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<SEC-DOCUMENT>0001193125-10-082104.txt : 20100611
<SEC-HEADER>0001193125-10-082104.hdr.sgml : 20100611
<ACCEPTANCE-DATETIME>20100413102905
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-10-082104
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100413

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INGLES MARKETS INC
		CENTRAL INDEX KEY:			0000050493
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-GROCERY STORES [5411]
		IRS NUMBER:				560846267
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			0929

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
		BUSINESS PHONE:		7046692941

	MAIL ADDRESS:	
		STREET 1:		P O BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
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<FILENAME>filename1.htm
<TEXT>
<HTML><HEAD>
<TITLE>Correspondence</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">April&nbsp;13, 2010 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chris Chase </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Staff Attorney </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mara Ransom </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Legal Branch Chief </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">H. Christopher Owings </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Assistant Director
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">United States Securities and Exchange Commission </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mail Stop 3561 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">100 F Street N.E. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington, DC 20549-7010 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Messrs. Chase
and Owings and Ms.&nbsp;Ransom: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We are in receipt of your letter dated April&nbsp;1, 2010 containing additional comments on
our Definitive Proxy Statement on Schedule 14A filed December&nbsp;22, 2009. This letter follows your original letter dated March&nbsp;8, 2010 and our initial response dated March&nbsp;29, 2010. We have repeated each of your comments in full and the
response to each such comment is noted directly below the quoted comment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Definitive Proxy Statement on Schedule 14A </U></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Executive Compensation and Other Information, page 9 </U></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Elements of Executive Compensation, page 10 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Your proposed disclosure in response to comment 11 states that Mr.&nbsp;Gaither&#146;s bonus &#147;is based on a percentage of Milkco&#146;s earnings before taxes and
payments of bonuses.&#148; Please revise to disclose this percentage or the formula used for determining this percentage. See Item&nbsp;402(b)(1)(v) of Regulation S-K. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: In our future proxy statements, we will provide the requested disclosure. By way of example, with respect to the
definitive proxy statement for our 2010 annual meeting, we would have revised the last paragraph under Cash Incentive Bonus Awards to read as follows: </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">April&nbsp;13, 2010 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Page 2 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Mr. Gaither
receives a bonus equal to 0.4% of Milkco&#146;s earnings before taxes and payment of bonuses, up to a maximum of $49,500 per year. Based on Milkco&#146;s expected financial performance, the Company anticipates Mr.&nbsp;Gaither will continue to
receive at or near the maximum bonus.&#148; </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Your proposed disclosure in response to comments 11 and 12 appears to cite inconsistent factors used in determining your executive&#146;s bonuses. Your response to
comment 11 cites &#147;Company profitability&#148; and &#147;the Executive Officer&#146;s performance for the fiscal year.&#148; In comparison, your response to comment 12 cites &#147;time of service with the Company and the likelihood that the
executive will continue to drive long-term shareholder value.&#148; Please revise your proposed disclosure to consistently disclose the specific items of corporate performance that are taken into account in making your bonus compensation decisions.
See Item&nbsp;402(b)(2)(v) of Regulation S-K. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: In our future proxy statements, we will provide
the requested disclosure. By way of example, with respect to the definitive proxy statement for our 2010 annual meeting, we would have replaced the first and second paragraphs under Cash Incentive Bonus Awards with the following language:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>&#147;Cash Incentive Bonus Awards.</I></B> With the exception of Mr.&nbsp;Robert&nbsp;P. Ingle, annual cash bonuses are
a significant component of each Executive Officer&#146;s compensation, reflecting the Company&#146;s belief that management&#146;s contribution to long-term shareholder returns comes from maximizing earnings and the potential of the Company.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other Executive Officers of the Company received a bonus, the amounts of which were subjectively determined taking into
consideration Company profitability, the Executive Officer&#146;s performance for the fiscal year to which the bonus relates, the Executive Officer&#146;s time of service with the Company and the likelihood that the Executive Officer will continue
to drive long-term shareholder value. The Company believes that compensating its Executive Officers with currently-paid cash incentives allows the Company to appropriately balance current conditions, the creation of long-term shareholder value, and
the value of an experienced, stable management team. The Company in the past maintained a stock option program that was discontinued and all options granted thereunder have expired. The Company believes that, for its particular circumstances, stock
options and other forms of compensation could act as disincentives to executives to place the performance of the Company and shareholder value ahead of personal gain. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This subjective determination of cash bonuses is made by Mr.&nbsp;Ingle, the President and Chief Operating Officer and/or the Chairman of
the Board, as appropriate, and approved by the Audit/Compensation Committee. The Audit/Compensation Committee also reviews Company profitability, the Executive Officer&#146;s performance and the entire compensation package for each Executive Officer
as part of its approval of bonuses recommended by Mr.&nbsp;Ingle, the President and Chief Operating Officer and/or the Chairman of the Board. Neither Mr.&nbsp;Ingle nor the Audit/Compensation Committee used any specific metrics or studies in
arriving in their subjective determinations.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">April&nbsp;13, 2010 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Page 3 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Security Ownership of Management and
Certain Beneficial Owners, page 14 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note your response to comment 13 of our March&nbsp;8, 2010 letter. Please further revise your proposed introductory disclosure to your beneficial ownership table to
clarify the statement that &#147;None of the beneficial owners has the right to acquire additional shares of Class&nbsp;A or Class B Common Stock within 60 days&#133; .&#148; as this appears inconsistent with the fact that Class B Common Stock can
be converted into Class&nbsp;A Common Stock at any time. In this regard, we understand that your table reflects Class&nbsp;A beneficial ownership as though all Class B has been converted, but this is not apparent in the context of your proposed
introductory paragraph. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: In our future proxy statements, we will modify the paragraph
immediately preceding the table so the entire paragraph reads as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;The following table sets forth the number of
shares of Class&nbsp;A Common Stock and Class B Common Stock owned beneficially as of September XX, 20XX, by each director and nominee for director, each of the executive officers of the Company named in the Summary Compensation Table, all directors
and executive officers as a group, and each person known by the Company to be a beneficial owner of more than five percent (5%)&nbsp;of either class of the outstanding Common Stock. The table also sets forth the percentage of each class of Common
Stock held by such stockholders. As of September XX, 20XX, there were 12,888,608 shares of Class&nbsp;A Common Stock and 11,623,651 shares of Class B Common Stock outstanding. The number of Class&nbsp;A shares owned beneficially assumes the
conversion of each share of issued and outstanding Class B stock beneficially owned plus the current number of issued and outstanding Class&nbsp;A shares beneficially owned.<B> </B>Except as otherwise indicated, each beneficial owner has sole voting
and investment power with respect to the Common Stock listed<B>. </B>Except for the right to convert shares of Class B to shares of Class&nbsp;A Common Stock on a one-for-one basis, none of the beneficial owners has the right to acquire additional
shares of Class&nbsp;A or Class B Common Stock within 60 days of September XX, 20XX.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Transactions with Related Persons, page 16 </U>
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note your response to comment 14 of our March&nbsp;8, 2010 letter. You reference &#147;internal ethics standards&#148; in your response. Please revise to elaborate
upon the content of these standards so that it is clear how they will assist the respective Committee in considering the related party transaction for approval. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Response</U>: In future proxy statements, we will add a new paragraph (modified from our March&nbsp;29 response) following the first
paragraph in the section TRANSACTIONS WITH RELATED PERSONS, as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Upon advance notification of a possible
transaction with a related person, the Executive Committee or Audit/Compensation Committee will review the transaction for propriety, evidence of arm&#146;s-length terms, and compliance with the Company&#146;s Code of Ethics (described under the
heading <B>&#147;ELECTION OF DIRECTORS &#150; Code of Ethics&#148;</B>). The Code of Ethics establishes guidelines with respect to (among other things) conflicts of </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">April&nbsp;13, 2010 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Page 4 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">interest, integrity and
objectivity. If necessary, outside counsel will be contacted to determine compliance with applicable law and regulation. If a transaction is approved by the Executive Committee or Audit/Compensation </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Committee, then the transaction is submitted to the full Board of Directors for ratification of the decision prior to execution of the
transaction.&#148; </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unless otherwise noted above, we will make the changes discussed in future Definitive Proxy Statement filings. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company acknowledges that: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1) the Company is responsible for the adequacy and accuracy of the disclosure in its filings with the Commission; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2) the staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with
respect to any filing; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3) the Company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you have any questions or comments
regarding the foregoing responses, please contact the undersigned at 828-669-2941, Ext. 223. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Very truly yours,</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px">&nbsp;</P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ingles Markets, Incorporated</FONT></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Ronald B. Freeman</FONT></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ronald B. Freeman</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief
Financial Officer</FONT></P></TD></TR></TABLE></DIV> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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