Harry’s Farmers Market, Inc. (Nasdaq: Hary), on Friday, reported results for the second quarter of the year ending August 2, 2000.

The Company reported its net loss applicable to common shareholders of approximately ($1,141,000) or ($0.18) per share for the thirteen weeks ended August 2, 2000, compared to a net loss applicable to common shareholders of approximately ($194,000) or ($0.03) per share for the quarter ended August 4, 1999. Net sales improved to approximately $35,277,000 for the thirteen weeks ended August 2, 2000, from approximately $35,160,000 for the same period last year. The $117,000 or 0.3% increase in sales was due to an improvement in same store sales.

The Company also reported its net loss applicable to common shareholders of approximately ($2,302,000) or ($0.37) per share for the first half of fiscal 2001, compared to a net loss applicable to common shareholders of approximately ($414,000) or ($0.07) during the first half of fiscal 2000. Net sales improved to approximately $70,188,000 during the first half of fiscal 2001 compared to approximately $68,834,000 during the first half of fiscal 2000. The improvement in sales during the first half of fiscal 2001 was $1,354,000 or 2.0% over the first half of 2000, which was due to improvements in same store sales

“The second quarter results show that we have been unable to maintain the positive momentum towards profitability that we had hoped for,” said Harry Blazer, Chief Executive Officer and President of the Company. “Management is currently working on initiatives designed to get us back on track. As a part of this effort, we have effected a significant management overhaul, which has included the chief operating officer, the director of store operations, the director of merchandising, the director of marketing and others. With the assistance of Peter Barr, a member of our Board of Directors and the Chairman of Hazelwood Foods, PLC, we are working to bring aboard a team with extensive experience in all aspects of the supermarket industry.”

Harry’s owns and operates concept megastores and convenience stores specializing in perishable food products – fresh fruits and vegetables; fresh meats, poultry and seafoods; fresh baked goods; freshly made ready-to-eat, ready-to-heat and ready-to-cook prepared foods; and deli, cheese and dairy products. Harry’s stores also feature lines of specialty, hard-to-find and gourmet nonperishable food products that are complimentary to the fresh food offerings. In addition, Harry’s stores carry kitchen-oriented housewares, floral items, natural health and beauty care items, and a full line of wines and imported and domestic beers. Harry’s bakery and prepared foods departments are fully-integrated food manufacturing operations. Harry’s presently owns and operates three megastores and five Harry’s In A Hurry convenience stores in the Atlanta, Georgia metropolitan area.

Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based on management’s belief, as well as assumptions made by and information currently available to management, pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Harry’s Farmers Market, Inc. may experience actual results that differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including the risk that funding may be inadequate to cover future plans of Harry’s, the inherent difficulties in opening new locations, the risk of market acceptance for new locations, unforeseen costs and expenses in implementing new systems and controls, the impact of certain litigation, the cost and timing of implementing various initiatives, the availability of human resources and other factors, including, but not limited to, those identified in Harry’s Farmers Market, Inc.’s Annual Report on Form 10-K for the most recently ended fiscal year.

             Harry's Farmers Market, Inc. and Subsidiaries
Financial Highlights
(Unaudited)

(Amounts in thousands, except per share data)

Three Months Ended Three Months Ended
August 2, 2000 August 4, 1999

Net Sales $35,277 $35,160
Cost of Goods Sold 25,245 24,967
Gross Profit 10,032 10,193
Operating Expenses 10,424 10,013
Income (loss) from Operations (392) 180
Interest expense net of other income (749) (337)
Loss applicable to common
Shareholders (1,141) (194)
Loss per Common Share $ (0.18) $ (0.03)

Six Months Ended Six Months Ended
August 2, 2000 August 4, 1999

Net Sales $70,188 $68,834
Cost of Goods Sold 50,176 49,306
Gross Profit 20,012 19,528
Operating Expenses 20,598 20,039
Loss from Operations (586) (511)
Interest expense net of other
income (1,428) 171
Loss applicable to common
Shareholders (2,302) (414)
Loss per Common Share $ (0.37) $ (0.07)