Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, May 5, 1995                   TAG: 9505050076
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: Associated Press
DATELINE: SALISBURY, N.C.                                LENGTH: Medium

SHAREHOLDERS PRAISE FOOD LION'S STOCK BUYBACK PLAN

Saying he, too, was frustrated with the value of his shares, Food Lion\ Chairman Tom Smith told shareholders Thursday that the supermarket chain will\ buy back up to $100 million of its common stock.

``I heard a lot of you express your feelings about the stock price,'' Smith told about 600 shareholders who attended the company's annual meeting at Catawba College. ``I'm a shareholder, too.

``We've taken a lot of steps, and we feel we're on track for a growth strategy,'' Smith said.

Smith received loud applause when he announced the board's decision Wednesday to buy back the stock, which would total about 4 percent of its 484 million outstanding shares.

Smith said the company will buy the shares from time to time on the open market, with a goal of increasing value for owners of shares remaining on the market.

Food Lion-A stock closed Thursday at $5.621/2 a share, unchanged from Wednesday on the Nasdaq stock market. Shares have been hovering between $5 and $6 a share for months.

While the meeting lacked the fireworks of recent years, a spokesman for a pro-union group criticizing the chain for selling outdated products was drowned out by shouts and loud coughs when he rose to speak.

Bob Harbrant represents a coalition of union and consumer groups called Consumers United With Employees.

On Wednesday, the group, based in Washington, D.C., released the fifth in a series of negative reports accusing Food Lion of selling outdated meat and perishable items.

Harbrant said he was prevented from entering the meeting until just before it began. However, Food Lion officials said he was allowed to come in after he agreed not to bring in pamphlets attacking Food Lion.

On Wednesday, Harbrant said members of his group purchased outdated perishable products at 113 of 116 Food Lion stores they visited in December and January.

In all, he said, the group found 2,885 outdated perishable products in stores in all 14 states where the chain operates.

Food Lion was the subject of an ABC-TV report in November 1992 alleging that the chain engaged in various unsanitary practices, including selling out-of-date meat. The company fiercely denied the charges made by ``PrimeTime Live.''

Just before the meeting ended, a shareholder stood up and accused Harbrant's group of planting outdated baby formula in a Food Lion store in Tennessee. In an interview later, Harbrant called the allegation ``absolutely false.''

Smith called 1994 a good year for the company, a period in which it saw its after-tax profits increase more than 42 percent. The company earned $153 million on sales of $7.9 billion.

For the first quarter of 1995, Food Lion's earnings were $37 million, or about 8 cents per share, a 21 percent increase from $31 million, or 6 cents per share, in 1994's first quarter. Sales in the first quarter totaled $1.87 billion, compared with $1.8 billion in the same period last year. Same-store sales increased 4.3 percent.