This past year marked the successful transition of The Vitamin Shoppe from a private company to a public company through our initial public offering on October 28, 2009. It had been two years since there had been an IPO in the retail sector before our debut. This successful offering confirms the proven historical successes of our company and inspires great confidence in the future. We are delighted to welcome a new shareholder base and remain committed to enhancing stockholder value.

As you review our first annual report, you will see that we have continued to grow top line sales in combination with increased profitability. The Vitamin Shoppe has shown consistent growth during many economic cycles and 2009 was the 16th consecutive year of positive comparable store sales, clearly demonstrating our resilient business model.

We continue to build on the strategies and core values which make The Vitamin Shoppe a unique place to shop. These values clearly resonate with our customers through their support of our Healthy Awards program which today encompasses 3.7 million members and represents 87% of our sales. We believe it’s the industry-leading loyalty program and reinforces that our customers are our best ambassadors of the health and wellness lifestyle that has come to define The Vitamin Shoppe.

According to Nutrition Business Journal, the VMS (vitamin, mineral and supplement) industry has shown compound annual growth of nearly 5% yearly since 2001 and is expected to continue with similar growth in the future. This organic industry growth backdrop provides Vitamin Shoppe with confidence about the future expansion of our unique concept as a leading multi-channel specialty retailer.

The Vitamin Shoppe maintains the most authoritative assortment of products both in store and online in the VMS industry. We average 8,000 unique products in our stores and more than 20,000 items online. These assortments affirm our dedication to our customers and the industry, and ensure we deliver the best selection to address the wellness needs of our customers.

The management team at The Vitamin Shoppe remains focused on the success of our overall business through superior execution in each of our disciplines. We are committed to increasing shareholder value and remain certain that our business model and brand values are fully aligned to executing our strategic plan. That, as well as our local health enthusiasts’ commitment to our customers needs, will continue to drive the success of our business. From our inception in 1977 to the end of our fiscal year as a public company, we have been focused on exceeding the needs of our customers. I am proud to tell you, our stockholders, that we achieved our objectives in 2009 and continue to focus on them for 2010 and beyond. This has been a winning formula for 32 years and I believe will continue to be successful for many years to come.

2009 Operational Highlights

In 2009 our net sales increased $73.0 million, or 12.1%, to $674.5 million for the year ended December 26, 2009, compared with $601.5 million for the year ended December 27, 2008. Comparable store sales for the year increased by 5.2%, marking the 16th consecutive year of positive growth. Income from operations increased $5.7 million, or 16.0%, to $41.3 million versus $35.6 million for the prior year. Income from operations as a percentage of net sales increased to 6.1% versus 5.9%. Net income was $12.7 million for the year ended December 26, 2009, compared with $8.2 million for the year ended December 27, 2008.

Throughout 2009, The Vitamin Shoppe continued to open stores in new and existing markets while other retailers were rethinking their store opening strategies. We maintained our financial disciplines opening 39 stores during 2009 funded with internal cash flow. In the VMS industry, there is no other retailer that has a corporate real estate story like The Vitamin Shoppe. Nationally, our focus on premier locations, ease of shopping for our customers, and store size to encompass our vast selection, is unparalleled in this industry.

Also during 2009, The Vitamin Shoppe strengthened its position as a leader in the homeopathic business. We launched our new merchandising strategy around homeopathic medicines and formulas as well as built new assortments into the category to capture these specialty customers. Homeopathic sales have significantly increased and performed beyond our expectations. We will continue to educate our associates and customers on the benefits of homeopathy.

Vitamin Shoppe, Inc. has consistently outperformed the industry in specialty supplement growth as well as growth in the sports nutrition category. Specialty supplements are among the best-selling product categories in our mix, and we continued to outperform the industry in 2009 with significant growth in a number of sub-categories including essential fatty acids (like fish oil), CoQ10, and probiotics for digestive health.

2010 outlook

The Company’s outlook for 2010 and beyond remains positive. The Vitamin Shoppe continues to invest in our health enthusiasts, making them the best trained associates in the industry. In 2010, we intend to open approximately 42 new stores and spend approximately $22 million in total capital expenditures.

Thank you for your support for our first year end as a public company. We continue to outperform the industry and our competition as we remain confident that our customer focused business model will continue to generate value for the foreseeable future. The support of you, our stockholders, of our management team, and of all our health enthusiasts who perform our vital every day business, gives me great confidence for the future of Vitamin Shoppe, Inc.

Sincerely,

Richard L. Markee

Chief Health Enthusiast
Chairman of the Board and
Chief Executive Officer