Granite City Restaurant features a full Bar and Brewery and has a growing amount of Restaurant and Bar locations in Cedar Rapids, Clive, Creve Coeur, Davenport, Eagan, East Peoria, Fargo, Fort Wayne, Kansas City, Lincoln, Madison, Maple Grove, Olathe, Omaha, Orland Park, Rockford, Rogers, Roseville, Sioux Falls, St. Cloud, St. Louis Park, Toledo, West Wichita, Wichita, Indianapolis, and South Bend.

Second Quarter Revenues Increase 145% at Granite City Food & Brewery
Unit Performance Exceeds Board Approved Budget

MINNEAPOLIS, July 23, 2004 - Granite City Food & Brewery Ltd. (Nasdaq: GCFB) today reported the results of operations for the second quarter ended June 27, 2004. Revenues for the second quarter 2004 increased approximately $4.5 million or 145% over second quarter 2003. Average restaurant sales increased to $87,654 per week during the second quarter.

For the quarter ended June 27, 2004, total revenue was $7,625,932 compared to $3,111,026 for the second quarter of 2003. The Company reported a net loss of ($369,265), or ($0.11) per share for the quarter ended June 27, 2004, compared to ($221,089), or ($0.10) per share for the second quarter of 2003. The primary reason for the increased loss is pre-opening expenses of $483,349 related to the opening of two restaurants in the second quarter of 2004.

For the twenty-six weeks ended June 27, 2004, total revenue was $13,918,803 compared to $5,981,186 for the same period last year. The Company reported a net loss of ($672,392), or ($0.27) per share for the two quarters ended June 27, 2004 compared to a net loss of ($405,711), or ($0.17) per share for the same period one year ago. The primary reason for the increased loss is the pre-opening expenses incurred with the opening of three new restaurants.

"We are very pleased with our store level bottom-line performance when compared to popular competitive products," said Steve Wagenheim, Granite City Food & Brewery's President and CEO. "Our income from restaurant operations, before pre-opening, corporate overhead, depreciation and amortization, was 18.1% of revenue for the quarter and 17.9% of revenue year to date. Additionally, we are showing a significant decrease in our corporate overhead. As a percentage of revenue, overhead decreased over last year 5.3% in the second quarter and 3.2% year to date. I believe these results showcase the strength of our concept and our ability to focus on guest satisfaction as well as shareholder satisfaction." Wagenheim continued, "It is very exciting to see our units performing so strongly going into the second half of the year because without incurring pre-opening expenses, we will have an opportunity to significantly grow our bottom line."

With declarations of preferred stock dividends valued at $108,710 and $168,732 in the second quarter of 2004 and 2003, respectively, the company's net loss available to common shareholders was ($477,975) and ($389,821) for the second quarter of 2004 and 2003, respectively. The preferred stock dividends declarations of $455,816 and $265,081 in the first half of 2004 and 2003, respectively, resulted in a net loss available to common shareholders of ($1,128,208) and ($670,792) in the first half of 2003 and 2004 respectively.

Wagenheim said the company is currently evaluating various sites with its developer to continue its expansion in the Midwest in 2005.

Granite City Food & Brewery Ltd. currently operates eight Granite City Food & Brewery casual dining restaurants featuring made-from-scratch food and handcrafted beers. Its broad menu offers traditional and regional foods served in generous portions at reasonable prices, affording guests an excellent value and great dining experience. Its first Granite City location, in St. Cloud, MN, opened in June 1999. Subsequently, the Company opened restaurants in Sioux Falls, SD, Fargo, ND, West Des Moines, IA, Cedar Rapids, IA, Davenport, IA, Lincoln, NE and Minneapolis, MN.

Certain statements made in this press release of a non-historical nature constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors include, but are not limited to, changes in economic conditions, changes in consumer preferences or discretionary consumer spending, a significant change in the performance of any existing units, the ability to obtain financing for, and complete construction of, additional restaurants at acceptable costs, our ability to implement and execute Fermentus Interruptus and the risks and uncertainties described in the Company's Form 10-KSB Report for the year ended December 28, 2003 as filed with the Securities and Exchange Commission.

-financial statements follow

GRANITE CITY FOOD & BREWERY LTD. CONDENSED STATEMENTS OF OPERATIONS

	Thirteen Weeks Ended			Twenty-six Weeks Ended
	June 29, 2003	June 27, 2004		June 29, 2003	June 27, 2004
Restaurant Revenues	$3,111,026	$7,625,932		$5,981,186	$13,918,803
Cost of Sales:
Food, beverage, & retail	909,316	2,333,702		1,728,198	4,209,817
Labor	1,061,028	2,526,463		2,046,861	4,569,684
Direct and Occupancy	653,660	2,526,463		1,316,927	2,647,193
Total Cost of Sales	2,624,004	6,242,496		5,091,986	11,426,694
Pre-opening	-	483,349		-	748,323
General & Administrative	412,806	605,478		706,423	1,194,062
Depreciation & amortization	197,159	384,970		390,195	715,010
Operating loss	(122,943)	(90,361)		(207,418)	(165,286)
Interest:
Income	23,581	221		46,882	4,192
Expense	(121,727)	(279,125)		(245,175)	(511,298)
Net Other Expenses	(98,146)	(278,904)		(198,293)	(507,106)
Less preferred stock dividends declared	(168,732)	(108,710)		(265,081)	(455,816)
Net loss available to common shareholders	($389,821)	($477,975)		($670,792)	($1,128,208)
Loss per common share, basic and diluted	($0.10)	($0.11)		($0.17)	($0.27)
Pro forma
Operating loss	($122,943)	($90,361)		($405,711)	($165,286)
Add Back:
Pre-opening	-	483,349		-	483,349
General and administrative	412,806	605,478		706,423	1,194,062
Depreciation and amortization	197,159	384,970		390,195	715,010
Income from restaurant operations before pre-opening, corporate overhead, depreciation and amortization	$487,022 - 15.7%	$1,383,436 - 18.1%		$690,907 - 11.6%	$2,492,109 - 17.9%

BALANCE SHEET DATA June 27, 2004:

Current Assets	$1,250,104
Total assets	23,788,466
Current liabilities	3,529,066
Total liabilities	18,152,689
Shareholders' equity	5,635,777

CONTACT:
Steven J. Wagenheim
President and Chief Executive Officer
(952) 525-2070 ir (612) 751-3331