Luby's, Inc.

2211 Northeast Loop 410
San Antonio, Texas 78217-4673
210/654-9000

Mailing Address:
P. O. Box 33069
San Antonio, Texas 78265-3069

November 2, 2000

Dear Fellow Shareholders:

We have recently announced exciting initiatives as part of our ongoing effort to
improve operating performance and work more closely with our store managers to
reverse our recent sales and earnings trends.  These initiatives, which are
discussed below, come after extensive interviews with our restaurant managers
and field executives initiated by the Board and management.

We will be sending you a detailed proxy statement and proxy card in the next few
weeks for the 2001 Annual Meeting of Luby's Shareholders. As you may be aware, a
small group of Luby's shareholders, calling themselves the Committee of
Concerned Luby's Shareholders, has indicated that they intend to solicit your
vote for a slate of candidates to be elected as directors of your company at the
2001 Annual Meeting.  YOUR BOARD OF DIRECTORS STRONGLY URGES YOU NOT TO SIGN OR
RETURN ANY PROXY CARD SENT TO YOU BY THE COMMITTEE OF CONCERNED LUBY'S
SHAREHOLDERS.


OUR INITIATIVES TO IMPROVE OPERATING PERFORMANCE
_________________________________________________

Your Board is committed to the creation of shareholder value.  We are convinced
that this can best be accomplished by improving our operations and creating
sales momentum.

As part of our initiatives, we have unified all of the company's field
operations and support functions under the direction of Darrell Wood, who has
been promoted to the newly created position of Senior Vice President-Head of
Field Operations.  Mr. Wood has been with Luby's for 16 years.  He began his
career as a Luby's restaurant manager and most recently served as Senior Vice
President-Operations for the San Antonio and Austin markets.  In his new
position, he has responsibility for all restaurant operations, including support
activities such as purchasing, management recruiting and training, quality
assurance, and business development.  We believe that this organizational change
will provide our managers with better support and an environment where they can
be more successful.

We have changed our restaurant management compensation plan effective
November 1, 2000. The new plan provides managers with greater incentives in the
form of significant financial participation in the profits of their restaurants
and a bonus for improved sales performance.  The new restaurant management
compensation plan was developed over the past several months with significant
input from various levels of field management, corporate personnel, and the
Board of Directors.  We expect that this plan will help us retain and
incentivize our managers during this difficult period.

We have also initiated a new marketing effort targeted at generating additional
sales and reenergizing the Luby's dining experience.  This initiative will focus
on thoughtful promotions demonstrating value; tailored marketing campaigns for
various markets; and new, thorough product testing programs designed to create
new menu items and products.  As a part of our new marketing effort, on
November 25 we will begin an integrated campaign to encourage dining in our
restaurants.  This campaign will include broadcast-advertising support in our
major markets coupled with coupon incentives.

In light of the departure of Barry Parker, the Board has formed a search
committee and will be hiring an executive search firm to find a new president
and chief executive officer.  Our current challenges are made more difficult
without a permanent chief executive officer.  We are working quickly to identify
a candidate with the experience and ability to lead our company, and we will
look both inside and outside the company.

The Board has also made the difficult but prudent decision to suspend payment of
quarterly dividends.  This decision was necessary to retain available cash in
order to provide flexibility in implementing operational changes and to prevent
adding to the company's leverage during this challenging period.  Future
dividend policy will be determined by the Board based on, among other things,
the company's operating results and cash requirements.

Your Board of Directors is committed to the creation of stockholder value by
reversing recent trends.  Please do not return any proxy cards from the
Committee of Concerned Luby's Shareholders.  Luby's is in the process of
preparing its own proxy materials, which will be accompanied by a WHITE proxy
card that you may use to support your Board's nominees.

This letter is submitted on behalf of your Board of Directors, some of whom will
be nominees for reelection.  The name, occupation, and Luby's shareholdings of
each of the company's current directors is provided on the enclosed.

Thank you for your continued support and interest.

Sincerely,

DAVID B. DAVIS
_____________________

David B. Daviss
Chairman of the Board

Enclosure

Luby's, Inc.

Proxy Materials

The Company has not yet set a date for its 2001 Annual Meeting of Shareholders,
and you are not being asked to give any proxies or take any other action with
respect to the meeting at this time.  The Company will be filing a proxy
statement concerning the solicitation of proxies by the Board of Directors in
connection with the election of directors and other issues to be decided at the
2001 Annual Meeting of Shareholders in the next few weeks.  As required by the
Securities and Exchange Commission ("SEC"), you are urged to read the proxy
statement when it becomes available because it will contain important
information.  After it is filed with the SEC, you will be able to obtain the
proxy statement free of charge at the SEC's website (www.sec.gov).  A proxy
statement will also be made available for free to any shareholder of the Company
who makes a request to Susan Beggs, Assistant Vice President-Shareholder
Relations, at (210) 654-9000 or 2211 Northeast Loop 410, P.O. Box 33069, San
Antonio, Texas 78265-3069.

Information Concerning Participants

Under the rules of the SEC, this letter may be deemed to be a solicitation by
the Company.  Under applicable SEC rules, the following individuals, all of whom
are directors of the Company, may be deemed to be participants in the
solicitation of proxies on behalf of the Company:  David B. Daviss (Chairman of
the Board of Directors and acting Chief Executive Officer of the Company),
Ronald K. Calgaard (Chief Operating Officer of Austin Calvert & Flavin, Inc.,
investment advisors), Lauro F. Cavazos (Professor of Family Medicine and
Community Health, Tufts University School of Medicine), Judith B. Craven
(Physician Administrator), Arthur R. Emerson (Chairman and Chief Executive
Officer of Groves Rojas Emerson, an advertising and public relations firm),
Roger R. Hemminghaus (Chairman Emeritus of Ultramar Diamond Shamrock
Corporation), Robert T. Herres (Chairman of USAA, insurance and financial
services), John B. Lahourcade (investor and retired Chairman of the Board of
Directors), Walter J. Salmon (Emeritus Professor, Harvard Graduate School of
Business), Joanne Winik (President, General Manager and a director of KLRN-TV,
San Antonio, Texas), and George H. Wenglein (investor and retired Chairman of
the Board of Directors and a founder of the Company).

At November 1, 2000, each of the directors may be deemed to be the beneficial
owner of the number of shares of the Company's common stock listed after his or
her name:  Daviss - 7,692; Calgaard - 0; Cavazos - 6,550; Craven - 1,500;
Emerson - 2,237; Hemminghaus - 5,966; Herres - 1,786; Lahourcade - 189,405;
Salmon - 7,768; Winik - 5,892; and Wenglein - 730,000.