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FLEMING, MEGAFOODS REACH AGREEMENT IN PRINCIPLE

 PHOENIX, Nov. 10 /PRNewswire/ -- Fleming Companies, Inc. (NYSE: FLM), and Megafoods Stores, Inc. (NASDAQ-NMS: MEGF), announced today that they had reached an agreement in principle under which Fleming will continue to supply 26 Megafoods Stores in Arizona, Nevada and Southern California. In addition, Fleming will supply all future Megafoods Stores, including five new stores expected to open by year end, and will begin supplying Megafoods' 15 Texans' Warehouse Foods stores in San Antonio, Texas, next January. The new agreement is expected to represent almost $400 million in sales by Fleming to Megafoods in 1994, including about $140 million of new business in Texas.
 Under terms of the agreement, Megafoods will enjoy a substantial cost of sales benefit compared to its current supply contract with Fleming. In addition, Megafoods has paid off approximately $15 million of loans previously owed to Fleming and will place on deposit with Fleming an amount calculated to cover Fleming's working capital investment associated with serving Megafoods' needs.
 Dean Miller, president and chief executive officer of Megafoods, said, "This form of distribution agreement is one we have sought since we became a public company. It will provide us a significantly more competitive cost of procured product and it matches the proposal from Safeway. Buying from Fleming's San Antonio division will also result in significant savings on freight cost. We are excited about a relationship with Fleming which passes along to our company, its shareholders, and our customers the benefits we would enjoy if we operated our own warehouse."
 "We're obviously pleased to be able to continue and expand our long and rewarding relationship with Megafoods," said Robert E. Stauth, president and chief executive officer of Fleming. "This arrangement represents to our knowledge a new type of alliance in the food distribution industry. It is consistent with our continuing evaluation of Efficient Consumer Response, a joint grocery industry strategy in which manufacturers and distributors work together to bring increased value to the consumer."
 Megafoods Stores, Inc., operates 26 warehouse-style supermarkets in Arizona, California, and Nevada, under the Megafoods name and 15 Texans' Warehouse Foods stores, which have a similar format, in San Antonio, Texas.
 Fleming supplies food, food-related products and retail services to more than 4,800 stores in 36 states, the Caribbean, Mexico and other Central and South American countries.
 -0- 11/10/93
 /CONTACT: Dean Miller, 602-545-3235, or Jack Walker, 602-957-3152, both of Megafoods; or Ron Frost of Fleming, 405-841-8125/
 (FLM MEGF)


CO: Fleming Companies, Inc.; Megafoods Stores, Inc. ST: Oklahoma, Texas IN: REA SU:

GK-MP -- NY030 -- 2659 11/10/93 10:05 EST
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Publication:PR Newswire
Date:Nov 10, 1993
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