Dairy Mart Announces Expressions of Interest From Potential Buyers; Board Authorizes Hiring of Investment Banker to Explore All Options.

Business Editors

HUDSON, Ohio--(BUSINESS WIRE)--May 11, 2000

Dairy Mart Convenience Stores, Inc., (AMEX:DMC) today announced that it has received credible expressions of interest from potential purchasers of the company.

In response to those inquiries, and in the interest of optimizing shareholder value, the board of directors has approved the hiring of an investment banker to explore all of the company's strategic options, including the sale of the company.

"Dairy Mart has made significant operational gains in recent years -- in per-store revenues, gross profits and cash flow," said Robert B. Stein, Chairman, President and Chief Executive Officer, noting in particular that EBITDA per store has increased sixfold since 1995."

"Our recently announced plan to sell 40 percent of our stores is designed to increase the value and potential of our portfolio. Given the expressions of interest in the entire company, however, the board has a fiduciary responsibility to look into every possible means of maximizing value for all shareholders."

Stein added that members of senior management, who are among the company's largest individual shareholders, fully support the action. In addition, a number of other major shareholders have urged management to fully explore the company's strategic options.

Stein said the expressions of interest in the company resulted in part from the announcement that, on April 6, the board approved a major initiative to sell stores that are not adequately profitable and do not meet the company's one-stop-shopping store profile.

"The board has remained diligent in representing the interests of all shareholders despite the distraction of a dissident proxy filing in mid-April," said Stein, referring to an April 15 filing by a former Chief Executive Officer of the company who was fired in 1994. "Given these new developments, the proxy contest can only hurt the company's efforts to maximize shareholder value."

Dairy Mart Convenience Stores, Inc. was named "Convenience Store Chain of the Year" in 1999 by Convenience Store Decisions magazine. The company owns and operates approximately 600 retail stores in seven states in the Midwest and Southeast. Through consulting and licensing agreements, the Company is also affiliated with more than 200 stores in Korea and approximately 400 locations in Malaysia. For more information, visit Dairy Mart's web site at www.dairymart.com.

Statements contained in this release that are not historical facts, including those relating to the sale of or closure of stores and the exploration of the company's strategic options, including the sale of the company may constitute forward-looking statements. Factors that could cause actual results to differ materially from those stated or implied in the forward-looking statements include competition, general economic conditions, the ability to find one or more suitable buyers for the stores or the whole company at acceptable prices, the ability of such buyers to finance store purchases or the whole company, the determination of the board of directors, which may or may not include a sale of the stores or the whole company and other factors disclosed in Dairy Mart's periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this release.