(LOS ANGELES) — Unified Western Grocers, Inc., the largest wholesale grocery distributor in the Western United States, announced a significant increase in earnings and sales for the year ended October 2, 2004 (“2004 period”).

The Los Angeles-based cooperative achieved earnings of $32.7 million before patronage dividends and income taxes for the 2004 period, a 29.6 percent improvement over the period ending September 27, 2003 (“2003 period”).  Net earnings for the Company in the 2004 period were $7.4 million, an increase of 40.3 percent over the prior year.  In fiscal 2004, the Company achieved net sales of $3.04 billion, an 11.3 percent increase over the 2003 period.

The Company’s operations generated cash flow of approximately $62.7 million in the 2004 period.  The availability of operating cash enabled the Company to reduce total outstanding debt by $43.2 million to $201.3 million at October 2, 2004.  Since 2002, the Company has reduced its outstanding debt by $104.5 million – and has done so without selling any significant corporate assets.  The combination of improved earnings, the Company’s ongoing Equity Enhancement program and patronage dividends reinvested in the Company increased shareholders’ equity to $119.2 million for the 2004 period compared to $101.4 million for the 2003 period.

The Company attributed its strong earnings performance to the combined strength of a growing membership and the quality services provided by the wholesaler that enhance its retail members’ competitiveness in the marketplace, as well as a continuing productivity improvement program at each of the Company’s five major distribution centers.  The Company also achieved improved profitability in its specialty foods subsidiary and fast-growing perishable products division.

Sales growth in the 2004 period was driven by a combination of a 53-week accounting year, a strike/lockout against three Southern California retail chains, new business obtained during the year, new stores opened by existing members and increased same-store sales at existing members’ retail locations.  When one-time sales gains from the 53rd week and the strike are excluded from the 2004 total, the Company’s net sales increased an estimated 4.6 percent over the prior year.

“We are extremely pleased with our results for 2004,” said Al Plamann, president and chief executive officer, Unified Western Grocers, Inc.  “While the strike helped many of our Southern California retail members generate additional sales over a 20-week period, many of these retailers were successful at retaining this additional business long after the strike had ended.

“Our members’ core retail business also continued to experience steady growth in 2004,” said Plamann.  “At Unified, we supported this growth with an expanded specialty products offering, continued emphasis on perishables, investments in retail technology and improvements in the efficiency and productivity of our distribution system.  We are well positioned for continued success in 2005.”

Unified Western Grocers, Inc. is a retailer-owned wholesale grocery distributor that supplies independent retailers throughout the Western United States.  Unified and its subsidiaries, which generated approximately $3.04 billion in sales during fiscal 2004, offer independent retailers all the resources they need to compete in the supermarket industry.

An online version of Unified’s Form 10-K, filed with the Securities and Exchange Commission, is available on Unified’s website at www.uwgrocers.com and at www.sec.gov/edgar.shtml.

Safe Harbor Statement

This press release contains forward-looking statements about the future performance of Unified Western Grocers, Inc. based on Management’s assumptions and beliefs in  light of information currently available to it.  There are a variety of factors that could cause actual and future results to differ materially from those anticipated by the statements made above.  These factors are outlined in the Company’s Form 10-K and other interim reports filed with the Securities and Exchange Commission.  Furthermore, Unified undertakes no obligation to update, amend or clarify forward-looking statements whether as a result of new information, future events, or otherwise.

Unified Western Grocers, Inc.

(dollars in thousands)

	For the the fiscal year-ended
	October 2, 2004	September 27, 2003
Net sales	$3,039,953	$2,731,442
Operating income	$50,040	$45,840
Earnings before patronage     dividends and income taxes	$32,720	$25,249
Patronage dividends	$20,742	$16,612
Net earnings	$7,406	$5,279