10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended: January 1, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                      to                     .

Commission file number: 0-785

NASH-FINCH COMPANY

(Exact name of Registrant as specified in its charter)

Delaware	41 -0431960
(State of Incorporation)	(I.R.S. Employer Identification No.)
7600 France Avenue South	55440-0355
P.O. Box 355	(Zip Code)
Minneapolis, Minnesota
(Address of principal executive offices)

Registrant’s telephone number, including area code: (952) 832-0534

Securities registered pursuant to Section 12(b) of the Act: None

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

Common Stock, par value $1.66-2/3 per share
Common Stock Purchase Rights

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

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act.
Yes o No þ

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 þ No o

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

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. o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “small reporting company” in Rule 12b-2 of the Securities Exchange Act.

Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
		Do not check if a smaller reporting company.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes o No þ

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 19, 2010 (the last business day of the Registrant’s most recently completed second fiscal quarter) was $450,761,160, based on the last reported sale price of $36.37 on that date on NASDAQ.

As of February 22, 2011, 12,108,622 shares of Common Stock of the Registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on May 18, 2011 (the “2011 Proxy Statement”) are incorporated by reference into Part III of this report, as specifically set forth in Part III.

Nash Finch Company

Index

	Page No.
Part I
Forward-Looking Information		3
Item 1. Business		4
Item 1A. Risk Factors		10
Item 1B. Unresolved Staff Comments		16
Item 2. Properties		16
Item 3. Legal Proceedings		18
Item 4. (Removed and Reserved)		19
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		19
Item 6. Selected Financial Data		22
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 7A. Quantitative and Qualitative Disclosures about Market Risk		40
Item 8. Financial Statements and Supplementary Data		41
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		82
Item 9A. Controls and Procedures		82
Item 9B. Other Information		85
Part III
Item 10. Directors, Executive Officers and Corporate Governance		85
Item 11. Executive Compensation		87
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		87
Item 13. Certain Relationships and Related Transactions and Director Independence		88
Item 14. Principal Accountant Fees and Services		88
Part IV
Item 15. Exhibits and Financial Statement Schedules		88
SIGNATURES		95
Exhibit 3.10
Exhibit 10.31
Exhibit 12.1
Exhibit 21.1
Exhibit 23.1
Exhibit 23.2
Exhibit 24.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

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Nash Finch Company

PART I

     Throughout this report, we refer to Nash-Finch Company, together with its subsidiaries, as “we,” “us,” “Nash Finch” or “the Company.”

Forward-Looking Information

     This report, including the information that is or will be incorporated by reference into this report, contains forward-looking statements that relate to trends and events that may affect our future financial position and operating results. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements in this report that are not historical in nature, particularly those that use terms such as “may,” “will,” “should,” “likely,” “expect,” “anticipate,” “estimate,” “believe” or “plan,” or comparable terminology, are forward-looking statements based on current expectations and assumptions, and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important factors known to us that could cause material differences include the following:

• the effect of competition on our food distribution, military and retail businesses;

• general sensitivity to economic conditions, including the uncertainty related to the current state of the economy in the U.S. and worldwide economic slowdown; disruptions to the credit and financial markets in the U.S. and worldwide; changes in market interest rates; continued volatility in energy prices and food commodities;

• macroeconomic and geopolitical events affecting commerce generally;

• changes in consumer buying and spending patterns;

• our ability to identify and execute plans to expand our food distribution, military and retail operations;

• possible changes in the military commissary system, including those stemming from the redeployment of forces, congressional action and funding levels;

• our ability to identify and execute plans to improve the competitive position of our retail operations;

• the success or failure of strategic plans, new business ventures or initiatives;

• our ability to successfully integrate and manage current or future businesses we acquire, including the ability to manage credit risks and retain the customers of those operations;

• changes in credit risk from financial accommodations extended to new or existing customers;

• significant changes in the nature of vendor promotional programs and the allocation of funds among the programs;

• limitations on financial and operating flexibility due to debt levels and debt instrument covenants;

• legal, governmental, legislative or administrative proceedings, disputes, or actions that result in adverse outcomes;

• failure of our internal control over financial reporting;

• changes in accounting standards;

• technology failures that may have a material adverse effect on our business;

• severe weather and natural disasters that may impact our supply chain;

• unionization of a significant portion of our workforce;

• costs related to a multi-employer pension plan which has liabilities in excess of plan assets;

• changes in health care, pension and wage costs and labor relations issues;

• product liability claims, including claims concerning food and prepared food products;

• threats or potential threats to security;

• unanticipated problems with product procurement; and

• maintaining our reputation and corporate image.

     A more detailed discussion of many of these factors is contained in Part I, Item 1A, “Risk Factors,” of this report on Form 10-K. You should carefully consider each of these factors and all of the other information in this report. We undertake no obligation to revise or update publicly any forward-looking statements. You are advised, however, to consult any future disclosures we make on related subjects in future reports to the Securities and Exchange Commission (“SEC”).

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ITEM 1. BUSINESS

     Originally established in 1885 and incorporated in 1921, we are the second largest publicly traded wholesale food distributor in the United States, in terms of revenue, serving the retail grocery industry and the military commissary and exchange systems. Our sales in fiscal 2010 were approximately $5.0 billion. Our business currently consists of three primary operating segments: military food distribution, food distribution and retail. Financial information about our business segments for the three most recent fiscal years is contained in Part II, Item 8 of this report under Note (18) — “Segment Information” in the Notes to Consolidated Financial Statements.

     In November 2006, we announced the launch of a strategic plan, Operation Fresh Start, designed to sharpen our focus and provide a strong platform to support growth initiatives. Our strategic plan is built upon extensive knowledge of current industry, consumer and market trends, and is formulated to differentiate the Company. The strategic plan includes long-term initiatives to increase revenues and earnings, improve productivity and cost efficiencies of our Military, Food Distribution and Retail business segments, and leveraging our corporate support services. The Company has strategic initiatives to improve working capital, manage debt, and increase shareholder value through capital expenditures with acceptable returns on investment. Several important elements of the strategic plan include:

• Supply chain services focused on supporting our businesses with warehouse management, inbound and outbound transportation management and customized solutions for each business;

• Growing the Military business segment through acquisition and expansion of products and services, as well as creating warehousing and transportation cost efficiencies with a long-term distribution center strategic plan;

• Providing our independent retail customers with high level of order fulfillment, broad product selection including leveraging the Our Family brand , support services emphasizing best-in-class offerings in marketing, advertising, merchandising, store design and construction, market research, retail store support, retail pricing and license agreement opportunities; and

• Retail formats designed to appeal to the needs of today’s consumers.

     The strategic plan includes the following long-term financial targets:

• 2% organic revenue growth

• 4% Consolidated EBITDA¹ as a percentage of sales

• 10% trailing four quarters Free Cash Flow as a percentage of Net Assets²

• 2.5 to 3.0x total leverage ratio (i.e., total debt divided by trailing four quarters Consolidated EBITDA)

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Consolidated EBITDA is a measurement not recognized by accounting principles generally accepted in the United States. Please refer to Part II, Item 7 of this report under the caption “Consolidated EBITDA (Non-GAAP Measurement)” for the definition of Consolidated EBITDA.

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Defined as cash provided from operations less capital expenditures for property, plant and equipment during the trailing four quarters divided by the average net assets for the current period and prior year comparable period (total assets less current liabilities plus current portion of long-term debt and capital leases). Please refer to Part II, Item 7 of this report under the caption “Free Cash Flow as a percentage of Net Assets (Non-GAAP Measurement)” for the definition of Free Cash Flow as a percentage of Net Assets.

     We have made significant progress towards achieving our long-term financial targets. From fiscal 2006 to the end of fiscal 2010, our Consolidated EBITDA margin improved from 2.2% of sales to 2.8% of sales and the debt leverage ratio has improved by nearly one full turn of Consolidated EBITDA from 3.11x to 2.29x. The ratio of free cash flow to net assets metric was 0.9% in fiscal 2010, however, excluding strategic investments made during the year, primarily associated with the expansion of our military food distribution business, our free cash flow to net assets metric was 8.4%. The organic revenue growth metric has been negatively affected by the economic environment in fiscal 2010 and was negative 5.4%.

     During fiscal 2010, we continued expansion activities associated with our military food distribution business, including our Columbus, Georgia facility becoming operational, and our purchases of new properties in Bloomington, Indiana and two adjacent facilities in Oklahoma City, Oklahoma, while continuing to maintain

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conservative debt levels in relation to our strategic target. Additionally, we continued cost reduction and working capital initiatives during a challenging business environment. In addition to the strategic initiatives already in progress, our 2011 initiatives include the following:

• Continued implementation of our military distribution center network expansion.

• Execute supply chain and center store initiatives within our food distribution segment.

• Implement cost reduction and profit improvement initiatives.

• Identify acquisitions that support our strategic plan.

     Additional description of our business is found in Part II, Item 7 of this report.

Military Segment

     Our military segment is one of the largest distributors, by revenue, of grocery products to U.S. military commissaries and exchanges. On January 31, 2009, the Company completed the purchase from GSC Enterprises, Inc., of substantially all of the assets relating to three wholesale food distribution centers located in San Antonio, Texas, Pensacola, Florida and Junction City, Kansas, including all inventory and customer contracts related to the purchased facilities. On December 1, 2009, we purchased a facility in Columbus, Georgia, which began servicing military commissaries and exchanges in the third quarter of fiscal 2010. During the third quarter of fiscal 2010, we purchased a facility in Bloomington, Indiana and two adjacent facilities in Oklahoma City, Oklahoma for expansion of our military food distribution business. The Bloomington, Indiana facility became operational during the fourth quarter of fiscal 2010, while the Oklahoma City, Oklahoma facilities are scheduled to become operational during fiscal 2012. In addition, we purchased the real estate associated with our Pensacola, Florida facility, which had previously been a leased facility, during the third quarter of fiscal 2010.

     We serve 181 military commissaries and over 200 exchanges located in 33 states across the United States and the District of Columbia, Europe, Puerto Rico, Cuba, the Azores and Egypt. Our military distribution centers are exclusively dedicated to supplying products to military commissaries and exchanges. These distribution centers are strategically located among the largest concentration of military bases in the areas we serve and near Atlantic ports used to ship grocery products to overseas commissaries and exchanges. We have an outstanding reputation as a distributor focused exclusively on U.S. military commissaries and exchanges, based in large measure on our excellent service metrics, which include fill rate, on-time delivery and shipping accuracy.

     The Defense Commissary Agency, also known as DeCA, operates a chain of commissaries on U.S. military installations throughout the world. DeCA contracts with manufacturers to obtain grocery and related products for the commissary system. Manufacturers either deliver the products to the commissaries themselves or, more commonly, contract with distributors such as us to deliver the products. These distributors act as drayage agents for the manufacturers by purchasing and maintaining inventories of products DeCA purchases from the manufacturers, and providing handling, distribution and transportation services for the manufacturers. Manufacturers must authorize the distributors as their official representatives to DeCA, and the distributors must adhere to DeCA’s frequent delivery system procedures governing matters such as product identification, ordering and processing, information exchange and resolution of discrepancies. We obtain distribution contracts with manufacturers through competitive bidding processes and direct negotiations.

     As commissaries need to be restocked, DeCA identifies each manufacturer with which an order is to be placed for additional products, determines which distributor is the manufacturer’s official representative in a particular region, and places a product order with that distributor under the auspices of DeCA’s master contract with the applicable manufacturer. The distributor selects that product from its existing inventory, delivers it to the commissary or commissaries designated by DeCA, and bills the manufacturer for the product shipped. The manufacturer then bills DeCA under the terms of its master contract. Overseas commissaries are serviced in a similar fashion, except that a distributor’s responsibility is to deliver products as and when needed to the port designated by DeCA, which in turn bears the responsibility for shipping the product to the applicable commissary or overseas warehouse.

     After we ship a particular manufacturer’s products to commissaries in response to an order from DeCA, we invoice the manufacturer for the product price plus a service and or drayage fee that is typically

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based on a percentage of the purchase price, but may in some cases be based on a dollar amount per case or pound of product handled. Our order handling and invoicing activities are facilitated by a procurement and billing system developed specifically for the military business, which addresses the unique aspects of its business, and provides our manufacturer customers with a web-based, interactive means of accessing critical order, inventory and delivery information.

     We have approximately 600 distribution contracts with manufacturers that supply products to the DeCA commissary system and various exchange systems. These contracts generally have an indefinite term, but may be terminated by either party without cause upon 30 days prior written notice to the other party. The contracts typically specify the commissaries and exchanges we are to supply on behalf of the manufacturer, the manufacturer’s products to be supplied, service and delivery requirements and pricing and payment terms. Our ten largest manufacturer customers represented approximately 43% of the military segment’s fiscal 2010 sales.

Food Distribution Segment

     Our food distribution segment sells and distributes a wide variety of nationally branded and private label grocery products and perishable food products from 14 distribution centers to approximately 1,800 independent retail locations located in 28 states across the United States. During the third quarter of fiscal 2010, we closed our food distribution center in Bridgeport, Michigan at the end of its lease term. Our customers are relatively diverse with the largest customer, excluding our corporate-owned stores, consisting of a consortium of stores representing 7.6%, and two others representing 5.6% and 3.5%, of our fiscal 2010 food distribution sales. No other customer represents greater than 3.0% of our food distribution business.

     Our distribution centers are strategically located to efficiently serve our independent customer stores and our corporate-owned stores. The distribution centers are equipped with modern materials handling equipment for receiving, storing and shipping merchandise and are designed for high volume operations at low unit costs. We continue to implement operating initiatives to enhance productivity and expand profitability while providing a higher level of service to our distribution customers. Our distribution centers have varying levels of available capacity giving us enough flexibility to service additional customers by leveraging our existing fixed cost base, which can enhance our profitability.

     Depending upon the size of the distribution center and the profile of the customers served, our distribution centers typically carry a full line of national brand and private label grocery products and perishable food products. Non-food items and specialty grocery products are distributed from two distribution centers located in Bellefontaine, Ohio and Sioux Falls, South Dakota. We currently operate a fleet of tractors and semi-trailers that deliver the majority of our products to our customers. Approximately 23% of deliveries are made through contract carriers.

     Our retailers order their inventory at regular intervals through direct linkage with our information systems. Our food distribution sales are made on a market price plus fee and freight basis, with the fee based on the type of commodity and quantity purchased. We adjust our selling prices based on the latest market information, and our freight policy contains a fuel surcharge clause that allows us to mitigate the impact of rising fuel costs.

     Products

     We primarily sell and distribute nationally branded products and a number of unbranded products, principally meat and produce, which we purchase directly from various manufacturers, processors and suppliers or through manufacturers’ representatives and brokers. We also sell and distribute high quality private label products under the proprietary trademark Our Family¹, a long-standing brand of Nash Finch that offers an alternative to national brands. In addition, we sell and distribute a premium line of branded products

¹ We own or have the rights to various trademarks, tradenames and service marks, including the following referred to in this report: AVANZA^®, Econofoods^®, Sun Mart^®, Family Thrift Center^®, Family Fresh Market^®, Our Family^®, Value Choice™, Food Pride^®, Fresh Place^® and Nash Brothers Trading Company^®. The trademark IGA^®, referred to in this report, is the registered trademark of IGA, Inc.

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under the Nash Brothers Trading Company trademark, a lower priced line of private label products under the Value Choice trademark and private label products for two of our independent customer groups. We offer over 3,400 stock-keeping units of competitively priced, high quality grocery products and perishable food products which compete with national branded and other value brand products.

     Services

     To further strengthen our relationships with our food distribution customers, we offer, either directly or through third parties, a wide variety of support services to help them develop and operate stores, as well as compete more effectively. These services include:

• promotional, advertising and merchandising programs;

• installation of computerized ordering, receiving and scanning systems;

• retail equipment procurement assistance;

• providing contacts for accounting, budgeting and payroll services;

• consumer and market research;

• remodeling and store development services;

• securing existing grocery stores that are for sale or lease in the market areas we serve and occasionally acquiring or leasing existing stores for resale or sublease to these customers; and

• NashNet, which provides supply chain efficiencies through internet services.

     During fiscal 2010 and 2009, 49% of food distribution revenues were from customers with whom we had entered into long-term supply agreements. The long-term supply agreements range from 2 to 20 years. These agreements also may contain provisions that give us the opportunity to purchase customers’ independent retail businesses before any third party.

     We also provide financial assistance to our food distribution customers, primarily in connection with new store development or the upgrading and expansion of existing stores. As of January 1, 2011, we had loans, net of reserves, of $25.6 million outstanding to 33 of our food distribution customers, and had guaranteed outstanding debt and lease obligations of certain food distribution customers in the amount of $9.4 million. We also, in the normal course of business, sublease retail properties and assign retail property leases to third parties. As of January 1, 2011, the present value of our maximum contingent liability exposure, net of reserves, with respect to the subleases and assigned leases was $22.8 million and $8.9 million, respectively.

     We distribute products to independent stores that carry the IGA banner and our proprietary Food Pride banner. We encourage our independent customers to join one of these banner groups to receive many of the same marketing programs and procurement efficiencies available to grocery store chains while allowing them to maintain their flexibility and autonomy as independents. To use either of these banners, these independents must comply with applicable program standards. As of January 1, 2011, we served 107 retail stores under the IGA banner and 58 retail stores under our Food Pride banner.

Retail Segment

     Our retail segment is made up of 52 corporate-owned stores, located primarily in the Upper Midwest, in the states of Colorado, Iowa, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Our corporate-owned stores principally operate under the Sun Mart, Econofoods, AVANZA, Family Thrift Center, Pick ‘n Save, Family Fresh Market, Prairie Market and Wholesale Food Outlet banners. Our stores are typically located close to our distribution centers in order to create certain operating and logistical efficiencies. As of January 1, 2011, we operated 45 conventional supermarkets, five AVANZA grocery stores, one Wholesale Food Outlet grocery store and one other retail store. Our retail segment also includes three corporate-owned pharmacies and one convenience store that are not included in our store count.

     Our conventional grocery stores offer a wide variety of high quality grocery products and services. Many have specialty departments such as fresh meat counters, delicatessens, bakeries, eat-in cafes, pharmacies, banks and floral departments. These stores also provide services such as check cashing, fax services and

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money transfers. We emphasize outstanding customer service and have created our G.R.E.A.T. (Greet, React, Escort, Anticipate and Thank) Customer Service Program to train every associate (employee) on the core elements of providing exceptional customer service. “The Fresh Place” concept within our conventional grocery stores is an umbrella banner that emphasizes our high quality perishable products, such as fresh produce, deli, meats, seafood, baked goods and takeout foods for today’s busy consumer. The AVANZA grocery stores offer products designed to meet the specific tastes and needs of Hispanic shoppers.

Competition

     Military Segment

     We are one of five distributors with annual sales to the DeCA commissary system in excess of $100 million that distributes products via the frequent delivery system. The remaining distributors that supply DeCA tend to be smaller, regional and local providers. In addition, manufacturers contract with others to deliver certain products, such as baking supplies, produce, deli items, soft drinks and snack items, directly to DeCA commissaries and service exchanges. Because of the narrow margins in this industry, it is of critical importance for distributors to achieve economies of scale, which is typically a function of the density or concentration of military bases within the geographic market(s) a distributor serves, and the distributor’s share of that market. As a result, no distributor in this industry has a nationwide presence. Rather, distributors tend to concentrate on specific regions, or areas within specific regions, where they can achieve critical mass and utilize warehouse and distribution facilities efficiently. In addition, distributors that operate larger non-military specific distribution businesses tend to compete for DeCA commissary business in areas where such business would enable them to more efficiently utilize the capacity of their existing distribution centers. We believe the principal competitive factors among distributors within this industry are customer service, price, operating efficiencies, reputation with DeCA and location of distribution centers. We believe our competitive position is very strong with respect to all these factors within the geographic areas where we compete.

     Food Distribution Segment

     The food distribution segment is highly competitive as evidenced by the low margin nature of the business. Success in this segment is measured by the ability to leverage scale in order to gain pricing advantages and operating efficiencies, to provide superior merchandising programs and services to the independent customer base and to use technology to increase distribution efficiencies. We compete with local, regional and national food distributors, as well as with vertically integrated national and regional chains using a variety of formats, including supercenters, supermarkets and warehouse clubs that purchase directly from suppliers and self-distribute products to their stores. We face competition from these companies on the basis of price, quality, variety, availability of products, strength of private label brands, schedules and reliability of deliveries and the range and quality of customer services.

     Continuing our quality service by focusing on key metrics such as our on-time delivery rate, fill rate, order accuracy and customer service is essential in maintaining our competitive advantage. During fiscal 2010, our distribution centers had an on-time delivery rate, defined as being within ¹/2 hour of our committed delivery time, of 96.8%; and a fill rate, defined as the percentage of cases shipped relative to the number of cases ordered, of 96.6%. We believe we are an industry leader with respect to these key metrics.

     Retail Segment

     Our retail segment is also highly competitive. We compete with many organizations of various sizes, ranging from national and regional chains that operate a variety of formats (such as supercenters, supermarkets, extreme value food stores and membership warehouse club stores) to local grocery store chains and privately owned unaffiliated grocery stores. Although our target geographic areas have a relatively low presence of national and multi-regional grocery store chains, we are facing increasing competitive pressure from the expansion of supercenters and regional chains. During fiscal 2010 and fiscal 2009, there were three and two, respectively, of our stores that were impacted by the opening of new supercenters in their markets and a total of 42 stores as of January 1, 2011, now compete with supercenters. Depending upon the market, we compete based on price, quality and assortment, store appeal (including store location and format), sales promotions, advertising, service and convenience. We believe our ability to provide convenience, outstanding perishable execution and exceptional customer service are particularly important factors in achieving competitive success.

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Vendor Allowances and Credits

     We participate with our vendors in a broad menu of promotions to increase sales of products. These promotions fall into two main categories, off-invoice allowances and performance-based allowances, and are often subject to negotiation with our vendors. In the case of off-invoice allowances, discounts are typically offered by vendors with respect to certain merchandise purchased by us during a specified period of time. We use off-invoice allowances to support a variety of marketing programs such as reduced price offerings for specific time periods, food shows, pallet promotions and private label promotions. The discounts are either reflected directly on the vendor invoice, as a reduction from the normal wholesale prices for merchandise to which the allowance applies, or we are allowed to deduct the allowance as an offset against the vendor’s invoice when it is paid.

     In the case of performance-based allowances, the allowance or rebate is based on our completion of some specific activity, such as purchasing or selling product during a certain time period. This basic performance requirement may be accompanied by an additional performance requirement such as providing advertising or special in-store promotions, tracking specific shipments of goods to retailers (or to customers in the case of our own retail stores) during a specified period (retail performance allowances), slotting (adding a new item to the system in one or more of our distribution centers) and merchandising a new item, or achieving certain minimum purchase quantities. The billing for these performance-based allowances is normally in the form of a “bill-back” in which case we are invoiced at the regular price with the understanding that we may bill back the vendor for the requisite allowance when the performance is satisfied. We also assess an administrative fee, reflected on the invoices sent to vendors, to recoup our reasonable costs of performing the tasks associated with administering retail performance allowances.

     We collectively plan promotions with our vendors and arrive at the amount the respective vendor plans to spend on promotions with us. Each vendor has its own method for determining the amount of promotional funds to be spent with us. In most situations, the vendor allowances are based on units we purchased from the vendor. In other situations, the allowances are based on our past or anticipated purchases and/or the anticipated performance of the planned promotions. Forecasting promotional expenditures is a critical part of our frequently scheduled planning sessions with our vendors. As individual promotions are completed and the associated billing is processed, the vendors track our promotional program execution and spend rate, and discuss the tracking, performance and spend rate with us on a regular basis throughout the year. These communications include discussions with respect to future promotions, product cost, targeted retails and price points, anticipated volume, promotion expenditures, vendor maintenance, billing issues and procedures, new items/discontinued items, and trade spend levels relative to budget per event and per year, as well as the resolution of any issues that arise between the vendor and us. In the future, the nature and menu of promotional programs and the allocation of dollars among them may change as a result of our ongoing negotiations and commercial relationships with our vendors.

Trademarks and Servicemarks

     We own or license a number of trademarks, tradenames and servicemarks that relate to our products and services, including those mentioned in this report. We consider certain of these trademarks, tradenames and servicemarks, such as Our Family, Value Choice and Nash Brothers Trading Company, to be of material value to the business conducted by our food distribution and retail segments, and we actively defend and enforce such trademarks, tradenames and servicemarks.

Employees

     As of January 1, 2011, we employed 6,822 persons, of whom 4,474 were employed on a full-time basis and 2,348 employed on a part-time basis. Of our total number of employees, 638 were represented by unions (9.4% of all employees) and consisted primarily of warehouse personnel and drivers in our Ohio and Indiana distribution centers. We consider our employee relations to be good.

Available Information

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     Our internet website is www.nashfinch.com. The references to our website in this report are inactive references only, and the information on our website is not incorporated by reference in this report. Through the Investor Relations portion of our website and a link to a third-party content provider (under the tab “SEC Filings”), you may access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We have also posted on the Investor Relations portion of our website, under the caption “Corporate Governance,” our Code of Business Conduct that is applicable to all our directors and employees, as well as our Code of Ethics for Senior Financial Management that is applicable to our Chief Executive Officer, Chief Financial Officer and Corporate Controller. Any amendment to or waiver from the provisions of either of these Codes that is applicable to any of these three executive officers will be disclosed on the Investor Relations portion of our website under the “Corporate Governance” caption.

ITEM 1A. RISK FACTORS

     In addition to the other information in this Form 10-K, you should carefully consider the specific risk factors set forth below in evaluating Nash Finch because any of the following risks could materially affect our business, financial condition, results of operations and future prospects.

We face substantial competition, and our competitors may have superior resources, which could place us at a competitive disadvantage and adversely affect our financial performance.

     Our businesses are highly competitive and are characterized by high inventory turnover, narrow profit margins and increasing consolidation. Our food distribution and military businesses compete not only with local, regional and national food distributors, but also with vertically integrated national and regional chains that employ a variety of formats, including supercenters, supermarkets and warehouse clubs. Our retail business, focused in the Upper Midwest, has historically competed with traditional grocery stores and is increasingly competing with alternative store formats such as supercenters, warehouse clubs, dollar stores and extreme value food stores.

     Some of our food distribution and retail competitors are substantially larger and may have greater financial resources and geographic scope, lower merchandise acquisition costs and lower operating expenses than we do, intensifying price competition at the wholesale and retail levels. Industry consolidation and the expansion of alternative store formats, which have gained and continue to gain market share at the expense of traditional grocery stores, tend to produce even stronger competition for our retail business and for the independent customers of our distribution business. To the extent our independent customers are acquired by our competitors or are not successful in competing with other retail chains and non-traditional competitors, sales by our distribution business will also be affected. If we fail to effectively implement strategies to respond to these competitive pressures, our operating results could be adversely affected by price reductions, decreased sales or margins, or loss of market share.

     In the military food distribution business we face competition from large national and regional food distributors as well as smaller food distributors. Due to the narrow margins in the military food distribution industry, it is of critical importance for distributors to achieve economies of scale, which are typically a function of the density or concentration of military bases in the geographic markets a distributor serves and a distributor’s share of that market. As a result, no distributor in this industry has a nationwide presence and it is very difficult, other than through acquisitions, to expand operations in this industry beyond the geographic regions where we currently can utilize our warehouse and distribution capacity.

Our business is sensitive to economic conditions that impact consumer spending.

     Our business is sensitive to changes in overall economic conditions that impact consumer spending, including discretionary spending and buying habits. Economic downturns or uncertainty has adversely affected overall demand and intensified price competition, but also has caused consumers to “trade down” by purchasing lower margin items and to make fewer purchases in traditional supermarket channels. Continued negative economic conditions affecting disposable consumer income such as employment levels, business conditions, changes in housing market conditions, the availability of credit, interest rates, volatility in fuel and energy

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costs, food price inflation or deflation, employment trends in our markets and labor costs, the impact of natural disasters or acts of terrorism, and other matters affecting consumer spending could cause consumers to continue shifting even more of their spending to lower-priced competitors. The continued general reductions in the level of discretionary spending or shifts in consumer discretionary spending to our competitors could continue to adversely affect our growth and profitability.

     The worldwide financial and credit market disruptions have reduced the availability of liquidity and credit generally necessary to fund a continuation and expansion of global economic activity. The shortage of liquidity and credit combined with substantial losses in equity markets has led to a worldwide economic recession that could be prolonged. The general slowdown in economic activity caused by an extended recession could adversely affect our business. A continuation or worsening of the current difficult financial and economic conditions could adversely affect our customers’ ability to meet the terms of sale or our suppliers’ ability to fully perform their commitments to us.

Macroeconomic and geopolitical events may adversely affect our customers, access to products, or lead to general cost increases which could negatively impact our results of operations and financial condition.

     Recent events in foreign countries which have resulted in political instability and social unrest and significant deficits in the United States at both the federal and state levels could adversely affect our businesses and customers. Adverse economic or geopolitical events could potentially reduce our access or increase prices associated with products sourced abroad. Such adverse events could lead to significant increases in the price of the products we procure, fuel and other supplies used in our business, utilities, or taxes that cannot be fully recovered through price increases. In addition, disposable consumer income could be affected by these events which could have a negative impact on our results of operations and financial condition.

Our businesses could be negatively affected if we fail to retain existing customers or attract significant numbers of new customers.

     Growing and increasing the profitability of our distribution businesses is dependent in large measure upon our ability to retain existing customers and capture additional distribution customers through our existing network of distribution centers, enabling us to more effectively utilize the fixed assets in those businesses. Our ability to achieve these goals is dependent, in part, upon our ability to continue to provide a high level of customer service, offer competitive products at low prices, maintain high levels of productivity and efficiency, particularly in the process of integrating new customers into our distribution system, and offer marketing, merchandising and ancillary services that provide value to our independent customers. If we are unable to execute these tasks effectively, we may not be able to attract significant numbers of new customers and attrition among our existing customer base could increase, either or both of which could have an adverse impact on our revenue and profitability.

     Growing and increasing the profitability of our retail business is dependent on increasing our market share in the markets our retail stores are located. We plan to invest in redesigning some of our retail stores into other formats in order to attract new customers and increase our market share. Our results of operations may be adversely impacted if we are unable to attract significant numbers of new retail customers.

Our military segment operations are dependent upon domestic and international military distribution, and a change in the military commissary system, or level of governmental funding, could negatively impact our results of operations and financial condition.

     Because our military segment sells and distributes grocery products to military commissaries and exchanges in the U.S. and overseas, any material changes in the commissary system, the level of governmental funding to DeCA, military staffing levels or in locations of bases may have a corresponding impact on the sales and operating performance of this segment. These changes could include privatization of some or all of the military commissary system, relocation or consolidation in the number of commissaries and exchanges, base closings, troop redeployments or consolidations in the geographic areas containing commissaries and exchanges served by us, or a reduction in the number of persons having access to the commissaries and exchanges.

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Our results of operations and financial condition could be adversely affected if we are unable to improve the competitive position of our retail operations.

     Our retail food business faces competition from regional and national chains operating under a variety of formats that devote square footage to selling food (i.e., supercenters, supermarkets, extreme value stores, membership warehouse clubs, dollar stores, drug stores, convenience stores, various formats selling prepared foods, and other specialty and discount retailers), as well as from independent food store operators in the markets where we have retail operations. During fiscal 2006, we announced new strategic initiatives designed to create value within our organization. These initiatives include designing and reformatting our base of retail stores to increase overall retail sales performance. In connection with these efforts, there are numerous risks and uncertainties, including our ability to successfully identify which course of action will be most financially advantageous for each retail store, our ability to identify those initiatives that will be the most effective in improving the competitive position of the retail stores we retain, our ability to efficiently and timely implement these initiatives, and the response of competitors to these initiatives. If we are unable to improve the overall competitive position of our remaining retail stores the operating performance of that segment may continue to decline and we may need to recognize additional impairments of our long-lived assets and goodwill, be compelled to close or dispose of additional stores and may incur restructuring or other charges to our earnings associated with such closure and disposition activities. In addition, we cannot assure you that we will be able to replace any of the revenue lost from these closed or sold stores from our other operations.

We may not be able to achieve the expected benefits from the implementation of new strategic initiatives.

     We have begun taking action to improve our competitive performance through a series of strategic initiatives. The goal of this effort is to develop and implement a comprehensive and competitive business strategy, addressing the food distribution industry environment and our position within the industry and ultimately create increased shareholder value.

     We may not be able to successfully execute our strategic initiatives and realize the intended synergies, business opportunities and growth prospects. Many of the other risk factors mentioned may limit our ability to capitalize on business opportunities and expand our business. Our efforts to capitalize on business opportunities may not bring the intended results. Assumptions underlying estimates of expected revenue growth or overall cost savings may not be met or economic conditions may deteriorate. Customer acceptance of new retail formats developed may not be as anticipated, hampering our ability to attract new retail customers or maintain our existing retail customer base. Additionally, our management may have its attention diverted from other important activities while trying to execute new strategic initiatives. If these or other factors limit our ability to execute our strategic initiatives, our expectations of future results of operations, including expected revenue growth and cost savings, may not be met.

Our ability to operate effectively could be impaired by the risks and costs associated with the current and future efforts to grow our business through acquisitions.

     Efforts to grow our business may include acquisitions. Acquisitions entail various risks such as identifying suitable candidates, effecting acquisitions at acceptable rates of return, obtaining adequate financing and acceptable terms and conditions. Our success depends in a large part on factors such as our ability to identify suitable acquisition candidates and successfully integrate such operations and personnel in a timely and efficient manner while retaining the customer base of the acquired operations. If we cannot identify suitable acquisition candidates, successfully integrate these operations and retain the customer base, we may experience material adverse consequences to our results of operations and financial condition. The integration of separately managed businesses operating in different markets involves a number of risks, including the following:

• demands on management related to the significant increase in our size after the acquisition of operations;

• difficulties in the assimilation of different corporate cultures and business practices, such as those involving vendor promotions, and of geographically dispersed personnel and operations;

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• difficulties in the integration of departments, information technology systems, operating methods, technologies, books and records and procedures, as well as in maintaining uniform standards and controls, including internal accounting controls, procedures and policies; and

• expenses of any undisclosed liabilities, such as those involving environmental or legal matters.

     Successful integration of new operations, including the acquisition of three distribution facilities from GSC Enterprises Inc. on January 31, 2009, our December 1, 2009 purchase of a facility in Columbus, Georgia, and our purchases of a facility in Bloomington, Indiana and two adjacent facilities in Oklahoma City, Oklahoma during the third quarter of fiscal 2010 will depend on our ability to manage those operations, fully assimilate the operations into our distribution network, realize opportunities for revenue growth presented by strengthened product offerings and expanded geographic market coverage, maintain the customer base and eliminate redundant and excess costs. We may not realize the anticipated benefits or savings from an acquisition in the time frame anticipated, if at all, or such benefits and savings may include higher costs than anticipated.

Substantial operating losses may occur if the customers to whom we extend credit or for whom we guarantee loan or lease obligations fail to repay us.

     In the ordinary course of business, we extend credit, including loans, to our food distribution customers, and provide financial assistance to some customers by guaranteeing their loan or lease obligations. We also lease store sites for sublease to independent retailers. Generally, our loans and other financial accommodations are extended to small businesses that are unrated and may have limited access to conventional financing. As of January 1, 2011, we had loans, net of reserves, of $25.6 million outstanding to 33 of our food distribution customers and had guaranteed outstanding debt and lease obligations of food distribution customers totaling $9.4 million. In the normal course of business, we also sublease retail properties and assign retail property leases to third parties. As of January 1, 2011, the present value of our maximum contingent liability exposure, net of reserves, with respect to subleases and assigned leases was $22.8 million and $8.9 million, respectively. While we seek to obtain security interests and other credit support in connection with the financial accommodations we extend, such collateral may not be sufficient to cover our exposure. Greater than expected losses from existing or future credit extensions, loans, guarantee commitments or sublease arrangements could negatively and potentially materially impact our operating results and financial condition.

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

     We engage in a wide variety of promotional programs cooperatively with our vendors. The nature of these programs and the allocation of dollars among them evolve over time as the parties assess the results of specific promotions and plan for future promotions. These programs require careful management in order for us to maintain or improve margins while at the same time driving sales for us and for the vendors. A reduction in overall promotional spending or a shift in promotional spending away from certain types of promotions that we have historically utilized could have a significant impact on our gross profit margin and profitability. Our ability to anticipate and react to changes in promotional spending by, among other things, planning and implementing alternative programs that are expected to be mutually beneficial to the manufacturers and us, will be an important factor in maintaining or improving margins and profitability. If we are unable to effectively manage these programs, it could have a material adverse effect on our results of operations and financial condition.

Our debt instruments include financial and other covenants that limit our operating flexibility and may affect our future business strategies and operating results.

     Covenants in the documents governing our outstanding or future debt, or our future debt levels, could limit our operating and financial flexibility. Our ability to respond to market conditions and opportunities as well as capital needs could be constrained by the degree to which we are leveraged, by changes in the availability or cost of capital, and by contractual limitations on the degree to which we may, without the consent of our lenders, take actions such as engaging in mergers, acquisitions or divestitures, incurring additional debt, making capital expenditures, repurchasing shares of our stock and making investments, loans or advances. If needs or opportunities were identified that would require financial resources beyond existing resources, obtaining those

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resources could increase our borrowing costs, further reduce financial flexibility, require alterations in strategies and affect future operating results.

Legal, governmental, legislative or administrative proceedings, disputes or actions that result in adverse outcomes or unfavorable changes in government regulations may affect our businesses and operating results.

     Adverse outcomes in litigation, governmental, legislative or administrative proceedings and/or other disputes may result in significant liability to the Company and affect our profitability or impose restrictions on the manner in which we conduct our business. Our businesses are also subject to various federal, state and local laws and regulations with which we must comply. Changes in applicable laws and regulations that impose additional requirements or restrictions on the manner in which we operate our businesses could increase our operating costs.

Failure of our internal control over financial reporting could materially impact our business and results.

     The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. An internal control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all internal control systems, internal control over financial reporting may not prevent or detect misstatements. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud, and could expose us to litigation or adversely affect the market price of our common stock.

Changes in accounting standards could materially impact our results.

     Generally accepted accounting principles and related accounting pronouncements, implementation guidelines, and interpretations for many aspects of our business, such as accounting for insurance and self-insurance, inventories, goodwill and intangible assets, store closures, leases, income taxes and share-based payments, are highly complex and involve subjective judgments. Changes in these rules or their interpretation could significantly change or add significant volatility to our reported earnings without a comparable underlying change in cash flow from operations.

We may experience technology failures which could have a material adverse effect on our business.

     We have large, complex information technology systems that are important to our business operations. Although we have an off-site disaster recovery center and have installed security programs and procedures, security could be compromised and technology failures and systems disruptions could occur. This could result in a loss of sales or profits or cause us to incur significant costs, including payments to third parties for damages.

Severe weather and natural disasters can adversely impact our operations, our suppliers or the availability and cost of products we purchase.

     Severe weather conditions and natural disasters could damage our properties and adversely impact the geographic areas where we conduct our business. Severe weather and natural disasters could also affect the suppliers from whom we procure products and could cause disruptions in our operations and affect our supply chain capabilities. In addition, unseasonably adverse climatic conditions that impact growing conditions and the crops of food producers may adversely affect the availability or cost of certain products.

Unions may attempt to organize our employees.

     While our management believes that our employee relations are good, we cannot be assured that we will not experience pressure from labor unions or become the target of campaigns similar to those faced by our competitors. The potential for unionization could increase if the United States Congress passes the Federal Employee Free Choice Act legislation. We have always respected our employees’ right to unionize or not to unionize. However, the unionization of a significant portion of our workforce could increase our overall costs at the affected locations and adversely affect our flexibility to run our business in the most efficient manner to

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remain competitive or acquire new business. In addition, significant union representation would require us to negotiate wages, salaries, benefits and other terms with many of our employees collectively and could adversely affect our results of operations by increasing our labor costs or otherwise restricting our ability to maximize the efficiency of our operations.

Costs related to a multi-employer pension plan, which has liabilities in excess of plan assets, may have a material adverse effect on the Company’s financial condition and results of operations.

     The Company participates in the Central States Southeast and Southwest Areas Pension Funds (“CSS” or “the plan”), a multi-employer pension plan, for certain unionized employees. The Company’s contributions to the plan may escalate in future years should we withdraw from the plan or factors outside the Company’s control, including the bankruptcy or insolvency of other participating employers, actions taken by trustees who manage the plan, government regulations, or a funding deficiency in the plan. Escalating costs associated with the plan may have a material adverse effect on the Company’s financial condition and results of operations.

     CSS adopted a rehabilitation plan as a result of its actuarial certification for the plan year beginning January 1, 2008 which placed the plan in critical status. The Actuarial Certification of Plan Status as of January 1, 2010 certified that the Central States Pension Fund remains in critical status with a funded percentage of 63.1%. The plan adopted an updated rehabilitation plan effective December 31, 2010 which implements additional measures to improve the plan’s funded level, including establishing an increased minimum retirement age and actuarially adjusting certain pre-age 65 benefits for participants who retire after July 1, 2011. Despite these changes, we can make no assurances of the extent to which the updated rehabilitation plan will improve the funded status of the plan.

     Effective July 9, 2009, the trustees of CSS formalized a decision to terminate the participation of YRC Worldwide, Inc. (formerly Yellow Freight and Roadway Express, “YRC”) and USF Holland, Inc. from the pension fund. Under an agreement between the Teamsters and YRC dated September 24, 2010, YRC would resume participation in the plan in July 2011 at a reduced contribution rate. It is our understand that the Trustees of the plan have not yet agreed to accept this agreement. At this time, there is no change to the funding obligations due from other participating employers in the fund as a result of this termination; however, further developments may necessitate a reevaluation of the funding obligations at some point in the future.

     The underfunding of the plan is not a direct obligation or liability of the Company. Moreover, if the Company were to exit certain markets or otherwise cease making contributions to the Plan, the Company could trigger a substantial withdrawal liability. However, the amount of any increase in contributions will depend upon several factors, including the number of employers contributing to the Plan, results of the Company’s collective bargaining efforts, investment returns on assets held by the Plan, actions taken by the trustees of the Plan, and actions that the Federal government may take. We are currently unable to reasonably estimate a liability. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably estimated.

Increases in employee benefit costs and other labor relations issues may lead to labor disputes and disruption of our businesses.

     If we are unable to control health care, pension and wage costs, or gain operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse impact on future results of operations. There can be no assurance that the Company will be able to negotiate the terms of any expiring or expired agreement in a manner that is favorable to the Company. Therefore, potential work disruptions from labor disputes could result, which may affect future revenues and profitability.

We are subject to the risk of product liability claims, including claims concerning food and prepared food products.

     The sale of food and prepared food products for human consumption may involve the risk of injury. Injuries may result from tampering by unauthorized third parties, product contamination or spoilage, including the presence of foreign objects, substances, chemicals, other agents, or residues introduced during the growing, storage, handling and transportation phases. We cannot be sure that consumption of products we distribute and sell will not cause a health-related illness in the future or that we will not be subject to claims or lawsuits relating to such matters.

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     Negative publicity related to these types of concerns, or related to product contamination or product tampering, whether valid or not, might negatively impact demand for products we distribute and sell, or cause production and delivery disruptions. We may need to recall products if any of these products become unfit for consumption. Costs associated with these potential actions could adversely affect our operating results.

Threats or potential threats to security may adversely affect our business.

     Threats or acts of terror, data theft, information espionage, or other criminal activity directed at the food industry, the transportation industry, or computer or communications systems, including security measures implemented in recognition of actual or potential threats, could increase security costs and adversely affect our operations.

We depend upon vendors to supply us with quality merchandise at the right time and at the right price.

     We depend heavily on our ability to purchase merchandise in sufficient quantities at competitive prices. We have no assurances of continued supply, pricing, or access to new products and any vendor could at any time change the terms upon which it sells to us or discontinue selling to us. Sales demands may lead to insufficient in-stock positions of our merchandise.

     Significant changes in our ability to obtain adequate product supplies due to weather, food contamination, regulatory actions, labor supply, or product vendor defaults or disputes that limit our ability to procure products for sale to customers could have an adverse effect on our operating results.

Maintaining our reputation and corporate image is essential to our business success.

     Our success depends on the value and strength of our corporate name and reputation. Our name, reputation and image are integral to our business as well as to the implementation of our strategies for expanding our business. Our business, prospects, financial condition and results of operations could be adversely affected if our public image or reputation were to be tarnished by negative publicity including dissemination via print, broadcast and social media and other forms of Internet-based communications. Adverse publicity about regulatory or legal action against us could damage our reputation and image, undermine our customers’ confidence and reduce long-term demand for our products and services, even if the regulatory or legal action is unfounded or not material to our operations. Any of these events could have a negative impact on our results of operations and financial condition.

     The foregoing discussion of risk factors is not exhaustive and we do not undertake to revise any forward-looking statement to reflect events or circumstances that occur after the date the statement is made.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

     Our principal executive offices are located in Minneapolis, Minnesota and consist of approximately 135,400 square feet of office space in a building that we own.

Military Segment

     The table below lists the locations and sizes of our facilities exclusively used in our military distribution business as of January 1, 2011. Unless otherwise indicated, we own each of these distribution centers. Leased locations for our military segment have original lease terms ranging from five to 20 years plus renewal options ranging up to five years. The military segment lease expirations range from December 2011 to November 2029.

     The lease that expires in December 2011 pertains to our Junction City, Kansas facility which requires lease payments be made to the holders of outstanding industrial revenue bonds. As of January 1, 2011, all of

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the outstanding industrial revenue bonds are held by the Company, and upon expiration of the lease term, the Company will take title to the property upon redemption of the outstanding bonds.

	Approx. Size
Location	(Square Feet)
Norfolk, Virginia (2)		756,200
Jessup, Maryland (1)		115,200
Junction City, Kansas (1) (3)		132,000
Pensacola, Florida		355,900
San Antonio, Texas		486,800
Columbus, Georgia (1) (3)		531,900
Bloomington, Indiana (4)		302,600
Oklahoma City, Oklahoma (5)		544,200
Total Square Footage		3,224,800

(1)	Leased facility.
(2)	Leased facility as of January 1, 2011, however, the property was purchased from the landlord on January 3, 2011. Please see Part 2, Item 8, Note 19 — “Other Information” of this Form 10-K for further information regarding the purchase of this property.
(3)	Leased locations requiring periodic lease payments to the holders of outstanding industrial revenue bonds. As of January 1, 2011, all outstanding industrial revenue bonds associated with these locations were held by the Company.
(4)	Purchased during the third quarter of fiscal 2010 and became operational during the fourth quarter of fiscal 2010.
(5)	Two adjacent properties purchased during the third quarter of fiscal 2010 which are scheduled to become operational during fiscal 2012.

Food Distribution Segment

     The table below lists, as of January 1, 2011, the locations and sizes of our distribution centers primarily used in our food distribution operations. Unless otherwise indicated, we own each of these distribution centers. Leased locations of our food distribution segment have original lease terms ranging from 15 to 20 years plus renewal options ranging up to five years. The food distribution segment lease expirations range from July 2015 to July 2016.

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	Approx. Size
Location	(Square Feet)
Midwest Region:
Omaha, Nebraska		626,900
Cedar Rapids, Iowa		351,900
St. Cloud, Minnesota		329,000
Sioux Falls, South Dakota (2)		275,400
Fargo, North Dakota		288,800
Rapid City, South Dakota (3)		195,100
Minot, North Dakota		185,200
Southeast Region:
Lumberton, North Carolina (1)		336,500
Statesboro, Georgia (1)		230,500
Bluefield, Virginia		187,500
Great Lakes Region:
Bellefontaine, Ohio		666,000
Lima, Ohio (4)		617,000
Westville, Indiana		631,900
Cincinnati, Ohio		403,300
Total Square Footage		5,325,000

(1)	Leased facility.
(2)	Includes 79,300 square feet that we lease.
(3)	Includes 8,000 square feet that we lease.
(4)	Includes 99,500 square feet that we lease.

Retail Segment

     The table below contains selected information regarding our 52 corporate-owned stores as of January 1, 2011. We own the facilities of 22 of these stores and lease the facilities of 30 of these stores.

	Number of				Average
Banner	Stores		Areas of Operation		Square Feet
Sun Mart		20		CO, MN, ND, NE		33,359
Econofoods		16		IA, MN, SD, WI		32,711
AVANZA		5		CO, NE		34,945
Family Thrift Center		4		SD		48,449
Family Fresh Market		2		WI		48,776
Pick ‘n Save		2		OH		49,588
Prairie Market		1		SD		29,480
Wholesale Food Outlet		1		IA		19,620
Other Stores		1		MN		3,500
Total		52

     The table excludes three corporate-owned stand-alone pharmacies and one convenience store. As of January 1, 2011, the aggregate square footage of our 52 retail grocery stores totaled 1,808,393 square feet.

ITEM 3. LEGAL PROCEEDINGS

Roundy’s Supermarkets, Inc. v. Nash Finch

     On February 11, 2008, Roundy’s Supermarkets, Inc. (“Roundy’s”) filed suit against us claiming we breached the Asset Purchase Agreement (“APA”), entered into in connection with our acquisition of certain

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distribution centers and other assets from Roundy’s, by not paying approximately $7.9 million that Roundy’s claimed was due under the APA as a purchase price adjustment. We answered the complaint denying any payment was due to Roundy’s and asserted counterclaims against Roundy’s for, among other things, breach of contract, misrepresentation, and breach of the duty of good faith and fair dealing. In our counterclaim we demanded damages from Roundy’s in excess of $18.0 million.

     On September 14, 2009, we entered into a settlement agreement with Roundy’s that fully resolved all claims brought in the lawsuit. Under the terms of the settlement agreement, both parties agreed to dismiss their claims against the other in exchange for a release of claims. Neither party was required to pay any money to the other. We recorded a $7.6 million gain in fiscal 2009 which represented the reversal of the liability we had recorded in conjunction with the disputed APA purchase price adjustment.

Other

     We are also engaged from time-to-time in routine legal proceedings incidental to our business. We do not believe that these routine legal proceedings, taken as a whole, will have a material impact on our business or financial condition.

ITEM 4. RESERVED

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

     Our common stock is quoted on the NASDAQ Global Select Market and currently trades under the symbol NAFC. The following table sets forth, for each of the calendar periods indicated, the range of high and low closing sales prices for our common stock as reported by the NASDAQ Global Select Market, and the quarterly cash dividends paid per share of common stock. At February 22, 2011, there were 1,822 stockholders of record.

									Dividends
	2010				2009				Per Share
	High		Low		High		Low		2010		2009
First Quarter	$	37.66	$	32.87	$	45.70	$	27.16	$	0.18	$	0.18
Second Quarter		38.10		33.65		34.36		27.69	$	0.18	$	0.18
Third Quarter		43.62		34.20		30.75		26.28	$	0.18	$	0.18
Fourth Quarter		43.78		36.08		37.49		28.00	$	0.18	$	0.18

     On March 1, 2011, the Nash Finch Board of Directors declared a cash dividend of $0.18 per common share, payable on March 25, 2011, to stockholders of record as of March 11, 2011.

Issuer Purchases of Equity Securities

     The following table provides information about shares of common stock the Company acquired during the fourth quarter of fiscal 2010:

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					(c) Total number
					of shares		(d) Maximum
	(a) Total				purchased as part		amount that
	number of		(b) Average		of publicly		may be spent
	shares		price paid per		announced plans		under plans or
Period	purchased (1)		share (1)		or programs (1)		programs (1)
Period 13 (December 5, 2010 to January 1, 2011)		60,499	$	41.55		60,499	$	—

(1) On November 10, 2009, our Board of Directors approved a share repurchase program to spend up to $25.0 million to purchase shares of the Company’s common stock. The program took effect on November 16, 2009 and expired on December 31, 2010, during which time we repurchased 673,974 shares for approximately $23.8 million.

Total Shareholder Return Graph

     The line graph below compares the cumulative total shareholder return on the Company’s common stock for the last five fiscal years with cumulative total return on the S&P SmallCap 600 Index and the peer group index described below. This graph assumes a $100 investment in each of Nash Finch Company, the S&P SmallCap 600 Index and the peer group index at the close of trading on December 31, 2005, and also assumes the reinvestment of all dividends. The stock price performance shown below is not necessarily indicative of future performance.

     The peer group represented in the line graph above includes the following nine publicly traded companies: SuperValu Inc., Arden Group, Inc., The Great Atlantic & Pacific Tea Company, Inc., Ingles Markets, Incorporated, Ruddick Corporation, Spartan Stores, Inc., United Natural Foods, Inc., Weis Markets, Inc. and Core-Mark Holding Company, Inc. The peer group cumulative return is weighted by market capitalization of each peer company as of the beginning of the five-year performance period. The decline of the peer group initial investment is representative of the bankruptcy filing of The Great Atlantic & Pacific Tea Company, Inc. during fiscal 2010 and a significant decline in the value of the common stock of SuperValu, Inc.

     From time-to-time, the peer group companies have changed due to merger and acquisition activity, bankruptcy filings, company delistings and other similar occurrences. There were no changes to the peer group during fiscal 2010.

     The performance graph above is being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, is not being filed for purposes of Section 18 of the Securities

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Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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ITEM 6. SELECTED FINANCIAL DATA

NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Summary of Operations
Five years ended January 1, 2011 (not covered by Independent Auditors’ Report)
(Dollar amounts in thousands except per share amounts)

	2010			2009 (1)			2008			2007			2006
	(52 Weeks)			(52 Weeks)			(53 Weeks)			(52 Weeks)			(52 Weeks)
Results of Operations
Sales	$	4,991,979		$	5,212,655		$	4,633,494		$	4,464,035		$	4,581,563
Cost of sales		4,591,191			4,793,967			4,226,545			4,066,381			4,179,741
Gross profit		400,788			418,688			406,949			397,654			401,822
Selling, general and administrative		269,140			287,328			288,263			280,818			319,678
Gains on sale of real estate		—			—			—			(1,867	)		(1,130	)
Special charges		—			6,020			—			(1,282	)		6,253
Gain on acquisition of a business		—			(6,682	)		—			—			—
Gain on litigation settlement		—			(7,630	)		—			—			—
Goodwill impairment		—			50,927			—			—			26,419
Depreciation and amortization		36,119			40,603			38,429			38,882			41,451
Interest expense		23,403			24,372			26,466			28,088			30,840
Income tax expense		21,185			20,972			20,646			16,984			4,198
Earnings (loss) from continuing operations		50,941			2,778			33,145			36,031			(25,887	)
Net earnings from discontinued operations		—			—			—			—			160
Cumulative effect of change in accounting principle, net of income tax (2)		—			—			—			—			169
Net earnings (loss)	$	50,941		$	2,778		$	33,145		$	36,031		$	(25,558	)
Basic earnings (loss) per share	$	3.97		$	0.21		$	2.57		$	2.67		$	(1.91	)
Diluted earnings (loss) per share	$	3.86		$	0.21		$	2.52		$	2.64		$	(1.91	)
Cash dividends declared per common share	$	0.72		$	0.72		$	0.72		$	0.72		$	0.72
Selected Data
Pretax earnings (loss) from continuing operations as a percent of sales		1.44	%		0.46	%		1.16	%		1.19	%		(0.47	)%
Net earnings (loss) as a percent of sales		1.02	%		0.05	%		0.72	%		0.81	%		(0.56	)%
Effective income tax rate		29.4	%		88.3	%		38.4	%		32.0	%		19.4	%
Current assets	$	591,510		$	557,816		$	467,951		$	477,934		$	457,053
Current liabilities	$	293,242		$	308,509		$	297,729		$	282,357		$	278,222
Net working capital	$	298,268		$	249,307		$	170,222		$	195,577		$	178,831
Ratio of current assets to current liabilities		2.02			1.81			1.57			1.69			1.64
Total assets	$	1,050,675		$	999,536		$	952,546		$	949,267		$	952,480
Capital expenditures	$	59,295		$	30,402		$	31,955		$	21,419		$	27,469
Long-term obligations (long-term debt and capitalized lease obligations)	$	311,186		$	279,032		$	248,026		$	280,010		$	315,321
Stockholders’ equity	$	377,004		$	350,559		$	349,019		$	331,600		$	313,113
Stockholders’ equity per share (3)	$	31.14		$	27.36		$	27.23		$	25.26		$	23.39
Return on stockholders’ equity (4)		13.51	%		0.79	%		9.50	%		10.87	%		(8.27	)%
Common stock high price (5)	$	43.78		$	45.70		$	46.33		$	51.29		$	31.74
Common stock low price (5)	$	32.87		$	26.28		$	30.97		$	26.89		$	19.42

(1)	Information presented for fiscal 2009 reflects our acquisition on January 31, 2009, from GSC Enterprises, Inc., of three wholesale food distribution centers which service military commissaries and exchanges. More generally, discussion regarding the comparability of information presented in the table above or material uncertainties that could cause the selected financial data not to be indicative of future financial condition or results of operations can be found in Part 1, Item 1A of this report, “Risk Factors,” Part II, Item 7 of this report, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8 of this report in our Consolidated Financial Statements and notes thereto.
(2)	Effect of adoption of revisions to ASC Topic 718 in fiscal 2006.
(3)	Based on outstanding shares at year-end.
(4)	Return based on continuing operations.
(5)	High and low closing sales price on NASDAQ.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     In terms of revenue, we are the second largest publicly traded wholesale food distributor in the United States serving the military commissary and exchange systems and the retail grocery industry. Our business consists of three primary operating segments: military food distribution, food distribution and retail.

     Our military segment contracts with manufacturers to distribute a wide variety of grocery products to military commissaries and exchanges located in the United States and the District of Columbia, and in Europe, Puerto Rico, Cuba, the Azores and Egypt. We have over 30 years of experience acting as a distributor to U.S. military commissaries and exchanges. On January 31, 2009, we completed the purchase from GSC Enterprises, Inc., of substantially all of the assets relating to three wholesale food distribution centers located in San Antonio, Texas, Pensacola, Florida and Junction City, Kansas, including all inventory and customer contracts related to the purchased facilities (“GSC acquisition”). On December 1, 2009, we purchased a facility in Columbus, Georgia which began servicing military commissaries and exchanges in the third quarter of fiscal 2010. During the third quarter of fiscal 2010, we purchased a facility in Bloomington, Indiana and two adjacent facilities in Oklahoma City, Oklahoma for expansion of our military food distribution business. The Bloomington, Indiana facility became operational during the fourth quarter of fiscal 2010, while the Oklahoma City, Oklahoma facilities are scheduled to become operational during fiscal 2012. In addition, we purchased the real estate associated with our Pensacola, Florida facility, which had previously been a leased facility, during the third quarter of fiscal 2010.

     Our food distribution segment sells and distributes a wide variety of nationally branded and private label grocery products and perishable food products from 14 distribution centers to approximately 1,800 independent retail locations located in 28 states, primarily in the Midwest and Southeast regions of the United States. During the third quarter of fiscal 2010, we closed our food distribution center in Bridgeport, Michigan at the end of its lease term and transitioned the majority of the business to our Lima, Ohio distribution center.

     Our retail segment operated 52 corporate-owned stores primarily in the Upper Midwest as of January 1, 2011. Primarily due to highly competitive conditions in which supercenters and other alternative formats compete for price conscious customers, we closed or sold four retail stores in 2008, four retail stores in 2009 and two retail stores in 2010. We are implementing initiatives of varying scope and duration with a view toward improving our response to and performance under these highly competitive conditions. These initiatives include designing and reformatting some of our retail stores into alternative formats to increase overall retail sales performance. As we continue to assess the impact of performance improvement initiatives and the operating results of individual stores, we may need to recognize additional impairments of long-lived assets and goodwill associated with our retail segment, and may incur restructuring or other charges in connection with closure or sales activities. The retail segment yields a higher gross profit percent of sales and higher selling, general and administrative (“SG&A”) expenses as a percent of sales compared to our food distribution and military segments. Thus, changes in sales of the retail segment can have a disproportionate impact on consolidated gross profit and SG&A as compared to similar changes in sales in our food distribution and military segments.

Results of Operations

     The following discussion summarizes our operating results for fiscal 2010 compared to fiscal 2009 and fiscal 2009 compared to fiscal 2008. However, fiscal 2008 results are not directly comparable to fiscal 2009 or fiscal 2010 because fiscal 2008 contained an additional week.

     Sales

     The following tables summarize our sales activity for fiscal 2010, 2009 and 2008. Certain prior year sales amounts for our food distribution and military segments below have been revised to conform to our current year presentation. Please refer to Part II, Item 8 in this report under Note (18) — “Segment Reporting” of this Form 10-K for additional information regarding our segment reporting revision.

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	2010								2009								2008
			Percent			Percent					Percent			Percent					Percent
(in millions)	Sales		of Sales			Change			Sales		of Sales			Change			Sales		of Sales
Segment Sales:
Military	$	2,290.0		45.9	%		1.6	%	$	2,254.4		43.2	%		45.0	%	$	1,555.2		33.6	%
Food Distribution		2,183.7		43.7	%		(8.5	)%		2,385.9		45.8	%		(3.6	)%		2,475.8		53.4	%
Retail		518.3		10.4	%		(9.4	)%		572.3		11.0	%		(5.0	)%		602.5		13.0	%
Total Sales	$	4,992.0		100.0	%		(4.2	)%	$	5,212.6		100.0	%		12.5	%	$	4,633.5		100.0	%

     The following table provides comparable sales for fiscal 2009 in comparison to fiscal 2008 by excluding the first week of sales from fiscal 2008:

					Fiscal 2008
			Fiscal 2008		Comparable		Comparable
(in millions)	Fiscal 2008		Week 1		52 Weeks of		Percent Change
Segment Sales:	Sales		Sales		Sales		2009 to 2008
Military	$	1,555.2	$	24.7	$	1,530.5		47.3	%
Food Distribution		2,475.8		41.6		2,434.2		(2.0	)%
Retail		602.5		11.2		591.3		(3.2	)%
Total Sales	$	4,633.5	$	77.5	$	4,556.0		14.4	%

     Total Company sales declined 4.2% during fiscal 2010 as compared to the comparable prior year period. However, excluding the additional sales of $59.4 million attributable to acquired military locations during the first quarter 2010 and the previously announced transition of a portion of a food distribution customer buying group to another supplier of $95.2 million during the second quarter 2010, total Company comparable sales declined 3.6% during fiscal 2010.

     Total Company sales increased 12.5% during fiscal 2009 in comparison to fiscal 2008 and increased 14.4% in comparison to fiscal 2008 after excluding the additional week of sales in fiscal 2008. Excluding the $683.3 million of sales attributable to the acquisition of three military distribution centers on January 31, 2009 and the extra week of sales in fiscal 2008, total company comparable sales for fiscal 2009 decreased 0.6%.

     Fiscal 2010 military sales increased 1.6% in comparison to the fiscal 2009. However, excluding the non-comparable sales attributable to the acquired locations during the first quarter 2010 of $59.4 million, fiscal 2010 comparable military segment sales decreased by 1.1% in comparison to the prior year. The comparable decrease in fiscal 2010 military sales is due to a 1.4% decrease in domestic sales which was partially offset by a 0.8% increase in sales overseas.

     Fiscal 2009 military sales increased 45.0% in comparison to fiscal 2008 and increased 47.3% in comparison to fiscal 2008 after excluding the additional week of sales in fiscal 2008. However, after excluding the sales attributable to the acquired locations and the additional week of sales in fiscal 2008, comparable military segment sales increased by 2.7% in comparison to the prior year. The comparable increase in military segment sales is due to 3.5% stronger sales domestically.

     Domestic and overseas sales represented the following percentages of military segment sales. Note that the business acquired through the GSC acquisition services domestic military bases only.

	2010			2009			2008
Domestic		83.3	%		83.2	%		75.2	%
Overseas		16.7	%		16.8	%		24.8	%

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     Fiscal 2010 food distribution sales decreased 8.5% in comparison to fiscal 2009, which is primarily attributable to the previously announced transition of a portion of a food distribution customer buying group to another supplier during the second quarter 2010 which accounted for $95.2 million in sales during fiscal 2009 and a decline in comparable sales to existing customers. Excluding the impact of the customer transition, food distribution sales declined 4.7%. The decrease in comparable sales to existing customers was partially attributable to deflation in certain product categories.

     Fiscal 2009 food distribution sales decreased 3.6% in comparison to fiscal 2008 and decreased 2.0% in comparison to fiscal 2008 after excluding the additional week of sales in fiscal 2008. This decrease was due primarily to a decrease in sales to existing customers which was driven by deflation in certain perishable categories.

     Retail sales for fiscal 2010 decreased 9.4% in comparison to fiscal 2009. The decrease in retail sales for fiscal 2010 was primarily attributable to a 5.0% decrease in same store sales, which compare retail sales for stores which were in operation for the same number of weeks in the comparative periods, and the closure of two stores during the year.

     Retail sales for fiscal 2009 decreased 5.0% in comparison to fiscal 2008 and decreased 3.2% in comparison to fiscal 2008 after excluding the additional week of sales in fiscal 2008. The decrease in retail sales for fiscal 2009 was primarily attributable to a 2.4% decrease in same store sales, which compare retail sales for stores which were in operation for the same number of weeks in the comparative periods, and the closure of four stores during the year.

     During fiscal 2010, 2009 and 2008, our corporate store count changed as follows:

	Fiscal Year			Fiscal Year			Fiscal Year
	2010			2009			2008
Number of stores at beginning of year		54			57			59
New stores		—			1			—
Acquired stores		—			—			2
Closed or sold stores		(2	)		(4	)		(4	)
Number of stores at end of year		52			54			57

     The table excludes corporate-owned stand-alone pharmacies and convenience stores.

     Gross Profit

     Consolidated gross profit for fiscal 2010 was 8.0% of sales compared to 8.0% for fiscal 2009 and 8.8% for fiscal 2008.

     The fiscal 2010 gross profit margin remained flat at 8.0% in comparison to the prior year. Our fiscal 2010 gross profit margin was positively impacted by 0.2% of sales driven primarily by higher gross margin performance in our food distribution and military segments. However, our gross profit margin was negatively affected by 0.2% of sales in fiscal 2010 due to a sales mix shift between our business segments between the years. This was due to a higher percentage of 2010 sales occurring in the military segment which have a lower gross profit margin than the retail and food distribution segments.

     Our fiscal 2009 gross profit margin was negatively affected by 0.6% of sales in comparison to fiscal 2008 due to a sales mix shift between our business segments between the years. This was due to a higher percentage of 2009 sales occurring in the military segment due to the GSC acquisition and a lower percentage in the retail and food distribution segments which have a higher gross profit margin. In addition, high levels of inflation resulted in higher than normal prior year gross profit margin performance while declines in commodity prices during the current year have had a negative impact on gross profit performance.

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     Inventory markdown and wind down costs related to retail store closings and retail markdown adjustments are included in cost of sales and were $0.2 million, $0.2 million and $0.4 million in fiscal 2010, 2009 and 2008, respectively.

     Selling, General and Administrative Expense

     The following table outlines consolidated SG&A and the significant factors affecting consolidated SG&A:

		2010						2009						2008
					% of						% of						% of
(in millions except percentages)	Segment				sales						sales						sales
SG&A		$	269.1			5.4	%		287.3			5.5	%		288.3			6.2	%
Significant factors affecting SG&A:
Retail store impairments and lease reserves	Corporate overhead		0.4			0.0	%		5.3			0.1	%		0.9			0.0	%
Reversal of food distribution customers reserves	Food distribution		—			0.0	%		—			0.0	%		(3.3	)		-0.1	%
Gain on sale of assets	Retail		(0.3	)		0.0	%		(0.7	)		0.0	%		(0.6	)		0.0	%
Acquisition and conversion costs	Military		1.7			0.0	%		1.9			0.0	%		0.5			0.0	%
Share-based compensation over prior year	Corporate overhead		—			0.0	%		1.4			0.0	%		—			0.0	%
Store opening expenses	Retail		—			0.0	%		0.7			0.0	%		—			0.0	%
Food distribution center closing costs	Food distribution		0.8			0.0	%		—			0.0	%		—			0.0	%
Tax consulting fees	Corporate overhead		—			0.0	%		0.4			0.0	%		—			0.0	%
Total significant factors affecting SG&A		$	2.6			0.1	%		9.0			0.2	%		(2.5	)		-0.1	%

     Consolidated SG&A for fiscal 2010 was 5.4% of sales as compared to 5.5% of sales in fiscal 2009. Our SG&A margin benefited by 0.2% of sales in fiscal 2010 due to the sales mix shift between our business segments due to the higher level of military sales relative to the other business segments in 2010. However, we experienced acquisition and conversion costs of $1.7 million and costs associated with the closing of a food distribution center of $0.8 million that negatively impacted our SG&A margin during fiscal 2010.

     Consolidated SG&A for fiscal 2009 was 5.5% of sales as compared to 6.2% of sales in fiscal 2008. Our SG&A margin benefited by 0.6% of sales in fiscal 2009 due to the sales mix shift between our business segments due to the higher level of military sales due to the GSC acquisition relative to the other business segments in 2009. In addition, certain variable employee compensation and benefit expenses were $11.4 million lower than those incurred during fiscal 2008 which contributed to a lower SG&A margin during fiscal 2009.

     Special Charge

     A special charge of $6.0 million was recognized in fiscal 2009 due to asset impairments in our food distribution segment. The charge included write-downs of $5.5 million to leasehold improvements and $0.5 million to fixtures and equipment.

     Gain on Acquisition of a Business

26

     A gain on the acquisition of a business of $6.7 million (net of tax) was recognized during fiscal 2009 related to the GSC acquisition. The fair value of the identifiable assets acquired and liabilities assumed of $84.8 million exceeded the fair value of the purchase price of the business of $78.1 million. Consequently, we reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measures were appropriate.

     Gain on Litigation Settlement

     A gain of $7.6 million was recognized in fiscal 2009 related to the settlement of litigation in connection with our 2005 acquisition of certain distribution centers and other assets from Roundy’s Supermarkets, Inc (“Roundy’s”). This gain represented the reversal of the liability we had recorded in connection with this litigation. Please refer to Part II, Item 8 in this report under Note (15) — “Commitments and Contingencies” of this Form 10-K for additional information.

     Goodwill Impairment

     Annually, we perform an impairment test of goodwill during the fourth quarter based on conditions as of the end of our third fiscal quarter in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 (“ASC 350”). No goodwill impairment changes were recorded during fiscal 2010 or fiscal 2008. We recorded a goodwill impairment charge of $50.9 million in fiscal 2009 that related to our retail reporting unit. Please refer to Part II, Item 8 in this report under Note (1) — “Summary of Significant Accounting Policies” under the caption “Goodwill and Intangible Assets” of this Form 10-K for additional information pertaining to our annual goodwill impairment analysis.

     Depreciation and Amortization Expense

     Depreciation and amortization expense for fiscal 2010, 2009 and 2008 was $36.1 million, $40.6 million and $38.4 million, respectively. The decrease in depreciation and amortization expense for fiscal 2010 in comparison to fiscal 2009 is attributable to lower depreciation and amortization expense in our food distribution and retail segments. The increase in depreciation and amortization expense for fiscal 2009 in comparison to fiscal 2008 was primarily attributable to the GSC acquisition.

     Interest Expense

     Interest expense decreased $1.0 million to $23.4 million in fiscal 2010 as compared to $24.4 million in fiscal 2009. Average borrowing levels decreased by $29.1 million from $362.7 million during fiscal 2009 to $333.6 million during fiscal 2010. The effective interest rate was 4.5% for fiscal 2010 as compared to 4.6% for fiscal 2009.

     Interest expense decreased $2.1 million to $24.4 million in fiscal 2009 as compared to $26.5 million in fiscal 2008. Fiscal 2008 interest expense includes the write-off of deferred financing costs of $1.0 million associated with the refinancing of our senior secured bank credit facility. Average borrowing levels increased by $21.1 million from $341.6 million during fiscal 2008 to $362.7 million during fiscal 2009. The effective interest rate was 4.6% for fiscal 2009 as compared to 5.4% for fiscal 2008. However, excluding the impact of the write-off of deferred financing costs, the effective interest rate was 5.1% for fiscal 2008.

     The calculation of our effective interest rates excludes non-cash interest required to be recognized on our senior subordinated convertible notes under ASC Subtopic 470-20. Non-cash interest expense recognized under ASC 470-20 was $5.3 million, $4.9 million and $4.7 million during fiscal 2010, 2009 and 2008, respectively. Additionally, the calculation of our average borrowing levels includes the unamortized equity component of our senior subordinated convertible notes that is required to be recognized under ASC Subtopic 470-20. The inclusion of the unamortized equity component brings the basis in our senior subordinated convertible notes to $150.1 million for purposes of calculating our average borrowing levels, or their aggregate issue price, which we are required to pay semi-annual cash interest on at a rate of 3.50% until March 15, 2013.

     Income Tax Expense

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     The effective tax rate for income from continuing operations was 29.4%, 88.3% and 38.4% for fiscal 2010, 2009 and 2008, respectively. Income tax expense from continuing operations differed from amounts computed by applying the federal income tax rate to pre-tax income as a result of the following:

	2010			2009			2008
Federal statutory tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal income tax benefit		3.7	%		4.7	%		4.0	%
Non-deductible goodwill		0.0	%		73.6	%		0.0	%
Change in tax contingencies		(8.0	)%		4.4	%		1.1	%
Gain on litigation settlement		0.0	%		(12.7	)%		0.0	%
Gain on acquisition of a business		0.0	%		(11.2	)%		0.0	%
Federal refund claim		0.0	%		(6.8	)%		0.0	%
Other, net		(1.3	)%		1.3	%		(1.7	)%
Effective tax rate		29.4	%		88.3	%		38.4	%

     The effective tax rate for fiscal 2010 was impacted by the increase in tax reserves of $3.4 million and the reversal of previously unrecognized tax benefits of $13.6 million primarily due to statute of limitation expirations and audit resolutions. In fiscal 2009, we increased tax reserves by $2.7 million and reversed previously unrecognized tax benefits of $0.2 million also, primarily due to state statute of limitation expirations and audit resolutions. Other items impacting the rate in 2009 include a large non-deductible goodwill charge, the litigation settlement related to Roundy’s of $3.0 million, the gain on the acquisition of the GSC assets of $2.7 million, and a refund on a claim made with the Internal Revenue Service of $1.7 million. The effective tax rate for fiscal 2008 was impacted by the reversal of previously unrecognized tax benefits of $2.6 million, primarily due to the filing of reports with various taxing authorities which resulted in the settlement of uncertain tax positions, a refund on a claim made with the Internal Revenue Service of $1.2 million and an increase in reserves of $2.7 million.

     Net Earnings

     Net earnings for fiscal 2010 were $50.9 million, or $3.86 per diluted share, compared to net earnings of $2.8 million, or $0.21 per diluted share, for fiscal 2009, and net earnings of $33.1 million, or $2.52 per diluted share, for fiscal 2008. Net earnings in each of the three years were affected by a number of events included in the discussion above that affected the comparability of results.

Liquidity and Capital Resources

     Historically, we have financed our capital needs through a combination of internal and external sources. We expect that cash flow from operations will be sufficient to meet our working capital needs and enable us to reduce our debt, with temporary draws on our revolving credit line needed during the year to build inventories for certain holidays. Longer term, we believe that cash flows from operations, short-term bank borrowings, various types of long-term debt and lease and equity financing will be adequate to meet our working capital needs, planned capital expenditures and debt service obligations. There can be no assurance, however, that we will continue to generate cash flows at current levels as our business is sensitive to trends in consumer spending at our customer locations and our owned retail food stores, as well as certain factors outside of our control, including, but not limited to, the current and future state of the U.S. and global economy, competition, recent and potential future disruptions to the credit and financial markets in the U.S. and worldwide and continued volatility in food and energy commodities. Please see Part I, Item 1A “Risk Factors” of this Form 10-K for a more detailed discussion of potential factors that may have an impact on our liquidity and capital resources.

     The following table summarizes our cash flow activity for fiscal 2010, 2009 and 2008 and should be read in conjunction with the consolidated statements of cash flows:

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(In thousands)	2010			2009			2008
Net cash provided by operating activities	$	66,116		$	102,373		$	111,999
Net cash used in investing activities		(57,938	)		(105,670	)		(60,414	)
Net cash provided by (used in) financing activities		(8,178	)		3,303			(51,623	)
Net change in cash and cash equivalents	$	—		$	6		$	(38	)

     Operating cash flows were $66.1 million for fiscal 2010, a decrease of $36.3 million from $102.4 million in fiscal 2009. An increase in our investment in our inventories of $47.8 million during fiscal 2010 as compared to a decline in our inventories of $21.1 million during fiscal 2009 is the primary factor driving the decline in operating cash flows during fiscal 2010 as compared to fiscal 2009. The increase in our inventories during fiscal 2010 was primarily driven by expansion activities associated with our military food distribution business. However, the impact our inventory investment had on our operating cash flows was partially offset by a year-over-year decline in our accounts receivable of $20.9 million.

     Operating cash flows were $102.4 million for fiscal 2009, a decrease of $9.6 million from $112.0 million in fiscal 2008. The primary reason for the fiscal 2009 decrease in operating cash flows was our net earnings, after adjusting for reconciling items to convert it to net cash provided, were $12.2 million lower than in fiscal 2008, which included one additional week or earnings in comparison to fiscal 2009. In addition, significant changes in operating assets and liabilities consisted of a $21.1 million decrease in our investment in our inventories during fiscal 2009 in comparison to a $31.5 million increase during fiscal 2008 which was offset by a year-over-year increase in our accounts receivable of $23.7 million, a year-over year decrease in our accrued expenses of $16.3 million, a year-over-year decrease in our accounts payable of $7.1 million and a year-over-year decrease in our income taxes payable of $6.2 million. The year-over year increase in our accounts receivable was due to a temporary timing difference related to our military accounts receivable billing cycle that accelerated collections into the last week of fiscal 2008 and the decrease in year-over-year accrued expense was primarily due to decreases in certain variable employee compensation and benefit expense accruals.

     Cash used for investing activities was $57.9 million in fiscal 2010, which consisted primarily of additions to property, plant and equipment of $59.3 million. The additions to property, plant and equipment during fiscal 2010 consisted primarily of expansion activities associated with our military distribution business, including the purchase of new facilities in Bloomington, Indiana and Oklahoma City, Oklahoma during the third quarter fiscal 2010, the addition of fixtures and equipment and conversion activities associated with our Columbus, Georgia facility, and our purchase of our Pensacola, Florida property during the fourth quarter of fiscal 2010, which had previously been a leased location. Cash used for investing activities was $105.7 million in fiscal 2009, which was primarily attributable to the GSC acquisition of $78.1 million and additions to property, plant and equipment of $30.4 million. Cash used for investing activities in fiscal 2008 were $60.4 million and consisted primarily of additions to property, plant and equipment of $32.0 million, loans to customers of $24.1 million and the acquisition of a business, net of cash, for $6.6 million.

     Cash used by financing activities was $8.2 million for fiscal 2010 which consisted primarily of $22.0 million used to repurchase shares of our common stock and $8.9 million in dividend payments, which was partially offset by net proceeds of long-term debt of $29.4 million. Cash provided by financing activities was $3.3 million for fiscal 2009 which consisted primarily of net proceeds of long-term debt of $29.9 million, a decrease in outstanding checks of $10.1 million and $9.2 million used to pay dividends on our common stock. Cash used by financing activities was $51.6 million for fiscal 2008 as $32.0 million was used to pay down long-term debt, $14.3 million was used to repurchase shares of our common stock and $9.2 million was used to pay dividends on our common stock.

     Share Repurchase

     On November 10, 2009, our Board of Directors approved a share repurchase program authorizing the Company to spend up to $25.0 million to purchase shares of the Company’s common stock (“2009 Repurchase Program”). The 2009 Repurchase Program took effect on November 16, 2009 and expired on December 31, 2010. During fiscal 2010, we repurchased a total of 643,234 shares for $22.8 million, at an average price per

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share of $35.42. During fiscal 2009, we repurchased a total of 30,720 shares for $1.0 million, at an average price per share of $33.10.

     On November 13, 2007, we announced that our Board of Directors had authorized a share repurchase program to purchase up to 1,000,000 shares of the Company’s common stock (“2007 Repurchase Program”). The 2007 Repurchase Program took effect on November 19, 2007 and concluded on January 3, 2009. During fiscal 2008 we repurchased 429,082 shares at an average price per share of $33.44 under the 2007 Repurchase Program.

     The average prices per share referenced above include commissions.

     Contractual Obligations and Commercial Commitments

     The following table summarizes our significant contractual cash obligations as of January 1, 2011, and the expected timing of cash payments related to such obligations in future periods:

	Amount Committed By Period
	Total
	Amount				Fiscal 2012-		Fiscal 2014-
(in thousands)	Committed		Fiscal 2011		2013		2015		Thereafter
Contractual Cash Obligations:
Long-Term Debt (1)	$	292,936	$	670	$	155,516	$	40	$	136,710
Interest on Long-Term Debt (2)		192,314		9,428		15,168		11,086		156,632
Capital Lease Obligations (3) (4)		33,413		4,826		8,800		6,760		13,027
Operating Leases (3)		86,804		20,517		32,336		18,994		14,957
Benefit Obligations (5)		29,804		3,212		6,008		5,803		14,781
Purchase Obligations (6)		11,549		3,777		3,462		1,900		2,410
Total (7)	$	646,820	$	42,430	$	221,290	$	44,583	$	338,517

(1)	Refer to Part II, Item 8 in this report under Note (7) — “Long-term Debt and Bank Credit Facilities” for additional information regarding long-term debt.
(2)	The interest on long-term debt for periods subsequent to fiscal 2015 reflects our Senior Subordinated Convertible Debt accreted interest for fiscal 2016 through 2035, should the convertible debt remain outstanding until maturity. Interest payments assume debt is held to maturity. For variable rate debt the current interest rates applicable as of January 1, 2011, were assumed for the remainder of the term.
(3)	Lease obligations primarily relate to store locations for our retail segment, as well as store locations subleased to independent food distribution customers. A discussion of lease commitments can be found in Part II, Item 8 in this report under Note (12) — “Leases” in the Notes to Consolidated Financial Statements and under the caption “Lease Commitments” in the Critical Accounting Policies section below.
(4)	Includes amounts classified as imputed interest.
(5)	Our benefit obligations include obligations related to third-party sponsored defined benefit pension and post-retirement benefit plans. For a further discussion see Part II, Item 8 in this report under Note (17) — “Pension and Other Post-retirement Benefits” in the Notes to Consolidated Financial Statements.
(6)	The amount of purchase obligations shown in the table represents the amount of product we are contractually obligated to purchase. The majority of our purchase obligations involve purchase orders made in the ordinary course of business, which are not included in the table above. Our purchase orders are based on our current needs and are fulfilled by our vendors within very short time horizons. The purchase obligations shown in this table also exclude agreements that are cancelable by us without significant penalty, which include contracts for routine outsourced services.
(7)	Payments for reserved tax contingencies are not included as the timing of specific tax payments is not determinable.

     We have also made certain commercial commitments that extend beyond 2010. These commitments include standby letters of credit and guarantees of certain food distribution customer debt and lease obligations. The following summarizes these commitments as of January 1, 2011:

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	Total		Commitment Expiration Per Period
Other Commercial Commitments (in	Amount				Fiscal 2012-		Fiscal 2014-
thousands)	Committed		Fiscal 2011		2013		2015		Thereafter
Standby Letters of Credit (1)	$	11,700	$	11,335	$	365	$	—	$	—
Guarantees (2)		22,578		3,863		6,325		4,687		7,703
Total Other Commercial Commitments	$	34,278	$	15,198	$	6,690	$	4,687	$	7,703

(1)	Letters of credit relate primarily to supporting workers’ compensation obligations.
(2)	Refer to Part II, Item 8 of this report under Note (13) — “Concentration of Credit Risk” in the Notes to Consolidated Financial Statements and under the caption “Guarantees of Debt and Lease Obligations of Others” in the Critical Accounting Policies section below for additional information regarding debt guarantees, lease guarantees and assigned leases.

     Asset-backed Credit Agreement

     Our credit agreement is an asset-backed loan consisting of a $340.0 million revolving credit facility, which includes a $50.0 million letter of credit sub-facility (the “Revolving Credit Facility”). Provided no default is then existing or would arise, we may from time-to-time, request that the Revolving Credit Facility be increased by an aggregate amount (for all such requests) not to exceed $110.0 million.

     The Revolving Credit Facility has a 5-year term and will be due and payable in full on April 11, 2013. We can elect, at the time of borrowing, for loans to bear interest at a rate equal to the base rate or LIBOR plus a margin. The LIBOR interest rate margin currently is 2.00% and can vary quarterly in 0.25% increments between three pricing levels ranging from 1.75% to 2.25% based on the excess availability, which is defined in the credit agreement as (a) the lesser of (i) the borrowing base; or (ii) the aggregate commitments; minus (b) the aggregate of the outstanding credit extensions.

     The credit agreement contains no financial covenants unless and until (i) the continuance of an event of default under the credit agreement, or (ii) the failure of us to maintain excess availability (A) greater than 10% of the borrowing base for more than two (2) consecutive business days or (B) greater than 7.5% of the borrowing base at any time, in which event, we must comply with a trailing 12-month basis consolidated fixed charge covenant ratio of 1.0:1.0, which ratio shall continue to be tested each month thereafter until excess availability exceeds 10% of the borrowing base for ninety (90) consecutive days.

     The credit agreement contains standard covenants requiring us, among other things, to maintain collateral, comply with applicable laws, keep proper books and records, preserve the corporate existence, maintain insurance, and pay taxes in a timely manner. Events of default under the credit agreement are usual and customary for transactions of this type including, among other things: (a) any failure to pay principal thereunder when due or to pay interest or fees on the due date; (b) material misrepresentations; (c) default under other agreements governing material indebtedness of the Company; (d) default in the performance or observation of any covenants; (e) any event of insolvency or bankruptcy; (f) any final judgments or orders to pay more than $15.0 million that remain unsecured or unpaid; (g) change of control, as defined in the credit agreement; and (h) any failure of a collateral document, after delivery thereof, to create a valid mortgage or first-priority lien.

     At January 1, 2011, $174.2 million was available under the Revolving Credit Facility after giving effect to outstanding borrowings and to $11.7 million of outstanding letters of credit primarily supporting workers’ compensation obligations. We are currently in compliance with all covenants contained within the credit agreement.

     Our Revolving Credit Facility represents one of our primary sources of liquidity, both short-term and long-term, and the continued availability of credit under that agreement is of material importance to our ability to fund our capital and working capital needs.

     Senior Subordinated Convertible Debt

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     On March 15, 2005, we completed a private placement of $150.1 million in aggregate issue price (or $322.0 million aggregate principal amount at maturity) of senior subordinated convertible notes due 2035. The funds were used to finance a portion of the acquisition of the Lima and Westville divisions from Roundy’s. The notes are unsecured senior subordinated obligations and rank junior to our existing and future senior indebtedness, including borrowings under our Revolving Credit Facility.

     Cash interest at the rate of 3.50% per year is payable semi-annually on the issue price of the notes until March 15, 2013. After that date, cash interest will not be payable, unless contingent cash interest becomes payable, and original issue discount for non-tax purposes will accrue on the notes at a daily rate of 3.50% per year until the maturity date of the notes. On the maturity date of the notes, a holder will receive $1,000 per note. Contingent cash interest will be paid on the notes during any six-month period, commencing March 16, 2013, if the average market price of a note for a ten trading day measurement period preceding the applicable six-month period equals 130% or more of the accreted principal amount of the note, plus accrued cash interest, if any. The contingent cash interest payable with respect to any six-month period will equal an annual rate of 0.25% of the average market price of the note for the ten trading day measurement period described above.

     The notes will be convertible at the option of the holder, only upon the occurrence of certain events, at an adjusted conversion rate of 9.5222 shares (initially 9.3120) of our common stock per $1,000 principal amount at maturity of notes (equal to an adjusted conversion price of approximately $48.95 per share). Upon conversion, we will pay the holder the conversion value in cash up to the accreted principal amount of the note and the excess conversion value, if any, in cash, stock or a combination of both, at our option.

     We may redeem all or a portion of the notes for cash at any time on or after the eighth anniversary of the issuance of the notes. Holders may require us to purchase for cash all or a portion of their notes on the 8th, 10th, 15th, 20th and 25th anniversaries of the issuance of the notes. In addition, upon specified change in control events, each holder will have the option, subject to certain limitations, to require us to purchase for cash all or any portion of such holder’s notes.

     In connection with the closing of the sale of the notes, we entered into a registration rights agreement with the initial purchasers of the notes. In accordance with that agreement, we filed with the Securities and Exchange Commission on July 13, 2005, a shelf registration statement covering the resale by security holders of the notes and the common stock issuable upon conversion of the notes. The shelf registration statement was declared effective by the Securities and Exchange Commission on October 5, 2005. Our contractual obligation, however, to maintain the effectiveness of the shelf registration statement has expired. As a result, we removed from registration, by means of a post-effective amendment filed on July 24, 2007, all notes and common stock that remained unsold at such time.

     Debt Obligations

     For debt obligations, the following table presents principal cash flows, related weighted average interest rates by expected maturity dates and fair value as of January 1, 2011:

	Fixed Rate							Variable Rate
(in thousands)	Fair Value		Amount		Rate			Fair Value		Amount		Rate
2011			$	670		6.0	%			$	—		—
2012				704		6.2	%				—		—
2013				712		6.1	%				154,100		2.6	%
2014				40		5.6	%				—		—
2015				—		—					—		—
Thereafter				136,710		3.5	%				—		—
	$	151,458	$	138,836				$	154,100	$	154,100

     Consolidated EBITDA (Non-GAAP Measurement)

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     The following is a reconciliation of EBITDA and Consolidated EBITDA to net earnings for fiscal 2010, 2009 and 2008 (amounts in thousands):

	2010			2009			2008
Net earnings	$	50,941			2,778			33,145
Income tax expense		21,185			20,972			20,646
Interest expense		23,403			24,372			26,466
Depreciation and amortization		36,119			40,603			38,429
EBITDA		131,648			88,725			118,686
LIFO charge (credit)		53			(3,033	)		19,740
Lease reserves		320			3,135			(1,832	)
Goodwill impairment		—			50,927			—
Asset impairments		937			2,460			2,555
Gains on sale of real estate		—			(54	)		—
Gain on acquisition of a business		—			(6,682	)		—
Gain on litigation settlement		—			(7,630	)		—
Share-based compensation		7,871			9,084			8,792
Special charges		—			6,020			—
Settlement of pre-acquisition contingency		(310	)		—			—
Subsequent cash payments on non-cash charges		(3,055	)		(2,815	)		(4,218	)
Total Consolidated EBITDA	$	137,464			140,137			143,723

     EBITDA and Consolidated EBITDA are measures used by management to measure operating performance. EBITDA is defined as net earnings before interest, taxes, depreciation, and amortization. Consolidated EBITDA excludes certain non-cash charges and other items that management does not utilize in assessing operating performance and is a metric used to determine payout of performance units pursuant to our Short-Term and Long-Term Incentive Plans. The above table reconciles net earnings to EBITDA and Consolidated EBITDA. Not all companies utilize identical calculations; therefore, the presentation of EBITDA and Consolidated EBITDA may not be comparable to other identically titled measures of other companies. Neither EBITDA or Consolidated EBITDA are recognized terms under GAAP and do not purport to be an alternative to net earnings as an indicator of operating performance or any other GAAP measure. In addition, EBITDA and Consolidated EBITDA are not intended to be measures of free cash flow for management’s discretionary use since they do not consider certain cash requirements, such as interest payments, tax payments and capital expenditures.

     Free Cash Flow as a percentage of Net Assets (Non-GAAP Measurement)

     The following is a reconciliation of Free Cash Flow to cash provided by operations and a reconciliation of Net Assets to Total Assets:

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	52 Weeks Ended
(In thousands)	January 1, 2011
Free cash flow / Net assets
Net cash provided by operations	$	66,116
Less capital expenditures		(59,295	)
Free cash flow	$	6,821
Strategic project adjustment (trailing 4 quarters)		51,950
Adjusted free cash flow (trailing 4 quarters)	$	58,771
	January 1, 2011			January 2, 2010
Net assets
Total assets	$	1,050,675			999,536
Less current liabilities		(293,242	)		(308,509	)
Plus current maturities of long-term debt and capitalized lease obligations		3,159			4,438
Net assets	$	760,592			695,465
Strategic project adjustment		(52,985	)		(9,879	)
Adjusted net assets	$	707,607			685,586
Average net assets (simple average)	$	728,029
Adjusted average net assets (simple average)	$	696,597
Free cash flow/ net assets		0.9	%
Free cash flow/ net assets (ex. strategic projects)		8.4	%

     Free cash flow and the ratio of free cash flow to net assets are measures used by management to measure operating performance and the ratio of free cash flow to net assets is a metric used to determine payout of performance units pursuant to one of our Long-Term Incentive Plans. Our free cash flow to net assets ratio is defined as cash provided from operations less capital expenditures for property, plant and equipment during the trailing four quarters divided by the average Net Assets for the current period and prior year comparable period (total assets less current liabilities plus current portion of long-term debt and capital leases). Free cash flow is not a recognized term under GAAP and does not purport to be an alternative to net earnings as an indicator of operating performance or any other GAAP measure. In addition, free cash flow is not intended to represent the residual cash flow available for discretionary expenditures as certain non-discretionary expenditures, including debt service payments, are not deducted from the measure.

     Derivative Instruments

     We have market risk exposure to changing interest rates primarily as a result of our borrowing activities and commodity price risk associated with anticipated purchases of diesel fuel. Our objective in managing our exposure to changes in interest rates and commodity prices is to reduce fluctuations in earnings and cash flows. From time-to-time we use derivative instruments, primarily interest rate and commodity swap agreements, to manage risk exposures when appropriate, based on market conditions. We do not enter into derivative agreements for trading or other speculative purposes, nor are we a party to any leveraged derivative instrument.

     The interest rate swap agreements are designated as cash flow hedges and are reflected at fair value in our Consolidated Balance Sheet and the related gains or losses on these contracts are deferred in stockholders’ equity as a component of other comprehensive income. Deferred gains and losses are amortized as an adjustment to expense over the same period in which the related items being hedged are recognized in income. However, to the extent that any of these contracts are not considered to be effective in accordance with ASC Topic 815 (“ASC 815”) in offsetting the change in the value of the items being hedged, any changes in fair value relating to the ineffective portion of these contracts are immediately recognized in income.

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     As of January 1, 2011, we had two outstanding interest rate swap agreements with notional amounts totaling $17.5 million, as follows (amounts in thousands):

Notional	Effective Date		Termination Date		Fixed Rate
$10,000		10/15/2010		10/15/2011		3.49	%

Notional	Effective Date		Termination Date		Fixed Rate
$7,500		10/15/2010		10/15/2011		3.38	%

     From time-to-time we use commodity swap agreements to reduce price risk associated with anticipated purchases of diesel fuel. The agreements call for an exchange of payments with us making payments based on fixed price per gallon and receiving payments based on floating prices, without an exchange of the underlying commodity amount upon which the payments are made. Resulting gains and losses on the fair market value of the commodity swap agreement are immediately recognized as income or expense.

     As of January 1, 2011, there were no commodity swap agreements in existence. Our only commodity swap agreement in place during fiscal 2008 expired during the first quarter and was settled for fair market value.

     In addition to the previously discussed interest rate and commodity swap agreements, from time-to-time we enter into fixed price fuel supply agreements to support our food distribution segment. On January 1, 2009, we entered into an agreement which required us to purchase a total of 252,000 gallons of diesel fuel per month at prices ranging from $1.90 to $1.98 per gallon. The term of the agreement was for one year and expired on December 31, 2009. The fixed price fuel agreement qualified for the “normal purchase” exception under ASC 815, therefore the fuel purchases under the contract were expensed as incurred as an increase to cost of sales.

     Off-Balance Sheet Arrangements

     As of the date of this report, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, often referred to as structured finance or special purpose entities, which are generally established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies

     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, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Audit and Finance Committee of our Board of Directors and with our independent auditors.

     An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our financial statements. We consider the following accounting policies to be critical and could result in materially different amounts being reported under different conditions or using different assumptions:

Customer Exposure and Credit Risk

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     Allowance for Doubtful Accounts — Methodology. We evaluate the collectability of our accounts and notes receivable based on a combination of factors. In most circumstances when we become aware of factors that may indicate a deterioration in a specific customer’s ability to meet its financial obligations to us (e.g., reductions of product purchases, deteriorating store conditions, changes in payment patterns), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. In determining the adequacy of the reserves, we analyze factors such as the value of any collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the collectability based on information considered and further deterioration of accounts. If circumstances change (i.e., further evidence of material adverse creditworthiness, additional accounts become credit risks, store closures), our estimates of the recoverability of amounts due us could be reduced by a material amount, including to zero.

     As of January 1, 2011, we have recorded an allowance for doubtful accounts reserve for our accounts and notes receivables of $6.2 million as compared to $5.7 million as of January 2, 2010. During fiscal 2010, we recorded additional allowance for doubtful account reserves of $0.7 million and experienced write-offs of $0.2 million.

     Lease Commitments. We have historically leased store sites for sublease to qualified independent retailers at rates that are at least as high as the rent paid by us. Under terms of the original lease agreements, we remain primarily liable for any commitments an independent retailer may no longer be financially able to satisfy. We also lease store sites for our retail segment. Should a retailer be unable to perform under a sublease or should we close underperforming corporate stores, we record a charge to earnings for costs of the remaining term of the lease, less any anticipated sublease income. Calculating the estimated losses requires that significant estimates and judgments be made by management. Our reserves for such properties can be materially affected by factors such as the extent of interested sub-lessees and their creditworthiness, our ability to negotiate early termination agreements with lessors, general economic conditions and the demand for commercial property. Should the number of defaults by sub-lessees or corporate store closures materially increase; the remaining lease commitments we must record could have a material adverse effect on operating results and cash flows. Refer to Part II, Item 8 of this report under Note (12) — “Leases” in the Notes to Consolidated Financial Statements for a discussion of Lease Commitments.

     As of January 1, 2011, we have recorded a provision for losses related to leases on closed locations of $6.8 million as compared to $9.3 million as of January 2, 2010. During fiscal 2010, we recorded additional provisions for losses related to leases on closed locations of $0.3 million, which was partially offset by payments made of $2.8 million.

     Guarantees of Debt and Lease Obligations of Others. We have guaranteed the debt and lease obligations of certain food distribution customers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, we would be unconditionally liable for the outstanding balance of their debt and lease obligations ($9.4 million as of January 1, 2011 as compared to $13.5 million as of January 2, 2010), which would be due in accordance with the underlying agreements.

     We have entered into loan and lease guarantees on behalf of certain food distribution customers that are accounted for under ASC Topic 460. ASC Topic 460 provides that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee. The maximum undiscounted payments we would be required to make in the event of default under the guarantees is $6.7 million, which is included in the $9.4 million total referenced above. These guarantees are secured by certain business assets and personal guarantees of the respective customers. We believe these customers will be able to perform under the lease agreements and that no payments will be required and no loss will be incurred under the guarantees. As required by ASC Topic 460, a liability representing the fair value of the obligations assumed under the guarantees of $1.0 million is included in the accompanying consolidated financial statements. All of the other guarantees were issued prior to December 31, 2002 and therefore not subject to the recognition and measurement provisions of ASC Topic 460.

     We have also assigned various leases to certain food distribution customers and other third parties. If the assignees were to become unable to continue making payments under the assigned leases, we estimate our

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maximum potential obligation with respect to the assigned leases, net of reserves, to be approximately $8.9 million as of January 1, 2011 as compared to $8.0 million as of January 2, 2010. In circumstances when we become aware of factors that indicate deterioration in a customer’s ability to meet its financial obligations guaranteed or assigned by us, we record a specific reserve in the amount we reasonably believe we will be obligated to pay on the customer’s behalf, net of any anticipated recoveries from the customer. In determining the adequacy of these reserves, we analyze factors such as those described above in “Allowance for Doubtful Accounts — Methodology” and “Lease Commitments.” It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the obligations based on information considered and further deterioration of accounts, with the potential for a corresponding adverse effect on operating results and cash flows. Triggering these guarantees or obligations under assigned leases would not, however, result in cross default of our debt, but could restrict resources available for general business initiatives. Refer to Part II, Item 8 of this report under Note (13) — “Concentration of Credit Risk” in the Notes to Consolidated Financial Statements for more information regarding customer exposure and credit risk.

Impairment of Long-Lived Assets

     Property, plant and equipment are tested for impairment in accordance with ASC Subtopic 360-10-35 whenever events or changes in circumstances indicate that the carrying amounts of such long-lived assets may not be recoverable from future net pretax cash flows. Impairment testing requires significant management judgment including estimating future sales and costs, alternative uses for the assets and estimated proceeds from disposal of the assets. Estimates of future results are often influenced by assessments of changes in competition, merchandising strategies, human resources and general market conditions, which may result in not recognizing an impairment loss. Impairment testing is conducted at the lowest level where cash flows can be measured and are independent of cash flows of other assets. An asset impairment would be indicated if the sum of the expected future net pretax cash flows from the use of the asset (undiscounted and without interest charges) is less than the carrying amount of the asset. An impairment loss would be measured based on the difference between the fair value of the asset and its carrying amount. We generally determine fair value by discounting expected future cash flows at a rate which management has determined to be consistent with assumptions used by market participants.

     The estimates and assumptions used in the impairment analysis are consistent with the business plans and estimates we use to manage our business operations and to make acquisition and divestiture decisions. The use of different assumptions would increase or decrease the impairment charge. Actual outcomes may differ from the estimates. It is possible that the accuracy of the estimation of future results could be materially affected by different judgments as to competition, strategies and market conditions, with the potential for a corresponding adverse effect on financial condition and operating results.

Goodwill

     We maintain three reporting units for purposes of our goodwill impairment testing, which are the same as our reporting segments disclosed in Part II, Item 8 of this report under Note (18) — “Segment Reporting”. Goodwill for each of our reporting units is tested for impairment in accordance with ASC 350 annually and/or when factors indicating impairment are present, which requires a significant amount of management’s judgment. Such indicators may include a decline in our expected future cash flows, unanticipated competition, the loss of a major customer, slower growth rates or a sustained significant decline in our share price and market capitalization, among others. Any adverse change in these factors could have a significant impact on the recoverability of our goodwill and could have a material impact on our consolidated financial statements.

     During fiscal 2009, we began applying the provision of ASC Topic 820 in relation to our goodwill impairment testing by applying, to the extent possible, observable market inputs to arrive at the fair values of our reporting units.

     Our fair value for each reporting unit is determined based on an income approach which incorporates a discounted cash flow analysis and a market approach that utilizes current earnings multiples for comparable publically-traded companies. Our income approach is based on an estimate of five years of future cash flows and a terminal value that factors in estimated long-term growth. The estimate of future cash flows are dependent on our knowledge and experience about past and current events and assumptions about conditions

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we expect to exist, including operating performance, economic conditions, long-term growth rates, capital expenditures, changes in working capital and effective tax rates. The discount rates applied to the income approach reflect a weighted average cost of capital for comparable publicly-traded companies which are adjusted for equity and size risk premiums based on market capitalization.

     We have weighted the valuation of our reporting units at 70% based on the income approach and 30% based on the market approach. We believe that this weighting is appropriate since it is often difficult to find other appropriate publicly-traded companies that are similar to our reporting units and it is our view that future discounted cash flows are more reflective of the value of the reporting units.

     Our estimates could be materially impacted by factors such as competitive forces, customer behaviors, changes in growth trends and specific industry conditions, with the potential for a corresponding adverse effect on financial condition and operating results potentially resulting in impairment of the goodwill. None of the reporting units are more susceptible to economic conditions than others. The income approach and market approach used to determine fair value are sensitive to changes in discount rates and market trading multiples.

     We performed our fiscal 2010 annual impairment test of goodwill during the fourth quarter of fiscal 2010 based on conditions as of the end of our third quarter of fiscal 2010 and determined that no indication of impairment existed in any of our reporting segments. The fair value of the retail segment was approximately 13% higher than its carrying value, while the food distribution segment’s fair value exceeded its carrying value by approximately 17% and the military segment’s fair value was approximately 54% higher than its carrying value.

     Discount rates applied in our income approach during fiscal 2010 ranged from 8.75% to 10.5% and were reflective of the weighted average cost of capital of comparable publically-trade companies with an adjustment for equity and size premiums based on market capitalization. Growth rates ranged from -2.5% to 2.0%. For the food distribution segment to have an indication of impairment the discount rate applied would need to increase over 2.0% or the assumed long-term growth rate would need to decrease by 2.0% with a corresponding increase in the discount rate of over 1.0%. For the retail segment to have an indication of impairment the discount rate applied would need to increase approximately 2.0% or the assumed long-term growth rate would need to decrease by 2.0% with a corresponding increase in the discount rate of over 1.0%.

     While we believe our estimates of fair value of our reporting units are reasonable, there can be no assurance that deterioration in economic conditions, customer relationships or adverse changes to expectations of future performance will not occur, resulting in a goodwill impairment loss. Please refer to Part II, Item 8 in this report under Note (1) — “Summary of Significant Accounting Policies” under the caption “Goodwill and Intangible Assets” of this Form 10-K for additional information pertaining to our annual goodwill impairment analysis.

Income Taxes

     When preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. The process involves estimating our actual current tax obligations based on expected income, statutory tax rates and tax planning opportunities in the various jurisdictions in which we operate. In the event there is a significant unusual or one-time item recognized in our results of operations, the tax attributable to that item would be separately calculated and recorded in the period the unusual or one-time item occurred.

     We utilize the liability method of accounting for income taxes as set forth in ASC Topic 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse or are settled. A valuation allowance is recorded when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change.

     We establish reserves when, despite our belief that the tax return positions are fully supportable, certain positions could be challenged and we may ultimately not prevail in defending our positions. These

38

reserves are adjusted in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of statutes of limitations. The effective tax rate includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as, related penalties and interest. These reserves relate to various tax years subject to audit by taxing authorities.

     Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. We recognize potential accrued interest and penalties related to the unrecognized tax benefits in income tax expense.

Reserves for Self Insurance

      We are primarily self-insured for workers’ compensation, general and automobile liability and health insurance costs. It is our policy to record our self-insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported. Worker’s compensation, general and automobile liabilities are actuarially determined on a discounted basis. We have purchased stop-loss coverage to limit our exposure to any significant exposure on a per claim basis. On a per claim basis, our exposure for workers compensation is $0.6 million, auto liability and general liability is $0.5 million and for health insurance our exposure is $0.4 million. Any projection of losses concerning workers’ compensation, general and automobile and health insurance liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns. Although our estimates of liabilities incurred do not anticipate significant changes in historical trends for these variables, such changes could have a material impact on future claim costs and currently recorded liabilities. A 100 basis point change in discount rates would increase our liability by approximately $0.2 million.

Vendor Allowances and Credits

     As is common in our industry, we use a third party service to undertake accounts payable audits on an ongoing basis. These audits examine vendor allowances offered to us during a given year as well as cash discounts, freight allowances and duplicate payments and establish a basis for us to recover overpayments made to vendors. We reduce future payments to vendors based on the results of these audits, at which time we also establish reserves for commissions payable to the third party service provider as well as for amounts that may not be collected. We also establish reserves for future repayments to vendors for disputed payment deductions related to accounts payable audits, promotional allowances and other items. Although our estimates of reserves do not anticipate changes in our historical payback rates, such changes could have a material impact on our currently recorded reserves.

Share-based Compensation

     ASC Topic 718 requires companies to estimate the fair value of share-based payment awards on the date of grant. The Company uses the grant date closing price per share of Nash Finch common stock to estimate the fair value of Restricted Stock Units (RSUs) and performance units granted pursuant to its long-term incentive plan (LTIP). The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options. No options were granted during fiscal 2010, fiscal 2009 or fiscal 2008 and no options were outstanding as of January 1, 2011. The Company uses a lattice model to estimate the fair value of stock appreciation rights (SARs) which contain market conditions. The value of the portion of the awards ultimately expected to vest is recognized as expense over the requisite service period which is derived from the data in the lattice valuation model. Share-based compensation is based on awards ultimately expected to vest, and is reduced for estimated forfeitures. ASC Topic 718 requires forfeitures be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ materially from those estimates. Significant judgment is required in selecting the assumptions used for estimating fair value of share-based compensation as well estimating forfeiture rates. Further, any awards with performance conditions that can affect vesting also add additional judgment in determining the amount expected to vest. There can be significant volatility in many of our assumptions and therefore our estimates of fair value, forfeitures, etc. are sensitive to changes in these assumptions.

39

     Please refer to Part II, Item 8 in this Form 10-K under Note (10) — “Share-based Compensation Plans” for a comprehensive discussion related to our share-based compensation plans.

New Accounting Standards

     In June 2009, the FASB issued amendments to ASC Topic 810 (“ASC 810”), which addresses the elimination of the concept of a qualifying special purpose entity. The amended guidance also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the amended guidance provides more timely and useful information about an enterprise’s involvement with a variable interest entity. Effective January 3, 2010, we adopted the amended provisions of ASC 810 which had no impact on our consolidated financial statements.

     On December 15, 2009, the FASB issued Accounting Standards Update No. 2010-06, Fair Value Measurements and Disclosures Topic 820 “Improving Disclosures about Fair Value Measurements”. This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in ASC Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. The Company adopted the provision of ASU 2010-06 effective January 3, 2010. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our exposure in the financial markets consists of changes in interest rates relative to our investment in notes receivable, the balance of our debt obligations outstanding and derivatives employed from time to time to manage our exposure to changes in interest rates and diesel fuel prices. We do not use financial instruments or derivatives for any trading or other speculative purposes.

     We carry notes receivable because, in the normal course of business, we make long-term loans to certain retail customers. Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates. As a result, the carrying value of notes receivable approximates market value. Refer to Part II, Item 8 of this report under Note (6) — “Accounts and Notes Receivable” in the Notes to Consolidated Financial Statements for more information.

     The table below provides information about our debt obligations that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates.

	January 1, 2011
	Fair
(in millions, except rates)	Value		Total			2011			2012			2013			2014			2015		Thereafter
Debt with variable interest rate:
Principal payable	$	154.1	$	154.1		$	—		$	—		$	154.1		$	—		$	—	$	—
Average variable rate payable				2.6	%								2.6	%
Debt with fixed interest rates:
Principal payable	$	151.5	$	138.8		$	0.7		$	0.7		$	0.7		$	—		$	—	$	136.7
Average fixed rate payable				3.5	%		6.0	%		6.2	%		6.1	%		5.6	%				3.5	%

40

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Nash-Finch Company

We have audited the accompanying consolidated balance sheet of Nash-Finch Company (a Minnesota Corporation) and subsidiaries (collectively, the Company) as of January 1, 2011, and the related consolidated statement of income, stockholders’ equity and cash flows for the year ended January 1, 2011. Our audit of the basic financial statements included the financial statement schedule referenced in Part IV, Item 15(2) of this report. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nash-Finch Company and subsidiaries as of January 1, 2011, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Nash-Finch Company and subsidiaries’ internal control over financial reporting as of January 1, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 3, 2011, expressed an unqualified opinion thereon.

/s/ Grant Thornton LLP

Minneapolis, Minnesota
March 3, 2011

41

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Nash-Finch Company

We have audited the accompanying consolidated balance sheet of Nash Finch Company and subsidiaries (collectively, the Company) as of January 2, 2010, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the two years in the period ended January 2, 2010. Our audits also included the financial statement schedule referenced in Part IV, Item 15(2) of this report. These financial statements and schedule 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Nash Finch Company and subsidiaries at January 2, 2010, and the consolidated results of their operations and their cash flows for each of the two years in the period ended January 2, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
March 4, 2010 except as to Note 18 as to which the date is March 3, 2011

42

NASH FINCH COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except per share amounts)

Fiscal years ended January 1, 2011,
January 2, 2010 and January 3, 2009	2010		2009			2008
Sales	$	4,991,979	$	5,212,655		$	4,633,494
Cost of sales		4,591,191		4,793,967			4,226,545
Gross profit		400,788		418,688			406,949
Other costs and expenses:
Selling, general and administrative		269,140		287,328			288,263
Special charges		—		6,020			—
Gain on acquisition of a business		—		(6,682	)		—
Gain on litigation settlement		—		(7,630	)		—
Goodwill impairment		—		50,927			—
Depreciation and amortization		36,119		40,603			38,429
Interest expense		23,403		24,372			26,466
Total other costs and expenses		328,662		394,938			353,158
Earnings before income taxes		72,126		23,750			53,791
Income tax expense		21,185		20,972			20,646
Net earnings	$	50,941	$	2,778		$	33,145
Net earnings per share:
Basic	$	3.97	$	0.21		$	2.57
Diluted		3.86		0.21			2.52
Declared dividends per common share	$	0.72	$	0.72		$	0.72
Weighted average number of common shares outstanding and common equivalent shares outstanding:
Basic		12,819		13,007			12,886
Diluted		13,186		13,378			13,161

See accompanying notes to consolidated financial statements.

43

NASH FINCH COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except per share amounts)

	January 1, 2011			January 2, 2010
Assets
Current Assets:
Cash	$	830		$	830
Accounts and notes receivable, net		233,436			250,767
Inventories		333,146			285,443
Prepaid expenses and other		15,817			11,410
Deferred tax assets		8,281			9,366
Total current assets		591,510			557,816
Notes receivable, net		20,350			23,343
Property, plant and equipment:
Property, plant and equipment		649,256			637,167
Less accumulated depreciation and amortization		(409,190	)		(422,529	)
Net property, plant and equipment		240,066			214,638
Goodwill		167,166			166,545
Customer contracts & relationships, net		18,133			21,062
Investment in direct financing leases		2,948			3,185
Other assets		10,502			12,947
Total assets	$	1,050,675		$	999,536
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt and capitalized lease obligations	$	3,159		$	4,438
Accounts payable		230,082			240,483
Accrued expenses		60,001			60,524
Income taxes payable		—			3,064
Total current liabilities		293,242			308,509
Long-term debt		292,266			257,590
Capital lease obligations		18,920			21,442
Deferred tax liability, net		36,344			19,323
Other liabilities		32,899			42,113
Commitments and contingencies		—			—
Stockholders’ equity:
Preferred stock — no par value
Authorized 500 shares; none issued		—			—
Common stock of $1.66 2/3 par value
Authorized 50,000 shares, issued 13,677 and 13,675 shares, respectively		22,796			22,792
Additional paid-in capital		114,799			106,705
Common stock held in trust		(1,213	)		(2,342	)
Deferred compensation obligations		1,213			2,342
Accumulated other comprehensive loss		(10,984	)		(10,756	)
Retained earnings		303,584			261,821
Common stock in treasury, 1,569 and 863 shares, respectively		(53,191	)		(30,003	)
Total stockholders’ equity		377,004			350,559
Total liabilities and stockholders’ equity	$	1,050,675		$	999,536

See accompanying notes to consolidated financial statements.

44

NASH FINCH COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

	2010			2009			2008
Fiscal Years Ended January 1, 2011, January 2, 2010 and January 3, 2009
Operating activities:
Net earnings	$	50,941		$	2,778		$	33,145
Adjustments to reconcile net earnings to net cash provided by operating activities:
Special charges — non cash portion		—			6,020			—
Impairment of retail goodwill		—			50,927			—
Gain on acquisition of a business		—			(6,682	)		—
Gain on litigation settlement		—			(7,630	)		—
Depreciation and amortization		36,119			40,603			38,429
Amortization of deferred financing costs		1,834			1,779			2,142
Non-cash convertible debt interest		5,346			4,944			4,651
Rebateable loans		4,096			4,095			2,992
Provision for (reversal of) bad debts		808			1,411			(1,292	)
Provision for (reversal of) lease reserves		320			3,136			(1,832	)
Deferred income tax expense (benefit)		12,211			(10,764	)		3,622
Gain on sale of real estate and other		(503	)		(137	)		(187	)
LIFO charge (credit)		53			(3,033	)		19,740
Asset impairments		937			2,460			2,555
Share-based compensation		7,871			9,084			8,792
Deferred compensation		1,075			1,223			244
Other		(753	)		(151	)		(742	)
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts and notes receivable		14,659			(6,250	)		17,430
Inventories		(47,756	)		21,143			(31,489	)
Prepaid expenses		1,913			(1,081	)		839
Accounts payable		(9,963	)		(8,178	)		(1,037	)
Accrued expenses		809			(12,367	)		3,970
Income taxes payable		(9,384	)		6,854			13,048
Other assets and liabilities		(4,517	)		2,189			(3,021	)
Net cash provided by operating activities		66,116			102,373			111,999
Investing activities:
Disposal of property, plant and equipment		783			830			438
Additions to property, plant and equipment		(59,295	)		(30,402	)		(31,955	)
Business acquired, net of cash		—			(78,056	)		(6,566	)
Loans to customers		(1,368	)		(2,350	)		(24,050	)
Payments from customers on loans		2,366			4,769			1,588
Corporate-owned life insurance, net		(427	)		(461	)		131
Other		3			—			—
Net cash used in investing activities		(57,938	)		(105,670	)		(60,414	)
Financing activities:
Proceeds from revolving debt		30,000			30,500			87,300
Dividends paid		(8,930	)		(9,239	)		(9,229	)
Proceeds from exercise of stock options		—			196			329
Proceeds from employee stock purchase plan		—			—			238
Repurchase of common stock		(21,970	)		(1,017	)		(14,348	)
Payments of long-term debt		(628	)		(595	)		(119,255	)
Payments of capitalized lease obligations		(3,529	)		(3,436	)		(3,639	)
Increase (decrease) in outstanding checks		(3,083	)		(10,065	)		9,951
Payments of deferred financing costs		—			(2,874	)		(3,573	)
Tax benefit from exercise of stock options		(38	)		(167	)		603
Net cash provided by (used in) financing activities		(8,178	)		3,303			(51,623	)
Net increase (decrease) in cash		—			6			(38	)
Cash at beginning of year		830			824			862
Cash at end of year	$	830		$	830		$	824
Supplemental disclosure of cash flow information:
Non cash investing and financing activities Acquisition of minority interest	$	—		$	—		$	64

See accompanying notes to consolidated financial statements.

45

NASH FINCH COMPANY

Consolidated Statements of Stockholders’ Equity

(In thousands, except per share amounts)

												Accumulated
	Common stock					Additional						other						Total
Fiscal years ended January 1, 2011,	(shares			Common		paid-in			Retained			comprehensive			Treasury			stockholders’
January 2, 2010 and January 3, 2009	outstanding)			stock		capital			earnings			income (loss)			stock			equity
Balance at December 29, 2007		13,125		$	22,599	$	84,658		$	244,915		$	(5,092	)	$	(15,479	)	$	331,601
Net earnings		—			—		—			33,145			—			—			33,145
Other comprehensive income:
Deferred loss on hedging activities, net of tax of ($745)		—			—		—			—			(1,165	)		—			(1,165	)
Minimum pension liability adjustment, net of tax of ($2,710)		—			—		—			—			(4,239	)		—			(4,239	)
Minimum other post-retirement liability adjustment, net of tax of ($243)		—			—		—			—			(380	)		—			(380	)
Comprehensive income																			27,361
Dividends declared of $.72 per share		—			—		—			(9,229	)		—			—			(9,229	)
Share-based compensation		—			3		8,871			(269	)		—			338			8,943
Share-based compensation modified from liability to equity based		—			—		3,412			—			—			—			3,412
Common stock issued upon exercise of options		23			26		415			—			—			—			441
Common stock issued for employee purchase plan		8			13		224			—			—			—			237
Common stock issued for performance units		77			135		(135	)		—			—			—			—
Repurchase of shares		(415	)		—		—			—			—			(14,348	)		(14,348	)
Forfeiture of restricted stock		—			—		—			—			—			(1	)		(1	)
Tax benefit associated with compensation plans		—			—		603			—			—			—			603
Balance at January 3, 2009		12,818			22,776		98,048			268,562			(10,876	)		(29,490	)		349,020
Net earnings					—		—			2,778			—			—			2,778
Other comprehensive income:
Deferred loss on hedging activities, net of tax of $304		—			—		—			—			475			—			475
Minimum pension liability adjustment, net of tax of ($194)		—			—		—			—			(303	)		—			(303	)
Minimum other post-retirement liability adjustment, net of tax of ($33)		—			—		—			—			(52	)		—			(52	)
Comprehensive income																			2,898
Dividends declared of $.72 per share		—			—		—			(9,239	)		—			—			(9,239	)
Share-based compensation		—			—		8,045			(280	)		—			504			8,269
Stock appreciation rights		—			—		599			—			—			—			599
Common stock issued upon exercise of options		8			13		183			—			—			—			196
Common stock issued for performance units		1			3		(3	)		—			—			—			—
Repurchase of shares		(15	)		—		—			—			—			(1,017	)		(1,017	)
Tax benefit associated with compensation plans					—		(167	)		—			—			—			(167	)
Balance at January 2, 2010		12,812			22,792		106,705			261,821			(10,756	)		(30,003	)		350,559
Net earnings		—			—		—			50,941			—			—			50,941
Other comprehensive income:
Deferred loss on hedging activities, net of tax of $272		—			—		—			—			426			—			426
Minimum pension liability adjustment, net of tax of ($434)		—			—		—			—			(679	)		—			(679	)
Minimum other post-retirement liability adjustment, net of tax of $16		—			—		—			—			25			—			25
Comprehensive income																			50,713
Dividends declared of $.72 per share		—			—		—			(8,930	)		—			—			(8,930	)
Share-based compensation		24			—		7,566			(248	)		—			793			8,111
Stock appreciation rights		—			—		570			—			—			—			570
Common stock issued for performance units		—			4		(4	)		—			—			—			—
Common stock transferred from rabbi trust		(85	)		—		—			—			—			(1,200	)		(1,200	)
Repurchase of shares		(643	)		—		—			—			—			(22,781	)		(22,781	)
Tax benefit associated with compensation plans		—			—		(38	)		—			—			—			(38	)
Balance at January 1, 2011		12,108		$	22,796	$	114,799		$	303,584		$	(10,984	)	$	(53,191	)	$	377,004

See accompanying notes to consolidated financial statements.

46

(1) Summary of Significant Accounting Policies

     Fiscal Year

     The fiscal year of Nash-Finch Company (“Nash Finch”) ends on the Saturday nearest to December 31. Fiscal 2008 consisted of 53 weeks while fiscal years 2010 and 2009 each consisted of 52 weeks. Our interim quarters consist of 12 weeks except for the third quarter which consists of 16 weeks. For fiscal 2008, the Company’s fourth quarter consisted of 13 weeks.

     Principles of Consolidation

     The accompanying financial statements include our accounts and the accounts of our majority-owned subsidiaries. All material inter-company accounts and transactions have been eliminated in the consolidated financial statements.

     Reclassification

     Certain prior year segment amounts have been revised to conform to the current year presentation. This revision had no impact on the Company’s consolidated financial statements in any period presented. Please refer to Note 18 — “Segment Reporting” for additional information pertaining to our segment reclassification that occurred during fiscal 2010.

     Cash and Cash Equivalents

     In the accompanying financial statements and for purposes of the statements of cash flows, cash and cash equivalents include cash on hand and short-term investments with original maturities of three months or less when purchased which are carried at fair value.

     Accounts and Notes Receivable

     We evaluate the collectability of our accounts and notes receivable based on a combination of factors. In most circumstances when we become aware of factors that may indicate a deterioration in a specific customer’s ability to meet its financial obligations to us (e.g., reductions of product purchases, deteriorating store conditions, changes in payment patterns), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. In determining the adequacy of the reserves, we analyze factors such as the value of any collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. It is possible that the accuracy of the estimation process could be materially affected by different judgments as to the collectability based on information considered and further deterioration of accounts. If circumstances change (i.e., further evidence of material adverse creditworthiness, additional accounts become credit risks, store closures), our estimates of the recoverability of amounts due us could be reduced by a material amount, including to zero.

     Revenue Recognition

     We recognize revenue when the sales price is fixed or determinable, collectability is reasonably assured and the customer takes possession of the merchandise.

     Revenues for the military segment are recognized upon the delivery of the product to the commissary or commissaries designated by the Defense Commissary Agency (DeCA), or in the case of overseas commissaries, when the product is delivered to the port designated by DeCA, which is when DeCA takes possession of the merchandise and bears the responsibility for shipping the product to the commissary or overseas warehouse.

     Revenues for the food distribution segment are recognized upon delivery of the product which is typically the same day the product is shipped.

47

     Revenue is recognized for retail store sales when the customer receives and pays for the merchandise at the point of sale. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes.

     Based upon the nature of the products we sell, our customers have limited rights of return, which are immaterial.

     Cost of sales

     Cost of sales includes the cost of inventory sold during the period, including distribution costs, shipping and handling fees, and vendor allowances and credits (see below). Advertising costs, included in cost of goods sold, are expensed as incurred and were $61.1 million, $63.1 million and $60.5 million for fiscal 2010, 2009 and 2008, respectively. Advertising income, included in cost of goods sold, was approximately $60.1 million, $64.5 million and $64.7 million for fiscal 2010, 2009 and 2008, respectively.

     Vendor Allowances and Credits

     We reflect vendor allowances and credits, which include allowances and incentives similar to discounts, as a reduction of cost of sales when the related inventory has been sold, based on the underlying arrangement with the vendor. These allowances primarily consist of promotional allowances, quantity discounts and payments under merchandising arrangements. Amounts received under promotional or merchandising arrangements that require specific performance are recognized in the consolidated statements of income when the performance is satisfied and the related inventory has been sold. Discounts based on the quantity of purchases from our vendors or sales to customers are recognized in the consolidated statements of income as the product is sold. When payment is received prior to fulfillment of the terms, the amounts are deferred and recognized according to the terms of the arrangement.

Inventories

     Inventories are stated at the lower of cost or market. Approximately 88% of our inventories were valued on the last-in, first-out (LIFO) method at January 1, 2011 as compared to approximately 86% at January 2, 2010. During fiscal 2010, we recorded a LIFO charge of $0.1 million compared to a LIFO credit of $3.0 million in fiscal 2009 and a LIFO charge of $19.7 million in fiscal 2008. The remaining inventories are valued on the first-in, first-out (FIFO) method. If the FIFO method of accounting for inventories had been applied to all inventories, inventories would have been higher by $73.1 million and $73.1 million at January 1, 2011 and January 2, 2010, respectively.

     Capitalization, Depreciation and Amortization

     Property, plant and equipment are stated at cost. Assets under capitalized leases are recorded at the present value of future lease payments or fair market value, whichever is lower. Expenditures which improve or extend the life of the respective assets are capitalized while maintenance and repairs are expensed as incurred.

     Property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets which generally range from 10-40 years for buildings and improvements and 3-10 years for furniture, fixtures and equipment. Capitalized leases and leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the useful life of the asset.

     Net property, plant and equipment consisted of the following (in thousands):

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	January 1,			January 2,
	2011			2010
Land	$	21,486		$	18,876
Buildings and improvements		235,096			214,959
Furniture, fixtures and equipment		286,708			289,713
Leasehold improvements		58,805			61,026
Construction in progress		13,575			5,928
Assets under capitalized leases		33,586			46,665
		649,256			637,167
Accumulated depreciation and amortization		(409,190	)		(422,529	)
Net property, plant and equipment	$	240,066		$	214,638

     Impairment of Long-Lived Assets

     An impairment loss is recognized whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. In applying Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC Subtopic 360-10-35 assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. We have generally identified this lowest level to be individual stores or distribution centers; however, there are limited circumstances where, for evaluation purposes, stores could be considered with the distribution center they support. We allocate the portion of the profit retained at the servicing distribution center to the individual store when performing the impairment analysis in order to determine the store’s total contribution to us. We consider historical performance and future estimated results in the impairment evaluation. If the carrying amount of the asset exceeds expected undiscounted future cash flows, we measure the amount of the impairment by comparing the carrying amount of the asset to its fair value as determined using an income approach. The inputs used in the income approach use significant unobservable inputs, or level 3 inputs, in the fair value hierarchy. In fiscal 2010, 2009 and 2008, we recorded impairment charges of $0.9 million, $8.5 million and $2.6 million, respectively.

     Reserves for Self-Insurance

     We are primarily self-insured for workers’ compensation, general and automobile liability and health insurance costs. It is our policy to record our self-insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported. Worker’s compensation, general and automobile liabilities are actuarially determined on a discounted basis. We have purchased stop-loss coverage to limit our exposure to any significant exposure on a per claim basis. On a per claim basis, our exposure for workers compensation is $0.6 million, auto liability and general liability is $0.5 million and for health insurance our exposure is $0.4 million. Any projection of losses concerning workers’ compensation, general and automobile and health insurance liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns. Although our estimates of liabilities incurred do not anticipate significant changes in historical trends for these variables, such changes could have a material impact on future claim costs and currently recorded liabilities. A 100 basis point change in discount rates would increase our liability by approximately $0.2 million.

     Goodwill and Intangible Assets

  Intangible assets, consisting primarily of goodwill and customer contracts resulting from business acquisitions, are carried at cost. Goodwill is not amortized and customer contracts and other intangible assets that are not deemed to have an indefinite life are amortized over their useful lives. In accordance with ASC Topic 350, we test goodwill for impairment on an annual basis in the fourth quarter or more frequently if we believe indicators of impairment exist. Such indicators may include a decline in our expected future cash flows, unanticipated competition, slower growth rates or a sustained significant decline in our share price and market capitalization, among others. Any adverse change in these factors could have a significant impact on the recoverability of our goodwill and could have a material impact on our consolidated financial statements.

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     The goodwill impairment test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill.

     Our fair value for each reporting unit is determined based on an income approach which incorporates a discounted cash flow analysis which uses significant unobservable inputs, or level 3 inputs, as defined by the fair value hierarchy, and a market approach that utilizes current earnings multiples of comparable publicly-traded companies. The Company has weighted the valuation of its reporting units at 70% based on the income approach and 30% based on the market approach. The Company believes that this weighting is appropriate since it is often difficult to find other comparable publicly-traded companies that are similar to our reporting units and it is our view that future discounted cash flows are more reflective of the value of the reporting units.

     We performed our fiscal 2010 annual impairment test of goodwill during the fourth quarter of fiscal 2010 based on conditions as of the end of our third quarter of fiscal 2010 and determined that no indication of impairment existed in any of our reporting segments. The fair value of the retail segment was approximately 13% higher than its carrying value, while the food distribution segment’s fair value exceeded its carrying value by approximately 17% and the military segment’s fair value was approximately 54% higher than its carrying value.

     Discount rates applied in our income approach during fiscal 2010 ranged from 8.75% to 10.50% and were reflective of the weighted average cost of capital of comparable publically-trade companies with an adjustment for equity and size premiums based on market capitalization. Growth rates ranged from -2.5% to 2.0%. For the food distribution segment to have an indication of impairment the discount rate applied would need to increase over 2.0% or the assumed long-term growth rate would need to decrease by 2.0% with a corresponding increase in the discount rate of over 1.0%. For the retail segment to have an indication of impairment the discount rate applied would need to increase approximately 2.0% or the assumed long-term growth rate would need to decrease by 2.0% with a corresponding increase in the discount rate of over 1.0%.

     The accounting principles regarding goodwill acknowledge that the observed market prices of individual trades of a company’s stock (and thus its computed market capitalization) may not be representative of the fair value of the company as a whole. Additional value may arise from the ability to take advantage of synergies and other benefits that flow from control over another entity. Consequently, measuring the fair value of a collection of assets and liabilities that operate together in a controlled entity is different from measuring the fair value of that entity’s individual common stock. In most industries, including ours, an acquiring entity typically is willing to pay more for equity securities that give it a controlling interest than an investor would pay for a number of equity securities representing less than a controlling interest. We have taken into consideration the current trends in our market capitalization and the current book value of our equity in relation to fair values arrived at in our fiscal 2010 goodwill impairment analysis, including the implied control premium, and have deemed the result to be reasonable.

     We determined that an indication of impairment existed in our retail segment in the first step of the fiscal 2009 goodwill impairment analysis which required us to calculate our retail segment’s implied fair value in the second step of the impairment analysis. For the second step we obtained appraisals for our real estate, fixtures and equipment and assigned a fair value to any unrecognized intangible assets, which included above and below market rents based on appraisals for locations we lease, a fair value to our trade names and our pharmacy scripts. Certain asset and liabilities’ carrying values approximated fair value due to their short maturities which included accounts receivable, inventories and accounts payable. Based on its implied fair value we were required to write-off $50.9 million of our retail goodwill in fiscal 2009. The decline in the fair value of our retail segment was reflective of a decline in long-term growth assumptions and lower comparable market multiples.

     During fiscal 2010, $0.6 million of retail goodwill was recorded for the value of a store buy-out agreement for one of our minority owned retail locations. Additionally, we transferred $8.9 million of

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goodwill from our food distribution segment to our military segment related to a segment reporting revision that occurred during fiscal 2010, which is discussed in further detail in Note 19 — “Segment Reporting” of this Form 10-K.

     Changes in the net carrying amount of goodwill were as follows:

			Food
(in thousands)	Military		Distribution			Retail			Total
Goodwill as of January 3 , 2009	$	25,754	$	121,863		$	70,797		$	218,414
Retail store closures		—		—			(942	)		(942	)
Retail goodwill impairment		—		—			(50,927	)		(50,927	)
Goodwill as of January 2, 2010		25,754		121,863			18,928			166,545
Food distribution to military revision		8,885		(8,885	)		—			—
Retail store buy-out agreement		—		—			621			621
Goodwill as of January 1, 2011	$	34,639	$	112,978		$	19,549		$	167,166

     Customer contracts and relationships intangibles were as follows (in thousands):

	January 1, 2011
	Gross					Net		Estimated
	Carrying		Accum.			Carrying		Life
	Value		Amort.			Amount		(years)
Customer contracts and relationships	$	42,317	$	(24,184	)	$	18,133		10-20

	January 2, 2010
	Gross					Net		Estimated
	Carrying		Accum.			Carrying		Life
	Value		Amort.			Amount		(years)
Customer contracts and relationships	$	42,798	$	(21,736	)	$	21,062		10-20

     Other intangible assets included in other assets on the consolidated balance sheets were as follows (in thousands):

	January 1, 2011
	Gross					Net		Estimated
	Carrying		Accum.			Carrying		Life
	Value		Amort.			Amount		(years)
Franchise agreements	$	2,694	$	(1,501	)	$	1,193		17-25
Non-compete agreements		346		(167	)		179		4-10
Pharmacy scripts		1,134		(600	)		534		5
License agreements		53		(29	)		24		5

	January 2, 2010
	Gross					Net		Estimated
	Carrying		Accum.			Carrying		Life
	Value		Amort.			Amount		(years)
Franchise agreements	$	2,754	$	(1,410	)	$	1,344		5-25
Non-compete agreements		696		(453	)		243		4-10
Pharmacy scripts		1,064		(379	)		685		5
License agreements		660		(571	)		89		1-5

     Aggregate amortization expense recognized for fiscal 2010, 2009 and 2008 was $3.4 million, $4.4 million and $4.0 million, respectively. The aggregate amortization expense for the five succeeding fiscal years is expected to approximate $3.1 million, $2.6 million, $2.3 million, $2.0 million and $1.8 million for fiscal years 2011 through 2015, respectively.

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     Income Taxes

     When preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. The process involves estimating our actual current tax obligations based on expected income, statutory tax rates and tax planning opportunities in the various jurisdictions in which we operate. In the event there is a significant, unusual or one-time item recognized in our results of operations, the tax attributable to that item would be separately calculated and recorded in the period the unusual or one-time item occurred.

     We utilize the liability method of accounting for income taxes as set forth in ASC Topic 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse or are settled. A valuation allowance is recorded when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change.

     We establish reserves when, despite our belief that the tax return positions are fully supportable, certain positions could be challenged and we may ultimately not prevail in defending our positions. These reserves are adjusted in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of statutes of limitations. The effective tax rate includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as, related penalties and interest. These reserves relate to various tax years subject to audit by taxing authorities.

     Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. We recognize potential accrued interest and penalties related to the unrecognized tax benefits in income tax expense.

     Financial Instruments

     We account for derivative financial instruments pursuant to ASC Topic 815. ASC Topic 815 requires derivatives be carried at fair value on the balance sheet and provides for hedge accounting when certain conditions are met.

     We have market risk exposure to changing interest rates primarily as a result of our borrowing activities and to the cost of fuel in our distribution operations. Our objective in managing our exposure to changes in interest rates and the cost of fuel is to reduce fluctuations in earnings and cash flows. To achieve these objectives, from time-to time we use derivative instruments, primarily interest rate swap agreements and fuel hedges, to manage risk exposures when appropriate, based on market conditions. We do not enter into derivative agreements for trading or other speculative purposes, nor are we a party to any leveraged derivative instrument.

     Share-based compensation

     Our results of operations reflect compensation expense for newly issued stock options and other forms of share-based compensation granted under our stock incentive plans, for the unvested portion of previously issued stock options and other forms of share-based compensation granted, and for our employee stock purchase plan. We estimate the fair value of share-based payment awards on the date of the grant. We use the grant date closing price per share of Nash Finch common stock to estimate the fair value of Restricted Stock Units (RSUs) and performance units granted pursuant to our long-term incentive plan (LTIP). We use the Black-Scholes option-pricing model to estimate the fair value of stock options and a lattice model to estimate the fair value of stock appreciation rights (SARs) which contain certain market conditions. For all types of awards, the value of the portion of the awards ultimately expected to vest is recognized as expense over the requisite service period.

     Comprehensive Income

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     We report comprehensive income in accordance with ASC Topic 220. Other comprehensive income refers to revenues, expenses, gains and losses that are not included in net earnings such as minimum pension and other post retirement liabilities adjustments and unrealized gains or losses on hedging instruments, but rather are recorded directly in the consolidated statements of stockholders’ equity.

     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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

     New Accounting Standards

     In June 2009, the FASB issued amendments to ASC Topic 810 (“ASC 810”), which addresses the elimination of the concept of a qualifying special purpose entity. The amended guidance also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, the amended guidance provides more timely and useful information about an enterprise’s involvement with a variable interest entity. Effective January 3, 2010, we adopted the amended provisions of ASC 810 which had no impact on our consolidated financial statements.

     On December 15, 2009, the FASB issued Accounting Standards Update No. 2010-06, Fair Value Measurements and Disclosures Topic 820 “Improving Disclosures about Fair Value Measurements”. This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in ASC Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. The Company adopted the provision of ASU 2010-06 effective January 3, 2010. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

(2) Acquisition

     On January 31, 2009, the Company completed the purchase from GSC Enterprises, Inc. (“GSC”), of substantially all of the assets relating to three military food distribution centers located in San Antonio, Texas, Pensacola, Florida and Junction City, Kansas serving military commissaries and exchanges (“Business”). The Company also assumed certain trade payables, accrued expenses and receivables associated with the assets being acquired. The aggregate purchase price paid was $78.1 million in cash.

     Effective January 4, 2009, the Company adopted the provisions of ASC Topic 805 (“ASC 805”, originally issued as SFAS No. 141R, “Business Combinations”). ASC 805 defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. ASC 805 requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. ASC 805 also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date.

     The following table summarizes the fair values of the assets acquired and liabilities of the Business assumed at the acquisition date:

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As of January 31, 2009
(in thousands)
Cash and cash equivalents	$	47
Accounts receivable		61,285
Inventories		42,061
Prepaid expenses and other		210
Property, plant and equipment		30,294
Other assets		890
Total identifiable assets acquired		134,787
Current liabilities		43,114
Accrued expenses		1,162
Deferred tax liability, net		4,272
Other long-term liabilities		1,456
Total liabilities assumed		50,004
Net assets acquired	$	84,783

     The fair value of the net identifiable assets acquired and liabilities assumed of $84.8 million exceeded the purchase price of $78.1 million. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measures were appropriate. As a result, the Company recognized a gain of $6.7 million (net of tax) in fiscal 2009 associated with the acquisition of the Business. The gain is included in the line item “Gain on acquisition of a business” in the consolidated statement of income.

     A contingency of $0.3 million is included in the other long-term liabilities account in the table above related to a payment the Company would have been required to make in the event a purchase option was not exercised associated with the sublease of the Pensacola, FL facility prior to October 10, 2010. The Company determined the range of the potential loss was zero to $1.0 million and the acquisition date fair value of the contingency was $0.3 million based upon a probability-weighted discounted cash flow valuation technique. The Company exercised the purchase option during the third quarter of fiscal 2010. The resulting gain recognized from the settlement of this contingency is included on the selling, general and administrative line on our consolidated statement of income.

     Although the Company has made reasonable efforts to do so, synergies achieved through the integration of the Business into the Company’s military segment, unallocated interest expense and the allocation of shared overhead specific to the Business cannot be precisely determined. Accordingly, the Company has deemed it impracticable to calculate the precise impact the Business had on the Company’s net earnings during fiscal 2009. However, please refer to “Note 18 — Segment Reporting” for a comparison of military segment sales and profits for fiscal years 2010, 2009 and 2008.

Supplemental pro forma financial information

     The unaudited pro forma financial information in the table below combines the historical results for the Company and the historical results for the Business for the 52 weeks ended January 2, 2010 and the 53 weeks ended January 3, 2009. This pro forma financial information is provided for illustrative purposes only and does not purport to be indicative of the actual results that would have been achieved by the combined operations for the periods presented or that will be achieved by the combined operations in the future.

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	52 Weeks Ended		53 Weeks Ended
	January 2,		January 3,
(in thousands, except per share data)	2010		2009
Total revenues	$	5,274,945		5,348,799
Net earnings		2,944		36,096
Basic earnings per share		0.23		2.80
Diluted earnings per share		0.22		2.74

(3) Vendor Allowances and Credits

     We participate with our vendors in a broad menu of promotions to increase sales of products. These promotions fall into two main categories: off-invoice allowances and performance-based allowances. These allowances are often subject to negotiation with our vendors. In the case of off-invoice allowances, discounts are typically offered by vendors with respect to certain merchandise purchased by us during a specified period of time. We use off-invoice allowances to support a variety of marketing programs such as reduced price offerings for specific time periods, food shows, pallet promotions and private label promotions. The discounts are either reflected directly on the vendor’s invoice, as a reduction from the normal wholesale prices for merchandise to which the allowance applies, or we are allowed to deduct the allowance as an offset against the vendor’s invoice when it is paid.

     In the case of performance-based allowances, the allowance or rebate is based on our completion of some specific activity, such as purchasing or selling product during a certain time period. This basic performance requirement may be accompanied by an additional performance requirement such as providing advertising or special in-store promotion, tracking specific shipments of goods to retailers (or to customers in the case of our own retail stores) during a specified period (retail performance allowances), slotting (adding a new item to the system in one or more of our distribution centers) and merchandising a new item, or achieving certain minimum purchase quantities. The billing for these performance-based allowances is normally in the form of a “bill-back,” in which case we are invoiced at the regular price with the understanding that we may bill back the vendor for the requisite allowance when the performance is satisfied. We also assess an administrative fee, reflected on the invoices sent to vendors, to recoup our reasonable costs of performing the tasks associated with administering retail performance allowances.

     We collectively plan promotions with our vendors and arrive at the amount the respective vendor plans to spend on promotions with us. Each vendor has its own method for determining the amount of promotional funds to be spent with us. In most situations, the vendor allowances are based on units we purchase from the vendor. In other situations, the allowances are based on our past or anticipated purchases and/or the anticipated performance of the planned promotions. Forecasting promotional expenditures is a critical part of our frequently scheduled planning sessions with our vendors. As individual promotions are completed and the associated billing is processed, the vendors track our promotional program execution and spend rate, and discuss the tracking, performance and spend rate with us on a regular basis throughout the year. These communications include discussions with respect to future promotions, product cost, targeted retails and price points, anticipated volume, promotion expenditures, vendor maintenance, billing issues and procedures, new items/discontinued items and trade spend levels relative to budget per event and per year, as well as the resolution of any issues that arise between the vendor and us. In the future, the nature and menu of promotional programs and the allocation of dollars among them may change as a result of ongoing negotiations and commercial relationships between vendors and us.

     We have a vendor dispute resolution process to facilitate timely research and resolution of disputed deductions from vendor payments. We estimate and record a payable based on current and historical claims.

(4) Special Charges

     In fiscal 2009, we recorded a special charge of $6.0 million due to asset impairments in our food distribution segment. The charge included write-downs of $5.5 million to leasehold improvements and $0.5 million to fixtures and equipment.

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(5) Long-Lived Asset Impairment Charges

      Impairment charges of $0.9 million, $8.5 million and $2.6 million were recorded for long-lived asset impairments in fiscal 2010, 2009 and 2008, respectively. The impairment charges primarily related to four retail stores in 2010, six retail stores and one food distribution center in 2009 and eight retail stores in 2008 that were impaired as a result of increased competition within the respective market areas. The estimated undiscounted cash flows related to these facilities indicated that the carrying value of the assets may not be recoverable based on current expectations, therefore these assets were written down in accordance with ASC 360-10-35.

(6) Accounts and Notes Receivable

     Accounts and notes receivable at the end of fiscal 2010 and 2009 are comprised of the following components:

(in thousands)	2010			2009
Customer notes receivable, current	$	5,364		$	7,227
Customer accounts receivable		218,050			229,884
Other receivables		15,753			18,769
Allowance for doubtful accounts		(5,731	)		(5,113	)
Net current accounts and notes receivable	$	233,436		$	250,767
Long-term customer notes receivable	$	20,811		$	23,917
Allowance for doubtful accounts		(461	)		(574	)
Net long-term notes receivable	$	20,350		$	23,343

     Operating results include bad debt expense of $0.8 million in fiscal 2010, $1.4 million in fiscal 2009 and the reversal of bad debt expense of $1.3 million during fiscal 2008.

(7) Long-term Debt and Bank Credit Facilities

     Long-term debt as of the end of the fiscal 2010 and 2009 is summarized as follows:

(In thousands)	2010			2009
Asset-backed credit agreement:
Revolving credit	$	154,100			124,100
Senior subordinated convertible debt, 3.50% due in 2035		136,710			131,364
Industrial development bonds, 5.60% to 5.75% due in various installments through 2014		1,830			2,365
Notes payable and mortgage notes, 7.95% due in various installments through 2013		296			388
Total debt		292,936			258,217
Less current maturities		(670	)		(627	)
Long-term debt	$	292,266			257,590

     Asset-backed Credit Agreement

     Our credit agreement is an asset-backed loan consisting of a $340.0 million revolving credit facility, which includes a $50.0 million letter of credit sub-facility (the “Revolving Credit Facility”). Provided no

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default is then existing or would arise, the Company may from time-to-time, request that the Revolving Credit Facility be increased by an aggregate amount (for all such requests) not to exceed $110.0 million.

     The Revolving Credit Facility has a 5-year term and will be due and payable in full on April 11, 2013. The Company can elect, at the time of borrowing, for loans to bear interest at a rate equal to the base rate or LIBOR plus a margin. The LIBOR interest rate margin currently is 2.00% and can vary quarterly in 0.25% increments between three pricing levels ranging from 1.75% to 2.25% based on the excess availability, which is defined in the credit agreement as (a) the lesser of (i) the borrowing base; or (ii) the aggregate commitments; minus (b) the aggregate of the outstanding credit extensions.

     At January 1, 2011, $174.2 million was available under the Revolving Credit Facility after giving effect to outstanding borrowings and to $11.7 million of outstanding letters of credit primarily supporting workers’ compensation obligations.

     The credit agreement contains no financial covenants unless and until (i) the continuance of an event of default under the credit agreement, or (ii) the failure of the Company to maintain excess availability (A) greater than 10% of the borrowing base for more than two (2) consecutive business days or (B) greater than 7.5% of the borrowing base at any time, in which event, the Company must comply with a trailing 12-month basis consolidated fixed charge covenant ratio of 1.0:1.0, which ratio shall continue to be tested each month thereafter until excess availability exceeds 10% of the borrowing base for ninety (90) consecutive days.

     The credit agreement contains standard covenants requiring the Company and its subsidiaries, among other things, to maintain collateral, comply with applicable laws, keep proper books and records, preserve the corporate existence, maintain insurance, and pay taxes in a timely manner. Events of default under the credit agreement are usual and customary for transactions of this type including, among other things: (a) any failure to pay principal there under when due or to pay interest or fees on the due date; (b) material misrepresentations; (c) default under other agreements governing material indebtedness of the Company; (d) default in the performance or observation of any covenants; (e) any event of insolvency or bankruptcy; (f) any final judgments or orders to pay more than $15.0 million that remain unsecured or unpaid; (g) change of control, as defined in the credit agreement; and (h) any failure of a collateral document, after delivery thereof, to create a valid mortgage or first-priority lien.

     We are currently in compliance with all covenants contained within the credit agreement.

     Senior Subordinated Convertible Debt

     To finance a portion of the acquisition from Roundy’s, which consisted primarily of our Lima and Westville distribution centers, we sold $150.1 million in aggregate issue price (or $322.0 million aggregate principal amount at maturity) of senior subordinated convertible notes due 2035 in a private placement completed on March 15, 2005. The notes are our unsecured senior subordinated obligations and rank junior to our existing and future senior indebtedness, including borrowings under our Revolving Credit Facility.

     Cash interest at the rate of 3.50% per year is payable semi-annually on the issue price of the notes until March 15, 2013. After that date, cash interest will not be payable, unless contingent cash interest becomes payable, and original issue discount for non-tax purposes will accrue on the notes at a daily rate of 3.50% per year until the maturity date of the notes. On the maturity date of the notes, a holder will receive $1,000 per note (a “$1,000 Note”). Contingent cash interest will be paid on the notes during any six-month period, commencing March 16, 2013, if the average market price of a note for a ten trading day measurement period preceding the applicable six-month period equals 130% or more of the accreted principal amount of the note, plus accrued cash interest, if any. The contingent cash interest payable with respect to any six-month period will equal an annual rate of 0.25% of the average market price of the note for the ten trading day measurement period described above.

     The notes will be convertible at the option of the holder only upon the occurrence of certain events summarized as follows:

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(1)	if the closing price of our stock reaches a specified threshold (currently $63.64) for a specified period of time,
(2)	if the notes are called for redemption,
(3)	if specified corporate transactions or distributions to the holders of our common stock occur,
(4)	if a change in control occurs or,
(5)	during the ten trading days prior to, but not on, the maturity date.

     Upon conversion by the holder, the notes convert at an adjusted conversion rate of 9.5222 shares (initially 9.3120 shares) of our common stock per $1,000 Note (equal to an adjusted conversion price of approximately $48.95 per share). Upon conversion, we will pay the holder the conversion value in cash up to the accreted principal amount of the note and the excess conversion value (or residual value shares), if any, in cash, stock or both, at our option. The conversion rate is adjusted upon certain dilutive events as described in the indenture, but in no event shall the conversion rate exceed 12.7109 shares per $1,000 Note. The number of residual value shares cannot exceed 7.1469 shares per $1,000 Note.

     We may redeem all or a portion of the notes for cash at any time on or after the eighth anniversary of the issuance of the notes. Holders may require us to purchase for cash all or a portion of their notes on the 8th, 10th, 15th, 20th and 25th anniversaries of the issuance of the notes. In addition, upon specified change in control events, each holder will have the option, subject to certain limitations, to require us to purchase for cash all or any portion of such holder’s notes.

     In connection with the closing of the sale of the notes, we entered into a registration rights agreement with the initial purchasers of the notes. In accordance with that agreement, we filed with the Securities and Exchange Commission a shelf registration statement covering the resale by security holders of the notes and the common stock issuable upon conversion of the notes. The shelf registration statement was declared effective by the Securities and Exchange Commission on October 5, 2005. Our contractual obligation, however, to maintain the effectiveness of the shelf registration statement has expired. As a result, we removed from registration, by means of a post-effective amendment filed on July 24, 2007, all notes and common stock that remained unsold at such time.

     Industrial Development Bonds and Mortgages

     At January 1, 2011, land in the amount of $1.4 million and buildings and other assets with a depreciated cost of approximately $3.0 million are pledged to secure obligations under issues of industrial development bonds and mortgages.

     Maturities of Long-term Debt

     Aggregate annual maturities of long-term debt for the five fiscal years after January 1, 2011, are as follows (in thousands):

2011	$	670
2012		704
2013		154,812
2014		40
2015		—
Thereafter		136,710
Total	$	292,936

     Interest paid was $16.6 million, $17.8 million and $18.7 million during fiscal 2010, fiscal 2009 and fiscal 2008, respectively.

(8) Derivative Instruments

     We have market risk exposure to changing interest rates primarily as a result of our borrowing activities and commodity price risk associated with anticipated purchases of diesel fuel. Our objective in

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managing our exposure to changes in interest rates and commodity prices is to reduce fluctuations in earnings and cash flows. To achieve these objectives, from time-to-time we use derivative instruments, primarily interest rate and commodity swap agreements, to manage risk exposures when appropriate, based on market conditions. We do not enter into derivative agreements for trading or other speculative purposes, nor are we a party to any leveraged derivative instrument.

     The interest rate swap agreements are designated as cash flow hedges and are reflected at fair value in our Consolidated Balance Sheet and the related gains or losses on these contracts are deferred in stockholders’ equity as a component of other comprehensive income. As of January 1, 2011, and January 2, 2010, we had recorded a fair value liability of $0.4 million and $1.1 million, respectively, which was included in accrued expenses in our Consolidated Balance Sheet. Deferred gains and losses are amortized as an adjustment to interest expense over the same period in which the related items being hedged are recognized in income. However, to the extent that any of these contracts are not considered to be effective in accordance with ASC 815 in offsetting the change in the value of the items being hedged, any changes in fair value relating to the ineffective portion of these contracts are immediately recognized in income. Our interest rate swap agreements resulted in recognizing interest expense of $1.0 million, $1.5 million and $0.1 million in fiscal 2010, fiscal 2009 and fiscal 2008, respectively.

     As of January 1, 2011, we had two outstanding interest rate swap agreements with notional amounts totaling $17.5 million, as follows (amounts in thousands):

Notional	Effective Date		Termination Date		Fixed Rate
$10,000		10/15/2010		10/15/2011		3.49	%

Notional	Effective Date		Termination Date		Fixed Rate
$7,500		10/15/2010		10/15/2011		3.38	%

     Interest rate swap agreements outstanding at January 1, 2011 and January 2, 2010 and their fair values are summarized as follows:

	January
(In thousands, except percentages)	1, 2011
Notional amount (pay fixed/receive variable)	$	17,500
Fair value liability		(433	)
Average receive rate for effective swaps		0.3	%
Average pay rate for effective swaps		3.4	%

	January
(In thousands, except percentages)	2, 2010
Notional amount (pay fixed/receive variable)	$	35,000
Fair value liability		(1,132	)
Average receive rate for effective swaps		2.6	%
Average pay rate for effective swaps		3.4	%

     From time-to-time we use commodity swap agreements to reduce price risk associated with anticipated purchases of diesel fuel. The agreements call for an exchange of payments with us making payments based on fixed price per gallon and receiving payments based on floating prices, without an exchange of the underlying commodity amount upon which the payments are made. Resulting gains and losses on the fair market value of the commodity swap agreement are immediately recognized as income or expense.

     As of January 1, 2011, there were no commodity swap agreements in existence. Our only commodity swap agreement in place during fiscal 2008 expired during the first quarter and was settled for fair market value.

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     In addition to the previously discussed interest rate and commodity swap agreements, from time-to-time we enter into a fixed price fuel supply agreements to support our food distribution segment. On January 1, 2009, we entered into an agreement which required us to purchase a total of 252,000 gallons of diesel fuel per month at prices ranging from $1.90 to $1.98 per gallon. The term of the agreement was for one year and expired on December 31, 2009. The fixed price fuel agreement qualified and was designated under the “normal purchase” exception under ASC 815, therefore the fuel purchases under the contract was expensed as incurred as an increase to cost of sales.

(9) Income Taxes

Income tax expense is made up of the following components:

(in thousands)	2010			2009			2008
Current:
Federal	$	6,268		$	27,382		$	12,414
State		783			3,231			1,656
Tax credits		(400	)		(268	)		(130	)
Deferred:
Federal		13,154			(8,271	)		6,284
State		1,380			(1,102	)		422
Total	$	21,185		$	20,972		$	20,646

     Income tax expense differed from amounts computed by applying the federal income tax rate to pre-tax income as a result of the following:

	2010			2009			2008
Federal statutory tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal income tax benefit		3.7	%		4.7	%		4.0	%
Non-deductible goodwill		0.0	%		73.6	%		0.0	%
Change in tax contingencies		(8.0	)%		4.4	%		1.1	%
Gain on litigation settlement		0.0	%		(12.7	)%		0.0	%
Gain on acquisition of a business		0.0	%		(11.2	)%		0.0	%
Federal refund claim		0.0	%		(6.8	)%		0.0	%
Other, net		(1.3	)%		1.3	%		(1.7	)%
Effective tax rate		29.4	%		88.3	%		38.4	%

     The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

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	January 1,			January 2,
(in thousands)	2011			2010
Deferred tax assets:
Compensation related accruals	$	19,566		$	16,812
Reserve for bad debts		2,440			2,264
Reserve for store shutdown and special charges		1,024			1,438
Workers compensation accruals		3,493			3,243
Pension accruals		7,030			6,540
Reserve for future rents		2,671			3,608
Other		4,505			3,216
Total deferred tax assets		40,729			37,121
Deferred tax liabilities:
Property, plant and equipment		11,995			5,120
Intangible assets		21,899			17,337
Inventories		12,407			8,263
Convertible debt interest		23,022			21,296
Other		572			2,059
Total deferred tax liabilities		69,895			54,075
Net deferred tax liability	$	(29,166	)	$	(16,954	)

     Our income tax expense from continuing operations was $21.2 million, $21.0 million and $20.6 million for fiscal years 2010, 2009 and 2008, respectively. The income tax rate from continuing operations for fiscal 2010 was 29.4% compared to 88.3% for fiscal 2009 and 38.4% for fiscal 2008. The effective income tax rate for fiscal 2010, 2009 and 2008 represented income tax expense incurred on pre-tax income from continuing operations. The effective tax rate for fiscal 2010 was impacted by the reversal of previously unrecognized tax benefits of $13.6 million primarily due to statute of limitation closures and audit resolutions and an increase in reserves of $3.4 million.

     Net income taxes paid were $23.9 million, $22.4 million, and $0.8 million during fiscal 2010, 2009 and 2008, respectively. Income tax benefits recognized through stockholders’ equity were $0.0 million, $0.0 million, and $0.6 million during fiscal years 2010, 2009 and 2008, respectively, as compensation expense for tax purposes were in excess of amounts recognized for financial reporting purposes.

     At January 1, 2011, the total amount of unrecognized tax benefits was $1.7 million compared to $11.9 million at January 2, 2010. The net decrease in unrecognized tax benefits of $10.2 million since January 2, 2010 was comprised of the following: $3.5 million due to a decrease in the unrecognized tax benefits relating the expiration of the applicable statutes of limitation, $7.8 million due to the reduction of unrecognized tax benefits relating to prior period tax positions, $2.3 million due to the reduction of unrecognized tax benefits relating to current period tax positions and $3.4 million due to the increase in unrecognized tax benefits as a result of tax positions taken in the current period. The net increase in unrecognized tax benefits of $2.5 million during the year ended January 2, 2010, was comprised of the following: $0.2 million due to a decrease in the unrecognized tax benefits relating to the expiration of the applicable statutes of limitation and $2.7 million due to the increase in unrecognized tax benefits as a result of tax positions taken in the current period.

     The following table summarizes the activity related to our unrecognized tax benefits:

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($ in thousands)
Unrecognized tax benefits — opening balance at 1/03/10	$	11,905
Increases related to current year tax period		3,409
Decreases related to current year tax periods		(2,288	)
Decreases related to prior year tax periods		(7,779	)
Lapse of statute of limitations		(3,500	)
Unrecognized tax benefits — ending balance 1/01/11	$	1,747

($ in thousands)
Unrecognized tax benefits — opening balance at 1/04/09	$	9,438
Increases related to current year tax period		2,706
Lapse of statute of limitations		(239	)
Unrecognized tax benefits — ending balance 1/02/10	$	11,905

     The total amount of tax benefits that if recognized would impact the effective tax rate was $0.4 million at January 1, 2011 and $4.1 million at January 2, 2010. The accrual for potential penalties and interest related to unrecognized tax benefits decreased by $2.1 million in 2010, and in total, as of January 2, 2010, is $0.1 million. The accrual for potential penalties and interest related to unrecognized tax benefits increased by $0.2 million in fiscal 2009.

     We do not expect our unrecognized tax benefits to change significantly over the next 12 months.

     The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. During fiscal 2010, we completed an audit by the federal tax authorities of our 2008 tax year. No adjustments that would have a substantial impact on the effective tax rate occurred. With few exceptions, we are no longer subject to U.S. federal, state or local examinations by tax authorities for years 2006 and prior.

(10) Share-based Compensation Plans

     We account for share-based compensation awards in accordance with the provisions of ASC Topic 718 (“ASC 718”) which requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the awards ultimately expected to vest is recognized as expense over the requisite service period. Share-based compensation expense recognized in our consolidated statements of income for fiscal years ended January 2, 2010 and January 3, 2009 included compensation expense for the share-based payment awards granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the pro forma provisions of ASC 718. Compensation expense for the share-based payment awards granted subsequent to January 1, 2006 was based on the grant date fair value estimated in accordance with the provisions of ASC 718. Share-based compensation expense recognized in the consolidated statements of income for years ended January 1, 2011, January 2, 2010, and January 3, 2009 was based on awards ultimately expected to vest, and therefore has been reduced for estimated forfeitures.

     Share-based compensation recognized under ASC 718 for the year ended January 1, 2011 was $7.9 million. Share-based compensation was $9.1 million during 2009 and $8.8 million in fiscal 2008. Share-based compensation amounts are included in selling, general & administrative expense line of our consolidated statements of income.

     We have four equity compensation plans under which incentive performance units, stock appreciation rights and other forms of share-based compensation have been, or may be, granted primarily to key employees and non-employee members of the Board of Directors. These plans include the 2009 Incentive Award Plan (“2009 Plan”), the 2000 Stock Incentive Plan (“2000 Plan”), the Director Deferred Compensation Plan, and the 1997 Non-Employee Director Stock Compensation Plan. No additional awards can be granted under the 2000 stock incentive program effective May 20, 2009, the date our Shareholder’s approved the 2009 plan.

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     The Board adopted the Director Deferred Compensation Plan for amounts deferred on or after January 1, 2005. The plan permits non-employee directors to annually defer all or a portion of his or her cash compensation for service as a director, and have the amount deferred into either a cash account or a share unit account. Each share unit is payable in one share of Nash Finch common stock following termination of the participant’s service as a director.

     Under the 2000 Plan, employees, non-employee directors, consultants and independent contractors were awarded incentive or non-qualified stock options, shares of restricted stock, stock appreciation rights or performance units.

     Awards to non-employee directors under the 2000 Plan began in 2004 and ended in May 2008 and have taken the form of restricted stock units (“RSUs”) that are granted annually to each non-employee director as part of his or her annual compensation for service as a director. The number of such units awarded to each director in 2008 was determined by dividing $45,000 by the fair market value of a share of our common stock on the date of grant. Each of these units vest six months after issuance and will entitle a director to receive one share of our common stock six months after the director’s service on our Board ends.

     The 2009 Plan permits the grant of stock options, restricted stock, restricted stock units, deferred stock, stock payments, stock appreciation rights, performance awards and other stock or cash awards to employees and/or other individuals who perform services for the Company and its Subsidiaries.

     Since 2005, awards have taken the form of performance units (including share units pursuant to our Long-Term Incentive Plan (“LTIP”)), RSUs and Stock Appreciation Rights (SARS).

     Performance units pursuant to our LTIP were granted during each of fiscal years 2007 through 2009 under the 2000 Plan and during fiscal 2010 under the 2009 Plan. These units vest at the end of a three-year performance period.

     In February 2008, the Compensation and Management Development Committee (the “Committee”) of the Board of Directors amended the 2007 LTIP plan to take into account the Company’s decision in the fall of 2007 to invest strategic capital in support of its strategic plan. To ensure the interests of management and shareholders remained aligned after the decision to invest strategic capital, the Committee decided in February 2008 to revise the 2007 LTIP plan by, among other things, adding a definition for Strategic Project and amending the definitions of Net Assets, RONA and Free Cash Flow. The 2007 LTIP Plan was amended as follows:

• 2007 LTIP Plan: The Committee amended the definition of “net assets” to allow for the impact on net assets resulting from the Company’s decision to expend strategic capital. Net Assets is defined in the amended Plan as: “Net Assets” means total assets minus current liabilities, excluding current maturities of long-term debt and capitalized lease obligations and further adjusted by (x) subtracting the additions of Strategic Project PP&E and Strategic Project Working Capital. “Strategic Project” means projects of the following type that have been approved by the Committee: (i) all Strategic Projects identified in the Company’s Five-Year Plan dated October 29, 2007; (ii) new retail store additions; (iii) conversions of current retail stores to a new format; (iv) conversion of current wholesale distribution centers; (v) new wholesale distribution centers or additions thereto; (vi) conversion of current distribution network systems; (vii) conversion of current wholesale or retail pricing and billing systems; (viii) conversion of current wholesale or retail merchandising systems; (ix) conversion of vendor income management systems. If a Strategic Project generates positive Consolidated EBITDA through July 1 of the year placed in service, then the adjustment for (x) above will not be made. If a Strategic Project first generates positive Consolidated EBITDA after July 1 of the year placed in service, then the adjustment for (x) above will be made during that fiscal year only. Net Assets will be further adjusted upward by the amount of any impairment of goodwill that the Company records beginning with the affected year during the Measurement Period. In addition, the Committee amended the definition of “Free Cash Flow” to provide as follows: “Free Cash Flow”

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means cash provided by operating activities minus additions of property, plant and equipment (“PP&E); and (i) adding back the additions of Strategic Project PP&E; (ii) adding back Strategic Project Working Capital; and (iii) subtracting projected Strategic Project Consolidated EBITDA, offset by the associated cash interest and income taxes. If a Strategic Project generates positive Consolidated EBITDA through July 1 of the year placed in service, the adjustment for (iii) above will only be made through July 1 of that year. If a Strategic Project first generates positive Consolidated EBITDA after July 1 of the year placed in service, then the adjustment for (iii) above will be made through the first anniversary date of the Strategic Project being placed in service.

     The Committee made the following additional amendments to the 2007 plan at its February 2008 meeting; (1) removing the plan participant’s option to receive payout of the award in cash; instead requiring that all awards be paid in stock; and (2) automatically deferring settlement of stock payouts to senior vice presidents, executive vice presidents and the CEO until 30 days following termination of their employment or until six months after termination of their employment if they are determined to be “specified employees” under 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986. The above modifications resulted in replacement of the previously outstanding liability awards with equity awards as defined by ASC 718. Therefore, the total expense recognized over the remaining service (vesting) period of the awards will equal the grant date fair value times number of shares that ultimately vest. The Company estimates expected forfeitures in determining the compensation expense recorded each period. The Company recorded no incremental compensation cost as a result of modifying the 2007 LTIP awards.

     During 2008, 119,821 units were granted pursuant to our 2008 LTIP. Depending on our ranking on compound annual growth rate for Consolidated EBITDA among the companies in the peer group and our free cash flow return on net assets performance against targets established by the Committee for the 2008 awards, a participant could receive a number of shares ranging from zero to 200% of the number of performance units granted. Because these units can only be settled in stock, compensation expense equal to the grant date fair value (for shares expected to vest) is recorded over the three-year vesting period.

     During 2010, 123,128 units were granted pursuant to our 2010 LTIP and during 2009, 108,696 units were granted pursuant to our 2009 LTIP. Under each plan, depending on a comparison of the Company’s cumulative three-year actual EBITDA results to the cumulative three-year strategic plan EBITDA targets and the Company’s ranking on absolute return on net assets and compound annual growth rate for return on net assets among the companies in the peer group, a participant could receive a number of shares ranging from zero to 200% of the number of performance units granted. Because these units can only be settled in stock, compensation expense (for shares expected to vest) is recorded over the three-year period for the grant date fair value.

     All units under the 2006 LTIP plan were settled during the second quarter 2009 for approximately 90,000 shares of our common stock of which approximately 15,000 shares, net of tax withholding of approximately 8,000 shares, were paid out of treasury stock during the second quarter 2009 and the remaining 67,000 shares deferred to future periods at the election of the recipients.

     On January 2, 2010, 102,133 units outstanding under the 2007 LTIP vested and were settled in the second quarter 2010 for approximately 182,000 shares of common stock of which approximately 22,000 shares, net of tax withholding of 10,900 shares were paid out of treasury stock during the second quarter of 2010 and the remaining 149,000 shares deferred to future periods at the election of the recipients.

     On January 1, 2011, 104,111 units outstanding under the 2008 LTIP vested and are expected to be settled in the second quarter of 2011 upon final comparison of the Company’s results to those reported by its peers.

     During fiscal years 2006 through 2010, RSUs were awarded to certain executives of the Company. Awards vest in increments over the term of the grant or cliff vest on the fifth anniversary of the grant date, as designated in the award documents. Compensation cost, net of projected forfeitures, is recognized on a straight-line basis over the period between the grant and vesting dates, with compensation cost for grants with a

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graded vesting schedule recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. In addition to the time vesting criteria, awards granted in 2008 and 2009 to two of the Company’s executives include performance vesting conditions. The Company records expense for such awards over the service vesting period if the Company anticipates the performance vesting conditions will be satisfied.

     On February 27, 2007, Mr. Covington was granted a total of 152,500 RSUs under the Company’s 2000 Stock Incentive Plan. The new RSU grant replaced a previous grant of 100,000 performance units awarded to Mr. Covington when he joined the Company in 2006. The previous 100,000 unit grant has been cancelled. The new grant delivers additional equity in lieu of the cash “tax gross up” payment included in the previous award; therefore no cash outlay will be required by the Company. Vesting of the new RSU grant to Mr. Covington will occur over a four year period, assuming Mr. Covington’s continued employment with Nash Finch. However, Mr. Covington will not receive the stock until six months after the termination of his employment, whenever that may occur. At the date of the modification, the Company deemed it improbable that the performance vesting conditions of the original awards would be achieved and therefore was not accruing compensation expense related to the original grant. Accordingly, the replacement of the previous grant had no immediate financial impact but resulted in incremental compensation cost in periods subsequent to the modification due to the expectation that the replacement awards will vest. As of January 1, 2011, the Company has recognized cumulative compensation expense related to the modified awards of $4.4 million versus $2.0 million that would have been recorded for the original awards based on actual and forecasted performance relative to the performance vesting conditions. The Company expects to record total compensation $4.7 million for the replacement awards over the 4-year vesting period compared with $2.1 million for the original awards.

     On December 17, 2008, in connection with the Company’s announcement of its planned acquisition of certain military distribution assets of GSC Enterprises, Inc. (GSC) as discussed in Note 2 — Acquisition , eight executives of the Company were granted a total of 267,345 stock appreciation rights (SARs) with a per share price of $38.44. The SARs are eligible to become vested during the 36 month period commencing on closing of the acquisition of the GSC assets which was January 31, 2009. The SARs will vest on the first business day during the vesting period that follows the date on which the closing prices on NASDAQ for a share of Nash Finch common stock for the previous 90 market days is at least $55.00 or a change in control occurs following the six month anniversary of the grant date or termination of the executive’s employment due to death or disability. Upon vesting and exercise, the Company will award the executive a number of shares of restricted stock equal to (a) the product of (i) the number of shares with respect to which the SAR is exercised and (ii) the excess, if any, of (x) the fair market value per share of common stock on the date of exercise over (y) the base price per share relating to such SAR, divided by (b) the fair market value of a share of common stock on the date such SAR is exercised. The restricted stock shall vest on the first anniversary of the date of exercise so long as the executive remains continuously employed with the Company.

     The fair value of Stock Appreciation Rights (SARs) is estimated on the date of grant using a modified binomial lattice model which factors in the market and service vesting conditions. The modified binomial lattice model used by the Company incorporates a risk-free interest rate based on the 5-year treasury rate on the date of the grant. The model uses an expected volatility calculated as the daily price variance over 60, 200 and 400 days prior to grant date using the Fair Market Value (average of daily high and low market price of Nash Finch common stock) on each day. Dividend yield utilized in the model is calculated by the Company as the average of the daily yield (as a percent of the Fair Market Value) over 60, 200 and 400 days prior to the grant date. The modified binomial lattice model calculated a fair value of $8.44 per SAR which will be recorded over a derived service period of 3.55 years.

     The following assumptions were used to determine the fair value of SARs during fiscal 2008:

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Assumptions - SARs Valuation	2008
Weighted-average risk-free interest rate		1.37	%
Expected dividend yield		1.86	%
Expected volatility		35	%
Exercise price	$	38.44
Market vesting price (90 consecutive market days at or above this price)	$	55.00
Contractual term	5.1 years

     The following tables summarize activity in our share-based compensation plans during the fiscal year ended January 1, 2011:

				Weighted					Weighted
	Service			Average		Performance			Average
	Based			Remaining		Based Grants			Remaining
	Grants			Restriction/		(LTIP &			Restriction/
	(Board Units			Vesting		Performance			Vesting
(in thousands, except per share amounts)	and RSUs)			Period		RSUs)			Period
Outstanding at January 2, 2010		606.8			1.0		408.1			1.0
Granted		40.1					123.7
Forfeited/cancelled		—					(11.9	)
Exercised/units settled		(49.0	)				(102.1	)
Shares deferred upon vesting/settlement & dividend equivalents on deferred shares*		48.6					151.0
Outstanding at January 1, 2011		646.5			0.6		568.8			0.7
Shares expected to vest**		641.4			1.6		205.0			2.1
Exercisable/unrestricted at January 2, 2010		273.6					102.1
Exercisable/unrestricted at January 1, 2011		322.1					323.7

* “Shares deferred upon vesting/settlement” above are net of the performance adjustment factor applied to the “units settled” for the participants that deferred shares as provided in the plan.

			Weighted
	Stock		Average
	Appreciation		Base/Exercise
(in thousands, except per share amounts)	Rights		Price Per SAR
Outstanding at January 2, 2010		267.3	$	38.44
Granted		—
Exercised/restrictions lapsed		—
Forfeited/cancelled		—
Outstanding at January 1, 2011		267.3		38.44
Shares expected to vest**		240.6		38.44
Exercisable/unrestricted at January 2, 2010		—
Exercisable/unrestricted at January 1, 2011		—

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** The “shares expected to vest” in the above tables represent the following: For all grants, gross units outstanding less management’s estimate of forfeitures due to termination of employment prior to vesting. For RSUs under “Performance Based Grants” that include a performance vesting condition based on a Nash Finch specific internal target, the number of shares expected to be paid based on management’s current expectation of achieving the target. Note that the shares expected to vest for LTIP does not include an estimate of the adjustment factor upon settlement which is partially dependent on external factors (the Company’s results on plan performance metrics versus its peer group). Note that shares expected to vest for SARs does not factor probability of achieving the market condition required for vesting.

     The weighted-average grant-date fair value of equity based restricted stock/performance units granted was $35.83, $33.35 and $37.35 during fiscal years 2010, 2009 and 2008, respectively. The weighted-average grant-date fair value of equity based SARs granted during 2008 was $8.44 per SAR.

     The following tables present the non-vested equity awards, including options, restricted stock/performance units including LTIP and stock appreciation rights.

						Performance			Weighted
	Service Based			Weighted		Based Grants			Average Fair
	Grants (Board			Average Fair		(LTIP &			Value at
	Units and			Value at Date		Performance			Date of
(in thousands, except per share amounts)	RSUs)			of Grant		RSUs)			Grant
Non-vested at January 2, 2010		333.2		$	29.39		237.5		$	36.32
Granted		40.1					123.7
Vested/restrictions lapsed		(49.0	)				(104.1	)
Forfeited/cancelled		—					(11.9	)
Non-vested at January 1, 2011		324.3		$	29.65		245.2		$	35.02

			Weighted
	Stock		Average Fair
	Appreciation		Value at Date
(in thousands, except per share amounts)	Rights		of Grant
Non-vested at January 2, 2010		267.3	$	8.44
Granted		—		—
Vested/restrictions lapsed		—		—
Forfeited/cancelled		—		—
Non-vested at January 1, 2011		267.3	$	8.44

     No stock options were outstanding for any of fiscal 2010. The total grant date fair value of stock options that vested during the year was nil for 2009 and $0.1 million for fiscal 2008. The aggregate intrinsic value of stock options exercised was approximately $42,000 and $0.3 million during fiscal 2009 and 2008, respectively. The total grant date fair value for all other share-based awards that vested during the year was $5.5 million, $6.2 million and $6.7 million for fiscal 2010, 2009 and 2008, respectively. The value of share-based liability awards paid during 2008 was $0.8 million related to settlement of units outstanding for 2005 LTIP grants. No liability awards were settled during fiscal 2010 or 2009. As of January 1, 2011, the total unrecognized compensation costs related to non-vested share-based compensation arrangements under our stock-based compensation plans was $2.5 million for service based awards, $2.6 million for performance based awards and $0.9 million for stock appreciation rights. The costs are expected to be recognized over a weighted-average period of 1.6 years for the service based awards, 2.1 years for the performance based awards and 1.5 years for stock appreciation rights.

     Cash received from employees resulting from our share-based compensation plans was nil, $0.2 million and $0.6 million for fiscal 2010, 2009 and 2008, respectively. The Company had a net tax deficiency

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of $0.0 million and $0.1 million during 2010 and 2009, respectively recognized as a reduction of paid-in-capital. The actual tax benefit realized for the tax deductions from share-based compensation plans was $0.7 million for fiscal year 2008.

(11) Earnings per Share

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

(in thousands, except per share amounts)	2010		2009		2008
Numerator:
Net earnings	$	50,941	$	2,778	$	33,145
Denominator:
Denominator for basic earnings per share (weighted-average shares)		12,819		13,007		12,886
Effect of dilutive options and awards		367		371		275
Denominator for diluted earnings per share (adjusted weighted-average shares)		13,186		13,378		13,161
Basic earnings per share	$	3.97	$	0.21	$	2.57
Diluted earnings per share	$	3.86	$	0.21	$	2.52

     The senior subordinated convertible notes due 2035 will be convertible at the option of the holder, only upon the occurrence of certain events, at an adjusted conversion rate of 9.5222 shares (initially 9.3120) of our common stock per $1,000 principal amount at maturity of the notes (equal to an adjusted conversion price of approximately $48.95 per share). Upon conversion, we will pay the holder the conversion value in cash up to the accreted principal amount of the note and the excess conversion value, if any, in cash, stock or both, at our option. Therefore, the notes are not currently dilutive to earnings per share as they are only dilutive above the accreted value.

     Performance units granted during 2005 under the 2000 Plan for the LTIP were payable in shares of Nash Finch common stock or cash, or a combination of both, at the election of the participant. No recipients notified the Company by the required notification date for the 2005 awards that they wished to be paid in cash. Therefore, all units under the 2005 plan were settled in shares of common stock during fiscal 2008. During fiscal 2010 and 2009, performance units granted under the 2007 LTIP Plan and 2006 LTIP Plan, respectively, were settled in shares of common stock, some of which were deferred by executives as required by the plans. Other performance units and RSUs granted during fiscal 2007, 2008, 2009 and 2010 pursuant to the 2000 Plan and 2009 Plan will pay out in shares of Nash Finch common stock. Unvested RSUs are not included in basic earnings per share until vested. All shares of time-restricted stock are included in diluted earnings per share using the treasury stock method, if dilutive. Performance units granted for the LTIP are only issuable if certain performance criteria are met, making these shares contingently issuable under ASC Topic 260. Therefore, the performance units are included in diluted earnings per share at the payout percentage based on performance criteria results as of the end of the respective reporting period and then accounted for using the treasury stock method, if dilutive. Shares related to the LTIP and shares related to RSUs that are included under “effect of dilutive options and awards” in the calculation of diluted EPS are as follows:

	Fiscal		Fiscal		Fiscal
(in thousands)	2010		2009		2008
LTIP		150		211		121
RSUs		217		160		150

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(12) Leases

      A substantial portion of our store and warehouse properties are leased. The following table summarizes assets under capitalized leases:

(in thousands)	2010			2009
Building and improvements	$	33,586		$	46,665
Less accumulated amortization		(14,089	)		(26,015	)
Net assets under capitalized leases	$	19,497		$	20,650

     Total future minimum sublease rents receivable related to operating and capital lease obligations as of January 1, 2011, are $23.9 million and $7.0 million, respectively. Future minimum payments for operating and capital leases have not been reduced by minimum sublease rentals receivable under non-cancelable subleases. At January 1, 2011, our future minimum rental payments under non-cancelable leases (including properties that have been subleased) are as follows:

(in thousands)	Operating Leases		Capital Leases
2011	$	20,517	$	4,826
2012		17,432		4,703
2013		14,904		4,097
2014		11,297		3,494
2015		7,697		3,265
Thereafter		14,957		13,027
Total minimum lease payments	$	86,804	$	33,412
Less imputed interest (rates ranging from 8.3% to 24.6%)				12,003
Present value of net minimum lease payments				21,409
Less current maturities				(2,489	)
Capitalized lease obligations			$	18,920

     Total rental expense under operating leases for fiscal 2010, 2009 and 2008 were as follows:

(in thousands)	2010			2009			2008
Total rentals	$	38,859		$	41,318		$	40,822
Less: real estate taxes, insurance and other occupancy costs		(2,716	)		(2,881	)		(3,614	)
Minimum rentals		36,143			38,437			37,208
Contingent rentals		(78	)		(34	)		(108	)
Sublease rentals		(6,881	)		(7,450	)		(8,611	)
	$	29,184		$	30,953		$	28,489

     Most of our leases provide that we must pay real estate taxes, insurance and other occupancy costs applicable to the leased premises. Contingent rentals are determined on the basis of a percentage of sales in excess of stipulated minimums for certain store facilities. Operating leases often contain renewal options. In those locations in which it makes economic sense to continue to operate, management expects that, in the normal course of business, leases that expire will be renewed or replaced by other leases.

(13) Concentration of Credit Risk

     We provide financial assistance in the form of loans to some of our independent retailers for inventories, store fixtures and equipment and store improvements. Loans are generally secured by liens on real estate, inventory and/or equipment, personal guarantees and other types of collateral, and are generally repayable over a period of five to seven years. We establish allowances for doubtful accounts based upon periodic assessments of the credit risk of specific customers, collateral value, historical trends and other information. We believe that adequate provisions have been recorded for any doubtful accounts. In addition,

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we may guarantee debt and lease obligations of retailers. In the event these retailers are unable to meet their debt service payments or otherwise experience an event of default, we would be unconditionally liable for the outstanding balance of their debt and lease obligations, which would be due in accordance with the underlying agreements.

     As of January 1, 2011, we have guaranteed outstanding debt and lease obligations of a number of retailers in the amount of $9.4 million. In the normal course of business, we also sublease and assign to third parties various leases. As of January 1, 2011, we estimate that the present value of our maximum potential obligation, net of reserves, with respect to the subleases to be approximately $22.8 million and assigned leases to be approximately $8.9 million.

     We have entered into loan and lease guarantees on behalf of certain food distribution customers that are accounted for under ASC Topic 460. ASC Topic 460 provides that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee. The maximum undiscounted payments we would be required to make in the event of default under the guarantees is $6.7 million, which is included in the $9.4 million total referenced above. These guarantees are secured by certain business assets and personal guarantees of the respective customers. We believe these customers will be able to perform under the lease agreements and that no payments will be required and no loss will be incurred under the guarantees. As required by ASC Topic 460, a liability representing the fair value of the obligations assumed under the guarantees of $1.0 million is included in the accompanying consolidated financial statements. All of the other guarantees were issued prior to December 31, 2002 and therefore not subject to the recognition and measurement provisions of ASC Topic 460.

(14) Fair Value of Financial Instruments

     In September 2006, the FASB issued ASC Topic 820. ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about instruments recorded at fair value. It also applies under other accounting pronouncements that require or permit fair value measurements. Effective January 1, 2008, we adopted the provisions of ASC 820 related to financial assets and liabilities recognized or disclosed on a recurring basis. Additionally, beginning in fiscal 2009, we now apply ASC 820 to financial and non-financial assets and liabilities.

     The fair value hierarchy for disclosure of fair value measurements under ASC 820 is as follows:

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

Level 2: Quoted prices, other than quoted prices included in Level 1, that are observable for the assets or liabilities, either directly or indirectly.

Level 3: Inputs that are unobservable for the assets or liabilities.

    Our outstanding interest rate swap agreements are classified within level 2 of the valuation hierarchy as readily observable market parameters are available to use as the basis of the fair value measurement. As of January 1, 2011, we have recorded a fair value liability of $0.4 million in relation to our outstanding interest rate swap agreements.

Other Financial Assets and Liabilities

     Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable and outstanding checks. The carrying value of these financial assets and liabilities approximates fair value due to their short maturities.

     The fair value of notes receivable approximates the carrying value at January 1, 2011 and January 2, 2010. Substantially all notes receivable are based on floating interest rates which adjust to changes in market rates.

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     The estimated fair value of our long-term debt, including current maturities, was $305.6 million and $255.0 million at January 1, 2011 and January 2, 2010, respectively, utilizing discounted cash flows. The fair value is based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities.

Non-Financial Assets

     We account for the impairment of goodwill and the impairment of long-lived assets in accordance with ASC 350 and ASC 360-10-35, respectively. During fiscal 2009 we recognized a goodwill impairment of $50.9 million and during fiscal 2010, 2009 and 2008 we recognized asset impairments of $0.9 million, $8.5 million and $2.6 million, respectively. We utilize a discounted cash flow model and market approach that incorporate unobservable level 3 inputs to test for goodwill and long-lived asset impairments.

(15) Commitments and Contingencies

Roundy’s Supermarkets, Inc. v. Nash Finch

     On February 11, 2008, Roundy’s Supermarkets, Inc. (“Roundy’s”) filed suit against us claiming we breached the Asset Purchase Agreement (“APA”), entered into in connection with our acquisition of certain distribution centers and other assets from Roundy’s, by not paying approximately $7.9 million that Roundy’s claimed was due under the APA as a purchase price adjustment. We answered the complaint denying any payment was due to Roundy’s and asserted counterclaims against Roundy’s for, among other things, breach of contract, misrepresentation, and breach of the duty of good faith and fair dealing. In our counterclaim we demanded damages from Roundy’s in excess of $18.0 million.

     On September 14, 2009, we entered into a settlement agreement with Roundy’s that fully resolved all claims brought in the lawsuit. Under the terms of the settlement agreement, both parties agreed to dismiss their claims against the other in exchange for a release of claims. Neither party was required to pay any money to the other. We recorded a $7.6 million gain in fiscal 2009 which represented the reversal of the liability we had recorded in conjunction with the disputed APA purchase price adjustment.

Other

     We are also engaged from time-to-time in routine legal proceedings incidental to our business. We do not believe that these routine legal proceedings, taken as a whole, will have a material impact on our business or financial condition.

(16) Long-Term Compensation Plans

     We have a profit sharing plan which includes a 401(k) feature, covering substantially all employees meeting specified requirements. Profit sharing contributions, determined by the Board of Directors, were made to a noncontributory profit sharing trust based on profit performance. Effective January 1, 2003, we added a match to the 401(k) feature of this plan, which was subsequently amended effective January 1, 2008, whereby we will make an annual matching contribution to each participant’s plan account. The fiscal 2009 annual matching contribution provided that we would match 100% of the participant’s contributions up to 3% of the participant’s eligible compensation for the year. In the event the participant’s contributions exceeded 3% of their eligible compensation for the year, we would match 50% of the next 2% of the participant’s eligible compensation for the year. The contribution expense for our matching contributions to the 401(k) plan reduced dollar for dollar the profit sharing contributions that would otherwise have been made to the profit sharing plan. During fiscal 2009, the Company eliminated the discretionary component of the profit sharing plan but maintained the annual matching contribution. During fiscal 2010, the Company modified the annual matching contribution to make it discretionary based on Company profitability. Total profit sharing expense (including the matching contribution) was $2.5 million, $4.5 million and $7.9 million for fiscal 2010, 2009 and 2008, respectively.

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     On January 1, 2000, we adopted a Supplemental Executive Retirement Plan (“SERP”) for key employees and executive officers. On the last day of the calendar year, each participant’s SERP account is credited with an amount equal to 20% of the participant’s base salary for the year. Benefits payable under the SERP typically vest based on years of participation in the SERP, ranging from 0% vested for less than five years of participation to 100% vested at 10 years’ participation (or age 60 if that occurs sooner). Amounts credited to a SERP account, plus earnings, are distributed following the executive’s termination of employment. Earnings are based on the quarterly equivalent of the average of the annual yield set forth for each month during the quarter in the Moody’s Corporate Bond Yield Averages. In February 2007, our Board of Directors fully vested the SERP account of Alec C. Covington, our President and Chief Executive Officer. Compensation expense related to the plan was $0.9 million in fiscal 2010, $0.9 million in fiscal 2009 and $0.8 million in fiscal 2008.

     We also have deferred compensation plans for a select group of management or highly compensated employees and for non-employee directors. The plans are unfunded and permit participants to defer receipt of a portion of their base salary, annual bonus or long-term incentive compensation in the case of employees, or cash compensation in the case of non-employee directors, which would otherwise be paid to them. The deferred amounts, plus earnings, are distributed following the executive’s termination of employment or the director’s termination of service on the Board. Earnings are based on the performance of phantom investments elected by the participant from a portfolio of investment options. Under the plans available to non-employee directors, the investment options include share units that correspond to shares of our common stock.

     During fiscal 2004, we created and funded a benefits protection trust to invest amounts deferred under these plans. The trust is a grantor trust and accounted for in accordance with ASC Subtopic 710-10-45. A benefits protection or rabbi trust holds assets that would be available to pay benefits under a deferred compensation plan if the settler of the trust, such as us, is unwilling to pay benefits for any reason other than bankruptcy or insolvency. The rabbi trust now holds corporate-owned life insurance which is intended to fund potential future obligations. Assets in the trust remain subject to the claims of our general creditors, and the investment in the rabbi trust is classified in “other assets” on our consolidated balance sheets.

(17) Pension and Other Post-retirement Benefits

     One of our subsidiaries has a qualified non-contributory retirement plan to provide retirement income for certain eligible full-time employees who are not covered by a union retirement plan. Pension benefits under the plan are based on length of service and compensation. Our subsidiary contributes amounts necessary to meet minimum funding requirements. This plan has been curtailed and no new employees can enter the plan.

     We provide certain health care benefits for retired employees not subject to collective bargaining agreements. Such benefits are not provided to any employee who left us after December 31, 2003. Employees who left us on or before that date become eligible for those benefits when they reach early retirement age if they have met minimum age and service requirements. Effective December 31, 2006, we terminated these health care benefits for retired employees and their spouses or dependents that were eligible for coverage under Medicare. We provide coverage to retired employees and their spouses until the end of the month in which they become eligible for Medicare (which generally is age 65). Health care benefits for retirees are provided under a self-insured program administered by an insurance company.

     On December 30, 2006, we adopted the recognition and disclosure provisions of ASC Subtopic 715-20-65. ASC Topic 715-20-65 required us to recognize the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of our pension plan and other post-retirement benefits in the December 30, 2006, statement of financial position, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The adjustment to accumulated other comprehensive income at adoption represents the net unrecognized actuarial losses, unrecognized prior service costs, and unrecognized transition obligation remaining from the initial adoption of ASC Topic 715, all of which were previously netted against the plan’s funded status in our statement of financial position. These amounts will be subsequently recognized as net periodic benefit cost pursuant to our historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic benefit cost in the same periods will be recognized as a component of other comprehensive income.

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Those amounts will be subsequently recognized as a component of net periodic benefit cost on the same basis as the amounts recognized in accumulated other comprehensive income at the adoption of ASC Topic 715-20-65.

     Accumulated other comprehensive income at January 1, 2011, consists of the following amounts that have not yet been recognized in net periodic benefit cost:

				Other Post-
				retirement
(in thousands)	Pension			Benefits			Total
Unrecognized prior service credits	$	—		$	(21	)	$	(21	)
Unrecognized actuarial losses (gains)		17,800			(206	)		17,594
Unrecognized net periodic cost (benefit)		17,800			(227	)		17,573
Less deferred taxes (benefit)		(6,942	)		88			(6,854	)
Total	$	10,858		$	(139	)	$	10,719

     Accumulated other comprehensive income at January 2, 2010, consisted of the following amounts that had not yet been recognized in net periodic benefit cost:

				Other Post-
				retirement
(in thousands)	Pension			Benefits			Total
Unrecognized prior service credits	$	—		$	(52	)	$	(52	)
Unrecognized actuarial losses (gains)		16,687			(134	)		16,553
Unrecognized net periodic cost (benefit)		16,687			(186	)		16,501
Less deferred taxes (benefit)		(6,508	)		73			(6,435	)
Total	$	10,179		$	(113	)	$	10,066

     The prior service credits and actuarial losses (gains) included in other comprehensive income and expected to be recognized in net periodic cost during the fiscal year ended December 31, 2011 are as follows:

			Other Post-
			retirement
(in thousands)	Pension		Benefits
Unrecognized prior service credits	$	—	$	(21	)
Unrecognized actuarial losses (gains)		1,576		(16	)
Total	$	1,576	$	(37	)

Funded Status

     The following table sets forth the actuarial present value of benefit obligations and funded status of the curtailed pension plan and curtailed post-retirement benefits for the years ended.

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	Pension Benefits						Other Post-retirement Benefits
(in thousands)	2010			2009			2010			2009
Funded Status
Projected benefit obligation
Beginning of year	$	(41,049	)	$	(38,564	)	$	(761	)	$	(845	)
Interest cost		(2,211	)		(2,327	)		(39	)		(48	)
Participant contributions		—			—			(44	)		(54	)
Actuarial gain (loss)		(3,005	)		(3,362	)		78			3
Benefits paid		3,140			3,204			22			183
End of year		(43,125	)		(41,049	)		(744	)		(761	)
Fair value of plan assets
Beginning of year		29,652			28,659			—			—
Actual return on plan assets		2,345			3,284						—
Employer contributions		905			913			(22	)		129
Participant contributions		—			—			44			54
Benefits paid		(3,140	)		(3,204	)		(22	)		(183	)
End of year		29,762			29,652			—			—
Funded status		(13,363	)		(11,397	)		(744	)		(761	)
Accumulated benefit obligation	$	(43,125	)	$	(41,049	)	$	(744	)	$	(761	)

Amounts recognized in the consolidated balance sheets consist of:

	Pension Benefits						Other Benefits
(in thousands)	2010			2009			2010			2009
Current liabilities	$	—		$	—		$	(118	)	$	(119	)
Non-current liabilities		(13,363	)		(11,397	)		(626	)		(642	)
Deferred tax asset (liability)		6,942			6,508			(88	)		(73	)
Accumulated other comprehensive loss (income)		10,858			10,179			(139	)		(113	)
Net amount recognized	$	4,437		$	5,290		$	(971	)	$	(947	)

Components of net periodic benefit cost (income)

     The aggregate costs for our retirement benefits included the following components:

	Pension Benefits									Other Benefits
(in thousands)	2010			2009			2008			2010			2009			2008
Interest cost	$	2,211		$	2,327		$	2,252		$	39		$	48		$	47
Expected return on plan assets		(1,854	)		(1,790	)		(2,410	)		—			—			—
Amortization of prior service credits		—			—			(2	)		(30	)		(82	)		(645	)
Recognized actuarial loss (gain)		1,401			1,370			539			(6	)		(5	)		(2	)
Net periodic benefit cost (gain)	$	1,758		$	1,907		$	379		$	3		$	(39	)	$	(600	)

Assumptions

     Weighted-average assumptions used to determine benefit obligations at January 1, 2011 and January 2, 2010:

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	Pension Benefits						Other Benefits
	2010			2009			2010			2009
Discount rate		5.10	%		5.60	%		5.10	%		5.60	%
Rate of compensation increase		N/A			N/A			N/A			N/A

     Weighted-average assumptions used to determine net periodic benefit cost for years ended January 1, 2011 and January 2, 2010:

	Pension Benefits						Other Benefits
	2010			2009			2010			2009
Discount rate		5.6	%		6.3	%		5.6	%		6.3	%
Expected return on plan assets		6.5	%		6.5	%		N/A			N/A
Rate of compensation increase		N/A			N/A			N/A			N/A

     Assumed health care cost trend rates were as follows:

	January 1, 2011			January 2, 2010
Current year trend rate		8.00	%		9.00	%
Ultimate year trend rate		5.00	%		5.00	%
Year of ultimate trend rate		2014			2014

     Assumed health care cost trend rates have an effect on the fiscal 2010 amounts reported for the health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects (in thousands):

	1%		1%
	Increase		Decrease
Effect on total of service and interest cost components	$	—	$	—
Effect on post-retirement benefit obligation		2		(2	)

     In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) became law in the United States. The Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least “actuarially equivalent” to Medicare. We believe that our postretirement benefit plan is not actuarially equivalent to Medicare Part D under the Act and consequently will not receive significant subsidies under the Act.

Pension Plan Investment Policy, Strategy and Assets

     Our investment policy is to invest in equity, fixed income and other securities to cover cash flow requirements of the plan and minimize long-term costs. The targeted allocation of assets is 30% equity securities and 70% debt securities. The pension plan’s weighted-average asset allocation by asset category is as follows:

	January 1,			January 2,
	2011			2010
Equity securities		34	%		32	%
Debt securities		13	%		13	%
Group annuity contract		53	%		55	%
Cash		0	%		0	%

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Pension Plan Investment Valuation

     Equity and debt securities consist of mutual funds which are public investment vehicles valued using the Net Asset Value (“NAV”) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and classified within level 1 of the fair value hierarchy of ASC 820.

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

     The following tables sets forth by level, within the fair value hierarchy of ASC 820, the plan’s assets at fair value as of January 1, 2011 and January 2, 2010:

	Investments at fair value - January 1, 2011
(in thousands)	Level 1		Level 2		Level 3		Total
Equity securities	$	9,992	$	—	$	—	$	9,992
Debt securities		3,771		—		—		3,771
Group annuity contract		—		—		15,999		15,999
Total investments	$	13,763	$	—	$	15,999	$	29,762

	Investments at fair value - January 2, 2010
(in thousands)	Level 1		Level 2		Level 3		Total
Equity securities	$	9,682	$	—	$	—	$	9,682
Debt securities		3,841		—		—		3,841
Group annuity contract		—		—		16,128		16,128
Cash		1		—		—		1
Total investments	$	13,524	$	—	$	16,128	$	29,652

     The following tables set forth a summary of changes in the fair value of the pension plan’s level 3 assets for the years ended January 1, 2011 and January 2, 2010:

	Group
(in thousands)	annuity contract
Balance at 1/2/2010	$	16,128
Interest income		918
Realized gains/(losses)		194
Purchases, sales, issuances and settlements (net)		(1,241	)
Balance at 1/1/2011	$	15,999

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	Group
(in thousands)	annuity contract
Balance at 1/3/2009	$	15,659
Interest income		975
Realized gains/(losses)		28
Purchases, sales, issuances and settlements (net)		(534	)
Balance at 1/2/2010	$	16,128

Estimated Future Benefits Payments

     The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

Year	Pension Benefits		Other Benefits
2011	$	3,094	$	118
2012		2,937		103
2013		2,876		92
2014		2,834		69
2015		2,844		56
2016 or later		14,592		189
	$	29,177	$	627

Expected Long-Term Rate of Return

     The expected return assumption was based on asset allocations and the expected return and risk components of the various asset classes in the portfolio. This assumption is assumed to be reasonable over a long-term period that is consistent with the liabilities. Management has reviewed these assumptions and takes responsibility for the valuation of pension assets and obligations.

Employer Contributions

Pension Plan

     We anticipate making contributions of $3.0 million during the measurement year ending December 31, 2011.

Multi-Employer Plans

     Approximately 6.6% of our employees are covered by collectively-bargained pension plans. Contributions are determined in accordance with the provisions of negotiated union contracts and are generally based on the number of hours worked. Amounts contributed to those plans were $3.3 million, $3.5 million and $3.4 million in fiscal 2010, 2009 and 2008, respectively.

     Certain of our unionized employees are covered by the Central States Southeast and Southwest Areas Pension Funds (“the Plan”), a multi-employer pension plan. Contributions are determined in accordance with the provisions of negotiated union contracts and are generally based on the number of hours worked. Based on the most recent information available, we believe the present value of actuarial accrued liabilities of the Plan substantially exceeds the value of the assets held in trust to pay benefits. The underfunding is not a direct obligation or liability of the Company. Moreover, if the Company were to exit certain markets or otherwise cease making contributions to the Plan, the Company could trigger a substantial withdrawal liability. However, the amount of any increase in contributions will depend upon several factors, including the number of employers contributing to the Plan, results of the Company’s collective bargaining efforts, investment returns

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on assets held by the Plan, actions taken by the trustees of the Plan, and actions that the Federal government may take. We are currently unable to reasonably estimate a liability. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably estimated.

(18) Segment Information

     We sell and distribute products that are typically found in supermarkets and operate three reportable operating segments. The military segment consists primarily of seven distribution centers that distribute products exclusively to military commissaries and exchanges. During fiscal 2010, our military distribution centers in Columbus, Georgia and Bloomington, Indiana became operational. Excluded from the military distribution center totals are two adjacent military distribution centers we purchased during the third quarter of fiscal 2010 in Oklahoma City, Oklahoma, which are scheduled to become operational during fiscal 2012. Our food distribution segment consists of 14 distribution centers that sell to independently operated retail food stores, our corporate owned stores and other customers. During the third quarter of fiscal 2010, we closed our food distribution center in Bridgeport, Michigan at the end of its lease term. The retail segment consists of 52 corporate-owned stores that sell directly to the consumer. We closed two retail stores during fiscal 2010.

     We evaluate segment performance and allocate resources based on profit or loss before income taxes, interest associated with corporate debt and other discrete items. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies.

     Inter-segment sales are recorded on a market price-plus-fee and freight basis. For segment financial reporting purposes, a portion of the operational profits recorded at our distribution centers related to corporate-owned stores is allocated to the retail segment. Certain revenues and costs from our distribution centers are specifically identifiable to either the independent or corporate-owned stores that they serve. The revenues and costs that are specifically identifiable to corporate-owned stores are allocated to the retail segment. Those that are specifically identifiable to independent customers are recorded in the food distribution segment. The remaining revenues and costs that are not specifically identifiable to either the independent or corporate-owned stores are allocated to the retail segment as a percentage of corporate-owned store distribution sales to total distribution center sales. For fiscal 2010, 23% of such warehouse operational profits were allocated to the retail operations compared to 18% and 19% in fiscal 2009 and 2008, respectively.

     In fiscal 2010, the Company revised its calculation of segment profit and unallocated corporate overhead to present segment profitability on a fully-allocated basis, with the exception of costs associated with corporate debt and other discrete items as shown in the “as adjusted” columns below. In addition, LIFO expenses or credits are now allocated to the business segments. Management believes the revised calculation of segment profit more accurately represents the operating profitability of the reporting segments, on a pre-tax basis. This revision had no impact on the Company’s consolidated financial statements in any period presented. Previously, interest expense was included in unallocated corporate overhead.

     In addition, during late fiscal 2009 and fiscal 2010, the Company acquired military food distribution centers in Columbus, Georgia, Bloomington, Indiana and two adjacent facilities in Oklahoma City, Oklahoma. The Company has historically serviced military commissaries and exchanges outside of the military segment’s distribution network through distribution centers that are included in the Company’s food distribution segment. The revenue and segment profit associated with that business has previously been reported in the food distribution segment. The Company is currently in the process of transitioning the military business serviced by the food distribution segment to military distribution facilities and is scheduled to have all of the business transitioned by fiscal 2012. Accordingly, we have revised our segment reporting to include that business in our military segment, which impacts amounts previously reported during fiscal 2009 and 2008. The revenue and segment profit associated with that business that was included in the food distribution segment represented approximately $269.1 million and $5.5 million during fiscal 2009, respectively, and was $264.7 million and $6.5 million during fiscal 2008, respectively. This revision had no impact on the Company’s consolidated financial statements in any period presented.

     Certain prior year amounts, as shown in the following two tables, have been revised to conform to the current year presentation.

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	Fiscal 2009
	As			Unallocated Corporate			Food Distribution to			As
(In thousands)	Reported			Overhead Revision			Military Reclassification			adjusted
Revenue from external customers:
Military	$	1,985,313			—			269,082		$	2,254,395
Food Distribution		2,655,012			—			(269,082	)		2,385,930
Retail		572,330			—			—			572,330
Total segment revenue	$	5,212,655								$	5,212,655
Segment depreciation:
Military	$	5,611			78			—		$	5,689
Food Distribution		8,787			14,441			—			23,228
Retail		7,269			4,417			—			11,686
Total segment depreciation	$	21,667								$	40,603
Segment assets:
Military	$	221,244			110,866			37,091		$	369,201
Food Distribution		434,040			100,378			(37,091	)		497,327
Retail		95,222			32,336			—			127,558
Total segment assets	$	750,506								$	994,086
Segment capital expenditures:
Military	$	10,760			—			—		$	10,760
Food Distribution		7,705			5,193			—			12,898
Retail		5,301			1,443			—			6,744
Total segment assets	$	23,766								$	30,402
Segment profit:
Military	$	49,717			(7,186	)		5,526		$	48,057
Food Distribution		88,116			(43,730	)		(5,526	)		38,860
Retail		15,888			(15,492	)		—			396
Total segment profit	$	153,721								$	87,313
Adjustment of inventory to LIFO		3,033			(3,033	)		—			—
Gain on acquisition of a business		6,682			—			—			6,682
Gain on litigation settlement		7,630			—			—			7,630
Goodwill impairment		(50,927	)		—			—			(50,927	)
Special charge		(6,020	)		—			—			(6,020	)
Interest		—			(20,928	)		—			(20,928	)
Unallocated corporate overhead		(90,369	)		90,369			—			—
Earnings before income taxes	$	23,750								$	23,750

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	Fiscal 2008
	As			Unallocated Corporate			Food Distribution to			As
(In thousands)	Reported			Overhead Revision			Military Reclassification			adjusted
Revenue from external customers:
Military	$	1,290,575			—			264,659		$	1,555,234
Food Distribution		2,740,462			—			(264,659	)		2,475,803
Retail		602,457			—			—			602,457
Total segment revenue	$	4,633,494								$	4,633,494
Segment depreciation:
Military	$	2,039			63			—		$	2,102
Food Distribution		9,359			15,745			—			25,104
Retail		6,769			4,454			—			11,223
Total segment depreciation	$	18,167								$	38,429
Segment assets:
Military	$	150,151			19,065			38,343		$	207,559
Food Distribution		451,222			139,958			(38,343	)		552,837
Retail		99,128			88,427			—			187,555
Total segment assets	$	700,501								$	947,951
Segment capital expenditures:
Military	$	3,395			—			—		$	3,395
Food Distribution		6,131			4,579			—			10,710
Retail		12,835			5,015			—			17,850
Total segment assets	$	22,361								$	31,955
Segment profit:
Military	$	49,125			(13,476	)		6,455		$	42,104
Food Distribution		100,275			(64,888	)		(6,455	)		28,932
Retail		21,335			(15,385	)		—			5,950
Total segment profit	$	170,735								$	76,986
Adjustment of inventory to LIFO		(19,740	)		19,740			—			—
Interest		—			(23,195	)		—			(23,195	)
Unallocated corporate overhead		(97,204	)		97,204			—			—
Earnings before income taxes	$	53,791								$	53,791

Major Segments of the Business
Year end January 1, 2011

			Food
(in thousands)	Military		Distribution			Retail		Total
Revenue from external customers	$	2,289,987	$	2,183,730		$	518,262	$	4,991,979
Inter-segment revenue		—		258,175			—		258,175
Interest revenue		—		(37	)		—		(37	)
Interest expense (including capitalized lease interest)		12		(36	)		3,633		3,609
Depreciation expense		6,269		19,674			10,176		36,119
Segment profit		51,301		33,650			6,660		91,611
Assets		441,866		490,467			115,470		1,047,803
Expenditures for long-lived assets		48,356		8,777			2,162		59,295

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Major Segments of the Business
Year end January 2, 2010

			Food
(in thousands)	Military		Distribution			Retail		Total
Revenue from external customers	$	2,254,395	$	2,385,930		$	572,330	$	5,212,655
Inter-segment revenue		—		290,523			—		290,523
Interest revenue		—		(26	)		—		(26	)
Interest expense (including capitalized lease interest)		32		(25	)		3,438		3,445
Depreciation expense		5,689		23,228			11,686		40,603
Segment profit		48,057		38,860			396		87,313
Assets		369,201		497,327			127,558		994,086
Expenditures for long-lived assets		10,760		12,898			6,744		30,402

Major Segments of the Business
Year end January 3, 2009

			Food
(in thousands)	Military		Distribution			Retail		Total
Revenue from external customers	$	1,555,234	$	2,475,803		$	602,457	$	4,633,494
Inter-segment revenue		—		307,591			—		307,591
Interest revenue		—		(8	)		—		(8	)
Interest expense (including capitalized lease interest)		—		(7	)		3,278		3,271
Depreciation expense		2,102		25,104			11,223		38,429
Segment profit		42,104		28,932			5,950		76,986
Assets		207,559		552,837			187,555		947,951
Expenditures for long-lived assets		3,395		10,710			17,850		31,955

Reconciliation

(in thousands)	2010			2009			2008
Revenues
Total external revenue for segments	$	4,991,979		$	5,212,655		$	4,633,494
Inter-segment revenue from reportable segments		258,175			290,523			307,591
Elimination of inter-segment revenues		(258,175	)		(290,523	)		(307,591	)
Total consolidated revenues	$	4,991,979		$	5,212,655		$	4,633,494
Profit (Loss)
Total profit for segments	$	91,611		$	87,313		$	76,986
Unallocated amounts:
Interest		(19,485	)		(20,928	)		(23,195	)
Goodwill impairment		—			(50,927	)		—
Gain on acquisition of a business		—			6,682			—
Gain on litigation settlement		—			7,630			—
Special charge		—			(6,020	)		—
Earnings before income taxes	$	72,126		$	23,750		$	53,791
Assets
Total assets for segments	$	1,047,803		$	994,086		$	947,951
Unallocated corporate assets		2,872			5,450			4,595
Total consolidated assets	$	1,050,675		$	999,536		$	952,546

     All revenues are attributed to and all assets are held in the United States. Our market areas are in the Midwest, Mid-Atlantic, Great Lakes and Southeast United States.

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(19) Other Information

     On January 3, 2011, the Company purchased the real estate associated with our military food distribution facility in Norfolk, Virginia for approximately $27.5 million. This facility had previously been a leased location.

NASH FINCH COMPANY AND SUBSIDIARIES
Quarterly Financial Information (Unaudited)
(In thousands, except per share amounts and percent to sales)

	First Quarter						Second Quarter						Third Quarter						Fourth Quarter
	12 Weeks						12 Weeks						16 Weeks						12 Weeks
	2010			2009			2010			2009			2010			2009			2010			2009
Sales	$	1,179,693		$	1,140,320		$	1,154,617		$	1,216,594		$	1,510,881		$	1,633,304		$	1,146,788		$	1,222,437
Cost of sales		1,087,873			1,045,201			1,060,280			1,117,565			1,388,926			1,504,350			1,054,112			1,126,851
Gross profit		91,820			95,119			94,337			99,029			121,955			128,954			92,676			95,586
Earnings before income taxes		13,330			17,526			17,966			16,114			22,830			31,655			18,000			(41,545	)
Income tax expense		5,389			3,106			7,252			6,576			7,484			9,728			1,060			1,562
Net earnings (loss)		7,941			14,420			10,714			9,538			15,346			21,927			16,940			(43,107	)
Net earnings (loss) as percentage of sales		0.67	%		1.26	%		0.93	%		0.78	%		1.02	%		1.34	%		1.48	%		(3.53	%)
Basic earnings (loss) per share	$	0.61		$	1.11		$	0.83		$	0.73		$	1.21		$	1.68		$	1.34		$	(3.31	)
Diluted earnings (loss) per share	$	0.59		$	1.08		$	0.81		$	0.72		$	1.18		$	1.64		$	1.30		$	(3.20	)

Significant items by quarter include the following:
1.	Conversion and opening costs related to opening of new military food distribution facilities of $0.4 million, $0.3 million, $1.1 million and $1.1 million during the first, second, third and fourth quarters, respectively, of fiscal 2010.
2.	Closing costs related to a food distribution facility of $1.2 million and $0.5 million during the second and third quarters, respectively, of fiscal 2010.
3.	The reversal of previously recorded income tax reserves of $2.2 million and $4.7 million during the third and fourth quarters, respectively, of fiscal 2010.
4.	Goodwill impairment charge of $50.9 million in the fourth quarter 2009.
5.	Gain on the acquisition of a business of $6.7 million, net of tax, in the first quarter 2009.
6.	Gain on the settlement of litigation of $7.6 million in the third quarter 2009.
7.	Acquisition and integration costs of $0.6 million, $0.8 million, $0.9 million and $0.4 million in the first, second, third and fourth quarters, respectively, of fiscal 2009.
8.	Special charge of $6.0 million in the fourth quarter 2009.
9.	Pre-opening and start-up costs of $0.1 million and $0.6 million in the first and second quarters, respectively, of fiscal 2009.
10.	Gain on the sale of intangible assets of $0.7 million in the fourth quarter 2009.
11.	Retail store impairments and lease related charges of $1.2 million, $0.9 million, $1.3 million and $1.9 million in the first, second, third and fourth quarters, respectively, of fiscal 2009.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

     Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934).

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Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

     There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our most recently completed fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management’s Annual Report On Internal Control Over Financial Reporting

     Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 1, 2011. In conducting its evaluation, our management used the criteria set forth by the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, management concluded our internal control over financial reporting was effective as of January 1, 2011.

     Our internal control over financial reporting as of January 1, 2011 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report included below.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Nash Finch Company

We have audited Nash-Finch Company and subsidiaries’ (a Minnesota Corporation) internal control over financial reporting as of January 1, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Nash-Finch Company and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on Nash-Finch Company and subsidiaries’ internal control over financial reporting based on our audit.

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

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

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Nash-Finch Company and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of January 1, 2011, based on criteria established in Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Nash-Finch Company and subsidiaries as of January 1, 2011, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year ended January 1, 2011 and our report dated March 3, 2011 expressed an unqualified opinion thereon.

Grant Thornton LLP

Minneapolis, Minnesota
March 3, 2011

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ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth information about our executive officers as of March 3, 2011:

			Year First
			Elected or
			Appointed as
			an Executive
Name	Age		Officer		Title
Alec C. Covington		53		2006	President and Chief Executive Officer
Christopher A. Brown		48		2006	Executive Vice President, President and Chief Operating Officer of Wholesale
Edward L. Brunot		47		2006	Senior Vice President, President and Chief Operating Officer of MDV
Robert B. Dimond		49		2007	Executive Vice President, Chief Financial Officer and Treasurer
Kathleen M. Mahoney		56		2006	Executive Vice President, General Counsel and Secretary
Jeffrey E. Poore		52		2001	Executive Vice President, Supply Chain Management
Calvin S. Sihilling		61		2006	Executive Vice President and Chief Information Officer
Michael W. Rotelle III		51		2008	Senior Vice President, Human Resources

     There are no family relationships between or among any of our executive officers or directors. Our executive officers are elected by the Board of Directors for one-year terms after initial election, commencing with their election at the first meeting of the Board of Directors immediately following the annual meeting of stockholders and continuing until the next such meeting of the Board of Directors.

     Alec C. Covington has been our President and Chief Executive Officer and a Director since May 2006. Mr. Covington served as President and Chief Executive Officer of Tree of Life, Inc., a marketer and distributor of natural and specialty foods, from February 2004 to May 2006, and for the same period as a member of the Executive Board of Tree of Life’s parent corporation, Royal Wessanen NV, a multi-national food corporation based in the Netherlands. From April 2001 to February 2004, he was Chief Executive Officer of AmeriCold Logistics, LLC, a provider of supply chain solutions in the consumer packaged goods industry. Prior to that time, Mr. Covington served as President of Richfood Inc., a regional food distributor.

     Christopher A. Brown has served as our Executive Vice President and President and Chief Operating Officer of Nash Finch Wholesale since February 2010. Mr. Brown returned to Nash Finch as Executive Vice President, Food Distribution in November 2006. Prior to that time, he served for three years as Chief Executive Officer of SimonDelivers, Inc., a leading Minnesota-based online grocery delivery company. Prior to joining SimonDelivers, Mr. Brown was our Executive Vice President, Merchandising from October 1999 to September 2003 and responsible for all merchandising, procurement, marketing, category management and advertising. During the nine years prior to serving Nash Finch, he held various management positions of increasing responsibility at Richfood Holdings, Inc. Mr. Brown holds a BSBA degree from Winona State University.

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     Edward L. Brunot has served as our Senior Vice President and President and Chief Operating Officer of MDV since February 2009. Mr. Brunot joined Nash Finch in July 2006 as our Senior Vice President, Military. Mr. Brunot previously served as Senior Vice President, Operations for AmeriCold Logistics, LLC from December 2002 to May 2006, where he was responsible for 29 distribution facilities in the Western Region. Before that, Mr. Brunot was Vice President of Operations for CS Integrated from 1999 to 2002. Mr. Brunot served as a Captain in the United States Army and holds a BS degree from the United States Military Academy, West Point and an MS degree from the University of Scranton.

     Robert B. Dimond returned as our Executive Vice President, Chief Financial Officer and Treasurer in January 2007. He previously served as Chief Financial Officer and Senior Vice President of Wild Oats Markets, Inc., a leading national natural and organic foods retailer, from April 2005 to December 2006. From January 2005 through March 2005, Mr. Dimond served as Executive Vice President and Chief Financial Officer of The Penn Traffic Company, a food retailer in the eastern United States, in connection with its emergence from bankruptcy proceedings. Prior to that, he served as our Executive Vice President, Chief Financial Officer and Treasurer from May 2002 to November 2004 and as our Chief Financial Officer and Senior Vice President from September 2000 to May 2002. Before that, Mr. Dimond held various financial roles with Kroger and Smith’s Food & Drug Centers, Inc. Mr. Dimond holds a BS degree in accounting from the University of Utah and is a Certified Public Accountant.

     Kathleen M. Mahoney has served as our Executive Vice President, General Counsel and Secretary since November 2009. Prior to that Ms. Mahoney served as our Senior Vice President, General Counsel and Secretary since July 2006. Ms. Mahoney joined Nash Finch as Vice President, Deputy General Counsel in November 2004. Prior to working at Nash Finch, she was the Managing Partner of the St. Paul office of Larson King, LLP from July 2002 to November 2004. Previously, she spent 13 years with the law firm of Oppenheimer, Wolff & Donnelly, LLP, where she served in a number of capacities including Managing Partner of their St. Paul office, Chair of the Labor and Employment Practice Group and Chair of the EEO Committee. Ms. Mahoney also served as Special Assistant Attorney General in the Minnesota Attorney General’s office for six years. Ms. Mahoney earned her JD degree from Syracuse University College of Law and a BA from Keene State College.

     Jeffrey E. Poore has served as our Executive Vice President, Supply Chain Management since July 2006. He previously served as our Senior Vice President, Military from July 2004 to July 2006 and as our Vice President, Distribution and Logistics from May 2001 to July 2004. Prior to joining Nash Finch, Mr. Poore served in various positions with Supervalu Inc., a food wholesaler and retailer, most recently as Vice President, Logistics from January 1999 to April 2001. Before that, Mr. Poore held various distribution and logistics roles with Computer Sciences Corporation, Hills Department Stores, Payless Shoe Stores and Payless Cashways. Mr. Poore holds a BA from Loyola Marymount University.

     Calvin S. Sihilling has served as our Executive Vice President and Chief Information Officer since August 2006. Mr. Sihilling previously served as Chief Information Officer for AmeriCold Logistics, LLC from August 2001 to January 2006, where he was responsible for the oversight of Information Technology, Transportation, Project Support, and the National Service Center. Before that, Mr. Sihilling was CIO of the Eastern Region of Richfood Holdings, Inc./SuperValu Inc. from August 1998 to August 2001. Prior to that, Mr. Sihilling held various leadership positions at such companies as Alex Lee, Inc., PepsiCo Food Systems, Dr. Pepper Company and Electronic Data Systems. Mr. Sihilling holds a BS from the Northrop Institute of Technology.

     Michael W. Rotelle III has served as our Senior Vice President, Human Resources since October 2008. Mr. Rotelle previously served as Executive Vice President, Human Resources for Acosta Sales and Marketing Company, a sales and marketing company serving the foodservice and grocery industries, from November 2007 to October 2008, where he was responsible for global Human Resource operations. Before that Mr. Rotelle served as Senior Vice President, Human Resources for Tree of Life, Inc. from August 2004 to November 2007. Prior to that Mr. Rotelle was Vice President, Human Resources of the Eastern Region of Richfood Holdings, Inc./ Supervalu Inc. from August 1994 to August 2004. Before that Mr. Rotelle held various operational and Human Resource positions with Rotelle, Inc. Mr. Rotelle holds a Bachelor of Science degree in Business Administration from Bloomsburg University.

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     The remaining information required by this item is incorporated by reference to the sections titled “Proposal Number 1: Election of Directors—Information About Directors and Nominees,” “Proposal Number 1: Election of Directors—Information About the Board of Directors and Its Committees,” “Corporate Governance—Governance Guidelines,” “Corporate Governance—Director Candidates” and “Section 16(a) Beneficial Ownership Reporting Compliance” of our 2011 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item is incorporated by reference to the sections titled “Proposal Number 1: Election of Directors—Compensation of Directors,” “Proposal Number 1: Election of Directors—Compensation and Management Development Committee Interlocks and Insider Participation” and “Executive Compensation and Other Benefits” of our 2011 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

     The following table provides information about Nash Finch common stock that may be issued upon the exercise of stock options, the payout of share units or performance units, or the granting of other awards under all of Nash Finch’s equity compensation plans in effect as of January 1, 2011:

Equity Compensation Plan Information
	Number of securities to be			Number of securities remaining
	issued upon exercise of			available for future issuance
	outstanding options,			under equity compensation plans
	warrants and rights			(excluding securities reflected in
Plan category	(a)			column (a)) (c)
Equity compensation plans approved by security holders		1,436,577	(1)		649,069	(2)
Equity compensation plans not approved by security holders		—			20,146	(3)
		1,436,577			669,215

(1)	Includes stock options, stock appreciation rights, restricted stock units and performance units awarded under the 2009 Incentive Award Plan (“2009 Plan”) and 2000 Stock Incentive Plan (“2000 Plan”).
(2)	The following numbers of shares remained available for issuance under each of our equity compensation plans at January 1, 2011. Grants under each plan may be in the form of any of the types of awards noted:

Plan	Number of Shares		Type of Award
2009 Plan		538,682	Stock options, restricted stock, stock appreciation rights, performance units, and stock bonuses.
2000 Plan		74,760	Stock options, restricted stock, stock appreciation rights, performance units, and stock bonuses.
1997 Director Plan		35,627	Share units

(3) Shares remaining available for issuance under the Director Deferred Compensation Plan. Each share unit acquired through the deferral of director compensation under the Director Deferred Compensation Plan is

87

payable in one share of Nash Finch common stock following the individual’s termination of service as a director.

Description of Plans Not Approved by Shareholders

     Director Deferred Compensation Plan. The Director Deferred Compensation Plan was adopted by the Board in December 2004 as a result of amendments to the Internal Revenue Code that affected the operation of non-qualified deferred compensation arrangements for amounts deferred on or after January 1, 2005. The Board reserved 50,000 shares of Nash Finch common stock for issuance in connection with the plan. The plan permits a participant to annually defer all or a portion of his or her cash compensation for service as a director, and have the amount deferred credited to either a cash account or a share account. Amounts credited to a share account are deemed to have purchased a number of share units determined by dividing the amount deferred by the then-current market price of a share of Nash Finch common stock. Each share unit represents the right to receive one share of Nash Finch common stock. The balance in a share account is payable only in stock following termination of service as a director.

Security Ownership of Certain Beneficial Owners and Management

     In addition to the information set forth above, the information required by this item is incorporated by reference to the sections titled “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management” of our 2011 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

     The information required by this item is incorporated by reference to the sections titled “Proposal Number 1: Election of Directors—Information About the Board of Directors and Its Committees,” “Corporate Governance—Governance Guidelines—Independent Directors” and “Corporate Governance—Related Party Transaction Policy and Procedures” of our 2011 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information required by this item is incorporated by reference to the sections titled “Independent Auditors—Fees Paid to Independent Auditors” and “Independent Auditors—Pre-Approval of Audit and Non-Audit Services” of our 2011 Proxy Statement.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1.	Financial Statements.
	The following financial statements are included in this report on the pages indicated:
	Reports of Independent Registered Public Accounting Firms — pages 41 to 42
	Consolidated Statements of Income for the fiscal years ended January 1, 2011, January 2, 2010 and January 3, 2009 — page 43
	Consolidated Balance Sheets as of January 1, 2011 and January 2, 2010 — page 44
	Consolidated Statements of Cash Flows for the fiscal years ended January 1, 2011, January 2, 2010 and January 3, 2009 — page 45
	Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 1, 2011, January 2, 2010 and January 3, 2009 — page 46

88

	Notes to Consolidated Financial Statements — pages 47 to 82
2.	Financial Statement Schedules.
	The following financial statement schedule is included herein and should be read in conjunction with the consolidated financial statements referred to above:
	Valuation and Qualifying Accounts — page 94
	Other Schedules. Other schedules are omitted because the required information is either inapplicable or presented in the consolidated financial statements or related notes.
3.	Exhibits.

Exhibit
No.	Description
*2.1	Asset Purchase Agreement between Roundy’s, Inc. and Nash-Finch Company, dated as of February 24, 2005 (incorporated by reference to Exhibit 2.1 to our current report on Form 8-K filed February 28, 2005 (File No. 0-785)).
*2.2	Asset Purchase Agreement between GSC Enterprises, Inc., MKM Management, L.L.C., Michael K. McKenzie, Grocery Supply Acquisition Corp. and Nash-Finch Company, dated as of December 17, 2008 (incorporated by reference to Exhibit 1.01 to our current report on Form 8-K filed December 18, 2008 (File No. 0-785)).
*2.3	First Amendment to Asset Purchase Agreement between GSC Enterprises, Inc., MKM Management, L.L.C., Michael K. McKenzie, Grocery Supply Acquisition Corp. and Nash-Finch Company, dated as of January 31, 2009 (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed February 3, 2009 (File No. 0-785)).
3.1	Restated Certificate of Incorporation of the Company, effective May 16, 1985 (incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the fiscal year ended December 28, 1985 (File No. 0-785)).
3.2	Certificate of Amendment to Restated Certificate of Incorporation of the Company, effective May 15, 1987 (incorporated by reference to Exhibit 4.5 to our Registration Statement on Form S-3 (filed June 8, 1987 (File No. 33-14871)).
3.3	Certificate of Amendment to Restated Certificate of Incorporation of the Company, effective May 16, 2002 (incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 15, 2002 (File No. 0-785)).
3.4	Certificate of Amendment to Restated Certificate of Incorporation of the Company, effective May 13, 2008 (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K dated May 16, 2008 (File No. 0-785)).
3.5	Certificate of Amendment to the Nash-Finch Company Restated Certificate of Incorporation, effective May 20, 2009 (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K filed May 26, 2009 (File No. 0-785)).
3.6	Fourth Restated Certificate of Incorporation of Nash Finch Company, effective July 27, 2009 (incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed July 28, 2009 (File No. 0-785)).

89

Exhibit
No.	Description
3.7	Nash-Finch Company Bylaws (as amended November 9, 2005) (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K filed November 14, 2005 (File No. 0-785)).
3.8	Amended and Restated Bylaws of Nash-Finch Company (as amended May 13, 2008) (incorporated by reference to Exhibit 3.2 to our current report on Form 8-K/A filed May 19, 2008 (File No. 0-785)).
3.9	Amended and Restated Bylaws of Nash Finch Company (as amended May 20, 2009) (incorporated by reference to Exhibit 3.2 to our current report on Form 8-K/A filed July 6, 2009 (File No. 0-785)).
3.10	Amended and Restated Bylaws of Nash Finch Company (as amended February 28, 2011) (filed herewith).
4.1	Stockholder Rights Agreement, dated February 13, 1996, between the Company and Wells Fargo Bank, N.A. (formerly known as Norwest Bank Minnesota, National Association) (incorporated by reference to Exhibit 4 to our current report on Form 8-K dated February 13, 1996 (File No. 0-785)).
4.2	Amendment to Stockholder Rights Agreement dated as of October 30, 2001 (incorporated by reference to Exhibit 4.2 to Amendment No. 1 to our Registration Statement on Form 8-A (filed July 26, 2002) (File No. 0-785)).
4.3	Indenture dated as of March 15, 2005 between Nash-Finch Company and Wells Fargo Bank, National Association, as Trustee (including form of Senior Subordinated Convertible Notes due 2035) (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed March 9, 2005 (File No. 0-785)).
4.4	Registration Rights Agreement dated as of March 15, 2005 between Nash-Finch Company and Deutsche Bank Securities Inc., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed March 9, 2005 (File No. 0-785)).
4.5	Notice of Adjustment of Conversion Rate of the Senior Subordinated Convertible Notes Due 2035 (incorporated by reference to Exhibit 99.1 to our current report on Form 8-K filed November 21, 2006 (File No. 0-785)).
4.6	First Supplemental Indenture to Senior Convertible Notes Due 2035 (incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended June 14, 2008 (File No. 0-785)).
4.7	Notice of Adjustment of Conversion Rate of Senior Subordinated Convertible Notes Due 2035 (incorporated by reference to Exhibit 7.1 to our current report on Form 8-K filed March 25, 2009 (File No. 0-785)).
10.1	Credit Agreement, dated as of April 11, 2008, among Nash Finch Company, Various Lenders and Bank of America, N.A. as Administrative Agent (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed April 14, 2008 (File No. 0-785)).
**10.2	Nash-Finch Company Income Deferral Plan (as amended through May 21, 2004) (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 filed May 25, 2004 (File No. 333-115849)).
**10.3	Second Declaration of Amendment to Nash-Finch Company Income Deferral Plan (as amended through May 21, 2004) (incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 (File No. 0-785)).
**10.4	Nash-Finch Company Deferred Compensation Plan (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 filed on December 30, 2004 (File No. 333-121755)).

90

Exhibit
No.	Description
**10.5	Amended and Restated Nash-Finch Company Deferred Compensation Plan (incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K filed March 12, 2009 (File No. 0-785)).
**10.6	Nash-Finch Company 2000 Stock Incentive Plan (as amended February 25, 2008) (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed May 16, 2008 (File No. 0-785)).
**10.7	Nash-Finch Company 2000 Stock Incentive Plan (as amended and restated on July 14, 2008) (incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K filed March 12, 2009 (File No. 0-785)).
**10.8	Form of Non-Statutory Stock Option Agreement (for employees under the Nash-Finch Company 2000 Stock Incentive Plan) (incorporated by reference to Exhibit 10.7 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 (File No. 0-785)).
**10.9	Description of Nash-Finch Company Long-Term Incentive Program Utilizing Performance Unit Awards (incorporated by reference to Appendix I to our Proxy Statement for our Annual Meeting of Stockholders on May 10, 2005 (filed March 21, 2005) (File No. 0-785)).
**10.10	Form of Non-Statutory Stock Option Agreement (for non-employee directors under the Nash-Finch Company 1995 Director Stock Option Plan) (incorporated by reference to Exhibit 10.10 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 (File No. 0-785)).
**10.11	Nash-Finch Company 1997 Non-Employee Director Stock Compensation Plan (2003 Revision) (incorporated by reference to Exhibit 10.9 to our Annual Report on Form 10-K for the fiscal year ended January 3, 2004 (File No. 0-785)).
**10.12	Nash-Finch Company 1997 Non-Employee Director Stock Compensation Plan (2003 Revision) — First Declaration of Amendment (incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 (File No. 0-785)).
**10.13	Nash-Finch Company 1997 Non-Employee Director Stock Compensation Plan (2003 Revision) — Second Declaration of Amendment (incorporated by reference to Exhibit 10.13 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 (File No. 0-785)).
**10.14	Nash-Finch Company Director Deferred Compensation Plan (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-8 filed on December 30, 2004 (File No. 333-121754)).
**10.15	Amended and Restated Nash-Finch Company Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.20 to our Annual Report on Form 10-K filed March 12, 2009 (File No. 0-785)).
**10.16	Nash-Finch Company Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2000 (File No. 0-785)).
**10.17	Nash-Finch Company Supplemental Executive Retirement Plan (as amended and restated on July 14, 2008) (incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K filed March 12, 2009 (File No. 0-785)).
**10.18	Nash-Finch Company Performance Incentive Plan (incorporated by reference to Exhibit 10.6 to our Quarterly Report on Form 10-Q for the quarter ended June 15, 2002 (File No. 0-785)).
**10.19	Description of Nash-Finch Company 2005 Executive Incentive Program (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the twelve weeks ended March 26, 2005 (File No. 0-785)).

91

Exhibit
No.	Description
**10.20	Form of Restricted Stock Unit Award Agreement (for non-employee directors under the 2000 Stock Incentive Plan) (incorporated by reference to Exhibit 10.19 to our Annual Report on Form 10-K for the fiscal year ended January 1, 2005 (File No. 0-785)).
**10.21	Form of Amended and Restated Restricted Stock Unit Agreement (for non-employee directors under the 2000 Stock Incentive Plan) (incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed March 12, 2009 (File No. 0-785)).
**10.22	New Form of Restricted Stock Unit Award Agreement (for non-employee directors under the 2000 Stock Incentive Plan) (incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10-K filed March 12, 2009 (File No. 0-785)).
**10.23	Form of Restricted Stock Unit Award Agreement (under the 2000 Stock Incentive Plan) (incorporated by reference to Exhibit 10.1 to our Form 8-K filed August 11, 2006 (File No. 0-785)).
**10.24	Form of Amended and Restated Restricted Stock Unit Award Agreement (under the 2000 Stock Incentive Plan) (incorporated by reference to Exhibit 10.3 to our Form 10-Q filed November 6, 2008 (File No. 0-785)).
**10.25	New Form of Executive Restricted Stock Unit Agreement (under the 2000 Stock Incentive Plan), effective July 14, 2008 (incorporated by reference to Exhibit 10.2 to our Form 10-Q filed November 6, 2008 (File No. 0-785)).
**10.26	Nash-Finch Company 2000 Stock Incentive Plan Performance Unit Award Agreement dated as of May 1, 2006 between the Company and Alec C. Covington (incorporated by reference to Exhibit 10.3 to our Form 10-Q for the quarter ended June 17, 2006 (File No. 0-785)).
**10.27	Nash-Finch Company 2000 Stock Incentive Plan Restricted Stock Unit Award Agreement dated as of May 1, 2006 between the Company and Alec C. Covington (incorporated by reference to Exhibit 10.2 to our Form 10-Q for the quarter ended June 17, 2006 (File No. 0-785)).
**10.28	Letter Agreement between Nash-Finch Company and Alec C. Covington dated March 16, 2006 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed April 18, 2006 (File No. 0-785)).
**10.29	Amendment to the Letter Agreement between Nash-Finch Company and Alec C. Covington dated February 27, 2007 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed March 1, 2007 (File No. 0-785)).
**10.30	Change in Control Agreement entered into by Nash-Finch Company and Alec. C. Covington dated February 26, 2008 (incorporated by reference to Exhibit 10.1 to our Form 8-K/A filed February 28, 2008 (File No. 0-785)).
**10.31	Change in Control Agreement entered into by Nash-Finch Company and Alec. C. Covington dated February 28, 2011 (filed herewith).
**10.32	Restricted Stock Unit Agreement between the Company and Alec C. Covington dated February 27, 2007 (incorporated by reference to Exhibit 10.2 to our Form 10-Q filed May 1, 2007 (File No. 0-785)).
**10.33	Letter Agreement between Nash-Finch Company and Robert B. Dimond dated November 29, 2006 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed December 21, 2006 (File No. 0-785)).
**10.34	Amended Form of Change in Control Agreement for Senior and Executive Vice Presidents, effective November 3, 2008 (incorporated by reference to Exhibit 10.1 to our Form 10-Q filed November 6, 2008 (File No. 0-785)).

92

Exhibit
No.	Description
**10.35	Form of Amended and Restated Indemnification Agreement (incorporated by reference to Exhibit 10.1 to our Form 10-Q filed November 13, 2007 (File No. 0-785)).
**10.36	Stock Appreciation Rights Agreement under the Nash-Finch Company 2000 Stock Incentive Plan dated December 17, 2008 (incorporated by reference to Exhibit 10.2 to our Form 8-K filed February 3, 2009 (File No. 0-785)).
**10.37	Amended and Restated Stock Appreciation Rights Agreement under the Nash-Finch Company 2000 Stock Incentive Plan dated December 17, 2008 (incorporated by reference to Exhibit 10.1 to our Form 10-Q filed May 4, 2009 (File No. 0-785)).
**10.38	Nash-Finch Company Incentive Award Plan (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed May 26, 2009 (File No. 0-785)).
**10.39	Nash Finch Company Performance Incentive Plan (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed May 26, 2009 (File No. 0-785)).
12.1	Computation of Ratio of Earnings to Fixed Charges (filed herewith).
21.1	Our subsidiaries (filed herewith).
23.1	Consent of Grant Thornton LLP (filed herewith).
23.2	Consent of Ernst & Young LLP (filed herewith).
24.1	Power of Attorney (filed herewith).
31.1	Rule 13a-14(a) Certification of the Chief Executive Officer (filed herewith).
31.2	Rule 13a-14(a) Certification of the Chief Financial Officer (filed herewith).
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer (filed herewith).
	A copy of any of these exhibits will be furnished at a reasonable cost to any of our stockholders, upon receipt from any such person of a written request for any such exhibit. Such request should be sent to Nash Finch Company, 7600 France Avenue South, P.O. Box 355, Minneapolis, Minnesota, 55440-0355, Attention: Secretary.

*	The Company agrees to furnish supplementary to the SEC upon request by the SEC any omitted schedule or exhibit.
**	Items that are management contracts or compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(a)(3) of Form 10-K.

93

NASH FINCH COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
Fiscal Years ended January 1, 2011, January 2, 2010 and January 3, 2009
(In thousands)

			Charged to			Charged
	Balance at		(Reversed			(Credited) to					Balance
	Beginning of		from) Costs			Other Accounts					at End of
Description	Year		and Expenses			(a)		Deductions			Year
53 weeks ended January 3, 2009:
Allowance for doubtful accounts (c)	$	7,669	$	(1,292	)	$	37	$	883	(b)	$	5,531
Provision for losses relating to leases on closed locations		13,202		(1,831	)		—		3,364	(d)		8,007
	$	20,871	$	(3,123	)	$	37	$	4,247		$	13,538
52 weeks ended January 2, 2010:
Allowance for doubtful accounts (c)	$	5,531	$	1,441		$	19	$	1,304	(b)	$	5,687
Provision for losses relating to leases on closed locations		8,007		3,135			—		1,891	(d)		9,251
	$	13,538	$	4,576		$	19	$	3,195		$	14,938
52 weeks ended January 1, 2011:
Allowance for doubtful accounts (c)	$	5,687	$	663		$	1	$	160	(b)	$	6,191
Provision for losses relating to leases on closed locations		9,251		320			—		2,723	(d)		6,848
	$	14,938	$	983		$	1	$	2,883		$	13,039

(a)	Recoveries on accounts previously written off, unless noted otherwise
(b)	Reversal of reserve relating to write-offs
(c)	Includes current and non-current receivables
(d)	Net payments of lease obligations and termination fees

94

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.

Dated: March 3, 2011	NASH-FINCH COMPANY
	By	/s/ Alec C. Covington
		Alec C. Covington
		President and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on March 3, 2011 by the following persons on behalf of the Registrant and in the capacities indicated.

/s/ Alec C. Covington	/s/ Robert B. Dimond
Alec C. Covington, President and Chief Executive Officer (Principal Executive Officer)	Robert B. Dimond, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

/s/ William R. Voss*	/s/ Mickey P. Foret*
William R. Voss, Chairman of the Board	Mickey P. Foret
/s/ Robert L. Bagby *	/s/ Douglas A. Hacker*
Robert L. Bagby	Douglas A. Hacker
/s/ Sam K. Duncan*	/s/Hawthorne L. Proctor*
Sam K. Duncan	Hawthorne L. Proctor

*By:	/s/ Kathleen M. Mahoney
	Kathleen M. Mahoney
	Attorney-in-fact

95

NASH-FINCH COMPANY
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-K
For Fiscal Year Ended January 1, 2011

Exhibit
No.	Description	Method of Filing
2.1	Asset Purchase Agreement between Roundy’s, Inc. and Nash-Finch Company, dated as of February 24, 2005.	Incorporated by reference (IBR)
2.2	Asset Purchase Agreement between GSC Enterprises, Inc., MKM Management, L.L.C., Michael K. McKenzie, Grocery Supply Acquisition Corp. and Nash-Finch Company, dated as of December 17, 2008.	IBR
2.3	First Amendment to Asset Purchase Agreement between GSC Enterprises, Inc., MKM Management, L.L.C., Michael K. McKenzie, Grocery Supply Acquisition Corp. and Nash-Finch Company, dated as of January 31, 2009.	IBR
3.1	Restated Certificate of Incorporation of the Company, effective May 16, 1985.	IBR
3.2	Certificate of Amendment to Restated Certificate of Incorporation of the Company, effective May 15, 1987.	IBR
3.3	Certificate of Amendment to Restated Certificate of Incorporation of the Company, effective May 16, 2002.	IBR
3.4	Certificate of Amendment to Restated Certificate of Incorporation of the Company, effective May 13, 2008.	IBR
3.5	Certificate of Amendment to the Nash-Finch Company Restated Certificate of Incorporation, effective May 20, 2009	IBR
3.6	Fourth Restated Certificate of Incorporation of Nash Finch Company, effective July 27, 2009	IBR
3.7	Nash-Finch Company Bylaws, as amended November 9, 2005.	IBR
3.8	Amended and Restated Bylaws of Nash-Finch Company (as amended May 13, 2008).	IBR
3.9	Amended and Restated Bylaws of Nash Finch Company (as amended May 20, 2009)	IBR
3.10	Amended and Restated Bylaws of Nash Finch Company (as amended February 28, 2011)	Filed Electronically (E)
4.1	Stockholder Rights Agreement, dated February 13, 1996, between the Company and Wells Fargo Bank, N.A. (formerly known as Norwest Bank Minnesota, National Association).	IBR
4.2	Amendment to Stockholder Rights Agreement dated as of October 30, 2001.	IBR

96

Exhibit
No.	Description	Method of Filing
4.3	Indenture dated as of March 15, 2005 between Nash-Finch Company and Wells Fargo Bank, National Association, as Trustee (including form of Senior Subordinated Convertible Notes due 2035).	IBR
4.4	Registration Rights Agreement dated as of March 15, 2005 between Nash-Finch Company and Deutsche Bank Securities Inc., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.	IBR
4.5	Notice of Adjustment of Conversion Rate of the Senior Subordinated Convertible Notes Due 2035.	IBR
4.6	First Supplemental Indenture to Senior Convertible Notes Due 2035.	IBR
10.1	Credit Agreement, dated as of April 11, 2008, among Nash Finch Company, Various Lenders and Bank of America, N.A. as Administrative Agent.	IBR
10.2	Nash-Finch Company Income Deferral Plan (as amended through May 21, 2004).	IBR
10.3	Second Declaration of Amendment to Nash-Finch Company Income Deferral Plan (as amended through May 21, 2004).	IBR
10.4	Nash-Finch Company Deferred Compensation Plan.	IBR
10.5	Amended and Restated Nash-Finch Company Deferred Compensation Plan.	IBR
10.6	Nash-Finch Company 2000 Stock Incentive Plan.	IBR
10.7	Nash-Finch Company 2000 Stock Incentive Plan (as amended and restated on July 14, 2008).	IBR
10.8	Form of Non-Statutory Stock Option Agreement (for employees under the Nash-Finch Company 2000 Stock Incentive Plan).	IBR
10.9	Description of Nash-Finch Company Long-Term Incentive Program Utilizing Performance Unit Awards.	IBR
10.10	Form of Non-Statutory Stock Option Agreement (for non-employee directors under the Nash-Finch Company 1995 Director Stock Option Plan).	IBR
10.11	Nash-Finch Company 1997 Non-Employee Director Stock Compensation Plan (2003 Revision).	IBR
10.12	Nash-Finch Company 1997 Non-Employee Director Stock Compensation Plan (2003 Revision) — First Declaration of Amendment.	IBR
10.13	Nash-Finch Company 1997 Non-Employee Director Stock Compensation Plan (2003 Revision) — Second Declaration of Amendment.	IBR

97

Exhibit
No.	Description	Method of Filing
10.14	Nash-Finch Company Director Deferred Compensation Plan.	IBR
10.15	Amended and Restated Nash-Finch Company Director Deferred Compensation Plan.	IBR
10.16	Nash-Finch Company Supplemental Executive Retirement Plan.	IBR
10.17	Nash-Finch Company Supplemental Executive Retirement Plan (as amended and restated on July 14, 2008).	IBR
10.18	Nash-Finch Company Performance Incentive Plan.	IBR
10.19	Description of Nash-Finch Company 2005 Executive Incentive Program.	IBR
10.20	Form of Restricted Stock Unit Award Agreement (for non-employee directors under the 2000 Stock Incentive Plan).	IBR
10.21	Form of Amended and Restated Restricted Stock Unit Agreement (for non-employee directors under the 2000 Stock Incentive Plan).	IBR
10.22	New Form of Restricted Stock Unit Award Agreement (for non-employee directors under the 2000 Stock Incentive Plan).	IBR
10.23	Form of Restricted Stock Unit Award Agreement (under the 2000 Stock Incentive Plan).	IBR
10.24	Form of Amended and Restated Restricted Stock Unit Award Agreement (under the 2000 Stock Incentive Plan).	IBR
10.25	New Form of Executive Restricted Stock Unit Agreement (under the 2000 Stock Incentive Plan), effective July 14, 2008.	IBR
10.26	Nash-Finch Company 2000 Stock Incentive Plan Performance Unit Award Agreement dated as of May 1, 2006 between the Company and Alec C. Covington.	IBR
10.27	Nash-Finch Company 2000 Stock Incentive Plan Restricted Stock Unit Award Agreement dated as of May 1, 2006 between the Company and Alec C. Covington.	IBR
10.28	Letter Agreement between Nash-Finch Company and Alec C. Covington dated March 16, 2006.	IBR
10.29	Amendment to the Letter Agreement between Nash-Finch Company and Alec. C. Covington dated February 27, 2007.	IBR
10.30	Change in Control Agreement entered into by Nash Finch Company and Alec C. Covington dated February 26, 2008.	IBR

98

Exhibit
No.	Description	Method of Filing
10.31	Change in Control Agreement entered into by Nash Finch Company and Alec C. Covington dated February 28, 2011.	E
10.32	Restricted Stock Unit Agreement between the Company and Alec C. Covington dated February 27, 2007.	IBR
10.33	Letter Agreement between Nash-Finch Company and Robert B Dimond dated November 29, 2006.	IBR
10.34	Amended Form of Change in Control Agreement for Senior and Executive Vice Presidents, effective November 3, 2008.	IBR
10.35	Form of Amended and Restated Indemnification Agreement.	IBR
10.36	Stock Appreciation Rights Agreement under the Nash-Finch Company 2000 Stock Incentive Plan dated December 17, 2008.	IBR
10.37	Amended and Restated Stock Appreciation Rights Agreement under the Nash-Finch Company 2000 Stock Incentive Plan dated December 17, 2008	IBR
10.38	Nash-Finch Company Incentive Award Plan	IBR
10.39	Nash Finch Company Performance Incentive Plan	IBR
12.1	Computation of Ratio of Earnings to Fixed Charges.	E
21.1	Our subsidiaries.	E
23.1	Consent of Grant Thornton LLP.	E
23.2	Consent of Ernst & Young LLP.
24.1	Power of Attorney.	E
31.1	Rule 13a-14(a) Certification of the Chief Executive Officer.	E
31.2	Rule 13a-14(a) Certification of the Chief Financial Officer.	E
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.	E

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EX-3.10

Exhibit 3.10

NASH-FINCH COMPANY BYLAWS
(As Amended February 28, 2011)

ARTICLE I
STOCK

     1. Shares of the Company’s stock may be certificated or uncertificated, as provided under Delaware law. All certificates of stock of the Company shall be numbered in the order in which they are issued, and shall be entered in the books of the Company as they are issued. Each certificate shall exhibit the holder’s name and the number of shares and shall be signed by the Board Chair, President or any corporate Vice President and by the Secretary or an Assistant Secretary. Any or all of the signatures on a stock certificate may be facsimiles.

     2. Transfer of shares of the Company’s stock shall be made only on the books of the Company and may be authorized only by the record holder of such shares, or his legal representative or duly authorized attorney-in-fact, and, in the case of shares represented by a certificate, upon surrender of the certificate for cancellation.

     3. Stock of the Company which shall have been purchased by it and held in the treasury shall be subject to disposal by the Board of Directors, but, while held by the Company, shall not be voted, nor shall it participate in the dividends or profits of the Company; provided that such stock may participate in any stock split in the form of a stock dividend.

ARTICLE II
STOCKHOLDERS AND STOCKHOLDERS MEETINGS

     1. The annual meeting of the stockholders of this Company for the election of directors and the transaction of such other business as may properly be brought before such meeting shall be held at such date, time and place, either within or outside the State of Delaware, as may be designated by resolution of the Board of Directors from time to time and stated in the notice of the meeting. The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors.

     2. The holders of a majority of the stock issued and outstanding, and entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by law, by the certificate of incorporation or by these bylaws. If, however, such majority shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereon, present in person or by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting, until the requisite amount of voting stock shall be present. At such adjourned meeting at which the requisite amount of voting stock shall be represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting. Voting at meetings of stockholders need not be by written ballot.

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Except as otherwise provided by these Bylaws, each director shall be elected by the vote of a majority of the votes cast with respect to that director’s election at any meeting for the election of directors at which a quorum is present, provided that if, as of the 10th day preceding the date the Company first mails its notice of meeting for such meeting to the stockholders of the Company, the number of nominees exceeds the number of directors to be elected (a “Contested Election”), the directors shall be elected by a vote of a plurality of the votes cast. For purposes of this Section 2, a majority of votes cast shall mean that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director’s elections (with “abstentions” and “broker nonvotes” not counted as a vote cast either “for” or “against” that director’s election). All other elections and questions coming before a meeting at which a quorum is present shall be decided by a majority vote of the stock issued and outstanding and entitled to vote thereon, then present in person or represented by proxy, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question.

In order for any incumbent director to become a nominee of the Board of Directors for further service on the Board of Directors, such person must submit an irrevocable resignation, contingent on (i) that person not receiving a majority of the votes cast in an election that is not a Contested Election, and (ii) acceptance of that resignation by the Board of Directors in accordance with the policies and procedures adopted by the Board of Directors for such purpose. In the event an incumbent director fails to receive a majority of the votes cast in an election that is not a Contested Election, the corporate governance committee, or such other committee designated by the Board of Directors pursuant to these Bylaws, shall make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board of Directors shall act on the resignation, taking into account the committee’s recommendation, and publicly disclose (by a press release and filing an appropriate disclosure with the Securities and Exchange Commission) its decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision within 90 days following certification of the election results. The committee in making its recommendation and the Board of Directors in making its decision each may consider any factors and other information that they consider appropriate and relevant.

If the Board of Directors accepts a director’s resignation pursuant to this Section 2, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors may fill the resulting vacancy pursuant to Article III, Section 2 of these Bylaws.

     3. Unless otherwise provided by statute, the certificate of incorporation or these Bylaws, at any meeting of the stockholders each stockholder shall be entitled to one vote in person or by written proxy for each share of the capital stock having voting power held by such stockholder.

     4. Unless otherwise provided by statute, the certificate of incorporation or these Bylaws, notice of an annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote thereat at such address as appears on the stock ledger of the Company not less than 10 days nor more than 60 days before the date of meeting.

     5. The officer who has charge of the stock ledger of the Company shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, at least 10 days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the Company. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided

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with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Article II, Section 5 or to vote in person or by proxy at any meeting of stockholders.

     6. At an annual meeting of stockholders, only such business (other than nominations for election to the Board of Directors, which must comply with the provisions of Article III, Section 6) shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) otherwise properly brought before the meeting by any stockholder of the Company (i) who is a stockholder of record on the date of the giving of the notice provided for in this Article II, Section 6 and on the record date for the determination of stockholders entitled to notice of and to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Article II, Section 6.

In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder (other than nominations for election to the Board of Directors, which must comply with the provisions of Article III, Section 6), the stockholder must have given timely notice in proper written form to the Secretary of the Company and any such proposed business must constitute a proper matter for stockholder action. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of stockholder’s notice as described above.

To be timely, a stockholder’s notice to the Secretary must be delivered to or be mailed and received at the principal executive offices of the Company not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the date of the meeting is called for a date that is not within 25 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or public announcement of the date of the annual meeting was made, whichever first occurs. To be in proper written form, a stockholder’s notice to the Secretary must set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment) and the reasons for conducting such business at such meeting; (ii) the name and address, as they appear on the Company’s books, of the stockholder proposing such business, and the name and record address of the beneficial owner, if any, on whose behalf the proposal is made; (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, (A) the class, series and number of all shares of the Company’s stock which are owned of record by such stockholder, (B) the name of each nominee holder of shares owned beneficially but not of record by such stockholder and the number of shares of stock held by each such nominee holder, and (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such stockholder and/or such beneficial owner with respect to stock of the Company and whether any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock) has been made by or on behalf of such stockholder and/or such beneficial owner, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk of stock price changes for, such stockholder and/or such beneficial owner or to increase the voting power or pecuniary or economic interest of such stockholder and/or such beneficial owner with respect to stock of the Company; (iv) a description of all agreements, arrangements, or understandings between such stockholder and/or such beneficial owner and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder and/or such beneficial owner in such business, including any anticipated benefit to the stockholder and/or such beneficial owner therefrom; (v) a representation that such stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the annual meeting to bring such business before the meeting; (vi) a representation whether the stockholder and/or the beneficial owner, intends or is a part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to approve or adopt the proposal and/or (B) otherwise to

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solicit proxies or votes from stockholders in support of such proposal; and (vii) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies with respect to business brought at an annual meeting of stockholders pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder. The foregoing notice requirements of this Article II, Section 6 shall be deemed satisfied by a stockholder with respect to business if the stockholder has notified the Company of his, her or its intention to present a proposal at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for such annual meeting. For purposes of these bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(b) of the Exchange Act.

Notwithstanding anything in these bylaws to the contrary, no business (other than nominations for election to the Board of Directors, which must comply with the provisions of Article III, Section 6) shall be conducted at an annual meeting except in accordance with the procedures set forth in this Article II, Section 6; provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Article II, Section 6 shall be deemed to preclude discussion by any stockholder of any such business. The chairman of the meeting may, if the facts warrant, determine that the business was not properly brought before the meeting; and if the chairman should so determine, the chairman shall so declare to the meeting, and any such business not properly brought before the meeting shall not be transacted.

Notwithstanding the foregoing provisions of this Article II, Section 6, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Company to present proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Article II, Section 6, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

Notwithstanding the foregoing provisions of this Article II, Section 6, a stockholder shall also comply with all applicable requirements of the Exchange Act, and the rules and regulations promulgated thereunder with respect to the matters set forth in this Article II, Section 6; provided however, that any reference in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to proposals as to any other business to be considered pursuant to this Article II, Section 6, and compliance with this Article II, Section 6 shall be the exclusive means for a stockholder to submit other business (other than business brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as such Rule may be amended from time to time). Nothing in this Article II, Section 6 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals or nominations in the Company’s proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act or (b) of the holders of any series of preferred stock of the Company to elect directors pursuant to any applicable provisions of the certificate of incorporation.

     7. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called at any time only by the Board Chair or the President or by an affirmative vote of two-thirds (2/3) of the full Board of Directors at any regular or special meeting of the Board of Directors called for that purpose. The Board of Directors may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Company’s notice of meeting.

     8. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

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     9. Notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of such meeting, to each stockholder entitled to vote at such meeting.

     10. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

     11. No action shall be taken by the stockholders except in an annual or special meeting as provided for in this Article II.

ARTICLE III
DIRECTORS

     1. The number of directors shall be not less than seven (7) nor more than twelve (12) in number, which number shall be determined by the Board of Directors from time to time. At each annual meeting of stockholders from and after the annual meeting of stockholders to be held in 2008, each director shall hold office for a term expiring at the next annual meeting of stockholders to be held in the year following the year of their election, with such director to hold office until his or her successor is elected and qualified. Directors shall hold office until the expiration of the terms for which they were elected and qualified; provided, however, that a director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

     2. If the office of any director or directors becomes vacant by reason of death, resignation, or retirement, disqualification, removal from office, increase in the number of directors, or otherwise, a majority of the remaining directors, though less than a quorum, at a meeting called for that purpose, may choose a successor or successors, or a new director or directors in the event of an increase in the number of directors, who shall hold office until the next annual meeting of stockholders or until a successor shall be elected and shall qualify.

     3. In addition to the powers and authorities by these bylaws expressly conferred upon it, the Board of Directors may exercise all such powers of the Company and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

     4. The Board of Directors may designate one or more committees, each committee to consist of one or more directors of the Company, which, to the extent provided in said resolution or resolutions and permitted by

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statute or by the certificate of incorporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Company, and may have power to authorize the seal of the Company to be affixed to all papers which may require it. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

     5. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect a director to serve as Board Chair. The director so elected shall not, by virtue of such election, be deemed to be an officer of the Company pursuant to Article VI hereof. An officer of the Company, elected by the Board of Directors under the provisions of said Article VI, however, may be elected to serve as the Board Chair. The Board Chair shall preside at all meetings of the stockholders and Board of Directors and otherwise shall have such duties and responsibilities as may be assigned from time to time by the Board of Directors. During the absence or disability of the Board Chair, the Board of Directors shall designate another director to discharge the duties of the Board Chair.

     6. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company, except as may be otherwise provided in the certificate of incorporation with respect to the right of holders of preferred stock of the Company to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (ii) by any stockholder of the Company (a) who is a stockholder of record on the date of the giving of the notice provided for in this Section Article III, Section 6 and on the record date for the determination of stockholders entitled to notice of and to vote at such meeting and (b) who complies with the notice procedures set forth in this Article III, Section 6.

In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Company. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of stockholder’s notice as described above.

To be timely, a stockholder’s notice to the Secretary must be delivered to or be mailed and received at the principal executive offices of the Company (i) in the case of an annual meeting, not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the date of the meeting is called for a date that is not within 25 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or public announcement of the date of the annual meeting was made, whichever first occurs; and (ii) in the case of a special meeting called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which notice of the date of the special meeting was mailed or public announcement of the date of the special meeting was made, whichever first occurs. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) (A) the class, series and number of all shares of stock of the Company which are owned of record by such person, (B) the name of each nominee holder of shares owned beneficially but not of record by such person and the number of shares of stock held by each such nominee holder, and (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person with respect to stock of the Company and whether any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock) has been made by or on behalf of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk of stock price changes for, such person or to increase the voting power or pecuniary or economic interest of such person with respect to stock of the Company; (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election

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of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice and the beneficial owner, if any, one whose behalf the nomination is made, (i) the name and record address of such stockholder and of any such beneficial owner; (ii) (A) the class, series and number of all shares of stock of the Company which are owned of record by such stockholder, (B) the name of each nominee holder of shares owned beneficially but not of record by such stockholder and the number of shares of stock held by each such nominee holder, and (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such stockholder and/or such beneficial owner with respect to stock of the Company and whether any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock) has been made by or on behalf of such stockholder and/or such beneficial owner, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk of stock price changes for, such stockholder and/or such beneficial owner or to increase the voting power or pecuniary or economic interest of such stockholder and/or such beneficial owner with respect to stock of the Company; (iii) a description of all agreements, arrangements, or understandings between such stockholder and/or such beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, and any material interest of such stockholder and/or such beneficial owner in such nomination, including any anticipated benefit to the stockholder and/or such beneficial owner therefrom; (iv) a representation that such stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; (v) a representation whether the stockholder or the beneficial owner, if any, intends or is a part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to elect the nominee and/or (B) otherwise to solicit proxies or votes from stockholders in support of such nomination; and (vi)any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. At the request of the Board of Directors (or any duly authorized committee thereof), any person nominated by the Board of Directors (or any duly authorized committee thereof) for election as a director shall furnish to the Secretary of the Company that information required to be set forth in a stockholder’s notice of nomination that pertains to the nominee.

The chairman of the meeting may, if the facts warrant, determine that a nomination was not made in accordance with the procedures prescribed in this bylaw; and if the chairman should so determine, the chairman shall so declare to the meeting, and the defective nomination shall be disregarded.

Notwithstanding the foregoing provisions of this Article III, Section 6, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Company to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Article III, Section 6, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

ARTICLE IV
MEETINGS OF THE BOARD

     1. Each newly elected Board of Directors shall hold its first and annual meeting immediately following the annual meeting of the stockholders at a place designated by the Board, or they may meet at such place and time as shall be fixed by the consent in writing or by electronic transmission of all the directors. No notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting; provided, however, that a majority of the whole Board shall be present.

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     2. Meetings of the Board of Directors other than the annual meeting, may be called at any time by the Board Chair, Chief Executive Officer, President or Secretary, or in their absence by the Executive Vice President, or by any Vice President or on the written request of any three directors; on one day’s notice to each director, either personally or by mail or by telecopier, telephone or other means of electronic transmission. Unless otherwise fixed by the Board, such meetings shall be held at the office of the Company in Edina, Minnesota.

     3. At all meetings of the Board a majority of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation or by these bylaws.

     4. Unless otherwise restricted by the certificate of incorporation or these bylaws, any actions required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting, if all members of the Board or the committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the Board or the committee.

     5. Unless otherwise restricted by the certificate of incorporation, the Board of Directors shall have the authority to fix the compensation of directors.

ARTICLE V
INDEMNIFICATION

Section 1. Right to Indemnification.

Every person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company or for its benefit as a director, officer, employee or agent of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, including any employee benefit plan, shall be indemnified and held harmless by the Company to the fullest extent legally permissible under the General Corporation Law of the State of Delaware in the manner prescribed therein, from time to time, against all expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection therewith. Similar indemnification may be provided by the Company to an employee or agent of the Company who was or is a party or is threatened to be made a party to or is involved in any such threatened, pending or completed action, suit or proceeding by reason of the fact that he is or was an employee or agent of the Company or is or was serving at the request of the Company or for its benefit as a director, officer, employee, or agent of another corporation or as its representative in a partnership, joint venture, trust or other enterprise, including any employee benefit plan.

Section 2. Other Indemnification.

     The rights of indemnification conferred by the Article shall not be exclusive of, but shall be in addition to, any other rights which such directors, officers, employees or agents may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any by-law, agreement, vote of stockholders, provisions or law or otherwise, as well as their rights under this Article.

Section 3. Indemnification Agreement.

     The Company shall have the express authority to enter such agreements as the Board of Directors deems appropriate for the indemnification of present or future directors or officers of the Company in

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connection with their service to, or status with, the Company or any other corporation, entity or enterprise with whom such person is serving at the express written request of the Company.

ARTICLE VI
OFFICERS

     1. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect the corporate officers of the Company.

     2. The corporate officers of the Company shall be a Chief Executive Officer, a President, as many Vice Presidents (some of whom may be designated Senior Vice Presidents) as may be deemed necessary, such Assistant Vice Presidents as may be deemed necessary, a Secretary and such Assistant Secretaries as may be deemed necessary, a Treasurer and such Assistant Treasurers as may be deemed necessary, and a Controller and such Assistant Controllers as may be deemed necessary.

     3. The Board of Directors may elect such other corporate officers and agents as it shall deem necessary, including a Chief Operating Officer, one or more Executive Vice Presidents, and one or more operating officers (who may be designated Vice Presidents, but who shall not be corporate officers). Such other corporate and operating officers and agents shall hold their offices for such terms, shall exercise such powers and perform such duties as shall be determined from time to time by the Board; provided, however, that operating officers shall exercise only such powers and perform only such duties as may be determined by the Board and shall not have authority to exercise the powers or discharge the duties of any corporate officer. Unless expressly stated to the contrary, any reference in these Bylaws to officers, by title or otherwise, other than in this Paragraph 3 of Article VI, shall be deemed to mean corporate officers.

     4. The Chief Executive Officer must be a director but no other officer need be a director. Any two offices may be held by the same person.

     5. If the President is also the Chief Executive Officer of the Company, he shall have general and active management of the business of the Company, shall see that all orders and resolutions of the Board are carried into effect and shall perform such other duties as the Board shall prescribe. He shall possess power to sign all certificates, contracts and other instruments of the Company. If the offices of President and Chief Executive Officer are not held by the same person, then the Chief Executive Officer shall have the foregoing responsibilities, duties and powers (except that, pursuant to Article I, Section 1 of these Bylaws, the Chief Executive Officer shall not sign certificates of stock); and the President shall report to the Chief Executive Officer and shall exercise such powers and shall perform such duties as shall be determined from time to time by the Board.

     6. During the absence of the Chief Executive Officer, the President (if a different person), and during the absence or disability of both of them, the Executive Vice Presidents in the order in which they have been nominated, shall exercise all the functions of the Chief Executive Officer. Each Executive Vice President shall have such powers and discharge such duties as may be assigned from time to time by the Board of Directors.

     7. The Vice Presidents and Assistant Vice Presidents shall perform such duties as are prescribed and allotted to them by the Board of Directors, the Chief Executive Officer or the President.

     8. The Secretary shall issue notices of all meetings, shall attend all meetings of the Board of Directors and all meetings of the stockholders, shall keep their minutes, shall have charge of the seal and the corporate books, shall sign with the President, Executive Vice Presidents or Vice Presidents, stock certificates and such other instruments as require such signature, and shall make such reports and perform such other duties as are incident to the office or are properly required of him by the Board of Directors.

     9. The Assistant Secretary shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.

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     10. The Treasurer shall have the custody of all monies and securities of the Company. He shall sign or countersign such instruments as require his signature, and shall perform all duties incident to his office, or that are properly required of him by the Board. He shall render to the Chief Executive Officer and Board of Directors, whenever required, a report of his transactions as Treasurer and of the financial condition of the Company.

     11. The Assistant Treasurers shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.

     12. The Controller shall keep regular books of accounts and balance the same periodically. He shall keep full and accurate accounts of receipts and disbursements of the Company. He shall deposit all monies, and other valuable effects of the Company, in such depositories as may be designated. He shall disburse the funds of the Company as properly authorized on adequate supporting documents and shall render to the Chief Executive Officer and Board of Directors, whenever required, an accounting of all of his transactions as Controller and the financial condition of the Company.

13. The Assistant Controller shall, in the absence or disability of the Controller, perform the duties and exercise the powers of the Controller, and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.

ARTICLE VII
DIVIDENDS

     1. Dividends upon the capital stock of the Company, subject to the provisions of the certificate of incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

     2. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Company, or for such other purposes as the directors shall think conducive to the interest of the Company, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE VIII
FIXING RECORD DATE

     1. In order that the Company may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of directors shall be the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

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     2. In order that the Company may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which shall not be more than 60 days prior to such other action. If no such record date is fixed, the record date for determining the stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolutions relating thereto.

ARTICLE IX
REGISTERED STOCKHOLDERS

     1. The Company shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE X
NOTICE

     1. Whenever under the provision of the statutes or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, by depositing the same in the post office or letter box, in a postpaid sealed wrapper, addressed to such stockholder or director at such address as appears on the books of the Company, and such notice shall be deemed to be given at the time when the same shall be thus mailed. Notice to directors may also be given by telecopier, telephone or other means of electronic transmission.

     2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE XI
SEAL

     1. The corporate seal of the Company shall be of such design as may be decided upon by the officers of the Company.

ARTICLE XII
AMENDMENTS

     1. These bylaws may be amended, repealed or altered in whole or in part by the Board of Directors at any regular meeting or at any special meeting of the Board of Directors where such action has been announced in the call and notice of meeting.

ARTICLE XIII
CONSTRUCTION

     1. Masculine pronouns shall be construed as feminine or neuter pronouns and singular pronouns and verbs shall be construed as plural in any place or places herein in which the context may require such construction.

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EX-10.31

Exhibit 10.31

February 28, 2011

Alec Covington
2900 Thomas Avenue South, Unit #2208
Minneapolis, MN 55416

Dear Mr. Covington:

By letter to you dated February 26, 2008 (the “February 26 Letter”), the Company set forth the benefits which the Company agreed to provide you in the event your employment with the Company is terminated in connection with a Change in Control. The Board has reviewed your February 26 Letter and desires to amend certain provisions to comply with applicable requirements of Section 409A of the Internal Revenue Code (“Section 409A”). This letter restates and supersedes the February 26 Letter.

You are presently the President and Chief Executive Officer of Nash Finch Company, a Delaware corporation. The Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control may arise and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.

Accordingly, the Board has determined that appropriate steps should be taken to minimize the risk that Company management will depart prior to a Change in Control, thereby leaving the Company without adequate management personnel during such a critical period, and that appropriate steps also be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management to their assigned duties without distraction in circumstances arising from the possibility of a Change in Control. In particular, the Board believes it important, should Nash Finch Company or its stockholders receive a proposal of transfer of control, that you be able to continue your management responsibilities and assess and advise the Board whether such proposal would be in the best interests of Nash Finch Company and its stockholders and to take other action regarding such proposal as the Board might determine to be appropriate, without being influenced by the uncertainties of your own personal situation.

The Board recognizes that continuance of your position with the Company involves a substantial commitment to the Company in terms of your personal life and professional career and the possibility of foregoing present and future career opportunities, for which the Company receives substantial benefits. Therefore, to induce you to remain in the employ of the Company, this letter agreement, which has been approved by the Board, sets forth the benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated in connection with a Change in Control under the circumstances described below.

     1. Definitions. The following terms will have the meaning set forth below unless the context clearly requires otherwise. Terms defined elsewhere in this Agreement will have the same meaning throughout this Agreement.

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     (a) “Agreement” means this letter agreement as amended, extended or renewed from time to time in accordance with its terms.

     (b) “Board” means the board of directors of the Parent Corporation duly qualified and acting at the time in question.

     (c) “Cause” means: (i) the willful and continued failure by you to substantially perform your duties to the Company (other than any such failure resulting from your Disability or incapacity due to bodily injury or physical or mental illness) after a demand for substantial performance is delivered to you by the Company which specifically identifies the manner in which you have not substantially performed your duties; or (ii) your conviction (including a plea of nolo contendere) of a felony or gross misdemeanor under federal or state law that the Board determines is injurious to reputation or the business of the Company; (iii) your commission of any act involving dishonesty, fraud, gross negligence or other willful misconduct in the performance of your duties of the Company or (iv) your breach of any confidentiality, non-compete or non-solicitation covenants you may have with the Company. For purposes of this definition, no act, or failure to act, on your part will be considered “willful” unless done, or omitted to be done, by you in bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board (or a committee hereof) or based upon the advice of counsel for the Company will be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company. It is also expressly understood that your attention to matters not directly related to the business of the Company will not provide a basis for termination for Cause so long as the Board does not expressly disapprove in writing of your engagement on such activities either before or within a reasonable period of time after the Board knew or could reasonably have known that you engaged in those activities. Notwithstanding the foregoing, you will not be deemed to have been terminated for Cause unless and until there has been delivered to you a copy of a resolution duly adopted by the Board (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the Board you were guilty of the conduct set forth above and specifying the particulars thereof in detail.

     (d) “Change in Control” means:

     (i) Any one person or more than one person acting as a group acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50 percent (50%) of the total fair market value or total voting power of the stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent (50%) of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Control;

     (ii) Any one person, or more than one person acting as a group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing thirty percent (30%) or more of the total voting power of the stock of the Company;

     (iii) Any one person, or more than one person acting as a group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) all or substantially all of the assets of the Company immediately prior to such acquisition or acquisitions; or

     (iv) A majority of the members of the Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election;

provided, that the transaction or event described in subsection (i), (ii), (iii) or (iv) also constitutes a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).

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

     (f) “Company” means the Parent Corporation, any Subsidiary and any Successor.

     (g) “Confidential Information” means information which is proprietary to the Company or proprietary to others and entrusted to the Company, whether or not trade secrets. It includes information relating to business plans and to business as conducted or anticipated to be conducted, and to past or current or anticipated products or services. It also includes, without limitation, information concerning research, development, purchasing, accounting, marketing and selling. All information which you have a reasonable basis to consider confidential is Confidential Information, whether or not originated by you and without regard to the manner in which you obtain access to that and any other proprietary information.

     (h) “Date of Termination” following a Change in Control (or prior to a Change in Control if your termination was either a condition of the Change in Control or was at the request or insistence of any Person (other than the Company) related to the Change in Control) means: (i) if your employment is to be terminated for Disability, thirty (30) calendar days after Notice of Termination is given (provided that you have not returned to the performance of your duties on a full-time basis during such thirty (30)-calendar-day period); (ii) if your employment is to be terminated by the Company for Cause or by you for Good Reason, the date specified in the Notice of Termination; (iii) if your employment is to be terminated by the Company for any reason other than Cause, Disability, death or Retirement, the date specified in the Notice of Termination, which in no event may be a date earlier than ninety (90) calendar days after the date on which a Notice of Termination is given, unless an earlier date has been expressly agreed to by you in writing either in advance of, or after, receiving such Notice of Termination; or (iv) if your employment is terminated by reason of death or Retirement, the date of death or Retirement, respectively; provided that in all events the applicable “Date of Termination” shall be the date of your “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h). In the case of termination by the Company of your employment for Cause, if you have not previously expressly agreed in writing to the termination, then within thirty (30) calendar days after receipt by you of the Notice of Termination with respect thereto, you may notify the Company that a dispute exists concerning the termination, in which event the Date of Termination will be the date set either by mutual written agreement of the parties or by the judge or arbitrators in a proceeding as provided in Section 13 of this Agreement. During the pendency of any such dispute, the Company will continue to pay you your full compensation and benefits in effect just prior to the time the Notice of Termination is given and until the dispute is resolved in accordance with Section 13 of this Agreement.

     (i) “Disability” means a disability as defined in the Company’s long-term disability plan as in effect immediately prior to the Change in Control or, in the absence of such a plan, means permanent and total disability as defined in section 22(e)(3) of the Code.

     (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (k) “Good Reason” means:

     (i) a material adverse change in your status or position(s) as an executive of the Company as in effect immediately prior to the Change in Control, including, without limitation, any adverse change in your status or position(s) as a result of a material diminution in your duties or responsibilities (other than, if applicable, any such change directly attributable to the fact that the Company is no longer publicly owned) or the assignment to you of any duties or responsibilities which are inconsistent with such status or position(s), or any removal of you from or any failure to reappoint or reelect you to such position(s) (except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason);

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     (ii) a reduction by the Company in your rate of total compensation (including, without limitation, salary and bonus potential) (or an adverse change in the form or timing of the payment thereof) as in effect immediately prior to the Change in Control;

     (iii) the failure by the Company to continue in effect any Plan in which you (and/or your family) are participating at any time during the ninety (90)-calendar-day period immediately preceding the Change in Control (or Plans providing you (and/or your family) with at least substantially similar benefits) other than as a result of the normal expiration of any such Plan in accordance with its terms as in effect immediately prior to the ninety (90)-calendar-day period immediately preceding the time of the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect you (and/or your family’s) continued participation in any of such Plans on at least as favorable a basis to you (and/or your family) as is the case on the date of the Change in Control or which would materially reduce your (and/or your family’s) benefits in the future under any of such Plans or deprive you (and/or your family) of any material benefit enjoyed by you (and/or your family) at the time of the Change in Control;

     (iv) the Company’s requiring you to be based more than fifty (50) miles from where your office is located immediately prior to the Change in Control, except for required travel on the Company’s business, and then only to the extent substantially consistent with the business travel obligations which you undertook on behalf of the Company during the ninety (90)-calendar-day period immediately preceding the Change in Control (without regard to travel related or in anticipation of the Change in Control);

     (v) the failure by the Company to obtain from any Successor the assent to this Agreement contemplated by Section 6 of this Agreement.

     (vi) any purported termination by the Company of your employment which is not properly effected pursuant to a Notice of Termination and pursuant to any other requirements of this Agreement, and for purposes of this Agreement, no such purported termination will be effective; or

     (vii) any refusal by the Company to continue to allow you to attend to matters or engage in activities not directly related to the business of the Company which, at any time prior to the Change in Control, you were not expressly prohibited in writing by the Board from attending to or engaging in.

Notwithstanding anything in the foregoing to the contrary, your termination of employment with the Company for any reason other than death, Disability or Retirement within six (6) calendar months following a Change in Control will be conclusively deemed to be for Good Reason.

     (l) “Highest Monthly Compensation” means one-twelfth (1/12) of the highest amount of your compensation for any twelve (12) consecutive calendar-month period during the thirty-six (36) consecutive calendar-month period prior to the month that includes the Date of Termination. For purposes of this definition, “compensation” means your base pay plus short term bonus target.

     (m) “Notice of Termination” means a written notice which indicates the specific termination provision in this Agreement pursuant to which the notice is given. Any purported termination by the Company or by you following a Change in Control (or prior to a Change in Control if your termination was either a condition of the Change in Control or was at the request or insistence of any Person (other than the Company) related to the Change in Control) must be communicated by written Notice of Termination.

     (n) “Parent Corporation” means Nash Finch Company and any Successor.

     (o) “Person” means and includes any individual, corporation, partnership, group, association or other “person”, as such term is used in section 14(d) of the Exchange Act, other than the Parent Corporation, a wholly-owned subsidiary of the Parent Corporation or any employee benefit plan(s) sponsored by the Parent Corporation or a wholly-owned subsidiary of the Parent Corporation.

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     (p) “Plan” means any compensation plan (such as a stock option, restricted stock plan or other equity-based plan), or any employee benefit plan (such as a thrift, pension, profit sharing, medical, dental, disability, accident, life insurance, relocation, salary continuation, expense reimbursements, vacation, fringe benefits, office and support staff plan or policy) or any other plan, program, policy or agreement of the Company intended to benefit you (and/or your family) (including, without limitation, the Company’s 2000 Stock Incentive Plan, Profit Sharing Plan, Income Deferral Plan, Deferred Compensation Plan and Supplemental Executive Retirement Plan).

     (q) “Retirement” means the day on which you attain the age of sixty-five (65).

     (r) “Subsidiary” means any corporation at least a majority of whose securities having ordinary voting power for the election of directors is at the time owned by the Company and/or one (1) or more Subsidiaries.

     (s) “Successor” means any Person that succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Parent Corporation’s business directly, by merger, consolidation or other form of business combination, or indirectly, by purchase of the Parent Corporation’s voting securities, all or substantially all of its assets or otherwise.

     2. Term of Agreement. This Agreement is effective immediately and will continue in effect until December 31, 2008; provided, however, that commencing on January 1, 2009 and each January 1 thereafter, the term of this Agreement will automatically be extended for one (1) additional year beyond the expiration date otherwise then in effect, unless at least ninety (90) calendar days prior to any such January 1, the Company or you has been given notice that this Agreement will not be extended; and, provided, further, that this Agreement will continue in effect beyond the termination date then in effect for a period of twenty-four (24) calendar months following a Change in Control if a Change in Control has occurred during such term.

     3. Benefits upon a Change in Control Termination. If your employment by the Company is terminated for any reason other than death, Cause, Disability or Retirement, or if you terminate your employment by the Company for Good Reason either within: (a) twenty-four (24) calendar months following a Change in Control; or (b) prior to a Change in Control if your termination was either a condition of the Change in Control or was at the request or insistence of a Person (other than the Company) related to the Change in Control, then, subject to your execution of a general release of claims against the Company in the Company’s customary form for such purpose (a “Release”) within 55 days of your Termination of Employment and not revoking such Release:

     (i) Cash Payment. On the later to occur of six months following the Date of Termination or sixteen days following your timely execution of a Release, the Company will make a lump-sum cash payment to you in an amount equal to the product of (A) your Highest Monthly Compensation multiplied by (B) the lesser of (I) the number of full or partial calendar months remaining until your Retirement or (II) thirty-six (36).

     (ii) Welfare Plans. The Company will maintain in full force and effect, for the continued benefit of you and your dependents for a period terminating on the earliest of (A) thirty-six (36) calendar months after the Date of Termination or (B) your Retirement, all insured and self-insured employee welfare benefit Plans (including, without limitation, health, life, dental and disability plans) in which you were entitled to participate at any time during the ninety (90)-calendar-day period immediately preceding the Change in Control, provided that your continued participation is possible under the general terms and provisions of such Plans and any applicable funding media and provided that you continue to pay an amount equal to your regular contribution under such Plans for such participation (based upon your level of benefits and employment status most favorable to you at any time during the ninety (90)-calendar-day period immediately preceding the Change in Control). If the thirty-six (36) month-period ends before you have reached Retirement and you have not previously received or are not then receiving equivalent benefits from a new employer (including coverage for any pre-existing conditions), the Company will arrange, at its sole cost and expense, to enable you to

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convert your and your dependents’ coverage under such plans to individual policies or programs under the same terms as executives of the Company may apply for such conversions. In the event that you or your dependents’ participation in any such Plan is barred, the Company, at its sole cost and expense, will arrange to have issued for the benefit of you and your dependents individual policies of insurance providing benefits substantially similar (on a federal, state and local income and employment after-tax basis) to those which you otherwise would have been entitled to receive under such Plans pursuant to this clause (ii) or, if such insurance is not available at a reasonable cost to the Company, the Company will otherwise provide you and your dependents equivalent benefits (on a federal, state and local income and employment after-tax basis). You will not be required to pay any premiums or other charges in an amount greater than that which you would have paid in order to participate in such Plans.

     (iii) Tax Reimbursement.

     (A) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payments or distributions by the Company, any person or entity whose actions result in a Change of Control or any person or entity affiliated with the Company or such person or entity, to or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement, any option agreement, restricted stock award agreement or otherwise, but determined without regard to any payments required under this Section 3(iii)) (collectively, the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Code or you incur any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then you shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that, after your payment of all taxes (and any interest or penalties imposed with respect to such taxes), including any income taxes and Excise Tax imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

     (B) Subject to the provisions of clause (D), below, all determinations required to be made under this Section 3(iii), including whether and when a Gross-Up Payment is required and the amount such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm of national reputation selected by the Company ( the “Accounting Firm”), which shall provide detailed supporting calculations both to you and to the Company within fifteen (15) business days of the receipt of notice from you that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, you shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the “Accounting Firm” hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 3(iii), shall be paid by the Company on your behalf within five days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish evidence of its determination that failure to report the Excise Tax on your applicable federal income tax return would not result in the imposition of a penalty. Any determination by the Accounting Firm shall be binding upon you and the Company.

     (C) As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which should have been made by the Company will not have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to clause (D) below and you thereafter are required to make a payment of any additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for your benefit.

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

     (1) give the Company any information reasonably requested by the Company relating to such claim;

     (2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

     (3) cooperate with the Company in good faith in order to effectively contest such claim; and

     (4) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this clause (D), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct you to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company directs you to pay such claim and sue for a refund, the Company shall: (i) to the extent not prohibited by law, rule or regulation, advance the amount of such payment to you on an interest-free basis; or (ii) to the extent any such advance is so prohibited, pay such amount directly; and, in either case, shall indemnify and hold you harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such payment or advance or with respect to any imputed income with respect to such payment or advance; and provided further that any extension of the statute of limitations relating to payment of taxes for your taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and you shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

     (E) If, after your receipt of an amount advanced by the Company pursuant to clause (D), above, you become entitled to receive any refund with respect to such claim, you shall (subject to the Company’s complying with the requirements of clause (D)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after your receipt of an amount advanced by the Company

7

pursuant to clause (D), above, a determination is made that you shall not be entitled to any refund with respect to such claim and the Company does not notify you in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

     (iv) Non-Competition Obligations. As consideration for the Gross-Up Payment (which is hereby acknowledged by you as providing you with additional and sufficient benefit to support the following covenant), you agree that in the event your employment with the Company is terminated upon conditions entitling you to the payments and benefits provided for under Section 3 of the Agreement, you will not, without the prior written consent of the Company (given after the consummation of the Change in Control), alone or in any capacity (other than by way of holding shares of a publicly traded company in an amount not exceeding five percent (5%) of the outstanding class or series so traded) with any other person or entity, directly or indirectly engage in competition with the Company or any Subsidiary, in association with or as an officer, director, employee, principal, agent or consultant of or to SuperValu, Inc., Spartan Stores, Inc., Merchants Distributors, Inc., Laurel Grocery Company, L.L.C., C&S Wholesale Grocers or any of their respective subsidiaries, affiliates or successors for a period ending one (1) year after such date of termination.

     4. Indemnification. Following a Change in Control, the Company will indemnify and pay your expenses, as incurred, to the full extent permitted by law and the Company’s certificate of incorporation and bylaws for damages, costs and expenses (including, without limitation, judgments, fines, penalties, settlements and reasonable fees and expenses of your counsel) incurred in connection with all matters, events and transactions relating to your service to or status with the Company or any other corporation, employee benefit plan or other entity with whom you served at the request of the Company.

     5. Confidentiality. You will not use, other than in connection with your employment with the Company, or disclose any Confidential Information to any person not employed by the Company or not authorized by the Company to receive such Confidential Information, without the prior written consent of the Company; and you will use reasonable and prudent care to safeguard and protect and prevent the unauthorized disclosure of Confidential Information. Nothing in this Agreement will prevent you from using, disclosing or authorizing the disclosure of any Confidential Information: (a) which is or hereafter becomes part of the public domain or otherwise becomes generally available to the public through no fault of yours; (b) to the extent and upon the terms and conditions that the Company may have previously made the Confidential Information available to certain persons; or (c) to the extent that you are required to disclose such Confidential Information by law or judicial or administrative process.

     6. Successors. The Company will seek to have any Successor, by agreement in form and substance satisfactory to you, assent to the fulfillment by the Company of the Company’s obligations under this Agreement. Failure of the Company to obtain such assent at least three (3) business days prior to the time a Person becomes a Successor (or where the Company does not have at least three (3) business days’ advance notice that a Person may become a Successor, within one (1) business day after having notice that such Person may become or has become a Successor) will constitute Good Reason for termination by you of your employment.

     7. Fees and Expenses. The Company, upon demand, will pay or reimburse you for all reasonable legal fees, court costs, experts’ fees and related costs and expenses incurred by you in connection with any actual, threatened or contemplated litigation or legal, administrative, arbitration or other proceeding relating to this Agreement to which you are or reasonably expect to become a party, whether or not initiated by you, including, without limitation, your seeking to obtain or enforce any right or benefit provided by this Agreement; provided, however, you will be required to repay (without interest) any such amounts to the Company to the extent that a court issues a final and non-appealable order setting forth the determination that the position taken by you was frivolous or advanced by you in bad faith.

8

     8. Binding Agreement. This Agreement inures to the benefit of, and is enforceable by, you, your personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you die while any amount would still be payable to you under this Agreement if you had continued to live, all such amounts, unless otherwise provided in this Agreement, will be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.

     9. No Mitigation. You will not be required to mitigate the amount of any payments or benefits the Company becomes obligated to make or provide to you in connection with this Agreement by seeking other employment or otherwise. The payments or benefits to be made or provided to you in connection with this Agreement may not be reduced, offset or subject to recovery by the Company by any payments or benefits you may receive from other employment or otherwise.

     10. No Setoff. The Company will have no right to setoff payments or benefits owed to you under this Agreement against amounts owed or claimed to be owed by you to the Company under this Agreement or otherwise.

     11. Taxes. All payments and benefits to be made or provided to you in connection with this Agreement will be subject to required withholding of federal, state and local income, excise and employment-related taxes.

     12. Notices. For the purposes of this Agreement, notices and all other communications provided for in, or required under, this Agreement must be in writing and will be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid and addressed to each party’s respective address set forth on the first page of this Agreement (provided that all notices to the Company must be directed to the attention of the chair of the Board), or to such other address as either party may have furnished to the other in writing in accordance with these provisions, except that notice of change of address will be effective only upon receipt.

     13. Disputes. Any dispute, controversy or claim for damages rising under or in connection with this Agreement may, in your sole discretion, be settled exclusively by such judicial remedies that you may seek to pursue or by arbitration in Minneapolis, Minnesota by three (3) arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. The Company will be entitled to seek an injunction or restraining order in a court of competent jurisdiction (within or without the State of Minnesota) to enforce the provisions of Section 5 of this Agreement.

     14. Jurisdiction. Except as specifically provided otherwise in this Agreement, the parties agree that any action or proceeding arising under or in connection with this Agreement must be brought in a court of competent jurisdiction in the State of Minnesota, and hereby consent to the exclusive jurisdiction of said courts for this purpose and agree not to assert that such courts are an inconvenient forum.

     15. Related Agreements. To the extent that any provision of any other Plan or agreement between the Company and you shall limit, qualify or be inconsistent with any provision of this Agreement, then for purposes of this Agreement, while such other Plan or agreement remains in force, the provision of this Agreement will control and such provision of such other Plan or agreement will be deemed to have been superseded, and to be of no force or effect, as if such other agreement had been formally amended to the extent necessary to accomplish such purpose. Nothing in this Agreement prevents or limits your continuing or future participation in any Plan provided by the Company and for which you may qualify, and nothing in this Agreement limits or otherwise affects the rights you may have under any Plans or other agreements with the Company. Amounts which are vested benefits or which you are otherwise entitled to receive under any Plan or other agreement with the Company at or subsequent to the Date of Termination will be payable in accordance with such Plan or other agreement.

     16. No Employment or Service Contract. Nothing in this Agreement is intended to provide you with any right to continue in the employ of the Company for any period of specific duration or interfere with or

9

otherwise restrict in any way your rights or the rights of the Company, which rights are hereby expressly reserved by each, to terminate your employment at any time for any reason or no reason whatsoever, with or without cause.

     17. Survival. The respective obligations of, and benefits afforded to, the Company and you which by their express terms or clear intent survive termination of your employment with the Company or termination of this Agreement, as the case may be, including, without limitation, the provisions of Sections 3, 4, 5, 6, 7, 10, 11, 12 and 13 of this Agreement, will survive termination of your employment with the Company or termination of this Agreement, as the case may be, and will remain in full force and effect according to their terms.

     18. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and the chair of the Board. No waiver by any party to this Agreement at any time of any breach by another party to this Agreement of, or of compliance with, any condition or provision of this Agreement to be performed by such party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter to this Agreement have been made by any party which are not expressly set forth in this Agreement.

This Agreement and the legal relations among the parties as to all matters, including, without limitation, matters of validity, interpretation, construction, performance and remedies, will be governed by and construed exclusively in accordance with the internal laws of the State of Minnesota (without regard to the conflict of laws provisions of any jurisdiction), except to the extent that the provisions of the corporate law of Delaware may apply to the internal affairs of the Company. Headings are for purposes of convenience only and do not constitute a part of this Agreement. The parties to this Agreement agree to perform, or cause to be performed, such further acts and deeds and to execute and deliver, or cause to be executed and delivered, such additional or supplemental documents or instruments as may be reasonably required by the other party to carry into effect the intent and purpose of this Agreement. The invalidity or unenforceability of all or any part of any provision of this Agreement will not affect the validity or enforceability of the remainder of such provision or of any other provision of this Agreement, which will remain in full force and effect. This Agreement may be executed in several counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same instrument.

If this letter correctly sets forth our agreement on the subject matter discussed above, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject.

Sincerely,

NASH FINCH COMPANY.

By:
	William R. Voss
	Chair, Nash Finch Board of Directors
Agreed to this 28th day of February 2011.
	Alec C. Covington

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EX-12.1

Exhibit 12.1

NASH-FINCH COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

Fiscal Year Ended
	December			December		January 3,		January 2,		January 1,
(in thousands, except ratios)	30, 2006			29, 2007		2009		2010		2011
Fixed Charges:
Interest expense on indebtedness	$	30,840		$	28,088	$	26,466	$	24,372	$	23,403
Rent expense (1/3 of total rent expense)		9,966			9,057		9,496		10,318		9,728
Total fixed charges	$	40,806		$	37,145	$	35,962	$	34,690	$	33,131
Earnings:
Earnings (loss) before provision for income taxes	$	(21,689	)	$	53,015	$	53,791	$	23,750	$	72,126
Fixed charges		40,806			37,145		35,962		34,690		33,131
Total earnings	$	19,117		$	90,160	$	89,753	$	58,440	$	105,257
Ratio		0.47			2.43		2.50		1.68		3.18

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF NASH-FINCH COMPANY
As of January 1, 2011

Subsidiary	State of
Corporation	Incorporation
Erickson’s Diversified Corporation	Wisconsin
GTL Truck Lines, Inc.	Nebraska
Hinky Dinky Supermarkets, Inc.	Nebraska
Super Food Services, Inc.	Delaware
T.J. Morris Company	Georgia
U Save Foods, Inc.	Nebraska
Grocery Supply Acquisition Corporation	Delaware
Nash Brothers Trading Company	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We have issued our reports dated March 3, 2011, with respect to the consolidated financial statements, schedule, and internal control over financial reporting included in the Annual Report of Nash-Finch Company on Form 10-K for the year ended January 1, 2011. We hereby consent to the incorporation by reference of said reports in the Registration Statements of Nash-Finch Company on Forms S-8 (File No. 33-64313 effective November 16, 1995, File No. 333-27563 effective May 21, 1997, File No. 333-81441 effective June 24, 1999, File No.’s 333-51506, 333-51508, and 333-51512 effective December 8, 2000, File No.’s 333-63754 and 333-63756 effective June 25, 2001, File No. 333-110098 effective October 30, 2003, File No. 333-115849 effective May 25, 2004, File No.’s 333-121754 and 333-121755 effective December 30, 2004, File No. 333-124863 effective May 12, 2005 and File No. 333-165299 effective March 5, 2010) and on Form S-3 (File No. 333-126559 effective July 13, 2005).

/s/ Grant Thornton LLP

Minneapolis, Minnesota
March 3, 2011

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the incorporation by reference in Registration Statements Nos. 333-51508, 333-27563, 333-63756, 333-110098, 333-115849, 333-121755, 333-121754, 333-165299 and 333-124863 on Form S-8 and 333-126559 on Form S-3 of Nash Finch Company of our reports dated March 4, 2010 (except Note 18, as to which the date is March 3, 2011), with respect to the consolidated financial statements and schedule of Nash-Finch Company included in its Annual Report (Form 10-K) for the year ended January 1, 2011, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
March 3, 2011

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

     The undersigned, a director of Nash-Finch Company (the “Company”), a Delaware corporation, does hereby constitute and appoint Robert B. Dimond and Kathleen M. Mahoney, and each of them, as the undersigned’s true and lawful attorneys-in-fact, with full power to each of them to act without the other, for and in the name of the undersigned to sign the Company’s Annual Report on Form 10-K for the 52 weeks ended January 1, 2011 and any amendments thereto (“Annual Report”), and to file said Annual Report so signed with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended; and hereby grants to the attorneys-in-fact, and each of them, full power and authority to do and perform any and all acts and things necessary to be done in the exercise of the rights and powers granted herein as fully and to all intents and purposes as the undersigned might or could do in person; and hereby ratifies and confirms all that such attorneys-in-fact, or any of them, may lawfully do or cause to be done by virtue hereof.

     In Witness Whereof, I have signed this Power of Attorney as of March 3, 2011.

/s/ William R. Voss* William R. Voss, Chairman of the Board	/s/ Mickey P. Foret* Mickey P. Foret
/s/ Robert L. Bagby *	/s/ Douglas A. Hacker*
Robert L. Bagby	Douglas A. Hacker
/s/ Sam K. Duncan*	/s/Hawthorne L. Proctor*
Sam K. Duncan	Hawthorne L. Proctor

EX-31.1

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION OF THE
CHIEF EXECUTIVE OFFICER

I, Alec C. Covington, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the fiscal year ended January 1, 2011 of Nash-Finch Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2011	by:	/s/ Alec C. Covington
	Name: Alec C. Covington
	Title: President and Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION OF THE
CHIEF FINANCIAL OFFICER

I, Robert B. Dimond, certify that:

1.	I have reviewed this Annual Report on Form 10-K for the fiscal year ended January 1, 2011 of Nash-Finch Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2011	by:	/s/ Robert B. Dimond
	Name: Robert B. Dimond
	Title: Executive Vice President
	and Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION OF THE CHIEF EXCECUTIVE
OFFICER AND CHIEF FINANCIAL OFFICER

In connection with the Annual Report on Form 10-K of Nash-Finch Company (the “Company”), for the period ended January 1, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Alec C. Covington, President and Chief Executive Officer, and Robert B. Dimond, Executive Vice President and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, that to our knowledge:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 3, 2011

By:	/s/ Alec C. Covington
Name:		Alec C. Covington
Title:		President and Chief Executive Officer
By:	/s/ Robert B. Dimond
Name:		Robert B. Dimond
Title:		Executive Vice President and Chief Financial Officer