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

                                         FORM 10-K
                      Annual Report pursuant to Section 13 or 15(d) of
                            The Securities Exchange Act of 1934

For the fiscal year ended                             Commission file number
November 2, 2002                                       1-5745
                                FOODARAMA SUPERMARKETS, INC.
                   (Exact name of Registrant as specified in its charter)

        New Jersey                                            21-0717108
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

                Building 6, Suite 1, 922 Hwy. 33, Freehold, New Jersey 07728
                          (Address of principal executive offices)

Registrant's telephone number, including area code:        (732) 462-4700

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

                                                Name of each exchange on
      Title of each class                                which registered

         Common Stock                           American Stock Exchange

    Par Value $1.00 per share

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

                                      NONE
                                   (Title of Class)

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

      The aggregate market value of voting stock held by non-affiliates of the
Registrant was approximately $16,382,000. Computation is based on the closing
sales price of $47.25 per share of such stock on the American Stock Exchange on
May 4, 2002, the last business day of the Registrant's most recently completed
second quarter.

       Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).  Yes____   No __x__
      As of January 10, 2003, the number of shares outstanding of Registrant's
Common Stock was 986,867
..
DOCUMENTS INCORPORATED BY REFERENCE
None
                                       1

                                           PART I


Disclosure Concerning Forward-Looking Statements

All statements,  other than statements of historical fact, included in this
Form 10-K,  including  without  limitation  the  statements  under  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
"Business", are, or may be deemed to be, "forward-looking statements" within the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act"),  and Section 21E of the Securities  Exchange Act of 1934, as
amended  (the  "Exchange  Act").   Such   forward-looking   statements   involve
assumptions,  known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Foodarama Supermarkets,
Inc. (the "Company", which may be referred to as we, us or our) to be materially
different  from any future  results,  performance or  achievements  expressed or
implied by such  forward-looking  statements  contained in this Form 10-K.  Such
potential  risks and  uncertainties,  include  without  limitation,  competitive
pressures from other supermarket  operators and warehouse club stores,  economic
conditions  in  the  Company's  primary  markets,  consumer  spending  patterns,
availability of capital,  cost of labor, cost of goods sold including  increased
costs  from  the  Company's  cooperative  supplier,  Wakefern  Food  Corporation
("Wakefern"),  and  other  risk  factors  detailed  herein  and in  other of the
Company's  Securities  and  Exchange  Commission  filings.  The  forward-looking
statements are made as of the date of this Form 10-K and the Company  assumes no
obligation  to update the  forward-looking  statements  or to update the reasons
actual  results  could  differ  from  those  projected  in such  forward-looking
statements.

Item 1.       Business

General

Foodarama  Supermarkets,  Inc.,  a New Jersey  corporation  formed in 1958,
operates a chain of twenty-three  supermarkets located in Central New Jersey, as
well as two liquor stores and two garden centers,  all licensed as ShopRite.  We
also operate a central food processing  facility to supply our stores with meat,
various  prepared  salads,  prepared foods and other items, and a central baking
facility which supplies our stores with bakery products. The Company is a member
of Wakefern, the largest retailer owned food cooperative warehouse in the United
States and owner of the  ShopRite  name.  The Company  operates in one  industry
segment, the retail sale of food and non-food products, primarily in the Central
New Jersey region.

The Company has incorporated the concept of "World Class" supermarkets into
its  operations.  "World  Class"  supermarkets  are  significantly  larger  than
conventional  supermarkets  and feature  fresh  fish-on-ice,  prime meat service
butcher departments,  in-store bakeries,  international foods including Chinese,
sushi and kosher  sections,  meals to go, salad bars, snack bars, bulk foods and
pharmacies.   We  have  also   introduced   many  of  these  features  into  our
conventionally  sized supermarkets through extensive  renovations;  these stores
are  considered  "Mini-World  Class"  supermarkets.  Currently,  nineteen of our
stores are "World Class",  two are "Mini-World  Class" and two are  conventional
supermarkets.

                                       2


The following table sets forth certain data relating to the Company's business
for the periods indicated:

                                               Fiscal Year Ended
                                   Nov. 2,   Nov. 3,     Oct 28, Oct 30, Oct 31,
                                     2002     2001**        2000   1999    1998

Average annual sales per store
(in millions)* ..................    $43.8      $43.0      $40.5   $37.1   $35.3

Same store sales increase
from prior year .................     1.56%      3.77%      4.24%  6.28%   4.45%

Total store area in square feet
(in thousands) ....................  1,340      1,301      1,294  1,195   1,195

Total store selling area in square
feet (in thousands) ...............  1,001        973        966    895     895

Average total square feet per store
(in thousands) ....................     61         59         59     57      57

Average square feet of selling area
per store (in thousands) ..........     46         44         44     43      43

Annual sales per square foot of
selling area* .....................   $962       $973       $923   $870    $832

Number of stores:
  Stores remodeled (over $500,000)       0          2          2      1       1
  New stores opened ..............       0          0          1      0       1
  Stores replaced/expanded .......       1          1          1      0       2
  Stores closed/divested .........       1          0          1      0       1
  Number of stores by size
  (total store area):
  30,000 to 39,999 sq.ft ..........      2          3          3      4       4
  40,000 to 49,999 sq.ft ..........      3          3          3      3       3
  Greater than 50,000 sq.ft .......     17         16         16     14      14
Total stores open at period end***      22         22         22     21      21


 *  Sales for stores open less than 52 weeks have been annualized.

**  Calculated on a 53 week basis. A like 52 week comparison would be $42.1
    million in average annual sales per store and $953 in annual sales per
    square foot of selling area.

*** The Company began operating a twenty-third supermarket on January 8, 2003.

                                       3

Store Expansion and Remodeling

     We believe that significant capital investment is critical to our operating
strategy  and we are  continuing  our  program to upgrade our  existing  stores,
replace outdated  locations and open new "World Class"  supermarkets  within our
core market area of Central New Jersey.

     In fiscal year 2002,  a  replacement  store in  Middletown,  New Jersey was
opened. Additionally,  after fiscal year end, a replacement store in Woodbridge,
New Jersey was opened on December 4, 2002 and on January 8, 2003 a new  location
was opened in Ewing, New Jersey.  Over the next three years the Company plans to
open three  replacement and four new stores and expand three existing  locations
as well as build a new  state of the art  bakery  commissary.  Construction  has
started on one replacement  store,  the expansion of two locations,  a new store
and the bakery  commissary.  All of these  stores are in Central  New Jersey and
will be "World Class" operations.

Technology

     Automation and  computerization  are important to the Company's  operations
and competitive position.  All stores utilize IBM 4690 software for the scanning
checkout  systems.  The  hardware  for the  point of sale  ("POS")  systems  was
replaced in our stores in fiscal 1999 and 2000.  This POS upgrade brought all of
our  stores  to a state of the art level  with  increased  processing  speed and
enhanced marketing capabilities. These systems improve pricing accuracy, enhance
productivity  and  reduce  checkout  time  for  customers.  During  fiscal  2002
automated  checkout systems were installed in two locations.  These systems were
also installed in the new  Woodbridge and Ewing,  New Jersey stores in the first
quarter of fiscal 2003.  This system will  provide  improved  customer  service,
especially  during peak volume  periods,  and labor  scheduling  benefits to the
Company.  Additionally,  all  stores  have IBM  RS/6000  processors,  which were
replaced  with the  current  version of this  equipment  in 1999.  A frame relay
communications  network is being used for high speed transmission and collection
of data.  This system  replaced  slower  telephone  lines.  The increased  speed
improves our ability to access,  review for accuracy  and analyze  data.  During
fiscal  2002  the  infrastructure  for  improved  wireless   communications  was
installed in all of our stores and ISDN circuits were installed which serve as a
back up system for the frame relay.  The use of these systems allows the Company
to offer  its  customers  debit  and  credit  card  payment  options  as well as
participation in Price Plus, ShopRite's  preferred  customer program,  and the
ShopRite co-branded credit card. By presenting the scannable Price Plus card or
the ShopRite  co-branded  card,  customers  can be given  electronic  discounts,
receive  credit  for the value of  ShopRite  in-ad  Clip Less  coupons  and cash
personal checks. Also, customers receive a 1% future rebate when paying with the
ShopRite credit card.

     We are also using  other  in-store  computer  systems.  Computer  generated
ordering is installed in all stores. This system is designed to reduce inventory
levels and out of stock  positions,  enhance shelf space  utilization and reduce
labor costs. In all stores, meat, seafood and delicatessen prices are maintained
on department  computers for automatic weighing and pricing.  Additionally,  all
stores have computerized  time and attendance  systems which are used for, among
other things,  automated  labor  scheduling,  and most stores have  computerized
energy management systems. We also utilize a direct store delivery receiving and
pricing system for most items not purchased through Wakefern in order to provide
cost and retail price control over these  products,  and  computerized  pharmacy
systems which provide  customer  profiles,  retail price control and third-party
billing.  The Company has also installed  computer based training systems in all
stores. The system is presently being used to train all new checkout and produce
department  personnel.   Modules  for  other  departments  are  currently  being
developed.

                                       4

In  addition,  all  field  merchandisers  and  operations  supervisors  are
equipped with laptop  personal  computers.  This provides  field  personnel with
current labor and product  information to facilitate  making accurate and timely
decisions.  Communication  among the Company's stores, our executive offices and
Wakefern has been improved with the installation of Lotus Notes.

Industry Segment and Principal Products

The Company is engaged in one industry segment. For the last three fiscal years,
our sales were divided among the categories listed below:

                                                Fiscal Year Ended

Product Categories                     11/02/02     11/03/01   10/28/00

Groceries                                 38.1%       39.1%       39.3%
Dairy & Frozen                            16.4        16.5        16.5
Meats, Seafood & Poultry                  10.1        10.2        10.5
Non-Foods                                 10.1        10.3        10.4
Produce                                    9.3         8.8         8.6
Appetizers & Prepared Foods                6.7         6.4         6.4
Pharmacy                                   5.4         4.9         4.5
Bakery                                     2.1         2.0         2.0
Liquor, Floral & Garden Centers            1.8         1.8         1.8
                                         ------      ------      ------
                                         100.0%      100.0%      100.0%

Gross  profit  derived by the  Company  from each  product  category is not
necessarily  consistent  with the percentage of total sales  represented by such
product category.

Wakefern Food Corporation

The Company  owns a 15.6%  interest in Wakefern,  a New Jersey  corporation
organized in 1946,  which  provides  purchasing,  warehousing  and  distribution
services  on a  cooperative  basis to its  shareholder  members,  including  the
Company,  who are  operators of ShopRite or alternate  format  supermarkets.  As
required by the Wakefern  By-Laws,  repayment of the  Company's  obligations  to
Wakefern  is  personally  guaranteed  by Joseph J.  Saker,  Richard J. Saker and
Thomas A. Saker. These personal guarantees are required of any 5% shareholder of
the Company who is active in the  operation of the Company.  Wakefern and its 38
shareholder  members operate  approximately  203  supermarkets of which Wakefern
owns and operates 51 locations.  Products  bearing the ShopRite label  accounted
for  approximately  18% of the  Company's  total sales for the fiscal year ended
November 2, 2002.  Wakefern maintains  warehouses in Elizabeth,  South Brunswick
and Woodbridge, New Jersey which handle a full line of groceries,  meats, frozen
foods,  produce,  bakery, dairy and delicatessen  products and health and beauty
aids,  as well as a number of non-food  items.  Wakefern also operates a grocery
and perishable products warehouse in Wallkill, New York.

Wakefern's  professional  advertising  staff  and  its  advertising  agency
develop and place most of the Company's advertising on television,  radio and in
major  newspapers.  We are charged for these services based on various  formulas
which account for the estimated  proportional  benefits we receive. In addition,
Wakefern  charges us for,  and provides  the Company  with,  product and support
services  in  numerous  administrative   functions.   These  include  insurance,
supplies,  technical support for  communications and electronic payment systems,
equipment purchasing and the coordination of coupon processing. Additionally, we
sublease two supermarkets from Wakefern. See Item 2. Properties.

Wakefern distributes,  as a patronage  dividend to each of its members,  a
share of its net  earnings  in  proportion  to the  dollar  volume  of  business
transacted by each member with Wakefern  during each fiscal year.  The Company's
                                       5

participation  percentage  was 12.2%  for  fiscal  2002.  See Note 4 of Notes to
Consolidated Financial Statements.

Although  Wakefern  has a  significant  in  house  professional  staff,  it
operates as a member  cooperative  and senior  executives of the Company spend a
substantial amount of their time working on Wakefern  committees  overseeing and
directing Wakefern purchasing, merchandising and various other programs.

Wakefern licenses the ShopRite name to its shareholder members and provides a
substantial and extensive merchandising program for the ShopRite label. Except
for the license to use the name "ShopRite", we do not believe that the ownership
of or rights in patents,  trademarks,  licenses,  franchises and  concessions is
material to our business.  The  locations at which we may open new  supermarkets
under  the  name  ShopRite  are  subject  to the  approval  of  Wakefern's  Site
Development Committee.  Under circumstances  specified in its By-Laws,  Wakefern
may refuse to sell merchandise to, and may repurchase the Wakefern stock of, any
shareholder member. Such circumstances include certain unapproved transfers by a
shareholder member of its supermarket business or its capital stock in Wakefern,
unapproved acquisition by a shareholder member of certain supermarket or grocery
wholesale supply  businesses,  the conduct of a business in a manner contrary to
the policies of Wakefern,  the material  breach of any provision of the Wakefern
By-Laws or any agreement with Wakefern or a  determination  by Wakefern that the
continued  supplying of merchandise or services to such shareholder member would
adversely affect Wakefern.

Wakefern requires each shareholder to invest in Wakefern's capital stock to
a maximum of $550,000 for each store operated by such  shareholder  member.  The
precise amount of the investment is computed according to a formula based on the
volume of each store's purchases from Wakefern.

Under its By-Laws, all bills for merchandise and other indebtedness are due
and  payable to Wakefern  weekly  and,  if these bills are not paid in full,  an
additional 1% service charge is due on the unpaid portion. Wakefern requires its
shareholder  members to pledge their Wakefern stock as collateral for payment of
their  obligations  to  Wakefern.  The  Company's  investment  in  Wakefern  was
$11,805,000  as of  November  2,  2002 and  November  3,  2001.  We also have an
investment in another company  affiliated with Wakefern which was $953,000 as of
November  2, 2002 and  November  3,  2001.  See Note 4 of Notes to  Consolidated
Financial Statements.

Since September  18, 1987,  the Company has had an  agreement,  amended in
1992, with Wakefern and all other  shareholders of Wakefern,  which provides for
certain commitments by, and restrictions on, all shareholders of Wakefern. Under
the agreement,  each shareholder,  including the Company,  agreed to purchase at
least  85% of  its  merchandise  in  certain  defined  product  categories  from
Wakefern.  The Company fulfilled this obligation during the 52 week period ended
November 2, 2002. If any shareholder fails to meet these purchase  requirements,
it must make  payments  to Wakefern  (the  "Compensatory  Payments")  based on a
formula  designed to compensate  Wakefern for the profit lost by it by virtue of
its lost warehouse volume.  Similar payments are due if Wakefern loses volume by
reason of the sale of one or more of a shareholder's  stores,  any shareholder's
merger with  another  entity or the  transfer of a  controlling  interest in the
shareholder.  Subject to a right of first refusal granted to Wakefern,  sales of
certain under  facilitated  stores are permitted free of the restrictions of the
agreement.  Also, the  restrictions of the agreement do not apply if volume lost
by a  shareholder  by the  sale of a store  is  made up by such  shareholder  by
increased  volume of new or existing stores and, in any event,  the Compensatory
Payments  otherwise  required to be made by the  shareholder to Wakefern are not
required if the sale is made to Wakefern,  another shareholder of Wakefern or to
a  purchaser  which is  neither  an owner or  operator  of a chain of 25 or more
supermarkets  in the United States,  excluding any ShopRite  supermarkets in any
area in which Wakefern  operates.  The agreement  extends for an indefinite term
and is subject to  termination  ten years after the approval by a vote of 75% of
the outstanding voting stock of Wakefern.
                                       6

The loss of, or material change in, our relationship with Wakefern (neither
of which is considered  likely) could have a significant  adverse  impact on the
Company's  business.  The  failure of Wakefern  to fulfill  its  obligations  or
another  member's  insolvency  or  withdrawal  from  Wakefern  could  result  in
additional  costs  to  the  remaining  members.  On  November  22,  2000  Big  V
Supermarkets,  Inc. ("Big V"), a member of Wakefern,  similar in sales volume to
the Company,  filed for reorganization  under Chapter 11 of the U.S.  Bankruptcy
Code and indicated its intent to depart from Wakefern. Big V was unsuccessful in
its challenge to provisions in its agreements with Wakefern which require, among
other things,  withdrawing  members to make a payment to Wakefern to make up for
the  resulting  loss of volume to the  cooperative.  On July 12,  2002  Wakefern
reported that it had closed on its purchase of  substantially  all of the assets
of Big V for approximately $185 million in cash and assumed  liabilities.  It is
not  possible to predict at this time what effect the  operation of Big V stores
by Wakefern will have on the Company.

We also purchase products and items sold in our supermarkets from a variety
of sources  other than  Wakefern.  Neither the  Company  nor, to the best of our
knowledge,  Wakefern has  experienced  or  anticipates  experiencing  any unique
material difficulties in procuring products and items in adequate quantities.

Competition

The  supermarket  business  is highly  competitive.  The  Company  competes
directly with a number of national and regional chains, including A&P, Pathmark,
Wegmans,  Acme, Stop & Shop and Foodtown, as well as various local chains, other
ShopRite members and numerous single-unit stores. We also compete with warehouse
club stores which charge a membership fee, are  non-unionized and operate larger
units.   Additional  competition  comes  from  drug  stores,   discount  general
merchandise stores, fast food chains and convenience stores.

Many of the  Company's  competitors  have greater  financial  resources and
sales. As most of our competitors offer substantially the same type of products,
competition is based primarily upon price, and particularly in the case of meat,
produce, bakery,  delicatessen,  and prepared foods, on quality.  Competition is
also based on  service,  location,  appearance  of stores and on  promotion  and
advertising.  The Company  believes  that its  membership  in  Wakefern  and the
ShopRite  brand name allow it to  maintain a  low-price  image  while  providing
quality products and the availability of a wide variety of merchandise including
numerous  private label  products under the ShopRite brand name. We also provide
clean, well maintained  stores,  courteous and quick service to the customer and
flexibility in tailoring the products  offered in each store to the demographics
of the communities we service.  The  supermarket  business is  characterized  by
narrow profit margins,  and accordingly,  our viability depends primarily on our
ability to  maintain  a  relatively  greater  sales  volume  and more  efficient
operations than our competitors.

Over  the  last two  years  many  changes  took  place in our  marketplace.
Pathmark, one of our principal competitors, completed a reorganization,  exiting
Chapter 11 in September 2000. This restructuring of Pathmark is reported to have
eliminated  almost one  billion  dollars of debt which was  converted  to common
stock. Edwards,  another formidable competitor,  has changed its name and format
to Stop & Shop, an affiliated  company.  Grand Union filed for bankruptcy  under
Chapter 11 and sold almost all of its stores.  Many of the Grand Union locations
in our trading area are now operating as Stop & Shop and Pathmark. The impact of
these changes has  strengthened  competition in our already  highly  competitive
marketplace.

Regulatory and Environmental Matters

Our stores and facilities, in common with those of the industry in general,
are  subject  to  numerous  existing  and  proposed  Federal,  State  and  local
regulations  which regulate the discharge of materials  into the  environment or
                                       7

otherwise  protect the  environment,  establish  occupational  safety and health
standards  and cover other  matters,  including  the  licensing of the Company's
pharmacies  and two liquor  stores.  Additionally,  as a company  with  publicly
traded securities,  we are subject to the requirements of the Sarbanes-Oxley Act
of 2002  signed into law on July 30,  2002.  We believe  our  operations  are in
compliance with such existing regulations and are of the opinion that compliance
with the regulations  has not had and will not have any material  adverse effect
on our capital expenditures, earnings or competitive position.

Employees

As of December 31, 2002, the Company employed  approximately 6,400 persons,
of whom approximately 5,850 are covered by collective bargaining agreements. 76%
of the employees are part time and almost all of these  employees are covered by
the  collective  bargaining  agreements.  Although the Company has  historically
maintained  favorable  relations  with  its  unionized  employees,  it  could be
affected by labor disputes. Most of our competitors are similarly unionized. The
Company is a party to seven collective bargaining agreements expiring on various
dates from April 2003 to August 2006. The  bargaining  agreement with the United
Food and  Commercial  Workers  Local 1360 expired in February  2002 and has been
renegotiated. The new contract expires February 2006.

By  virtue  of  the  nature  of  the  Company's   supermarket   operations,
information  concerning  backlog,  seasonality,   major  customers,   government
contracts, research and development activities and foreign operations and export
sales is not relevant.

Item 2.  Properties
The Companys twenty-three supermarkets,  all of which are leased, range in
size from 31,000 to 101,000  square feet with sales area averaging 75 percent of
the total  area.  All stores  are  air-conditioned,  have  modern  fixtures  and
equipment,  have their own ample parking  facilities and are located in suburban
areas.

Leases for 20 of the Company's 23 existing  supermarkets  expire on various
dates  from 2003  through  2028.  We are  leasing  one  location,  which will be
replaced,  on a month to month basis. Two of our supermarkets are subleased from
Wakefern  and  these  subleases  expire  in 2006 and  2008,  respectively.  Upon
expiration of these subleases, the underlying leases for these supermarkets will
be  assigned  to and  assumed by us if certain  conditions,  which  include  the
absence of  defaults  by the  Company in its  obligations  to  Wakefern  and our
lenders,  and the maintenance of a specified level of net worth,  are satisfied.
The terms of these leases expire in 2021 and 2018, respectively.  Except for the
two subleases  with  Wakefern,  one lease  expiring in 2003 and the one month to
month lease,  all leases  contain  renewal  options  ranging from 5 to 25 years.
Eight leases  require,  in addition to a fixed rental,  a further rental payment
based on a percentage of the annual sales in excess of a stipulated minimum. The
minimum has been exceeded in one of the eight locations in the last fiscal year.
Most leases also require us to pay for insurance,  common area  maintenance  and
real estate  taxes.  Five  additional  leases  have been signed for  supermarket
locations,  two of which will be replacements  for existing stores and three for
new  locations.  Additionally,  two new leases  have been  signed  for  existing
locations which will be expanded and remodeled and a lease has been executed for
a new bakery  commissary.  The terms of the supermarket leases are substantially
similar to the terms of the leases for our  existing  supermarkets.  The Company
has experienced delays in the opening of certain new stores because of extensive
governmental approvals required to develop new retail properties in New Jersey.

Also,  we are  subject to a lease  covering  our  executive  and  principal
administrative  offices containing  approximately  18,000 square feet in Howell,
New Jersey.  The Company  also leases  57,000  square feet of space used for its
existing bakery operations and storage in Howell,  New Jersey, and 50,000 square
feet of space used for storage in Lakewood,  New Jersey.  Upon the completion of
                                       8

the new bakery facility under  construction,  the Company  anticipates  that the
existing  bakery  facility  will be used for storage.  The Company owns meat and
prepared foods processing  facilities in Linden,  New Jersey,  which is the only
real property  owned by us. In addition,  we are a party to an additional  three
leases for locations where we no longer conduct supermarket  operations;  two of
these locations have been sublet to  non-affiliated  persons.  In most instances
these stores have been sublet at terms at least substantially  equivalent to the
Company's  obligations  under its prime  lease.  See Notes 10 and 14 of Notes to
Consolidated Financial Statements.

Item 3.  Legal Proceedings

On March 27, 2002,  Melvin Jules Bukiet, on behalf of himself and acting as
trustee  for the  benefit of minors  Madeline  Bukiet,  Miles  Bukiet and Louisa
Bukiet (together, the "Plaintiffs"),  commenced a shareholders derivative action
against the Company,  as nominal defendant,  and against all five members of the
Board of Directors, Joseph J. Saker, Richard J. Saker, Charles T. Parton, Albert
A.  Zager  and  Robert  H.  Hutchins  (together,  the  "Defendants"),  in  their
capacities as directors and/or officers of the Company. This lawsuit,  which was
filed in the Superior Court of New Jersey,  Middlesex County,  Chancery Division
(the "Court"),  alleges that the Defendants have breached their fiduciary duties
to the  Company  and  its  shareholders  and  sought  to  "enrich  and  entrench
themselves at the shareholders' expense" through their previous  recommendation,
implementation  and  administration  of the 2001 Stock Incentive Plan (the "2001
Plan"),  which was approved by the Company's  shareholders on April 4, 2001, and
by  proposing  an amendment to the 2001 Plan to increase the number of shares of
Common Stock  available  for  issuance by 65,000  shares and an amendment to the
Company's amended and restated certificate of incorporation (the "Certificate of
Incorporation")  to create a classified  Board of Directors  consisting  of five
classes of directors,  with only one class standing for election in any year for
a five-year term. The shareholders of the Company approved the amendments to the
2001 Plan and the Certificate of Incorporation on May 8, 2002.

The  parties to the  litigation  have  tentatively  agreed on a  settlement
proposal,  subject  to,  among  other  things,  approval by the Court and by the
Company's  director and officer  liability  insurance  carrier.  Pursuant to the
terms of the proposed  settlement,  1) the Company's five-year  classified board
will be eliminated and the  Defendants  will agree not to submit any proposal to
the  shareholders  of the Company in  connection  with the  implementation  of a
classified  board  for  five  years  from  the  date of  final  approval  of the
settlement;  2) the 2001  Plan will be  amended  so that the  maximum  number of
shares that can be awarded to any individual  thereunder shall be 50,000; and 3)
the 2001 Plan will be amended to require that the exercise  price of any options
or other stock based  compensation  granted  thereunder,  following  the date of
final approval of the settlement,  shall be equal to the closing market price of
the Company's stock on the date of grant. In addition, Joseph J. Saker, Chairman
and Chief  Executive  Officer of the Company,  will return to the Company 10,000
stock options previously awarded to him under the 2001 Plan. The Plaintiffs have
also  informed  the  Defendants  that they intend to seek an award of  attorneys
fees,  however, it is not possible to predict the amount of the fees that may be
awarded.

Additionally,  in the  ordinary  course  of our  business,  we are party to
various  legal actions not covered by  insurance.  Although a possible  range of
loss cannot be estimated,  it is the opinion of management,  that  settlement or
resolution  of these  proceedings  will not, in the  aggregate,  have a material
adverse  impact on the  financial  condition  or  results of  operations  of the
Company.

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

Not applicable.
                                       9

                                          Part II

Item 5. Market for Registrants Common Stock and Related Security Holder Matters

      (a)   The Company's Common Stock is traded on the American Stock Exchange.
            The following table sets forth the high and low sales prices for the
            Common Stock as reported on the American Stock Exchange for the
            fiscal years ended November 3, 2001 and November 2, 2002.


     Fiscal Quarter Ended                 High              Low

      January 27, 2001                    21.25             15.13
      April 28, 2001                      20.00             17.00
      July 28, 2001                       35.25             18.50
      November 3, 2001                    42.00             34.35

      February 2, 2002                    43.00             35.75
      May 4, 2002                         47.50             34.50
      August 3, 2002                      47.25             36.90
      November 2, 2002                    35.75             22.55

      (b)   The approximate number of record holders of the Companys Common
            Stock was 320 as of January 10, 2003. In addition, the Company
            believes that as of that date there were approximately 338
            beneficial owners.

      (c)   No dividends have been declared or paid with respect to the Companys
            Common Stock since October 1979. We are prohibited from paying
            dividends on our Common Stock by the Third Amended and Restated
            Revolving Credit and Term Loan Agreement between the Company and
            four financial institutions. See Management's Discussion and
            Analysis-Financial Condition and Liquidity. The Company has no
            intention of paying dividends on its Common Stock in the foreseeable
            future.

      (d)   On June 8, 2001 the Company announced the commencement of a stock
            repurchase program whereby we would seek to repurchase shares of
            our Common Stock having a value of up to $3 million. This program
            was increased to $5.6 million in April 2002. For the year ended
            November 2, 2002, the Company repurchased a total of 102,853 shares
            of Common Stock. 101,553 of these shares were purchased in
            privately negotiated transactions and the remaining 1,300 shares
            were acquired in open market transactions. 6,377 of these shares
            were owned by a member of the family of Joseph J. Saker, the
            Company's Chairman, and were purchased for an average of $39.52 per
            share. $4,523,670, or an average of $43.98 per share, was expended
            for the purchase of the 102,853 shares. Since the announcement of
            the stock repurchase program in June 2001, the Company has
            repurchased 131,923 shares for $5,591,597 or an average of $42.39
            per share. See Management's Discussion and Analysis-Financial
            Condition and Liquidity.

Item 6.  Selected Financial Data

The selected  financial  data set forth below is derived from the Company's
consolidated  financial  statements and should be read in  conjunction  with the
consolidated  financial  statements and related notes included elsewhere in this
Annual Report. See Management's Discussion and Analysis-Financial  Condition and
Liquidity and Results of Operations.


                                       10


                                         Year Ended


                   November 2,  November 3,  October 28, October 30, October 31,
                    2002 (1)     2001 (2)      2000 (3)     1999       1998 (4)
                            (Dollars in thousands, except per share amounts)

Income statement
data:
Sales               $963,611      $945,301    $866,363    $778,726     $687,974

Net income          $  3,240      $  3,938    $  2,382    $  1,945        1,780

Net income per
common share:
       Basic        $   3.16      $   3.54    $   2.13    $   1.74     $   1.59
Diluted             $   3.01      $   3.50    $   2.13    $   1.74     $   1.59
Cash dividends
per common share           -             -           -           -            -

Balance sheet data
(at year end):
Working capital
(deficit)           $   (590)     $ (6,907)   $ (1,215)   $  2,507       (2,725)

Total assets        $219,389      $194,526    $191,185    $156,186     $149,567

Long-term debt
(excluding current
 portion)           $100,037      $ 75,553    $ 82,241    $ 59,604     $ 50,656

Common share-
holders' equity (5) $ 36,625      $ 38,493    $ 37,422    $ 35,040     $ 33,014

Book value per
common share        $  37.13      $  35.37    $  33.49    $  31.36     $  29.55

Tangible book value
per common share    $  34.31      $  32.49    $  30.37    $  27.93     $  25.47



(1)   The Company opened one replacement location in November 2001. See
      Management's Discussion and Analysis - Results of Operations - Sales.

(2)   53 week period.

(3)   The Company opened one new and one replacement location in February and
      April 2000, respectively. See Management's Discussion and Analysis -
      Results of Operations - Sales.

(4)   The Company opened one replacement and one new location in February and
      August 1998, respectively.

(5)   The Company repurchased shares of its Common Stock in fiscal 2001 and
      2002. See Item 5. - Market for Registrant's Common Stock and Related
      Security Holder Matters.


                                       11

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical  accounting policies are those accounting policies that management
believes are important to the portrayal of the Company's financial condition and
results  and  require   management's  most  difficult,   subjective  or  complex
judgments,  often as a result of the need to make estimates  about the effect of
matters that are inherently uncertain.

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

Impairment of Goodwill

Goodwill is amortized on a  straight-line  basis over periods from 15 to 36
years. The carrying amount of goodwill is reviewed whenever events or changes in
circumstances indicate that it may not be recoverable. We use an estimate of the
future  undiscounted net cash flows of the acquired  business over the remaining
life of the asset in measuring  whether the assets are  recoverable.  Where such
estimate of the future  undiscounted cash flows is less than the carrying amount
of goodwill, a potential impairment exists.

We  are  required  to  adopt  the  provisions  of  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 142,  "Goodwill and Other Intangible Assets"
beginning  November 3, 2002. This statement  requires that goodwill no longer be
amortized, and it requires instead that goodwill be tested at least annually for
impairment. If the carrying value of goodwill were determined to be greater than
its estimated  fair value under the  impairment  test,  then it would be written
down to its estimated fair value.

The  discontinuance  of  goodwill  amortization  is not  expected to have a
significant effect on our future results of operations.  We have not completed a
transitional impairment test, as required by SFAS No. 142.

Patronage Dividends

As a  stockholder  of  Wakefern,  the Company  earns a share of  Wakefern's
earnings, which is distributed as a "patronage dividend". This dividend is based
on a distribution  of Wakefern's  operating  profits for its fiscal year,  which
ends the Saturday closest to September 30, in proportion to the dollar volume of
business  done by each member of Wakefern  during  that fiscal  year.  Patronage
dividends are recorded as a reduction of cost of goods sold. The Company accrues
estimated  patronage  dividends due from Wakefern quarterly based on an estimate
of the annual Wakefern patronage dividend and an estimate of the Company's share
of this annual dividend based on the Company's  estimated  proportional share of
the  dollar  volume of  business  transacted  with  Wakefern  that  year.  These
estimates  are  based on both  historical  patronage  dividend  percentages  and
the current volume of merchandise purchased from Wakefern.

Workers' Compensation Insurance

From  June 1,  1991 to May 31,  1997 we  maintained  workers'  compensation
insurance with various  carriers on a retrospective basis where claims within
certain limits remain the responsibility of the Company. We have  established
reserve  amounts based upon our evaluation of the status of claims still open as
of November 2, 2002 and loss development factors used by the insurance industry.
As of November 2, 2002, the worker's  compensation reserve totaled approximately
$663,000.  Such reserve amount is only an estimate and there can be no assurance
that our eventual workers'  compensation  obligations will not exceed the amount
of the  reserve.  However,  we believe  that any  difference  between the amount
recorded for our estimated liability and the costs of settling the actual claims
would not be material to the results of operations.
                                       12

FINANCIAL CONDITION AND LIQUIDITY

As of September 26, 2002 the Company and its lenders entered into The Third
Amended and Restated  Revolving Credit and Term Loan Agreement (as amended,  the
"Credit Agreement"). The Credit Agreement is secured by substantially all of the
Company's  assets and  increased the total  lending  commitment to  $80,000,000,
including  a  revolving  credit  facility  (the  "Revolving   Note")  of  up  to
$35,000,000,  a term loan (the "Term Loan") in the amount of  $25,000,000  and a
capital expenditures  facility (the "Capex Facility") of up to $20,000,000.  The
outstanding   balances  on  the  prior  term  loan   ($5,000,000)   and  capital
expenditures  facility  ($10,652,662)  were incorporated into the Term Loan. The
Credit  Agreement will mature  December 31, 2007. The Term Loan is to be paid in
quarterly principal payments of $1,250,000 commencing January 1, 2003. The Capex
Facility  provides for the payment of interest only on its outstanding  balance,
an unused  facility  fee of .75% until  December  31,  2004 and fixed  quarterly
principal payments thereafter based on a seven year amortization schedule with a
balloon  payment due December 31, 2007.  Interest  rates float on the  revolving
credit  facility,  Term Loan and Capex Facility at the Base Rate (defined below)
plus 1.50%,  2.00% and 2.00%,  respectfully.  The Base Rate is the rate which is
the  greater  of (i) the bank  prime  loan  rate as  published  by the  Board of
Governors of the Federal  Reserve  System,  or (ii) the Federal Funds rate, plus
..50%.  Additionally,  the Company  has the  ability to use the London  Interbank
Offered  Rate  ("LIBOR")  plus  3.25%  to  determine  the  interest  rate on the
revolving credit facility and LIBOR plus 3.75% to determine the interest rate on
the Term Loan and Capex  Facility.  Other terms and conditions  under the Credit
Agreement,  including (a) the amount of permitted  additional new  indebtedness;
(b) the amount of permitted  capitalized  lease  obligations;  (c) the amount of
capital  expenditures;  (d) covenant  requirements and (e) certain  definitions,
have been modified to reflect the  additional  term of the Credit  Agreement and
the  Company's  financial and  operational  plan.  Additionally,  the Company is
allowed to repurchase  its Common Stock for an aggregate  purchase  price not to
exceed  $1,000,000,  subject to certain  conditions and  limitations,  under the
Credit Agreement.  For the year ended November 2, 2002, the value of the accrued
benefits  under the Company's  pension plans  exceeded the aggregate fair market
value of the assets of such plans by  $3,020,000,  $20,000  more than the amount
permitted  under the Credit  Agreement.  This event of default was waived by the
Company's lenders.

As of November 2, 2002 the Company  owed  $25,000,000  on the Term Loan and had
not borrowed under the Capex Facility.

The Company's  compliance with the major financial  covenants under the Credit
Agreement was as follows as of November 2, 2002:
                                                          Actual
Financial                Credit                       (As defined in the
Covenant                 Agreement                     Credit Agreement)
---------                ---------                    -------------------
Adjusted EBITDA (1)      Greater than $16,500,000         $  20,890,000
Leverage Ratio  (1)      Less than 3.20 to 1.00            2.12 to 1.00
Debt Service Coverage
 Ratio                   Greater than 1.10 to 1.00         1.94 to 1.00
Adjusted Capex (2)       Less than $7,800,000  (3)        $   5,210,000 (4)
Store Project Capex      Less than $24,000,000 (3)        $  15,809,000 (4)

(1)   Excludes  obligations  under  capitalized  leases,  interest  expense and
      depreciation expense attributable to capitalized leases and changes in the
      LIFO reserve.

(2)   Adjusted Capex is all capital expenditures other than New/Replacement
      Store Project Capex.

(3)   Represents limitations on capital expenditures for fiscal 2002.

(4)   Represents capital expenditures for fiscal 2002.
                                       13

On December 31, 1999 the Company financed the purchase of $1,527,000 of POS
hardware in 17 operating locations. The financing bears interest at 7.60% and is
payable in monthly installments over its three year term.

No cash  dividends  have been paid on the Common  Stock since 1979,  and we
have no present intentions or ability to pay any dividends in the near future on
our Common Stock.  The Credit  Agreement does not permit the payment of any cash
dividends on the Company's Common Stock.

Working Capital:

At November 2, 2002, November 3, 2001 and October 28, 2000, the Company had
working   capital   deficiencies   of  $590,000,   $6,907,000  and   $1,215,000,
respectively.  The Company  normally  requires small amounts of working  capital
since inventory is generally sold at  approximately  the same time that payments
to  Wakefern  and other  suppliers  are due and most  sales are for cash or cash
equivalents.  Working Capital improved in fiscal 2002 primarily as the result of
the increase in  receivables  and other current  assets.  This increase  relates
primarily to receivables due from landlords for construction  allowances for the
Woodbridge and Ewing, New Jersey  locations.  A portion of these receivables is
currently  in  dispute  as a result of  litigation with the  landlord  over the
correct  commencement  date of the lease for the new  Woodbridge  location.  The
Company  denies  the  landlord's  allegations,  and the  amount  and  timing  of
collection of the  construction  allowances  will depend upon the outcome of the
litigation. When collected, the proceeds from these receivables will be used to
reduce the Revolving Note which is classified as long-term borrowings. This will
result in a corresponding  decrease in working capital.  The balance of accounts
receivables  consist  primarily  of  returned  checks  due the  Company,  coupon
receivables,  third party  pharmacy  insurance  claims and  organization  charge
accounts.  The terms of most  receivables are 30 days or less. The allowance for
uncollectible  accounts  is  large  in  comparison  to the  amount  of  accounts
receivable  because the allowance  consists  primarily of a reserve for returned
checks which are not written off until all collection efforts are exhausted.

Working capital decreased in fiscal 2001 primarily as the result of the net
increase  in  accounts  payable and  accrued  expenses  of  $5,050,000  over the
increase in inventory.  This increase  relates  primarily to cost of merchandise
and  capital  expenditures  for the new  Middletown,  New Jersey  store,  opened
November 14, 2001, as well as accrued  occupancy  costs related to the 53rd week
of fiscal 2001.

Working capital decreased in fiscal 2000 primarily as the result of the net
increase  in  accounts  payable and  accrued  expenses  of  $3,035,000  over the
increase in  inventory,  which  related  primarily  to cost of  merchandise  and
operating expenses for the new Branchburg and Wall Township,  New Jersey stores.
Additionally,  the  current  portion of  long-term  debt,  primarily  related to
equipment financing, increased.

Working capital ratios were as follows:

      November 2, 2002         .99 to 1.00
      November 3, 2001         .90 to 1.00
      October 28, 2000         .98 to 1.00

Cash flows (in millions) were as follows:
                                           2002        2001       2000

From operations.....................      $15.5        $24.2      $15.5
Investing activities................      (26.0)       (16.9)     (15.2)
Financing activities................       10.6        ( 7.1)     (  .4)
                                          ------       ------     ------
Totals                                    $  .1        $  .2      $( .1)
                                          ======       ======     ======
Fiscal 2002 capital  expenditures  totaled $21,019,000 with depreciation of
$14,175,000  compared to $17,047,000 and  $12,840,000,  respectively  for fiscal
2001 and $16,750,000 and $11,524,000, respectively for fiscal 2000. The increase
                                       14

in depreciation  in fiscal 2002 was the result of the purchase of equipment and
leasehold  improvements,  as well as the capitalized  real estate lease, for the
Middletown store opened in November 2001 and a full year of depreciation for the
three locations remodeled in fiscal 2001. The increase in depreciation in fiscal
2001 was the result of the purchase of equipment and leasehold  improvements for
the three locations remodeled during fiscal 2001 and a full year of depreciation
for the locations  opened in fiscal 2000. The increase in depreciation in fiscal
2000 was the result of the purchase of equipment and leasehold  improvements for
the two new locations as well as two additional real estate capitalized  leases.
Capital  expenditures  increased in fiscal 2002,  fiscal 2001 and fiscal 2000 as
the result of the  purchase of  equipment  and  leasehold  improvements  for the
locations  opened in  December  2002 and January  2003,  projects  currently  in
process for a new store,  the expansion and  remodeling of an existing  location
and the new bakery  commissary,  the new store opened in fiscal 2001,  locations
remodeled in fiscal 2001 and the two locations opened in fiscal 2000.

In  fiscal  2002   long-term  debt   increased   $26,220,000   due  to  the
capitalization of a real estate lease for the location opened in the year and an
increase  in  borrowings  under  the  Credit  Agreement.  These  increases  were
partially offset by cash generated by operations used to pay down existing debt.

In fiscal 2001 net  long-term  debt  decreased  $5,959,000 as the result of
payments made to reduce the balances outstanding under existing debt. The source
of these  payments  was cash  generated  by  operations  and an  increase in the
revolving credit facility of $929,000.

In  fiscal  2000   long-term  debt   increased   $25,499,000   due  to  the
capitalization  of real estate leases for the two locations  opened in the year,
the  financing of POS  hardware  and  equipment  for two new  locations  and the
restructuring  of borrowings  under the then Credit  Agreement.  These increases
were partially offset by cash generated by operations used to pay down a portion
of the  balances  outstanding  under the  revolving  credit  facility  and other
existing debt.

For the year ended  November 2, 2002,  the Company  repurchased  a total of
102,853  shares of Common  Stock.  101,553 of these  shares  were  purchased  in
privately  negotiated  transactions and the remaining 1,300 shares were acquired
in open market transactions. 6,377 of these shares were owned by a member of the
family of Joseph J. Saker,  the Company's  Chairman,  and were  purchased for an
average of $39.52 per share. $4,523,670,  or an average of $43.98 per share, was
expended for the purchase of the 102,853 shares.  Since the  announcement of the
stock  repurchase  program in June 2001,  the  Company has  repurchased  131,923
shares for $5,591,597 or an average of $42.39 per share.

During the year ended November 3, 2001, the Company  repurchased a total of
29,070  shares of  Common  Stock.  25,070  of these  shares  were  purchased  in
privately  negotiated  transactions.  7,000 of these  shares  were  owned by the
Estate of Mary Saker,  of which the Company's  Chairman,  Joseph J. Saker,  is a
co-executor,  and 18,000  shares  were owned by certain  members of Mr.  Saker's
family.  $1,067,927,  or an average of $36.74 per share,  was  expended  for the
purchase of the 29,070 shares.

At November 2, 2002, the Company had $10,000,000 of available credit, under
its  revolving  credit  facility.  The Company has capital  commitments  (net of
landlord   contributions)  of  $15,443,000  for  equipment  and  $5,268,000  for
leasehold   improvements   related  to  the  four  stores  (two  of  which  have
subsequently  opened)  under  construction  as of November  2, 2002.  The Credit
Agreement  will  adequately  meet  our  operating   needs,   scheduled   capital
expenditures and debt service for fiscal 2003.

During the fiscal year 2002,  the Business Tax Reform Act was passed in the
State of New Jersey. This legislation is effective for tax years beginning on or
after January 1, 2002 (fiscal 2003). Taxpayers would pay an Alternative Minimum
Assessment  ("AMA"),  which would be based upon either New Jersey gross receipts
or New Jersey gross profits, if the AMA exceeds the tax based on net income. The
Company is evaluating the impact that this  legislation will have on its results
of operation, financial position and cash flow for fiscal 2003.
                                       15

RESULTS OF OPERATIONS

Sales:
The Company's sales were $963.6 million, $945.3 million and $866.4 million,
respectively  in fiscal 2002,  2001 and 2000. This represents an increase of 1.9
percent in 2002 and an increase of 9.1 percent in 2001.  These  changes in sales
levels were the result of the opening of a replacement  store in November  2001,
the full year of operations  in fiscal 2001 of two locations  opened in February
and  April  2000 and the 53rd  week in  fiscal  2001.  The  locations  opened in
November 2001 and April 2000 replaced  smaller,  older stores.  Comparable store
sales  increased 1.6% in fiscal 2002 and 3.8% in fiscal 2001.  Comparable  store
sales in fiscal 2002 were partially  offset by decreased sales in certain of the
Company's stores affected by competitive store openings.

Comparable  store sales in the fourth quarter of fiscal 2002 decreased 1.3%
when  compared  to the fourth  quarter of fiscal  2001 on a  comparable  13 week
basis. This decrease was primarily due to a softening in the economy, the effect
of  competitive  store  openings and the impact of deflation in certain  product
categories.

Gross Profit:
Gross  profit  totaled  $245.1  million in fiscal  2002  compared to $234.2
million in fiscal  2001 and $208.9  million in fiscal  2000.  Gross  profit as a
percent  of sales was 25.4% in fiscal  2002,  24.8% in fiscal  2001 and 24.1% in
fiscal 2000.

The increase in fiscal 2002 of gross  profit as a  percentage  of sales was
primarily due to improved  product mix, the  contribution of the new location in
Middletown,  New Jersey, more efficient  commissary  operations,  an increase in
patronage  dividends  from  Wakefern  and a reduction  in product  loss  through
improved  shrink  control.  These  increases  were  offset  in part by  programs
implemented  in certain of the  Company's  stores to address  competitive  store
openings.

In fiscal 2001 gross profit as a percentage of sales increased primarily as
a result of improved  product mix, the  contribution  of the new locations,  the
completion of  promotional  programs  initiated by the Company for the locations
opened in fiscal  2000, a reduction  in product  loss  through  improved  shrink
control  and more  efficient  commissary  operations,  partially  offset  by the
completion of Wakefern  incentive  programs for the new locations  opened in the
prior fiscal year.

The increase in fiscal 2000 of gross  profit as a  percentage  of sales was
primarily  due  to  improved  product  mix,  reduced  Wakefern  assessment  as a
percentage of sales and Wakefern incentive programs for the new locations opened
in fiscal 2000,  partially offset by promotional  programs for the new locations
opened in the current year period, the completion of Wakefern incentive programs
for  the  new  locations   opened  in  fiscal  1998  and  the  adoption  of  the
Last-In-First-Out ("LIFO") method of inventory valuation for grocery and nonfood
categories.  See  Note  1  of  Notes  to  Consolidated  Financial  Statements  -
Merchandise Inventories.

Patronage  dividends applied as a reduction of the cost of merchandise sold
were $7,124,000, $6,515,000 and $5,903,000 for the last three fiscal years. This
translates to .74%, .69% and .68% of sales for the respective periods.

                                           Fiscal Years Ended
                                    11/02/02   11/03/01     10/28/00
                                             (in millions)
Sales........................       $963.6        $945.3     $866.4
Gross profit.................        245.1         234.2      208.9
Gross profit percentage......         25.4%         24.8%      24.1%
Selling, General and Administrative Expenses:
                                       16

Fiscal 2002 selling, general and administrative expenses totaled $231.7 million
compared to $220.3 million in fiscal 2001 and $198.2 million in fiscal 2000.
                                           Fiscal Years Ended
                                     11/02/02      11/03/01   10/28/00
                                             (in millions)
Sales........................          $963.6        $945.3     $866.4
Selling, General and
Administrative Expenses......           231.7         220.3      198.2
Percent of Sales.............            24.0%         23.3%      22.9%

Selling,  general and  administrative  expenses  increased  as a percent of
sales when comparing fiscal 2002 to fiscal 2001.  Increases in labor and related
fringe  benefits,  depreciation,  other store expenses,  which include  Wakefern
support  services and  debit/credit  card and bank service fees,  administration
expense and  pre-opening  costs were partially  offset by decreases in occupancy
and selling  expense.  The increase in labor and related fringe benefits was the
result of additional personnel for the new Middletown store,  increased sales in
service intensive departments and contractual increases in fringe benefit costs.
Depreciation  expense  increased as the result of the purchase of equipment  and
leasehold  improvements,  as well as the capitalized  real estate lease, for the
Middletown store opened in November 2001 and a full year of depreciation for the
three locations  remodeled in fiscal 2001. Other store expenses increased as the
result of increases in debit/credit  card fees and the increased  utilization of
the cards by our customers.  Administration  expense increased  primarily due to
increases  in fringe  benefit  costs.  Pre-opening  costs are related to the new
Middletown  store  opened  in  November  2001.  Occupancy  decreased  due to the
accounting for the new Middletown  store's lease as a capitalized  lease.  Under
this method the costs of the lease are expensed as  depreciation  and  interest.
Formally,  the old Middletown store's lease was an operating lease and the costs
of the lease were expensed as rent.  Selling  expense  declined as the result of
changes in certain  promotional  programs.  As a percentage of sales,  labor and
related fringe benefits increased .67%, depreciation increased .09%, other store
expenses  increased .05%,  administration  increased .09% and pre-opening  costs
increased .02%.  These increases were partially offset by decreases in occupancy
of .09% and selling expense of .04%.  Pre-opening  costs were $246,000 in fiscal
2002.

Selling, general and  administrative  expenses  increased  as a percent of
sales when comparing fiscal 2001 to fiscal 2000.  Increases in labor and related
fringe benefits,  administrative expense, occupancy,  depreciation,  other store
expenses,  which include Wakefern  support services and debit/credit  card fees,
and a decrease in  miscellaneous  income were  partially  offset by decreases in
advertising,  pre-opening  costs and  reserve  for  closed  store  expense.  The
increase  in labor and  related  fringe  benefits  was the result of  additional
personnel  for all of fiscal 2001 for the two new stores  opened  during  fiscal
2000  and  increased  sales in  service  intensive  departments.  Administrative
expense increased as the result of increases in employee  incentive programs and
the charges  related to the stock  incentive  plan.  Occupancy  increased due to
increased costs for CAM, real estate taxes and sanitation.  Depreciation expense
increased  due to a full  year  of  depreciation  for the  equipment,  leasehold
improvements and the capitalized leases for the two stores opened in fiscal 2000
and  additional  depreciation  related to the three  stores  remodeled in fiscal
2001.  Other store  expenses  increased  due to increases in charges for certain
Wakefern programs.  Miscellaneous  income decreased due to a lack of income from
the sale of  recycled  cardboard.  Selling  expense  increased  in  dollars  but
declined as a percentage of sales.  Pre-opening  costs in fiscal 2001 related to
the new  Middletown  store which did not open until  November 14, 2001 while two
stores were opened in fiscal 2000.  The decrease in the reserve for closed store
expense  relates  primarily  to the  expensing  in  fiscal  2000 of  anticipated
expenses for a location  closed in April 2000 when the new Wall  Township  store
opened.  As a percentage of sales,  labor and related fringe benefits  increased
..30%,   administrative   expense  increased  .21%,   occupancy  increased  .06%,
depreciation   increased   .05%,   other  store  expenses   increased  .05%  and
miscellaneous  income  decreased .08%.  These increases were partially offset by
                                       17

decreases in selling expense of .05%,  pre-opening costs of .09% and reserve for
closed store expense of .16%. Pre-opening costs were $114,000 in fiscal 2001.

Amortization  expense  decreased  in fiscal  2002 to  $463,000  compared to
$576,000 in fiscal  2001 and  $679,000 in fiscal  2000.  The  decrease in fiscal
2002, as compared to fiscal 2001,  was the result of decreased  amortization  of
deferred escalation rents partially offset by increased amortization of deferred
financing  costs.  The decrease in fiscal 2001, as compared to fiscal 2000,  was
also the result of decreased amortization of deferred escalation rents partially
offset by increased  amortization  of deferred  financing  costs.  See Note 1 of
Notes to Consolidated  Financial Statements  -Intangibles and Deferred Financing
Costs.

Interest Expense:
Interest  expense  totaled  $8.2  million in fiscal  2002  compared to $7.6
million in fiscal 2001 and $7.1 million in fiscal  2000.  The increase in fiscal
2002, as compared to fiscal 2001, was due to an increase in average  outstanding
debt, including  capitalized lease obligations partially offset by a decrease in
the average interest rate paid on debt. The increase in fiscal 2001, as compared
to fiscal 2000, was due to an increase in the average outstanding debt in fiscal
2001, including capitalized lease obligations, partially offset by a decrease in
the average interest rate paid on the debt.

Income Taxes:
The Company  recorded a tax provision of $2.2 million in fiscal 2002,  $2.6
million in fiscal 2001 and $1.6 million in fiscal 2000.  See Note 13 of Notes to
Consolidated Financial Statements.

Net Income:
The Company  had net income of  $3,240,000  or $3.01 per  diluted  share in
fiscal 2002  compared to net income of  $3,938,000 or $3.50 per diluted share in
fiscal 2001.  EBITDA for fiscal 2002 were $28,076,000 as compared to $27,342,000
in fiscal 2001.

Fiscal 2000 resulted in net income of $2,382,000 or $2.13 per diluted share.
EBITDA for fiscal 2000 were $22,914,000.

Weighted average diluted shares outstanding were 1,076,030 for fiscal 2002,
1,124,192 for fiscal 2001 and 1,117,290 for fiscal 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 142 ("SFAS 142"),  "Accounting for Goodwill
and Other Intangible Assets" which is effective for fiscal years beginning after
December 15, 2001. SFAS 142 discontinues the practice of amortizing goodwill and
indefinite  lived   intangible   assets  and  initiates  an  annual  review  for
impairment.  Impairment would be examined more frequently if certain  indicators
are encountered. Intangible assets with a determinable useful life will continue
to be amortized over that period.  The Company is currently  assessing,  but has
not yet determined, the impact of SFAS 142 on its financial position and results
of  operations.  The  Company  plans to adopt  SFAS 142 in the first  quarter of
fiscal year 2003.

In June 2001, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 143 ("SFAS  143"),  "Accounting  for Asset
Retirement  Obligations,"  which is effective for fiscal years  beginning  after
June 15, 2002, with early application  encouraged.  SFAS 143 addresses financial
accounting  and  reporting for  obligations  associated  with the  retirement of
tangible  long-lived  assets and the  associated  asset  retirement  costs.  The
Company  plans to adopt SFAS 143 in the first  quarter  of fiscal  year 2003 and
believes  that it will have no impact on its  financial  position  or results of
operations.
                                       18

Effective  November  4, 2001 the Company  adopted  Statement  Of  Financial
Accounting  Standards No. 144 ("SFAS 144"),  "Accounting  for the  Impairment or
Disposal of  Long-Lived  Assets".  SFAS 144 requires,  among other  things,  the
application of one accounting  model for long-lived  assets that are impaired or
to be disposed of by sale. There was no significant  impact from the adoption of
SFAS 144 in fiscal year 2002.

In April 2002, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  145  ("SFAS  145"),  "Recission  of  FASB
Statements  No. 4, 44 and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections,"  which is effective for fiscal years beginning after May 15, 2002,
with  earlier  application  encouraged.  Under SFAS 145,  gains and losses  from
extinguishment  of debt  will no  longer  be  aggregated  and  classified  as an
extraordinary  item,  net of related  income tax  effect,  on the  statement  of
earnings.  The  Company  plans to adopt SFAS 145 in the first  quarter of fiscal
year 2003 and believes that it will have no impact on its financial  position or
results of operations.

In June 2002, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 146 ("SFAS  146"),  "Accounting  for Costs
Associated  with Exit or Disposal  Activities,"  which is effective  for exit or
disposal  activities  that are  initiated  after  December 31, 2002,  with early
application encouraged. SFAS No. 146 requires recognition of a liability for the
costs  associated  with an exit or  disposal  activity  when  the  liability  is
incurred,  as  opposed to when the  entity  commits to an exit plan as  required
under  EITF Issue No.  94-3.  SFAS 146 will  primarily  impact the timing of the
recognition of costs associated with any future exit or disposal activities. The
Company  plans to adopt SFAS 146 in the first quarter of fiscal year 2003 and is
in the  process  of  evaluating  the  impact of the  adoption  on our  financial
statements.

Effective  November 4, 2001, the Company  adopted the Emerging  Issues Task
Force Issue No. 01-09 ("EITF 01-09"),  "Accounting for Consideration  Given by a
Vendor to a Customer  (Including  a Reseller of the  Vendor's  Products)."  EITF
01-09 codifies and reconciles the  consensuses on all or specific issues of EITF
00-14,  "Accounting for Certain Sales  Incentives," EITF 00-22,  "Accounting for
'Points' and Certain Other Time-Based or Volume-Based  Sales Incentives  Offers,
and Offers for Free  Products or Services to be  Delivered  in the  Future," and
EITF 00-25, "Vendor Income Statement Characterization of Consideration Paid to a
Reseller  of the  Vendor's  Products,"  which  address  various  aspects  of the
accounting  for  consideration  given by a vendor to a customer or a reseller of
the vendor's products.  The adoption of EITF 01-09 did not have an impact on the
Company's financial position or results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Except for  indebtedness  under the Credit Agreement which is variable rate
financing,  the balance of our indebtedness is fixed rate financing.  We believe
that our exposure to market risk relating to interest rate risk is not material.
The Company believes that its business operations are not exposed to market risk
relating to foreign currency exchange risk, commodity price risk or equity price
risk.

Item 8.  Financial Statements and Supplementary Data

See Consolidated Financial Statements and Schedules included in Part IV, Item 15

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

None.

                                       19

                                          Part III

Item 10. Directors and Executive Officers of the Registrant

Directors of the Company

The directors of the Company are as set forth below:
                                                                      Year First
                                                                       Elected a
             Name and Age                 Principal Occupation         Diector
--------------------------------------------------------------------------------
Joseph J. Saker    (73)      Chairman of the Board of the Company        1958
Richard J. Saker   (51)      President and Secretary of the Company      1987
Charles T. Parton  (61)      Chairman of the Board - Two River           1995
                                Community Bank, a commercial bank
Albert A. Zager    (54)      Member - Carton, Arvanitis, McGreevy,       1995
                                Argeris, Zager & Aikins, L.L.C.,
                                Attorneys at Law
Robert H. Hutchins (51)      President and Managing Director -           2001
                                Hutchins, Farrell, Meyer & Allison,
                                P.A., Certified Public Accountants

Mr.  Joseph J.  Saker has  served as  President  of the  Company  since its
incorporation  in 1958 until  October 3, 2000 and as  Chairman  since  1971.  In
addition  to his  responsibilities  with  the  Company,  he is  active  in other
community affairs.

Mr. Richard J. Saker, a graduate of St. Joseph's  University,  has been
employed   by   the   Company   since   1969   and   served   as   Senior   Vice
President-Operations from 1984 until 1995, at which time he assumed the position
of  Executive  Vice  President-Operations.  On October 3, 2000,  he was  elected
President of the  Company.  He is a member of the Board of Directors of Wakefern
Food Corporation and a member of its Finance Committee.  Richard J. Saker is the
son of Joseph J. Saker.

Mr. Parton  is  Chairman  of the Board of Two  River  Community  Bank (the
"Bank")  and has served in that  position  since May 1, 2000.  Prior to assuming
that position,  he served as President and Chief Executive Officer of the Bank
from  February 1, 2000 to April 30,  2000.  In addition,  on March 1, 1999,  Mr.
Parton began serving and continues to serve as a managing  member of TRB, LLC, a
financial  holding  company formed in connection with the  incorporation  of the
Bank. He formerly served as the President of Concord Science and Technology Co.,
Inc.  from May 1997 until  February  1999.  He has been a  financial  executive,
consultant  and  Certified  Financial  Planner  for the last  nine  years and is
Executive Vice President and Treasurer of The Parton  Corporation.  He is also a
Director of Kuehne Chemical Co., Inc. (chlorine and caustic soda products).

Mr. Zager has been a member of Carton, Arvanitis,  McGreevy, Argeris, Zager
& Aikins,  L.L.C.  Attorneys at Law and its  predecessors  since 1977. He is the
Chairman of its  Executive  and  Management  Committees.  He is President of the
Board of Directors of the Center for  Holocaust  Studies of Brookdale  Community
College,  a founding  member of the Board of Directors  of the Eastern  Monmouth
Area  Chamber of Commerce  Educational  Foundation,  Inc.,  and outside  General
Counsel for Meridian Health System, Inc.

Mr. Hutchins,  CPA,  has been  the  President  and  Managing  Director  of
Hutchins,  Farrell,  Meyer & Allison,  P.A., a certified public accounting firm,
since he founded the firm in 1984. In addition,  Mr. Hutchins has been active in
community  affairs.  He is a founder  and  Chairman  of the Board of Trustees of
Ocean Housing  Alliance,  Inc., and has served as an elected Board Member of the
Toms River  Regional  School  District and as an  appointed  member of the Ocean
County Mental Health  Advisory Board. He is past Chairman of the American Cancer
Society-Ocean Unit, Co-chairperson of the American Cancer Society Eastern Region
                                       20

Excalibur  and a  member  of the  National  American  Cancer  Society  Excalibur
Advisory Committee.

Executive Officers of the Company
The executive officers of the Company are as set forth below:

Name                          Age  Capacities in Which Served
--------------------------------------------------------------------------------
Joseph J. Saker (1)            73  Chairman of the Board
Richard J. Saker (1)           51  President and Secretary
Michael Shapiro (2)            60  Senior Vice President, Chief Financial
                                      Officer and Treasurer
Emory A. Altobelli (3)         62  Senior Vice President - Corporate
                                      Subsidiaries and Services
Carl L. Montanaro (4)          61  Senior Vice President - Sales and
                                      Merchandising
Robert V. Spires (5)           49  Senior Vice President - Human Resources and
                                      Labor Relations
Joseph J. Saker, Jr. (6)       42   Senior Vice President - Marketing and
                                            Advertising

Joseph C. Troilo (7)           68  Senior Vice President - Financial
                                      Administration, Assistant Secretary and
                                      Assistant Treasurer

(1)   See "Directors of the Company" above.

(2)   Mr. Shapiro joined the Company on August 15, 1994 as Senior Vice
      President, Chief Financial Officer and Treasurer.

(3)   Mr. Altobelli has served as Senior Vice President, Corporate Subsidiaries
      and Services, since June 21, 1995. Prior to that date he served as Senior
      Vice President, Administration, commencing in June 1990.

(4)   Mr. Montanaro has served as Senior Vice President, Sales and
      Merchandising, since June 21, 1995. From March 1988 to June 1995 he served
      as Vice President of Sales and Merchandising.

(5)   Mr. Spires has served as Senior Vice President, Human Resources and Labor
      Relations, since June 21, 1995. From August 1991 to June 1995, he served
      as Vice President of Human Resources and Labor Relations.

(6)   Mr. Joseph J. Saker, Jr. has served as Senior Vice President, Marketing
      and Advertising since March 1, 2002. From October 2001 to February 28,
      2002 he served as a Vice President of Operations. From May 1990 to
      September 2001, he served as a Director of Operations. Joseph J. Saker,
      Jr. is the son of Joseph J. Saker.

(7)   Mr. Troilo has served as Senior Vice President, Financial Administration,
      since August 1994. From 1974 to August 1994, he served as Senior Vice
      President, Finance.
                                       21

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's executive officers
and directors,  and persons who own more than ten percent of a registered  class
of the Company's equity securities,  to file reports of ownership and changes of
ownership  on Forms  3, 4 and 5 with  the  Securities  and  Exchange  Commission
("SEC"). Executive officers, directors and greater than ten percent shareholders
are required by SEC  regulation  to furnish the Company with copies of all Forms
3, 4 and 5 they file.

Based  solely on the  Company's  review of the  copies of such forms it has
received,  the Company  believes that,  during the fiscal year ended November 2,
2002,  all of its  executive  officers,  directors  and greater than ten percent
beneficial owners complied with all filing requirements  applicable to them with
respect to reports required to be filed by Section 16(a) of the Exchange Act.

Item 11. Executive Compensation

The aggregate  compensation  paid or accrued by the Company during the last
three fiscal years ended October 28, 2000, November 3, 2001 and November 2, 2002
to the Chief  Executive  Officer  of the  Company  and to the four  most  highly
compensated  executive  officers (other than the Chief Executive  Officer) whose
compensation in salary and bonus exceeded  $100,000 in the last fiscal year (the
"Named Officers") is set forth in the following table:

                              Summary Compensation Table

                             Annual Compensation      All Other Compensation
                             -------------------      --------------------------
                                                                        Shares
                                                                      Underlying
                                                                        Options/
Name and Principal Position    Year  Salary  Bonus (1) SERP(2) 401(k)(3)  SARS
---------------------------    ----  ------  --------  ------  ---------  -----
Joseph J. Saker                2002 $413,200  $74,732 $150,100 $3,400
  Chairman and                 2001  395,553  122,176  128,500  3,400  50,000(4)
  Chief Executive Officer      2000  361,201   69,893  134,400  3,400
Richard J. Saker               2002 $504,250  $90,611 $523,000 $3,400
  President, Chief Operating   2001  437,118  132,188  345,000  3,400  50,000(4)
  Officer and Secretary        2000  374,475   76,742  298,000  3,400
Michael Shapiro                2002 $203,857  $28,164 $102,400 $6,150
  Senior Vice President, Chief 2001  189,351   39,430   88,400  5,421   1,000(4)
  Financial Officer and        2000  185,827   25,934   91,700  6,023
  Treasurer
Carl L. Montanaro              2002 $173,758  $22,692 $ 60,200 $6,006
  Senior Vice President,       2001  169,367   31,769   53,200  5,321   1,000(4)
  Sales and Merchandising      2000  153,106   20,896   27,400  5,608
Joseph J. Saker, Jr.           2002 $161,561  $21,920        - $5,856
 Senior Vice President,        2001  146,555   23,700        -  5,180
 Marketing and Advertising     2000  121,713   12,178        -  4,260


(1)   Incentive compensation paid or accrued pursuant to the Company's Incentive
      Compensation Plans (the "Incentive Plans"). The Incentive Plans were
      adopted by the Company's Board of Directors ("Board of Directors" or
      "Board") for each of the fiscal years presented in the table to attract,
      retain and motivate non-union salaried employees by providing incentive
      compensation awards in cash. The Board administers the Incentive Plans,
      which includes designating non-union salaried employees eligible to
                                       22

      participate in the Incentive Plans and awarding incentive compensation to
      the eligible employees, subject to the Company achieving certain specified
      levels of pre-tax profit. In administering the Incentive Plans, the Board
      took into account the recommendations of the Company's executive officers,
      except that determinations made with respect to the Company's Chief
      Executive Officer and Chief Operating Officer were made solely by the
      Company's independent directors.

(2)   These amounts represent the projected annual benefit at retirement as of
      the end of each fiscal year for the applicable named executive officer
      under the Company's Supplemental Executive Retirement Plan (the "SERP"),
      which was approved by the Board on January 17, 1989.  Amounts payable at
      retirement under the SERP range from 40% to 50% of the employee's highest
      average compensation over a five-year period less primary Social Security,
      pension plan benefits and 401(k) benefits and are payable until death, but
      for a minimum of 120 months.This Plan covers seven executive officers and
      other key employees and is intended to supplement the Company's retirement
      benefits. Such amounts are not payable until the earlier of the death,
      disability or retirement of the covered employee. The Company anticipates
      paying for benefits as they become due out ofcurrent operating income.

      The SERP provides for a pre-retirement death benefit of one-half the
      amount payable upon retirement, actuarially computed, payable to the
      employee's beneficiary over 120 months. If the employee dies after
      retirement, such employee's beneficiary will receive the same benefit the
      employee would have received if the employee had lived for 120 months.
      During fiscal 2002, the Company recorded $475,000 of deferred compensation
      expense with respect to the SERP.

(3)   Represents amounts contributed by the Company under its 401(k) Plan (the
      "401(k) Plan"). The Company maintains a 401(k) Plan for all qualified
      non-union employees. Employees are eligible to participate in the 401(k)
      Plan after completing one year of service (1,000 hours) and attaining age
      21. Employee contributions are discretionary to a maximum of 30% of
      compensation but may not exceed $11,000 per year. The Company has elected
      to match 25% of the employee's  contributions up to 6% of employee
      eligible compensation not exceeding $200,000. The Company may make
      additional discretionary contributions. These discretionary contributions
      amounted to 2% of eligible compensation for the three calendar years
      ending December 31, 2002.

(4)   Represents options to purchase shares of the Company's Common Stock,
      granted pursuant to the Company's 2001 Stock Incentive Plan, described
      more particularly in Notes (1) and (2) in the table below captioned
      "Aggregated Option Exercises in the Fiscal Year Ended November 2, 2002 and
      Year-End Option Values."  See Item 3. "Legal Proceedings."



                                       23

Option Grants and Exercises During Fiscal Year Ended November 2, 2002.

No options were granted in the Fiscal Year Ended November 2, 2002.

Aggregated Option Exercises in the Fiscal Year Ended November 2, 2002 and
Year-End Option Values:


                           Total Number of Securities       Value of Unexercised
                           Underlying Unexercised           In-the-Money Options
                           Options at November 2, 2002    at November 2, 2002(1)

--------------------------------------------------------------------------------
           Shares
           Acquired
           on        Value                                               Unexer-
Name (2)   Exercise  Realized   Exercisable  Unexercisable  Exercisable  cisable

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joseph J.
Saker         -         -        10,000        40,000        $74,000    $296,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Richard J.
Saker         -         -        10,000        40,000        $74,000    $296,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael
Shapiro       500     $6,575         -             500           -        $3,700
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carl L.
Montanaro     250     $5,213         250           500         $1,850     $3,700
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joseph J.
Saker, Jr.      -         -            -             -            -          -
--------------------------------------------------------------------------------

(1)   This represents the difference between the closing price of the Company's
      Common stock on November 1, 2002, the last trading day in Fiscal 2002
      ($27.00), and the exercise price of the options.

(2)   All stock options were granted on August 8, 2001 (the"Grant Date") in
      accordance with the Company's 2001 Stock Incentive Plan ("2001 Plan").
      The stock options granted to Messrs. Joseph J. Saker and  Richard J. Saker
      are assignable to any of their respective children or grandchildren who
      are employed by the Company at the store manager or higher level. The
      options granted to Messrs. Joseph  J. Saker and Richard J. Saker, which
      include 10,000 shares subject to currently exercisable options, vest
      quarterly from the Grant Date over a five year period. All other stock
      options granted vest, per individual, 250 shares on the Grant Date and
      250 shares on each anniversary of the Grant Date thereafter for the next
      three years. See Item 3. "Legal Proceedings."

Pension Plan

The  Company   maintains  a  defined  benefit  pension  plan  for  eligible
employees.  Full  vesting  occurs  after five years of  service.  Benefits  upon
retirement prior to age 65 are reduced actuarially.  Benefits under the plan are
determined  by a formula  equal to .6% times the highest five  consecutive  year
average of a  participant's  compensation  from the  commencement  of employment
through  September  30, 1997,  times the total years of service at September 30,
1997.  The plan also  provides for lump sum  payments,  which are payable  under
certain circumstances.  The table set forth below specifies the estimated annual
benefits  payable  upon normal  retirement  at age 65.  Pursuant to a resolution
adopted  by the Board on  September  24,  1997,  years of  service  and  benefit
accruals for participants in the plan were frozen effective  September 30, 1997.
In lieu of  contributions  to the  defined  benefit  pension  plan for the three
calendar years ended December 31, 2002, the Board has approved  contributions to
the 401(k)  Plan in an amount  equal to the sum of (a) two  percent  (2%) of the
eligible compensation of 401(k) Plan participants;  and (b) $.25 for every $1.00

                                       24

contributed  to  the  401(k)  Plan  by  the  participants  for  up to 6% of  the
participant's eligible compensation.  The Company did not make any contributions
to the 401(k) Plan prior to freezing  benefit accruals under the defined benefit
pension plan.

                           Years of Service at September 30, 1997
Remuneration        15            20          25           30           35
------------        --            --          --           --           --
$ 100,000         $ 7,500      $10,000      $12,500      $15,000      $17,500
  125,000           9,375       12,500       15,625       18,750       21,875
  150,000          11,250       15,000       18,750       22,500       26,250
  175,000          13,125       17,500       21,875       26,250       30,625
  200,000          15,000       20,000       25,000       30,000       35,000
  225,000          16,875       22,500       28,125       33,750       39,375
  250,000          18,750       25,000       31,250       37,500       43,750
  275,000          20,625       27,500       34,375       41,250       48,125
  300,000          22,500       30,000       37,500       45,000       52,500


For purposes of vesting  benefits  under the Pension Plan,  the Company has
credited Richard J. Saker with 23 years of service; Michael Shapiro with 3 years
of service; Joseph J. Saker, Jr. with 21 years of service; and Carl L. Montanaro
with 35  years of  service.  The  highest  five  consecutive  year  average,  or
pro-rated portion thereof,  of compensation  through September 30, 1997 for each
of the Company's Named Officers,  after giving effect to applicable  limitations
under the Internal Revenue Code of 1986, as amended,  is as follows:  Richard J.
Saker - $150,000;  Michael  Shapiro - $150,000,  Carl Montanaro - $119,000,  and
Joseph J. Saker, Jr. - $99,000.

Mr. Joseph  J. Saker received a lump sum distribution of $403,878 in January
1995, representing the amount of his vested interest in the Pension Plan.

Directors' Compensation

All non-employee  directors receive, in addition to reimbursement for their
reasonable  expenses  associated  with  attendance at meetings of the Board,  an
annual  retainer fee of $15,000  payable  quarterly in advance (prior to June of
2002 the annual retainer fee was $12,000), and a participation fee of $1,000 for
each  meeting  of the Board  attended.  All  non-employee  members  of the Audit
Committee  receive,  in addition to reimbursement for their reasonable  expenses
associated with attendance at Audit Committee meetings, a fee of $1,000 for each
Audit  Committee  meeting  attended if held on a day other than a day on which a
Board  meeting  is  held,  and a fee of $500 for each  Audit  Committee  meeting
attended  if held on the same day as a meeting  of the Board.  All  non-employee
members of the Stock Option Committee receive,  in addition to reimbursement for
their reasonable  expenses  associated with attendance at Stock Option Committee
meetings, a fee of $500 for each Stock Option Committee meeting attended if held
on a day other than a day on which a Board meeting is held.

The Company paid a total of $68,250 during the fiscal year ended November 2,
2002 to directors who are not employees of the Company.

                                       25

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

For the fiscal  year ended  November 2, 2002,  the full Board of  Directors
performed the functions of a board  compensation  committee.  Executive officers
who  served on the Board were Mr.  Joseph J.  Saker,  Chairman  of the Board and
Chief Executive Officer,  and Mr. Richard J. Saker,  President,  Chief Operating
Officer, and Secretary. The Board acted on matters of compensation for the Chief
Executive  Officer and the Chief Operating  Officer,  with each of such officers
abstaining from any compensation decisions relating specifically to them.

Compensation Report of the Board of Directors

The Company's  independent  directors are  responsible  for determining the
compensation of the Company's  Chief  Executive  Officer and its Chief Operating
Officer.  These  two  officers  do not limit  their  functions  to the  distinct
parameters  typically  associated with their respective  titles.  Instead,  they
actively share the responsibilities  attendant to both of these offices in their
management  of  the  business.  Accordingly,  a  comparative  assessment  of the
compensation  paid for their respective  positions is  impracticable,  because a
comparison  of  compensation  based on  mutually-exclusive  job titles would not
yield results commensurate with the combined contributions of these officers.

In  order  to  arrive  at an  appropriate  level  of  compensation  for the
Company's  Chief Executive  Officer and Chief  Operating  Officer for the fiscal
year ended November 2, 2002, the independent  directors  considered a variety of
factors presented in this report. The Company's  independent  directors not only
reviewed  market  compensation  levels for chief  executive  officers  and chief
operating officers of similarly-sized grocery retailing organizations throughout
the country,  but they also  considered a  "management  service fee" approach to
this determination.  The management service fee concept uses competitive data to
evaluate appropriate relative  compensation levels between a corporation's chief
executive officer and chief operating officer in circumstances  where the duties
of these offices overlap.  This concept more accurately  recognizes the value to
the Company of the shared efforts of its senior management and the importance of
such efforts in achieving seamless management succession.

The  Company's  financial  performance  and other  achievements  during the
fiscal year ended November 3, 2001 were considered by the Company's  independent
directors in determining  compensation  levels for the Company's Chief Executive
Officer  and Chief  Operating  Officer  for  fiscal  2002.  Sales,  income  from
operations, EBITDA and net income increased substantially in fiscal 2001 despite
difficult market  conditions.  In addition,  Foodarama stock proved to be one of
the top performing securities listed on the American Stock Exchange in 2001.

In addition,  during the fiscal year ended  November 2, 2002, the Company's
Chief Operating Officer assumed the duties and responsibilities  associated with
representing  the Company with  Wakefern,  including  serving as a member of the
Wakefern  Board  of  Directors.   These  responsibilities  had  previously  been
undertaken by the Company's Chief Executive Officer.  The independent  directors
took this shift of responsibility  into consideration  when making  compensation
decisions.  In addition, the independent directors considered the fact that both
the Chief  Executive  Officer and Chief  Operating  Officer of the Company  have
personally guaranteed significant amounts of indebtedness owed by the Company to
Wakefern.

After  careful  consideration  of the  various  factors,  including,  among
others,  the facts referenced above, the independent  directors  determined that
the base  salaries  for both the Chief  Executive  Officer  and Chief  Operating
Officer  should be  increased  for the fiscal year ended  November 2, 2002.  See
"Executive Compensation - Summary Compensation Table."

The Company's  Chief  Executive  Officer and Chief  Operating  Officer make
determinations  with  respect  to  cash  compensation  paid to  other  executive
officers of the Company. In addition to considering market comparisons, salaries
paid to executive officers are based on the executive's level of responsibility,
experience in his role, and overall performance and the condition of the Company
and the economy at large.
                                       26

The Company's Board is responsible for administration of the Company's 2002
Incentive  Compensation Plan. Pursuant to the 2002 Incentive  Compensation Plan,
the Company has undertaken to pay incentive compensation to designated employees
if it  achieved  certain  adjusted  pre-tax  profit  levels.  The  terms  of the
Company's 2002 Incentive  Compensation  Plan are generally  consistent  with the
terms of incentive  compensation  plans  adopted and approved by the Company for
prior fiscal years. Pursuant to the Company's 2002 Incentive  Compensation Plan,
the Board awarded cash  incentive  compensation  to certain  non-union  salaried
employees  of the  Company,  including  Mr.  Joseph J. Saker and Mr.  Richard J.
Saker. See "Executive Compensation - Summary Compensation Table."

The Stock Option Committee of the Board of Directors, which consists of its
outside  directors,  administers  the Company's 2001 Plan. The 2001 Plan enables
the Company to grant stock-based and other forms of incentives,  including stock
options,  stock appreciation rights,  phantom stock, and restricted stock, among
others.  The Stock Option Committee may select from among these types of awards,
and may combine different types of awards within individual grants, to establish
individual  grants  affording  long-term  incentives,  for the purpose of better
aligning  the  interests  of  the  Company's   management   with  those  of  its
shareholders.  The  Stock  Option  Committee  did not  grant  any  awards to the
Company's key executives and directors  during the fiscal year ended November 2,
2002.

Section  162(m) of the Internal  Revenue Code places a limit of  $1,000,000
(per  person) on the amount of  compensation  that may be  deducted  by a public
company  in any  year for  compensation  paid to each of a  corporation's  Named
Officers.  Qualifying  performance  based  compensation  is not  subject  to the
deduction limit if certain  requirements are satisfied.  The grant of options to
the Named Officers in 2001, under the 2001 Plan, does not qualify as performance
based  compensation.  The exercise of these  options  could result in deductible
compensation  in excess of the limit  imposed  by Section  162(m).  The Board of
Directors may award compensation that may be non-deductible under Section 162(m)
when, in the exercise of its business judgment,  such award would be in the best
interests  of the Company.  The Section  162(m)  limitation  has not yet had any
effect  upon  the  Company  and  its  ability  to  deduct,   for  tax  purposes,
compensation paid to its Named Officers.

The Company's  independent directors believe that the best interests of the
Company and its  shareholders are served by the Company's  current  compensation
programs.  The Board members will continue to review the Company's  compensation
plans  periodically to determine what changes,  if any, should be implemented to
their  structure,  taking into account the  Company's  financial  condition  and
performance.

Submitted by:   Charles T. Parton
                Albert A. Zager
                Robert H. Hutchins


Performance Analysis

Set forth below is a line graph  comparing the  cumulative  total return of
the Company,  the AMEX Wholesale & Retail Trade Index, the Standard & Poor's 500
Composite  Stock  Price  Index and the AMEX  Composite  Index for the five years
commencing November 1, 1997 and ended November 2, 2002.


                                       27



                                FOODARAMA SUPERMARKETS, INC.
                                  PRICE PERFORMANCE GRAPH

[THE FOLLOWING TABLES ARE REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]

AMEX COMPOSITE
                1997       1998        1999       2000       2001        2002
             ---        ---         ---        ---        ---         ---
               675.75     645.41      800.80     909.30     824.20      828.99
                 1.00       0.96        1.19       1.35       1.22        1.23
               100.00       95.51     118.51     134.56     121.97      122.68
INDUSTRY (AMEX)
                1997       1998        1999       2000       2001        2002
             ---        ---         ---        ---        ---         ---
               245.86     233.07      247.94     165.20   127.19      132.11
                 1.00     0.95          1.01       0.67     0.52        0.54
               100.00       94.80     100.85      67.19    51.73       53.73
FSM
                1997       1998        1999       2000       2001        2002
             ---        ---         ---        ---        ---         ---
                18.50      32.00       28.63      18.38     40.75       27.00
                 1.00       1.73        1.55       0.99      2.20        1.46
               100.00      172.97     154.73      99.32    220.27      145.95
S&P 500
                1997       1998        1999       2000       2001        2002
             ---        ---         ---        ---        ---         ---
               914.62    1098.67     1362.93    1429.40   1059.78      900.96
                 1.00       1.20        1.49       1.56      1.16        0.99
               100.00      120.12     149.02     156.28    115.87       98.51


                                       28

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

Principal Shareholders

     The following  table shows,  as of December 31, 2002,  the persons known to
the Company who owned directly or  beneficially  more than 5% of the outstanding
Common Stock of the Company:


                                                        Amount
                                                  Beneficially       Percent of
Name of Beneficial Owner                                Owned          Class
------------------------                                -----          -----
Joseph J. Saker (1)(2)(3)(7)                             184,576       18.4
Saker Family Corporation (1) (4)                          85,000        8.6
Estate of Mary Saker (1)(3)                               55,798        5.7

Richard J. Saker (1)(4)(5)(7)                            194,303       19.4
Joseph J. Saker, Jr. (1)(4)(6)                           107,695       10.9
Thomas   A.   Saker    (1)(4)                            114,641       11.6
Dimensional Fund Advisors, Inc.(8)                        81,400        8.2
Arthur N. Abbey (9)                                      116,400       11.8
Trellus Management Company, LLC (10)                      51,300        5.2


(1)   The address of the foregoing person is c/o Foodarama Supermarkets, Inc.,
      922 Highway 33, Building 6, Suite 1, Freehold, New Jersey 07728.

(2)   Includes 13,378 shares held by Joseph J. Saker's wife and 31,399 shares
      willed to him by Mary Saker.

(3)   Mary Saker, deceased, was the mother of Joseph J. Saker. 31,399 of her
      shares have been willed to Joseph J. Saker.

(4)   Includes 85,000 shares held by the Joseph Saker Family Partnership, L.P.,
      a Delaware limited partnership (the "Partnership"). The Saker Family
      Corporation is the sole general partner (the "General Partner") of the
      Partnership. Richard J. Saker owns 40% of the outstanding capital stock of
      the General Partner, and each of Joseph J. Saker, Jr. and Thomas A. Saker
      owns 30% of the outstanding capital stock of the General Partner. The
      General Partner owns a 1% interest in the Partnership and has the sole
      power to sell, transfer or otherwise dispose of the shares of Foodarama
      Common Stock only upon the unanimous consent of all shareholders of the
      General Partner. On other matters not involving the sale, transfer or
      other disposition of such shares, the shares of Foodarama Common Stock
      held by the Partnership are voted as directed by the individual
      shareholders of the General Partner in accordance with their respective
      ownership interests in the General Partner. Accordingly, the General
      Partner votes 34,000 shares as directed by Richard J. Saker, 25,500 shares
      as directed by Joseph J. Saker, Jr. and 25,500 shares as directed by
      Thomas A. Saker on such other matters.

      In addition to their ownership interests in the General Partner, Richard
      J. Saker, Joseph J. Saker, Jr. and Thomas A. Saker are the beneficiaries
      of the trust which owns a 99% interest in the Partnership (the "Limited
      Partner"). Thus, each of Richard J. Saker, Joseph J. Saker, Jr. and Thomas
      A. Saker also has an indirect interest in the Company's Common Stock held

                                       29

      by the Partnership by reason of their respective beneficial interests in
      the Limited Partner. Their beneficial interests in the Limited Partner are
      in identical proportion to their ownership interests in the General
      Partner. Richard J. Saker, Joseph J. Saker, Jr. and Thomas A. Saker each
      disclaim beneficial ownership of shares held by the Partnership in excess
      of their pecuniary interests.

(5)   Includes 1,760 shares held by Richard  J. Saker's wife and 1,377 shares
      which are held in a trust for Mr. Saker's son, of which Mr. Saker is
      trustee. Mr. Saker disclaims beneficial ownership of the shares
      described in the preceding sentence.

(6)   Includes 2,754 shares which are held in two trusts for the benefit of Mr.
      Saker's sons, of which trusts Mr. Saker is the trustee. Mr. Saker
      disclaims beneficial ownership of the shares described in the preceding
      sentence.

(7)   Includes 15,000 shares subject to currently exercisable options or
      options exercisable within sixty days of December 31, 2002
      granted pursuant to the 2001 Plan.  See Item 3. "Legal Proceedings"

(8)   The address of Dimensional Fund Advisors, Inc. ("Dimensional") is 1299
      Ocean Avenue, 11th Floor, Santa Monica, California 90401.  Dimensional, an
      investment advisor registered under Section 203 of the Investment Advisors
      Act of 1940, furnishes investment advice to four investment companies
      registered under the Investment Company Act of 1940, and serves as
      investment manager for certain other investment vehicles, including
      commingled group trusts. These investment companies and investment
      vehicles are referred to collectively herein as the "Portfolios." In its
      role as investment advisor and investment manager, Dimensional possesses
      both voting and investment power over 81,400 shares of the Company's
      Common Stock based upon a copy of Schedule 13G dated January 30, 2002. The
      Portfolios own all securities reported in the table, and Dimensional
      disclaims beneficial ownership of such securities.

(9)   The address of Arthur N. Abbey is 212 East 39th Street, New York, New
      York 10016. Based upon a copy of Schedule 13D dated October 9, 2002
      Mr. Abbey has sole voting power with respect to the shares.

(10)  The address of Trellus Management Company, LLC ("Trellus") is 350 Madison
      Avenue, Ninth Floor, New York, New York 10017. Trellus is a Delaware
      limited liability company and is a Delaware registered investment advisor
      to domestic and offshore hedge funds. Adam Usdan is President of Trellus.
      Based upon a copy of a Schedule 13G dated August 12, 2002, Adam Usdan and
      Trellus have shared voting power with respect to these shares.



Securities Owned By Management

The following  table sets forth certain  information  regarding  beneficial
ownership of the Company's Common Stock as of December 31, 2002 by each director
and nominee for director of the Company,  the executive  officers of the Company
on such date and the executive officers,  nominees for director and directors as
a Group.  Except as set forth in the footnotes to this table,  the  shareholders
have sole voting and investment power over such shares.

                                       30

                                             Amount Beneficially   Percent of
Name of Beneficial Owner                              Owned           Class
------------------------                       -------------------   ----------
Joseph J. Saker (1)(2)(3)                             184,576         18.4
Richard J. Saker (1)(2)(4)(5)                         194,303         19.4
Joseph J. Saker, Jr.  (1)(4)(6)                       107,695         10.9
Albert A. Zager (1)(7)                                  2,000           *
Charles T. Parton (1)(7)                                2,900           *
Robert H. Hutchins (1)                                    500           *
Michael Shapiro (1) (9)                                   500           *
Emory A. Altobelli (1)(7)                                 525           *
Carl L. Montanaro (1)(8)                                  515           *
Robert V. Spires (1)(7)                                   500           *
Joseph C. Troilo (1)(8)                                   250           *
Directors, Nominees for Director and                 409,264           40.1
   Executive Officers as a Group (11 persons)
   (2)(3)(4)(5)(6)(7)(8)(9)(10)(11)
(*)  Less than one percent.

(1)   The address of the foregoing person is c/o Foodarama Supermarkets, Inc.,
      922 Highway 33, Building 6, Suite 1, Freehold, New Jersey 07728.

(2)   Includes 15,000 shares subject to currently exercisable options or options
      exercisable within 60 days of December 31, 2002 granted pursuant to the
      2001 Plan.

(3)   Includes 13,378 shares held by Joseph J. Saker's wife and 31,399 shares
      willed to him by Mary Saker.

(4)   Includes 85,000 shares held by the Joseph Saker Family Partnership, L.P.,
      a Delaware limited partnership (the "Partnership"). The Saker Family
      Corporation is the sole general partner (the "General Partner") of the
      Partnership. Richard J. Saker owns 40% of the outstanding capital stock of
      the General Partner, and each of Joseph J. Saker, Jr. and Thomas A. Saker
      owns 30% of the outstanding capital stock of the General Partner. The
      General Partner owns a 1% interest in the Partnership and has the sole
      power to sell, transfer or otherwise dispose of the shares of Foodarama
      Common Stock only upon the unanimous consent of all shareholders of the
      General Partner. On other matters not involving the sale, transfer or
      other disposition of such shares, the shares of Foodarama Common Stock
      held by the Partnership are voted as directed by the individual
      shareholders of the General Partner in accordance with their respective
      ownership interests in the General Partner. Accordingly, the General
      Partner votes 34,000 shares as directed by Richard J. Saker, 25,500 shares
      as directed by Joseph J. Saker, Jr. and 25,500 shares as directed by
      Thomas A. Saker on such other matters.

      In addition to their ownership interests in the General Partner, Richard
      J. Saker, Joseph J. Saker, Jr. and Thomas A. Saker are the beneficiaries
      of the trust which owns a 99% interest in the Partnership (the "Limited
      Partner"). Thus, each of Richard J. Saker, Joseph J. Saker, Jr. and Thomas
      A. Saker also has an indirect interest in the Company's Common Stock held
      by the Partnership by reason of their respective beneficial interests in
      the Limited Partner. Their beneficial interests in the Limited Partner are
      in identical proportion to their ownership interests in the General
      Partner. Richard J. Saker, Joseph J. Saker, Jr. and Thomas A. Saker each
      disclaim beneficial ownership of shares held by the Partnership in excess
      of their pecuniary interests.

                                       31

(5)   Includes 1,760 shares held by Richard J. Saker's wife and 1,377 shares
      which are held in a trust for the benefit of Mr. Saker's son, of which
      Mr. Saker is the trustee.  Mr. Saker disclaims beneficial ownership of
      the shares described in the preceding sentence.

(6)   Includes 2,754 shares which are held in two trusts for the benefit of Mr.
      Saker's sons, of which trusts Mr. Saker is the trustee. Mr. Saker
      disclaims beneficial ownership of the shares described in the preceding
      sentence.

(7)   Includes 500 shares subject to currently exercisable options granted
      pursuant to the 2001 Plan.

(8)   Includes 250 shares subject to currently exercisable options granted
      pursuant to the 2001 plan.

(9)   Owned jointly with Mr. Shapiro's wife.

(10)  Of the 409,264 shares, directors of the Company own or have rights to
      acquire 384,279 shares.

(11)  Includes 85,000 shares held by the Joseph Saker Family Partnership, L.P.,
      the total number of which shares is also included both in the total number
      of shares attributed to ownership by Richard J. Saker, and the total
      number of shares attributed to ownership by Joseph J. Saker, Jr.

The Company's Third Amended and Restated  Revolving  Credit and Term Loan
Agreement  provides  that an event of default  shall occur if Messrs. Joseph J.
Saker and Richard J. Saker together, do not own, beneficially, all voting rights
with respect to at least 27% of all of the issued and  outstanding  Common Stock
of the Company.


Securities Authorized for Issuance under Equity Compensation Plans

The  number of stock  options  outstanding  under our  equity  compensation
plans,  the weighted  average  exercise  price of outstanding  options,  and the
number of securities  remaining available for issuance,  as of November 2, 2002,
were as follows:
-------------------------------------------------------------------------------
                                                                Number of
                                                                securities
                                                                remaining
                         Number of                            available for
                      securities to be                       future issuance
                        issued upon      Weighted-average      under equity
                        exercise of      exercise price of     compensation
                        outstanding         outstanding      plans (excluding
                     options, warrants   options, warrants      securities
                         and rights         and rights         reflected in
Plan Category                (a)                (b)            column (a))
                                                                   (c)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity compensation
plans approved by
security holders
                           113,300             $19.78              92,700
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity compensation
plans not approved
by securityholders
                            None               None                None
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total                     113,300             $19.78              92,700
-------------------------------------------------------------------------------

The Company has one equity  incentive  plan,  the 2001 Plan.  The 2001 Plan
provides for the issuance of incentive awards to officers, directors,  employees
and  consultants in the form of stock  options,  stock  appreciation  rights and
restricted stock.
                                       32


Item 13. Certain Relationships and Related Transactions

(a)Transactions with Management and Certain Business Relationships

As required by the By-Laws of Wakefern  Food  Corporation  ("Wakefern"),  a
retailer-owned   food  distribution   corporation  which  provides   purchasing,
warehousing  and  distribution  services to the Company as well as other  retail
supermarket  chains,  the  obligations  owed  by the  Company  to  Wakefern  are
personally  guaranteed by Joseph J. Saker, Richard J. Saker and Thomas A. Saker.
As of November  2, 2002 the  Company  was  indebted to Wakefern in the amount of
approximately  $31,935,000  for  current  charges  in  the  ordinary  course  of
business.  Wakefern  presently requires each of its shareholders to invest up to
$550,000 in Wakefern's  non-voting  capital stock for each store operated by it,
computed  in  accordance  with a formula  based on the  volume  of such  store's
purchases  from  Wakefern.  As of  November  2, 2002,  the  Company  had a 15.6%
investment in Wakefern of $11,805,000.  As a shareholder member of Wakefern, the
Company earns a share of any annual Wakefern patronage dividend. The dividend is
based on the distribution of operating profits on a pro rata basis in proportion
to the dollar volume of business  transacted by each member with Wakefern during
each fiscal year. As of November 2, 2002, the Company was indebted in connection
with an investment in Wakefern.  The debt of $1,315,000 was non-interest bearing
and payable in scheduled installments over a period of up to six years.

The Company also has an investment in  Insure-Rite,  Ltd.,  another company
affiliated with Wakefern, of $953,000 as of November 2, 2002. Insure-Rite,  Ltd.
provides the Company with a portion of its liability insurance coverage with the
balance paid through Wakefern to a private carrier.  The Company paid $4,364,000
for such  insurance  coverage  in fiscal 2002 and  believes  that such amount is
comparable  to  the  amount  that  would  be  charged  by a  similarly  situated
unaffiliated general liability and property insurer.

The Company leases from Joseph J. Saker,  the Chairman of the Company,  and
his wife, doing business as Saker Enterprises,  a 57,000 square foot supermarket
in Freehold,  New Jersey,  under a lease which expires on December 31, 2018, and
provides  for four five year  extension  options.  The Company  also leases from
Saker  Enterprises a 5,200 square foot garden  center  building and 5,000 square
feet of yard area under a lease expiring December 31, 2003 and 9,000 square feet
of space for its liquor store under a lease expiring  December 31, 2003, both of
which are located in the same  shopping  center as the  supermarket.  During the
fiscal year ended  November 2, 2002,  an  aggregate  amount for rent  (including
taxes and  insurance)  of $891,000 was paid by the Company to Saker  Enterprises
for the supermarket, garden center and liquor store.

The Company  subleases  from  Wakefern a supermarket  in East Windsor,  New
Jersey  under a sublease  expiring in 2008.  The  Company  also  subleases  from
Wakefern a  supermarket  in Marlboro,  New Jersey  under a sublease  expiring in
2006. During the fiscal year ended November 2, 2002,  aggregate amounts for rent
of  $1,090,000  and  $837,000  were paid by the Company to Wakefern for the East
Windsor supermarket and the Marlboro supermarket,  respectively. Upon expiration
of these subleases, the underlying leases will be assigned to and assumed by the
Company provided that certain conditions,  which include the absence of defaults
by the Company in its obligations to Wakefern and the Company's lenders, and the
maintenance of a specified  level of net worth,  are satisfied.  The term of the
leases for the East Windsor and Marlboro  supermarkets  expire in 2018 and 2021,
respectively.

During the fiscal year ended November 2, 2002, in connection with the stock
repurchase  program  announced  by the  Company  on June 8,  2001,  the  Company
repurchased a total of 102,853 shares of which 101,553  shares were  repurchased
in  privately  negotiated  transactions.  6,377 of these  shares were owned by a
member of the  family  of Joseph J.  Saker,  the  Company's  Chairman,  and were
purchased for an average price per share of $39.52.

The  Company  believes  that the terms of the  foregoing  transactions  are
comparable  to  those  available  from  non-affiliated   persons  under  similar
circumstances.
                                       33

(b)  Indebtedness of Management

      None.

                                          Part IV

Item 14.    Controls and Procedures

As required by Rule 13a-15 under the  Exchange Act within  ninety (90) days
prior to the filing date of this report,  the Company  carried out an evaluation
of the  effectiveness  of the design and operation of the  Company's  disclosure
controls and  procedures.  This evaluation was carried out under the supervision
and with the participation of the Company's management,  including the Company's
Chairman and Chief  Executive  Officer along with the Company's  Chief Financial
Officer, who concluded that the Company's disclosure controls and procedures are
effective.  The Company's Internal Auditor and Principal Accounting Officer also
participated in this evaluation.  There have been no significant  changes in the
Company's internal controls or in other factors which could significantly affect
internal controls subsequent to the date the Company carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures that
are designed to ensure that information  required to be disclosed in the Company
reports  filed or  submitted  under the  Exchange  Act is  recorded,  processed,
summarized and reported, within the time periods specified in 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 Company reports filed under the Exchange
Act is accumulated and communicated to management, including the Company's Chief
Executive  Officer and Chief Financial  Officer as appropriate,  to allow timely
decisions regarding required disclosure.























                                       34

Item 15.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K

a.1.     Audited financial statements and                    Page No.
         supplementary data

            Independent Auditors' Report                          F-1

            Foodarama Supermarkets, Inc. and
              Subsidiaries Consolidated Financial
              Statements:

            Balance Sheets as of November 2, 2002                F-2 to F-3
              and November 3, 2001.

            Statements of Operations for each of the
              fiscal years ended November 2, 2002,
              November 3, 2001 and October 28, 2000.             F-4


            Statements of Shareholders' Equity
              for each of the fiscal years ended
              November 2, 2002, November 3, 2001
              and October 28, 2000.                              F-5


            Statements of Cash Flows for each of the
             fiscal years ended November 2, 2002,
             November 3, 2001 and October 28, 2000.              F-6


            Notes to Consolidated Financial Statements           F-7 to F-30


a.2.    Financial Statement Schedules

            Schedule II                                          S-1
            Schedules other than Schedule II have been
            omitted because they are not applicable.

a.3.    Exhibits                                                 E-1 to E-8
            Exhibit 3.1- Certificate of Amendment to the Amended and Restated
                         Certificate of Incorporation
            Exhibit 10.1-Amendment No.1 to Third Amended and Restated
                         Revolving Credit and Term Loan Agreement
            Exhibit 10.2-Consent, Waiver and Amendment No. 2 to
                         Third Amended and Restated Revolving
                         Credit and Term Loan Agreement
            Exhibit 21-List of Subsidiaries
            Exhibit 99.1-Certification
            Exhibit 99.2-Certification
            Exhibit 23.1-Consent of Independent Accountant

b.      Reports on Form 8-K


           September 30, 2002 - The Company entered into the Third Amended and
           Restated Revolving Credit and Term loan Agreement with its lenders -
           the Third Amended and Restated Revolving Credit and Term Loan
           Agreement was filed as an exhibit.
                                 * * * * * *

                                       35


                                         SIGNATURES

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

                                    FOODARAMA SUPERMARKETS, INC.
                                         (Registrant)


                                    /S/ Michael Shapiro
                                    -------------------
                                     Michael Shapiro
                                     Senior Vice President,
                                     Chief Financial Officer


                                    /S/ Thomas H. Flynn
                                    -------------------
                                     Thomas H. Flynn
                                     Principal Accounting Officer

Date: January 29, 2003

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

     Name                       Title                         Date


/S/  Joseph J. Saker
--------------------------------------------------
Joseph J. Saker               Chairman of the Board       January 24, 2003
                              of Directors, Chief
                              Executive Officer

/S/  Richard Saker
---------------------------------------------------
Richard Saker                 President,  Secretary       January 24, 2003
                              and Director, Chief
                              Operating Officer

/S/  Charles T. Parton
---------------------------------------------------
Charles T. Parton             Director                    January 24, 2003

/S/  Albert A. Zager
---------------------------------------------------
Albert A. Zager               Director                    January 24, 2003

/S/  Robert H. Hutchins
---------------------------------------------------
Robert H. Hutchins            Director                    January 24, 2003


                                       36

                                   CERTIFICATION

      I, Joseph J. Saker, certify that:

1.    I have reviewed this annual report on Form 10-K of Foodarama
      Supermarkets, Inc.;

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

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

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

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

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

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

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

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

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

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


Date: January 29, 2003                   /S/ Joseph J. Saker
                                         -------------------
                                          Joseph J. Saker
                                          Chief Executive Officer

                                       37

                              CERTIFICATION


      I, Michael Shapiro, certify that:

1.    I have reviewed this annual report on Form 10-K of Foodarama Supermarkets,
      Inc.;

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

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

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

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

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

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

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

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

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

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

Date: January 29, 2003                   /S/ Michael Shapiro
                                         -------------------
                                         Michael Shapiro
                                         Chief Financial Officer
                                       38





                          Independent Auditors' Report

Board of Directors and Shareholders
Foodarama Supermarkets, Inc.
Howell, New Jersey

We have audited the accompanying consolidated balance sheets of Foodarama
Supermarkets, Inc. and Subsidiaries as of November 2, 2002 and November 3, 2001,
and the related consolidated statements of operations, shareholders' equity and
cash flows for the fiscal years ended November 2, 2002, November 3, 2001 and
October 28, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Foodarama Supermarkets, Inc. and
Subsidiaries as of November 2, 2002 and November 3, 2001, and the results of
their operations and their cash flows for the fiscal years ended November 2,
2002, November 3, 2001 and October 28, 2000 in conformity with accounting
principles generally accepted in the United States of America.

In connection with our audits of the financial statements referred to above, we
audited the financial schedule listed under Item 14. In our opinion, the
financial schedule, when considered in relation to the financial statements
taken as a whole, presents fairly, in all material respects, the information
stated therein.


                                    AMPER, POLITZINER & MATTIA P.C.

January 21, 2003
Edison, New Jersey





                   FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                      November 2, 2002 and November 3, 2001
                                 (In thousands)


                                                         2002           2001
                                                         ----           ----

                                     Assets

Current assets
   Cash and cash equivalents                         $    4,280     $    4,219
   Merchandise inventories                               43,707         42,827
   Receivables and other current assets                  11,214          5,466
   Prepaid income taxes                                     257              -
   Related party receivables - Wakefern                   8,903          8,970
   Related party receivables - other                          -              7
                                                     -----------    -----------
                                                         68,361         61,489
                                                     -----------    -----------
Property and equipment
   Land                                                     308            308
   Buildings and improvements                             1,220          1,220
   Leasehold improvements                                41,311         39,589
   Equipment                                            114,077        103,394
   Property under capital leases                         69,867         59,909
   Construction in progress                              15,364          6,787
                                                     -----------    -----------
                                                        242,147        211,207
   Less accumulated depreciation and amortization       112,360         98,218
                                                     -----------    -----------
                                                        129,787        112,989
                                                     -----------    -----------
Other assets
   Investments in related parties                        12,758         12,758
   Intangibles                                            2,785          3,136
   Other                                                  3,963          2,550
   Related party receivables - Wakefern                   1,735          1,593
   Related party receivables - other                          -             11
                                                     -----------    -----------
                                                         21,241         20,048
                                                     -----------    -----------
                                                     $  219,389     $  194,526
                                                     ===========    ===========


                See notes to consolidated financial statements.
                                       F-2




                   FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheets - (continued)
                      November 2, 2002 and November 3, 2001
                                 (In thousands)


                                                           2002           2001
                                                           ----           ----

                      Liabilities and Shareholders' Equity

Current liabilities
   Current portion of long-term debt                  $    7,158     $    5,390
   Current portion of long-term debt, related party          629            902
   Current portion of obligations under capital leases     1,140            899
   Current income taxes payable                                -            704
   Deferred income taxes                                   1,433          1,079
   Accounts payable
     Related party - Wakefern                             31,935         35,988
     Others                                               14,078          8,780
   Accrued expenses                                       12,578         14,654
                                                      -----------    -----------
                                                          68,951         68,396
                                                      -----------    -----------
Long-term debt                                            35,745         19,294
Long-term debt, related party                                686          1,310
Obligations under capital leases                          63,606         54,949
Deferred income taxes                                      1,142          1,201
Other long-term liabilities                               12,634         10,883
                                                      -----------    -----------
                                                         113,813         87,637
                                                      -----------    -----------
Shareholders' equity
   Common stock, $1.00 par; authorized 2,500,000 shares;
   issued 1,621,767 shares; outstanding 986,367 shares
   November 2, 2002; 1,088,220 shares November 3, 2001     1,622          1,622
   Capital in excess of par                                4,168          4,168
   Deferred compensation                                  (1,324)        (1,696)
   Retained earnings                                      47,256         44,016
   Accumulated other comprehensive income
     Minimum pension liability                            (2,896)        (1,920)
                                                      -----------    -----------
                                                          48,826         46,190
   Less 635,400 shares November 2, 2002; 533,547 shares
    November 3, 2001, held in treasury, at cost           12,201          7,697
                                                      -----------    -----------
                                                          36,625         38,493
                                                      -----------    -----------
                                                      $  219,389     $  194,526
                                                      ===========    ===========

                See notes to consolidated financial statements.
                                       F-3


                   FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Operations
    Fiscal Years Ended November 2, 2002, November 3, 2001 and October 28, 2000
                      (In thousands, except per share data)


                                            2002           2001           2000
                                            ----           ----           ----

Sales                                 $   963,611    $   945,301    $   866,363

Cost of goods sold                        718,520        711,092        657,436
                                      -----------    -----------    -----------

Gross profit                              245,091        234,209        208,927

Selling, general and administrative
   expenses                               231,653        220,283        198,216
                                      -----------    -----------    -----------
Earnings from operations                   13,438         13,926         10,711
                                      -----------    -----------    -----------

Other income (expense)
   Interest expense                        (8,184)        (7,627)        (7,059)
   Interest income                            148            265            318
                                      -----------    -----------    -----------
                                           (8,036)        (7,362)        (6,741)
                                      -----------    -----------    -----------

Earnings before income tax provision        5,402          6,564          3,970

Income tax provision                       (2,162)        (2,626)        (1,588)
                                      -----------    -----------    -----------

Net income                            $     3,240    $     3,938    $     2,382
                                      ===========    ===========    ===========

Per share information:

Net income per common share
   Basic                              $      3.16    $      3.54    $      2.13
                                      ===========    ===========    ===========
   Diluted                            $      3.01    $      3.50    $      2.13
                                      ===========    ===========    ===========

Weighted average shares outstanding
   Basic                                1,024,235      1,111,727      1,117,290
                                      ===========    ===========    ===========
   Diluted                              1,076,030      1,124,192      1,117,290
                                      ===========    ===========    ===========



                See notes to consolidated financial statements.
                                       F-4


                  FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                 Consolidated Statements of Shareholders' Equity
    Fiscal Years Ended November 2, 2002, November 3, 2001 and October 28, 2000
                    (In thousands, except per share data)

                                                                                              
                                                                        Accumulated
                                Common Stock                              Other
                                --------------  Capital                   Compre-    Compre-
                              Shares            in Excess   Deferred      hensive    hensive   Retained     Treasury Stock  Total
                              Issued     Amount  of Par   Compensation   Income       Income    Earnings   Shares    Amount  Equity
                            ---------  --------  ------   ------------   ----------   -------   --------  --------- -------- ------
Balance - October 30, 1999  1,621,767  $  1,622 $ 2,351   $        -     $        -           $   37,696  (504,477) $(6,629)$35,040
Comprehensive income
  Net income 2000                   -         -       -            -              -   $ 2,382      2,382         -        -   2,382
                              -------  -------- -------      -------       --------  --------   ---------  -------  -------  ------
Comprehensive income                                                                  $ 2,382
                                                                                     ========

Balance - October 28, 2000  1,621,767     1,622   2,351            -              -               40,078  (504,477)  (6,629) 37,422
Grant of stock options              -         -   1,817       (1,817)             -                    -         -        -       -
Amortization of deferred
 compensation                       -         -       -          121              -                    -         -        -     121
Repurchase of common stock          -         -       -            -              -                    -   (29,070)  (1,068) (1,068)
Comprehensive income
  Net income 2001                   -         -       -            -              -     3,938      3,938         -        -   3,938
  Other comprehensive income
   Minimum pension liability,
    net of deferred tax             -         -       -            -         (1,920)   (1,920)         -         -        -  (1,920)
                              -------  -------- -------      -------       --------  --------   --------  --------  -------  -------
Comprehensive income                                                                  $ 2,018
                                                                                     ========

Balance - November 3, 2001  1,621,767     1,622   4,168       (1,696)        (1,920)              44,016 (533,547)   (7,697) 38,493
Amortization of deferred
 compensation                       -         -       -          372              -                    -        -         -     372
Issuance of common stock            -         -       -            -              -                    -    1,000        20      20
Repurchase of common stock          -         -       -            -              -                    - (102,853)   (4,524) (4,524)
Comprehensive income
  Net income 2002                   -         -       -            -              -     3,240      3,240        -         -   3,240
  Other comprehensive income
   Minimum pension liability,
    net of deferred tax             -         -       -            -           (976)     (976)         -        -         -    (976)
                              -------  --------  ------      -------        -------  --------   --------  -------   -------  ------
Comprehensive income                                                                  $ 2,264
                                                                                     ========

Balance - November 2, 2002  1,621,767  $  1,622  $4,168     $ (1,324)      $ (2,896)            $ 47,256 (635,400) $(12,201)$ 36,625
                          =========== ========= =======     ========       ========            ========= ========   =======   ======


                 See notes to consolidated financial statements.
                                       F-5


                   FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Cash Flows
    Fiscal Years Ended November 2, 2002, November 3, 2001 and October 28, 2000
                                 (In thousands)
                                                  2002        2001         2000
                                                  ----        ----         ----
Cash flows from operating activities
   Net income                                  $  3,240    $  3,938    $  2,382
   Adjustments to reconcile net income to net
    cash from operating activities
    Depreciation                                 14,175      12,840      11,524
    Amortization, intangibles                       351         351         352
    Amortization, deferred financing costs          342         285         243
    Amortization, deferred rent escalation         (230)        (60)         84
    Provision to value inventory at LIFO            397         900         723
    Deferred income taxes                           946        (139)       (574)
    Amortization of deferred compensation           270         256           -
    (Increase) decrease in
      Merchandise inventories                    (1,277)       (962)     (5,375)
      Receivables and other current assets         (781)       (507)       (463)
      Prepaid income taxes                         (257)        398        (398)
      Other assets                                 (453)        963         207
      Related party receivables - Wakefern          (75)       (224)       (784)
    Increase (decrease) in
      Accounts payable                            1,245       2,936       5,018
      Income taxes payable                         (704)        704        (457)
      Other liabilities                          (1,713)      2,534       3,047
                                                -------    --------    --------
                                                 15,476      24,213      15,529
                                                -------    --------    --------
Cash flows from investing activities
   Cash paid for the purchase of property and
    equipment                                    (7,858)    (11,718)    (14,280)
   Cash paid for construction in progress       (13,161)     (5,329)       (943)
   Construction advance due from landlords       (4,138)          -           -
   Deposits on equipment                           (829)          -           -
   Decrease in related party receivables-other       18         169          15
                                                -------    --------    --------
                                                (25,968)    (16,878)    (15,208)
                                                -------    --------    --------
Cash flows from financing activities
   Proceeds from issuance of debt                22,961         929      20,595
   Principal payments under long-term debt       (4,742)     (5,344)    (18,754)
   Principal payments under capital lease
     obligations                                 (1,060)       (664)       (699)
   Principal payments under long-term debt,
     related party                                 (897)       (880)       (627)
   Deferred financing costs                      (1,205)        (66)       (953)
   Proceeds from exercise of stock options           20           -           -
   Repurchase of common stock                    (4,524)     (1,068)          -
                                               --------    --------    --------
                                                 10,553      (7,093)       (438)
                                               --------    --------    --------
Net change in cash and cash equivalents              61         242        (117)
Cash and cash equivalents, beginning of year      4,219       3,977       4,094
                                               --------    --------    --------

Cash and cash equivalents, end of year         $  4,280    $  4,219    $  3,977
                                               ========    ========    ========
Supplemental disclosures of cash paid
   Interest                                    $  8,125    $  8,046    $  6,683
   Income taxes                                   2,188       1,674       2,869
                 See notes to consolidated financial statements.
                                       F-6


                   FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                    Notes to Consolidated Financial Statements
             (Tabular dollars in thousands, except per share amounts)

Note 1 - Summary of Significant Accounting Policies
         Nature of Operations
         Foodarama Supermarkets, Inc. and Subsidiaries (the "Company"), operate
         22 ShopRite supermarkets, primarily in Central New Jersey. The Company
         is a member of Wakefern Food Corporation ("Wakefern"), the largest
         retailer-owned food cooperative in the United States.

         Fiscal Year
         The Company's fiscal year ends on the Saturday closest to October 31.
         Fiscal 2002 consists of the 52 weeks ended November 2, 2002, fiscal
         2001 consists of the 53 weeks ended November 3, 2001 and fiscal 2000
         consists of the 52 weeks ended October 28, 2000.

         Principles of Consolidation
         The consolidated financial statements include the accounts of the
         Company and its wholly owned subsidiaries. All significant intercompany
         accounts and transactions have been eliminated.

         Revenue Recognition
         Revenues from the sale of products are recognized at the point of sale
         to the Company's customers. Vendor rebates and credits that relate to
         the Company's buying and merchandising activities are recognized as
         earned.

         Industry Segment
         The Company operates in one industry segment, the retail sale of food
         and nonfood products, primarily in the Central New Jersey region.

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

         Fair Value of Financial Instruments
         Cash and cash equivalents, receivables and accounts payable are
         reflected in the consolidated financial statements at carrying value
         which approximates fair value because of the short-term maturity of
         these instruments. The fair value of long-term debt was approximately
         equivalent to its carrying value, due to the fact that the interest
         rates currently available to the Company for debt with similar terms
         are approximately equal to the interest rates for its existing debt. As
         the Company's investments in Wakefern can only be sold to Wakefern for
         approximately the amount invested, it is not practicable to estimate
         the fair value of such stock. Determination of the fair value of
         related party receivables and long-term debt - related party is not
         practicable due to their related party nature.

         Cash Equivalents
         The Company considers all highly liquid debt instruments purchased with
         an original maturity of three months or less to be cash equivalents.

                                      F-7

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 1 - Summary of Significant  Accounting  Policies - (continued)

         Merchandise Inventories
         Merchandise inventories are stated at the lower of cost or market.
         Approximately 82% of merchandise inventories, consisting primarily of
         grocery and nonfood items, are valued by the LIFO (last-in, first-out)
         method of inventory valuation while the remaining inventory items are
         valued by the FIFO (first-in, first-out) method with cost being
         determined under the retail method.

         If the FIFO method had been used for the entire inventory, inventory at
         November 2, 2002 and November 3, 2001 would have been $2,020,000 and
         $1,623,000 higher, respectively.

         Property and Equipment
         Property and equipment is stated at cost and is depreciated on a
         straight-line basis over the estimated useful lives ranging between
         three and ten years for equipment, the shorter of the useful life or
         lease term for leasehold improvements, and twenty years for buildings.
         Repairs and maintenance are expensed as incurred.

         Property and equipment under capital leases are recorded at the lower
         of fair market value or the net present value of the minimum lease
         payments. They are depreciated on a straight-line basis over the
         shorter of the related lease terms or its useful life.

         Investments
         The Company's investments in its principal supplier, Wakefern, and in
         Insure-Rite, are stated at cost (see Note 4).

         Intangibles
         Intangibles consist of goodwill and favorable operating lease costs.
         Goodwill is being amortized on a straight-line basis over periods from
         15 to 36 years. The favorable operating lease costs are being amortized
         on a straight-line basis over the terms of the related leases, which
         range from 12 to 24 years.

         Long-Lived Assets
         The Company reviews the carrying values of its long-lived assets for
         possible impairment whenever circumstances indicate the carrying amount
         of an asset may not be recoverable. An impairment is recognized to the
         extent the sum of the undiscounted estimated future cash flow expected
         to result from the use of the asset is less than the carrying value.

         Deferred Financing Costs
         Deferred financing costs are being amortized over the life of the
         related debt using the effective interest method.

         Postretirement Benefits other than Pensions
         The Company accrues for the cost of providing postretirement benefits,
         principally supplemental income payments and limited medical benefits,
         over the working careers of the officers in the plan.

                                      F-8

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 1 - Summary of Significant Accounting Policies (continued)

         Postemployment Benefits
         The Company accrues for the expected cost of providing postemployment
         benefits, primarily short-term disability payments, over the working
         careers of its employees.

         Advertising
         Advertising costs are expensed as incurred. Advertising expense was
         $8.6, $8.8 and $8.5 million for the fiscal years 2002, 2001 and 2000,
         respectively.

         Store Closing Costs
         The costs, net of amounts expected to be recovered, are expensed upon
         the closing of a store. It is reasonably possible that these estimates
         may change in the near term. Operating results continue to be reported
         until a store is closed.

         Stock Option Plan
         The Company has elected to follow Accounting Principles Board Opinion
         No. 25, "Accounting for Stock Issued to Employees," ("APB 25") and
         related interpretations in accounting for its employee stock options.
         Under this method, compensation cost is measured as the amount by which
         the market price of the underlying stock exceeds the exercise price of
         the stock option at the date at which both the number of options
         granted and the exercise price are known.

         Earnings Per Share
         Earnings per common share are based on the weighted average number of
         common shares outstanding. Diluted earnings per share amounts are based
         on the weighted average number of common shares outstanding, plus the
         incremental shares that would have been outstanding upon the assumed
         exercise of all diluted stock options, subject to antidilution
         limitations.

         Recent Accounting Pronouncements
         In June 2001, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 142 ("SFAS 142"), "Accounting for
         Goodwill and Other Intangible Assets," which is effective for fiscal
         years beginning after December 15, 2001. SFAS 142 discontinues the
         practice of amortizing goodwill and indefinite lived intangible assets
         and initiates an annual review for impairment. Impairment would be
         examined more frequently if certain indicators were encountered.
         Intangible assets with a determinable useful life will continue to be
         amortized over that period. The Company is currently assessing but has
         not yet determined the impact of SFAS 142 on its financial position and
         results of operations. The Company plans to adopt SFAS 142 in the first
         quarter of fiscal year 2003.

                                      F-9

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 1 - Summary of Significant Accounting Policies (continued)

         Recent Accounting Pronouncements - (continued)

         In June 2001, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 143 ("SFAS 143"), "Accounting for
         Asset Retirement Obligations," which is effective for fiscal years
         beginning after June 15, 2002, with early application encouraged. SFAS
         143 addresses financial accounting and reporting for obligations
         associated with the retirement of tangible long-lived assets and the
         associated asset retirement costs. The Company plans to adopt SFAS 143
         in the first quarter of fiscal year 2003 and believes that it will have
         no impact on its financial position or results of operations.

         Effective November 4, 2001 the Company adopted Statement of Financial
         Accounting Standards No. 144 ("SFAS 144"), "Accounting for the
         Impairment or Disposal of Long-Lived Assets". SFAS 144 requires, among
         other things, the application of one accounting model for long-lived
         assets that are impaired or to be disposed of by sale. There was no
         significant impact from the adoption of SFAS 144 in fiscal year 2002.

         In April 2002, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards No. 145 ("SFAS 145"),
         "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
         Statement No. 13, and Technical Corrections," which is effective for
         fiscal years beginning after May 15, 2002, with earlier application
         encouraged. Under SFAS 145, gains and losses from extinguishment of
         debt will no longer be aggregated and classified as an extraordinary
         item, net of related income tax effect, on the statement of earnings.
         The Company plans to adopt SFAS 145 in the first quarter of fiscal year
         2003 and believes that it will have no impact on its financial position
         or results of operations.

         In June 2002, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 146 ("SFAS 146"), "Accounting for
         Costs Associated with Exit or Disposal Activities," which is effective
         for exit or disposal activities that are initiated after December 31,
         2002, with early application encouraged. SFAS 146 requires recognition
         of a liability for the costs associated with an exit or disposal
         activity when the liability is incurred, as opposed to when the entity
         commits to an exit plan as required under EITF Issue No. 94-3. SFAS 146
         will primarily impact the timing of the recognition of costs associated
         with any future exit or disposal activities. The Company plans to adopt
         SFAS 146 in the first quarter of fiscal year 2003 and is in the process
         of evaluating the impact of the adoption on its financial statements.

         Effective November 4, 2001, the Company adopted the Emerging Issues
         Task Force Issue No. 01-09 ("EITF 01-09"), "Accounting for
         Consideration Given by a Vendor to a Customer (Including a Reseller of
         the Vendor's Products)." EITF 01-09 codifies and reconciles the
         consensuses on all or specific issues of EITF 00-14, "Accounting for
         Certain Sales Incentives," EITF 00-22, "Accounting for `Points' and
         Certain Other Time-Based or Volume-Based Sales Incentives Offers, and
         Offers for Free Products or Services to be Delivered in the Future,"
         and EITF 00-25, "Vendor Income Statement Characterization of
         Consideration Paid to a Reseller of the Vendor's Products," which
         address various aspects of the accounting for consideration given by a
         vendor to a customer or a reseller of the vendor's products. The
         adoption of EITF 01-09 did not have an impact on the Company's
         financial position or results of operations.
                                      F-10

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 2 - Concentration of Cash Balance
         As of November 2, 2002 and November 3, 2001, cash balances of
         approximately $1,241,000 and $1,179,000, respectively, were maintained
         in bank accounts insured by the Federal Deposit Insurance Corporation
         (FDIC). These balances exceed the insured amount of $100,000.

Note 3 - Receivables and Other Current Assets
                                                      November 2,  November 3,
                                                          2002         2001
                                                      -----------  -----------
            Accounts receivable                       $    4,247    $   3,980
            Construction advance due from Landlords        4,138            -
            Prepaids                                       2,304        2,260
            Deposits on equipment                            829            -
            Rents receivable                                 380           99
            Less allowance for uncollectible accounts       (684)        (873)
                                                      -----------   ----------
                                                      $   11,214    $   5,466
                                                      ===========   ==========

Note 4 - Related Party Transactions
         Wakefern Food Corporation
         As required by Wakefern's By-Laws, all members of the cooperative are
         required to make an investment in the common stock of Wakefern for each
         supermarket operated ("Store Investment Program"), with the exact
         amount per store computed in accordance with a formula based on the
         volume of each store's purchases from Wakefern. The maximum required
         investment per store was $550,000 at November 2, 2002, November 3, 2001
         and October 28, 2000. During fiscal 2000 and 1999, the required
         investment in Wakefern increased, resulting in a total increase in the
         investment by $1,039,000 in 2000 and $1,286,000 in 1999, and a related
         increase in the obligations due Wakefern for the same amount,
         respectively. This increase in the obligation is non-interest bearing
         and is payable over four years, with two years currently remaining. The
         Company has an investment in Wakefern of $11,805,000 at November 2,
         2002 and November 3, 2001, representing a 15.6% and 12.3% interest in
         Wakefern, respectively. Wakefern is operated on a cooperative basis for
         its members. The shares of stock in Wakefern are assigned to and held
         by Wakefern as collateral for any obligations due Wakefern. In
         addition, the obligations to Wakefern are personally guaranteed by the
         principal officers/shareholders of the Company. As of November 2, 2002
         and November 3, 2001, the Company was obligated to Wakefern for
         $1,315,000 and $2,212,000, respectively, for the increase in its
         required investment (see Note 8).

         The Company also has an investment of approximately 10.0% in
         Insure-Rite, Ltd., a company affiliated with Wakefern, which was
         $953,000 at November 2, 2002 and November 3, 2001. Insure-Rite, Ltd.
         provides the Company with a portion of its liability insurance coverage
         with the balance paid through Wakefern to a private insurer. Insurance
         premiums paid to Insure-Rite, Ltd. and through Wakefern for fiscal
         years 2002, 2001 and 2000 were $4,364,000, $3,819,000 and $3,528,000,
         respectively.
                                      F-11

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 4 - Related Party Transactions - (continued)

         Wakefern Food Corporation - (continued)

         As a stockholder member of Wakefern, the Company earns a share of an
         annual Wakefern patronage dividend. The dividend is based on the
         distribution of operating profits on a pro rata basis in proportion to
         the dollar volume of business transacted by each member with Wakefern
         during each fiscal year. It is the Company's policy to accrue quarterly
         an estimate of the annual patronage dividend. The Company reflects the
         patronage dividend as a reduction of the cost of merchandise in the
         consolidated statements of operations. In addition, the Company also
         receives from Wakefern other product incentives and rebates. For fiscal
         2002, 2001 and 2000, total patronage dividends and other product
         incentives and rebates were $10,706,000, $9,909,000 and $9,273,000,
         respectively.

         At November 2, 2002 and November 3, 2001, the Company has current
         receivables due from Wakefern of approximately $8,903,000 and
         $8,970,000, respectively, representing patronage dividends, vendor
         rebates, coupons and other receivables due in the ordinary course of
         business and a noncurrent receivable representing a deposit of
         approximately $1,735,000 and $1,593,000, respectively.

         In September 1987, the Company and all other stockholder members of
         Wakefern entered into an agreement with Wakefern, as amended in 1992,
         which provides for certain commitments and restrictions on all
         stockholder members of Wakefern. The agreement contains an evergreen
         provision providing for an indefinite term and is subject to
         termination ten years after the approval of 75% of the outstanding
         voting stock of Wakefern. Under the agreement, each stockholder,
         including the Company, agreed to purchase at least 85% of its
         merchandise in certain defined product categories from Wakefern and, if
         it fails to meet such requirements, to make payments to Wakefern based
         on a formula designed to compensate Wakefern for its lost profit.
         Similar payments are due if Wakefern loses volume by reason of the sale
         of one or more of a stockholder's stores, merger with another entity or
         on the transfer of a controlling interest in the stockholder.

         The Company fulfilled its obligation to purchase a minimum of 85% in
         certain defined product categories from Wakefern for all periods
         presented. The Company's merchandise purchases from Wakefern, including
         direct store delivery vendors processed by Wakefern, approximated $641,
         $647 and $588 million for the fiscal years 2002, 2001 and 2000,
         respectively.

         Wakefern charges the Company for, and provides the Company with support
         services in numerous administrative functions. These services include
         advertising, insurance, supplies, technical support for communications
         and in-store computer systems, equipment purchasing, and the
         coordination of coupon processing.

         In addition to its investment in Wakefern, which carries only voting
         rights, the Company's President serves as a member of Wakefern's Board
         of Directors and its finance committee. Several of the Company's
         officers and employees also hold positions on various Wakefern
         committees.
                                      F-12

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 4 - Related Party Transactions - (continued)

         Other Related Party
         During the fiscal year ended November 3, 2001, the Company utilized an
         entity, which is wholly-owned by the daughter of the Company's Chairman
         of the Board, to provide construction management services on several
         store renovations. During the fiscal year ended November 3, 2001 the
         Company incurred $214,000 of construction management fees relating to
         this entity and these amounts have been included in property and
         equipment. The Company did not utilize this entity during the fiscal
         year ended November 2, 2002.

Note 5 - Intangibles
                                                     November 2    November 3,
                                                       2002           2001

            Goodwill                               $     3,493    $     3,493
            Favorable operating lease costs              4,685          4,685
                                                   ------------   ------------
                                                         8,178          8,178
            Less accumulated amortization                5,393          5,042
                                                   ------------   ------------
                                                   $     2,785    $     3,136
                                                   ============   ============

Note 6 - Accrued Expenses
                                                       November 2   November 3,
                                                          2002         2001

            Payroll and payroll related expenses   $     6,848    $     7,211
            Insurance                                      663          1,405
            Sales, use and other taxes                   1,243          1,294
            Interest                                       122             63
            Employee benefits                            1,168          1,346
            Occupancy costs                              1,445          2,179
            Real estate taxes                              544            537
            Other                                          545            619
                                                   ------------   ------------
                                                   $    12,578    $    14,654
                                                   ============   ============

Note 7 - Long-term Debt
         Long-term debt consists of the following:
                                                      November 2,  November 3,
                                                         2002         2001

            Revolving note                         $    13,380    $     3,766
            Term loan                                   25,000          6,500
            Capital expenditure facility                     -          7,306
            Other notes payable                          4,523          7,112
                                                   ------------   ------------
                                                        42,903         24,684
            Less current portion                         7,158          5,390
                                                   ------------   ------------
                                                   $    35,745    $    19,294
                                                   ============   ============

                                      F-13

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 7 - Long-term Debt - (continued)

         The Company has a revolving credit and term loan agreement which was
         amended and assigned to three financial institutions on January 7, 2000
         and further amended on May 11, 2001 and August 7, 2001, January 25,
         2002 and March 29, 2002. On September 26, 2002 the Credit Agreement was
         further amended and restated (as amended, the "Credit Agreement"). The
         Credit Agreement is collateralized by substantially all of the
         Company's assets, provides for a total commitment of $80,000,000
         (previously $58,000,000) and matures December 31, 2007 (previously
         matured December 31, 2004). The Credit Agreement provides the Company
         with the option to convert portions of the debt to Eurodollar loans, as
         defined in the Credit Agreement, which have interest rates indexed to
         LIBOR. The Credit Agreement consists of a Revolving Note, a Term Loan
         and a Capital Expenditure Facility.

         The Credit Agreement (a) increases the total amount available to the
         Company under the Revolving Note to $35,000,000 from $28,000,000,
         subject to the borrowing base limitation of 65% of eligible inventory;
         (b) increases the amount of permitted new indebtedness throughout the
         term of the Credit Agreement to more closely meet the Company's
         projected borrowing needs; (c) increases the amount of indebtedness
         attributable to capitalized lease obligations over the term of the
         Credit Agreement to more closely track new real estate lease
         obligations; (d) increases capital expenditures ("Capex") relating to
         New/Replacement Store Projects over the term of the Credit Agreement;
         (e) increases capital expenditures relating to Adjusted Capex over the
         term of the Credit Agreement; (f) restores amounts available under the
         Capex Facility to $20,000,000 from the $8,000,000 available prior to
         September 26, 2002 and extends the expiration date of the period during
         which the Company may borrow against the Capex Facility to December 31,
         2004 from June 30, 2002. In addition the balance outstanding on the
         Capex Facility of $10,652,662 (the "Capex Loans"), which included
         $4,000,000 borrowed during fiscal 2002, was combined with the Term
         Loan; (g) the Term Loan was increased to $25,000,000 by combining the
         then outstanding Term Loan of $5,000,000 with the Capex Loans plus an
         additional funding amount of $9,347,338; (h) allows the Company to
         repurchase an additional $1,000,000 of its common stock subject to
         certain conditions and limitations, previously the Company was
         permitted and it utilized $5,600,000 (this amount was increased from
         $5,000,000 to $5,600,000 as part of the amendments dated January 25,
         2002 and March 29, 2002) to repurchase its' common stock (see Note 12);
         (i) allows for loans to employees not to exceed $50,000 in the
         aggregate; (j) increases the interest rate on the Revolving Note from
         prime plus .50% or LIBOR plus 2.50% to prime plus 1.50% or LIBOR plus
         3.25%, increases the interest rate on the Term Loan and Capex Facility
         from prime plus .75% or LIBOR plus 2.75% to prime plus 2.00% or LIBOR
         plus 3.75%; and (k) amends certain definitions. Other terms and
         conditions of the Credit Agreement previously reported upon by the
         Company have not been modified.

         The Revolving Note has an overall availability of $35,000,000, not to
         exceed 65% of eligible inventory, and provides for availability of up
         to $4,500,000 for letters of credit. The Revolving Note bears interest
         at prime plus 1.50% or LIBOR plus 3.25%.
                                      F-14

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 7 - Long-term Debt - (continued)

         The Company had a letter of credit outstanding of $497,004 and
         $1,012,004 at November 2, 2002, and November 3, 2001, respectively. A
         commitment fee of .5% is charged on the unused portion of the Revolving
         Note. Available credit under the Revolving Note was $10,000,000 and
         $18,691,000 at November 2, 2002 and November 3, 2001. As of November 2,
         2002 and November 3, 2001, $7,264,000 and $7,475,000 of cash receipts
         on hand or in transit were restricted for application against the
         Revolving Note balance.

         The Term Loan is $25,000,000 and is payable in quarterly principal
         installments of $1,250,000 commencing January 1, 2003 through October
         1, 2007 (prior to September 26, 2002, the Term Loan was payable in
         quarterly principal installments of $500,000). Interest is payable
         monthly at prime plus 2.00% or LIBOR plus 3.75%. At November 2, 2002,
         $22,500,000 was under a six month Eurodollar rate of 5.41% maturing
         April 2003 and $2,500,000 was under a one month Eurodollar rate of
         5.55% maturing November 2002, of which $1,250,000 was renewed through
         February 2003 at 5.19%. At November 3, 2001, $6,000,000 of the Term
         Loan balance was under a one month Eurodollar rate of 5.39%.

         The $20,000,000 Capital Expenditure Facility provides for a
         non-restoring commitment to fund equipment purchases for five new
         stores through December 31, 2004, with a maximum of $4,000,000 per
         store. Interest only is due monthly at prime plus 2.00% or LIBOR plus
         3.75% for any amount utilized through December 31, 2004. Amounts
         borrowed through December 31, 2004 will be converted to a term loan
         with interest payable monthly at rates described above and fixed
         quarterly principal payments, commencing April 1, 2005, calculated on a
         seven-year amortization schedule. A balloon payment is due at December
         31, 2007 for amounts outstanding on the term loans. A commitment fee of
         .75% is charged on the unused portion of the Capital Expenditure
         Facility. The Company had no amounts outstanding at November 2, 2002
         and $7,306,000 outstanding as of November 3, 2001. At November 2, 2002
         and November 3, 2001 the Company had $20,000,000 and $12,000,000
         available, respectively, under this facility. At November 3, 2001,
         $7,000,000 of the Capital Expenditure facility was under a one month
         Eurodollar rate of 5.31%.

         Subsequently, on November 27, 2002 the Company drew down $1,595,274 on
         the Capital Expenditure Facility.

         The Agreement places restrictions on dividend payments and requires the
         maintenance of debt service coverage and leverage ratios and other
         financial ratios, as well as limitations on capital expenditures and
         new debt. For the year ended November 2, 2002, the Company exceeded the
         limit by which plan liabilities may exceed plan assets of its defined
         benefit plans (see Note 15), which was waived by the financial
         institutions.

         The prime rate at November 2, 2002 and November 3, 2001 was 4.75% and
         5.50%, respectively.
                                      F-15

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 7 - Long-term Debt - (continued)

         Other Notes Payable
         Included in other notes payable are the following:
                                                        November 2,  November 3,
                                                             2002         2001
         Note payable to a financing institution, maturing
         October 2004, payable at $56,000 per month
         plus interest at 7.26%, collateralized by related
         equipment.                                       $  1,330     $  1,996

         Note payable to a financing institution, maturing
         April 2005, payable at $46,000 per month including
         interest at 7.44%, collateralized by
         related equipment.                                  1,204        1,642

         Various equipment loans maturing through November
         2004, payable at an aggregate monthly payment of
         $152,000 including interest at rates
         ranging from 5.79% to 9.02%, collateralized by
         various equipment.                                  1,989        3,474
                                                          ---------    ---------

         Total other notes payable                        $  4,523     $  7,112
                                                          =========    =========

         Aggregate maturities of long-term debt are as follows:

           Fiscal Year
              2003                                                   $    7,158
              2004                                                        7,091
              2005                                                        5,274
              2006                                                        5,000
              2007                                                        5,000
              Thereafter                                                 13,380

Note 8 - Long-term Debt, Related Party
         As of November 2, 2002 and November 3, 2001, the Company was indebted
         for an investment in Wakefern in the amount of $1,315,000 and
         $2,212,000, respectively. The debt is non-interest bearing and payable
         in scheduled installments as follows:

          Fiscal Year
              2003                                                   $      629
              2004                                                          341
              2005                                                          182
              2006                                                          107
              2007                                                           56

                                      F-16

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 9 - Other Long-term Liabilities
                                                       November 2,  November 3,
                                                          2002         2001

            Deferred escalation rent                  $    4,422   $    4,652
            Minimum pension liability (Note 15)            5,119        3,399
            Postretirement benefit cost                    2,393        1,965
            Other                                            700          867
                                                      -----------  -----------
                                                      $   12,634   $   10,883
                                                      ===========  ===========

Note 10 -Long-term Leases
         Capital Leases
                                                       November 2, November 3,
                                                          2002        2001

            Real estate                               $    69,867   $  59,909
            Less accumulated amortization                  16,029      12,922
                                                      ------------  ----------
                                                      $    53,838   $  46,987
                                                      ============  ==========

         The following is a schedule by year of future minimum lease payments
         under capital leases, together with the present value of the net
         minimum lease payments, as of November 2, 2002:

          Fiscal Year

            2003                                                    $   7,311
            2004                                                        7,383
            2005                                                        7,496
            2006                                                        7,565
            2007                                                        7,320
            Thereafter                                                105,925
                                                                    ----------
            Total minimum lease payments                              143,000
            Less amount representing interest                          78,254
                                                                    ----------
            Present value of net minimum lease payments                64,746
            Less current maturities                                     1,140
                                                                    ----------
            Long-term maturities                                    $  63,606
                                                                    ==========

         Operating Leases
         The Company is obligated under operating leases for rent payments
         expiring at various dates through 2028. Certain leases provide for the
         payment of additional rentals based on certain escalation clauses and
         seven leases require a further rental payment based on a percentage of
         the stores' annual sales in excess of a stipulated minimum. Percentage
         rent expense was $156,000, $268,000 and $264,000 for the fiscal years
         2002, 2001 and 2000, respectively. Under the majority of the leases,
         the Company has the option to renew for additional terms at specified
         rentals.

                                      F-17

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 10 -Long-term Leases - (continued)
         Operating Leases - (continued)
         Total rental expense for all operating leases consists of:

                                         Fiscal 2002   Fiscal 2001  Fiscal 2000
                                         -----------   -----------  -----------

            Land and buildings           $  10,690    $   11,020    $  10,828
            Less subleases                  (3,147)       (3,089)      (2,641)
                                         ----------   -----------   ----------
                                         $   7,543    $    7,931    $   8,187
                                         ==========   ===========   ==========

         The minimum rental commitments under all noncancellable operating
         leases reduced by income from noncancellable subleases at November 2,
         2002, are as follows:

                                                       Income from
                                          Land and   Noncancellable Net Rental
             Fiscal Year                  Buildings     Subleases   Commitment

                2003                     $  11,202    $    2,415    $   8,787
                2004                        10,979         1,954        9,025
                2005                        10,887         1,482        9,405
                2006                         9,513         1,102        8,411
                2007                         8,618           704        7,914
                Thereafter                  78,280         1,139       77,141
                                         ----------   -----------   ----------
                                         $ 129,479    $    8,796    $ 120,683
                                         ==========   ===========   ==========

         The Company is presently leasing one of its supermarkets, a garden
         center and liquor store from a partnership in which the Chairman of the
         Board has a controlling interest, at an annual aggregate rental of
         $744,000, $736,000 and $719,000 for the fiscal years 2002, 2001 and
         2000, respectively.

Note 11 -Stock Option Plan

         On April 4, 2001, the Company's shareholders approved the Foodarama
         Supermarkets,  Inc. 2001 Stock Incentive Plan (the "2001  Plan").  The
         2001 Plan  replaces the Foodarama Supermarkets, Inc. 1995 Stock Option
         Plan under which no options were granted.

         The 2001 Plan provides for the issuance of up to 150,000 shares of
         Foodarama Supermarkets, Inc. Common Stock (subject to anti-dilution
         adjustment). On May 8, 2002 the Company's shareholders approved an
         amendment increasing the number of shares reserved for issuance under
         the 2001 Plan to 215,000 shares. The maximum number of shares of stock
         that may be covered by the awards granted to any one participant for
         the life of the 2001 Plan shall be equal to one-third of the shares
         reserved for issuance under the 2001 Plan (see Note 14).

                                      F-18

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 11 -Stock Option Plan - (continued)
         The types of awards that the Administrator may grant under the 2001
         Plan are stock options, stock appreciation rights, restricted and
         non-restricted stock awards, phantom stock, performance awards, other
         stock grants or any combination of these awards.

         On August 8, 2001 (the "Grant Date"), the Company granted 107,500
         shares as stock options and 11,000 shares in the form of Stock
         Performance Units (the "Units"). On September 12, 2002 (the "2002 Grant
         Date"), the Company granted an additional 3,800 shares in the form of
         Stock Performance Units. The Units represent deferred compensation
         based upon the increase or decrease in the market value of the
         Company's common stock during the grantee's employment

         The stock options consist of 50,000 shares granted to each of the
         Chairman of the Board and the President of the Company and vest
         quarterly from the grant date over a five-year period. The remaining
         7,500 shares were granted to certain officers and elected board members
         of the Company and vest, per individual, 250 shares at the Grant Date
         and 250 shares each year thereafter for the next two to three years
         (see Note 14.)

         The Units are payable in cash only, were granted to certain officers
         and senior management of the Company and vest, per individual, 250
         units at the Grant Date and 250 units thereafter, for the next one to
         three years. Units granted at the 2002 Grant Date were granted to
         certain management and vest, per individual, between 200 and 250 units
         at the 2002 Grant Date with the remaining over the next year.

         The term of the stock options and Units granted expire ten years after
         the grant date. The exercise price of the options and the market price
         of the Company's Common Stock at the date of grant were $19.60 and
         $36.50, respectively, for the options and Units granted on August 8,
         2001. The exercise price and market price for the Units granted
         September 12, 2002 was $25.00. At the Grant Date, the Company recorded
         deferred compensation expense and a related adjustment to capital in
         excess of par of $1,817,000 relating to the stock options granted. For
         the years ended November 2, 2002 and November 3, 2001, the Company
         realized compensation expense relating to the stock option plan of
         $372,000 and $121,000, respectively. For the years ended November 2,
         2002 and November 3, 2001, the Company realized compensation expense of
         $72,000 and $135,000, respectively, related to the Units granted, based
         on the market price of the Company's common stock of $27.00 at November
         2, 2002 and $40.75 at November 3, 2001, respectively.

                                      F-19

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 11 - Stock Option Plan - (continued) The following table summarizes
         stock option and Units activity:

                                      Options Outstanding
                       --------------------------------------------------
                           Stock Options       Stock Performance Units
                           -------------       -----------------------
                                                                         Stock
                                                                         Options
                                                                         and
                             Exercise Weighted                  Weighted Units
                               Price  Average          Exercise Average  Avail-
                               Per    Exercise           Price  Exercise ble for
                       Shares  Share   Price    Units  Per Share  Price  Grant
                       ------  -----   -----    -----  ---------  -----  ------
   Balance October
   28, 2000                 -      -       -         -       -        -      -
     Reserved                                                           150,000
     Granted          107,500 $19.60  $19.60    11,000  $19.60  $ 19.60(118,500)
     Exercised              -      -       -         -       -        -
                       ----------------------  ---------------------------------
   Outstanding        107,500  19.60   19.60    11,000   19.60    19.60  31,500
   November 3, 2001    ----------------------  ---------------------------------

   Additional shares
   reserved                                                              65,000
     Granted                -      -       -     3,800  25.00     25.00  (3,800)
     Exercised         (1,000)$19.60  $19.60    (8,000) 19.60     19.60
                       ----------------------  ---------------------------------

   Outstanding                                         $19.60 to
   November 2, 2002   106,500 $19.60   $19.60    6,800 $25.00    $22.62  92,700
                       ======================  =================================

   Options exercisable at:
     October 28, 2000       -      -        -        -      -         -
     November 3, 2001   2,000 $19.60   $19.60    4,750 $19.60    $19.60
     November 2, 2002  23,000 $19.60   $19.60    2,900 $19.60    $22.62
                                                         to
                                                       $25.00

         Following is a summary of the status of stock options outstanding at
         November 2, 2002:

                                    Outstanding Options      Exercisable Options
                                    ---------------------    -------------------
                                         Weighted
                                          Average   Weighted            Weighted
                                         Remaining  Average             Average
                      Exercise          Contractual Exercise           Exercise
                        Price   Number     Life     Price     Number    Price
                        -----   ------     ----     -----     ------    -----
                      $ 19.60   106,500 8.75 years $ 19.60    23,000 $   19.60

         Pro forma information regarding net income and earnings per share is
         required by Statement 123, and has been determined as if the Company
         had accounted for its employee stock options under the fair value
         method of that Statement. The fair value for these options was
         estimated at $22.93 on the date of grant using the Black-Scholes
         option-pricing model.

         The Black-Scholes option valuation model was developed for use in
         estimating the fair value of traded options, which have no vesting
         restrictions and are fully transferable. In addition, option valuation
         models require the input of highly subjective assumptions including the
         expected stock price volatility. Because the Company's employee stock
         options have characteristics significantly different from those of
         traded options, and because changes in the subjective input assumptions
         can materially affect the fair value estimate, in management's opinion,
         the existing models do not necessarily provide a reliable single
         measure of the fair value of its employee stock options.

                                      F-20

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)


Note 11 - Stock Option Plan - (continued)
The following weighted-average assumptions were used for the year ended
November 3, 2001:

                                  Risk-free interest rate          5.0%
                                  Expected volatility             40.2%
                                  Dividend yield                     0%
                                  Expected life                 5 years

         For purposes of pro forma disclosures, the estimated fair value of the
         options is amortized to expense over the options' vesting period. The
         Company's pro forma information follows:

                       Fiscal 2002        Fiscal 2001            Fiscal 2000
                       -----------        -----------            -----------
                          As       Pro       As      Pro         As        Pro
                          reported Forma    reported Forma      reported   forma
                       ----------- ---- ------------ ----     ----------- -----
        Net income       $3,240   $3,161    $3,938   $3,915    $2,382     $2,382
        Earnings per
        share
           Basic         $3.16    $ 3.09    $3.54    $3.52     $2.13      $ 2.13
           Diluted       $3.01    $ 2.94    $3.50    $3.48     $2.13      $ 2.13

Note 12 -Shareholders' Equity
         On May 11, 2001, the Board of Directors authorized the Company to
         repurchase, in either open market or private transactions, up to
         $3,000,000 of its common stock. During the fiscal year ended November
         2, 2002 the Board of Directors increased the authorized amount of
         common stock the Company could repurchase to $5,600,000. The Company
         repurchased 102,853 and 29,070 shares of its common stock at an
         aggregate cost of $4,523,670 and $1,067,927 for the years ended
         November 2, 2002 and November 3, 2001, respectively. During the fiscal
         year ended November 2, 2002 the Company issued 1,000 shares of common
         stock due to the exercise of stock options, in accordance with the
         provisions of its 2001 Stock Incentive Plan (see Note 11).

Note 13 -Income Taxes
         The income tax provisions consist of the following:

                                     Fiscal 2002    Fiscal 2001    Fiscal 2000
                                     -----------    -----------    -----------
            Federal
               Current                $  1,035       $  2,247       $  1,621
               Deferred                    688           (212)          (411)
            State and local
               Current                     181            518            541
               Deferred                    258             73           (163)
                                      ---------      ---------      ---------
                                      $  2,162       $  2,626       $  1,588
                                      =========      =========      =========

                                      F-21

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)
Note 13 -Income Taxes - (continued)

         The following tabulations reconcile the federal statutory tax rate to
         the effective rate:
                                           Fiscal 2002  Fiscal 2001 Fiscal 2000

            Tax provision at the statutory rate   34.0 %     34.0 %     34.0 %
            State and local income tax provision,
             net of federal income tax             5.9 %      5.9 %      5.9 %
            Goodwill amortization not deductible
             for tax purposes                       .9 %      1.0 %      1.3 %
            Tax credits                            (.3)%      (.2)%      (.7)%
            Adjustment to prior years tax
             provision                            (2.9)%       .5 %     (1.0)%
            Other                                  2.4 %     (1.2)%       .5 %
                                                 -------    -------    -------
            Actual tax provision                  40.0 %     40.0 %     40.0 %
                                                 =======    =======    =======

         Net deferred tax assets and liabilities consist of the following:

                                                     November 2,   November 3,
                                                        2002          2001
                                                        ----          ----
            Current deferred tax assets
               Deferred revenue and gains on
                sale/leaseback                            $  144         $230
               Allowances for uncollectible receivables      293          461
               Inventory capitalization                       11            9
               Closed store reserves                         279          430
               Vacation accrual                              669          433
               Accrued post-employment                       162          159
               Accrued post-retirement                       969          796
               Other                                          37           37
                                                     ------------  -----------
                                                           2,564        2,555
                                                     ------------  -----------
            Current deferred tax liabilities
               Prepaids                                     (326)        (280)
               Patronage dividend receivable              (2,603)      (2,278)
               Accelerated real estate taxes                (217)        (212)
               Prepaid pension                              (851)        (864)
                                                     ------------  -----------
                                                          (3,997)      (3,634)
                                                     ------------  -----------
            Current deferred tax liability             $  (1,433)  $   (1,079)
                                                     ============  ===========

            Noncurrent deferred tax assets
               Lease obligations                     $     4,348   $    3,558
               Minimum pension liability                   1,931        1,280
               Stock options and deferred compensation       207          104
               State loss carryforward                        85           72
                                                     ------------  -----------
                                                           6,571        5,014
               Valuation allowance                           (85)         (72)
                                                     ------------  -----------
                                                           6,486        4,942
                                                     ------------  -----------
                                      F-22

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 13 -   Income Taxes - (continued)

                                                     November 2,   November 3,
                                                        2002          2001
                                                        ----          ----
            Noncurrent deferred tax liabilities
               Depreciation                               (6,529)      (5,453)
               Pension obligations                          (750)        (341)
               Other                                        (349)        (349)
                                                     ------------  -----------
                                                          (7,628)      (6,143)
                                                     ------------  -----------
            Noncurrent deferred tax liability          $  (1,142)   $  (1,201)
                                                      ===========   ==========

         At November 2, 2002 and November 3, 2001, Minimum pension liability of
         $1,931,000 and $1,280,000, respectively, was charged against
         accumulated other comprehensive income (see Note 15).

         State loss carryforwards of approximately $860,000 expire through
         October 2011.

         During the fiscal year 2002, the Business Tax Reform Act was passed in
         the State of New Jersey. This legislation is effective for tax years
         beginning on or after January 1, 2002 (fiscal 2003). Taxpayers would
         pay an "Alternative Minimum Assessment" ("AMA"), which would be based
         upon either New Jersey Gross Receipts or New Jersey Gross Profits, if
         the AMA exceeds the tax based on net income. An election must be made
         in the first year to use either the Gross Profits or Gross Receipts
         method and must be kept in place for five years, at which time the
         election may be changed. The Company is evaluating the impact that this
         legislation will have on its results of operations, financial position
         and cash flow for fiscal 2003.

Note 14 -Commitments and Contingencies
         Legal Proceedings
         The Company is involved in various legal actions and claims arising in
         the ordinary course of business. Management believes that the outcome
         of any such litigation and claims will not have a material effect on
         the Company's financial position or results of operations.

         Shareholder Lawsuit
         On March 27, 2002, certain shareholders (the "Plaintiffs") filed a
         derivative action against the Company, as nominal defendant, and
         against all five members of the Board of Directors (together, the
         "Defendants"), in their capacities as directors and/or officers of the
         Company. The lawsuit alleges that the Defendants breached their
         fiduciary duties to the Company and its shareholders and sought to
         "enrich and entrench themselves at the shareholders' expense" through
         their previous recommendation, implementation and administration of the
         2001 Stock Incentive Plan (the "2001 Plan"), which was approved by the
         Company's shareholders on April 4, 2001, and by proposing an amendment
         to the 2001 Plan to increase the number of shares of Common Stock
         available for issuance by 65,000 shares and an amendment to the
         Company's amended and restated certificate of incorporation (the
         "Certificate of Incorporation") to create a classified Board of
         Directors consisting of five classes of directors, with only one class
         standing for election in any year for a five-year term. The
         shareholders of the Company approved the amendments to the 2001 Plan
         and the Certificate of Incorporation on May 8, 2002 (see Note 11).
                                      F-23

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 14 -Commitments and Contingencies - (continued)

         Shareholder Lawsuit - (continued)

         The parties to the litigation have tentatively agreed on a settlement
         proposal, subject to, among other things, approval by the Court and by
         the Company's director and officer liability insurance carrier.
         Pursuant to the terms of the proposed settlement, 1) the Company's
         five-year classified board will be eliminated and the Defendants will
         agree not to submit any proposal to the shareholders of the Company in
         connection with the implementation of a classified board for five years
         from the date of final approval of the settlement; 2) the 2001 Plan
         will be amended so that the maximum number of shares that can be
         awarded to any individual thereunder shall be 50,000; and 3) the 2001
         Plan will be amended to require that the exercise price of any options
         or other stock based compensation granted thereunder following the date
         of final approval of the settlement shall be equal to the closing
         market price of the Company's stock on the date of grant. In addition
         the Chairman and Chief Executive Officer of the Company, will return to
         the Company 10,000 stock options previously awarded to him under the
         2001 Plan. The Plaintiffs have also informed the Defendants that they
         intend to seek an award of attorney's fees, however, it is not possible
         to predict at this time the amount of fees that may be awarded.

         Commitments
         At November 2, 2002 the Company had capital commitments (net of
         landlord contributions) of $5,268,000 for leasehold improvements and
         $15,443,000 for equipment.

         Guarantees
         The Company remains contingently liable under leases assumed by third
         parties. As of November 2, 2002, the minimum annual rental under these
         leases amounted to approximately $1,697,000 expiring at various dates
         through 2011. The Company has not experienced and does not anticipate
         any material nonperformance by such third parties.

Note 15 -Retirement and Benefit Plans
         Defined Benefit Plans
         The Company sponsors two defined benefit pension plans covering
         administrative personnel and members of a union. Employees covered
         under the administrative pension plan earned benefits based upon a
         percentage of annual compensation and could make voluntary
         contributions to the plan. Employees covered under the union pension
         benefit plan earn benefits based on a fixed amount for each year of
         service. The Company's funding policy is to pay at least the minimum
         contribution required by the Employee Retirement Income Security Act of
         1974. The plans' assets consist primarily of publicly traded stocks and
         fixed income securities. As of November 2, 2002, and November 3, 2001,
         the plans' assets included common stock of the Company with a fair
         value of $1,004,000 and $1,516,000, respectively.

                                      F-24

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 15 -Retirement and Benefit Plans - (continued)
         Defined Benefit Plans - (continued)
         A summary of the plans' funded status and the amounts recognized in the
         consolidated balance sheets as of November 2, 2002 and November 3, 2001
         follows:
                                                       November 2,  November 3,
                                                          2002         2001
            Change in benefit obligation
               Benefit obligation - beginning of year  $  (7,178)   $  (5,772)
               Service cost                                  (94)         (63)
               Interest cost                                (511)        (454)
               Actuarial gain (loss)                        (625)      (1,517)
               Benefits paid                                 601          628
                                                       ----------  -----------
               Benefit obligation - end of year           (7,807)      (7,178)
                                                        ---------  -----------

            Change in plan assets
               Fair value of plan assets-beginning of year 5,913        6,174
               Actual return (loss) on plan assets          (995)         145
               Employer contributions                        675          402
               Benefits paid                                (601)        (628)
               Administrative expense                       (204)        (180)
                                                         --------  -----------
               Fair value of plan assets - end of year      4,788       5,913
                                                         --------  -----------

            Funded status                                 (3,019)      (1,265)

            Unrecognized prior service cost                  292          199

            Unrecognized net loss from past
             experience different from that assumed        4,827        3,205

            Unrecognized transition asset                      -           (5)

            Adjustment required to recognize
             minimum liability                            (5,119)      (3,399)
                                                     ------------  -----------

            Accrued pension cost                     $    (3,019)  $   (1,265)
                                                     ============  ===========
         Pension expense consists of the following:
                                                  Fiscal     Fiscal     Fiscal
                                                   2002        2001      2000

            Service cost - benefits earned
             during the period                 $      94   $     63   $    63
            Interest expense on benefit obligation   511        454       449
            Expected return on plan assets          (475)      (488)     (506)
            Settlement (gain) loss recognized        350          -         -
            Amortization of prior service costs       37         37        37
            Amortization of unrecognized net loss    197         67         8
            Amortization of unrecognized transition
             obligation (asset)                       (5)        (5)       (5)
                                               ----------  ---------  --------
            Total pension expense              $     709   $    128   $    46
                                               ==========  =========  ========
                                      F-25

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 15 -Retirement and Benefit Plans - (continued)

         Defined Benefit Plans - (continued)
         The discount rate used in determining the actuarial present value of
         the projected benefit obligation ranged from 7.00% to 7.25% at November
         2, 2002, and 7.25% to 8.00% at November 3, 2001. The expected long-term
         rate of return on plan assets was 8% at November 2, 2002 and November
         3, 2001.

         On September 30, 1997, the Company adopted an amendment to freeze all
         future benefit accruals relating to the plan covering administrative
         personnel. A curtailment gain of $55,000 was recorded related to this
         amendment.

         At November 2, 2002 and November 3, 2001, the accumulated benefit
         obligation exceeded the fair value of the plans' assets in both defined
         benefit plans. The provisions of Statement of Financial Accounting
         Standards No. 87 ("SFAS 87"), "Employers' Accounting for Pensions,"
         require recognition in the balance sheet of an additional minimum
         liability and related intangible asset for pension plans with
         accumulated benefits in excess of plan assets; any portion of such
         additional liability which is in excess of the plan's prior service
         cost is reflected as a direct charge to equity, net of related tax
         benefit. Accordingly, at November 2, 2002 and November 3, 2001, a
         liability of $5,119,000 and $3,399,000, respectively, was included in
         other long-term liabilities, an intangible asset equal to the prior
         service cost of $292,000 and $199,000, respectively, is included in
         other assets, and a charge of $2,896,000 and $1,920,000 net of deferred
         taxes of $1,931,000 and $1,280,000, respectively, is reflected as a
         minimum pension liability in shareholders' equity in the Consolidated
         Balance Sheet.

         Multi-Employer Plans
         Health, welfare, and retirement expense was approximately $13,240,000
         in fiscal 2002, $10,440,000 in fiscal 2001 and $9,155,000 in fiscal
         2000, under plans covering union employees. Such plans are administered
         through the unions involved. Under federal legislation regarding such
         pension plans, a company is required to continue funding its
         proportionate share of a plan's unfunded vested benefits in the event
         of withdrawal (as defined by the legislation) from a plan or plan
         termination. The Company participates in a number of these pension
         plans and may have a potential obligation as a participant. The
         information required to determine the total amount of this contingent
         obligation as well as the total amount of accumulated benefits and net
         assets of such plans, is not readily available. However, the Company
         has no present intention of withdrawing from any of these plans, nor
         has the Company been informed that there is any intention to terminate
         such plans.

         401(k)/Profit Sharing Plan
         The Company maintains an employee 401(k) Savings Plan (the "Plan") for
         all qualified non-union employees. Employees are eligible to
         participate in the Plan after completing one year of service (1,000
         hours) and attaining age 21. Employee contributions are discretionary
         to a maximum of 30% of compensation, to a maximum of $11,000. The
         Company matches 25% of the employees' contributions up to 6% of
         employee compensation. The Company has the right to make additional
         discretionary contributions, which are allocated to each eligible
         employee in proportion to their eligible compensation, which was 2% for
         fiscal years 2002, 2001 and 2000. 401(k) expense for the fiscal years
         2002, 2001 and 2000 was approximately $630,000, $607,000 and $507,000,
         respectively.
                                      F-26

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 16 -Other Postretirement and Postemployment Benefits

         Postretirement Benefits
         The Company will provide certain current officers and provides former
         officers with supplemental income payments and limited medical benefits
         during retirement. The Company recorded an estimate of deferred
         compensation payments to be made to the officers based on their
         anticipated period of active employment and the relevant actuarial
         assumptions at November 2, 2002 and November 3, 2001, respectively.

         A summary of the plan's funded status and the amounts recognized in the
         balance sheets as of November 2, 2002 and November 3, 2001, follows:

                                                        November 2, November 3,
                                                           2002        2001
            Change in benefit obligation
               Benefit obligation - beginning of year    $ (3,380)   $ (2,630)
               Service cost                                  (106)       (103)
               Interest cost                                 (238)       (214)
               Actuarial gain (loss)                         (979)       (480)
               Benefits paid                                   47          47
                                                         ---------   ---------
               Benefit obligation - end of year            (4,656)     (3,380)
                                                         ---------   ---------
            Change in plan assets
               Fair value of plan assets - beginning of year    -           -
               Actual return on plan assets                     -           -
               Employer contributions                          47          47
               Benefits paid                                  (47)        (47)
                                                         ---------   ---------
               Fair value of plan assets - end of year          -           -
                                                         ---------   ---------

            Funded status                                  (4,656)     (3,380)

            Unrecognized prior service cost                   113         137

            Unrecognized net loss from past experience
             different from that assumed                    2,150       1,278
                                                         ---------   ---------
            Accrued postretirement benefit cost        $   (2,393)   $ (1,965)
                                                         ==========  =========

                                      F-27


                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 16 -Other Postretirement and Postemployment Benefits - (continued)
         Postretirement Benefits - (continued)
         Net postretirement benefit expense consists of the following:

                                                 Fiscal      Fiscal     Fiscal
                                                  2002        2001       2000
                                            ----------- ----------- -----------
            Service cost - benefits earned
             during the period               $      106    $    103 $        89
            Interest expense on benefit obligation  238         214         174
            Expected return on plan assets            -           -           -
            Amortization of prior service costs      23          23           2
            Amortization of unrecognized net
             loss (gain)                            108          92         149
            Amortization of unrecognized
             transition obligation (asset)            -           -           -
                                              ---------   ---------   ---------

            Postretirement benefit expense   $      475    $    432    $    414
                                              =========   =========   =========

         The assumed discount rate used in determining the postretirement
         benefit obligation was 7.25% and 8% as of November 2, 2002 and November
         3, 2001, respectively. The weighted average rate of compensation
         increase was 5.50% at November 2, 2002 and 4% at November 3, 2001.

         Postemployment Benefits
         Under SFAS No. 112, the Company is required to accrue the expected cost
         of providing postemployment benefits, primarily short-term  disability
         payments, over the working careers of its employees.

         The accrued liability under SFAS No. 112 as of November 2, 2002 and
         November 3, 2001 was $399,000 and $393,000, respectively.

Note 17 -Earnings Per Share
                                               Fiscal      Fiscal     Fiscal
                                                2002        2001       2000
                                            ----------- ----------- -----------
         Basic EPS
            Net income available to common
            shareholders                     $  3,240    $  3,938    $  2,382
                                             =========   =========   ========

            Weighted average shares
             outstanding                    1,024,235   1,111,727   1,117,290
                                            ----------  ----------  ---------
            Per share amount                 $   3.16    $   3.54    $   2.13
                                            =========   =========   =========

         Effect of Dilutive Securities
            Stock Options - Incremental
             shares                            51,795      12,465           -
                                           ==========   =========   =========
         Dilutive EPS
            Weighted average shares outstanding
             including incremental shares   1,076,030   1,124,192   1,117,290
                                            ----------  ----------  ----------
            Per share amount                 $   3.01    $   3.50    $   2.13
                                            =========   =========   =========

                                      F-28

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 18 -Noncash Investing and Financing Activities
         During fiscal 2002 and 2001, the Company retired property and equipment
         with an original cost of $37,000 and $2,173,000 and accumulated
         depreciation of $33,000 and $2,109,000, respectively.

         During fiscal 2002, the Company reclassed $4,584,000 of construction in
         progress to leasehold improvements and equipment. During fiscal 2000,
         the Company reclassed $1,911,000 of construction in progress to
         leasehold improvements and equipment.

         At November 2, 2002, the Company had an additional minimum pension
         liability of $5,119,000, a related intangible asset of $292,000 and a
         direct charge to equity of $2,896,000, net of deferred taxes of
         $1,931,000. At November 3, 2001, the Company had an additional minimum
         pension liability of $3,399,000, a related intangible asset of $199,000
         and a direct charge to equity of $1,920,000, net of deferred taxes of
         $1,280,000.

         During fiscal 2001, the Company recorded an increase in capital in
         excess of par and deferred compensation expense of $1,817,000 in
         accordance with its stock option plan.

         During fiscal 2002 and 2000, capital lease obligations of $9,958,000
         and $21,691,000, were incurred when the Company entered into leases for
         one and two new stores, respectively.

         During fiscal 2002, $10,653,000 of outstanding Capital Expenditure
         loans were combined into the Company's Term loan.

         During fiscal 2000, the required investment in Wakefern increased from
         a maximum per store of $500,000 to $550,000. This resulted in an
         increase of $1,039,000 in the investment and obligations due Wakefern.

         The Company was required to make an additional investment in Wakefern
         of $500,000 and $103,000 for a new store and a replacement store,
         respectively, which opened during fiscal 2000. In conjunction with the
         investment, liabilities were assumed for the same amount.

         During fiscal 2000, the Company was required to invest an additional
         $124,000 in Insure-Rite, Ltd. In conjunction with the investment,
         liabilities were assumed for the same amount.

         During fiscal 2000 the Company financed equipment purchased for
         $1,527,000.

                                      F-29

                 FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            (Tabular dollars in thousands, except per share amounts)

Note 19 -Unaudited Summarized Consolidated Quarterly Information
         Summarized quarterly information for the years ended November 2, 2002
         and November 3, 2001 was as follows:

                                              Thirteen Weeks Ended
                                      ---------------------------------------
                                    February 2, May 4,    August 3, November 2,
                                       2002      2002       2002       2002
                                       ----      ----       ----       ----

            Sales                   $252,027   $235,236  $241,544   $234,804
            Gross profit              63,392     58,883    62,289     60,527
            Net income                 1,267        183     1,203        587
            Earnings available per share:
               Basic                    1.17        .18      1.22        .59
               Diluted                  1.12        .17      1.15        .57


                                                                    Fourteen
                                                                       Weeks
                                           Thirteen Weeks Ended        Ended
                                   ------------------------------      -----
                                   January 27, April 28,  July 28,  November 3,
                                       2001      2001       2001       2001
                                       ----      ----       ----       ----

            Sales                   $238,594   $223,926  $233,052   $249,729
            Gross profit              57,829     55,625    58,356     62,399
            Net income                 1,168        963     1,044        763
            Earnings available per share:
               Basic                    1.05        .86       .94        .69
               Diluted                  1.05        .86       .94        .66

         Dilutive earnings per share amounts by quarter do not equal dilutive
         earnings per share amounts for the year ended November 3, 2001 due to
         the stock option plan being adopted in the fourth quarter.

Note 20 -Subsequent Events
         On December 4, 2002, the Company opened a new store in Woodbridge, New
         Jersey. This store replaced an existing store at the same location. On
         January 8, 2003 the Company opened a new store in Ewing, New Jersey.
         Capital lease obligations of $20,068,000 were incurred relating to
         these new stores, as well as an increase in property under capitalized
         leases in the same amount.

                                      F-30



                                                                     Schedule II

                  FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
                        Valuation and Qualifying Accounts
                Fiscal Years Ended November 2, 2002, November 3,
                            2001 and October 28, 2000
                                 (In thousands)



                                                Additions
                                           -------------------
                                  Balance  Charge to Charge to           Balance
                               at beginning costs and  other             at end
   Description                  of year    expenses  accounts Deductions of year
   -----------                   -------   --------  -------- ---------  -------

   Fiscal year ended November 2,
    2002
     Allowance for doubtful
     accounts (deducted
     from receivables and other
     current assets)             $  873    $  266    $    -    $ 455 (1)   $ 684
                                 =======   =======   ======    =======    ======
   Fiscal year ended November 3,
    2001
     Allowance for doubtful
     accounts (deducted
     from receivables and other
     current assets)            $   543    $  400    $    -    $  70 (1)   $ 873
                                ========   =======   ========  ========    =====

   Fiscal year ended October 28,
    2000
     Allowance for doubtful
     accounts (deducted
     from receivables and other
     current assets)            $   506    $  143    $    -    $ 106 (1)   $ 543
                                ========   =======   ========  =======  ========



   (1) Accounts deemed to be uncollectible.




                                      S-1



                                                           Schedule X

c.      Exhibits

3.    Articles of Incorporation and By-Laws

         *i.            Restated Certificate of Incorporation of Registrant
                        filed with the Secretary of State of the State of New
                        Jersey on May 15, 1970.

        *ii.            Certificate of Merger filed with the Secretary of
                        State of the State of New Jersey on May 15, 1970.

       *iii.            Certificate of Merger filed with the Secretary of
                        State of the State of New Jersey on March 14, 1977.

        *iv.            Certificate of Merger filed with the Secretary of
                        State of the State of New Jersey on June 23, 1978.

         *v.            Certificate of Amendment to Restated Certificate of
                        Incorporation filed with the Secretary of State of
                        the State of New Jersey on May 12, 1987.

       **vi.            Certificate of Amendment to Restated Certificate of
                        Incorporation filed with the Secretary of State of
                        the State of New Jersey on February 16, 1993.

    ****vii.            Amendment to the Certificate of Incorporation of the
                        Registrant dated April 4, 1996.

      *viii.            By-Laws of Registrant.

        *ix.            Amendments to By-Laws of Registrant adopted
                        September 14, 1983.

          x.            Amendment to By-Laws of Registrant adopted March
                        15, 1991 is incorporated herein by reference to the
                        Registrant's Annual Report on Form 10-K for the year
                        ended November 2, 1991 filed with the Securities and
                        Exchange Commission on February 18, 1992.

         xi.            Certificate of Amendment to the Amended and Restated
                        Certificate of Incorporation filed with the Department
                        of the Treasury of the State of New Jersey on May 14,
                        2002.


*    Each of these Exhibits is incorporated herein by reference to
     the Registrant's Annual Report on Form 10-K for the year ended
     October 29, 1988 filed with the Securities and Exchange
     Commission on February 13, 1989.

**   Each of these Exhibits is incorporated herein by reference to
     the Registrant's Annual Report on Form 10-K for the year ended
     October 31, 1992 filed with the Securities and Exchange
     Commission on February 19, 1993.



                                            E-1

10.            Material Contracts.


         i.       The Agreement dated September 18, 1987 entered into
                  by Wakefern Food Corporation and the Registrant is
                  incorporated herein by reference to Exhibit A to the
                  Registrant's Form 8-K filed with the Securities and
                  Exchange Commission on November 19, 1987.

     ***ii.       Certificate of Incorporation of Wakefern Food Corporation
                  together with amendments thereto and certificates of merger.

    ***iii.       By-Laws of Wakefern Food Corporation.

     ***iv.       Form of Deferred Compensation Agreement, between the
                  Registrant and certain of its key employees.

         v.       Registrant's 1987 Incentive Stock Option Plan is incorporated
                  herein by reference to Exhibit 4 (a) to the Registrant's Form
                  S-8 filed with the Securities and Exchange Commission on
                  May 26, 1989.

        vi.       Agreement, dated September 20, 1993, between the Registrant,
                  ShopRite of Malverne, Inc. and The Grand Union Company is
                  incorporated herein by reference to the Registrant's Annual
                  Report on Form 10-K for the year ended October 30, 1993,
                  filed with the Securities and Exchange Commission on
                  February 24, 1994.

       vii.       Revolving Credit and Term Loan Agreement, dated as of
                  February 15, 1995 between the Registrant and NatWest Bank as
                  agent for a group of banks is incorporated herein by reference
                  to the Registrant's Form 8-K filed with the Securities and
                  Exchange Commission on July 10, 1995.

      viii.       Asset Purchase Agreement dated April 20, 1995 and Amendment
                  No. 1 to the Agreement dated May 24, 1995 between the
                  Registrant and Wakefern Food Corporation is incorporated
                  herein by reference to the Registrant's Form 8-K filed with
                  the Securities and Exchange Commission on July 27, 1995.

        ix.       Amendment of Revolving Credit and Term Loan Agreement, dated
                  as of January 25, 1996, between the Registrant and each of
                  the banks which are signatory thereto is incorporated herein
                  by reference to the Registrant's Form 10-Q for the quarterly
                  period ended January 27, 1996, filed with the Securities and
                  Exchange Commission on March 12, 1996.

     ****x.       Agreement, dated as of March 29, 1996, between the Registrant
                  and Wakefern Food Corporation.

--------------------------------------------------------------------------------
   ***      Each of these Exhibits is incorporated herein by reference to the
            Registrant's Annual Report on Form 10-K for the year ended October
            28, 1989 filed with the Securities and Exchange Commission on
            February 9, 1990.



                                            E-2

    ****xi.       Amendment of Revolving Credit and Term Loan Agreement, dated
                  as of May 10, 1996, between the Registrant and each of the
                  Banks which are signatory thereto.

       xii.       Waiver and Amendment of Revolving Credit and Term Loan
                  Agreement, dated as of July 26, 1996, between the Registrant
                  and each of the Banks which are signatory thereto is
                  incorporated herein by reference to the Registrant's Form 10-Q
                  for the quarterly period ended July 27, 1996, filed with the
                  Securities and Exchange Commission on September 10, 1996.

      xiii.       Amended and Restated Revolving Credit and Term Loan
                  Agreement, dated as of May 2, 1997, between the Registrant
                  and the Financial Institution which are signatory thereto is
                  incorporated herein by reference to the Registrant's Form
                  10-Q for the quarterly period ended May 3, 1997, filed with
                  the Securities and Exchange Commission on June 16, 1997.

  *****xiv.       First Amendment to Amended and Restated Revolving Credit and
                  Term Loan Agreement, dated October 28, 1997, between the
                  Registrant and the Financial Institution which are signatory
                  thereto.


   *****xv.       Consent and Second Amendment to Amended and Restated Revolving
                  Credit and Term Loan Agreement and other loan documents, dated
                  November 14, 1997, between the Registrant and the Financial
                  Institution which are signatory thereto.

  *****xvi.       Third Amendment to Amended and Restated Revolving Credit and
                  Term Loan Agreement, dated January 15, 1998, between the
                  Registrant and the Financial Institution which are signatory
                  thereto.

      xvii.       Amendment to the Amended and Restated Revolving Credit and
                  Term Loan Agreement, dated March 11, 1999, between the
                  Registrant and the Financial Institution which are signatory
                  thereto, is incorporated herein by reference to the
                  Registrant's Form 10-Q for the quarterly period ended May 1,
                  1999, filed with the Securities and Exchange Commission on
                  June 11, 1999.

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

     ****         Incorporated herein by reference to the Registrant's Form
                  10-Q for the quarterly period ended April 27, 1996, filed
                  with the Securities and Exchange Commission on June 10, 1996.

     *****        Incorporated herein by reference to the Registrant's Form
                  10-K for the year ended November 1, 1997 filed with the
                  Securities and Exchange Commission on January 29, 1998.


                                            E-3




   xviii.         Second Amended and Restated Revolving Credit and Term Loan
                  Agreement, dated as of January 7, 2000 between the Registrant
                  and each of the Financial Institutions which are signatory
                  thereto, is incorporated herein by reference to the
                  Registrant's Form 10-K for the year ended October 30, 1999
                  filed with the Securities and Exchange Commission on January
                  27, 2000.

     xix.         Restatement of Supplemental Executive Retirement Plan, dated
                  as of January 1, 1998, is incorporated herein by reference to
                  the Registrant's Form 10-Q for the quarterly  period ended
                  January 24, 2000, filed with the Securities and Exchange
                  Commission on March 9, 2000.

      xx.         Registrant's 2001 Stock Incentive Plan is incorporated
                  herein by reference to Appendix B to the Registrant's Proxy
                  Statement filed with the Securities and Exchange Commission on
                  February 26, 2001.

     xxi.         Amendment No. 1 to Second Amended and Restated Revolving
                  Credit and Term Loan Agreement, dated as of May 11, 2001,
                  between the Registrant and each of the Financial Institutions
                  which are signatory thereto is incorporated herein by
                  reference to the Registrant's Form 10-Q for the quarterly
                  period ended April 28, 2001, filed with the Securities and
                  Exchange Commission on June 8, 2001.

     xxii.        Amendment No. 2 to Second Amended and Restated Revolving
                  Credit and Term Loan Agreement, dated as of August 7, 2001
                  between the Registrant and each of the Financial Institutions
                  which are signatory thereto is incorporated herein by
                  reference to the Registrant's Form 10-Q for the quarterly
                  period ended July 28, 2001, filed with the Securities and
                  Exchange Commission on September 10, 2001.

******xxiii.      Letter Amendment to Second Amended and Restated Revolving
                  Credit and Term Loan Agreement, dated as of January 30, 2002
                  between the Registrant and each of the Financial Institutions
                  which are signatory thereto.

******xxiv.       Letter Amendment to Second Amended and Restated Revolving
                  Credit and Term Loan Agreement, dated as of January 30,   2002
                  between the Registrant and each of the Financial Institutions
                  which are signatory thereto.

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


******            Incorporated herein by reference to the Registrant's Form 10-Q
                  for the quarterly period ended February 2, 2002, filed with
                  the Securities and Exchange Commission on March 15, 2002.



                                         E-4


 xxv.             Letter Amendment to Second Amended and Restated Revolving
                  Credit and Term Loan Agreement, dated as of March 29, 2002
                  between the Registrant and each of the Financial Institutions
                  which are signatory thereto is incorporated herein by
                  reference to the Registrant's Form 8-K filed with the
                  Securities and Exchange Commission on April 5, 2002.

xxvi.             Third Amended and Restated Revolving Credit and Term Loan
                  Agreement, dated as of September 26, 2002 between the
                  Registrant and each of the Financial Institutions which are
                  signatory thereto, is incorporated herein by reference to the
                  Registrant's Form 8-K filed with the Securities and Exchange
                  Commission on September 30, 2002.

xxvii.            Amendment No. 1 to Third Amended and Restated Revolving Credit
                  and Term Loan Agreement, dated as of December 17, 2002 between
                  the Registrant and each of the Financial Institutions which
                  are signatory thereto.

xxviii.           Consent, Waiver and Amendment No. 2 to Third Amended and
                  Restated Revolving Credit and Term Loan Agreement, dated as of
                  January 21, 2003 between the Registrant and each of the
                  Financial Institutions which are signatory thereto.






























                                      E-5





Exhibit 21

                             LIST OF SUBSIDIARIES
                        OF FOODARAMA SUPERMARKETS, INC.





Name of Subsidiary                                          State of
------------------                                          Incorporation
                                                            -------------
ShopRite of Malverne, Inc.                                  New York

New Linden Price Rite, Inc.                                 New Jersey

ShopRite of Reading, Inc.                                   Pennsylvania































                                            E-6


Exhibit 3.1


                                  CERTIFICATE OF AMENDMENT
                                TO THE AMENDED AND RESTATED
                              CERTIFICATE OF INCORPORATION OF
                                FOODARAMA SUPERMARKETS, INC.

To:   Department of the Treasury
      State of New Jersey

     This  is  to  certify  that  the  Amended  and  Restated   Certificate   of
Incorporation  of  Foodarama  Supermarkets,  Inc.  (herein  referred  to as  the
"Corporation"), which was filed and recorded with the Department of the Treasury
of the State of New  Jersey on May 13,  1970,  as  amended  by  Certificates  of
Amendment  filed on October 17, 1986,  May 12, 1987,  February 16, 1993, and May
20, 1996, is hereby  further  amended,  pursuant to the provisions of N.J. Stat.
Ann.  $14A 9-2 and $14A  9-2 of the New  Jersey  Business  Corporation  Act,  as
follows:

ARTICLE I  NAME OF CORPORATION.
      The name of the Corporation is Foodarama Supermarkets, Inc.

     ARTICLE II DATE OF ADOPTION AND TEXT OF AMENDMENTS. The following amendment
(the  "Amendment") to the Amended and Restated  Certificate of  Incorporation of
the Corporation,  as amended, was adopted by the shareholders of the Corporation
(the "Shareholders") by a vote of two-thirds of the votes cast by the holders of
shares  entitled  to  vote  thereon  at  the  Corporation's  Annual  Meeting  of
Shareholders, which was held on May 8, 2002.

     Article  Sixth of the  Corporation's  Amended and Restated  Certificate  of
Incorporation is amended to read in its entirety as follows:

     The number of directors of the  Corporation  shall be the number,  not
     less than three (3) nor more than eleven  (11),  fixed from time to time by
     the Board of Directors.  The Board of Directors  shall be divided into five
     classes,  designated Class I, Class II, Class III, Class IV and Class V, as
     nearly equal in number as possible, and the term of office of  directors of
     one class shall expire at each annual meeting of  shareholders,  and in
     all cases as to each  director  until his successor  shall be elected and
     shall  qualify  (except in cases  where no successor  is  elected due to a
     reduction  in the  size of the Board of Directors) or until his earlier
     resignation,  removal from office, death or incapacity. The initial term of
     office of directors of Class I shall expire at the  annual  meeting of
     shareholders  in 2003;  that of Class II shall expire at the annual
     meeting of  shareholders  in 2004;  that of Class III shall expire at
     the annual meeting of  shareholders  in 2005; that of Class IV shall
     expire at the annual meeting of  shareholders in 2006; and that of Class V
     shall expire at the annual  meeting in 2007; and in all cases as to
     each director  until his  successor  shall be  elected  and shall  qualify
     (except in cases where no  successor  is elected due to a reduction  in the
     size of the Board of Directors) or until his earlier  resignation,  removal
     from office,  death or incapacity.  At each annual meeting of  shareholders
     after 2002, the number of directors equal to the number of directors of the
     class whose term  expires at the time of such  meeting  (or,  if less,  the
     number of directors properly nominated and qualified for election) shall be
     elected by a plurality  vote of the  shareholders  to hold office until the
     fifth  succeeding  annual meeting of shareholders  after their election and
     until their  successors are elected and qualify.  Additional  directorships
     resulting from an increase in the number of directors  shall be apportioned

     among the classes as equally as possible.  Vacancies,  including  vacancies
     created  by an  increase  in the size of the Board of  Directors,  shall be
     filled by the  affirmative  vote of a majority  of the  remaining  Board of
     Directors,  though  less than a quorum,  but any such  director  so elected
     shall hold office until the next succeeding annual meeting of shareholders.
     At such annual meeting, such director or a successor to such director shall
     be elected and qualified in the class to which such director is assigned to
     hold office for the term or remainder of the term of such class.  Directors
     shall  be  assigned  to each  class  in  accordance  with a  resolution  or
     resolutions adopted by the Board of Directors. Any election or removal of a
     director by the Corporation's shareholders shall be undertaken by a vote of
     the  shareholders at a meeting thereof and shall not be effected by written
     consent. The directors need not be residents of the State of New Jersey and
     the directors need not be shareholders of the Corporation.  This subsection
     (a) of this Article Sixth shall not be amended,  altered or repealed except
     by the  affirmative  vote of the  holders  of not less than  sixty-six  and
     two-thirds   percent   (66-2/3%)  of  the  combined  voting  power  of  the
     then-outstanding  shares  of  stock  of the  Corporation  entitled  to vote
     generally in the election of directors, voting together as a single class.

ARTICLE III APPROVAL OF AMENDMENTS.

          The Corporation has Nine Hundred Eighty-Five  Thousand,  Three Hundred
     and Sixty Seven (985,367) shares of Common Stock  outstanding,  the holders
     of  which  were  entitled  to  vote  to  approve  the  Amendment.   At  the
     Corporation's   Annual  Meeting  of   Shareholders  on  May  8,  2002,  the
     Shareholders  approved the Amendments with Six Hundred Thirty-Two Thousand,
     Three Hundred Sixteen  (632,316)  shares of Common Stock voting in favor of
     the Amendment. The number of shares of the Corporation's Common Stock voted
     against the Amendment was 314,745.

ARTICLE IV EFFECTIVE DATE OF AMENDMENTS.

          The effective date of this  Certificate of Amendment shall be the date
     on it is  filed by or on  behalf  of the New  Jersey  Secretary  of  State.
                                                FOODARAMA SUPERMARKETS, INC.


                                    By:    /s/ Richard J. Saker
                                           --------------------
                                  Name: Richard J. Saker
                                 Title: President

Date:   May 13, 2002



Exhibit 10.1


                                 GMAC BUSINESS CREDIT, LLC
                                461 Fifth Avenue, 21st Floor
                                 New York, New York 100171


                                                      December 17, 2002

Mr. Michael Shapiro
Foodarama Supermarkets, Inc.
922 Highway 33
Building 6, Suite 1
Freehold, NJ 07728

                           Re: Amendment No. 1 to Loan Agreement

Dear Mr. Shapiro:


       Reference is made to the Third Amended and Restated  Revolving  Credit
and Term Loan  Agreement  (as amended,  supplemented,  restated or modified
from time to time, the "Loan  Agreement") dated as of the date hereof among
Foodarama Supermarkets, Inc. (the "Parent") and New Linden Price Rite, Inc.
("New  Linden"  and,  together  with  the  Parent,  each a  "Borrower"  and
collectively, the "Borrowers"), the financial institutions named therein or
which hereafter become a party thereto  (collectively,  "Lenders") and GMAC
Business  Credit,  LLC ("GMACBC") as agent for the Lenders  (GMACBC in such
capacity, "Agent"). All capitalized terms used herein which are not defined
shall have the meanings given to them in the Loan Agreement.


       By their  signatures  below,  the parties to the Loan Agreement hereby
agree that  Sections  7.03(i)(x)(2)(e)  and (f) of the Loan  Agreement  are
amended in their entirety to provide as follows:

"(e) $7,000,000 in new Adjusted Indebtedness incurred during Fiscal Year 2003;
(f) $15,000,000 in new Adjusted Indebtedness incurred during Fiscal Year 2004;".


                     [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




Other than as amended hereby, the Loan Agreement remains in full force and
effect in accordance with its terms.

                                    Very truly yours,

                                    GMAC BUSINESS CREDIT, LLC, as Agent

                                    By:_________________________
                                    Name:  Thomas Maiale
                                    Title:  Vice President

Agreed to by:

NEW LINDEN PRICE RITE, INC.,
as Borrower and as Guarantor

By:_______________________________
Name:
Title:


FOODARAMA SUPERMARKETS, INC., as
Borrower and as Guarantor

By:_____________________________
Name:
Title:


SHOP RITE OF READING, INC., as Guarantor

By:_____________________________
Name:
Title:


SHOP RITE OF MALVERNE, INC., as Guarantor

By:_____________________________
Name:
Title:



Exhibit 10.2


                                    [GMACBC Letterhead]



                                    January 21, 2003



Mr. Michael Shapiro
Foodarama Supermarkets, Inc.
922 Highway 33
Building 6, Suite 1
Freehold, NJ 07728

            Re:   Consent, Waiver and Amendment No. 2 to Loan Agreement

Dear Mr. Shapiro:

      Reference  is made to the Third  Amended and  Restated  Revolving Credit
and Term Loan Agreement (as amended, supplemented,  restated or modified  from
time to time, the  "Loan  Agreement")  dated as of September 26, 2002 among
Foodarama  Supermarkets,  Inc. (the "Parent") and New Linden Price Rite,  Inc.
("New Linden" and,  together with the Parent,  each a "Borrower" and
collectively,  the  "Borrowers"),  the financial institutions named therein or
which hereafter become a party  thereto  (collectively,  "Lenders")  and  GMAC
Business  Credit,  LLC  ("GMACBC")  as  agent  for  the  Lenders  (GMACBC  in
such  capacity, "Agent").  All  capitalized  terms used  herein  which are not
defined shall have the meanings given to them in the Loan Agreement.

      Borrowers have advised us, pursuant to the correspondence that is attached
hereto as Exhibit A (the "Correspondence"), that (I) Parent's Local 1360
Employees' Retirement Plan has been amended and (II) certain Events of Default
have occurred and are continuing under the Loan Agreement (collectively, the
"Designated Defaults"), including:

            (a)   the Events of Default under Section VIII(a) of the Loan
Agreement resulting from the breach of the representations and warranties set
forth in Section 4.10(vi) of the Loan Agreement due to the fact that, during the
period(s) ended November 2, 2002, the value of all accrued benefits under all
Pension Plans (other than Multiemployer Plans) exceeded the aggregate fair
market value of the assets of such Plans by more than $3,000,000; and

            (b)   the Events of Default under Sections VIII(a) and (d)(i) of the
Loan Agreement resulting from the breach of the representations and warranties
set forth in Section 4.06 of the Loan Agreement and the covenants set forth in
Section 6.06 of the Loan Agreement, respectively, due to the litigation by
Symbol Technologies, Inc., a manufacturer of bar code and/or machine vision
equipment ("Symbol"), against Lemelson Medical, Educational & Research
Foundation Limited Partnership (the "Lemelson Foundation") in which Symbol is
seeking to invalidate certain patents held by the Lemelson Foundation, as
further described in the Correspondence.

      Agent and Lenders hereby

            (x) consent to the amendment of Parent's Local 1360 Employees'
Retirement Plan as described in the Correspondence, provided that such amendment
shall have been effectuated pursuant to documentation that is satisfactory in
form and substance to Agent (such documentation, the "ERISA Amendment");


            (y) waive the following:

                  (i) any Event of Default that may have occurred and be
      continuing under the Loan Agreement as a result of the ERISA Amendment;
      and

                  (ii) the Designated Defaults, provided that the Designated
      Defaults described in clause (a) above are waived solely to the extent
      that, during the period(s) ended November 2, 2002, the value of all
      accrued benefits under all Pension Plans (other than Multiemployer Plans)
      exceeded the aggregate fair market value of the assets of such Plans by no
      more than $3,020,000; and

            (z) agree that the Loan Agreement is hereby amended as follows:

                  (i) Section 4.06 of the Loan Agreement is amended by deleting
      the reference therein to "Schedule 4.04(a)" and replacing it with
      "Schedule 4.06(a)"; and

                  (ii) Schedule 4.06(a) to the Loan Agreement is amended in its
      entirety and replaced with Schedule 4.06(a) hereto.





                     [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




      Except as expressly  provided herein, this letter agreement  shall not
constitute  an amendment to, or waiver of,  any  provision  of the  Loan
Agreement or any other documents,  instruments or agreements  executed and/or
delivered  thereunder or in connection therewith, and the Loan Agreement and all
other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby
ratified and confirmed.

                                    Very truly yours,

                                    GMAC BUSINESS CREDIT, LLC, as Lender and
                                    Agent

                                    By:_________________________
                                    Name:  Thomas Maiale
                                    Title:  Vice President


                                    THE BANK OF NEW YORK, as Lender

                                    By:_________________________
                                    Name:
                                    Title:


                                    CITIZENS BUSINESS CREDIT COMPANY, as Lender

                                    By:_________________________
                                    Name:
                                    Title:


                                    NATIONAL CONSUMER COOPERATIVE BANK, d/b/a
                                    National
                                    Cooperative Bank, as Lender

                                    By:_________________________
                                    Name:
                                    Title:



                        [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]




               [CONTINUED SIGNATURES TO CONSENT, WAIVER AND AMENDMENT NO. 2]



Agreed to by:

NEW LINDEN PRICE RITE, INC.,
as Borrower and as Guarantor

By:_______________________________
Name:
Title:


FOODARAMA SUPERMARKETS, INC., as
Borrower and as Guarantor

By:_____________________________
Name:
Title:


SHOP RITE OF READING, INC., as Guarantor

By:_____________________________
Name:
Title:


SHOP RITE OF MALVERNE, INC., as Guarantor

By:_____________________________
Name:
Title:





                                         Exhibit A


                                       Correspondence

Mr. Thomas Maiale                                           January 7, 2003
GMAC Business Credit, LLP
461 Fifth Avenue, 21st Floor
New York, N.Y. 10017


Dear Tom:

As we move ahead to finalize our financial statements for fiscal 2002, there are
a few matters relating to the Loan Agreement that require attention.
Specifically, we have determined that the aggregate present value of all accrued
benefits under all Foodarama Pension Plans exceeds the aggregate fair market
value of the assets of such plans by $3,019,000, $19,000 more than permitted
under the Loan Agreement. In addition, Foodarama is obliged to make certain
amendments to the Local 1360 Pension Plan in order to conform with changes in
the law. Finally, we received a letter from Eran Zur, a Nevada attorney,
concerning certain claims of patent infringement that may be asserted by the
Lemelson Foundation against the Company.

The underfunding of the Pension Plan relates to Section 4.10(vi). With respect
to the amendment to the Pension Plan, the provisions of the Loan Agreement that
deal with ERISA and employee benefit plans are Sections 4.10, 6.07 and 7.14. The
amendments to the 1360 plan were made to conform with the Family and Medical
Leave Act of 1993, the Unemployment Compensation Amendments of 1992, the
Employee Retirement Income Security Act of 1974 and Sections 401(a) and 501(a)
of the Internal Revenue Code of 1986. The Lemelson claims relate to Section
4.06.

Inasmuch as these events necessitate a waiver of events of default, please
contact me so that we can discuss these issues as well as processing the waiver.
Thank you for your attention to this matter.


                                    Very truly yours,
                                    FOODARAMA SUPERMARKETS, INC.


MS:md                               Michael Shapiro
                                    Senior Vice President
c:    J. Aiello

See attached




                                      Schedule 4.06(a)


                                         Litigation

1.  Foodarama v. Hilltop  Supermarkets,  Inc.  and Franklin  Center  Associates.
Docket No.  MID-L-3156-01.  Foodarama has been named in an action  regarding its
Franklin  Township  store.  On April 26, 2002,  summary  judgment was entered in
favor of Foodarama. Plaintiff, Hilltop Supermarkets, Inc. has filed a motion for
reconsideration,  and has hired a new attorney.  The motion for  reconsideration
was denied and Hilltop Supermarkets, Inc. has appealed the court's decision. The
appeal is still  pending  with  Foodarama's  brief due on February 3, 2003.  The
claim against Foodarama was for  approximately  $450,000 and the court dismissed
the complaint.  The court did,  however,  award Hilltop  Supermarkets,  Inc. the
additional  rent under the lease for the months of  September  2000 and  October
2000,  because a formal  extension  of the lease  was  negotiated  for those two
months over one year prior to the lapsing of the lease term. Further,  the court
found that the assignment  pursuant to which  Foodarama  took  possession of the
lease allowed for extensions of the lease, and therefore the extension obligated
Foodarama to pay the  additional  rent ($36,000) to Hilltop  Supermarkets,  Inc.
Foodarama  successfully  cross-moved to have this liability  shifted to Franklin
Center  Associates.  By way of  background,  Foodarama took an assignment of the
lease at the Franklin  Township store from the Plaintiff  Hilltop  Supermarkets,
Inc.,  and  through a variety of  agreements  was  required  to pay a fee to the
Plaintiff,  Hilltop  Supermarkets,  Inc.,  above and beyond the rent paid to the
landlord  Franklin  Center  Associates.  Foodarama  did not renew the lease with
Franklin Center Associates as it was contemplated that it would open a new store
in North  Brunswick at a different  site.  Although  Foodarama did not renew the
lease it retained possession of the premises,  and paid rent on a month-to-month
basis as a month-to-month  tenant to the landlord,  Franklin Center  Associates.
The  Plaintiff's  claim  against  Franklin  Center  Associates  was  that it was
required and obligated to provide the  Plaintiff  with notice that the lease was
not renewed and allow an additional  thirty (30) days for the Plaintiff to renew
the lease  itself and  exercise  the options  under the lease.  Franklin  Center
Associates was granted summary judgment motion on this issue.

2. Foodarama v.  Unclaimed  Freight,  Inc.  Docket No.  MON-L-986-02.  Unclaimed
Freight  ("Unclaimed  Freight") was a sublessee of property  leased by Foodarama
and located in Reading, Pennsylvania.  Foodarama had an ongoing dispute with the
landlord  regarding  Foodarama's  obligation  to make repairs to the roof of the
leased  premises  and  other  repairs  required  upon  surrender  of the  leased
premises.   Foodarama  and  the  landlord   agreed  to  a  cost  of  repairs  of
approximately $107,000. Foodarama believes it has a right to recover this amount
from the sub-tenant,  Unclaimed Freight. Foodarama's outside counsel has filed a
lawsuit on behalf of Foodarama  against  Unclaimed Freight for amounts allegedly
due upon the  termination  of  Foodarama's  lease  with  the  landlord,  and its
sublease  to  Unclaimed  Freight.  The amount in  controversy  is  approximately
$107,000.  Unclaimed  Freight has refused to pay the amount due which  Foodarama
believes is payable  pursuant to the terms of the  sublease and the prime lease.
The suit alleges breach of  lease/contract.  The sublease came to be assigned to
an entity known as UFC,  Inc.,  by way of an order issued from the United States
Bankruptcy Court relating to the bankruptcy of UFC, Inc.'s  predecessor,  Valley
Advisors,  Inc. Valley Advisors,  Inc. was the original  sublessor.  Service has
been  effectuated  only upon the related  entity  Unclaimed  Freight  LLC.  This
defendant  filed a motion to dismiss in lieu of an answer,  and that  motion has
been denied. Discovery is continuing.

3.  Carmen J.  Maggio,  Chapter 7 Trustee  Of Carmen  Forgione & Sons,  Inc.  v.
Foodarama  Supermarkets,  Inc.  Docket  No.  MON-L-5006-01.  Carmine  J.  Maggio
("Maggio") Chapter 7 Trustee of Carmine Forgone & Sons, Inc. ("Forgione"), filed


a complaint  against  Foodarama in October,  2001,  claiming that Foodarama owes
$27,709.88  for waste  disposal  services  rendered by the  bankrupt,  Forgione.
Foodarama has filed an answer  denying all  allegations.  The Company's  records
show something less than $27,709.88 is due, and confirmed  approximately $15,000
was due.  Plaintiff  has  accepted  12,500.  Recently,  Plaintiff's  counsel has
amended the complaint to add a second claim. Upon further review of the bankrupt
entities  records an  additional  claim for unpaid  invoices of $80,000 has been
made. This information has just been recently sent to Foodarama for review.

4. Melvin Jules Bukiet, et al, v. Foodarama Supermarkets, Inc. et al. Docket No.
MID-C-101-02.  This  lawsuit  was  filed in the  Superior  Court of New  Jersey,
Middlesex  County Chancery  Division,  alleging that the directors and the named
officers breached their fiduciary duties to the Company's  shareholders  through
their previous  recommendation,  implementation  and  administration of the 2001
Stock  Incentive  Plan,  and  by  proposing  that  the  shareholders  adopt  the
amendments to the 2001 Stock Incentive Plan and to the Company's  certificate of
incorporation.  The plaintiffs allege that the actions have been taken to enrich
and entrench the defendants at the  shareholders'  expense.  The plaintiffs have
asked the court,  among other things,  to reverse  previous grants of options to
the  defendants  under the 2001 Stock  Incentive  Plan and to enjoin the Company
from submitting the proposals described above to shareholders at the 2002 annual
meeting.  A motion  to  dismiss  the  complaint  was filed on June 7,  2002.  On
November  1,  2002,  plaintiffs  filed a motion  seeking  leave  to amend  their
complaint to add  additional  claims.  The motions have been fully  briefed and,
depending on the resolution of a tentative settlement, will be argued orally.

5. Levin Properties,  L.P. v. Foodarama.  Levin Properties,  L.P. is Foodarama's
landlord of a new store  located in  Woodbridge,  New  Jersey.  The new store is
located in the same shopping center as a previous store leased from the landlord
to Foodarama. The landlord and Foodarama did not execute a new lease for the new
store.  Instead, the landlord and Foodarama executed a modification of the lease
for the previous store, which, among other things,  modifies the lease to demise
to Foodarama the new store in place of the previous  store.  On or about January
13, 2003, the landlord commenced a suit against Foodarama  seeking,  among other
things, a declarative  determination as to various payment obligations under the
lease. The claim arises out of a dispute as to the correct commencement date for
the payment of an  increased  rental  amount  under the lease.  Under the lease,
Foodarama  was to construct  the new store.  The  landlord was then  required to
reimburse  Foodarama for certain  construction costs up to $3,400,000 upon terms
more particularly set forth in the lease. The landlord is currently  withholding
payment  to  Foodarama  of a  portion  of those  construction  funds as a setoff
against the increase in rental  payments which the landlord  alleges should have
commenced  on January 18, 2002.  The  landlord  alleges that the total amount of
Foodarama's  delinquency  in rental  payments was  $877,030.36 as of October 10,
2002, and further  alleges that, as a result of the alleged rental  delinquency,
landlord is entitled to an additional $534,186 security deposit under the lease.
Foodarama alleges that the increase in rental payments should not have commenced
before December 2002, and that,  therefore,  there is no material delinquency in
the payment of rent.  The  construction  funds  currently  being withheld by the
landlord are approximately $850,000.  Additional construction funds which are or
will  become due from the  landlord to  Foodarama  are  approximately  $850,000.
Foodarama  intends to assert a  counterclaim  against  the  landlord  to collect
payment from the landlord of funds advanced by Foodarama for the construction of
the new store.

6.  Symbol  Technologies,  Inc.  v.  Lemelson  Medical,  Educational  & Research
Foundation Limited  Partnership.  Symbol  Technologies,  Inc.  ("Symbol"),  is a
supplier of bar code and/or  machine  vision  equipment.  The Lemelson  Medical,
Educational & Research Foundation Limited Partnership  ("Lemelson") is the owner

of several patents related to bar-code and machine vision equipment.  In July of
1999, seven bar code manufacturers, including Symbol, jointly filed a lawsuit in
Nevada  federal  court  against  Lemelson  seeking a  declaration  that  patents
asserted  by  Lemelson  against  end uses of bar  code  equipment  are  invalid,
unenforceable  and not  infringed.  Symbol  alleges  that the suit was  filed to
protect the  manufacturers'  customers,  who have received letters from Lemelson
requesting  licensing  fees  for  use of the  bar  code  and/or  machine  vision
equipment.  In March of 2000,  the Symbol lawsuit was combined with another suit
that was filed against Lemelson by Cognex Corporation ("Cognex"), which also was
seeking a declaration  that Lemelson patents that claim to cover bar code and/or
machine vision  equipment are invalid,  unenforceable,  and not  infringed.  The
trial  began in the U.S.  District  Court of  Nevada  (Las  Vegas),  on or about
November  18, 2002,  and  concluded  on or about  January 17,  2003.  Cognex has
advised that the parties will be submitting post trial briefs,  which are due on
or before May 16, 2003, and that the judge is not expected to issue his decision
before  the end of July  2003.  Foodarama  is not a  party  to this  litigation,
however,  in  December  of 2002,  Foodarama  received a letter  from an attorney
representing  Lemelson. In the letter, the attorney alleges that Lemelson is the
holder of certain patents  related to bar code and machine vision  equipment and
that the  validity of the patents is the  subject of the pending  litigation  in
Nevada. The attorney for Lemelson further alleges that, provided the validity of
the  patents  is  upheld,  Lemelson  intends  to  pursue  legal  action  against
Foodarama.





Exhibit 99.1



                                 CERTIFICATION

     I, Joseph J. Saker, Chief Executive Officer of Foodarama Supermarkets, Inc.
(the "Company"),  do hereby  certify in  accordance  with 18 U.S.C.  1350, as
adopted pursuant to section 906 of the  Sarbanes-Oxley Act of 2002, that to my
knowledge the  Company's  foregoing  Annual  Report on Form 10-K for the fiscal
year ended November 2, 2002:

(1)   fully complies with the requirements of section 13(a) or 15(d) of the
      Securities Exchange Act of 1934, 15 U.S.C. 78m or 78o(d), and,

(2)   the information contained in the periodic report fairly presents, in all
      material respects, the financial condition and results of operations of
      the Company.




Dated January 29, 2003
                                           /S/ Joseph J. Saker
                                           ________________________
                                           Joseph J. Saker
                                           Chief Executive Officer






























                                      E-7


Exhibit 99.2




                                 CERTIFICATION

     I, Michael Shapiro, Chief Financial Officer of Foodarama Supermarkets, Inc.
(the "Company"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge
the Company's foregoing Annual Report on Form 10-K for the fiscal year ended
November 2, 2002:

(1)   fully complies with the requirements of section 13(a) or 15(d) of the
      Securities Exchange Act of 1934, 15 U.S.C. 78m or 78o(d), and,

(2)   the information contained in the periodic report fairly presents, in all
      material respects, the financial condition and results of operations of
      the Company.




Dated January 29, 2003                     /S/ Michael Shapiro
                                           -------------------
                                           Michael Shapiro
                                           Chief Financial Officer























                                              E-8





Exhibit 23.1

                             CONSENT OF INDEPENDENT ACCOUNTANTS

     We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (Registration  No.  333-65328) of Foodarama  Supermarkets,
Inc., including  Post-Effective Amendment No. 1 to the Registration Statement on
Form S-8, of our report  dated  January 21,  2003  relating to the  consolidated
financial statements of Foodarama Supermarkets,  Inc. which appear in the Annual
Report on Form 10-K of  Foodarama  Supermarkets,  Inc. for the fiscal year ended
November 2, 2002. We also consent to the reference to our firm under the heading
"Experts"  in  the  prospectus  included  in the  above-referenced  Registration
Statement and amendment thereto.



                                    /S/AMPER, POLITZINER & MATTIA P.C.

Edison, New Jersey
January 29, 2003