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

FORM 10-Q

Commission File Number:  000-31127

SPARTAN STORES, INC.
(Exact Name of Registrant as Specified in Its Charter)

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

As of July 16, 2004 the registrant had 20,468,479 outstanding shares of common stock, no par value.

FORWARD-LOOKING STATEMENTS

          The matters discussed in this Quarterly Report on Form 10-Q include "forward-looking statements" about the plans, strategies, objectives, goals or expectations of Spartan Stores, Inc. (together with its subsidiaries, "Spartan Stores"). These forward-looking statements are identifiable by words or phrases indicating that Spartan Stores or management "expects," "anticipates," "projects," "plans," "believes," "estimates," "intends," is "optimistic" or "confident" that a particular occurrence "will," "may," "could," "should" or "will likely" result or that a particular event "will," "may," "could," "should" or "will likely" occur in the future, that the "trend" is toward a particular result or occurrence, or similarly stated expectations. Accounting estimates, such as those described under the heading "Critical Accounting Policies" in Item 2 of this Form 10-Q, are inherently forward-looking. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report.

          In addition to other risks and uncertainties described in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q, Spartan Stores' Annual Report on Form 10-K for the year ended March 27, 2004 and other periodic reports filed with the Securities and Exchange Commission, there are many important factors that could cause actual results to differ materially. Our ability to strengthen our retail-store performance; improve sales growth; increase gross margin; reduce operating costs; sell on favorable terms assets classified as held for sale; continue to meet the terms of our debt covenants; and implement the other programs, plans, strategies, objectives, goals or expectations described in this Quarterly Report will be affected by changes in economic conditions generally or in the markets and geographic areas that we serve, adverse effects of the changing food and distribution industries and other factors including, but not limited to, thos e discussed below.

          Anticipated future sales are subject to competitive pressures from many sources. Our Retail and Grocery Distribution businesses compete with many warehouse discount stores, supermarkets, pharmacies and product manufacturers. Future sales will be dependent on the number of retail stores that we own and operate, our ability to retain and add to the retail stores to whom we distribute, competitive pressures in the retail industry generally and our geographic markets specifically and our ability to implement effective new marketing and merchandising programs. Competitive pressures in these and other business segments may result in unexpected reductions in sales volumes, product prices or service fees.

          Our operating and administrative expenses may be adversely affected by unexpected costs associated with, among other factors: difficulties in the operation of our business segments; future business acquisitions; adverse effects on business relationships with independent retail grocery store customers; difficulties in the retention or hiring of employees; labor shortages, stoppages or disputes; business and asset divestitures; increased transportation or fuel costs; current or future lawsuits and administrative proceedings; and losses of, or financial difficulties of, customers or suppliers. Our operating and administrative expenses could also be adversely affected by changes in our sales mix. Our ongoing cost reduction initiatives and changes in our marketing and merchandising programs may not be as successful as we anticipate. Acts of terrorism or war have in the past and may in the future result in considerable economic and political uncertainties that could have advers e effects on consumer buying behavior, fuel costs, shipping and transportation, product imports and other factors affecting our company and the grocery industry generally.

          Our future interest expense and income also may differ from current expectations, depending upon, among other factors: the amount of additional borrowings; changes in our borrowing agreements; changes in the interest rate environment; and changes in the amount of fees received or paid. The availability of our secured loan agreement depends on compliance with the terms of the loan agreement.

          In fiscal 2004, we completed the sales of substantially all of the assets of United Wholesale Grocery Company, L&L/Jiroch Distributing Company, J.F. Walker Company, Inc. and most Food Town stores and have closed all Food Town stores that were not sold. We believe that these actions will allow us to better focus our efforts and capital on key strategic markets where we have the strongest growth and value creation opportunities. However, we cannot assure you that these transactions will be beneficial to our company. The agreements relating to some of these transactions require us to indemnify these asset buyers for breaches of our representations and warranties contained in the agreements and certain other matters.

          This section is intended to provide meaningful cautionary statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This should not be construed as a complete list of all economic, competitive, governmental, technological and other factors that could adversely affect our expected consolidated financial position, results of operations or liquidity. We undertake no obligation to update or revise our forward-looking statements to reflect developments that occur or information obtained after the date of this Quarterly Report.

PART I
FINANCIAL INFORMATION

SPARTAN STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

See accompanying notes to consolidated financial statements.

SPARTAN STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

See accompanying notes to consolidated financial statements.

SPARTAN STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
(Unaudited)

          See accompanying notes to consolidated financial statements.

SPARTAN STORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

See accompanying notes to consolidated financial statements.

SPARTAN STORES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1
Basis of Presentation and Significant Accounting Policies

The Consolidated Financial Statements include the accounts of Spartan Stores, Inc. and its subsidiaries ("Spartan Stores"). All significant intercompany accounts and transactions have been eliminated.

In the opinion of management, the accompanying consolidated financial statements, taken as a whole, contain all adjustments, which are of a normal recurring nature, necessary to present fairly the financial position of Spartan Stores as of June 19, 2004 and the results of its operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Stock-Based Compensation
Spartan Stores has a stock incentive plan, which is more fully described in Note 10 of the 2004 Annual Report on Form 10-K. Spartan Stores accounts for the plan under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. No stock-based compensation cost is reflected in the Statements of Operations, as all options granted under the plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net earnings (loss) and earnings (loss) per share as if Spartan Stores had applied the fair value recognition principles of Statement of Financial Accounting Standards Statement No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation:

(In thousands, except per share data)

Reclassifications
Certain reclassifications have been made to the fiscal 2004 consolidated financial statements to conform to the fiscal 2005 presentation.

Note 2
New Accounting Standards

In May 2004, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position ("FSP") FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003." FSP FAS 106-2 supercedes FSP FAS 106-1, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003," and provides guidance on the accounting, disclosure, effective date and transition rules related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. FSP FAS 106-2 will be effective in the second quarter of fiscal 2005 and is not expected to have a significant impact on the financial statements.

Note 3
Discontinued Operations

Spartan Stores' former convenience distribution operations, insurance operations and certain of its retail, grocery distribution and real estate operations have been recorded as discontinued operations. Results of the discontinued operations are excluded from the accompanying notes to the consolidated financial statements for all periods presented, unless otherwise noted.

Discontinued operations had no sales during the quarter ended June 19, 2004 and generated sales of $216.3 million during the quarter ended June 21, 2003. The operating loss in discontinued operations for the quarter ended June 19, 2004 of $0.2 million was partially offset by an income tax benefit of $0.1 million. The net loss from discontinued operations had no impact on earnings per share. The $3.0 million loss from discontinued operations for the quarter ended June 21, 2003 consisted of a loss from operations of $2.3 million, provision for asset impairments and exit costs of $3.6 million, gain on disposal of $1.8 million and an income tax benefit of $1.1 million. The net loss from discontinued operations contributed a loss of $0.15 per share in fiscal 2004.

Total assets of discontinued operations decreased from $8.3 million at March 27, 2004 to $7.2 million at June 19, 2004. Total liabilities of discontinued operations decreased from $16.9 million at March 27, 2004 to $15.6 million at June 19, 2004.

In accordance with Emerging Issues Task Force Issue No. 87-24, "Allocation of Interest to Discontinued Operations," interest was allocated to discontinued operations based on the interest on debt that was required to be repaid as a result of disposal transactions. Interest expense of $1.3 million was allocated to, and is included in, loss on discontinued operations in the Consolidated Statements of Operations for the quarter ended June 21, 2003. Interest expense is no longer allocated to discontinued operations as all debt has been repaid as a result of the disposal of these operations.

Note 4
Asset Impairments and Exit Costs

The discontinued retail operations recognized pre-tax charges of $3.6 million during the first quarter of fiscal 2004 for asset impairments and exit costs related to transaction costs and severance.

The following table provides the activity of exit costs for fiscal year 2004 and the first quarter of fiscal 2005. Exit costs recorded in the Consolidated Balance Sheets are included in Other accrued expenses in current liabilities and Other long-term liabilities based on when the obligations are expected to be paid.

(In thousands)

(a) Includes $2.0 million of charges recorded in discontinued Retail operations and $0.6 million recorded in discontinued Grocery Distribution operations.
(b) Includes $3.1 million of charges recorded in discontinued Retail operations and $0.2 million recorded in discontinued Grocery Distribution operations.

Note 5
Associate Retirement Plans

The following table provides the components of net periodic pension and postretirement benefit costs for the first quarter of fiscal 2005 and 2004:

(In thousands)

Spartan Stores expects to contribute $0.8 million to its defined benefit plans in fiscal 2005 to meet the minimum funding requirements. No amounts have been contributed as of June 19, 2004.

Note 6
Operating Segment Information

The following tables set forth information about Spartan Stores by operating segment:

(In thousands)

Executive Overview

          Spartan Stores is a leading regional grocery distributor and grocery retailer, operating principally in Michigan and Ohio.

          We currently operate two reportable business segments: Grocery Distribution and Retail. Our Grocery Distribution segment provides a full line of grocery, general merchandise, frozen and perishable items to more than 400 stores, including 330 independently owned grocery stores and 75 corporate owned stores. Our Retail segment operates 54 retail supermarkets in Michigan under the banners Family Fare Supermarkets and Glen's Markets and 21 deep-discount food and drug stores in Ohio and Michigan under the banner The Pharm. Our retail supermarkets have a "neighborhood market" focus to distinguish them from supercenters and limited assortment stores. Our deep-discount food and drug stores offer a unique combination of full-service pharmacy, general merchandise products and basic food offerings.

          Our Grocery Distribution and Retail segments' sales and operating performance vary with seasonality. Our first and fourth quarters are typically our slowest sales quarters and therefore operating results are generally lower during these two quarters. Additionally, these two quarters can be affected based on the timing of the Easter holiday, which is a strong sales week. All quarters are 12 weeks, except for our third quarter, which is 16 weeks and includes the Thanksgiving and Christmas holidays. Most of our northern Michigan stores are dependent on tourism and, therefore, most affected by seasons and weather patterns, including, but not limited to, the amount and timing of snowfall during the winter months and the range of temperature during the summer months.

Results of Operations

          The following table sets forth items from our Consolidated Statements of Operations as a percentage of net sales and the year-to-year percentage change in dollar amounts:

(Unaudited)

* Percentage change is not meaningful

          Net Sales - Net sales for the quarter ended June 19, 2004 ("first quarter") increased $11.7 million, or 2.5 percent, from $462.6 million in the quarter ended June 21, 2003 ("prior year first quarter") to $474.3 million.

          Net sales for the first quarter in our Grocery Distribution segment increased $10.5 million, or 4.2 percent, from $250.3 million in the prior year first quarter to $260.8 million. These increases were due to sales to new customers of $15.6 million which were partially offset by sales decreases to certain existing customers.

          Net sales for the first quarter in our Retail segment increased $1.2 million, or 0.6 percent, from $212.3 million in the prior year first quarter to $213.5 million. First quarter comparable store sales increased 1.0 percent. Comparable store sales increases include 0.4 percent due to the recording of bottle deposits as a liability when sold and an asset when returned, rather than a net reduction in sales as was done in fiscal 2004, as supermarkets typically receive more returns of bottles than originally sold. This change has no impact on reported gross margin dollars. We believe this revised reporting method better reflects the true sales performance of our stores. The remaining sales increase was due primarily to more effective marketing and merchandising programs, store refurbishing and product reset initiatives and continued improvements in store level execution at our supermarkets. Also contributing to the sales increase was higher customer traffic in certain superm arkets due to the closure of competing stores in northern Michigan. These increases were partially offset by sales decreases at our deep-discount food and drug stores as we began cycling the significant promotional activity that accompanied the closure of select Food Town stores and due to lower prescription sales resulting from an increase in direct mail order prescription fulfillment resulting from a United Auto Workers union cost containment initiative.

          The sales increases represent the fifth consecutive quarter of year-over-year sales improvement in both operating segments. During the fourth quarter of fiscal 2004, two supercenters opened in markets where we operate corporate owned stores. An additional two supercenters are expected to open in either our second or third quarter of fiscal 2005 in similar markets. We believe our improved marketing and merchandising practices and the continued weakening of conventional food competitors will allow us to sustain our growth, but at rates closer to industry averages. We continue to believe that fiscal 2005 consolidated net sales will improve between 1.0 percent and 3.0 percent, with comparable store sales ranging from flat to an increase of 1.5 percent.

          Gross Margin - Gross margin represents sales less cost of sales, which include purchase costs and promotional allowances. Vendor allowances that relate to our buying and merchandising activities consist primarily of promotional allowances, which are generally allowances on purchased quantities and, to a lesser extent, slotting allowances, which are billed to vendors for our merchandising costs, such as setting up warehouse infrastructure. Vendor allowances are recognized as a reduction in cost of sales when the product is sold. Lump sum payments received for multi-year contracts are amortized over the life of the contracts based on contractual terms.

          Gross margin for the first quarter increased $1.1 million, or 1.3 percent, from $84.8 million in the prior year first quarter to $85.9 million. As a percent of net sales, gross margin for the first quarter decreased to 18.1 percent from 18.3 percent. The gross margin dollars improvement was primarily due to increased sales in both segments. The decrease in gross margin rate was due primarily to the timing of new product launches at the Grocery Distribution segment and a higher percentage of consolidated net sales being generated from the lower margin Grocery Distribution segment. The decrease in rate was partially offset by improvements in the Retail segment's gross margin due to more refined promotional and merchandising strategies, primarily impacting our deep-discount food and drug stores.

          Selling, General and Administrative Expenses - Selling, general and administrative ("SG&A") expenses consist primarily of salaries and wages, employee benefits, warehousing costs, store occupancy costs, utilities, equipment rental, depreciation and other administrative costs.

          SG&A expenses for the first quarter decreased $4.7 million, or 5.4 percent, from $85.7 million in the prior year first quarter to $81.0 million. As a percent of net sales, SG&A for the first quarter improved to 17.1 percent from 18.5 percent. The decrease in SG&A is primarily due to the following:

          Interest Expense - Interest expense for the first quarter decreased $1.7 million, or 42.2 percent, from $4.0 million in the prior year first quarter to $2.3 million. The decrease in interest expense is primarily due to bank waiver fees recorded in the prior year first quarter of $1.7 million that were not incurred in the current year and lower total average borrowings. Total average borrowings for the first quarter decreased $74.5 million from $194.0 million in the prior year first quarter to $119.4 million as a result of debt repayments resulting primarily from the sale of our discontinued operations.

          In accordance with Emerging Issues Task Force Issue No. 87-24, "Allocation of Interest to Discontinued Operations," interest was allocated to discontinued operations based on the interest on debt that was required to be repaid as a result of disposal transactions. Interest expense of $1.3 million was allocated to, and is included in, loss on discontinued operations in the Consolidated Statements of Operations for the prior year first quarter. Interest expense is no longer allocated to discontinued operations as all debt has been repaid as a result of the disposal of these operations.

Discontinued Operations

          Our former convenience distribution operations, insurance operations and certain of our retail, grocery distribution and real estate operations have been recorded as discontinued operations. Results of the discontinued operations are excluded from the accompanying notes to the consolidated financial statements for all periods presented, unless otherwise noted.

          Discontinued operations had no sales during the first quarter and generated sales of $216.3 million during the prior year first quarter. The first quarter operating loss in discontinued operations of $0.2 million was partially offset by an income tax benefit of $0.1 million. The net loss from discontinued operations had no impact on earnings per share. The $3.0 million loss from discontinued operations for the prior year first quarter consisted of a loss from operations of $2.3 million, provision for asset impairments and exit costs of $3.6 million, gain on disposal of $1.8 million and an income tax benefit of $1.1 million. The net loss from discontinued operations contributed a loss of $0.15 per share in fiscal 2004.

          Total assets of discontinued operations decreased from $8.3 million at March 27, 2004 to $7.2 million at June 19, 2004. Total liabilities of discontinued operations decreased from $16.9 million at March 27, 2004 to $15.6 million at June 19, 2004.

Liquidity and Capital Resources

          The following table summarizes our consolidated statements of cash flows for the first quarter and prior year first quarter:

(In thousands)

          Net cash provided by operating activities increased during the first quarter primarily due to the net change in our investment in working capital and an improvement in first quarter net earnings. This effect was partially offset by the receipt of a tax refund associated with net operating loss carrybacks of $9.3 million in the prior year first quarter and changes in other operating assets and liabilities.

          Net cash used in investing activities increased during the first quarter primarily due to increased capital expenditure activity. Capital expenditure dollars were split relatively equally between our two segments and were used for store refurbishments and new equipment and software. Under the terms of our senior secured revolving credit facility and our supplemental secured credit facility ("credit facilities"), should our available borrowings fall below certain levels, our capital expenditures would be restricted each fiscal year. We expect capital expenditures to approximate $23.0 million for fiscal 2005 which would be within these restrictions.

          Net cash used in financing activities includes cash paid and received from our long-term borrowings and in the prior year first quarter, the payment of financing fees associated with our credit facilities. Our current maturities of long-term debt at June 19, 2004 are $4.1 million. Our ability to borrow additional funds is governed by the terms of our credit facilities.

          Net cash (used in) provided by discontinued operations contains the net cash flows of our discontinued operations and consists primarily of net proceeds received on the sale of assets, net of identifiable debt repayments, the payment of store exit cost reserves, partial year operating results, and the payment of severance and related benefit accruals of employees that previously worked for discontinued operations. We expect the cash usage of our discontinued operations will be approximately $7.0 million in fiscal 2005 for the payment of store exit costs and other liabilities.

          Our principal sources of liquidity are cash flows generated from operations and our $185.0 million credit facilities. The credit facilities terminate December, 2007, and are secured by substantially all of our assets. We had available borrowings of $43.0 million at June 19, 2004 and maximum availability of $53.0 million, which exceeds the minimum excess availability levels, as defined in the credit agreements. We believe that cash generated from operating activities and available borrowings under the credit facilities are sufficient to support current operations.

          Our current ratio was 1.16:1.00 at June 19, 2004 versus 1.30:1.00 at March 27, 2004 and our investment in working capital decreased to $23.4 million at June 19, 2004 from $39.3 million at March 27, 2004. The improvement in our overall working capital requirements is primarily the result of the timing and mix of accounts payable balances and more efficient management of operating assets.

          Our long-term debt to equity ratio at June 19, 2004 was 0.98:1.00 versus 1.18:1.00 at March 27, 2004. This improvement was primarily due to reducing long-term debt by $18.6 million and the first quarter net earnings of $1.6 million.

          For information on contractual obligations, see our 2004 Annual Report on Form 10-K. At June 19, 2004, there have been no material changes to our significant contractual obligations outside the ordinary course of business.

New Accounting Standards

          In May 2004, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position ("FSP") FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003." FSP FAS 106-2 supercedes FSP FAS 106-1, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003," and provides guidance on the accounting, disclosure, effective date and transition rules related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. FAS FSP 106-2 will be effective in the second quarter of fiscal 2005 and is not expected to have a significant impact on our financial statements.

Critical Accounting Policies

          This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, assets held for sale, long-lived assets, income taxes, self-insurance reserves, exit costs, retirement benefits and contingencies and litigation. We base our estimates on historical experience and on various other assumptions and factors that we believe to be reasonable under the circumstances. Based on our ongoing review, we make adjustments we consider appropriate under the facts and circumstances. The accompanying condensed consolidated financial statements are prepared using the same critical accounting policies discussed in our 2004 Annual Report on Form 10-K.

          There were no material changes in market risk of Spartan Stores in the period covered by this Quarterly Report on Form 10-Q.

          Spartan Stores' Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Spartan Stores' disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q (the "Evaluation Date"). Based on the evaluation of those controls and procedures required by Rule 13a-15(b), they have concluded that Spartan Stores' disclosure controls and procedures were adequate and effective as of the Evaluation Date. During the last fiscal quarter there was no change in Spartan Stores' internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Spartan Stores' internal control over financial reporting.

PART II
OTHER INFORMATION

          Each of the above-listed Forms 8-K are considered to have been "furnished" but not "filed" with the Securities and Exchange Commission.

SIGNATURES

          Pursuant to the requirements 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.

EXHIBIT INDEX