term B-1 Loans.”

16. Term. Section 13.1(a) of the Loan Agreement is hereby amended by deleting the reference therein to “SEVEN (7) YEARS” from the first sentence thereof and replacing it with “NINE (9) YEARS”.

17. Assignments; Participations.

17.1 As of the Term B-1 Loan Funding Date, Section 13.7(a) of the Loan Agreement is hereby amended by deleting the reference to “a portion equal to at least $5,000,000 in the aggregate for the assigning Lender” contained therein and replacing it with the following: “a portion equal to at least $5,000,000 in the aggregate for the assigning Lender (or in the case of any Term B-1 Loan Lender, a portion equal to at least $1,000,000)”.

17.2 As of the Term B-1 Loan Funding Date, Section 13.7 of the Loan Agreement is hereby amended by adding the following new subsection (i) at the end thereof:

“(i) A Term B-1 Loan may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register or comparable register. Any assignment or sale of all or part of such Term B-1 Loan may be effected only by registration of such assignment or sale on the Register (or comparable register). Prior to

16

the registration of assignment or sale of any Term B-1 Loan, Agent and Borrowers shall treat the Person in whose name such Loan is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the event that any Term B-1 Loan Lender sells participations in a Term B-1 Loan, such Term B-1 Loan Lender shall maintain a register on which it enters the name of all participants in the Term B-1 Loan (the “Participant Register”). A Term B-1 Loan may be participated in whole or in part only by registration of such participation on the Participant Register. Any participation of such Term B-1 Loan may be effected only by the registration of such participation on the Participant Register.”

18. Amendment Fee. In addition to all other fees and charges payable by any Borrower or Guarantor to Agent and Lenders under the Loan Agreement, Amendment No. 5 or any of the other Financing Agreements, in consideration of the amendments set forth herein, Borrowers shall pay to Agent, for the account of Lenders or Agent, at its option, may charge the loan account of Borrowers maintained by Agent, an amendment fee in the amount of $100,000, which fee is fully earned and payable as of the date hereof and shall constitute part of the Obligations.

19. Representations and Warranties. Each Borrower and Guarantor hereby represents and warrants to Agent and Lenders the following (which shall survive the execution and delivery of this Amendment No. 5), the truth and accuracy of which are a continuing condition of the making of Loans and providing Letter of Credit Accommodations to Borrowers:

19.1 This Amendment No. 5 and each other agreement or instrument to be executed and delivered by the Borrowers and Guarantors pursuant hereto have been duly authorized, executed and delivered by all necessary action on the part of each of the Borrowers and Guarantors which is a party hereto and thereto and, if necessary, their respective stockholders and is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of each of the Borrowers and Guarantors, as the case may be, contained herein and therein, constitute the legal, valid and binding obligations of each of the Borrowers and Guarantors, respectively, enforceable against them in accordance with their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

19.2 The execution, delivery and performance of this Amendment No. 5 are all within each Borrower’s and Guarantor’s corporate or limited liability company powers and are not in contravention of law or the terms of any Borrower’s or Guarantor’s certificate or articles of incorporation, by laws, or other organizational documentation, or any indenture, agreement or undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or its property are bound.

19.3 No Default or Event of Default exists or has occurred and is continuing.

20. Condition Precedent. The effectiveness of the amendments contained herein shall only be effective upon the following:

17

20.1 Agent shall have received an executed original or executed original counterparts of this Amendment No. 5, duly authorized, executed and delivered by the parties hereto (including all Lenders required for the consent and amendments provided for herein); and

20.2 Agent shall have received a true and correct copy of any consent, waiver or approval (if any) to or of this Amendment No. 5, which any Borrower is required to obtain from any other Person.

21. Effect of this Amendment. Except as expressly amended pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied, and, in all other respects, the Financing Agreements are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof. To the extent that any provision of the Loan Agreement or any of the other Financing Agreements are inconsistent with the provisions of this Amendment No. 5, the provisions of this Amendment No. 5 shall control.

22. Further Assurances. Borrowers and Guarantors shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Agent to effectuate the provisions and purposes of this Amendment No. 5.

23. Governing Law. The validity, interpretation and enforcement of this Amendment No. 5 and the other Financing Agreements (except as otherwise provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Illinois but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of Illinois.

24. Binding Effect. This Amendment No. 5 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

25. Headings. The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 5.

26. Counterparts. This Amendment No. 5 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment No. 5 by telefacsimile shall have the same force and effect as the delivery of an original executed counterpart of this Amendment No. 5. Any party delivering an executed counterpart of this Amendment No. 5 by telefacsimile shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

18

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to be duly executed and delivered by their authorized officers as of the day and year first above written.

AGENT	BORROWERS
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), f/k/a Congress Financial Corporation (Central), as Agent	SPARTAN STORES, INC.
By:	By:
Title:	Title:
	SPARTAN STORES DISTRIBUTION, LLC UWG COMPANY (F/K/A UNITED WHOLESALE GROCERY COMPANY) MARKET DEVELOPMENT CORPORATION SPARTAN STORES ASSOCIATES, LLC FAMILY FARE, LLC MSFC, LLC SEAWAY FOOD TOWN, INC. THE PHARM OF MICHIGAN, INC. VALLEY FARM DISTRIBUTING CO. GRUBER’S FOOD TOWN, INC. GRUBER’S REAL ESTATE LLC PREVO’S FAMILY MARKETS, INC. CUSTER PHARMACY, INC. BUCKEYE REAL ESTATE MANAGEMENT CO. SPARTAN STORES FUEL, LLC
	By:
	Title:
	GUARANTORS
	JFW DISTRIBUTING COMPANY LLJ DISTRIBUTING COMPANY SPARTAN STORES HOLDING, INC. SI INSURANCE AGENCY, INC.
	By:
	Title:

LENDERS

WACHOVIA CAPITAL FINANCE

CORPORATION (CENTRAL), f/k/a

Congress Financial Corporation (Central)

By:                                                                                                                          

Title:                                                                                                                       

KEY BANK NATIONAL ASSOCIATION

By:                                                                                                                          

Title:                                                                                                                       

BANC OF AMERICA LEASING &

CAPITAL, LLC (successor by merger to

Fleet Capital Corporation)

By:                                                                                                                          

Title:                                                                                                                       

NATIONAL CITY BUSINESS CREDIT, INC.

By:                                                                                                                          

Title:                                                                                                                       

GENERAL ELECTRIC CAPITAL CORPORATION

By:                                                                                                                          

Title:                                                                                                                       

FIFTH THIRD BANK, an Ohio Banking Corporation

By:                                                                                                                          

Title:                                                                                                                       

EXHIBIT A

TO

AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT

List of Revolving Loan Commitments of Lenders

1.	WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL) Commitment: $52,220,000
2.	KEY BANK NATIONAL ASSOCIATION Commitment: $30,000,000
3.	BANC OF AMERICA LEASING & CAPITAL, LLC (successor to Fleet Capital Corporation) Commitment: $31,112,500
4.	NATIONAL CITY BUSINESS CREDIT Commitment: $20,000,000
5.	GENERAL ELECTRIC CAPITAL CORPORATION Commitment: $50,000,000
6.	FIFTH THIRD BANK Commitment: $26,667,500

EXHIBIT B

TO

AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT

List of Term B-1 Loan Commitments of Term B-1 Loan Lenders

1.	WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL) Term B-1 Loan Commitment: $7,780,000
2	BANC OF AMERICA LEASING & CAPITAL, LLC (successor to Fleet Capital Corporation) Term B-1 Loan Commitment: $3,887,500
3	FIFTH THIRD BANK Term B-1 Loan Commitment: $3,332,500

EXHIBIT C

TO

AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT

List of Commitments of Lenders

1.	WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL) Commitment: $60,000,000
2.	KEY BANK NATIONAL ASSOCIATION Commitment: $30,000,000
3.	BANC OF AMERICA LEASING & CAPITAL, LLC (successor to Fleet Capital Corporation) Commitment: $35,000,000
4.	NATIONAL CITY BUSINESS CREDIT Commitment: $20,000,000
5.	GENERAL ELECTRIC CAPITAL CORPORATION Commitment: $50,000,000
6.	FIFTH THIRD BANK Commitment: $30,000,000

EX-10.26

EXHIBIT 10.26

SCHEDULE TO NOTES IN FORM OF EMPLOYMENT AGREEMENT

Note 1 (Name)	Note 2 (Title)
Dennis Eidson	President and Chief Executive Officer
David M. Staples	Executive Vice President and Chief Financial Officer
Theodore Adornato	Executive Vice President, Retail Operations
Alex J. DeYonker	Executive Vice President, General Counsel and Secretary

Explanatory note: this form of agreement includes amendments as of May 17, 2012.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by SPARTAN STORES, INC., a Michigan corporation (the “Company”), and             [NOTE 1]                     (“Executive”). The parties agree as follows:

1. Effective Date and Term. This Agreement will take effect as of December 19, 2008 (“Effective Date”), and will remain in effect during Executive’s employment with the Company and thereafter as to those provisions that expressly state that they will remain in effect after termination of Executive’s employment.

2. Employment. Executive will serve as the Company’s             [NOTE 2]                    , [for all officers except the Chief Executive Officer: “or in such other positions as an officer of Spartan Stores, Inc. (“Officer”)”] and such additional positions with the Company or an Affiliate as may be assigned by the Company (the “Employment”). Executive will perform the duties assigned from time to time to Executive’s position. The Employment will be full time and Executive’s entire business time and efforts will be devoted to the Employment, except as otherwise provided by written Company policy. Executive agrees to comply with Company policies, including but not limited to any applicable Company policy requiring Executive to own shares of common stock in the Company. As used in this Agreement, the term “Affiliate” includes any organization controlling, controlled by or under common control with the Company.

3. Term of Employment. The term of the Employment will be indefinite and will continue until terminated pursuant to this Agreement.

4. Compensation. Executive will be compensated during the Employment as follows:

(a) Salary. The Executive’s salary as of the Effective Date is $             per year (or a pro-rated weekly amount for any partial year), subject to normal payroll deductions and payable in accordance with the Company’s normal payroll practices. Executive’s salary will be reviewed annually by the Company and subject to the limitations in Section 5(b)(i) may be adjusted to reflect Company determinations of Executive’s performance, Company performance, or business or economic conditions.

(b) Bonus. Executive will be eligible to participate in any bonus programs designated by the Company from time to time for [“Officers occupying positions at the same level as Executive’s position” or, in the case of the Chief Executive Officer, “senior executive Officers”] in accordance with the terms of such programs, which are subject to change from time to time in the Company’s discretion.

(c) Benefits. Executive will be eligible to participate in fringe benefit programs covering the Company’s salaried employees as a group, and in any programs applicable under Company policy to [“Officers occupying positions at the same level as Executive’s position” or, in the case of the Chief Executive Officer, “senior executive Officers”]. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Company’s discretion.

(d) Business Expenses. The Company will reimburse Executive for reasonable ordinary and necessary business expenses that are specifically authorized or authorized by Company policy, subject to Executive’s prompt submission of proper documentation for tax and accounting purposes. Such expenses shall be reimbursed within thirty (30) days after Executive requests reimbursement, but in no event later than two and one-half (2  ¹/2) months after the end of the year in which the expense is incurred.

5. Termination of Employment.

(a) Termination Without Severance Pay. Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(a), except (A) unpaid salary installments through the end of the week in which the Employment terminates, and (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program.

- 2 -

i. Death. The Employment will terminate automatically upon Executive’s death.

ii. Disability. If Executive is unable to perform Executive’s duties under this Agreement due to physical or mental disability for a continuous period of one hundred eighty (180) days or longer and Executive is eligible for benefits under the Company’s long-term disability insurance policy (“long-term disability benefits”), the Company may terminate the Employment under this Section 5(a)(ii). If the Company terminates the Employment as the result of Executive’s inability to perform Executive’s duties for less than one hundred eighty (180) days due to a disability, the termination of Employment will be deemed to be pursuant to Section 5(b)(ii) below.

iii. Termination by Company for Cause. The Company may terminate the Employment for “Cause,” defined as Executive’s: (A) breach of any provision of Sections 7, 8, or 9 of this Agreement; (B) willful continued failure to perform or willful poor performance of duties (other than due to disability) after warning and reasonable opportunity to meet reasonable required performance standards; (C) gross negligence causing or placing the Company at risk of significant damage or harm; (D) misappropriation of or intentional damage to Company property; (E) conviction of a felony (other than negligent vehicular homicide); or (F) intentional act or omission that Executive knows or should know is significantly detrimental to the interests of the Company.

If the Company becomes aware after termination of the Employment other than for Cause that Executive engaged before the termination of Employment in willful misconduct constituting Cause, the Company may recharacterize Executive’s termination as having been for Cause.

iv. Discretionary Termination by Executive. Executive may terminate the Employment at will, with at least thirty (30) days advance written notice. If Executive gives such notice of termination, the Company may (but need not) relieve Executive of some or all of Executive’s responsibilities for part or all of such notice period, provided that Executive’s pay and benefits are continued for the lesser of thirty (30) days or the remaining period of the Employment.

(b) Termination With Severance Pay. Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(b), except (A) unpaid salary installments through the end of the week in which the Employment terminates, (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program, and (C) any Severance Pay to which Executive is entitled under this Section 5(b).

i. Termination by Executive for Good Reason. Executive may terminate the Employment for “Good Reason” if and only if the Company materially breaches the Company’s obligations to Executive under this Agreement, or materially reduces Executive’s salary other than an economic or

- 3 -

business motivated reduction accompanied by proportionate reductions in the salaries of all other Officers. Executive may not resign for Good Reason unless (A) Executive notifies the Company’s [“Chief Executive Officer” or, in the case of the Chief Executive Officer terminating Employment, the “Secretary”] in writing, within thirty (30) days after the act or omission in question, asserting that the act or omission in question constitutes Good Reason and explaining why, (B) the Company fails, within thirty (30) days after the notification, to take all reasonable steps to cure the breach, and (C) Executive resigns by written notice within thirty (30) days after expiration of the thirty (30) day period under Section 5(b)(i)(B). If Executive terminates the Employment for Good Reason, Executive will be entitled to Severance Pay as provided in and subject to Section 6. Executive’s failure to object to a material breach as provided above will not waive Executive’s right to resign with Good Reason after following the above procedure with regard to any subsequent material breach.

ii. Discretionary Termination by Company. The Company may terminate the Employment at will, but if the Company does so Executive will be entitled to Severance Pay as provided in and subject to Section 6. Any termination of Executive’s Employment by the Company under Section 5(a) that is found not to meet the standards of such Section will be considered to have been a termination under Section 5(b)(ii).

6. Severance Pay. The Company will pay and provide Executive with the payments and benefit continuation provided in this Section 6 (“Severance Pay”) upon Executive’s “separation from service” as that term is defined by Section 409A of the Internal Revenue Code (the “Code”), if Executive’s Employment is terminated as provided in Section 5(b) and the Executive contemporaneously or subsequently experiences a separation from service.

(a) Amount and Duration of Severance Pay. Subject to the other provisions of this Section, Severance Pay will consist of:

i. Cash Payment. A lump sum cash payment equal to fifty-two (52) weeks of Executive’s salary as of the date on which Executive’s separation from service occurs, payable as provided in Section 6(b), except that if the separation from service occurs during 2008 payment will be made by (A) continuing Executive’s then-current salary installments (in accordance with the Company’s normal pay practice) through December 31, 2008, and (B) payment to Executive as provided in Section 6(b) of a lump sum cash payment in an amount equal to the difference between fifty-two (52) weeks of Executive’s salary and the amount of salary continuation paid under (A). The lump sum cash payment will be considered wages allocated equally to each of the weeks covered by the payment for purposes of any applicable unemployment compensation or workers compensation laws, and any applicable disability insurance program, but will not be considered to extend Executive’s employment beyond the date of Executive’s separation from service under any Company qualified retirement plan or other Company benefit plan or program.

- 4 -

ii. Health Coverage Reimbursement. Reimbursement to Executive by the Company of the COBRA continuation coverage premiums incurred and paid by Executive to continue Executive’s then current employee and dependent health, dental, and prescription drug coverage for fifty-two (52) weeks after the date of termination of the Employment, provided that (A) Executive elects and remains eligible for COBRA continuation coverage, (B) Executive continues to pay the normal employee contribution for such coverage, and (C) that the Company’s obligation to provide coverage will end if Executive becomes eligible for comparable coverage from a new employer. Reimbursement for each monthly premium paid by Executive will be made not later than thirty (30) days after Executive requests reimbursement, but in no event later than the end of the second year after that in which the Executive’s separation from service occurs. Reimbursements under this Section 6(a)(ii) will be reported as part of Executive’s W-2 compensation and will be subject to Federal income tax withholding.

iii. Outplacement Assistance. Up to $10,000 of outplacement assistance from an outplacement assistance firm selected by Executive and approved by the Company (whose approval shall not be unreasonably withheld). All costs under this Section 6(a)(iii) must be incurred during the period beginning with the date of Executive’s separation from service and ending not later than the last day of the year following that in which the Executive’s separation from service occurs, and will be paid not later than sixty (60) days after the expense is incurred and billed to the Company.

(b) Payment Terms. Any salary continuation payments for 2008 under Section 6(a)(i) will be made on the Company’s normal pay date for each payment. The lump sum cash payment under Section 6(a)(i) will be made on the Company’s first normal pay date after the release provided for in Section 6(c)(iii) becomes effective and after any 2008 salary continuation payments have been made, or earlier if required by this Section 6(b). In any event, no payments will be made under this Section until the Company’s first regular pay date after Executive has signed the release provided for in Section 6(c)(iii) and any revocation period provided for in the release has expired. In no event will the latest date for (A) signing of the release, and (B) expiration of any revocation period in the release, and (C) the completion of payments under Section 6(a)(i), be deferred beyond the fifteenth (15^th) day of the third (3^rd) month after the end of the year in which the Executive’s separation from service occurs.

Example: If Executive were terminated on November 1, 2008, salary continuation payments would be made for the balance of 2008, and the balance of fifty-two (52) weeks salary would be paid on the first payroll date in 2009, provided that no payments would be made until the release is signed and becomes effective, and provided further that all payments must be made at latest by March 15, 2009.

The Executive will receive the payments called for by Section 6(a)(i) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(d). If Executive dies before all payments under Section 6(a) have been made, any 2008 salary continuation under Section 6(a)(i) will continue for the remainder of

- 5 -

2008 and such payments and any lump sum cash payment will be paid to Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary), and health coverage continuation under Section 6(a)(ii) will continue for Executive’s eligible dependants for the remainder of the fifty-two (52) week period subject to the conditions in Sections 6(a)(ii)(A) and (B). If Executive becomes eligible for long-term disability benefits, no further payments will be made under Section 6(a)(i) after the date that Executive is eligible to begin receiving such disability benefits.

(c) Conditions to Severance Pay. To be eligible for Severance Pay, Executive must meet the following conditions: (i) Executive must comply with Executive’s obligations under this Agreement that continue after termination of the Employment; (ii) Executive must not claim unemployment compensation for any week for which Executive receives payment under Section 6(a)(i) above; (iii) Executive must promptly sign and continue to honor a release, in form acceptable to the Company, of any and all claims arising out of or relating to Executive’s Employment or its termination and that Executive might otherwise have against the Company, the Company’s Affiliates, any of their officers, directors, employees and agents, provided that the release will not waive Executive’s right to any payments due under this Section or Section 5, or any right of Executive to liability insurance coverage under any liability insurance policy or to indemnification under the Company’s Articles of Incorporation or Bylaws or any written indemnification agreement; (iv) Executive must reaffirm in writing upon request by Company Executive’s obligations under Sections 7, 8 and 9 of this Agreement; (v) Executive must resign upon written request by Company from all positions with or representing the Company or any Affiliate, including but not limited to membership on boards of directors; and (vi) Executive must provide the Company for a period of ninety (90) days after the Employment termination date with consulting services regarding matters within the scope of Executive’s former duties, upon request by [“the Company’s Chief Executive Officer” or, in the case of the Chief Executive Officer, “the Company”]; Executive will only be required to provide those services by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments.

(d) Offsets to Severance Pay. The Severance Pay due to Executive under Section 6(a)(i) will be reduced (but not below 0) by: (i) any disability benefits to which Executive will be entitled for any portion of the fifty-two (52) week period covered by Section 6(a)(i) under any disability insurance policy or program of the Company or any Affiliate (including but not limited to worker’s disability compensation); (ii) any severance pay payable to Executive under any other agreement or Company policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) any amount owing by Executive to the Company that the Company is legally entitled to set off against the Severance Pay under applicable law.

- 6 -

7. Loyalty and Confidentiality; Certain Property and Information.

(a) Loyalty and Confidentiality. Executive will be loyal to the Company during the Employment and will forever hold in strictest confidence, and not use or disclose, any information regarding techniques, processes, developmental or experimental work, trade secrets, customer or prospect names or information, or proprietary or confidential information relating to the current or planned products, services, sales, pricing, costs, employees or business of the Company or any Affiliate, except as disclosure or use may be required in connection with Executive’s work for the Company or any Affiliate or as may be compelled pursuant to court order or subpoena. Executive will also keep the terms of this Agreement confidential. The Executive’s commitment not to use or disclose information does not apply to information that becomes publicly known without any breach of this Agreement by Executive.

(b) Certain Property and Information. Upon termination of the Employment, Executive will deliver to the Company any and all property owned or leased by the Company or any Affiliate and any and all materials and information (in whatever form) relating to the business of the Company or any Affiliate, including without limitation all customer lists and information, financial information, business notes, business plans, documents, keys, credit cards and other Company-provided equipment. All Company property will be returned promptly and in good condition except for normal wear.

Executive’s commitments in this Section will continue in effect after termination of the Employment. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

8. Ideas, Concepts, Inventions and Other Intellectual Property. All business ideas and concepts and all inventions, improvements, developments and other intellectual property made or conceived by Executive, either solely or in collaboration with others, during the Employment, whether or not during working hours, and relating to the business or any aspect of the business of the Company or any Affiliate or to any business or product the Company or any Affiliate is actively planning to enter or develop, shall become and remain the exclusive property of the Company, and the Company’s successors and assigns. Executive shall disclose promptly in writing to the Company all such inventions, improvements, developments and other intellectual property, and will cooperate in confirming, protecting, and obtaining legal protection of the Company’s ownership rights. Executive’s commitments in this Section will continue in effect after termination of the Employment as to ideas, concepts, inventions, improvements and developments and other intellectual property made or conceived in whole or in part before the date the Employment terminates. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

Executive represents and warrants that there are no ideas, concepts, inventions, improvements, developments or other intellectual property that Executive invented or conceived before becoming employed by the Company to which Executive, or any assignee of Executive, now claims title, and that would be covered by this Section if made or conceived by Employee during the Employment.

- 7 -

9. Covenant Not to Compete.

(a) Executive’s Commitments. During the Employment Executive will not do or prepare to do, and for twelve (12) months after any termination of the Employment Executive will not do, any of the following:

i. directly or indirectly compete with the Company or any Affiliate; or

ii. be employed by, perform services for, advise or assist, own any interest in or loan or otherwise provide funds to, any other business that is engaged (or seeking Executive’s services with a view to becoming engaged) in any Competitive Business (as defined below); or

iii. solicit or suggest, or provide assistance to anyone else seeking to solicit or suggest, that any person having or contemplating a Covered Relationship (as defined below) with the Company or an Affiliate refrain from entering into or terminate the Covered Relationship, or enter into any similar relationship with anyone else instead of the Company or the Affiliate.

This Section 9 does not prohibit Executive from owning not more than two percent (2%) of any class of securities of a publicly traded entity, provided that Executive does not engage in other activity prohibited by this Section 9.

Executive’s commitments in this Section will continue in effect after termination of the Employment for the twelve (12) month period set forth above. The parties agree that any breach of Executive’s commitments in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

(b) Definitions. As used in this Section 9:

i. “Competitive Business” means a business that

(A) owns, or

(B) operates, or

(C) sells or supplies products similar to or that substitute for products supplied by the Company to,

any Covered Operation (as defined below) that is located in any state of the United States in which the Company owns, operates, sells or supplies products to, any Covered Operation; and

ii. “Covered Operation” means any grocery store, grocery superstore, mass merchandiser, wholesale club, supermarket, limited assortment store, convenience store, drug store, pharmacy or any other store that offers grocery or food products separate or in combination with pharmaceutical products, general merchandise or other nonfood products, or any grocery or convenience store product distribution facility; and

- 8 -

iii. “Covered Relationship” means a customer relationship, a vendor relationship, an employment relationship, or any other contractual or independent contractor relationship.

10. Amendment and Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless the waiver, modification, or discharge is authorized by the Company’s Board of Directors, or a committee of the Board of Directors, and is agreed to in a writing signed by Executive and by the Chief Executive Officer [in the case of the Chief Executive Officer, “an authorized Officer”] of the Company. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.

11. Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. If a court of competent jurisdiction ever determines that any provision of this Agreement (including, but not limited to, all or any part of the non-competition covenant in this Agreement) is unenforceable as written, the parties intend that the provision shall be deemed narrowed or revised in that jurisdiction (as to geographic scope, duration, or any other matter) to the extent necessary to allow enforcement of the provision. The revision shall thereafter govern in that jurisdiction, subject only to any allowable appeals of that court decision.

12. Entire Agreement. No agreements or representations, oral or otherwise, express or implied, with respect to Executive’s Employment with the Company or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement and the Executive Severance Agreement between Executive and the Company (“Executive Severance Agreement”), and this Agreement supersedes any pre-existing employment agreements and any other agreements on the subjects covered by this Agreement, except the Executive Severance Agreement.

13. Non-Contravention. Executive represents and warrants that:

(a) No Restrictive Agreement. Executive is not a party to or bound by any agreement that purports to prevent or restrict Executive from: (A) engaging in the Employment that Executive has been offered by the Company; (B) inducing any person to become an employee of the Company; (C) using any information and expertise that Executive possesses (other than information constituting a trade secret of another person under applicable law) for the benefit of the Company; or (D) performing any obligation under this Agreement.

(b) No Abuse of Confidential Information or Trade Secrets. Executive will not use in the course of Executive’s Employment with the Company, or disclose to the Company or its personnel, any information belonging to any other person that is subject to any confidentiality agreement with or constitutes a trade secret of another person.

- 9 -

14. Dispute Resolution.

(a) Arbitration. The Company and Executive agree that except as provided in Section 14(b) the sole and exclusive method for resolving any dispute between them arising out of or relating to this Agreement shall be arbitration under the procedures set forth in this Section, except that nothing in this Section prohibits a party from seeking preliminary or permanent judicial injunctive relief, or from seeking judicial enforcement of the arbitration award. The arbitrator shall be selected pursuant to the Rules for Commercial Arbitration of the American Arbitration Association. The arbitrator shall hold a hearing at which both parties may appear, with or without counsel, and present evidence and argument. Pre-hearing discovery shall be allowed in the discretion of and to the extent deemed appropriate by the arbitrator, and the arbitrator shall have subpoena power. The procedural rules for an arbitration hearing under this Section shall be the rules of the American Arbitration Association for Commercial Arbitration hearings and any rules as the arbitrator may determine. The hearing shall be completed within ninety (90) days after the arbitrator has been selected and the arbitrator shall issue a written decision within sixty (60) days after the close of the hearing. The hearing shall be held in Grand Rapids, Michigan. The award of the arbitrator shall be final and binding and may be enforced by and certified as a judgment of the Circuit Court for Kent County, Michigan or any other court of competent jurisdiction. One-half of the fees and expenses of the arbitrator shall be paid by the Company and one-half by Executive. The attorney fees and expenses incurred by the parties shall be paid by each party. Notwithstanding the foregoing, however, the Company will reimburse the Executive for Executive’s portion of the arbitrator’s fees and expenses, and the Executive’s reasonable attorney fees and expenses incurred in connection with the arbitration proceeding, if the Executive substantially prevails in the arbitration proceeding or, if the Executive prevails in part, then the Company will reimburse a proportionate part of such fees and expenses, with such proportion to represent the approximate portion of such fees and expenses relating to the issues on which the Executive prevailed. The decision as to whether the Executive has substantially prevailed, or prevailed in part, and on the amount to be reimbursed to the Executive under the standards in this Section, will be made by the arbitrator. Reimbursement of attorney fees and expenses called for by this Section must be made within sixty (60) days after receipt by the Company of the arbitrator’s award, but in no event after the last day of the year following that in which the expense being reimbursed was incurred.

(b) Section 14(a) shall be inapplicable to a dispute arising out of or relating to Sections 7, 8 or 9 of this Agreement.

15. Assignability. This Agreement contemplates personal services by Executive, and Executive may not transfer or assign Executive’s rights or obligations under this Agreement, except that Executive may designate beneficiaries for Severance Pay in the event of Executive’s death, and may designate beneficiaries for benefits as allowed by the Company’s benefit programs. This Agreement may be assigned by the Company to any subsidiary or parent

- 10 -

corporation or a division of that corporation, but the Company shall remain liable for any Severance Pay due under this Agreement and not paid by any assignee. The Company is not required to assign this Agreement but if the Agreement is assigned as provided above, Executive will be given notice and this Agreement will continue in effect.

16. Notices. Notices to a party under this Agreement must be personally delivered or sent by certified mail (return receipt requested) and will be deemed given upon post office delivery or attempted delivery to the recipient’s last known address. Notices to the Company must be sent to the attention of [“the Company’s Chief Executive Officer” or, if the Chief Executive Officer is giving notice, “the Company’s Secretary”].

17. Governing Law. The validity, interpretation, and construction of this Agreement are to be governed by Michigan laws, without regard to choice of law rules. The parties agree that any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in either Kent County Circuit Court or the U.S. District Court for the Western District of Michigan. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Executive or the Company may be located at the time any action may be commenced. The parties agree that Kent County is a mutually convenient forum and that each of the parties conducts business in Kent County.

18. Counterparts. This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.

19. Section 409A. This Agreement is intended to be exempt from Section 409A of the Code partially as a short-term deferral as that term is understood under Treasury Regulations Section 1.409A-1(b)(4) and partially as an involuntary separation pay plan as that term is understood under Treasury Regulation 1.409A-1(b)(9) and shall be interpreted and operated consistently with those intentions. Notwithstanding any other provision to the contrary, the total payments under this Agreement, other than the lump sum cash payment under Section 6(a)(i), are limited to the 409A Limit to avoid the application of Section 409A of the Code to this Agreement. “409A Limit” means the lesser of (1) two times Executive’s annualized compensation as determined under Section 409A of the Code; or (2) two times the maximum amount that may be taken into account under a qualified retirement plan under Section 401(a)(17) of the Code for the year in which Executive experiences a separation from service ($460,000 for 2008, as adjusted for future years). If the benefits under this Agreement are required to be limited by the Section 409A Limit, the first benefit to be limited will be reimbursements otherwise called for by Section 14. If further limitation is required, the remaining benefits under this Agreement, disregarding the lump sum cash payment under Section 6(a)(i), shall be limited pro rata until the benefits payable under the Agreement do not exceed the 409A Limit.

[The Agreements with Mr. Eidson and Mr. Staples only contain the following additional provision, and subsequent sections are re-numbered accordingly:

- 11 -

Sarbanes-Oxley Act Compliance. If obligated to reimburse the Company under Section 304(a) of the Sarbanes-Oxley Act of 2002, Executive will promptly reimburse the Company for any profit, any bonus or other incentive-based or equity-based compensation, or any other sums as required by Section 304(a), within thirty (30) days of the earlier of becoming aware of such obligation or receiving written notice of such obligation from the Company.]

20. Coordination of This Agreement With Executive Severance Agreement.

(a) Circumstances Under Which Section 9 of This Agreement Will Lapse. If there is a termination of Executive’s Employment entitling Executive to Severance Benefits under Section 3 of the Executive Severance Agreement, then Section 9 of this Agreement (“Covenant Not to Compete”) will lapse and become void and of no further effect on the date of such termination of Employment.

(b) Coordination of Severance Pay Under This Agreement and Severance Benefits Under Executive Severance Agreement. If Executive receives Severance Benefits under Section 3 of the Executive Severance Agreement, Executive will not be entitled to Severance Pay under this Agreement. If Executive becomes entitled to receive Severance Benefits under Section 3 of the Executive Severance Agreement after receiving Severance Pay under this Agreement, the amount of Severance Benefits to which Executive is entitled under Section 3 of the Executive Severance Agreement will be reduced by the amount of Severance Pay received by Executive under this Agreement.

The parties have signed this Employment Agreement as of the Effective Date in Section 1.

SPARTAN STORES, INC.
By:
		[Name of Executive]
Its:		“Executive”
	“Company”

- 12 -

EX-10.27

EXHIBIT 10.27

Explanatory note: the Company has entered into this form of Executive Severance Agreement with the following named executive officers:

Dennis Eidson, President and Chief Executive Officer

David M. Staples, Executive Vice President and Chief Financial Officer

Theodore Adornato, Executive Vice President Retail Operations

Alex J. DeYonker, Executive Vice President, General Counsel and Secretary

Derek R. Jones, Executive Vice President Wholesale Operations

This form of agreement includes all amendments through May 17, 2012.

EXECUTIVE SEVERANCE AGREEMENT

THIS AGREEMENT is entered into as of the 19th day of December, 2008 (the “Effective Date”), by and between SPARTAN STORES, INC., a Michigan corporation (“Spartan Stores”), and [name of Executive] (“Executive”).

W I T N E S S E T H:

WHEREAS, Executive currently serves as a key employee of Spartan Stores and/or its subsidiaries (the “Company”) and his services and knowledge are valuable to the Company in connection with the management of one or more of the Company’s principal operating facilities, divisions, or subsidiaries; and

WHEREAS, Spartan Stores considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders; and

WHEREAS, the Board has determined that it is in the best interests of Spartan Stores and its shareholders to secure Executive’s continued services and to ensure Executive’s continued dedication and objectivity in the event of any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as hereafter defined) of Spartan Stores, without concern as to whether Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage Executive’s full attention and dedication to Spartan Stores and/or its subsidiaries, the Board has authorized Spartan Stores to enter into this Agreement.

NOW, THEREFORE, COMPANY AND EXECUTIVE AGREE AS FOLLOWS:

1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) “Board” means the Board of Directors of Spartan Stores.

(b) “Cause” means (1) the willful and continued failure by Executive to substantially perform his duties with the Company (other than any such failure resulting from Executive’s incapacity due to physical or mental injury or illness, or any such actual or anticipated failure resulting from Executive’s termination for Good Reason) after a demand for substantial performance is delivered to Executive by the Board (which demand shall specifically identify the manner in which the Board believes that Executive has not substantially performed Executive’s duties); or (2) the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company. For purposes of this Section, no act or failure to act on the part of Executive shall be considered “willful” unless done or omitted to be done by Executive not in good faith and without reasonable belief that his action(s) or omission(s) was in the best interests of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until the Company provides Executive with a copy of a resolution adopted by an affirmative vote of not less than two-thirds of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive, with counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive has been guilty of conduct set forth in subsections (1) or (2) above, setting forth the particulars in detail. A determination for Cause by the Board shall not be binding upon or entitled to deference by any finder of fact in the event of a dispute, it being the intent of the parties that such finder of fact shall make an independent determination of whether the termination was for “Cause” as defined in (1) or (2) above.

(c) “Change in Control” means:

(1) the acquisition by any individual, entity, or group (a “Person”), including any “person” within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 20% or more of either (i) the then outstanding shares of common stock of Spartan Stores (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding securities of Spartan Stores entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company, (B) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any Person controlled

2

by the Company, (C) any acquisition by any corporation pursuant to a reorganization, merger, or consolidation involving the Company, if, immediately after such reorganization, merger, or consolidation, each of the conditions described in clauses (i), (ii), and (iii) of subsection (c)(3) shall be satisfied, or (D) any acquisition by the Executive or any group of persons including the Executive; and provided further that, for purposes of clause (A), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 20% or more of the Outstanding Company Common Stock or 20% or more of the Outstanding Company Voting Securities by reason of an acquisition by the Company and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Company Common Stock or any additional Outstanding Company Voting Securities, such additional beneficial ownership shall constitute a Change in Control;

(2) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided, however, that any individual who becomes a director of Spartan Stores subsequent to the date hereof whose election, or nomination for election by the shareholders of Spartan Stores, was approved by the vote of at least two-thirds of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of Spartan Stores in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board; and provided further, that no individual who was initially elected as a director of Spartan Stores as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board, shall be deemed to have been a member of the Incumbent Board;

(3) the effective time and consummation of a reorganization, merger, or consolidation approved by the shareholders of Spartan Stores unless, in any such case, immediately after such reorganization, merger, or consolidation, (i) more than 50% of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation and more than 50% of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such reorganization, merger, or consolidation and in substantially the same proportions relative to each other as their ownership, immediately prior to such reorganization, merger, or consolidation, of the Outstanding Company Common Stock and the Outstanding Company Voting

3

Securities, as the case may be, (ii) no Person (other than (A) the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or the corporation resulting from such reorganization, merger, or consolidation (or any corporation controlled by the Company), or (B) any Person which beneficially owned, immediately prior to such reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation or 20% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger, or consolidation; or

(4) the effective time and consummation of (i) a plan of complete liquidation or dissolution of Spartan Stores as approved by the shareholders of Spartan Stores or (ii) the sale or other disposition of all or substantially all of the assets of Spartan Stores as approved by the shareholders of Spartan Stores other than to a corporation with respect to which, immediately after such sale or other disposition, (A) more than 50% of the then outstanding shares of common stock thereof and more than 50% of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such sale or other disposition and in substantially the same proportions relative to each other as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or such corporation (or any corporation controlled by the Company), or any Person which beneficially owned, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock thereof or 20% or more of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition.

4

Notwithstanding anything contained in this Agreement to the contrary, if Executive’s employment is terminated prior to a Change in Control and Executive reasonably demonstrates that such termination was at the request of or in response to a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control (a “Third Party”), and who subsequently effectuates a Change in Control, then for all purposes of this Agreement, the date of a Change in Control shall mean the date immediately prior to the date of such termination of Executive’s employment.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Common Stock” means the common stock of Spartan Stores, no par value per share.

(f) “Date of Termination” means the effective date on which Executive’s employment by the Company terminates as specified in a Notice of Termination by the Company or Executive, as the case may be, in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code. Notwithstanding the previous sentence, (i) if the Executive’s employment is terminated for Disability, as defined in Section 1(g), then such Date of Termination shall be no earlier than thirty (30) days following the date on which a Notice of Termination is received, and (ii) if the Executive’s employment is terminated by the Company other than for Cause, then such Date of Termination shall be no earlier than thirty (30) days following the date on which a Notice of Termination is received.

(g) “Disability” means Executive’s failure to be available to substantially perform his duties with the Company on a full-time basis for at least one hundred eighty (180) consecutive days as a result of Executive’s incapacity due to mental or physical illness.

(h) “Good Reason” means, without Executive’s express written consent, the occurrence of any of the following events after or in connection with a Change in Control:

(1) (i) the assignment to Executive of any duties inconsistent in any material adverse respect with Executive’s position(s), duties, responsibilities, or status with the Company immediately prior to such Change in Control, (ii) a material adverse change in Executive’s positions, reporting responsibilities, titles or offices with the Company as in effect immediately prior to such Change in Control, (iii) any removal or involuntary termination of Executive by the Company otherwise than as expressly permitted by this Agreement (including any purported termination of employment which is not effected by a Notice of Termination), or (iv) any failure to re-elect Executive to any position with the Company held by Executive immediately prior to such Change in Control;

(2) a reduction by the Company in Executive’s rate of annual base salary as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter;

5

(3) any requirement of the Company that Executive (i) be based anywhere other than the facility where Executive is located at the time of the Change in Control or reasonably equivalent facilities within Kent County, Michigan or (ii) engage in business travel to an extent substantially more burdensome than the travel obligations of Executive immediately prior to such Change in Control;

(4) the failure of the Company to continue the Company’s executive incentive plans or bonus plans in which Executive is participating immediately prior to such Change in Control or a reduction of the Executive’s target incentive award opportunity under any such bonus plan, unless Executive is permitted to participate in other plans providing Executive with substantially comparable benefits or receives compensation as a substitute for such plans providing Executive with a substantially equivalent economic benefit;

(5) the failure of the Company to (i) continue in effect any employee benefit plan or compensation plan in which Executive is participating immediately prior to such Change in Control, unless Executive is permitted to participate in other plans providing Executive with substantially comparable benefits or receives compensation as a substitute for such plans providing Executive with a substantially equivalent after-tax economic benefit, or the taking of any action by the Company which would adversely affect Executive’s participation in or materially reduce Executive’s benefits under any such plan, (ii) provide Executive and Executive’s dependents with welfare benefits (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) in accordance with the most favorable plans, practices, programs, and policies of the Company in effect for Executive immediately prior to such Change in Control, (iii) provide other fringe benefits in accordance with the most favorable plans, practices, programs, and policies of the Company in effect for Executive immediately prior to such Change in Control, or (iv) provide Executive with paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company as in effect for Executive immediately prior to such Change in Control;

(6) the failure of the Company to pay any amounts owed Executive as salary, bonus, deferred compensation or other compensation;

(7) the failure of Spartan Stores to obtain any assumption agreement contemplated in Section 10(b);

(8) any purported termination of Executive’s employment which is not effected pursuant to a Notice of Termination which satisfies the requirements of a Notice of Termination; or

6

(9) any other material breach by Spartan Stores of its obligations under this Agreement.

For purposes of this Agreement, any good faith determination of Good Reason made by Executive shall be conclusive on the parties; except that an isolated and insubstantial action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by Executive shall not constitute Good Reason. Any event or condition described in this Section 1(h) which occurs prior to a Change in Control, but which Executive reasonably demonstrates was at the request of or in response to a Third Party who effectuates a Change in Control or who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, shall constitute Good Reason following a Change in Control for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control.

Executive may not terminate the employment for Good Reason unless:

(i) Executive notifies the Board in writing, within sixty (60) days after Executive becomes aware of the act or omission constituting Good Reason that the act or omission in question constitutes Good Reason and explaining why the Executive considers it to constitute Good Reason;

(ii) the Company fails, within ten (10) days after notice from Executive under (i) above, to revoke the action or correct the omission and make the Executive whole; and

(iii) Executive gives notice of termination within thirty (30) days after expiration of the ten (10) day period under (ii) above.

Executive’s failure to give notice as provided in (i) above will not waive Executive’s right to resign with Good Reason, provided that he follows the above procedure, with regard to any subsequent act or omission constituting Good Reason.

Executive need not fulfill the above conditions a second time if the Company repeats the act or omission constituting Good Reason.

(i) “Mandatory Retirement” means Executive’s involuntary retirement as required by a lawful Company policy requiring Executive to retire at or after age sixty-five (65), but only if such policy is adopted by the Company before a Change in Control and only if such policy was not adopted by the Company at the request of or in response to a Third Party who subsequently effectuates a Change in Control.

(j) “Nonqualifying Termination” means a termination of Executive’s employment (1) by the Company for Cause, (2) by Executive for any reason (including a voluntary retirement) other than for Good Reason with Notice of Termination, (3) as a result of Executive’s death, (4) by the Company due to Executive’s Disability, unless within thirty (30) days after Notice of Termination is provided to Executive, Executive shall have returned (or offered to return, if not permitted by the Company to do so) to substantial performance of Executive’s duties on a full-time basis, or (5) as a result of Executive’s Mandatory Retirement.

7

(k) “Notice of Termination” means a written notice by the Company or Executive, as the case may be, to the other, which (1) indicates the specific reason for Executive’s termination, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment, and (3) specifies the Date of Termination. The failure by Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(l) “SERP” means the Spartan Stores, Inc. Supplemental Executive Retirement Plan, as amended from time to time.

(m) “Termination Period” means the period of time beginning with a Change in Control and ending two (2) years following the Change in Control.

2. Term of Agreement. This Agreement shall commence on the Effective Date and shall continue in effect until Spartan Stores has fulfilled all of its obligations under this Agreement following any termination of Executive’s employment with the Company.

3. Severance Benefits. If the employment of Executive with the Company shall terminate during the Termination Period in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code, other than by reason of a Nonqualifying Termination, then Executive shall receive the following severance benefits as compensation for services rendered:

(a) Lump Sum Cash Payment. On the tenth (10th) business day after the Date of Termination, Executive shall receive a lump sum cash payment in an amount equal to the sum of the following:

(1) Executive’s unpaid base salary from the Company through the Date of Termination at the rate in effect (without taking into account any reduction of base salary constituting Good Reason), just prior to the time a Notice of Termination is given plus any benefit awards (including both the cash and stock components) and bonus payments which pursuant to the terms of any plans have been earned and become payable, to the extent not theretofore paid.

(2) A bonus will be paid under the Company’s Annual Incentive Plan or any successor plan (“Annual Plan”) for the time Executive was employed by the Company in the fiscal year of termination, in an amount equal to the product of (i) the number of days Executive was employed by the Company prior to the Date of Termination in the year of termination divided by the number of days in the year, multiplied by (ii) 100% of the Executive’s current year target bonus (with such calculations to be made as though the target level has been achieved for each Performance Goal (as defined in the Annual Plan)).

8

(3) An amount equal to two (2) times the sum of (i) the higher of the Executive’s annual rate of base salary from the Company in effect on the Date of Termination or in effect on the day before the Change in Control; and (ii) the higher of (A) the Executive’s current year target bonus under the Annual Plan (with such calculations to be made as though the target level has been achieved for each performance goal (as defined in the Annual Plan)), or (B) the current-year forecasted bonus under the Annual Plan as of the Date of Termination.

(4) If Executive’s target bonus under the Annual Plan for the fiscal year in which the Date of Termination occurs has not been established by the Date of Termination, then the bonus amount under Section 3(a)(2)(ii) and the bonus amount under Section 3(a)(3)(ii) shall be the Executive’s target bonus under the Annual Plan for the fiscal year immediately preceding that in which the Date of Termination occurs (with such calculations to be made as though the target level has been achieved for each Performance Goal (as defined in the Annual Plan)).

(b) Benefits. The Company shall provide Executive with the benefits, payments and reimbursements set forth in subsections (1) to (3) below. The benefits provided for in this section are subject to the reimbursement or in-kind benefit conditions provided in Section 9 below.

(1) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twenty-fourth (24th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will reimburse Executive for 100% of Executive’s cost to obtain health, dental and prescription drug benefits equal to those provided by the Company for the Executive and eligible dependents immediately before the Date of Termination. Such reimbursement shall consist of the COBRA continuation cost for any portion of the above period that Executive is entitled to elect COBRA continuation coverage. For any portion of the above period that Executive is not entitled to elect COBRA continuation coverage, such reimbursement shall be in the amount of the Executive’s cost to obtain equivalent coverage from another source. Reimbursements under this Section 3(b)(1) will be made no later than thirty (30) days after Executive requests reimbursement, but in no event after the year following that in which the Executive incurs such expense. Reimbursements under this Section 3(b)(1) will be reported as part of Executive’s W-2 compensation and will be subject to Federal income tax withholding.

9

(2) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twelfth (12th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will continue the Executive’s tax and financial planning benefit, with reimbursement of any costs incurred by Executive to obtain such benefits to be made to the Executive within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such costs.

(3) For the period beginning on the Date of Termination and ending on the earlier of (A) the end of the twenty-fourth (24th) month after the Date of Termination or (B) the date on which Executive receives a substantially equal benefit from a new employer, the Company will continue all of the Executive’s Company funded life insurance coverage, or, if the Company’s life insurance program does not permit such continued coverage, the Company will pay the Executive’s cost to replace such coverage, with reimbursement of any costs incurred by Executive to replace such coverage to be made to the Executive within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such costs.

In addition to the payments called for by Section 3(b)(1), (2) and (3) the Company shall make payments to Executive in the amount necessary to eliminate the income tax cost to Executive resulting from any conversion of such benefits from non-taxable employee benefits to taxable benefits, payments or reimbursements. Such additional payments shall be made at the same time that the Company reimburses the Executive under this Section 3(b).

(c) Outplacement Services. The Company will provide the Executive with outplacement services through an outplacement services firm selected by the Company with the Executive’s approval, which shall not be withheld if the firm selected is reputable, at a cost not to exceed an amount equal to $25,000. The timing of outplacement services to be received shall be determined by the Executive, provided that all costs under this subsection must be incurred, and all applicable payments to the outplacement firm made, not later than the last day of the second year following that in which the Date of Termination occurred.

(d) Certain Reductions Disregarded. In computing the payments under subsections (a) through (c) above, any reduction in Executive’s base salary, bonus or fringe benefits shall be disregarded if such reduction constituted Good Reason as defined in Section 1(h) of this Agreement including the text before and in subsections (1) through (9) and the paragraph immediately following subsection (9), but excluding the remaining text of Section 1(h).

10

4. Retirement Benefits.

(a) The Executive is a participant in the SERP. If the employment of Executive with the Company shall terminate during the Termination Period in a manner that constitutes a “separation from service” as that term is defined by Section 409A of the Code, other than by reason of a Nonqualifying Termination, then Executive shall receive (as a lump sum, to be paid on the tenth (10th) business day after the Date of Termination) an amount equal to the difference between (i) the total amounts the Executive is eligible to receive as of the Date of Termination under the Spartan Stores, Inc. Cash Balance Pension Plan and any successor plan (the “Pension Plan”) and the SERP (assuming election by Executive of the lump sum payment options under the Pension Plan and SERP); and (ii) the total amounts the Executive would have been eligible to receive under the Pension Plan and SERP if the Executive were fully vested under the Pension Plan and the Executive had received additional age and years of service credits based on continued employment until the end of the twenty-fourth (24th) month following the month in which the Date of Termination occurs.

(b) The payments to Executive under this Section 4 shall be in addition to any payments under Section 3 of this Agreement and any payments under the Pension Plan and SERP.

(c) In computing the payment under subsection (a) above, any change to the SERP shall be disregarded if such change constituted Good Reason as defined in Section 1(h) of this Agreement including the text before and in subsections (1) through (9) and the paragraph immediately following subsection (9), but excluding the remaining text of Section 1(h).

5. Acceleration of Vesting Upon Change in Control. Effective at the time of a Change in Control, all unvested stock options and stock previously issued to Executive as to which rights of ownership are subject to forfeiture shall immediately vest; all risk of forfeiture of the ownership of stock or stock options and restrictions on the exercise of options shall lapse; and, Executive shall be entitled to exercise any or all options, such that the underlying shares will be considered outstanding at the time of the Change in Control.

6. Delay in Payment to a Specified Employee. Notwithstanding any other timing provision in this Agreement, if, at the time the payments would commence, Executive is a “Specified Employee” as defined by Section 409A of the Code, then no payment under this Agreement may be paid before the date that is six (6) months after Executive’s separation from service, except for payment of current compensation under Section 3(a)(1) and the acceleration of vesting under Section 5. Payments to which Executive would otherwise have been entitled during that six (6) months will be accumulated and paid on the first day after six (6) months following the date of Executive’s separation from service. All payments that would otherwise be made more than six (6) months following the date of Executive’s separation from service will be made in accordance with the general timing provisions described above. If the

11

six (6) month delay in payment to a Specified Employee applies and Executive dies before the end of the six (6) month period, the delay shall cease and payments shall begin upon Executive’s death. Payments to which Executive would otherwise have been entitled during the delay shall be accumulated and paid on the tenth business day after Executive’s death.

7. Certain Additional Payments by the Company. Anything in this Agreement to the contrary notwithstanding, the Company shall make a Gross-Up Payment to Executive as provided in this Section 7 if such a payment is called for by Section 7(a). If application of the Excise Tax (as defined in Section 7(a)) can be avoided by reduction of up to ten percent (10%) of the payments otherwise due to Executive under Sections 3 and 4, such reduction shall be made by first reducing the benefit under Section 3(c), then reducing if necessary the benefit under Section 3(b)(2), and finally by reducing if necessary the payment under Section 3(a)(3) and then if necessary the payment under Section 4. If a reduction of up to ten percent (10%) of the payments otherwise called for by Sections 3 and 4 as provided above is insufficient to avoid the application of the Excise Tax, then there shall be no reduction to the payments otherwise called for by Sections 3 and 4.

(a) Except as provided in the preceding paragraph, and notwithstanding any other provisions of this Agreement, if any payments or distributions by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (“Payments”)) trigger application of the excise tax imposed by Section 4999 of the Code, or any successor Code provision (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), or any interest or penalties are incurred by Executive with respect to Excise Tax on such amount, then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes) including, without limitation, any income and employment taxes (and any interest and penalties imposed with respect thereto) and any Excise Tax, imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments, it being the intent of this Section that the Executive shall be held harmless from all Excise Tax and interest and penalties on Excise Tax.

(b) Subject to the provisions of Section 7(c), all determinations required to be made under this Section 7, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company or Executive (collectively, the “Determination”). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change

12

in Control, Executive shall appoint another nationally recognized public accounting firm to make the Determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7, shall be paid by the Company to Executive within five (5) days of the receipt of the Determination, but in no case later than the end of the year after that in which Executive remits the Excise Tax, provided that in no event shall such payment be made until six (6) months following Executive’s separation from service, if at the time of such separation from service the Executive is a Specified Employee as defined by Section 409A of the Code. If the Accounting Firm determines that no Excise Taxes are payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The Determination by the Accounting Firm shall be binding upon the Company and Executive; however, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”) consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 7(c) and Executive thereafter is required to make payment of any Excise Tax that qualifies for a Gross-Up Payment in accordance with this Section 7, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. If the six (6) month delay in payment to a Specified Employee applies and Executive dies before the end of the six (6) month period, the delay shall cease and payments shall begin upon Executive’s death. Payments to which Executive would otherwise have been entitled during the delay shall be accumulated and paid on the tenth business day after Executive’s death.

(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

13

(iii) cooperate with the Company in good faith in order effectively to contest such claim; and

(iv) permit the Company to participate in any proceeding relating to such claim;

provided, however, that the Company shall reimburse Executive for all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income or employment tax (including interest and penalties with respect thereto) imposed as a result of such contest and payment of costs and expenses. Any reimbursement under this Section 7 must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs the expense. Without limitation on the foregoing provisions of this Section 7(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a Determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income or employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 7, Executive becomes entitled to receive, and receives, any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 7) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 7, a Determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such Determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

14

8. Withholding Taxes. The Company may withhold from all payments due to Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local, or other law, the Company is required to withhold therefrom.

9. Reimbursement of Expenses. If any contest or dispute shall arise under or related to this Agreement involving termination of Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse Executive, on a current basis, for all reasonable legal fees and expenses, if any, incurred by Executive in connection with such contest or dispute regardless of the result thereof. The reimbursement of an eligible amount must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurs such expense. Any reimbursement or in-kind benefit provided for under this Agreement shall comply with the conditions on such payments required by Treasury Regulation § 1.409A-3(i)(1)(iv) as follows:

(a) The expenses eligible for reimbursement, or the provision of the in-kind benefits, shall be provided on an objectively determinable nondiscretionary basis.

(b) The reimbursement of expenses incurred, or the provision of the in-kind benefits, shall be provided during an objectively and specifically prescribed period.

(c) The amount of expenses eligible for reimbursement, or in-kind benefits provided, during Executive’s taxable year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year. Expenses eligible for reimbursement or the provision of in-kind benefits shall be provided pro rata monthly over the period of the benefits and may not be prepaid or delayed in any way that would affect the benefits provided in any other taxable year.

(d) The reimbursement of an eligible expense shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred.

(e) The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

15

10. Successors; Binding Agreement.

(a) This Agreement shall not be terminated by any merger or consolidation of Spartan Stores whereby Spartan Stores is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of Spartan Stores. In the event of any such merger, consolidation, or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.

(b) Spartan Stores agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 10, it will cause any successor or transferee unconditionally to assume, by written instrument delivered to Executive (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of Spartan Stores to obtain such assumption prior to the effectiveness of any such merger, consolidation, or transfer of assets shall be a breach of this Agreement and shall constitute Good Reason hereunder and shall entitle Executive to compensation and other benefits from the Company in the same amount and on the same terms as Executive would be entitled hereunder if Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing, the date on which any such merger, consolidation, or transfer becomes effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if requested by Executive.

(c) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to receive such amounts or, if no person is so appointed, to Executive’s estate.

11. Notice. For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or received by facsimile transmission or five (5) days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

[address of Executive]

16

If to Spartan Stores:

Spartan Stores, Inc.

850 76th Street, S.W.

P. O. Box 8700

Grand Rapids, Michigan 49518-8700

Attention: [“Secretary” for the Chief Executive Officer; “President & Chief Executive Officer” for all other officers]

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

12. Full Settlement; Resolution of Disputes.

(a) The Company’s obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

(b) If there shall be any dispute between the Company and Executive in the event of any termination of Executive’s employment then, until there is a final, nonappealable, determination pursuant to arbitration declaring that such termination was for Cause, that the determination by Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to Executive and his dependents or other beneficiaries, as the case may be, under Sections 3 and 4, the Company shall pay all amounts, and provide all benefits, to Executive and his dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3 and 4 as though such termination were by the Company without Cause or by Executive with Good Reason; except that the Company shall not be required to pay any disputed amounts pursuant to this Section 12 except upon receipt of an undertaking by or on behalf of Executive to repay all such amounts to which Executive is ultimately determined by the arbitrator not to be entitled.

(c) Arbitration. Any dispute or controversy under this Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect, except that Executive shall be entitled to seek specific performance of his right to be paid pursuant to Section 12(b) during a dispute. Judgment may be entered on the arbitration award in any court having jurisdiction. The Company shall reimburse Executive for all reasonable costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 12(c). The reimbursement of an eligible amount must be made within thirty (30) days after Executive requests reimbursement, but in no event after the end of the year following that in which the Executive incurred the expense.

17

13. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Michigan without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

14. Establishment of Trust. Upon written request by Executive and except as provided below, immediately prior to a Change in Control, the Company shall establish and maintain a Trust in the form attached as Exhibit A. Upon the occurrence of a Change in Control the Company shall pay into the Trust the amounts called for under Exhibit A (to be determined as of the Change in Control), and shall thereafter make such additional payments as called for under Exhibit A. No payment to the Trust by the Company shall reduce the Company’s obligations to make payments to Executive under this Agreement. Notwithstanding the above, the Company shall not set aside, reserve or restrict (directly or indirectly) any assets to informally fund the Agreement, including, but not limited to, the Company’s obligation to establish and make payments to the Trust (but not the Company’s obligation to make payment to Executive when called for by this Agreement), if such action would result in inclusion of any amount in Executive’s taxable income under Section 409A(b) of the Code before such funds are paid to Executive

15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

16. Miscellaneous. No provision of this Agreement may be modified or waived unless such modification is agreed to in writing and signed by Executive and by a duly authorized officer of the Company, or such waiver is signed by the waiving party. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right Executive or the Company may have hereunder, including without limitation, the right of Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The rights of, and benefits payable to, Executive, his estate, or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, Executive, his estate, or his beneficiaries under any other employee benefit plan or compensation program of the Company, except that no benefits pursuant to any other employee plan or compensation program that become payable or are paid in

18

accordance with this Agreement shall be duplicated by operation of this Agreement. No agreements or representations, oral or otherwise, express or implied, with regard to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

17. 409A Compliance. This Agreement is intended to comply with Section 409A and the regulations and guidance promulgated thereunder and shall be interpreted and operated consistently with those intentions. The time and schedule of payment under this Agreement may not be accelerated or delayed for any reason except as permitted by Section 409A. In addition to any other restriction in the Agreement, the Agreement may not be amended or terminated except in compliance with Section 409A.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of Spartan Stores. Executive has executed this Agreement as of the day and year first written above.

	SPARTAN STORES, INC.
	By:
[Name of Executive] “Executive”		Dennis Eidson Its President and Chief Executive Officer “Company”

19

EXHIBIT A

SPARTAN STORES, INC.

EXECUTIVE SEVERANCE AGREEMENT

EXHIBIT A

EXECUTIVE BENEFIT TRUST

Dated:             , 20    

SPARTAN STORES, INC.

EXECUTIVE SEVERANCE AGREEMENT

EXHIBIT A

EXECUTIVE BENEFIT TRUST

This Agreement (the “Trust Agreement”) is made this             day of             , 20    , by and between Spartan Stores, Inc. (“Spartan Stores”), a Michigan corporation, and             (“Trustee”).

Spartan Stores has entered into an Agreement dated             , 20            (the “Agreement”) with             .

Spartan Stores has established and maintains a Supplemental Executive Retirement Plan (“SERP”) and a Supplemental Executive Savings Plan (“SESP”) for a number of key executives, including the executives identified in Appendix A. Spartan Stores has entered into Executive Severance Agreements (each a “Severance Agreement” and collectively the “Severance Agreements”) with a number of key executives, including the executives identified in Appendix A. The SERP, the SESP and each Severance Agreement, together with each other designated plan, agreement or program providing for deferred compensation that is in effect as to any key executive identified in Appendix A at the time this Trust is created or funded, is an “Executive Compensation Plan” and collectively they are the “Executive Compensation Plans”. Each executive identified in Appendix A is an “Executive” and collectively they are the “Executives”.

Appendix A shall be deemed amended from time to time to reflect the addition of each new plan, agreement or program designated by Spartan Stores as an Executive Compensation Plan for purposes of this Trust Agreement, the removal of any existing or new Executive Compensation Plan that is terminated in accordance with its terms by Spartan Stores, the addition of a new executive designated by Spartan Stores as an Executive with respect to one or more Executive Compensation Plans and the removal of an individual as an Executive with respect to one or more Executive Compensation Plans upon the full satisfaction of all liabilities to that Executive under that plan.

The Executive Compensation Plans are maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended, and are provided only to a select group of management and highly compensated employees. Spartan Stores has incurred and expects in the future to incur liability under the Executive Compensation Plans with respect to one or more of the Executives or a beneficiary (“Beneficiary”) of a deceased Executive. Each Executive Compensation Plan provides for the creation of a trust to hold assets relating to that liability. Spartan Stores intends to establish this Trust (“Trust”) to satisfy its obligations to create a trust for the Executives and to facilitate meeting its obligations to the Executives under the respective Executive Compensation Plans. However, because this Trust does not extend to key executives other than the Executives identified in Appendix A, the creation of this Trust does not fulfill its obligations to those other key executives under the Executive Compensation Plans as they may apply to those other executives.

In connection with the Agreement, Spartan Stores wishes to establish this Trust and to contribute to the Trust assets to be held in the Trust, subject to the claims of Spartan Stores’ creditors in the event of Spartan Stores’ Insolvency, as defined in Section 3, until paid to the Executives or their beneficiaries in such manner and at such times as specified in the Executive Compensation Plans or otherwise disposed of as provided in this Trust Agreement.

The parties intend that this Trust shall constitute an unfunded arrangement that shall not affect the unfunded status of the Executive Compensation Plans. It is the intention of Spartan Stores to make contributions to this Trust to provide itself with a source of funds to assist it in meeting its liabilities under the Executive Compensation Plans, but the existence of this Trust will not in any way eliminate or decrease Spartan Stores’ liabilities to the Executives or Beneficiaries under the respective Executive Compensation Plans except to the extent assets of the Trust are actually used to pay benefits due to Executives.

Therefore, by this Trust Agreement the parties establish the Trust and agree that the Trust shall be comprised of the assets contributed to it and described in this Trust Agreement and shall be held, administered and disposed of as follows:

SECTION 1

Establishment of the Trust

1.1 Trust; Sub-Trusts.

Notwithstanding this creation of a single trust for the Executive Compensation Plans, the Trustee at all times shall maintain separate sub-trusts for each Executive or Beneficiary with respect to each of the Executive Compensation Plans under which the Executive or Beneficiary has rights (each a “Sub-Trust” and collectively the “Sub-Trusts”). The three Sub-Trusts for each current Executive based on the SERP, the SESP and the respective Severance Agreements are identified in Appendix A. Additional sub-trusts will be created as necessary as additional Executives acquire rights under an Executive Compensation Plan and as new Executive Compensation Plans are created.

Notwithstanding any other provision in this Trust Agreement, except as otherwise expressly specified in this Trust Agreement, the provisions of this Trust Agreement shall apply separately to each Sub-Trust maintained for each Executive or Beneficiary with respect to each Executive Compensation Plan, including but not limited to the accounting provisions of Section 5.4. Further, except as provided in Section 8.2(c), no assets of any Sub-Trust may be used for the benefit of any Executive or Beneficiary other than the Executive or Beneficiary with respect to whom the Sub-Trust is designated in Appendix A.

1.2 Spartan Stores Contributions.

No later than the effective time of a “Change in Control” of Spartan Stores, as defined in the Executive Severance Agreements (the “Effective Time”), or as soon thereafter as permitted by Section 1.8, Spartan Stores will make an initial irrevocable contribution to each Sub-Trust as specified in Appendix A that equals a reasonable, good faith estimate of 100% of the amount necessary to pay the Executive to whom the Sub-Trust relates the total amount due and potentially due to the Executive under the Executive Compensation Plan to which the Sub-Trust relates. Spartan Stores shall make the contributions in cash.

-2-

In the event the value of the assets in a Sub-Trust, determined as of the last day of each Plan Year of the Executive Compensation Plan to which the Sub-Trust relates pursuant to the accounting procedures set forth in this Trust Agreement, is less than 100% of the amount necessary to pay the applicable Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan, determined as of such date by the Trustee, Spartan Stores shall deposit additional funds into each applicable Sub-Trust sufficient to bring the value of the assets in each Sub-Trust to that 100% threshold within 30 days after receiving notice from the Trustee that additional contributions are needed to attain the 100% level of funding for each Sub-Trust or as soon thereafter as permitted by Section 1.8.

Spartan Stores, in its sole discretion but subject to Section 1.8, at any time and from time to time, may make additional deposits in excess of the amounts provided above to one or more Sub-Trusts of cash or other property acceptable to the Trustee to augment the principal and to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement. Neither the Trustee nor any Executive or Beneficiary shall have any right to compel such additional deposits.

1.3 Irrevocable.

Prior to the Effective Time, the Trust shall be revocable by Spartan Stores. On and after the Effective Time, the Trust shall be irrevocable, except that each Sub-Trust shall be revocable with the written consent of Spartan Stores and the Executive for whom the Sub-Trust was created, and each Sub-Trust is subject to Sections 2.7 and 8.2(c).

1.4 Grantor Trust.

The Trust is intended to be a grantor trust, of which Spartan Stores is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be construed accordingly.

1.5 Limited Rights of Executive.

The principal and earnings of each Sub-Trust shall be held separate and apart from other funds of Spartan Stores and each other Sub-Trust and except as provided herein shall be used exclusively for the uses and purposes of the applicable Executive, Beneficiary and general creditors and for the payment of related fees and expenses as set forth herein. No Executive or Beneficiary shall have a preferred claim on, or a beneficial ownership interest in, any assets of the Trust or any Sub-Trust. The rights created under the Executive Compensation Plans and this Trust Agreement shall be mere unsecured contractual rights of each Executive and Beneficiary against Spartan Stores. Assets held in the Trust or Sub-Trust will be subject to the claims of Spartan Stores’ general creditors under federal and state law in the event of Insolvency, as defined in Section 3.1.

-3-

1.6 Acceptance by Trustee.

The Trustee accepts its duties and obligations as Trustee under this Trust Agreement, agrees to accept funds delivered to it by Spartan Stores, and agrees to hold, manage, administer, and apply all Trust assets in accordance with the terms and conditions of this Trust Agreement.

1.7 Committee; Absence of Committee or Spartan Stores.

The Compensation Committee (“Committee”) of the Board of Directors of Spartan Stores, or another committee designated by the Board of Directors, shall have the powers, rights, and duties of the Committee described in this Trust Agreement. The highest ranking human resources officer of Spartan Stores will certify to the Trustee from time to time the names of the members of the Committee. The Trustee may rely on the most recent certificate without further inquiry or verification. The Trustee also may rely on minutes and other written communications, certified by the secretary or acting secretary of the Committee or the highest ranking human resources officer of Spartan Stores, as accurately setting forth any action or decision by the Committee.

If for any period there are no members of the Committee, or the Committee is unable to exercise its powers and duties under this Trust Agreement, the Board of Directors of Spartan Stores shall act on behalf of, and shall have all of the powers, rights, and duties otherwise reserved to, the Committee. Spartan Stores warrants that all directions and authorizations by the Committee, or by the Board of Directors, whether for the payment of money or otherwise, will comply with the provisions of each Executive Compensation Plan and this Trust Agreement.

In the event that Spartan Stores no longer exists and there is no successor to Spartan Stores, the Trustee shall have all of the powers and duties (other than any contribution requirement) of Spartan Stores and the Committee under this Trust Agreement and, in its sole discretion, shall determine and make all payments from Trust assets due Executives and Beneficiaries under the Executive Compensation Plans or due general creditors under Section 3.

1.8 Trust Funding Restrictions.

Notwithstanding the general rules of this Trust Agreement, including but not limited to the funding obligations of Section 1.2, Spartan Stores’ obligation to establish and make payments to the Trust (but not Spartan Stores’ obligations to make payment to an Executive or Beneficiary when called for by an Executive Compensation Plan) is subject to the restrictions of Section 409A(b) of the Code as follows:

(a) Covered Employees. The Trust will not be established or funded for a Covered Employee during a Restricted Period. This restriction shall not apply to funds contributed to the Trust before a Restricted Period.

(i) Covered Employee Defined. A “Covered Employee” means an “Applicable Covered Employee” as defined by Section 409A(b)(3)(D)(i) of the Code.

(ii) Restricted Period Defined. “Restricted Period” has the meaning provided in Section 409A(b)(3)(B) of the Code.

-4-

(b) Offshore Trust. Notwithstanding anything else in this Trust Agreement, the Trust, including any assets of the Trust, may not be located or transferred outside the United States unless substantially all of the services to which the payments under the applicable Executive Compensation Plan relate are performed in such jurisdiction.

(c) Spartan Stores’ Financial Health. Notwithstanding anything else in this Trust Agreement, the Trust may not be established or funded if such establishment or funding will result in inclusion of trust funds in Executive’s taxable income under Section 409A(b)(2) of the Code before such funds are paid to Executive.

SECTION 2

Payments to Executives

2.1 Payment Schedule.

Spartan Stores shall deliver to the Trustee a schedule (the “Payment Schedule”) that indicates the amounts payable in respect of each Executive (and his or her Beneficiaries) or a formula or other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Executive Compensation Plans), and the time of commencement for payment of such amounts. Except as otherwise provided in this Trust Agreement, the Trustee shall make payments to the Executives and their Beneficiaries in accordance with the Payment Schedule, formula or payment instructions. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Executive Compensation Plans and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Spartan Stores.

2.2 Right To Payment.

The entitlement of an Executive or Beneficiary to benefits under the applicable Executive Compensation Plan shall be determined by Spartan Stores or such party as it shall designate under the Executive Compensation Plans (other than any Executive or Beneficiary), and any claim for benefits shall be considered and reviewed under the procedures set forth in the applicable Executive Compensation Plan. However, notwithstanding that general rule, after the Effective Time, the dispute resolution procedure and arbitration provisions of the Executive’s Severance Agreement shall be substituted for the claims procedure set forth in each of the Executive Compensation Plans, subject to the limitations of Section 3. Further, in the event of a dispute between an Executive and Spartan Stores after the Effective Time involving any of the Executive Compensation Plans, the determinations of Spartan Stores (or any plan administrator) shall not be entitled to deference, it being the intent of the parties that there shall be independent determinations of any disputed fact or issue through the dispute resolution and arbitration procedures.

-5-

2.3 Direct Payment by Spartan Stores.

Spartan Stores may make direct payments to each eligible Executive or Beneficiary as benefits become due under the terms of the applicable Executive Compensation Plan. Spartan Stores shall notify the Trustee in writing of its decision to make such payments directly prior to the time amounts are payable to Executives or their Beneficiaries. Subject to Section 3, Spartan Stores may direct the Trustee in writing to reimburse Spartan Stores from the Trust, and debit the applicable Sub-Trust of the applicable Executive, for amounts Spartan Stores paid directly to the Executive or Beneficiary on or after the date the funding obligations of Section 1.2 have been met. Subject to Section 3, the Trustee shall reimburse Spartan Stores for such payments promptly after the Trustee receives satisfactory written evidence that Spartan Stores has made the direct payments. In addition, if the principal of the Trust (including any Sub-Trust), and any earnings thereon, are not sufficient to pay any portion of any benefit in accordance with the terms of the Executive Compensation Plans, Spartan Stores shall make the balance of each such payment as it falls due. The Trustee shall notify Spartan Stores where principal and earnings are not sufficient.

2.4 Default Payment By Trustee.

Upon receipt of a written notice from an Executive or Beneficiary that a payment is due with respect to the Executive under an Executive Compensation Plan and that amounts due have not been paid, the Trustee shall notify Spartan Stores in writing that an Executive or Beneficiary has made a claim for benefits. Spartan Stores shall have ten (10) days from the receipt of such notice in which to provide the Trustee a written notice disputing the right to payment from the Trust. If Spartan Stores does not respond within the time specified in the preceding sentence and no Insolvency has occurred or any Insolvency is no longer continuing, the Trustee shall make the payment or payments due each Executive or Beneficiary in the required amount as due, subject to Section 2.6 below.

If Spartan Stores disputes the Executive’s or Beneficiary’s right to payment from the Trust, the Trustee, the Executive or Spartan Stores may initiate proceedings to settle the dispute. Notwithstanding the claims procedures governing the applicable Executive Compensation Plan, any such dispute under this Trust Agreement shall be settled exclusively by arbitration in Grand Rapids, Michigan, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitration award in any court having jurisdiction.

Spartan Stores shall reimburse the Executive and the Trustee for all reasonable costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 2.4. The reimbursement of an eligible amount must be made within thirty (30) days after the Executive or the Trustee requests reimbursement, but in the case of an Executive in no event after the end of the year following that in which the Executive incurred the expense.

In the event of such a dispute involving a Severance Agreement, subject to the limitations of Section 3, until there is a final, nonappealable, determination pursuant to arbitration regarding the Executive’s or Beneficiary’s right to payment the Trustee shall pay all such disputed amounts and provide all benefits under the Severance Agreement to Executive or the Beneficiary; provided, however, the Trustee shall not make any such payments except upon receipt of an undertaking by or on behalf of Executive to repay all such amounts to which Executive or Beneficiary is ultimately determined by the arbitrator (or other final determination) not to be entitled.

-6-

Spartan Stores waives all rights to contest any payment by the Trustee pursuant to this Section 2.4 except in the event of intentional misconduct by the Trustee or a violation of Section 3. Nothing in this Section 2.4 shall require the Trustee to undertake an independent determination or payment.

2.5 Payment Deductions.

Except as otherwise provided in this Trust Agreement, the Trustee shall make the payment or payments to each eligible Executive or Beneficiary and shall debit each payment from the applicable Sub-Trust.

2.6 Limit On Payments; Spartan Stores Obligation.

In no event shall a payment from the Trust to or with respect to an Executive under an Executive Compensation Plan exceed the amount allocated to the applicable Sub-Trust at the time of the payment. Spartan Stores shall be solely responsible for, and shall make as due, all required payments to or with respect to an Executive under the applicable Executive Compensation Plan that are not made from the Trust.

2.7 Missing Persons.

If the recipient entitled to any payment to be made by the Trustee from the Trust cannot be located directly by the Trustee through reasonable efforts, the Trustee shall notify the Committee of that fact. The Trustee shall then determine whether to continue to issue payments to or on behalf of the recipient, to discontinue payments pending the receipt of further information, or to terminate the Sub-Trust with regard to that recipient. The Trustee shall use reasonable efforts to determine the status of the recipient and may, but shall not be required to, seek a judicial determination of the recipient’s status or the action to be taken by the Trustee under this Section 2.7. The Trustee thereafter shall have no obligation to search for or ascertain the whereabouts of any payee under this Trust Agreement.

2.8 Documentation and Information for Trustee.

Spartan Stores at all times shall provide the Trustee with current copies of all Executive Compensation Plans for which the Trust is established and maintained from time to time, including amendments, and shall notify the Trustee when any Executive Compensation Plan is modified or terminated or a new Executive Compensation Plan is created. At least annually, Spartan Stores also shall provide the Trustee with updated information concerning the amounts payable with respect to each Executive under each Executive Compensation Plan and the underlying information necessary for calculating the amounts due.

-7-

SECTION 3

Insolvency; Administration

3.1 Insolvency.

Notwithstanding any other provision of this Trust Agreement, the Trustee shall cease payment of benefits from the Trust to any Executive or Beneficiary, and shall cease any reimbursements to Spartan Stores, if Spartan Stores is Insolvent. Spartan Stores shall be considered “Insolvent” for purposes of this Trust Agreement if Spartan Stores is (a) unable to pay its debts as they become due, (b) subject to a pending proceeding as a debtor under the United States Bankruptcy Code or (c) determined to be insolvent by a governing federal or state regulatory agency.

3.2 Claims of General Creditors. At all times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of Spartan Stores under federal and state law as set forth below.

(a) Duty to Inform; Notice. The Board of Directors and the highest ranking officer of Spartan Stores shall have the duty to inform the Trustee in writing of Spartan Stores’ Insolvency. If a person claiming to be a creditor of Spartan Stores alleges in writing to the Trustee that Spartan Stores has become Insolvent, the Trustee shall determine whether Spartan Stores is Insolvent and, pending such determination, the Trustee shall discontinue payments from the Trust to Executives and Beneficiaries and shall discontinue reimbursements to Spartan Stores.

(b) Duty to Inquire. Unless the Trustee has actual knowledge of Spartan Stores’ Insolvency, or has received notice from Spartan Stores or a person claiming to be a creditor alleging that Spartan Stores is Insolvent, the Trustee shall have no duty to inquire whether Spartan Stores is Insolvent. The Trustee may in all events rely on such evidence concerning Spartan Stores’ solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning Spartan Stores’ solvency.

(c) Payments. If at any time the Trustee has determined that Spartan Stores is Insolvent, the Trustee shall discontinue payments to Executives and Beneficiaries, shall discontinue reimbursements or Sub-Trust termination payments to Spartan Stores, and shall hold the assets of the Trust for the benefit of Spartan Stores’ general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of any Executive or Beneficiary to pursue rights as a general creditor of Spartan Stores with respect to benefits due under the applicable Executive Compensation Plan or otherwise. Any assets of the Trust used for the benefit of creditors as provided above shall be debited from each Sub-Trust in proportion to the assets of Sub-Trust relative to the assets of the Trust as a whole.

(d) Resumption. The Trustee shall resume payments from the Trust to Executives and Beneficiaries and reimbursements to Spartan Stores in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that Spartan Stores is not Insolvent or is no longer Insolvent.

-8-

(e) Omitted Payments. Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to this Section 3.2 and subsequently resumes such payments, the first payments following such discontinuance shall include the aggregate amount of all payments due to Executives and Beneficiaries under the terms of the Executive Compensation Plans for the period of such discontinuance, plus interest at the applicable federal rate as published by the IRS for the applicable period, less the aggregate amount of any payments made by Spartan Stores in lieu of the payments provided for under this Trust Agreement during the period of discontinuance.

SECTION 4

Payments to Spartan Stores

4.1 General Limitation.

Except as otherwise provided in this Trust Agreement, after the Trust has become irrevocable, Spartan Stores shall not have any right or power to direct the Trustee to return to Spartan Stores or to divert to others any of the Trust assets before payment of all benefits has been made to the Executives and Beneficiaries pursuant to the terms of this Trust Agreement and the applicable Executive Compensation Plans.

4.2 Trust Income.

During the term of this Trust, except to the extent explicitly provided otherwise in this Trust Agreement, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested.

SECTION 5

Administration of Trust

5.1 In General.

The Trust and all Trust assets shall be administered by the Trustee pursuant to all of the express and implied duties and powers and subject to all express and implied conditions and limitations contained in or derived from the provisions of this Trust Agreement and conferred and imposed by applicable law. All rights associated with administration of the Trust and with Trust assets shall be exercised by the Trustee, the Committee, or Spartan Stores or a person designated by the Trustee, the Committee, or Spartan Stores, as provided in this Trust Agreement, and in no event shall such rights be exercisable by or rest with any Executive or Beneficiary, except to the extent that approval of an amendment of the Trust Agreement or removal of the Trustee and appointment of a successor Trustee is reserved to the Executive.

-9-

5.2 Duties and Powers of Trustee.

In addition to the duties and powers set forth in other provisions of this Trust Agreement, and subject to all applicable conditions and limitations, the Trustee shall have the following duties and powers with respect to the Trust:

(a) Control, Manage, and Invest Assets. To the extent necessary to carry out the investment responsibilities in Section 6, to hold, manage, improve, repair, control and invest all assets forming part of the Trust;

(b) Records; Reports. To maintain records and to prepare and file reports required by law to be filed by the Trustee or required by agreement with Spartan Stores or by this Trust Agreement;

(c) Payments. To make payments and distributions from the fund as provided in this Trust Agreement, including benefits that have become payable under the applicable Executive Compensation Plan pursuant to Section 2 or that are required to be made to the general creditors of Spartan Stores as set forth in Section 3;

(d) Acquire and Dispose of Assets. To the extent necessary to carry out the investment responsibilities in Section 6, to purchase, sell, convey, exchange, lease, convert, transfer, divide, repair, partition, consent to partition, or otherwise acquire or dispose of any property at any time held in trust under this Trust Agreement by public or private transaction, for the consideration and upon the terms and conditions determined by the Trustee;

(e) Extend Due Dates. To the extent necessary to carry out the investment responsibilities in Section 6, to extend the time of payment of any investment obligation held by it;

(f) Voting Rights. To exercise all voting rights with respect to property held in the Trust directly or by proxy, with or without the power of substitution, and to delegate the Trustee’s powers and discretions with respect to such property to any such proxy;

(g) Exercise Other Rights. To the extent necessary to carry out the investment responsibilities in Section 6, to exchange securities, to sell or exercise subscription, conversion, and other rights and options, and make payments from the Trust in connection with that action, with respect to any property held in the Trust;

(h) Employ Agents and Advisors. To engage as reasonably necessary agents, attorneys, accountants, and other persons (who also may be employed by Spartan Stores or the Committee), to delegate duties and discretionary powers to such persons, and to reasonably rely upon information and advice furnished by such persons; provided that each delegation and acceptance of duties and powers shall be in writing; and provided further that the Trustee may not delegate its responsibilities for the management and control of the assets of the Trust;

(i) Insure Assets. To insure Trust assets when appropriate (as determined by the Trustee in its discretion) through a policy or contract of casualty insurance;

-10-

(j) Custodian. To keep on deposit with a custodian in the United States any part of the Trust;

(k) Collection. To demand, collect, and receive the principal, dividends, interest, other income and all other money or property due the Trust;

(l) Registration and Holding of Trust Assets. To register investments in its own name or in the name of a nominee; to hold any investment in bearer form; and to combine certificates representing securities with certificates of the same issue held by it in other fiduciary capacities; to deposit or to arrange for the deposit of such securities with any depository or other securities clearing entity, even though, when so deposited, such securities may be held in the name of the nominee of such depository with other securities deposited therewith by other persons; or to deposit or to arrange for the deposit of any securities issued or guaranteed by the United States government, or any agency or instrumentality thereof, including securities evidenced by book entries rather than by certificates, with the United States Department of the Treasury or a Federal Reserve Bank, even though, when so deposited, such securities may not be held separate from securities deposited therein by other persons; provided, however, that no securities held in the Trust shall be deposited with the United States Department of the Treasury or a Federal Reserve Bank or other depository in the same account as any individual property of the Trustee, and provided, further, that the books and records of the Trustee shall at all times show that all such securities are part of the Trust;

(m) Claims. To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Trust, to commence or defend suits or legal proceedings to protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other body or tribunal; provided, however, that the Trustee shall not be required to take any such action unless it shall have been indemnified by Spartan Stores to its reasonable satisfaction against liability or expenses it may incur;

(n) Execute Documents. To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers granted in this Trust Agreement; and

(o) Other Acts. To perform all other acts the Trustee deems necessary, suitable, or desirable for the control and management of the Trust and discharge of its duties.

Notwithstanding the foregoing, the Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein.

5.3 Limitation on Duties and Powers of the Trustee.

Unless expressly provided for in this Trust Agreement or otherwise properly delegated and assumed by agreement of the Trustee, the Trustee shall not be required to exercise a duty or power of Spartan Stores, the Committee, or any other fiduciary under this instrument.

-11-

If the Trustee appoints an investment manager to manage and invest some or all of the Trust assets (an “Investment Manager”), the Investment Manager shall have, and the Trustee shall not have, the express and implied duties and powers under this Trust Agreement with respect to investment of Trust assets subject to the Investment Manager’s control. The Trustee shall have no obligation or power to exercise discretionary authority or control with respect to investment of the assets managed by the Investment Manager, or to render advice regarding the investment of such assets. The Trustee shall not be liable for the investment performance of the assets managed by the Investment Manager, other than as provided in Section 6.2. The powers and duties of the Trustee with respect to such Trust assets shall be limited to the following:

(a) Custody and Protection. To act as custodian of the Trust assets not transferred to the custody of the Investment Manager or another custodian, and to protect the assets in its custody from loss by theft, fire, or other cause;

(b) Acquisitions. To acquire additional assets for the Trust in accordance with the direction of the Investment Manager;

(c) Dispositions. To sell or otherwise dispose of Trust assets in accordance with the direction of the Investment Manager;

(d) Accountings. To account for and render accountings with respect to the Trust, except for assets held by another custodian;

(e) Authorized Actions. To take authorized actions for and on behalf of the Trust in accordance with the direction of the Investment Manager; and

(f) Ministerial and Custodial Tasks. To perform other ministerial and custodial tasks in accordance with the direction of the Investment Manager.

If Trust assets are transferred to another custodian, that custodian shall have, and the Trustee shall not have, the duties and powers set forth under Section 5.2 with respect to those assets.

Except as provided in Section 6.2, the Trustee shall have no liability or responsibility for any loss resulting to the Trust by reason of the sale or purchase of any investment directed by an Investment Manager or by reason of the failure to take any action with respect to any investment that was acquired pursuant to any such direction in the absence of further directions of such Investment Manager. The Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued by the Investment Manager which the Trustee believes to be genuine and to have been issued by the Investment Manager.

5.4 Accounting by Trustee.

(a) Records and Accounting. The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Spartan Stores and Trustee. As soon as reasonably practicable following the close of each calendar year and each other valuation date agreed by Spartan Stores and the Trustee, and after the removal or resignation of the Trustee, the Trustee shall deliver to the Committee an account of its administration of the Trust during such year, or during the period from the close of the last valuation period to the date of the removal or resignation, setting forth all investments, receipts,

-12-

disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or valuation period, or as of the date of such removal or resignation, as the case may be.

(b) Objection; Settlement. The Committee may object to an accounting within 180 days after it is furnished and require that it be settled by an audit by a qualified, independent certified public accountant. The auditor shall be chosen by the Trustee from a list of at least three such accountants furnished by the Committee at the time the audit is requested. Either the Committee or the Trustee may require that the account be settled by a court of competent jurisdiction, in lieu of or in conjunction with the audit. All expenses of any audit or court proceedings, including reasonable attorney fees, shall be allowed as administrative expenses of the Trust and paid by Spartan Stores.

(c) Revision. If the Committee does not object to an accounting within the time provided, the account shall be deemed settled and final for the period covered by it. Notwithstanding the preceding sentence, the Trustee agrees it will, at reasonable cost, revise any accounting if determined by Spartan Stores to be necessary due to a latent error or omission and will do so at no cost to the extent the error or omission was the fault of the Trustee.

(d) Sub-Trust Accounting. The Trustee shall maintain a recordkeeping account for each Sub-Trust that, pursuant to rules established by the Trustee, will reflect with respect to each Sub-Trust:

(i) Deposits. Deposits made by Spartan Stores to the Sub-Trust pursuant to Section 1 of this Trust Agreement;

(ii) Income. Income, losses, and appreciation or depreciation in the value of Sub-Trust assets resulting from investment of the assets;

(iii) Payments. Payments made from the Sub-Trust to the Executive or Beneficiary and to Spartan Stores; and

(iv) Other. Any other amounts charged to the Sub-Trust, including administrative and investment expenses as described in this Trust Agreement.

The accounting provisions of this Section 5.4 shall be applied separately to each Sub-Trust maintained for each Executive under each applicable Executive Compensation Plan.

(e) Compensation and Expenses. Spartan Stores shall pay directly reasonable compensation of the Trustee and all expenses reasonably incurred by the Trustee and the Committee in the administration of this Trust, including compensation of agents, actuaries, attorneys, accountants, and other persons employed by the Trustee or the Committee, and including indemnification costs described in Section 9.2, and including any other amounts owed to Trustee or expenses of the Trust under this Trust Agreement other than as provided in the following sentence. Expenses solely attributable to investment of the Trust assets, such as investment manager fees, load or other commission fees, brokerage, postage, express or insurance charges, and stock transfer stamps expense, shall be paid from the Trust to the extent not paid directly by Spartan Stores and shall be charged to each Sub-Trust in proportion to the assets in the Sub-Trust.

-13-

To the extent such compensation and expenses remain unpaid forty-five (45) days after mailing of an invoice for the same by the Trustee to Spartan Stores, the Trustee may notify Spartan Stores of its intent to pay the amounts due from the Trust. If any amount remains unpaid thirty (30) days after mailing of the notice of intent to pay from the Trust, the Trustee may pay such compensation and expenses from the Trust. Expenses paid from the Trust shall be charged to each Sub-Trust in proportion to the assets in the Sub-Trust.

5.5 Carrying on a Business.

Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains from that business within the meaning of Section 301.7701-2 of the Treasury Regulations promulgated pursuant to the Code.

5.6 Fiduciary Duty of Trustee.

The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

SECTION 6

Investment and Investment Managers

6.1 Investment of Trust Assets.

(a) SERP and Severance Agreement Sub-Trust Investment Authority. The Trustee may only invest SERP and Severance Agreement Sub-Trust assets in investment grade debt securities as provided in this Section 6.1(a) and shall invest those assets with the goal of preserving principal and maintaining liquidity. SERP and Severance Agreement Sub-Trust assets may be invested and reinvested in any readily marketable investment grade debt securities, such as preferred stocks; corporate bonds; municipal bonds; notes; debentures; certificates of deposit or demand or time deposits, including any such deposits with the Trustee; and obligations of the United States. Notwithstanding these general rules, the Trustee shall not invest SERP or Severance Agreement Sub-Trust assets in any security (including stock or rights to acquire stock) issued by Spartan Stores or any affiliate other than a de minimis amount held in a mutual fund.

(b) SESP Sub-Trust Investment Authority. The “Investment Results” (as such term is defined in Section 2.19 of the SESP) of the SESP Accounts shall be determined in accordance with Section 4.5 of the SESP and amounts credited to an Executive’s SESP Sub-Trust shall be determined in accordance with those Investment Results. Notwithstanding the foregoing, and notwithstanding Sections 2.19 and 4.5 of the SESP, after the Effective Time the Plan Administrator of the SESP (as defined in Section 2.24 of the SESP) may determine that

-14-

some or all of the investment funds will no longer be available to Executives participating in the SESP for purposes of determining the Investment Results to be credited to an Executive’s SESP Sub-Trust. If the SESP Plan Administrator makes such a determination, an Executive may choose among the remaining investment funds made periodically available by the SESP Plan Administrator for the purpose of determining the Investment Results credited to that Executive’s SESP Sub-Trust. Notwithstanding these general rules, after the Effective Time the Trustee shall not invest in any security (including stock or rights to acquire stock) or obligations issued by Spartan Stores or any affiliate other than a de minimis amount held in a mutual fund.

Notwithstanding anything to the contrary contained in this Section 6.1(b), however, the Trustee shall be under no obligation to make actual investments that correspond to the Executive’s investment elections, even though the Executive’s elections are used to determine the Investment Results on the Executive’s SESP Sub-Trust.

If at any time no investment funds are made available, the Trustee shall invest the SESP Sub-Trust assets as provided in Section 6.1(a), above, and the Investment Results of the SESP Accounts shall be determined based on the actual investment experience of the Trustee with respect to those SESP Sub-Trust assets.

The provisions of this Section 6.1(b) constitute an amendment of Sections 2.19 and 4.5 of the SESP in accordance with Section 8.2 of the SESP, effective at the Effective Time.

(c) Other Sub-Trust Investment Authority. Any additional sub-trusts created in accordance with Section 1.1 shall be invested as provided in Section 6.1(a).

(d) Short Term Investment Authority. Trust assets may be held uninvested only for such reasonable periods as are necessary to invest new assets deposited in Trust or to clear investment transactions and reinvest the proceeds. The Trustee may hold reasonable amounts of assets invested only in an appropriate daily or other short-term investment alternative for a reasonable period of time pending payment of benefits, payment of expenses or other distributions, or pending availability of other investments.

6.2 Investment Discretion.

Except as provided in Section 6.1, the Trustee shall have sole and absolute discretion in the management and investment of the fund and in exercising investment responsibility shall have all the duties and powers set forth under Section 5.2. Spartan Stores and the Committee shall not have any of the express or implied duties and powers contained in this Trust Agreement with respect to the control, management and investment of Trust assets and shall not have any power to approve or withhold approval of any action by the Trustee with respect to the control, management and investment of the Trust. The Trustee shall have the sole right to retain or discharge Investment Managers and related custodians, and to determine the terms of the engagement of any Investment Manager and related custodian.

The Trustee shall have the right, in its sole discretion, to delegate its investment responsibility to an Investment Manager, which may be an affiliate of the Trustee. In the event the Trustee appoints an affiliated Investment Manager, the Trustee shall remain, at all times, responsible for the acts of the affiliated Investment Manager. In all cases, the Trustee may not appoint an Investment Manager if the appointment will increase the cost or expense to be paid by Spartan Stores unless Spartan Stores consents to the appointment.

-15-

SECTION 7

Resignation and Removal of Trustee

7.1 Resignation of Trustee.

The Trustee may resign at any time by written notice to Spartan Stores, which shall be effective 60 days after receipt of such notice unless Spartan Stores and the Trustee agree otherwise.

7.2 Removal of Trustee.

The Trustee may be removed by Spartan Stores only with the consent of a majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time.

7.3 Appointment of Successor.

Subject to Sections 7.1 and 7.2 of this Trust Agreement, if the Trustee resigns or is removed, a successor that is independent of Spartan Stores shall be appointed by Spartan Stores as provided in this Section 7.3. If a Trustee desires to resign or is removed, a successor Trustee, which shall be the trust department of a bank or trust company ranked among the 50 largest banks in size of total assets in the United States, shall be appointed by Spartan Stores with the consent of a majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time. In the event Spartan Stores does not appoint a successor Trustee, the Trustee may apply to a court of competent jurisdiction for appointment of a successor Trustee or for instructions. The appointment of the successor shall be effective when accepted in writing by the new Trustee or as of such later date or dates when Trust assets are delivered to the successor Trustee.

7.4 Duties of Predecessor Trustee and Successor Trustee.

Upon the resignation or removal of the Trustee and appointment of a successor Trustee, the resigning or removed Trustee shall transfer and deliver the assets of the Trust to such successor after reserving such reasonable amounts as it shall deem necessary to provide for any expenses, fees, or taxes then or thereafter chargeable against the Trust. The transfer shall be completed within 10 days after receipt of notice of resignation or removal, unless Spartan Stores extends the time limit. A Trustee that resigns or is removed shall promptly furnish to the Committee and the successor Trustee a final account of its administration of the Trust. A successor Trustee shall succeed to all rights in and ownership of the predecessor Trustee in the assets of the Trust and the predecessor Trustee shall deliver the property comprising the Trust to the successor Trustee together with any instruments of transfer, conveyance, assignment, and further assurances as the successor Trustee may reasonably require. Each successor Trustee shall have all the powers, rights, and duties conferred by this Trust Agreement as if named the initial Trustee. Subject to applicable law, no Trustee shall be personally liable for any act or failure to act of a predecessor or successor Trustee.

-16-

7.5 Expenses.

All reasonable expenses of any resigning or removed Trustee, including the reasonable cost of any court proceeding deemed necessary by the resigning or removed Trustee, shall be administrative expenses paid by Spartan Stores.

SECTION 8

Amendment or Termination

8.1 Amendment.

(a) In General. This Trust Agreement as a whole or its provisions governing a particular Sub-Trust may be amended by a written instrument executed by the Trustee and Spartan Stores. If an amendment to the Trust Agreement as a whole could reasonably be anticipated to have an adverse impact on an Executive or Beneficiary (including but not limited to an impact on the amount, likelihood or timing of payment of any amount due or that may become due under an Executive Compensation Plan) or to affect an Executive’s or Beneficiary’s voting rights, then the amendment shall also require the written consent of the majority of the total number of Executives and Beneficiaries of deceased Executives who remain entitled to benefits under the Executive Compensation Plans at such time who could reasonably be anticipated to be adversely impacted by the amendment.

If the amendment to a particular Sub-Trust could reasonably be anticipated to have an adverse impact on the Executive or Beneficiary as to whom the Sub-Trust relates (including but not limited to an impact on the amount, likelihood or timing of payment of any amount due or that may become due under an Executive Compensation Plan) or to affect an Executive’s or Beneficiary’s voting rights, then the amendment to the Sub-Trust shall also require the written consent of the Executive or Beneficiary to whom the Sub-Trust relates.

Notwithstanding the foregoing, no such amendment shall conflict with the terms of an Executive Compensation Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1.2 of this Trust Agreement.

(b) Trustee; Investment Manager. The powers, duties and liabilities of the Trustee and any Investment Manager under this Trust Agreement cannot be changed without their mutual written consent.

8.2 Termination.

(a) Timing. Subject to the allocation of assets provided in Section 8.2(c), below, each Sub-Trust shall automatically terminate when an Executive and/or Beneficiary is no longer entitled to benefits pursuant to the terms of the applicable Executive Compensation Plan;

-17-

provided, however, that if any Executive or Beneficiary has an outstanding claim against Spartan Stores regarding his or her benefits under an Executive Compensation Plan, the Sub-Trust shall not terminate until the claim has been finally resolved, until all assets held in the Sub-Trust have been properly distributed, or until the Executive agrees in writing to the termination. A Sub-Trust may also terminate with the written consent of the affected Executive or Beneficiary, as provided in Section 1.3. The entire Trust shall terminate upon the termination of all Sub-Trusts. Except as provided above, the Trust and each Sub-Trust shall not terminate with respect to an Executive or Beneficiary until the date on which such Executive and/or Beneficiary is no longer entitled to any benefits pursuant to the terms of any of the Executive Compensation Plans.

(b) Continuing Powers. Upon termination of this Trust or any Sub-Trust, the Trustee shall continue to have such of the powers provided in this Trust Agreement as are necessary or desirable for the orderly liquidation and distribution of the Trust or Sub-Trust assets.

(c) Assets. Upon termination of a Sub-Trust, all assets remaining in the Sub-Trust shall be allocated as provided in this Section 8.2(c). The Trustee shall not make any transfer to another Sub-Trust or pay any funds to Spartan Stores under this Section 8.2 prior to satisfaction of all benefit obligations to which the applicable Sub-Trust relates.

(i) Direct Assets to Executive’s Sub-Trusts. The Trustee shall transfer the assets from any terminated Sub-Trust to the other Sub-Trusts relating to the affected Executive, and allocate the assets among the Executive’s other Sub-Trusts proportionately based on the assets in the other Sub-Trusts, until such assets are fully allocated or such Sub-Trusts reach 100% of the amount necessary to pay the Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan. If assets remain after the application of the immediately preceding sentence, such assets shall be allocated pursuant to Section 8.2(c)(ii) below.

(ii) Direct Assets to Other Sub-Trusts. If there are assets remaining after the allocation provided for in Section 8.2(c)(i), above, the Trustee shall transfer the remaining assets from that Sub-Trust to the Sub-Trusts for all other Executives, and allocate the assets among the other Sub-Trusts proportionately based on the assets in the other Sub-Trusts, until such assets are fully allocated or such Sub-Trusts reach 100% of the amount necessary to pay the Executive the amount the Executive could be entitled to under the applicable Executive Compensation Plan.

(iii) Return to Spartan Stores. If assets remain after the application of Sections 8.2(c)(i) and (c)(ii), to the extent permitted by Section 3, such assets shall be returned to Spartan Stores.

(d) Trust. Upon termination of the entire Trust, all assets remaining in the Trust shall be returned to Spartan Stores.

-18-

SECTION 9

Liability and Indemnification

9.1 Liabilities Mutually Exclusive.

Except as otherwise provided in this Trust Agreement or by applicable law, Spartan Stores, the Trustee, the Committee, the Board of Directors, and each member thereof and each Investment Manager shall be responsible only for its or their own acts or omissions.

9.2 Indemnification.

Spartan Stores hereby agrees to indemnify and hold harmless the Trustee and its directors, officers, employees and agents from and against all losses, damages, liabilities, claims, costs, and expenses, including reasonable attorneys’ fees, that the Trustee or its directors, officers, employees and agents may incur by reason of the negligence or willful misconduct of Spartan Stores or the Committee. In making any distributions and taking any other action under this Trust Agreement, the Trustee may rely upon and shall be fully protected in relying upon, any notice, certificate, or other paper or written document provided by Spartan Stores or the Committee that is reasonably believed to be genuine and consistent with this Trust Agreement and the Executive Compensation Plans.

All duties and responsibilities of the Trustee shall be exercised in its sole and absolute discretion and, except as provided below, the Trustee and its directors, officers, employees and agents shall be protected from any loss or liability in the good faith exercise of that discretion. Spartan Stores agrees that it will indemnify and hold harmless the Trustee and its directors, officers, employees and agents from and against all losses, damages, liabilities, claims, costs and expenses, including reasonable attorneys’ fees, that the Trustee may incur by reason of its good faith acts or omissions in the exercise of its discretion. However, indemnification shall not apply to grossly negligent acts or omissions, acts or omissions in bad faith or to willful misconduct.

The indemnification obligation described in this Section 9.2 shall survive and continue after the termination of the Trust or any Sub-Trust and may not be altered or amended with respect to any current or former Trustee without its written consent.

SECTION 10

General Provisions

10.1 Successor to Spartan Stores.

In the event Spartan Stores is succeeded by another entity, references to Spartan Stores in this Trust Agreement shall refer to the successor.

10.2 Merger of Trustee.

If the Trustee is merged or consolidated with, or shall sell or transfer all or substantially all of its assets and business to another entity, or shall be in any manner reorganized or reincorporated, then the successor corporation or other entity shall continue to be the Trustee pending subsequent resignation or removal as provided in Section 7.

-19-

10.3 Nonalienation.

Benefits payable to Executives and their Beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. An interest in an amount promised shall not provide collateral or security for a debt of an Executive or Beneficiary or be subject to garnishment, execution, assignment, levy, or to another form of judicial or administrative process or to the claim of a creditor of an Executive or Beneficiary, through legal process or otherwise. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or to otherwise dispose of benefits payable, before actual receipt of the benefits, or a right to receive benefits, shall be void and shall not be recognized.

10.4 Severability.

Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

10.5 Governing Law.

This Trust Agreement shall be governed by and construed in accordance with the laws of the state of Michigan, to the extent not preempted by federal law.

10.6 Notices.

Notices pursuant to this Trust Agreement shall be given by first class or priority U.S. mail or by commercial express delivery and shall be addressed to:

Spartan Stores:	Spartan Stores, Inc. Attn: General Counsel 850 76th Street S.W. P.O. Box 8700 Grand Rapids, Michigan 49518
Trustee:
	Attn:

10.7 Counterparts.

This Trust Agreement and any amendment hereto may be executed in two or more counterparts.

-20-

10.8 Gender and Number.

Except when otherwise indicated by the context, words denoting the masculine gender shall include the feminine, the singular shall include the plural, and the plural shall include the singular.

10.9 Scope of this Agreement.

This Trust Agreement will be binding on the Executives and all other persons entitled to any benefits hereunder and their respective heirs and legal representatives, and upon Spartan Stores, the Committee, the Trustee, and any Investment Managers, and their successors and assigns.

10.10 Statutory References.

Any references in this Trust Agreement to a section of the Code or any other statute or regulation shall include any comparable section or sections that amends, supplements, or supersedes that section.

10.11 Headings.

The headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of the Trust Agreement or the construction of any provision thereof.

10.12 Section 409A.

This Trust is intended to comply with the trust funding restrictions of Section 409A(b) of the Code and shall be interpreted and operated consistently with those intentions.

IN WITNESS WHEREOF, this Trust Agreement is executed on behalf of Spartan Stores, and the Trustee by their respective authorized officers, as of the day and year set forth above.

SPARTAN STORES, INC.

By

Its

[TRUSTEE]

By

Its

-21-

TABLE OF CONTENTS

		Page
SECTION 1	Establishment of the Trust		2
1.1	Trust; Sub-Trusts		2
1.2	Spartan Stores Contributions		2
1.3	Irrevocable		3
1.4	Grantor Trust		3
1.5	Limited Rights of Executive		3
1.6	Acceptance by Trustee		4
1.7	Committee; Absence of Committee or Spartan Stores		4
1.8	Trust Funding Restrictions		4
(a)	Covered Employees		4
(b)	Offshore Trust		5
(c)	Spartan Stores’ Financial Health		5
SECTION 2	Payments to Executives		5
2.1	Payment Schedule		5
2.2	Right To Payment		5
2.3	Direct Payment by Spartan Stores		6
2.4	Default Payment By Trustee		6
2.5	Payment Deductions		7
2.6	Limit On Payments; Spartan Stores Obligation		7
2.7	Missing Persons		7
2.8	Documentation and Information for Trustee		7
SECTION 3	Insolvency; Administration		8
3.1	Insolvency		8
3.2	Claims of General Creditors		8
	(a)    Duty to Inform; Notice		8
	(b)    Duty to Inquire		8
	(c)    Payments		8
	(d)    Resumption		8
	(e)    Omitted Payments		9
SECTION 4	Payments to Spartan Stores		9
4.1	General Limitation		9
4.2	Trust Income		9
SECTION 5	Administration of Trust		9
5.1	In General		9
5.2	Duties and Powers of Trustee		10
	(a)    Control, Manage, and Invest Assets		10
	(b)    Records; Reports		10
	(c)    Payments		10
	(d)    Acquire and Dispose of Assets		10
	(e)    Extend Due Dates		10
	(f)     Voting Rights		10
	(g)    Exercise Other Rights		10

-i-

	(h)    Employ Agents and Advisors	11
	(i)     Insure Assets	11
	(j)     Custodian	11
	(k)    Collection	11
	(l)     Registration and Holding of Trust Assets	11
	(m)   Claims	11
	(n)    Execute Documents	11
	(o)    Other Acts	11
5.3	Limitation on Duties and Powers of the Trustee	11
	(a)    Custody and Protection	12
	(b)    Acquisitions	12
	(c)    Dispositions	12
	(d)    Accountings	12
	(e)    Authorized Actions	12
	(f)     Ministerial and Custodial Tasks	12
5.4	Accounting by Trustee	12
	(a)    Records and Accounting	12
	(b)    Objection; Settlement	13
	(c)    Revision	13
	(d)    Sub-Trust Accounting	13
	(e)    Compensation and Expenses	13
5.5	Carrying on a Business	14
5.6	Fiduciary Duty of Trustee	14
SECTION 6	Investment and Investment Managers	14
6.1	Investment of Trust Assets	14
	(a)    SERP and Severance Agreement Sub-Trust Investment Authority	14
	(b)    SESP Sub-Trust Investment Authority	14
	(c)    Other Sub-Trust Investment Authority	14
	(d)    Short Term Investment Authority	14
6.2	Investment Discretion	14
SECTION 7	Resignation and Removal of Trustee	16
7.1	Resignation of Trustee	16
7.2	Removal of Trustee	16
7.3	Appointment of Successor	16
7.4	Duties of Predecessor Trustee and Successor Trustee	16
7.5	Expenses	17
SECTION 8	Amendment or Termination	17
8.1	Amendment	17
	(a)    In General	17
	(b)    Trustee; Investment Manager	17
8.2	Termination	17
	(a)    Timing	17
	(b)    Continuing Powers	18
	(c)    Assets	18
	(d)    Trust	18
SECTION 9	Liability and Indemnification	19

-ii-

9.1	Liabilities Mutually Exclusive	19
9.2	Indemnification	19
SECTION 10	General Provisions	19
10.1	Successor to Spartan Stores	19
10.2	Merger of Trustee	19
10.3	Nonalienation	20
10.4	Severability	20
10.5	Governing Law	20
10.6	Notices	20
10.7	Counterparts	20
10.8	Gender and Number	21
10.9	Scope of this Agreement	21
10.10	Statutory References	21
10.11	Headings	21
10.12	Section 409A	21

-iii-

EX-12.1

Exhibit 12.1

SPARTAN STORES, INC.

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Fiscal Year Ended
(In thousands, except ratios)	March 31, 2012			March 26, 2011			March 27, 2010			March 28, 2009			March 29, 2008
Earnings:
Earnings before income taxes and discontinued operations	$	51,556		$	52,959		$	42,408		$	58,947		$	48,067
Fixed charges		26,218			26,338			28,136			24,830			24,083
Amortization of capitalized interest		109			133			172			224			260
Capitalized interest		(109	)		(35	)		(43	)		(116	)		(195	)
Earnings available for fixed charges	$	77,774		$	79,395		$	70,673		$	83,885		$	72,215
Fixed charges:
Interest expense	$	15,037		$	15,104		$	16,394		$	14,138		$	13,842
Capitalized interest		109			35			43			116			195
Interest component of rent expense		11,072			11,199			11,699			10,576			10,046
Total fixed charges	$	26,218		$	26.338		$	28,136		$	24,830		$	24,083
Ratio of earnings to fixed charges		2.97			3.01			2.51			3.38			3.00

EX-21

EXHIBIT 21

LIST OF SUBSIDIARIES OF SPARTAN STORES, INC. Direct subsidiaries of Spartan Stores, Inc.:
1.	SPARTAN STORES DISTRIBUTION, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Spartan Stores Distribution, LLC
2.	MARKET DEVELOPMENT, LLC Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Market Development, LLC Jefferson Square (in IN) Market Street Plaza (in IN)
3.	SEAWAY FOOD TOWN, INC. (see this entity’s subsidiaries below) Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Seaway Food Town, Inc. (in OH) The Pharm (in OH)
4.	SPARTAN STORES ASSOCIATES, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Spartan Stores Associates, LLC

Indirect subsidiaries of Spartan Stores, Inc.:

	Subsidiaries of Seaway Food Town, Inc.
5.	SPARTAN STORES FUEL, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Spartan Stores Fuel, LLC D&W Quick Stop Family Fare Quick Stop Glen’s Quick Stop VG’s Quick Stop
6.	FAMILY FARE, LLC (see this entity’s subsidiary below) Jurisdiction of Formation: Names under which business is conducted:	Michigan Family Fare, LLC Family Fare Pharmacy Family Fare Supermarkets Felpausch Food Center Glen’s Markets Glen’s Pharmacy D&W Fresh Market D&W Pharmacy VG’s Food Center VG’s Pharmacy VG’s Food & Pharmacy Dolven Pharmacy Spartan Stores Pharmacy Valu Land
	Subsidiary of Family Fare, LLC:
7.	PREVO’S FAMILY MARKETS, INC. (see this entity’s subsidiary below) Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Prevo’s Family Markets, Inc. D&W Fresh Market D&W Pharmacy Family Fare Pharmacy Family Fare Supermarket Felpausch Food Center Glen’s Markets Glen’s Pharmacy
	Subsidiary of Prevo’s Family Markets, Inc.:
8.	MSFC, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan MSFC, LLC

-2-

	Subsidiaries of Seaway Food Town, Inc.:
9.	THE PHARM OF MICHIGAN, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan The Pharm of Michigan, Inc. The Pharm
10.	SPARTAN PROPERTIES MANAGEMENT, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Ohio Spartan Properties Management, Inc.
11.	VALLEY FARM DISTRIBUTING CO. Jurisdiction of Incorporation: Names under which business is conducted:	Ohio Valley Farm Distribution Co. VFD (in MI, OH and PA) Valley Farm Foods (in OH)
12.	CUSTER PHARMACY, INC. Jurisdiction of Incorporation: Names under which business is conducted:	Michigan Custer Pharmacy, Inc.
13.	GRUBER’S REAL ESTATE, LLC Jurisdiction of Formation: Names under which business is conducted:	Michigan Gruber’s Real Estate, LLC

744893-20

-3-

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-161749, 333-161745, 333-161742, 333-110952, 333-110593, 333-65802, 333-66430, 333-72010, 333-75810, 333-100794, 333-145432, 333-96615, 333-71774, 333-49448, and 333-129156 on Form S-8, Registration Statement Nos. 333-53672 and 333-145494 on Form S-3, and Registration Statement No. 333-37050 on Form S-4 of our reports dated May 22, 2012, relating to the consolidated financial statements of Spartan Stores, Inc. and subsidiaries (the “Company”) and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Company for the year ended March 31, 2012.

/s/ Deloitte & Touche LLP

Grand Rapids, Michigan

May 22, 2012

EX-24

Exhibit 24

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ M. Shân Atkins
Print Name:	M. Shân Atkins
Title:	Director
Date:	10 April 2012

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Wendy A. Beck
Print Name:	Wendy A. Beck
Title:	Director
Date:	4/6/12

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Dr. Frank M. Gambino
Print Name:	Dr. Frank M. Gambino
Title:	Director
Date:	4/27/2012

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Yvonne R. Jackson
Print Name:	Yvonne R. Jackson
Title:	Director
Date:	4/21/12

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Fred J. Morganthall II
Print Name:	Fred J. Morganthall II
Title:	Director
Date:	4/5/2012

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Elizabeth A. Nickels
Print Name:	Elizabeth A. Nickels
Title:	Director
Date:	4/25/12

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Timothy J. O’Donovan
Print Name:	Timothy J. O’Donovan
Title:	Director
Date:	4/5/12

POWER OF ATTORNEY

The undersigned in his or her capacity as a director or officer, or both, of Spartan Stores, Inc., does hereby appoint DENNIS EIDSON, DAVID M. STAPLES and ALEX J. DeYONKER, or any of them, his or her attorneys or attorney, with full power of substitution, to execute in his or her name an Annual Report of Spartan Stores, Inc. on Form 10-K for its fiscal year ended March 31, 2012, and any amendments to that report, and to file it with the Securities and Exchange Commission or other regulatory authority. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.

Signature:	/s/ Craig C. Sturken
Print Name:	Craig C. Sturken
Title:	Chairman and Director
Date:	4/5/2012

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Dennis Eidson, certify that:

1. I have reviewed this Annual Report on Form 10-K of Spartan Stores, Inc.;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 22, 2012	/s/ Dennis Eidson
	Dennis Eidson
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, David M. Staples, certify that:

1. I have reviewed this Annual Report on Form 10-K of Spartan Stores, Inc.;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 22, 2012	/s/ David M. Staples
	David M. Staples
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, each of the undersigned hereby certifies in his capacity as an officer of Spartan Stores, Inc. (the “Company”) that the Annual Report of the Company on Form 10-K for the accounting period ended March 31, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all material respects, the financial condition of the Company at the end of such period and the results of operations of the Company for such period.

This Certificate is given pursuant to 18 U.S.C. § 1350 and for no other purpose.

Dated: May 22, 2012	/s/ Dennis Eidson
	Dennis Eidson President and Chief Executive Officer (Principal Executive Officer)
Dated: May 22, 2012	/s/ David M. Staples
	David M. Staples Executive Vice President and Chief Financial Officer (Principal Financial Officer)

A signed original of this written statement has been provided to Spartan Stores, Inc. and will be retained by Spartan Stores, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Acquisitions Of Assets

12 Months Ended

Mar. 31, 2012

Acquisitions Of Assets [Abstract]

Acquisitions Of Assets

Note 2

Acquisitions of Assets

During fiscal 2010, Spartan Stores acquired certain assets of one fuel center/convenience store and three pharmacies in separate transactions for a total purchase price of $7.2 million. The purchased assets included inventory, customers lists, non-compete agreements, land, building, equipment and goodwill. The acquisitions were made to increase market share. Goodwill of $2.2 million and $0.4 million was assigned to the Retail and Distribution segments, respectively.

XML

Summary Of Significant Accounting Policies And Basis Of Presentation

12 Months Ended

Mar. 31, 2012

Summary Of Significant Accounting Policies And Basis Of Presentation [Abstract]

Summary Of Significant Accounting Policies And Basis Of Presentation

Note 1

Summary of Significant Accounting Policies and Basis of Presentation

Principles of Consolidation: The consolidated financial statements include the accounts of Spartan Stores, Inc. and its subsidiaries ("Spartan Stores"). All significant intercompany accounts and transactions have been eliminated.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods might differ from those estimates.

Fiscal Year: Spartan Stores' fiscal year ends on the last Saturday of March. The fiscal year ended March 31, 2012 consisted of 53 weeks. The fiscal years ended March 26, 2011 and March 27, 2010 each consisted of 52 weeks.

Revenue Recognition: The Retail segment recognizes revenues from the sale of products at the point of sale. Customer returns are immaterial. Discounts provided to customers by Spartan Stores at the time of sale are recognized as a reduction in sales as the products are sold. Spartan Stores does not recognize a sale when it sells gift cards and gift certificates; rather, a sale is recognized when the gift card or gift certificate is redeemed to purchase product. The Distribution segment recognizes revenues when products are delivered or ancillary services are provided. Sales and excise taxes are excluded from revenue.

Cost of Sales: Cost of sales includes purchase costs, freight, physical inventory adjustments, markdowns and promotional allowances. Vendor allowances that relate to our buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for our merchandising costs such as setting up warehouse infrastructure. Vendor allowances are recognized as a reduction in cost of sales when the related product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms. The distribution segment includes shipping and handling costs in the selling, general and administrative section of operating expenses on the Consolidated Statement of Earnings.

Cash and Cash Equivalents: Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase.

Accounts Receivable: Accounts receivable are shown net of allowances for credit losses of $0.9 million in fiscal 2012 and $1.4 million in fiscal 2011. Spartan Stores evaluates the adequacy of its allowances by analyzing the aging of receivables, customer financial condition, historical collection experience, the value of collateral and other economic and industry factors. Operating results include bad debt expense of $0.7 million, $0.9 million, and $1.3 million for fiscal years 2012, 2011 and 2010, respectively.

Inventory Valuation: Inventories are valued at the lower of cost or market using the last-in, first-out ("LIFO") method. If replacement cost had been used, inventories would have been $43.8 million and $42.4 million higher at March 31, 2012 and March 26, 2011, respectively. The replacement cost method utilizes the most current unit purchase cost to calculate the value of inventories. During fiscal years 2012, 2011 and 2010, certain inventory quantities were reduced. The reductions resulted in liquidation of LIFO inventory carried at lower costs prevailing in prior years, the effect of which decreased the LIFO provision in fiscal years 2012, 2011 and 2010 by $3.0 million, $7.7 million and $0.4 million, respectively. Spartan Stores accounts for its Distribution inventory using a perpetual system and utilizes the retail inventory method ("RIM") to value inventory for center store products in the Retail segment. Under the retail inventory method, inventory is stated at cost with cost of sales and gross margin calculated by applying a cost ratio to the retail value of inventories. Fresh and pharmacy products are accounted for at cost in the Retail segment. We evaluate inventory shortages throughout the year based on actual physical counts in our facilities. We record allowances for inventory shortages based on the results of recent physical counts to provide for estimated shortages from the last physical count to the financial statement date.

Long-Lived Assets Other than Goodwill: Spartan Stores reviews and evaluates long-lived assets for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. When the undiscounted future cash flows are not sufficient to recover an asset's carrying amount, the fair value is compared to the carrying value to determine the impairment loss to be recorded. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value, less the cost to sell. Fair values are determined by independent appraisals or expected sales prices based upon market participant data developed by internal licensed real estate professionals. Estimates of future cash flows and expected sales prices are judgments based upon Spartan Stores' experience and knowledge of operations. These estimates project cash flows several years into the future and are affected by changes in the economy, real estate market conditions and inflation.

Goodwill: Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in business combinations after amounts have been allocated to intangible assets. Goodwill is not amortized, but is reviewed for impairment during the fourth quarter of each year, or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, using a discounted cash flow model and comparable market values of each reporting segment.

Other Assets: Included in Other assets are intangible assets and debt issuance costs. Intangible assets primarily consist of trade name, favorable lease agreements, prescription lists, non-compete agreements, liquor licenses and franchise fees. Favorable leases are amortized on a straight-line basis over the related lease terms. Prescription lists are amortized on a straight-line basis over the period of expected benefit. Non-compete agreements are amortized on a straight-line basis over the length of the agreements. Franchise fees are amortized on a straight-line basis over the term of the franchise agreement. Debt issuance costs are amortized over the term of the related financing agreement. The trade name and liquor licenses are not amortized as they have indefinite lives.

Property and Equipment: Property and equipment are recorded at cost and depreciated over the shorter of the estimated useful lives or lease periods of the assets. Expenditures for normal repairs and maintenance are charged to operations as incurred. Depreciation is computed using the straight-line method as follows:

Land improvements	15 years
Buildings and improvements	15 to 40 years
Equipment	3 to 15 years

Insurance Reserves: Spartan Stores is primarily self-insured for workers' compensation and general liability costs. Losses are recorded when reported and consist of individual case estimates. Incurred but not reported losses are actuarially estimated based on available historical information. We have purchased stop-loss coverage to limit our exposure to any significant exposure on a per claim basis. Our exposure for workers' compensation and general liability is $0.5 million per claim.

A summary of changes in Spartan Stores' self-insurance liability is as follows:

(In thousands)	March 31, 2012			March 26, 2011			March 27, 2010
Beginning balance	$	2,843		$	4,049		$	3,848
Expense		2,527			1,838			2,762
Claim payments		(2,365	)		(3,044	)		(2,561	)
Ending balance		3,005			2,843			4,049

The current portion of the self-insurance liability is included in "Other accrued expenses" and the long-term portion is included in "Other long-term liabilities" in the Consolidated Balance Sheets.

Income Taxes: Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax asset and liability computations are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred and other tax assets and liabilities.

Earnings per share: Basic earnings per share ("EPS") excludes dilution and is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by increasing the weighted average number of common shares outstanding by the dilutive effect of the issuance of common stock for options outstanding under Spartan Stores' stock incentive plans. Unvested restricted stock awards contain non-forfeitable rights to dividends and, therefore, are considered participating securities and included in the computation of basic earnings per share pursuant to the two-class method.

The following table sets forth the computation of basic and diluted earnings per share for continuing operations:

(In thousands, except per share amounts)	March 31, 2012		March 26, 2011		March 27, 2010
Numerator:
Earnings from continuing operations	$	31,870	$	32,539	$	25,933
Denominator:
Weighted average shares outstanding – basic		22,791		22,606		22,406
Effect of dilutive stock options		96		82		74
Weighted average shares outstanding – diluted		22,887		22,688		22,480
Basic earnings per share from continuing operations	$	1.40	$	1.44	$	1.16
Diluted earnings per share from continuing operations	$	1.39	$	1.43	$	1.15

Weighted average shares issuable upon the exercise of stock options that were not included in the earnings per share calculations because they were anti-dilutive were 239,326 in fiscal 2012, 435,446 in fiscal 2011, and 571,008 in fiscal 2010.

Restricted stock units granted in fiscal 2010 were only issuable if certain performance criteria were met, making these shares contingently issuable under ASC Topic 260. Fiscal 2010 performance criteria was not met and, therefore, no shares were issued. In addition, no restricted stock units were granted in fiscal 2012 or 2011 and none are planned to be issued in fiscal 2013.

The senior subordinated convertible notes due 2027 will be convertible at the option of the holder, only upon the occurrence of certain events, at an initial conversion rate of 28.0310 shares of Spartan Stores common stock per $1,000 principal amount at maturity of the notes (equal to an initial conversion price of approximately $35.67 per share). Upon conversion, Spartan Stores will pay the holder the conversion value in cash up to the accreted principal amount of the note and the excess conversion value, if any, in shares of Spartan Stores common stock – unless Spartan Stores elects to satisfy its obligation under such conversion by delivering only shares of common stock. Therefore, the notes are not currently dilutive to earnings per share as they are only dilutive above the accreted value. (See Note 5.)

Stock-Based Compensation: All share-based payments to employees are recognized in the financial statements as compensation cost based on the fair value on the date of grant. Spartan Stores determines the fair value of stock option awards using the Black-Scholes option-pricing model. The grant date closing price per share of Spartan Stores stock is used to estimate the fair value of restricted stock awards and restricted stock units. The value of the portion of awards expected to vest is recognized as expense over the requisite service period.

Shareholders' Equity: Spartan Stores' restated articles of incorporation provide that the board of directors may at any time, and from time to time, provide for the issuance of up to 10 million shares of preferred stock in one or more series, each with such designations as determined by the board of directors. At March 31, 2012, there were no shares of preferred stock outstanding.

Comprehensive Income: Comprehensive income is net earnings adjusted for the net (loss) income on the interest rate swap agreement and the minimum pension liability, net of applicable income taxes.

(In thousands)	Interest Rate Swap Liability			Minimum Pension Liability			Accumulated Other Comprehensive Income (Loss)
Balance March 28, 2009		(283	)		(13,868	)		(14,151	)
Other comprehensive (loss) income		(117	)		1,295			1,178
Balance March 27, 2010		(400	)		(12,573	)		(12,973	)
Other comprehensive (loss) income		(265	)		2,664			2,399
Pension curtailment income		—			(2,442	)		(2,442	)
Balance March 26, 2011	$	(665	)	$	(12,351	)	$	(13,016	)
Other comprehensive (loss) income		211			(1,442	)		(1,231	)
SWAP Termination, net of tax		454			—			454
Balance March 31, 2012	$	—		$	(13,793	)	$	(13,793	)

Advertising Costs: Spartan Stores' advertising costs are expensed as incurred and are included in selling, general and administrative expenses. Advertising expenses were $14.5 million, $14.2 million and $14.8 million in fiscal years 2012, 2011 and 2010, respectively.

Recently Adopted Accounting Standards

In June 2009, the FASB issued guidance for the consolidation of variable interest entities ("VIE"). This guidance establishes new criteria for determining the primary beneficiary. It also requires an ongoing assessment to determine whether a company is the primary beneficiary of a VIE. The guidance was effective beginning in fiscal 2011. This guidance did not have a material impact on our consolidated financial statements.

In January 2010, the Financial Accounting Standards Board ("FASB") issued guidance which amends and clarifies existing guidance related to fair value measurements and disclosures. This guidance requires new disclosures for (1) transfers in and out of Level 1 and Level 2 and reasons for such transfers; and (2) the separate presentation of purchases, sales, issuances and settlement in the Level 3 reconciliation. It also clarifies guidance around disaggregation and disclosures of inputs and valuation techniques for Level 2 and Level 3 fair value measurements. This guidance was effective for us for the first quarter of fiscal 2011, except for the new disclosures in the Level 3 reconciliation. The Level 3 disclosures are effective for the first quarter of fiscal 2012. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2011, the FASB amended its standards related to fair value measurements and disclosures. The objective of the amendment is to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. This amendment primarily changed the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. In addition, the amendment clarified the FASB's intent about the application of existing fair value measurement requirements. The new standard also requires additional disclosures related to fair value measurements categorized within Level 3 of the fair value hierarchy and requires disclosure of the categorization in the hierarchy for items that are not recorded at fair value but as to which fair value is required to be disclosed. The new rules became effective for interim and annual periods beginning after December 15, 2011. The Company adopted this standard and it did not have a material impact on the financial statements for fiscal 2012.

In September 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2011-09, Compensation—Retirement Benefits—Multi-employer Plans (Subtopic 715-80) ("ASU 2011-09"). This accounting standard provides guidance on disclosure requirements for employers participating in multi-employer pension and other postretirement benefit plans (multi-employer plans) to improve transparency and increase awareness of the commitments and risks involved with participation in multi-employer plans. The new guidance requires employers participating in multi-employer plans to provide additional quantitative and qualitative disclosures to provide users with more detailed information regarding an employer's involvement in multi-employer plans. The Company adopted the standard effective March 31, 2011. Refer to Note 8, Commitments and Contingencies and Note 10, Associate Retirement Plans in the accompanying Notes to Consolidated Financial Statements for additional information on the Company's participation in the multi-employer pension plan. The adoption of this new standard resulted in enhanced disclosures, but otherwise did not have an impact on the Company's Consolidated Financial Statements.

In September 2011, the FASB amended its standards related to the testing of goodwill for impairment. The objective of this amendment is to simplify the annual goodwill impairment evaluation process. The amendment provides entities the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The two-step impairment test is now only required if an entity determines through this qualitative analysis that it is more likely than not that the fair value of the reporting unit is less than its carrying value. The new rules are effective for interim and annual periods beginning after December 15, 2011; however, entities were permitted to adopt the standards early. We continued to test our goodwill for impairment using the allowed two step test.

Recently Issued Accounting Standards:

In June 2011, the FASB amended its rules regarding the presentation of comprehensive income. The objective of this amendment is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. Specifically, this amendment requires that all non-owner changes in shareholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new rules were to become effective for interim and annual periods beginning after December 15, 2011. In December 2011, the FASB deferred certain aspects of this standard beyond the December 15, 2011 effective date, specifically the provisions dealing with reclassification adjustments. Because the standards only affect the display of comprehensive income and do not affect what is included in comprehensive income, the standards will not have a material effect on our Consolidated Financial Statements.

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Mar. 26, 2011
Assets
Cash and cash equivalents	$ 26,476	$ 43,824
Accounts receivable, net	58,637	56,344
Inventories, net	99,778	103,814
Prepaid expenses	9,478	6,006
Other current assets	13,686	1,402
Deferred taxes on income	1,582	1,526
Total current assets	209,637	212,916
Other assets
Goodwill	240,194	241,244
Other, net	56,866	55,788
Total other assets	297,060	297,032
Property and equipment
Land and improvements	23,456	21,866
Buildings and improvements	235,886	219,449
Equipment	298,028	306,993
Total property and equipment	557,370	548,308
Less accumulated depreciation and amortization	300,594	306,860
Property and equipment, net	256,776	241,448
Total assets	763,473	751,396
Liabilities and Shareholders' Equity
Accounts payable	107,703	100,919
Accrued payroll and benefits	39,366	37,679
Accrued Income Taxes	12,352
Other accrued expenses	17,611	18,343
Current portion of restructuring costs	3,472	4,470
Current maturities of long-term debt and capital lease obligations	4,449	4,205
Total current liabilities	184,953	165,616
Long-term liabilities
Deferred income taxes	83,807	66,241
Postretirement benefits	13,618	14,222
Other long-term liabilities	16,292	18,269
Restructuring costs	7,630	10,832
Long-term debt and capital lease obligations	133,565	170,711
Total long-term liabilities	254,912	280,275
Shareholders' equity
Common stock, voting, no par value; 50,000 shares authorized; 22,215 and 22,619 shares outstanding	155,134	162,086
Preferred stock, no par value, 10,000 shares authorized; no shares outstanding
Accumulated other comprehensive loss	(13,793)	(13,016)
Retained earnings	182,267	156,435
Total shareholders' equity	323,608	305,505
Total liabilities and shareholders' equity	$ 763,473	$ 751,396

XML

Consolidated Statement Of Shareholders' Equity (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2012	Mar. 26, 2011	Mar. 27, 2010
Consolidated Statements Of Shareholders' Equity [Abstract]
Pension liability adjustment, net of taxes	$ 911	$ 1,682	$ 819
Change in fair value of interest rate swap, net of taxes	119	166	74
Dividend, per share	$ 0.26	$ 0.2	$ 0.2
Pension curtailment, net of taxes		1,543
Repurchase of equity component of convertible debt, net of tax		246
Swap termination charge, net of taxes	$ 321

XML

Reporting Segment Information

12 Months Ended

Mar. 31, 2012

Reporting Segment Information [Abstract]

Reporting Segment Information

Note 15

Reporting Segment Information

Spartan Stores has two reportable segments. The Distribution segment supplies independent retail customers and its own retail stores with dry grocery, produce, dairy, meat, delicatessen, bakery, beverages, frozen food, seafood, floral, general merchandise, pharmacy and health and beauty care items. Sales to independent retail customers and inter-segment sales are recorded based upon a "cost plus" model for grocery, frozen, dairy, pharmacy and health and beauty care items and a "variable mark-up" model for meat, deli, bakery, produce, seafood, floral and general merchandise products. To supply its wholesale customers, Spartan Stores operates a fleet of tractors, conventional trailers and refrigerated trailers, substantially all of which are leased by Spartan Stores.

The Retail segment operates supermarkets in Michigan that typically offer dry grocery, produce, frozen, dairy, meat, beverages, floral, seafood, health and beauty care, delicatessen and bakery goods. Additionally, complementing these offerings, approximately 69% of the stores offer pharmacy services and 27 fuel centers were in operation as of March 31, 2012.

Identifiable assets represent total assets directly associated with the reporting segments. Eliminations in assets identified to segments include intercompany receivables, payables and investments.

The following tables set forth information about Spartan Stores by reporting segment:

(In thousands)	Distribution		Retail		Total
Year Ended March 31, 2012
Net sales to external customers	$	1,138,739	$	1,495,487	$	2,634,226
Inter-segment sales		660,400		—		660,400
Depreciation and amortization		8,444		28,350		36,794
Operating earnings		44,292		22,191		66,483
Capital expenditures		9,375		33,143		42,518
Year Ended March 26, 2011
Net sales to external customers	$	1,089,689	$	1,443,375	$	2,533,064
Inter-segment sales		663,827		—		663,827
Depreciation and amortization		8,465		26,693		35,158
Operating earnings		47,987		19,979		67,966
Capital expenditures		8,800		24,229		33,029
Year Ended March 27, 2010
Net sales to external customers	$	1,091,285	$	1,460,671	$	2,551,956
Inter-segment sales		687,423		—		687,423
Depreciation and amortization		8,598		26,042		34,640
Operating earnings		38,073		20,591		58,664
Capital expenditures		7,347		43,125		50,472
(In thousands)	2012		2011		2010
Total Assets at Year End
Distribution	$	216,873	$	261,028	$	237,480
Retail		541,110		484,839		510,486
Discontinued operations		5,490		5,529		5,515
Total	$	763,473	$	751,396	$	753,481

Spartan Stores offers a wide variety of grocery products, general merchandise and health and beauty care, pharmacy, fuel and other items and services. The following table presents sales by type of similar product and services:

(Dollars in thousands)	2012				2011				2010
Non-perishables (1)	$	1,293,147	49	%	$	1,297,719	51	%	$	1,367,298	53	%
Perishables (2)		933,545	36			906,945	36			895,005	35
Fuel		219,903	8			123,262	5			95,937	4
Pharmacy		187,631	7			205,138	8			193,716	8
Consolidated net sales	$	2,634,226	100	%	$	2,533,064	100	%	$	2,551,956	100	%

(1) Consists primarily of general merchandise, grocery, beverages, snacks and frozen foods.

(2) Consists primarily of produce, dairy, meat, bakery, deli, floral and seafood.

XML

Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Mar. 31, 2012	Mar. 26, 2011	Mar. 27, 2010
Cash flows from operating activities
Net earnings	$ 31,758	$ 32,307	$ 25,558
Loss from discontinued operations	112	232	375
Earnings from continuing operations	31,870	32,539	25,933
Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash restructuring, asset impairment and other	(23)	532	5,654
Non-cash convertible debt interest	3,745	3,462	3,533
Depreciation and amortization	36,767	35,273	34,895
LIFO income - warehouse consolidation		(3,450)
LIFO (income) expense	1,401	(735)	(176)
Postretirement benefits expense	3,817	3,501	3,373
Deferred taxes on income	17,861	19,655	12,030
Stock-based compensation expense	5,048	5,372	4,627
Excess tax benefit on stock compensation	(237)	(212)	(344)
Gain on repurchase of convertible notes		(69)
(Gain) / Loss on disposal of assets	(399)	100	138
Change in operating assets and liabilities:
Accounts receivable	(2,309)	(1,855)	(2,487)
Inventories	2,635	17,885	(3,526)
Prepaid expenses and other assets	(17,172)	2,316	1,181
Accounts payable	8,841	(14,496)	18,095
Accrued payroll and benefits	845	4,698	(3,436)
Postretirement benefits	(6,746)	(6,251)	(6,032)
Other accrued expenses and other liabilities	7,790	(8,509)	(1,756)
Net cash provided by operating activities	93,734	89,756	91,702
Cash flows from investing activities
Purchases of property and equipment	(42,518)	(33,029)	(50,472)
Net proceeds from the sale of assets	678	41	77
Acquisitions	(478)	(1,250)	(6,375)
Other	(1,482)	1,115	(1,258)
Net cash used in investing activities	(43,800)	(33,123)	(58,028)
Cash flows from financing activities
Proceeds from revolving credit facility	4,933	143,179	504,690
Payments on revolving credit facility	(49,933)	(143,179)	(524,630)
Share repurchase	(12,381)
Repurchase of convertible notes		(10,724)
Repayment of long-term borrowings	(5,318)	(4,681)	(4,007)
Excess tax benefit on stock compensation	237	212	344
Proceeds from exercise of stock options	1,182	349	190
Dividends paid	(5,926)	(4,525)	(4,483)
Net cash (used in) financing activities	(67,206)	(19,369)	(27,896)
Cash flows from discontinued operations
Net cash used in operating activities	(76)	(2,610)	(3,145)
Net cash provided by investing activities			18
Net cash (used in) discontinued operations	(76)	(2,610)	(3,127)
Net (decrease) increase in cash and cash equivalents	(17,348)	34,654	2,651
Cash and cash equivalents at beginning of year	43,824	9,170	6,519
Cash and cash equivalents at end of year	26,476	43,824	9,170
Supplemental Cash Flow Information:
Cash paid for interest	10,248	10,653	11,896
Cash paid for income taxes	$ 202	$ 509	$ 884

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Mar. 26, 2011
Consolidated Balance Sheets [Abstract]
Common stock, par value
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares outstanding	22,215,000	22,619,000
Preferred stock, par value
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0

XML

Associate Retirement Plans

12 Months Ended

Mar. 31, 2012

Associate Retirement Plans [Abstract]

Associate Retirement Plans

Note 10

Associate Retirement Plans

Spartan Stores' retirement programs include pension plans providing non-contributory benefits and salary reduction defined contribution plans providing contributory benefits. Substantially all of Spartan Stores' associates not covered by collective bargaining agreements are covered by either a frozen non-contributory cash balance pension plan ("Company Plan"), a defined contribution plan or both. Associates covered by collective bargaining agreements are included in multi-employer pension plans.

Effective January 1, 2011, the Cash Balance Pension Plan was frozen and, as a result, additional service credits are no longer added to each Associate's account, however, interest credits will continue to accrue. Effective the same date, Company matching contributions to the Savings Plus 401k Plan were reinstated at a rate of 50% of pay deferral contributions up to 6% of each Associate's qualified compensation. Additionally, a provision allowing for a discretionary annual profit sharing contribution was added to the Company's 401k Plan.

In conjunction with this change to the Cash Balance Pension Plan, pretax curtailment income of $4.0 million was recognized in the third quarter of fiscal 2011 and is included in Restructuring, asset impairment and other on the Consolidated Statements of Earnings. No additional associates are eligible to participate in the Cash Balance Pension Plan after January 1, 2011.

Prior to the plan freeze, Spartan Stores' Company Plan benefit formula utilized a cash balance approach. Under the cash balance formula, credits are added annually to a participant's "account" based on a percent of the participant's compensation and years of vested service at the beginning of each calendar year. At Spartan Stores' discretion, interest credits were also added annually to a participant's account based upon the participant's account balance as of the last day of the immediately preceding calendar year. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act of 1976 ("ERISA"). Company Plan assets consist principally of common stocks and U.S. government and corporate obligations. The Company Plan does not hold any Spartan Stores stock.

Spartan Stores also maintains a Supplemental Executive Retirement Plan ("SERP"), which provides nonqualified deferred compensation benefits to Spartan Stores' officers. Benefits under the SERP are paid from Spartan Stores' general assets, as there is no separate trust established to fund benefits.

Expense for Company contributions made to defined contribution plans totaled $5.4 million, $2.5 million and $1.7 million in fiscal years 2012, 2011 and 2010, respectively. Fiscal 2012 and 2011 also include the addition of a discretionary profit sharing company contribution, which was added to the plan effective January 1, 2011.

Spartan Stores and certain subsidiaries provide health care benefits to retired associates who have at least 30 years of service or 10 years of service and have attained age 55, and who were not covered by collective bargaining arrangements during their employment ("covered associates"). Qualified covered associates that retired prior to March 31, 1992 receive major medical insurance with deductible and coinsurance provisions until age 65 and Medicare supplemental benefits thereafter. Covered associates retiring after April 1, 1992 are eligible for monthly postretirement health care benefits of $5 multiplied by the associate's years of service. This benefit is in the form of a credit against the monthly insurance premium. The retiree pays the balance of the premium.

The following tables set forth the change in benefit obligation, change in plan assets, weighted average assumptions used in actuarial calculations and components of net periodic benefit costs for Spartan Stores' pension and postretirement benefit plans excluding multi-employer plans. The accrued benefit costs are reported in Postretirement benefits in the Consolidated Balance Sheets.

(In thousands, except percentages)	Pension Benefits						SERP Benefits						Postretirement Benefits
	March 31, 2012			March 26, 2011			March 31, 2012			March 26, 2011			March 31, 2012			March 26, 2011
Change in benefit obligation
Benefit obligation at beginning of year	$	60,421		$	61,987		$	1,071		$	1,047		$	8,633		$	8,149
Service cost		—			2,622			—			45			192			193
Interest cost		2,893			3,077			51			52			424			420
Actuarial loss		508			1,351			(26	)		57			162			155
Benefits paid		(3,872	)		(5,691	)		(111	)		(59	)		(281	)		(283	)
Curtailment gain due to plan freeze		—			(2,925	)		—			(71	)		—			—
Benefit obligation at end of year	$	59,950		$	60,421		$	985		$	1,071		$	9,130		$	8,634
Change in plan assets
Plan assets at fair value at beginning of year	$	58,352		$	52,330		$	—		$	—		$	—		$	—
Actual return on plan assets		596			5,987			—			—			—			—
Company contributions		4,000			5,726			110			59			281			283
Benefits paid		(3,872	)		(5,691	)		(110	)		(59	)		(281	)		(283	)
Plan assets at fair value at measurement date	$	59,076		$	58,352		$	—		$	—		$	—		$	—
Unfunded status	$	(874	)	$	(2,069	)	$	(985	)	$	(1,071	)	$	(9,130	)	$	(8, 634	)
Components of net amount recognized in financial position:
Current liabilities	$	—		$	—		$	(90	)	$	(121	)	$	(313	)	$	(316	)
Noncurrent liabilities		(874	)		(2,069	)		(895	)		(950	)		(8,817	)		(8,318	)
	$	(874	)	$	(2,069	)	$	(985	)	$	(1,071	)	$	(9,130	)	$	(8,634	)
Amounts recognized in accumulated other comprehensive income:
Net actuarial loss	$	20,131		$	17,793		$	410		$	477		$	2,367		$	2,339
Prior service credit		—			—			—			—			(396	)		(450	)
	$	20,131		$	17,793		$	410		$	477		$	1,971		$	1,889
Weighted average assumptions at Measurement date
Discount rate		4.50	%		5.00	%		4.50	%		5.00	%		4.50	%		5.00	%
Expected return on plan assets		7.50	%		7.75	%		N/A			N/A			N/A			N/A
Rate of compensation increase		N/A			N/A			N/A			N/A			N/A			N/A

The benefit obligation for pension plans is measured as the projected benefit obligation; the benefit obligation for postretirement benefit plans is measured as the accumulated benefit obligation. The accumulated benefit obligation for both of the defined benefit pension plans was $60.9 million and $61.5 million at March 31, 2012 and March 26, 2011, respectively.

Components of net periodic benefit cost

(In thousands)	Pension Benefits									SERP
	March 31, 2012			March 26, 2011			March 27, 2010			March 31, 2012		March 26, 2011		March 27, 2010
Service cost	$	—		$	2,621		$	2,949		$	—	$	45	$	82
Interest cost		2,893			3,077			3,605			51		52		57
Expected return on plan assets		(4,081	)		(4,265	)		(4,069	)		—		—		—
Amortization of prior service cost		—			(478	)		(637	)		—		—		—
Recognized actuarial net loss		1,656			1,557			658			40		41		42
Net periodic benefit cost	$	468		$	2,512		$	2,506		$	91	$	138	$	181

	Postretirement Benefits
	March 31, 2012			March 26, 2011			March 27, 2010
Service cost	$	192		$	193		$	133
Interest cost		424			420			439
Amortization of prior service cost		(54	)		(54	)		(54	)
Recognized actuarial net loss		133			124			21
Net periodic benefit cost	$	695		$	683		$	539

The net actuarial loss, prior service cost and transition obligation included in "Accumulated Other Comprehensive Income" and expected to be recognized in net periodic benefit cost during fiscal year 2013 are as follows:

(In thousands)	Pension Benefits		SERP Benefits		Postretirement Benefits
Net actuarial loss	$	1,278	$	33	$	137
Prior service credit		—		—		(54	)
	$	1,278	$	33	$	83

Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Actuarial gains and losses are amortized over the average remaining service life of active participants when the accumulation of such gains and losses exceeds 10% of the greater of the projected benefit obligation and the fair value of plan assets.

Spartan Stores has assumed an average long-term expected return on pension plan assets of 7.50% as of March 31, 2012. The expected return assumption was modeled by third-party investment portfolio managers, based on asset allocations and the expected return and risk components of the various asset classes in the portfolio. Determining projected stock and bond returns and then applying these returns to the target asset allocations of the plan assets developed the expected return. Equity returns were based primarily on historical returns of the S&P 500 Index. Fixed-income projected returns were based primarily on historical returns for the broad U.S. bond market. This overall return assumption is believed to be reasonable over a longer-term period that is consistent with the liabilities.

Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement plan. The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 8.00% for fiscal 2012, 8.50% for fiscal 2011 and 9.00% for fiscal 2010, decreasing .50% per year to 5.00%. A 1% increase in the assumed health care cost trend rate would increase the accumulated postretirement benefit obligation by 0.23% and the periodic postretirement benefit cost by 0.79%. A 1% decrease in the assumed health care cost trend rate would decrease the accumulated postretirement benefit obligation by 0.23% and total service and interest cost by 1.00%.

Spartan Stores has an investment policy for the pension plan with a long-term asset allocation mix designed to meet the long-term retirement obligations. The asset allocation mix is reviewed annually and, on a regular basis, actual allocations are rebalanced to approximate the prevailing targets. The following table summarizes actual allocations as of March 31, 2012 and March 26, 2011:

				Plan Assets
	Target Range			March 31, 2012			March 26, 2011
Asset Category
Equity securities		55.0 -75.0	%		66.0	%		64.7	%
Fixed income		25.0 -45.0			34.0			35.3
Total		100.0	%		100	%		100.0	%

The investment policy emphasizes the following key objectives: (1) maintain the purchasing power of the current assets and all future contributions by producing positive real rates of return on plan assets; (2) maximize return within reasonable and prudent levels of risk in order to minimize contributions and (3) control costs of administering the plan and managing the investments.

The fair value of Spartan Stores' pension plan assets at March 31, 2012 by asset category is as follows:

	Fair Value Measurements
(In thousands)	Total		Quoted prices in markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Mutual funds	$	52,222	$	52,222	$	—	$	—
Money market fund		2,763		—		2,763		—
Guaranteed annuity contract		4,025		—		—		4,025
Total fair value	$	59,010	$	52,222	$	2,763	$	4,025

The fair value of Spartan Stores' pension plan assets at March 26, 2011 by asset category is as follows:

	Fair Value Measurements
(In thousands)	Total		Quoted prices in markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Mutual funds	$	48,388	$	48,388	$	—	$	—
Money market fund		5,771		—		5,771		—
Guaranteed annuity contract		4,193		—		—		4,193
Total fair value	$	58,352	$	48,388	$	5,771	$	4,193

A reconciliation of the beginning and ending balances for Level 3 assets for the fiscal year 2012 follows:

(In thousands)	Guaranteed Annuity Contract
Balance as of March 26, 2011	$	4,193
Purchases, sales, issuances and settlements (net)		(424	)
Realized gains		256
Balance as of March 31, 2012	$	4,025

A reconciliation of the beginning and ending balances for Level 3 assets for the fiscal year 2011 follows:

(In thousands)	Guaranteed Annuity Contract
Balance as of March 27, 2010	$	4,388
Purchases, sales, issuances and settlements (net)		(439	)
Realized gains		244
Balance as of March 26, 2011	$	4,193

See Note 7 for a discussion of the levels of the fair value hierarchy. The assets' fair value measurement level above is based on the lowest level of any input that is significant to the fair value measurement.

The following is a description of the valuation methods used for the plan's assets measured at fair value in the above tables:

• Cash & money market funds: The carrying value approximates fair value.

• Mutual Funds/Collective Trusts: These investments are publicly traded investments, which are valued using the net asset value (NAV). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund's liabilities, expressed on a per-share basis. The NAV is a quoted price in an active market and classified within level 1 of the fair value hierarchy of ASC 820.

• Guaranteed Annuity Contracts: The guaranteed annuity contract is an immediate participation contract held with an insurance company that acts as custodian of the pension plan's assets. The guaranteed annuity contract is stated at contract value as determined by the custodian, which approximates fair value. We evaluate the general financial condition of the custodian as a component of validating whether the calculated contract value is an accurate approximation of fair value. The review of the general financial condition of the custodian is considered obtainable/observable through the review of readily available financial information the custodian is required to file with the Securities and Exchange Commission. The group annuity contract is classified within level 3 of the valuation hierarchy of ASC 820.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuations methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement.

Spartan Stores made a contribution of $4.1 million in the third quarter to move the cash balance pension plan closer to a fully funded status and reduce future pension expense. Funding credit carry forward balances will likely be used to fund future quarterly contribution requirements until December 2012 when a contribution will likely be made to continue to move funding closer to a fully funded status.

The following estimated benefit payments are expected to be paid in the following fiscal years:

(In thousands)	Pension Benefits and SERP Benefits		Other Benefits
2013	$	5,077	$	313
2014		5,206		347
2015		4,767		371
2016		4,726		405
2017 to 2020		26,010		3,132

In addition to the plans described above, Spartan Stores participates in a multi-employer pension plan and other defined contribution plans for substantially all associates covered by collective bargaining agreements.

Expense is recognized in connection with these plans as contributions are funded, in accordance with accounting standards. The Company contributed $8.2, $7.3 and $7.5 million to these plans for fiscal years 2012, 2011 and 2010, respectively. The risks of participating in these multi-employer plans are different from the risks associated with single-employer plans in the following respects:

a. Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

c. If the Company chooses to stop participating in some multi-employer plans, or makes market exits or otherwise has participation in the plan drop below certain levels, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Company's participation in this plan is outlined in the tables below. The EIN/Pension Plan Number column provides the Employee Identification Number ("EIN") and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status ("PPA") available in 2012 and 2011 relates to the plans' two most recent fiscal year-ends. The zone status is based on information that the Company received from the plan and is certified by each plan's actuary. Among other factors, red zone status plans are generally less than 65 percent funded and are considered in critical status. The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or has been implemented by the trustees of each plan.

Pension	EIN – Pension	Plan Month / Day End		Pension Protection Act Zone Status				FIP/RP Status Pending/		Contributions						Surcharges Imposed or Amortization
Fund	Plan Number	Date		2012		2011		Implemented		2012		2011		2010		Provisions
Central States, Southeast and Southwest Areas Pension Fund	366044243-001		12/31		Red		Red		Implemented	$	8,232	$	7,336	$	7,477		No

The following table describes the expiration of the Company's collective bargaining agreements associated with the significant multi-employer plans in which the Company participates:

Pension Fund	Total Collective Bargaining Agreements	Expiration Date		% of Associates under Collective Bargaining Agreement			Over 5% Contribution 2012
Central States, Southeast and Southwest Areas Pension Fund	1		10/8/2012		8.0	%		No

At the date the financial statements were issued, Forms 5500 were generally not available for the plan years ending in 2011.

See Note 8 for further information regarding Spartan's participation in the Central States, Southeast and Southwest Areas Pension Fund.

Multi-employer Postretirement Benefit Plans Other than Pensions

The Company also makes contributions to the multi-employer health and welfare plan in amounts set forth in the related collective bargaining agreements. This plan provides medical, dental, pharmacy, vision, and other ancillary benefits to active employees and retirees as determined by the trustees of the plan. The vast majority of the Company's contributions benefit active employees and as such, may not constitute contributions to a postretirement benefit plan. However, the Company is unable to separate contribution amounts to postretirement benefit plans from contribution amounts paid for active participants in the plan.

XML

Document And Entity Information (USD $)	12 Months Ended
	Mar. 31, 2012	May 07, 2012	Sep. 10, 2011
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Entity Registrant Name	SPARTAN STORES INC
Entity Central Index Key	0000877422
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 345,915,556
Entity Common Stock, Shares Outstanding		21,664,787

XML

Taxes On Income

12 Months Ended

Mar. 31, 2012

Taxes On Income [Abstract]

Taxes On Income

Note 11 Taxes on Income

The income tax provision for continuing operations is summarized as follows:

(In thousands)	March 31, 2012			March 26, 2011			March 27, 2010
Currently payable:
Federal	$	(191	)	$	(536	)	$	3,199
State		2,016			1,301			1,246
Total currently payable		1,825			765			4,445
Deferred:
Federal		15,734			16,644			10,424
State		2,127			3,011			1,606
Total deferred		17,861			19,655			12,030
Total	$	19,686		$	20,420		$	16,475

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:

	2012			2011			2010
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal income tax benefit		5.2			5.3			4.5
Tax credits		(1.1	)		(1.1	)		(0.2	)
Charitable product donations		(0.7	)		(0.7	)		(0.4	)
Other		(0.2	)		0.1			(0.1	)
Effective income tax rate		38.2	%		38.6	%		38.8	%

Deferred tax assets and liabilities resulting from temporary differences as of March 31, 2012 and March 26, 2011 are as follows:

(In thousands)	2012			2011
Deferred tax assets:
Employee benefits	$	23,859		$	20,783
Accounts receivable		365			530
Asset impairment and closed store reserves		2,719			3,103
Deferred revenue		879			966
State taxes		146			1,182
All other		1,220			3,159
Total deferred tax assets		29,188			29,723
Deferred tax liabilities:
Employee benefits		8,784			7,418
Depreciation & Amortization		33,917			28,727
Inventory		6,424			7,016
Goodwill		39,693			31,833
Convertible debt interest		15,384			14,202
Leases		6,271			4,523
All other		940			719
Total deferred tax liabilities		111,413			94,438
Net deferred tax liability	$	(82,225	)	$	(64,715	)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(In thousands)	March 31, 2012			March 26, 2011
Balance at beginning of year	$	2,320		$	2,232
Gross increases — tax positions taken in prior years		74			10
Gross decreases — tax positions taken in prior years		(483	)		(447	)
Gross increases — tax positions taken in current year		589			540
Lapse of statute of limitations		(7	)		(15	)
Balance at end of year	$	2,493		$	2,320

In the fourth quarter of fiscal 2012 we elected to accelerate the recognition of certain revenues for tax purposes, which resulted in a $12.4 million increase in taxes payable and a related increase in other current assets at March 31, 2012. The majority of these amounts will reverse in the first quarter of fiscal 2013.

Spartan Stores anticipates that $0.7 million of the unrecognized tax benefits will be settled prior to March 31, 2013. Spartan Stores recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. Accrued interest and penalties are not material. As of March 31, 2012, the balance of unrecognized tax benefits included tax positions of $1.6 million that would reduce Spartan Stores' effective income tax rate if recognized in future periods.

Spartan Stores files income tax returns with federal, state and local tax authorities within the United States. In October 2011, the Internal Revenue Service (IRS) completed its examination of Spartan Stores' federal income tax returns for fiscal year 2007. With few exceptions, we are no longer subject to U.S. federal, state or local examinations by tax authorities for fiscal years before 2008.

XML

Consolidated Statements Of Earnings (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Mar. 31, 2012	Mar. 26, 2011	Mar. 27, 2010
Consolidated Statements Of Earnings [Abstract]
Net sales	$ 2,634,226	$ 2,533,064	$ 2,551,956
Cost of sales	2,078,116	1,976,549	1,993,306
Gross margin	556,110	556,515	558,650
Operating expenses
Selling, general and administrative	489,650	488,017	493,832
Restructuring, asset impairment and other	(23)	532	6,154
Total operating expenses	489,627	488,549	499,986
Operating earnings	66,483	67,966	58,664
Other income and expenses
Interest expense	15,037	15,104	16,394
Other, net	(110)	(97)	(138)
Total other income and expenses	14,927	15,007	16,256
Earnings before income taxes and discontinued operations	51,556	52,959	42,408
Income taxes	19,686	20,420	16,475
Earnings from continuing operations	31,870	32,539	25,933
Earnings (loss) from discontinued operations, net of taxes	(112)	(232)	(375)
Net earnings	$ 31,758	$ 32,307	$ 25,558
Basic earnings per share:
Earnings from continuing operations	$ 1.40	$ 1.44	$ 1.16
Earnings (loss) from discontinued operations	$ (0.01)	$ (0.01)	$ (0.02)
Net earnings	$ 1.39	$ 1.43	$ 1.14
Diluted earnings per share:
Earnings from continuing operations	$ 1.39	$ 1.43	$ 1.15
Earnings (loss) from discontinued operations		$ (0.01)	$ (0.01)	[1]
Net earnings	$ 1.39	$ 1.42	$ 1.14
Weighted average shares outstanding:
Basic	22,791	22,606	22,406
Diluted	22,887	22,688	22,480

[1] Includes rounding.

XML

Long-Term Debt

12 Months Ended

Mar. 31, 2012

Long-Term Debt [Abstract]

Long-Term Debt

Note 5

Long-Term Debt

Spartan Stores' long-term debt consists of the following:

(In thousands)	March 31, 2012		March 26, 2011
Senior secured revolving credit facility, due December 2012	$	—	$	45,000
Convertible subordinated notes, 3.375% due May 2027, net of unamortized debt discount		88,856		85,111
Capital lease obligations (Note 9)		48,864		44,436
Other, 7.00% – 9.25%, due fiscal 2013 – 2021		294		369
		138,014		174,916
Less current portion		4,449		4,205
Total long-term debt	$	133,565	$	170,711

Available borrowings under our $255.0 million revolving credit facility are based on stipulated advance rates on eligible assets, as defined in the credit agreement. The credit facility contains covenants that include a minimum fixed charge coverage ratio and maximum capital expenditures, as defined in the credit agreement. These covenants are not effective as long as Spartan Stores maintains minimum excess availability levels of $25.0 million with respect to the minimum fixed charge coverage ratio and $20 million with respect to maximum capital expenditures. Spartan Stores had available borrowings of $142.7 million at March 31, 2012 and excess availability of $162.7 million. Payment of dividends and repurchases of outstanding shares are permitted up to a total of $30.0 million per year, provided that excess availability of $20.0 million is maintained. The credit facility provides for the issuance of letters of credit, of which $0.6 million were outstanding and unused as of March 31, 2012. Borrowings under the revolving credit portion of the facility bear interest at LIBOR plus 1.25% or the prime rate (weighted average interest rate of 3.25% at March 31, 2012 (see Note 6).

On May 30, 2007, Spartan Stores issued $110 million in aggregate principal amount of unsecured 3.375% convertible senior notes due May 15, 2027. The notes are general unsecured obligations and rank equally in right of payment with all of our other existing and future unsecured and unsubordinated obligations. They are effectively subordinated to our existing and any future secured indebtedness to the extent of the assets securing such indebtedness. The notes are structurally subordinated to our subsidiaries' indebtedness and other liabilities. The Notes are not guaranteed by our subsidiaries. The net proceeds from the sale of the notes after deducting selling discounts of 2.5% and offering expenses of $0.6 million were approximately $106.5 million, and were used to pay down amounts owed under our senior secured revolving credit facility and partially fund the Felpausch stores acquisition.

At the end of the 3^rd quarter of fiscal 2012 the Company terminated the interest rate swap agreement and recorded a charge of $0.8 million, which was recorded in interest expense. Early in the 4^th quarter of fiscal 2012 the Company repaid the entire outstanding balance of $45.0 million on its revolving credit facility.

Interest at an annual rate of 3.375% is payable semi-annually on May 15 and November 15 of each year. Contingent interest will be paid to holders of the notes during the period commencing May 20, 2012 and ending on November 14, 2012 and for any six-month period thereafter, if the average contingent interest trading price per $1,000 principal amount of the notes for the five-consecutive-trading-day-period ending on the third trading day immediately preceding the first day of such interest period equals 120% or more of the principal amount of the notes. Contingent interest payable with respect to any six-month period will equal 0.25% per annum of the average contingent interest-trading price of $1,000 principal amount of notes during the five-consecutive-trading-day measurement period described above.

Spartan Stores may redeem the notes for cash in whole or in part, at any time or from time to time, on or after May 15, 2014 at 100% of the principal amount of the notes to be redeemed, and prior to that date on or after May 20, 2012 at a price equal to a specified percentage of the principal amount, plus, in each case, any accrued and unpaid interest. Holders may require Spartan Stores to repurchase their notes, in whole or in part, on May 15, 2014, May 15, 2017 and May 15, 2022 for a cash price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. In addition, upon certain fundamental change transactions, each holder would have the option, subject to certain conditions, to require Spartan Stores to repurchase for cash, in whole or in part, such holder's notes. For the purposes of the notes, a "fundamental change" would include, among other events set forth in the Indenture governing the notes, the acquisition of 50% or more of our common stock by a person or group, a consolidation, merger, or sale of all or substantially all of our assets, certain changes in our board of directors, or a termination of trading of our common stock.

The notes will be convertible at the option of the holder only under certain circumstances summarized as follows:

1. If the closing sale price per share of Spartan Stores common stock is greater than 130% of the applicable conversion price for a specified period of time,

2. If the trading price of the notes was less than 98% of the product of the closing sale price per share of Spartan Stores common stock and the conversion rate in effect for the notes for a specified period of time,

3. If the notes are called for redemption,

4. At any time on or after February 15, 2027 until the close of business on the business day immediately preceding the maturity date,

5. Upon the occurrence of specified corporate transactions.

Upon conversion by the holder, the notes convert at an initial conversion rate of 28.0310 shares of Spartan Stores common stock per $1,000 principal amount of notes (equal to an initial conversion price of approximately $35.67 per share), subject to adjustments upon certain events. Upon a surrender of notes for conversion, Spartan Stores will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and the total conversion obligation, and shares of Spartan Stores common stock in respect of the remainder, if any, of the conversion obligation, unless Spartan Stores has elected to satisfy its obligation under such conversion by delivering only shares of common stock.

In connection with the closing of the sale of the notes, Spartan Stores entered into a registration rights agreement with the initial purchasers of the notes, pursuant to which Spartan Stores filed with the Securities and Exchange Commission (SEC) a shelf registration statement covering resale by security holders of the notes and the shares of Spartan Stores common stock issuable upon conversion of the notes. The SEC declared the registration statement effective on September 27, 2007.

The amount of interest expense recognized and the effective interest rate for Spartan Stores' convertible senior notes were as follows:

(In thousands)	2012			2011			2010
Contractual coupon interest	$	3,353		$	3,333		$	3,712
Amortization of discount on convertible senior notes		3,745			3,462			3,533
Interest expense	$	7,098		$	6,795		$	7,245
Effective interest rate		8.125	%		8.125	%		8.125	%

The debt and equity components recognized for Spartan Stores' convertible senior notes were as follows:

(In thousands)	March 31, 2012			March 26, 2011
Principal amount of convertible senior notes	$	97,740		$	97,740
Unamortized discount		8,884	(1)		12,629
Net carrying amount		88,856			85,111
Common stock		16,032			16,032

⁽¹⁾  Will be recognized over a remaining period of 2.1 years.

The weighted average interest rates including loan fee amortization for fiscal 2012, 2011 and fiscal 2010 were 8.05%, 7.81% and 7.59%, respectively.

At March 31, 2012, long-term debt was due as follows:

(In thousands)

Fiscal Year
2013	$	4,449
2014		3,605
2015		92,155
2016		3,590
2017		3,915
Thereafter		30,301
	$	138,014

During the first quarter of fiscal 2011 the Company repurchased $12.3 million in principal amount of its outstanding convertible senior notes for approximately $10.7 million and recognized a resultant gain of $0.1 million. No additional repurchases were made in fiscal 2011 and 2012.

XML

Restructuring, Asset Impairment And Other

12 Months Ended

Mar. 31, 2012

Restructuring, Asset Impairment And Other [Abstract]

Restructuring, Asset Impairment And Other

Note 4

Restructuring, Asset Impairment and Other

The following table provides the activity of restructuring costs for fiscal years 2012, 2011 and 2010. Restructuring costs recorded in the Consolidated Balance Sheets are included in "Current portion of restructuring costs" in Current liabilities and "Restructuring costs" in Long-term liabilities based on when the obligations are expected to be paid.

(In thousands)	Lease and Ancillary Costs			Severance			Other			Total
Balance at March 28, 2009	$	44,545		$	—		$	—		$	44,545
Provision for lease and related ancillary costs, net of sublease income		1,111			—			—			1,111
Provision for severance and other costs		—			2,915			1,109			4,024
Changes in estimates (Note 3)		(4,860	)		—			—			(4,860	)(a)
Payments, net of interest accretion		(6,914	)		(859	)		(1,109	)		(8,882	)
Balance at March 27, 2010		33,882			2,056			—			35,938
Provision for severance and other costs		1,876			644			288			2,808
Reversal of reserve related to lease terminations and other reversals (Note 3)		(6,948	)		—			—			(6,948	)
Changes in estimates (Note 3)		(7,423	)		—			—			(7,423	)(a)
Payments, net of interest accretion		(6,085	)		(2,700	)		(288	)		(9,073	)
Balance at March 26, 2011		15,302			—			—			15,302
Changes in estimates (Note 3)		(1,318	)		—			—			(1,318	)
Payments, net of interest accretion		(2,882	)		—			—			(2,882	)
Balance at March 31, 2012	$	11,102		$	—		$	—		$	11,102

(a) Goodwill was reduced by $1.0 million, $7.1 million and $3.9 million in fiscal 2012, 2011 and 2010, respectively, as a result of these changes in estimates as the initial charges for certain stores were established in the purchase price allocations for previous acquisitions. In fiscal 2010, $0.1 million was included in discontinued operations. Through an acquisition, Spartan assumed sublease liabilities for a closed store location and two operating store locations that were accounted for as capital leases. The underlying leases were terminated by a bankruptcy judge in December 2010. In fiscal 2011 the closed store liability was reversed resulting in a gain of $6.9 million and was partially offset by $1.1 million representing the remaining net value of the two capital leases also written off.

Restructuring, asset impairment and other included in the Consolidated Statements of Earnings for the year ended March 26, 2011 consisted of the following:

(In thousands)	Retail			Distribution			Total
Asset impairment charges, assets at underperforming stores and abandoned development projects (Note A below)	$	7,502		$	357		$	7,859
Provision for severance and other costs related to warehouse closing (Note B below)		—			2,546			2,546
Net benefit related to favorable lease terminations (Note C below)		(5,888	)		—			(5,888	)
Pension curtailment income related to the freezing of the cash balance pension plan (Note 10) (Note D below)		(1,704	)		(2,281	)		(3,985	)
	$	(90	)	$	622		$	532

Note A: This charge relates to assets that required impairment and the values reflected in the Consolidated Balance Sheet were reduced. Therefore the adjustment is reflected in the Consolidated Balance Sheet and is not a component of the activity of restructuring costs on page 49. The asset impairment charges were recorded due to the economic and competitive environment these stores operated in and its impact on their forecasted financial performance.

Note B: The provision for severance and other costs has two components as broken out in the reconciliation included in our previous response. The first component is the $2.5 million reflected above and the second component is the $0.3 million related to changes in estimates for union sick pay and property taxes. The changes in estimates were reflected on the "changes in estimates" line totaling $7.4 million included in the table on page 49.

Note C: Through an acquisition, Spartan assumed sublease liabilities for a closed store location and two operating store locations that were accounted for as capital leases. A bankruptcy judge terminated the underlying leases in December 2010. The closed store liability was reversed resulting in a gain of $6.9 million and was partially offset by $1.1 million representing the remaining net value of the two capital leases also written off.

Note D: The offset to the recording of pension curtailment income related to the freezing of the cash balance pension plan, which is reflected in the table on page 50, is an adjustment to Accumulated Other Comprehensive Income (Loss) (AOCI) in the Consolidated Statements of Shareholders' Equity. The taxes relating to curtailment income totaled $1.5 million bringing the net adjustment to AOCI of $2.4 million.

During the fourth quarter of fiscal 2010, Spartan Stores implemented the final stages of a comprehensive, multi-year supply chain optimization strategy. As a part of these optimization efforts the Plymouth, Michigan dry grocery distribution operation was transitioned to our Grand Rapids facility. The transition was completed in the first quarter of fiscal 2011. As a result of the closing of the warehouse facility and elimination of certain administrative positions, we incurred charges of $4.2 million for severance, asset impairment and other related one-time costs in the fourth quarter of fiscal 2010. In addition, in fiscal 2011 the Company incurred additional charges/adjustments related to its warehouse consolidation initiative. These charges consisted of warehouse closing expenses for lease payments and other related expenses, which were offset by a LIFO credit due to reduced inventory levels resulting in a year-to-date net $0.6 million after tax benefit.

Store lease obligations included in restructuring costs include the present value of future minimum lease payments, calculated using a risk-free interest rate, and related ancillary costs from the date of closure to the end of the remaining lease term, net of estimated sublease income.

XML

Quarterly Financial Information

12 Months Ended

Mar. 31, 2012

Quarterly Financial Information [Abstract]

Quarterly Financial Information

Note 16

Quarterly Financial Information (unaudited)

Earnings per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year. Common stock prices are the high and low sales prices for transactions reported on the NASDAQ Global Select Market for each period.

(In thousands, except per share data)	Full Year (53 weeks)			4th Quarter (13 weeks)		3rd Quarter (16 weeks)			2nd Quarter (12 weeks)			1st Quarter (12 weeks)
Fiscal 2012
Net sales	$	2,634,226		$	614,773	$	797,242		$	619,647		$	602,564
Gross margin		556,110			135,086		162,950			132,737			125,337
Restructuring, asset impairment and other		(23	)		114		(2	)		(135	)		—
Earnings from continuing operations before income taxes		51,556			16,369		7,752			16,611			10,824
Earnings from continuing operations		31,870			10,477		4,988			10,270			6,135
Discontinued operations, net of taxes		(112	)		23		(11	)		(18	)		(106	)
Net earnings		31,758			10,500		4,977			10,252			6,029
Earnings from continuing operations per share:
Basic	$	1.40		$	0.46	$	0.22		$	0.45		$	0.27
Diluted		1.39			0.46		0.22			0.45			0.27
Net earnings per share:
Basic	$	1.39		$	0.46	$	0.22		$	0.45		$	0.27
Diluted		1.39			0.46		0.22			0.45			0.26
Dividends	$	5,926		$	1,469	$	1,487		$	1,486		$	1,484
Common stock price – High		21.37			19.24		19.21			21.37			19.81
Common stock price – Low		14.01			16.95		14.01			14.06			14.35

(In thousands, except per share data)	Full Year (52 weeks)			4th Quarter (12 weeks)		3rd Quarter (16 weeks)			2nd Quarter (12 weeks)			1st Quarter (12 weeks)
Fiscal 2011
Net sales	$	2,533,064		$	571,471	$	782,300		$	602,056		$	577,237
Gross margin		556,515			129,821		164,807			135,198			126,689
Restructuring, asset impairment and other		532			192		(2,425	)		183			2,582
Earnings from continuing operations before income taxes		52,959			12,480		11,922			18,589			9,968
Earnings from continuing operations		32,539			7,649		7,470			11,345			6,075
Discontinued operations, net of taxes		(232	)		124		(162	)		(106	)		(88	)
Net earnings		32,307			7,773		7,308			11,239			5,987
Earnings from continuing operations per share:
Basic	$	1.44		$	0.34	$	0.33		$	0.50		$	0.27
Diluted		1.43			0.34		0.33			0.50			0.26
Net earnings per share:
Basic	$	1.43		$	0.34	$	0.32		$	0.50		$	0.27
Diluted		1.42			0.34		0.32			0.50			0.26
Dividends	$	4,525		$	1,131	$	1,133		$	1,131		$	1,130
Common stock price – High		17.80			17.75		17.80			14.94			17.22
Common stock price – Low		12.76			13.95		13.21			12.76			13.45

XML

Stock-Based Compensation

12 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 12

Stock-Based Compensation

Spartan Stores has two shareholder-approved 10-year stock incentive plans covering 4,200,000 shares of Spartan Stores' common stock: the Spartan Stores, Inc. 2001 Stock Incentive Plan (the "2001 Plan") and the Spartan Stores, Inc. Stock Incentive Plan of 2005 (the "2005 Plan"). The plans provide for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, and other stock-based awards to directors, officers and other key associates. Shares issued, as a result of stock option exercises, will be funded with the issuance of new shares. Holders of restricted stock and stock awards are entitled to participate in cash dividends and dividend equivalents. The 2001 plan expired on May 8, 2011 and no shares remained unissued as of that date. As of March 31, 2012, 962,938 shares remained unissued under the 2005 Plan.

Stock option awards were granted with an exercise price equal to the market value of Spartan Stores common stock at the date of grant, vest and become exercisable in 25 percent increments over a four-year service period and have a maximum contractual term of 10 years. Upon a "Change in Control", as defined by the Plan, all outstanding options vest immediately. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is determined based upon a combination of historical volatility of Spartan Stores common stock and the expected volatilities of guideline companies that are comparable to Spartan Stores in most significant respects to reflect management's best estimate of Spartan Stores' future volatility over the option term. Due to certain events that are considered unusual and/or infrequent in nature, and that resulted in significant business changes during the limited historical exercise period, management does not believe that Spartan Stores' historical exercise data will provide a reasonable basis upon which to estimate the expected term of stock options. Therefore, the expected term of stock options granted is determined using the "simplified" method as described in SEC Staff Accounting Bulletins that uses the following formula: ((vesting term + original contract term)/2). The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant, using U.S. constant maturities with remaining terms equal to the expected term. Expected dividend yield is based on historical dividend payments.

The following weighted average assumptions were used to estimate the fair value of stock options at the date of grant using the Black-Scholes option-pricing model. There were no stock options granted in fiscal 2012 or 2011.

	2010
Dividend yield	1.43%
Expected volatility	41.50% - 42.30%
Risk-free interest rate	2.28%
Expected life of option	6.25 years

The following table summarizes stock option activity for the three years ended March 31, 2012:

	Shares Under Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life Years		Aggregate Intrinsic Value (In thousands)
Options outstanding at March 28, 2009		706,367		$	17.99		7.20	$	1,506
Granted		179,382			13.87
Exercised		(27,869	)		6.99				201
Cancelled		(26,031	)		20.62
Options outstanding at March 27, 2010		831,849		$	17.39		6.90	$	1,279
Granted		—			—
Exercised		(27,128	)		7.85				231
Cancelled		—			—
Options outstanding at March 26, 2011		804,721		$	17.71		6.02	$	1,243
Granted		—			—
Exercised		(84,630	)		11.64				572
Cancelled		(16,962	)		17.94
Options outstanding at March 31, 2012		703,129		$	18.43		5.53	$	1,926
Options exercisable at March 27, 2010		366,113		$	15.15		5.15	$	1,111
Options exercisable at March 26, 2011		519,733		$	16.94		5.19	$	1,095
Options exercisable at March 31, 2012		557,787		$	18.60		5.22	$	1,581
Vested and expected to vest in the future at March 31, 2012		697,589		$	18.44		5.52	$	1,911

The weighted average grant-date fair value of stock options granted during fiscal year 2010 was $5.26. Cash received from option exercises was $1.0 million, $0.2 million and $0.2 million during fiscal years 2012, 2011 and 2010, respectively.

Restricted shares awarded to employees vest ratably over a five-year service period (over a four year period for grants to associates in fiscal 2011 and one year for grants to the Board of Directors in fiscal 2011). Awards granted to directors prior to May 10, 2006 vest 100 percent after three years and awards granted on or after May 10, 2006 vest in one-third increments over a three-year service period. Awards are subject to certain transfer restrictions and forfeiture prior to vesting. All shares fully vest upon a "Change in Control" as defined by the Plan. Compensation expense, representing the fair value of the stock at the measurement date of the award, is recognized over the vesting period.

Historically, awards have been granted in the form of stock options and restricted stock. In fiscal 2010, Spartan Stores also granted restricted stock units ("RSU's") to certain executive employees of the Company. The RSU's had a service condition and a performance condition that was to be met in order for the awards to vest. The performance condition was not met in fiscal 2010. In addition, no RSU's were granted in fiscal 2011 or 2012 and none are planned to be issued in fiscal 2013.

The following table summarizes restricted stock activity for the three years ended March 31, 2012:

	Shares			Weighted Average Grant-Date Fair Value
Outstanding and nonvested at March 28, 2009		590,693			19.12
Granted		333,746			13.88
Vested		(202,896	)		15.61
Forfeited		(102,821	)		14.06
Outstanding and nonvested at March 27, 2010		618,722			18.28
Granted		216,890			15.37
Vested		(280,437	)		18.21
Forfeited		(7,404	)		16.99
Outstanding and nonvested at March 26, 2011		547,771		$	16.99
Granted		222,848			16.06
Vested		(175,433	)		17.60
Forfeited		(14,293	)		15.67
Outstanding and nonvested at March 31, 2012		580,893		$	16.48

The total fair value of shares vested during fiscal years 2012, 2011 and 2010 was $2.8 million, $4.3 million and $3.2 million, respectively.

Share-based compensation expense recognized and included in "Selling, general and administrative expenses" in the Consolidated Statements of Earnings and related tax benefits were as follows:

(In thousands)	2012			2011			2010
Stock options	$	1,238		$	929		$	1,067
Restricted stock		3,810			4,443			3,560
Tax benefits		(1,928	)		(2,081	)		(1,792	)
	$	3,120		$	3,291		$	2,835

As of March 31, 2012, total unrecognized compensation cost related to non-vested share-based awards granted under the stock incentive plans was $0.2 million for stock options and $6.1 million for restricted stock. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 0.8 years for stock options and 2.5 years for restricted stock.

Spartan Stores recognized tax deductions of $3.5 million, $4.6 million and $3.3 million related to the exercise of stock options and the vesting of restricted stock during fiscal years 2012, 2011 and 2010, respectively.

Spartan Stores has a stock bonus plan covering 300,000 shares of Spartan Stores common stock. Under the provisions of this plan, certain officers and key associates of Spartan Stores may elect to receive a portion of their annual bonus in common stock rather than cash and will be granted additional shares of common stock worth 30% of the portion of the bonus they elect to receive in stock. Compensation expense is recorded based upon the market price of the stock as of the measurement date. A total of 82,647 shares remained unissued under the plan at March 31, 2012.

Spartan Stores has an associate stock purchase plan covering 200,000 shares of Spartan Stores common stock. The plan provides that associates of Spartan Stores and its subsidiaries may purchase shares at 95% of the fair market value. 19,755 shares had been issued under the plan at March 31, 2012,.

XML

Commitments And Contingencies

12 Months Ended

Mar. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note 8

Commitments and Contingencies

Spartan Stores subleases property at certain locations and received rental income of $1.9 million in fiscal 2012. In the event of the customer's default, Spartan would be responsible for fulfilling these lease obligations. The future payment obligations under these leases are disclosed in Note 9.

Unions represent approximately 8% of Spartan Stores' associates. These associates are covered by a collective bargaining agreement which expires in October 2012.

Various lawsuits and claims, arising in the ordinary course of business, are pending or have been asserted against Spartan Stores. While the ultimate effect of such actions cannot be predicted with certainty, management believes that their outcome will not result in an adverse effect on the consolidated financial position, operating results or liquidity of Spartan Stores.

Spartan Stores contributes to the Central States multi-employer pension plan based on obligations arising from its collective bargaining agreement covering its warehouse union associates. This plan provides retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed by employers and unions; however, Spartan Stores is not a trustee. The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plan

Based on the most recent information available to Spartan Stores, we believe that the present value of actuarial accrued liabilities in this multi-employer plan significantly exceeds the value of the assets held in trust to pay benefits. Because we are one of a number of employers contributing to this plan, it is difficult to ascertain what the exact amount of the under funding would be, although we anticipate that our contributions to this plan will increase each year. Spartan believes that funding levels have not changed significantly since year-end. To reduce this under funding we expect meaningful increases in expense as a result of required incremental multi-employer pension plan contributions over the years. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably determined.

XML

Derivative Instruments

12 Months Ended

Mar. 31, 2012

Derivative Instruments [Abstract]

Derivative Instruments

Note 6

Derivative Instruments

Spartan Stores has limited involvement with derivative financial instruments and uses them only to manage well-defined interest rate risk exposure when appropriate, based on market conditions. Spartan Stores' objective in managing exposure to changes in interest rates is to reduce fluctuations in earnings and cash flows, and consequently, from time to time Spartan Stores uses interest rate swap agreements to manage this risk. Spartan Stores does not use financial instruments or derivatives for any trading or other speculative purposes.

On January 2, 2009, Spartan Stores entered into an interest rate swap agreement. The interest rate swap is considered to be a cash flow hedge of interest payments on $45.0 million of borrowings under Spartan Stores' senior secured revolving credit facility by effectively converting a portion of the variable rate debt to a fixed rate basis. Under the terms of the agreement, Spartan Stores has agreed to pay the counterparty a fixed interest rate of 3.33% and the counterparty has agreed to pay Spartan Stores a floating interest rate based upon the 1-month LIBOR plus 1.25% on a notional amount of $45 million. The interest rate swap agreement was to expire concurrently with its senior secured revolving credit facility on December 24, 2012. However, the swap agreement was terminated in the third quarter of fiscal 2012, and included a $0.8 million termination charge which was recorded in interest expense.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current earnings. There was no impact on earnings in fiscal 2012 and 2011 as the cash flow hedge is highly effective through its termination at the end of the third quarter of fiscal 2012.

The following table provides a summary of the fair value and balance sheet classification of the derivative financial instrument designated as an interest rate cash flow hedge:

Balance Sheet Classification	March 31, 2012		March 26, 2011
Other long-term liabilities	$	—	$	1,085

The following table provides a summary of the financial statement effect of the derivative financial instrument designated as an interest rate cash flow hedge for fiscal 2012 and 2011:

	Location in Consolidated Financial Statements	2012			2011
(Gain) Loss, net of taxes, recognized in other comprehensive income	Other comprehensive income	$	(665	)	$	265
Pre-tax loss reclassified from accumulated other comprehensive loss	Interest expense		646			833
Pre-tax swap termination charge	Interest expense		775			—

XML

Fair Value Measurements

12 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 7

Fair Value Measurements

Financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable and long-term debt. The carrying amounts of cash and cash equivalents, accounts and notes receivable, and accounts payable approximate fair value because of the short-term nature of these financial instruments. At March 31, 2012 and March 26, 2011 the estimated fair value and the book value of our debt instruments were as follows:

(In thousands)	March 31, 2012		March 26, 2011
Book value of debt instruments:
Current maturities of long-term debt and capital lease obligations	$	4,449	$	4,205
Long-term debt and capital lease obligations		133,565		170,711
Equity component of convertible debt		8,884		12,629
Total book value of debt instruments		146,898		187,545
Fair value of debt instruments		144,374		177,112
Excess of book value over fair value	$	2,524	$	10,433

The estimated fair value of debt is based on market quotes for instruments with similar terms and remaining maturities (level 2 valuation technique).

ASC 820 prioritizes the inputs to valuation techniques used to measure fair value into the following hierarchy:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability, reflecting the reporting entity's own assumptions about the assumptions that market participants would use in pricing.

At March 26, 2011 the fair value of the interest rate swap liability was approximately $1.1 million and is included in other long-term liabilities in the accompanying consolidated balance sheets. The fair value measurements are classified within Level 2 of the hierarchy and are determined using prices from a financial institution that develops values based on observable inputs in active markets.

Long-lived assets totaling $0.2 million and $8.2 in fiscal years 2012 and 2011, respectively, were measured at a fair value of $0.1 and $1.6, respectively, on a nonrecurring basis using Level 3 inputs as defined in the fair value heirarchy. Our accounting and finance team management, who report to the chief financial officer, determine our valuation policies and procedures. The development and determination of the unobservable inputs for level 3 fair value measurements and fair value calculations are the responsibility of our accounting and finance team management and are approved by the chief financial officer. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows, discounted using a risk-adjusted rate of interest. Spartan Stores estimates future cash flows based on experience and knowledge of the market in which the assets are located, and when necessary, uses real estate brokers. See Note 4 for discussion of long-lived asset impairment charges.

XML

Leases

12 Months Ended

Mar. 31, 2012

Leases [Abstract]

Leases

Note 9

Leases

Most of the Company's retail stores are operated in leased facilities. The Company also leases small ancillary warehouse facilities, its tractor and trailer fleet and certain other equipment. Most of the property leases contain renewal options of varying terms. Terms of certain leases contain provisions requiring payment of percentage rent based on sales and payment of executory costs such as property taxes, utilities, insurance and maintenance. Terms of certain leases of transportation equipment contain provisions requiring payment of percentage rent based upon miles driven. Portions of certain property are subleased to others.

Rental expense, net of sublease income, under operating leases consisted of the following:

(In thousands)	2012			2011			2010
Minimum rentals	$	32,204		$	32,464		$	33,706
Contingent payments		805			806			1,013
Sublease income		(1,899	)		(1,926	)		(2,064	)
	$	31,110		$	31,344		$	32,655

Total future lease commitments of Spartan Stores under capital and operating leases in effect at March 31, 2012 are as follows:

	Capital			Operating
(In thousands)	Used in Operations			Used in Operations		Subleased to Others		Total
Fiscal Year
2013	$	7,873		$	28,855	$	1,114	$	29,969
2014		7,233			24,779		881		25,660
2015		6,674			20,451		790		21,421
2016		6,697			17,522		467		17,989
2017		6,719			11,715		225		11,940
Thereafter		46,348			27,667		38		27,704
Total		81,544		$	130,989	$	3,515	$	134,503
Interest		(32,680	)
Present value of minimum lease obligations		48,864
Current portion		4,407
Long-term obligations	$	44,457

Amortization expense for property under capital leases was $3.6 million, $4.3 million and $4.1 million in fiscal years 2012, 2011 and 2010, respectively.

Assets held under capital leases consisted of the following:

(In thousands)	March 31, 2012		March 26, 2011
Buildings and improvements	$	45,517	$	45,788
Equipment		6,704		3,924
		52,221		49,712
Less accumulated depreciation		19,934		16,627
Net property	$	32,287	$	33,085

One of Spartan Stores' subsidiaries leases retail store facilities. Of the stores leased, several are owned and others were obtained through leasing arrangements and are accounted for as operating leases. A majority of the leases provide for minimum and contingent rentals based upon stipulated sales volumes and contain renewal options. Certain of the leases contain escalation clauses.

Owned assets, included in property and equipment, which are leased to others are as follows:

(In thousands)	March 31, 2012		March 26, 2011
Land and improvements	$	1,173	$	1,173
Buildings		5,942		5,942
		7,115		7,115
Less accumulated depreciation		4,043		3,803
Net property	$	3,072	$	3,312

Future minimum rentals to be received under operating leases in effect at March 31, 2012 are as follows:

(In thousands)

Fiscal Year	Owned Property		Leased Property		Total
2013	$	1,344	$	905	$	2,249
2014		689		656		1,345
2015		444		560		1,004
2016		430		426		856
2017		371		239		610
Thereafter		387		40		427
Total	$	3,665	$	2,826	$	6,491

XML

Discontinued Operations

12 Months Ended

Mar. 31, 2012

Discontinued Operations [Abstract]

Discontinued Operations

Note 14

Discontinued Operations

Certain of our retail and grocery distribution operations have been recorded as discontinued operations. Results of the discontinued operations are excluded from the accompanying notes to the condensed consolidated financial statements for all periods presented, unless otherwise noted.

The results of discontinued operations reported on the Consolidated Statements of Earnings are reported net of tax.

Discontinued operations did not have sales for fiscal years 2012, 2011 and 2010. Significant assets and liabilities of discontinued operations are as follows:

(In thousands)	March 31, 2012		March 26, 2011
Current assets	$	1,589	$	2,365
Property, net		4,001		5,001
Other long-term assets		1463		434
Current liabilities		268		1,490
Long-term liabilities		74		10

XML

Consolidated Statements Of Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Common Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]	Total
Balance, value at Mar. 28, 2009	$ 153,778	$ (14,151)	$ 107,578	$ 247,205
Balance, shares at Mar. 28, 2009	22,213
Comprehensive income, net of tax:
Net earnings			25,558	25,558
Pension liability adjustment, net of taxes		1,295		1,295
Change in fair value of interest rate swap, net of taxes		(117)		(117)
Total comprehensive income				26,736
Dividends			(4,483)	(4,483)
Stock-based employee compensation	4,629			4,629
Issuances of common stock and related tax benefits on stock option exercises, value	266			266
Issuances of common stock and related tax benefits on stock option exercises, shares	28
Issuances of restricted stock and related income tax benefits, value	478			478
Issuances of restricted stock and related income tax benefits, shares	293
Cancellations of restricted stock, value	(926)			(926)
Cancellations of restricted stock, shares	(84)
Balance, value at Mar. 27, 2010	158,225	(12,973)	128,653	273,905
Balance, shares at Mar. 27, 2010	22,450
Comprehensive income, net of tax:
Net earnings			32,307	32,307
Pension liability adjustment, net of taxes		2,664		2,664
Pension curtailment, net of taxes		(2,442)		(2,442)
Change in fair value of interest rate swap, net of taxes		(265)		(265)
Total comprehensive income				32,264
Dividends			(4,525)	(4,525)
Repurchase of equity component of convertible debt, net of tax	(388)			(388)
Stock-based employee compensation	5,379			5,379
Issuances of common stock and related tax benefits on stock option exercises, value	428			428
Issuances of common stock and related tax benefits on stock option exercises, shares	33
Issuances of restricted stock and related income tax benefits, value	(295)			(295)
Issuances of restricted stock and related income tax benefits, shares	222
Cancellations of restricted stock, value	(1,263)			(1,263)
Cancellations of restricted stock, shares	(86)
Balance, value at Mar. 26, 2011	162,086	(13,016)	156,435	305,505
Balance, shares at Mar. 26, 2011	22,619			22,619
Comprehensive income, net of tax:
Net earnings			31,758	31,758
Swap termination charge, net of taxes		454		454
Pension liability adjustment, net of taxes		(1,442)		(1,442)
Change in fair value of interest rate swap, net of taxes		211		211
Total comprehensive income				30,981
Dividends			(5,926)	(5,926)
Share repurchase, value	(12,381)			(12,381)
Share repurchase, shares	(687)
Stock-based employee compensation	5,048			5,048
Issuances of common stock and related tax benefits on stock option exercises, value	1,311			1,311
Issuances of common stock and related tax benefits on stock option exercises, shares	93
Issuances of restricted stock and related income tax benefits, value	(116)			(116)
Issuances of restricted stock and related income tax benefits, shares	255
Cancellations of restricted stock, value	(814)			(814)
Cancellations of restricted stock, shares	(65)
Balance, value at Mar. 31, 2012	$ 155,134	$ (13,793)	$ 182,267	$ 323,608
Balance, shares at Mar. 31, 2012	22,215			22,215

XML

Goodwill And Other Intangible Assets

12 Months Ended

Mar. 31, 2012

Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

Note 3

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill were as follows:

(In thousands)	Retail			Distribution		Total
Balance at March 27, 2010:
Goodwill	$	242,023		$	92,493	$	334,516
Accumulated impairment charges		(86,600	)		—		(86,600	)
Goodwill, net		155,423			92,493		247,916
Acquisitions		450			—		450
Other (Note 4)		(7,122	)		—		(7,122	)
Balance at March 26, 2011:
Goodwill		235,351			92,493		327,844
Accumulated impairment charges		(86,600	)		—		(86,600	)
Goodwill, net		148,751			92,493		241,244
Other (Note 4)		(1,050	)		—		(1,050	)
Balance at March 31, 2012:
Goodwill		234,301			92,493		327,844
Accumulated impairment charges		(86,600	)		—		(86,600	)
Goodwill, net	$	147,701		$	92,493	$	240,194

The following table reflects the components of amortized intangible assets, included in "Other, net" on the Consolidated Balance Sheets:

	March 31, 2012				March 26, 2011
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Non-compete agreements	$	3,504	$	2,616	$	3,422	$	2,273
Favorable leases		3,906		1,815		3,906		1,548
Customer lists		11,065		6,330		10,738		4,806
Franchise fees and other		625		242		599		200
Total	$	19,100	$	11,003	$	18,665	$	8,827

The weighted average amortization period for amortizable intangible assets is as follows:

Non-compete agreements	9.9 years
Favorable leases	14.6 years
Customer lists	7.1 years
Franchise fees and other	11.9 years

Amortization expense for intangible assets was $2.2 million, $2.1 million and $2.3 million for fiscal years 2012, 2011 and 2010, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows:

(In thousands)

Fiscal Year	Amortization Expense
2013	$	2,276
2014		2,001
2015		1,365
2016		964
2017		428

Indefinite-lived intangible assets that are not amortized consist primarily of a trade name and licenses for the sale of alcoholic beverages and amounted to $26.5 million as of March 31, 2012 and March 26, 2011.

XML

Supplemental Cash Flow Information

12 Months Ended

Mar. 31, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

Note 13

Supplemental Cash Flow Information

Non-cash financing activities include the issuance of restricted stock to employees and directors of $3.6 million, $3.3 million and $4.6 million for fiscal years 2012, 2011 and 2010, respectively. Non-cash investing activities also include capital expenditures included in accounts payable of $3.3 million, $4.0 million and $2.3 million for fiscal years 2012, 2011 and 2010 respectively.