Minyard to Outsource Warehouse, Distribution.

Associated Wholesale Grocers Deal Enables Supermarket Chain to Redeploy Assets in Support of Growth Strategy and Better Serve Stores

COPPELL, Texas -- In a move executives with Minyard Food Stores Inc. say will greatly increase the North Texas grocery chain's buying power and enable it to invest more in its stores, the company has signed an agreement to outsource its warehouse and distribution functions to Kansas City, Kan.-based Associated Wholesale Grocers.

The news is a continuation of the transformation strategy of the longtime North Texas grocery chain to build on its niche strength and to reduce costs. The company's fresh-concept, Latino-themed Carnival brand is its growth vehicle for the future.

"AWG is the oldest and second-largest retailer-owned grocery wholesaler in the United States serving more than 1,900 stores in 21 states. Being a co-op member gives us increased buying power by tapping into AWG's $5 billion in annual purchases, which means more value for our customers," said CEO Michael D. Byars.

Minyard Food Stores will be AWG's largest co-op member. The transition to AWG will be conducted over 6-to-9 months to late Summer 2007. It will entail selling or leasing Minyard's 722,000-square-foot Coppell distribution center and related assets. The company will maintain its current corporate headquarters in Coppell.

"We are actively looking for new operators who will continue to run the warehouse and distribution center, and who will require the experience of our current associates to staff it," Byars said.

This decision could affect up to 231 local employees who will remain with the company through the transition. The management team said it will work to address community concerns and assist any affected employees.

"Minyard Food Stores has served this community for 75 years, and we plan to remain a North Texas institution," Byars said. "Our new flagship Carnival Super Market and our four remodeled Carnival stores have been a resounding success, and we are taking further steps to position our company to compete with renewed vigor."

The agreement to outsource warehouse and distribution functions will free up financial and human resources and allow the company to continue to upgrade its portfolio of supermarkets.

"Besides increased buying power, the AWG agreement will enable everyone in our company - from headquarters to our stores - to focus on what is most important, and that is our customers," Byars stated.

Byars underscored the company's commitment to Texas shoppers, emphasizing that the decision to outsource its warehouse operations was made as part of an overall effort to provide better value for its entire customer base.

"We're dedicated to fulfilling the needs and wants of our customers in the neighborhoods we serve by providing the best possible shopping experience," Byars said. "At times, that means changing some of our longstanding infrastructure to ensure that we remain well-positioned to provide all of our customers with top values and top quality."

About Minyard Food Stores Inc.

Headquartered in Coppell, Texas, Minyard Food Stores Inc. consists of 65 supermarkets, 39 pharmacies and 15 fuel stations in the Dallas/Fort Worth Metroplex, including 24 Minyard, 23 Carnival and 18 Sack 'n Save stores.