UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

		OR

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

Commission file number 001-13222

STATER BROS. HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware		33-0350671
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
301 S. Tippecanoe Avenue San Bernardino, California		92408
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (909) 733-5000

Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)

     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. 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 (§232.405 of this chapter) during the preceding 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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ.

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

As of August 10, 2010, there were issued and outstanding
34,552 shares of the registrant’s Class A Common Stock.

 

 

STATER BROS. HOLDINGS INC.
June 27, 2010

INDEX

		Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 27, 2009 and June 27, 2010 (Unaudited)			3
Consolidated Statements of Income (Unaudited) for the 13 weeks ended June 28, 2009 and June 27, 2010			5
Consolidated Statements of Income (Unaudited) for the 39 weeks ended June 28, 2009 and June 27, 2010			6
Consolidated Statements of Cash Flows (Unaudited) for the 39 weeks ended June 28, 2009 and June 27, 2010			7
Notes to Consolidated Financial Statements (Unaudited)			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3. Quantitative and Qualitative Disclosure about Market Risk			23
Item 4. Controls and Procedures			23
PART II OTHER INFORMATION
Item 1. Legal Proceedings			24
Item 1A. Risk Factors			24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			25
Item 3. Defaults Upon Senior Securities			25
Item 4. (Removed and Reserved)			25
Item 5. Other Information			25
Item 6. Exhibits			25
SIGNATURES			26
EX-31.1
EX-31.2
EX-32.1

PART I — FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

ASSETS

		Sept. 27,				June. 27,
		2009				2010
						(Unaudited)
Current assets
Cash and cash equivalents		$	196,914			$	267,830
Restricted cash			3,121				3,121
Receivables, net of allowance of $759 and $747			36,671				35,711
Income tax receivable			4,049				626
Inventories			212,856				222,104
Prepaid expenses			9,330				11,045
Deferred income taxes			20,479				25,941
Assets held for sale			83,617				—
Note receivable, current portion			300				—
Long-term receivable, current portion			—				16,001
Total current assets			567,337				582,379
Property and equipment
Land			97,430				97,430
Buildings and improvements			544,440				557,619
Store fixtures and equipment			428,431				435,424
Property subject to capital leases			9,983				9,983
			1,080,284				1,100,456
Less accumulated depreciation and amortization			408,791				447,320
			671,493				653,136
Deferred income taxes, long-term			36,014				36,742
Deferred debt issuance cost, net			11,276				8,868
Note receivable, less current portion			493				—
Long-term receivable, less current portion			18,867				—
Other assets			9,255				8,828
			75,905				54,438
Total assets		$	1,314,735			$	1,289,953

See accompanying notes to unaudited consolidated financial statements.

STATER BROS. HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS (contd.)
(In thousands, except share amounts)

LIABILITIES AND STOCKHOLDER’S EQUITY

		Sept. 27,				June 27,
		2009				2010
						(Unaudited)
Current liabilities
Accounts payable		$	153,083			$	139,026
Accrued payroll and related expenses			53,313				59,574
Other accrued liabilities			79,618				57,792
Liabilities held for sale			5,634				—
Current portion of capital lease obligations			1,336				1,501
Total current liabilities			292,984				257,893
Long-term debt			810,000				810,000
Capital lease obligations, less current portion			3,768				2,620
Long-term portion of self-insurance and other reserves			36,227				39,834
Long-term deferred benefits			77,396				79,106
Other long-term liabilities			30,605				31,085
Total liabilities			1,250,980				1,220,538
Commitment and contingencies
Stockholder’s equity
Common Stock, $.01 par value:
Authorized shares - 100,000 Issued and outstanding shares - 0			—				—
Class A Common Stock, $.01 par value:
Authorized shares - 100,000 Issued and outstanding shares - 35,152 in 2009, 34,552 in 2010			—				—
Additional paid-in capital			8,939				8,786
Accumulated other comprehensive loss			(16,720	)			(16,720	)
Retained earnings			71,536				77,349
Total stockholder’s equity			63,755				69,415
Total liabilities and stockholder’s equity		$	1,314,735			$	1,289,953

See accompanying notes to unaudited consolidated financial statements.

STATER BROS. HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share and share amounts)

		13 Weeks Ended
		June 28,				June 27,
		2009				2010
Sales		$	928,641			$	900,044
Cost of goods sold			674,425				654,387
Gross profit			254,216				245,657
Operating expenses
Selling, general and administrative expenses			203,277				205,564
Depreciation and amortization			13,146				12,619
Total operating expenses			216,423				218,183
Operating profit			37,793				27,474
Interest income			86				27
Interest expense			(16,923	)			(16,983	)
Other income, net			601				17
Income before income taxes			21,557				10,535
Income taxes			6,415				4,553
Net income		$	15,142			$	5,982
Earnings per average common share outstanding		$	430.76			$	173.13
Average common shares outstanding			35,152				34,552
Shares outstanding at end of period			35,152				34,552

See accompanying notes to unaudited consolidated financial statements.

STATER BROS. HOLDINGS INC.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share and share amounts)

		39 Weeks Ended
		June 28,				June 27,
		2009				2010
Sales		$	2,818,890			$	2,709,445
Cost of goods sold			2,061,986				1,989,193
Gross profit			756,904				720,252
Operating expenses
Selling, general and administrative expenses			620,593				608,870
Gain on sale of dairy assets			—				(9,396	)
Depreciation and amortization			40,058				38,073
Total operating expenses			660,651				637,547
Operating profit			96,253				82,705
Interest income			416				112
Interest expense			(51,371	)			(51,546	)
Other income, net			707				22
Income before income taxes			46,005				31,293
Income taxes			16,201				12,633
Net income		$	29,804			$	18,660
Earnings per average common share outstanding		$	847.86			$	536.84
Average common shares outstanding			35,152				34,759
Shares outstanding at end of period			35,152				34,552

See accompanying notes to unaudited consolidated financial statements.

STATER BROS. HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

		39 Weeks Ended
		June 28,				June 27,
		2009				2010
Operating activities:
Net income		$	29,804			$	18,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			51,591				46,554
Amortization of debt issuance costs			2,408				2,408
Increase in deferred income taxes			(2,697	)			(6,190	)
Gain on sale of dairy assets			—				(9,396	)
Gain on disposals of assets			(572	)			(21	)
Changes in operating assets and liabilities:
Decrease in restricted cash			2,500				—
(Increase) decrease in receivables			(5,852	)			960
Decrease in income tax receivable			—				3,423
Increase in inventories			(4,253	)			(9,248	)
Increase in prepaid expenses			(1,113	)			(1,715	)
(Increase) decrease in assets held for sale			(1,329	)			215
(Increase) decrease in other assets			(27	)			744
Decrease in accounts payable			(831	)			(14,057	)
Increase in accrued income taxes			7,724				—
Decrease in other accrued liabilities			(25,859	)			(15,565	)
Increase (decrease) in liabilities held for sale			(4,999	)			1,014
Increase in long-term reserves			12,808				5,797
Net cash provided by operating activities			59,303				23,583
Financing activities:
Principal payments on capital lease obligations			(846	)			(983	)
Stock redemption			—				(8,000	)
Dividend paid			—				(5,000	)
Net cash used in financing activities			(846	)			(13,983	)
Investing activities:
(Increase) decrease in note receivable			(793	)			793
Decrease in store construction reimbursements			6,664				—
Long term receivable			—				1,740
Proceeds from sale of dairy assets, net of fees			—				85,833
Purchase of property and equipment			(51,826	)			(27,117	)
Proceeds from sale of property and equipment			990				67
Net cash provided by (used in) investing activities			(44,965	)			61,316
Net increase in cash and cash equivalents			13,492				70,916
Cash and cash equivalents at beginning of period			144,939				196,914
Cash and cash equivalents at end of period		$	158,431			$	267,830
Interest paid		$	65,581			$	65,340
Income taxes paid		$	11,175			$	15,400

See accompanying notes to unaudited consolidated financial statements.

STATER BROS. HOLDINGS INC.

(Unaudited)

Note 1 — Basis of Presentation

     The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the thirty-nine weeks ended June 27, 2010 are not necessarily indicative of the results that may be expected for the year ending September 26, 2010.

     The consolidated balance sheet at September 27, 2009 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

     For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s report on Form 10-K for the year ended September 27, 2009.

Note 2 — Principles of Consolidation

     The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Stater Bros. Markets (“Markets”) and Stater Bros. Development, Inc. (“Development”) and Markets’ wholly-owned subsidiaries, Super Rx, Inc. (“Super Rx”) and SBM Dairies, Inc. (“Dairies”). All significant inter-company transactions have been eliminated in consolidation.

Note 3 — Reclassifications

     Certain amounts in assets held for sale and deferred income taxes within the September 27, 2009 consolidated balance sheet and certain captions for operating activities within the June 28, 2009 statement of cash flows have been reclassified to conform to the current period’s financial statement presentation. Substantially all of the assets and certain liabilities of Dairies had been classified as “Held for Sale” prior to their disposal on October 11, 2009 as described in “Note 8 — Asset Sale” in these notes to the unaudited consolidated financial statements.

Note 4 — Subsequent Events

     The Company has evaluated the impact of subsequent events and determined it did not have any material subsequent events that need to be disclosed in the notes to the consolidated financial statements.

Note 5 — Use of Estimates

     The preparation of financial statements in conformity with U.S. 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.

Note 6 — Income Taxes

     The Company establishes deferred tax liabilities for anticipated tax timing differences where payment of tax is anticipated. Such amounts represent a reasonable provision for taxes ultimately expected to be paid, and the amounts may be adjusted over time as additional information becomes known.

STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
JUNE 27, 2010

Note 6 — Income Taxes (contd.)

     The Company does not have any material tax positions that did not meet a “more-likely-than-not” recognition threshold. As such, the Company has not recorded any liabilities for uncertain tax positions. During the thirty-nine weeks ended June 27, 2010, there have been no material changes to the amount of uncertain tax positions.

     The Company recognizes interest and penalties related to income tax deficiencies or assessments by taxing authorities for any underpayment of income taxes separately from income tax expenses as either interest expense or other operating expenses.

     For federal tax purposes, the Company is subject to a review of its fiscal 2007 through fiscal 2009 tax returns. For state tax purposes, the Company is subject to review of its fiscal 2006 through fiscal 2009 state tax returns. The Company is currently under audit for its fiscal 2006 and 2007 state tax returns by the State of California’s Franchise Tax Board (“FTB”).

Note 7 — Retirement Plans

     The Company has a noncontributory defined benefit pension plan covering substantially all non-union employees. The plan provides for benefits based on an employee’s compensation during the eligibility period while employed with the Company. The Company’s funding policy for this plan is to contribute annually at a rate that is intended to provide sufficient assets to meet future benefit payment requirements. Market value of plan assets is calculated using fair market values as provided by a third-party trustee. The plan’s investments include cash, which earns interest, governmental securities, and corporate bonds and securities, all of which have quoted market values.

The following table provides the components of net periodic pension expense:

		Thirteen Weeks Ended								Thirty-Nine Weeks Ended
		June 28,				June 27,				June 28,				June 27,
		2009				2010				2009				2010
		(in thousands)								(in thousands)
Expected return on assets		$	(800	)		$	(877	)		$	(2,401	)		$	(2,632	)
Service cost			574				840				1,721				2,522
Interest cost			964				1,029				2,893				3,086
Amortization of prior service cost			(1	)			(1	)			(2	)			(2	)
Amortization of recognized losses			49				358				148				1,076
Net pension expense		$	786			$	1,349			$	2,359			$	4,050
Actuarial assumptions used to determine net pension expense were:
Discount rate			7.50	%			5.50	%			7.50	%			5.50	%
Rate of increase in compensation levels			3.00	%			3.00	%			3.00	%			3.00	%
Expected long-term rate of return on assets			6.50	%			6.50	%			6.50	%			6.50	%

     The Company made approximately $2.5 million of contributions to its noncontributory defined pension plan during the thirty-nine weeks ended June 27, 2010 and the Company expects to contribute an additional $0.7 million during the remainder of fiscal 2010.

STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
JUNE 27, 2010

Note 8 — Asset Sale

     On October 11, 2009, the Company sold substantially all of the assets of Dairies to subsidiaries of Dean Foods (“Dean Foods”) for $88.0 million in cash, subject to a working capital adjustment, and assumption of certain liabilities including substantially all of Dairies’ current liabilities, which included accounts payable. In the second quarter of fiscal 2010, the purchase price was adjusted upward by approximately $1.5 million due to an adjustment made for working capital. Dairies’ assets which were sold consisted primarily of accounts receivable, inventory and property and equipment. The Company incurred approximately $3.8 million in transaction and other fees related to the transaction and recognized a gain, net of tax, of approximately $5.6 million. The pre-tax gain from the sale of Dairies’ assets is included in “Gain on sale of dairy assets” within the unaudited consolidated statements of income. Dairies retained responsibility for all workers compensation claims through the date of the transaction. As of June 27, 2010, Dairies has accrued approximately $4.1 million in workers’ compensation liabilities.

     Also on October 11, 2009, the Company entered into a ten year Product Purchase Agreement (the “PPA”) with Dean Foods to purchase substantially all of its milk products sold in its supermarkets from Dean Foods. The purchase prices under the PPA are deemed to approximate market pricing.

     As of October 11, 2009, the Company ceased all dairy manufacturing operations. Markets and Super Rx have similar customers, regulatory requirements and delivery methods to customers and are included together as one reportable segment. Prior to the Dairy Transaction, Dairies was a separate reportable segment of the Company. As operating activities of Dairies have ceased and operating results from September 28, 2009 to October 11, 2009 are not material to the overall financial statements of the Company taken as a whole, the Company no longer has separate reportable segments to disclose.

Note 9 — Subsidiary Guarantee

     The Company has $525.0 million of 8.125% Senior Notes due June 15, 2012 and $285.0 million of 7.75% Senior Notes due April 15, 2015 collectively (the “Notes”).

     The Notes are guaranteed by the Company’s subsidiaries Markets and Development, and the Company’s indirect subsidiaries Super Rx and Dairies (each a “subsidiary guarantor”, and collectively, the “subsidiary guarantors”). Condensed consolidating financial information with respect to the subsidiary guarantors is not provided because the Company has no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and there are no subsidiaries of the Company other than the subsidiary guarantors.

STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
JUNE 27, 2010

Note 10 — Credit Facility

     On May 4, 2010, the Company and Markets entered into the Third Amended and Restated Credit Agreement with Bank of America, N.A. (“Bank of America”), as sole and exclusive administrative agent and sole initial lender, consisting of a three-year unsecured revolving credit facility in a principal amount of up to $100 million (the “Credit Facility”), which replaced Markets’ previous credit facility.

     Markets is the borrower under the Credit Facility. The Credit Facility is guaranteed by the Company and all of its existing and future material subsidiaries, including Development and the Company’s indirect subsidiary Super Rx. Subject to certain restrictions, the entire amount of the Credit Facility may be used for loans, letters of credit, or a combination thereof. Borrowings under the Credit Facility are unsecured and may be used for working capital, certain capital expenditures and other general corporate purposes. Letters of credit issued under the letter of credit facility are expected to be used to support obligations incurred in connection with the construction of stores and workers’ compensation insurance obligations. The availability of the loans and letters of credit is subject to certain borrowing restrictions.

     Loans under the Credit Facility bear interest at a rate based upon either (i) the “Base Rate” (defined as the higher of (a) the federal funds rate plus 0.50% and (b) the rate of interest publicly announced by Bank of America as its “prime rate”), plus 1.00%, or (ii) the “Eurodollar Rate” (defined as the British Bankers Association LIBOR Rate for deposits in dollars, adjusted for the maximum reserve requirement for Eurocurrency funding), plus 1.75%. For Eurodollar Rate Loans, the Eurodollar Rate will apply for periods, as selected by Markets, of one, two, three or six months (but in any event not later than the maturity date of the Credit Facility).

     The Credit Facility requires Markets to meet certain financial tests, including minimum net worth and the maintenance of minimum earnings levels. The Credit Facility contains covenants which, among other things, limit the ability of Markets and its subsidiaries to (i) incur indebtedness, grant liens and guarantee obligations, (ii) enter into mergers, consolidations, liquidations and dissolutions, asset sales, investments, leases and transactions with affiliates, and (iii) make restricted payments. Markets is allowed under the Credit Facility to make payments to the Company for interest obligations on the Senior Notes, consolidated federal and state income taxes and certain corporate overhead. The Credit Facility also contains covenants that apply to the Company and its subsidiaries, and the Company is a party to the Credit Facility for purposes of these covenants. These covenants, among other things, limit the ability of the Company and its subsidiaries to incur indebtedness, make restricted payments, enter into transactions with affiliates, and make certain amendments to the Indentures governing the 8.125% Senior Notes and the 7.75% Senior Notes (“Notes Indentures”).

     The Credit Facility will mature on April 1, 2013.

     As of June 27, 2010, the Company had $49.8 million of outstanding letters of credit and it had $50.2 million available under the Credit Facility and Markets and the Company were in compliance with all restrictive covenants under the Credit Facility. However, there can be no assurance that Markets or the Company will be able to achieve the expected operating results or implement the capital expenditure strategy upon which future compliance with such covenants is based.

     The Company had no short-term borrowings outstanding as of June 27, 2010 and the Company did not incur any short-term borrowings during the thirty-nine weeks ended June 27, 2010.

STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
JUNE 27, 2010

Note 11 — Litigation Matters

     Various legal actions and claims are pending against the Company in the ordinary course of business. In the opinion of management and its general legal counsel, the ultimate resolution of such pending legal actions and claims will not have a material adverse effect on the Company’s consolidated financial position or its results of operations.

     In December 2008, an action was filed by Dennis M. O’Connor, et al. against Santee Dairies, Inc. (now SBM Dairies, Inc.) in the Los Angeles Superior Court. This action seeks damages for time spent by nonexempt hourly paid employees for changing into and out of sanitary uniforms. The court has certified a class in this action which is in the discovery stage and no date has been set for trial. The Company does not believe that any liability under this matter will have a material adverse effect on the Company’s consolidated financial position and results of operations. The Company is and will continue vigorously defending its rights and interests in this matter.

Note 12 — Dividend and Stock Redemption

     On November 17, 2009, the Company paid a $5.0 million dividend to La Cadena Investments (“La Cadena”), the sole shareholder of the Company.

     On December 28, 2009, the Company redeemed and retired 600 shares of its Class A Common Stock for $8.0 million. The redemption was for shares held by the Moseley Family Revocable Trust. La Cadena had distributed the shares to the Moseley Family Revocable Trust concurrently with the redemption and retirement of the shares.

     As of June 27, 2010, the Company has the ability and right under the Credit Facility and the Notes’ Indentures to make restricted payments, including dividends, of $37.3 million.

Note 13 — Long-Term Receivable

     During the second quarter of fiscal 2010, Markets entered into the Comprehensive Tri-Party Termination Infrastructure Reimbursement Agreement (the “Termination Agreement”) with the Inland Valley Development Agency (the “IVDA”) and Hillwood/San Bernardino, LLC (“Hillwood”) to terminate commitments with Hillwood under certain obligations and settle outstanding financial issues among the parties arising from several agreements previously entered into with Hillwood and the IVDA in connection with the development of the Company’s Norton distribution center. As part of the Termination Agreement, the amount previously due from the IVDA for tax increment reimbursement related to the construction of the Norton distribution center was negotiated downward from $18.9 million to $17.7 million with the $17.7 million to be paid to Markets no later than December 31, 2010. As such, the $17.7 million receivable was classified as a current asset and the $1.2 million adjustment out of long-term receivable was recorded to “Building and improvements” in the Company’s June 27, 2010 consolidated balance sheet. Under the Termination Agreement, Markets paid approximately $0.7 million to Hillwood as reimbursement for shared improvement costs and any further financial commitments between Markets and Hillwood were terminated. The $0.7 million reimbursement was recorded to “Buildings and improvements” in the Company’s June 27, 2010 consolidated balance sheet.

STATER BROS. HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
JUNE 27, 2010

Note 14 — Fair Value of Financial Instruments

     The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

     Cash and Cash Equivalents

     The carrying amount approximates fair value because of the short-term maturity of these instruments.

     Receivables

     The carrying amount approximates fair value because of the short-term maturity of these instruments.

     Long-Term Receivable, Current Portion

     Although market quotes for the fair value of the Company’s long-term receivable are not readily available, the Company believes the stated value approximates fair value.

     Long-Term Debt and Capital Lease Obligations

     The fair value of the 8.125% Senior Notes and the 7.75% Senior Notes, are based on quoted market prices. Although market quotes for the fair value of the Company’s capitalized lease obligations are not readily available, the Company believes the stated value approximates fair value.

     The estimated fair values of the Company’s financial instruments are as follows:

		As of
		June 27, 2010
		(In thousands)
		Carrying				Fair
		Amount				Value
Cash and cash equivalents		$	267,830			$	267,830
Receivables		$	36,337			$	36,337
Long-term receivable, current portion		$	16,001			$	16,001
Long-term debt		$	810,000			$	812,026
Capitalized lease obligations		$	4,121			$	4,121

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PART I — FINANCIAL INFORMATION (contd.)

Item 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

We have chosen accounting policies that we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a consistent manner. Our critical accounting policies are summarized in our report on Form 10-K for the year ended September 27, 2009.

Our discussion and analysis of financial condition and results of operations are based upon our unaudited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. The preparation of the financial statements requires the use of estimates and judgments on the part of management. We base our estimates on our historical experience combined with management’s understanding of current facts and circumstances.

SIGNIFICANT ACCOUNTING POLICIES

There are certain accounting policies that we have adopted that may differ from policies of other companies within our industry and other companies as a whole. Such differences in the treatment of these policies may be important to the readers of our report on Form 10-Q and our unaudited consolidated financial statements contained herein. For further information regarding our accounting policies, refer to the significant accounting policies included in the notes to the unaudited consolidated financial statements contained herein and in our report on Form 10-K for the year ended September 27, 2009.

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OWNERSHIP OF THE COMPANY

La Cadena Investments (“La Cadena”), a California general partnership whose sole voting partner is the Jack H. Brown Revocable Trust holds all of our issued and outstanding capital stock. Jack H. Brown, the Chairman of the Board, President and Chief Executive Officer of the Company, is the Managing General Partner of La Cadena with the power to vote the shares of our capital stock held by La Cadena on all matters, including with respect to the election of our Board of Directors, and any other matters requiring shareholder approval.

AVAILABLE INFORMATION

We file quarterly and annual reports electronically with the Security and Exchange Commission (“SEC”) under forms 10-Q and 10-K and we file current reports on form 8-K and amendments to these reports. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. These electronic files can be found at the SEC’s website at http://www.sec.gov. The public may read and copy any of our reports filed with the SEC at the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549. The public may obtain information on the Public Reference Room by calling the SEC at 1-800-SEC-0330.

EXECUTIVE OVERVIEW

We are the largest privately owned supermarket chain in Southern California. Our revenues are generated primarily from retail sales through our supermarkets. Our success is a result of our marketing strategy of offering everyday low prices while providing our customers with friendly and outstanding service on each of their visits to our stores which has been a seventy-four year Stater Bros.’ tradition.

On October 11, 2009, we sold substantially all of the assets of SBM Dairies, Inc (“Dairies”) to subsidiaries of Dean Foods (“Dean Foods”), (the “Dairy Transaction”), for $88.0 million in cash and assumption of certain liabilities including substantially all of Dairies current liabilities, which included accounts payable. In the second quarter of fiscal 2010, the purchase price was adjusted upwards by approximately $1.5 million due to an adjustment for working capital. Dairies’ assets which were sold consisted primarily of accounts receivable, inventory and property and equipment. Also on October 11, 2009, we entered into a ten year Product Purchase Agreement (the “PPA”) with Dean Foods to purchase substantially all fluid milk products sold in our supermarkets from Dean Foods. The purchase prices under the PPA are deemed to approximate market pricing. We incurred approximately $3.8 million in fees related to the Dairy Transaction and recognized a gain, net of tax, of approximately $5.6 million. We retained responsibility for all workers’ compensation claims of Dairies’ employees for events occurring through the transaction date. As of October 11, 2009, the Company ceased all dairy manufacturing operations.

As a result of the Dairy Transaction and the continued decline in the current economy, we anticipate that our sales will be lower than in fiscal 2009. Our strategy in the near term is to retain customer counts during these tough economic times by continuing to provide exceptional customer service and provide value to our customers on their purchases from our supermarkets.

Both our third quarter and our year-to-date fiscal 2010 consolidated gross profit margins, as a percentage of sales, were lower than the comparable periods of the previous year. Our marketing area of Southern California continues to be highly competitive and in flux. With the current economic conditions, our marketing area has seen job losses and business closures which will put further pressure on our gross margin as we endeavor to retain our customer base. We anticipate continued competitive pressures from “big box” format competitors including Walmart, Costco and Target, from our traditional grocery format competitors Vons, Albertsons and Ralphs and from independent supermarket operators.

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Sales and Cost of Sales

		Thirteen Weeks Ended								Change
		June 28,				June 27,				2010 to 2009
($ in thousands)		2009				2010				Dollar				%
Sales		$	928,641			$	900,044			$	(28,597	)			(3.08	)%
Gross Profit		$	254,216			$	245,657			$	(8,559	)			(3.37	)%
as a % of sales			27.38	%			27.29	%
		Thirty-Nine Weeks Ended								Change
		June 28,				June 27,				2010 to 2009
($ in thousands)		2009				2010				Dollar				%
Sales		$	2,818,890			$	2,709,445			$	(109,445	)			(3.88	)%
Gross Profit		$	756,904			$	720,252			$	(36,652	)			(4.84	)%
as a % of sales			26.85	%			26.58	%

Sales

Overall, our sales were down $28.6 million and $109.4 million for the thirteen and thirty-nine week periods of fiscal 2010, respectively.

Third quarter sales were down $28.6 million of which $23.0 million of the decrease was related to the loss sales of Santee Dairy due to the Dairy Transaction asset sale.

For the thirty-nine week period of fiscal 2010, sales were down $109.4 million of which $72.6 million of the decrease was related to the Dairy Transaction asset sale.

Sales in our supermarkets for the thirteen and thirty-nine weeks ended June 27, 2010 compared to the comparable periods of fiscal 2009 were down 0.61% and 1.34%, respectively.

Like Store Sales

Our like store sales have been adversely affected by the downturn in our local economy and by continued competitive pressures. We anticipate that our like store sales for the remainder of fiscal 2010 will be lower than like store sales in fiscal 2009 as we believe that for the foreseeable future unemployment in our marketing area will continue to be high and competitive pressures will continue.

We calculate like store sales by comparing year-to-year sales for stores that are opened in both years. For stores that were not opened for the entire previous year periods, we only include the current year’s weekly sales that correspond to the weeks the stores were opened in the previous year. For stores that have been closed, we only include the prior year’s weekly sales that correspond to the weeks the stores were opened in the current year. Replacement store sales and replaced store sales are included in like store sales.

Like store sales are affected by various factors including, but not limited to, inflation and deflation, promotional discounting, customer traffic, buying trends, pricing pressures from competitors and competitive openings and closings.

Like store sales for the third quarter of fiscal 2010 compared to the third quarter of fiscal 2009 decreased $10.8 million or 1.19%. Our recently opened stores have had an impact on our existing store sales. We estimate that they drew approximately $1.6 million of their third quarter 2010 sales from our existing stores.

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (contd.)

Like Store Sales (contd.)

Since the beginning of the third quarter of fiscal 2009, we opened one store. As such, the corresponding sales in fiscal 2010 are not included in like store sales. This recently opened store had third quarter fiscal 2010 sales of $5.2 million, none of which is included in like store sales.

For the thirty-nine week period of fiscal 2010, like store sales decreased $59.4 million or 2.17% from the thirty-nine week period of fiscal 2009. Our recently opened stores have had an impact on our existing store sales. For the thirty-nine weeks of fiscal 2010, we estimate that they drew approximately $7.6 million of their sales from our existing stores.

During fiscal 2009, we opened three stores, one of which was opened during the fourth quarter of fiscal 2009. As such, these corresponding sales in fiscal 2010 are not included in like store sales. For the thirty-nine weeks of fiscal 2010, the recently opened stores had sales of $42.5 million of which $23.7 million are not included in like store sales. We closed one store in the first quarter of fiscal 2009, which reduced the thirty-nine week fiscal 2010 sales by approximately $1.2 million.

Gross Profit

Our gross profit margin in the third quarter of fiscal 2010, as a percentage of sales, was 27.29% a decline of nine basis points when compared to the third quarter fiscal 2009 gross margin of 27.38%. We also had a decline in our gross margin percentage for the thirty-nine week period of fiscal 2010 of 27 basis points compared to the same period of fiscal 2009. Beginning in March of 2009 and continuing through a portion of the third quarter of fiscal 2009, we were able to raise gross margin percentages as competitive pressures eased for a short period of time. At the end of the third quarter of fiscal 2009 and continuing into the thirty-nine weeks of fiscal 2010, competitive pressures again intensified. We have taken actions, including the reduction in gross margins, in order to hold onto market share during these tough economic times. With the depressed economic conditions in the nation and in our marketing area, we and our competitors continue to take steps to retain market share, we anticipate our gross margins to be challenged in the foreseeable future.

Operating Expenses and Operating Profit

		Thirteen Weeks Ended								Change
		June 28,				June 27,				2010 to 2009
($ in thousands)		2009				2010				Dollar				%
Operating Expenses:
Selling, general and administrative expenses		$	203,277			$	205,564			$	2,287				1.13	%
as a % of sales			21.89	%			22.84	%
Depreciation and amortization		$	13,146			$	12,619			$	(527	)			(4.01	)%
as a % of sales			1.42	%			1.40	%
Operating profit		$	37,793			$	27,474			$	(10,319	)			(27.30	)%
as a % of sales			4.07	%			3.05	%

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (contd.)

Operating Expenses and Operating Profit (contd.)

		Thirty-Nine Weeks Ended								Change
		June 28,				June 27,				2010 to 2009
($ in thousands)		2009				2010				Dollar				%
Operating Expenses:
Selling, general and administrative expenses		$	620,593			$	608,870			$	(11,723	)			(1.89	)%
as a % of sales			22.02	%			22.47	%
Gain on sale of assets		$	—			$	(9,396	)		$	(9,396	)			—
as a % of sales			—				(0.35	)%
Depreciation and amortization		$	40,058			$	38,073			$	(1,985	)			(4.96	)%
as a % of sales			1.42	%			1.41	%
Operating profit		$	96,253			$	82,705			$	(13,548	)			(14.08	)%
as a % of sales			3.41	%			3.05	%

Selling, General and Administrative Expenses

The increase in selling, general and administrative expenses, as a percentage of sales, in the thirteen week period of fiscal 2010 over the same period of fiscal 2009 is primarily attributed to increases in union insurance and workers’ compensation expense. Union insurance cost for the fiscal 2010 thirteen week period increased $5.7 million over the prior year as a result of rate increases under our union contracts. Workers’ compensation expense increased approximately $2.8 million over the prior year thirteen week period. The increase in selling, general and administrative expenses, as a percentage of sales, for the thirty-nine week periods of fiscal 2010 versus the same periods of fiscal 2009 is attributed primarily to an increase of approximately $6.5 million in union insurance under our UFCW contracts and from increases of approximately $3.6 million in workers’ compensation expense. The remaining increase in selling, general and administrative expense, as a percentage of sales, in the third quarter and the thirty-nine week periods of fiscal 2010 over fiscal 2009 is attributed to cost being compared to lower consolidated sales volumes in the current year versus the prior year.

The amount of salaries, wages and administrative costs associated with the purchase of our products included in selling, general and administrative expenses for both the third quarters of fiscal 2010 and fiscal 2009 is $0.3 million and $1.0 million and $0.9 million for the thirty-nine weeks ended June 27, 2010 and June 28, 2009, respectively.

Gain on Sale of Dairy Assets

The pre-tax gain from the Dairy Transaction in the thirty-nine week period of fiscal 2010 was approximately $9.4 million.

Depreciation and Amortization

The decrease in depreciation and amortization expense in the third quarter and thirty-nine weeks of fiscal 2010 compared to the same periods in fiscal 2009 is due primarily to reduced fixed asset additions in the current year and to the Dairy Transaction. Included in cost of goods sold is depreciation and amortization expense related to warehousing and distribution activities in both fiscal 2010 and fiscal 2009 of $2.8 million and $2.9 million in the third quarters of fiscal 2010 and 2009, respectively, and $8.5 million and $11.5 million for the thirty-nine weeks of fiscal 2010 and 2009, respectively. The decrease in depreciation and amortization expense included in cost of goods sold is attributed to the Dairy Transaction.

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (contd.)

Interest Income

Interest income was $27,000 and $86,000 for the third quarters of fiscal 2010 and 2009, respectively, and $112,000 and $416,000 for the thirty-nine week periods of fiscal 2010 and 2009, respectively. Interest income has decreased due to lower market rates. We expect our interest income to continue to be lower in the current fiscal year as market rates continue to be depressed.

Interest Expense

Prior to the effect of capitalized interest, interest expense was $17.0 million and $17.1 million for the third quarter of fiscal 2010 and 2009, respectively, and $51.6 million and $51.8 million for the thirty-nine week periods of fiscal 2010 and 2009, respectively. We did not capitalize any interest in the third quarter of fiscal 2010 and we capitalized $117,000 of interest in the third quarter of fiscal 2009. Our capitalized interest was $16,000 and $376,000 for the thirty-nine week periods of fiscal 2010 and 2009, respectively. The decrease in the amount of capitalized interest in both the third quarter and year-to-date periods is due to our completion of the construction of our Norton distribution center and to no new store construction in the thirty-nine weeks of fiscal 2010.

Income Before Income Taxes

Income before income taxes amounted to $10.5 million and $21.6 million for the third quarters of fiscal 2010 and fiscal 2009, respectively, and was $31.3 million and $46.0 million for the thirty-nine week periods of fiscal 2010 and fiscal 2009, respectively.

Income Taxes

Income taxes amounted to $4.6 million and $6.4 million in the third quarters of fiscal 2010 and fiscal 2009, respectively, and $12.6 million and $16.2 million in the thirty-nine week periods of fiscal 2010 and 2009, respectively. Our effective tax rate was 43.2% and 29.8% for the third quarters of fiscal 2010 and 2009, respectively, and 40.4% and 35.2% for the thirty-nine week periods of fiscal 2010 and 2009, respectively. The lower effective tax rate in fiscal 2009 versus fiscal 2010 for both the thirteen and thirty-nine week periods is due primarily to having tax credits associated with the construction of the Norton distribution center in fiscal 2009 that were not present in fiscal 2010 and to favorable provision to return adjustments in fiscal 2009.

Net Income

Net income amounted to $6.0 million and $15.1 million in the third quarter of fiscal 2010 and fiscal 2009, respectively. Net income for the thirty-nine weeks ended June 27, 2010 amounted to $18.7 million compared to $29.8 million for the thirty-nine weeks ended June 28, 2009.

LIQUIDITY AND CAPITAL RESOURCES

We historically fund our daily cash flow requirements through funds provided by operations. We have the ability to borrow under our short-term revolving credit facility. Our credit agreement, as amended and restated on May 4, 2010, expires in April 2013 and consists of a revolving loan facility for working capital and letters of credit of $100.0 million. The letter of credit facility is maintained pursuant to our workers’ compensation and general liability self-insurance requirements.

As of June 27, 2010, we had $49.8 million of outstanding letters of credit and we had $50.2 million available under our credit facility.

We had no short-term borrowings outstanding as of June 27, 2010 and we did not incur any short-term borrowings during the thirty-nine weeks of fiscal 2010.

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (contd.)

The following table sets forth our contractual cash obligations and commercial commitments as of June 27, 2010.

		Contractual Cash Obligations
		(in thousands)
						Less than												After
		Total				1 Year				1-3 Years				4-5 Years				5 Years
8.125% Senior Notes due June 2012
Principal		$	525,000			$	—			$	525,000			$	—			$	—
Interest			85,312				42,656				42,656				—				—
			610,312				42,656				567,656				—				—
7.75% Senior Note due April 2015
Principal			285,000				—				—				285,000				—
Interest			110,438				22,088				44,175				44,175				—
			395,438				22,088				44,175				329,175				—
Capital lease obligations (1)
Principal			4,121				1,501				2,106				514				—
Interest			1,158				593				528				37				—
			5,279				2,094				2,634				551				—
Operating leases (1)			349,946				37,337				66,595				50,779				195,235
Total contractual cash obligations		$	1,360,975			$	104,175			$	681,060			$	380,505			$	195,235
		Other Commercial Commitments
		(in thousands)
						Less than												After
		Total				1 Year				1-3 Years				4-5 Years				5 Years
Standby letters of credit (2)		$	49,762			$	49,762			$	—			$	—			$	—
Total other commercial commitments		$	49,762			$	49,762			$	—			$	—			$	—

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (contd.)

Working capital amounted to $324.5 million at June 27, 2010 and $274.4 million at September 27, 2009, and our current ratios were 2.26:1 and 1.94:1, respectively. Fluctuations in working capital and current ratios are not unusual in our industry.

Net cash provided by operating activities for the thirty-nine week periods ended June 27, 2010 and June 28, 2009 was $23.6 million and $59.3 million, respectively. Significant sources of cash provided by operating activities was non-cash depreciation and amortization and increases in long-term reserves for self insurance offset by decreases in accounts payable and other accrued liabilities.

The Dairy Transaction generated approximately $85.8 million in cash. Other significant uses of cash in the thirty-nine week period ended June 27, 2010 included capital stock redemption of $8.0 million and a dividend payment of $5.0 million.

As of June 27, 2010, we have the ability and right to pay restricted payments, including dividends, of up to $37.3 million.

We believe that operating cash flows and current cash reserves will be sufficient to meet our currently identified operating needs and scheduled capital expenditures. However, we may elect to fund some capital expenditures through capital leases, operating leases or debt financing. There can be no assurance that such debt and lease financing will be available to us in the future.

Labor Relations

Our collective bargaining agreements with the UFCW were renewed in March 2007 and extend through March 2011. Our collective bargaining agreement with the International Brotherhood of Teamsters was renewed in September 2005 and expires in September 2010. We believe we have good relations with our employees.

STATER BROS. HOLDINGS INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT FOR PURPOSES OF “SAFE HARBOR PROVISIONS” OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information contained in our filings with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by us) includes statements that are forward-looking, such as statements relating to plans for future activities. Such forward-looking information involves important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of Holdings. These risks and uncertainties include, but are not limited to, those relating to domestic economic conditions, seasonal and weather fluctuations, labor unrest, expansion and other activities of competitors, changes in federal or state laws and the administration of such laws and the general condition of the economy.

STATER BROS. HOLDINGS INC.
JUNE 27, 2010

PART I — FINANCIAL INFORMATION (contd.)

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are subject to interest rate risk on our fixed interest rate debt obligations. Our fixed rate debt obligations are comprised of the 8.125% Senior Notes due June 2012, the 7.75% Senior Notes due April 2015 and capital lease obligations. In general, the fair value of fixed rate debt will increase as the market rate of interest decreases and will decrease as the market rate of interest increases. We have not engaged in any interest rate swap agreements, derivative financial instruments or other type of financial transactions to manage interest rate risk.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 27, 2010. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 27, 2010. There were no material changes in our internal control over financial reporting during the thirteen and thirty-nine week periods ended June 27, 2010.

STATER BROS. HOLDINGS INC.
JUNE 27, 2010

PART II — OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Various legal actions and claims are pending against us in the ordinary course of business. In the opinion of management and its general legal counsel, the ultimate resolution of such pending legal actions and claims will not have a material adverse effect on our consolidated financial position or our results of operations.

In December 2008, an action was filed by Dennis M. O’Connor, et al. against Santee Dairies, Inc. (now SBM Dairies, Inc.) in the Los Angeles Superior Court. This action seeks damages for time spent by nonexempt hourly paid employees for changing into and out of sanitary uniforms. The court has certified a class in this action which is in the discovery stage and no date has been set for trial. We do not believe that any liability under this matter will have a material adverse effect on our consolidated financial position and results of operations. We are and will continue vigorously defending our rights and interests in this matter.

For a further description of legal proceedings, please refer to the footnote entitled “Litigation Matters” contained in the Notes to Consolidated Financial Statements section of our Form 10-K for the fiscal year ended September 27, 2009.

Item 1A. RISK FACTORS

Our performance is affected by inflation and deflation. In recent periods, we have experienced increases in transportation costs and the cost of products we sell in our stores. Our costs fluctuate for increases and decreases in commodities such as fuel, plastic and other product categories. As inflation has increased expenses, we have recovered, to the extent permitted by competition, the increase in expenses by increasing prices over time. However, the economic and competitive environment in Southern California continues to challenge us to become more cost efficient as our ability to recover increases in expenses through price increases is diminished. Our future results of operations will depend upon our ability to adapt to the current economic environment as well as the current competitive conditions.

The supermarket industry is a highly competitive industry, which is characterized by low profit margins. Competitive factors typically include the price, quality and variety of products, customer service, and store location and condition. We believe that our competitive strengths include our service departments, everyday low prices, breadth of product selection, high product quality, one-stop shopping convenience, attention to customer service, convenient store locations, a long history of community involvement and established long-term customer base in Southern California.

Given the wide assortment of products we offer, we compete with various types of retailers, including local, regional and national supermarket retailers, convenience stores, retail drug stores, national general merchandisers and discount retailers, membership clubs and warehouse stores. Our primary competitors include Vons, Albertsons, Ralphs, and a number of independent supermarket operators. We also face competitive pressures from existing and new “big box” format retailers. We expect Vons, Albertsons and Ralphs to continue to apply pricing and other competitive pressures as they expand the number of their stores in our market area and as they continue to take steps to both maintain and grow their customer counts. We believe our everyday low prices, breadth of product offering, which includes approximately 40,000 items offered for sale in our stores, service departments and long-term customer relationships will assist and complement our ability to compete in this increased competitive environment. We monitor competitive activity and regularly review our marketing and business strategies and periodically adjust them to adapt to changes in our trading area.

STATER BROS. HOLDINGS INC.
JUNE 27, 2010

Item 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     None

Item 3.    DEFAULTS UPON SENIOR SECURITIES

     None

Item 4.    (REMOVED AND RESERVED)

     None

Item 5.    OTHER INFORMATION

     None

Item 6.    EXHIBITS

	(a)		Exhibits
	31.1		Certification of Principal Executive Officer pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of Principal Financial Officer pursuant to Section 302 (a) of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

STATER BROS. HOLDINGS INC.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 10, 2010		/s/ Jack H. Brown   Jack H. Brown
		Chairman of the Board, President, and Chief Executive Officer
		(Principal Executive Officer)
Date: August 10, 2010		/s/ Phillip J. Smith   Phillip J. Smith
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer) (Principal Accounting Officer)