SAFEWAY INC, 10-Q, 1994-05-06

SAFEWAY INC
10-Q, 1994-05-06
GROCERY STORES

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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - --- EXCHANGE ACT OF 1934

For the quarterly period ended March 26, 1994

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission file number 1-41
----

SAFEWAY INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
Delaware 94-3019135
-------- ----------
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)

Fourth and Jackson Streets
Oakland, California 94660
------------------- -----
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (510) 891-3000
--------------
</TABLE>

Not Applicable
--------------
(Former name, former address and former fiscal year,
if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO .
--- ---

As of May 2, 1994, there were issued and outstanding 102,673,046 shares
of the registrant's common stock.
<PAGE> 2
SAFEWAY INC. AND SUBSIDIARIES

INDEX

<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION (UNAUDITED) Page
- - ------ --------------------------------- ----
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of 3
March 26, 1994 and January 1, 1994

Condensed Consolidated Statements of Operations 5
for the 12 weeks ended March 26, 1994 and
March 27, 1993

Condensed Consolidated Statements of Cash Flows 6
for the 12 weeks ended March 26, 1994 and
March 27, 1993

Notes to the Condensed Consolidated Financial 7
Statements

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 11
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PART II OTHER INFORMATION
- - ------- -----------------

ITEM 1. LEGAL PROCEEDINGS 14

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
</TABLE>

2
<PAGE> 3
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)

<TABLE>
<CAPTION>
March 26, January 1,
1994 1994
--------- ---------
<S> <C> <C>
ASSETS
- - ------
Current assets:
Cash and equivalents $ 36.3 $ 118.4
Receivables 124.9 119.5
Merchandise inventories 1,092.8 1,128.1
Prepaid expenses and other 93.1 98.0
-------- --------
Total current assets 1,347.1 1,464.0
-------- --------
Property 4,202.2 4,207.3
Less accumulated depreciation
and amortization 1,686.2 1,647.2
-------- --------
Property, net 2,516.0 2,560.1
Goodwill, net of amortization of $87.5
and $86.2, respectively 341.0 347.6
Prepaid pension costs 308.3 307.1
Investments in unconsolidated affiliates 313.9 303.4
Other assets 108.9 92.5
-------- --------
Total assets $4,935.2 $5,074.7
======== ========
</TABLE>

(Continued)

3
<PAGE> 4

SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(in millions, except per share amounts)
(Unaudited)

<TABLE>
<CAPTION>
March 26, January 1,
1994 1994
---------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Current liabilities:
Current maturities of notes
and debentures $ 144.9 $ 188.6
Current obligations under capital leases 19.2 19.3
Accounts payable 799.1 880.5
Accrued salaries and wages 191.1 216.3
Other accrued liabilities 436.4 406.7
-------- --------
Total current liabilities 1,590.7 1,711.4
-------- --------
Long-term debt:
Notes and debentures 2,238.2 2,287.7
Obligations under capital leases 187.3 193.6
-------- --------
Total long-term debt 2,425.5 2,481.3
Deferred income taxes 143.6 145.5
Accrued claims and other liabilities 352.6 353.6
-------- --------
Total liabilities 4,512.4 4,691.8
-------- --------
Stockholders' equity:
Common stock: par value $.01 per share;
300 shares authorized; 102.3 and 101.5
shares outstanding, respectively 1.0 1.0
Additional paid-in capital 629.1 624.5
Cumulative translation adjustments 32.4 39.0
Accumulated deficit (239.7) (281.6)
-------- --------
Total stockholders' equity 422.8 382.9
-------- --------
Total liabilities and stockholders' equity $4,935.2 $5,074.7
======== ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

4
<PAGE> 5
SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)

12 Weeks Ended
---------------------
March 26, March 27,
1994 1993
--------- ---------
<S> <C>
Sales $ 3,491.8 $ 3,404.6
Cost of goods sold (2,540.1) (2,478.9)
--------- ---------
Gross profit 951.7 925.7
Operating and administrative expenses (834.3) (883.4)
--------- ---------
Operating profit 117.4 42.3
Interest expense (55.8) (63.2)
Equity in earnings of unconsolidated affiliates 10.5 16.1
Other income, net 1.4 1.7
--------- ---------
Income (loss) before income taxes 73.5 (3.1)
Income taxes (31.6) 1.4
--------- ---------
Net income (loss) $ 41.9 $ (1.7)
========= =========
Primary and fully diluted earnings (loss) per common
share and common share equivalent $ 0.34 $ (0.02)
========= =========
Weighted average common shares and common
share equivalents:
Primary 124.0 100.3
Fully diluted 124.9 100.4
</TABLE>

See accompanying notes to condensed consolidated financial statements.

5
<PAGE> 6
SAFEWAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)

<TABLE>
<CAPTION>
12 Weeks Ended
------------------------
March 26, March 27,
1994 1993
--------- ---------
<S> <C> <C>
CASH FLOW FROM OPERATIONS:
Net income (loss) $ 41.9 $ (1.7)
Reconciliation to net cash flow from operations:
Depreciation and amortization 74.7 76.3
LIFO expense 2.3 3.2
Equity in undistributed earnings of unconsolidated
affiliates (10.5) (16.1)
Other 10.3 (0.6)
Change in working capital items:
Receivables and prepaids (2.3) 4.3
Inventories at FIFO cost 20.8 9.3
Payables and accruals (87.7) (30.4)
Income taxes 16.8 (13.6)
--------- ---------
Net cash flow from operations 66.3 30.7
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Cash paid for property additions (55.9) (43.4)
Proceeds from sale of property 5.3 10.8
Other (22.9) (7.4)
--------- ---------
Net cash flow used by investing activities (73.5) (40.0)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Additions to short-term borrowings -- 26.0
Payments on short-term borrowings (34.0) (14.9)
Additions to long-term borrowings 24.9 61.4
Payments on long-term borrowings (69.4) (97.1)
Net proceeds from sale of common stock 4.6 0.5
Other (1.0) 1.1
--------- ---------
Net cash flow used by financing activities (74.9) (23.0)
--------- ---------
Decrease in cash and equivalents (82.1) (32.3)

CASH AND EQUIVALENTS:
Beginning of period 118.4 96.6
--------- ---------
End of period $ 36.3 $ 64.3
========= =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

6
<PAGE> 7
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE A - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Safeway Inc.
and subsidiaries ("Safeway" or the "Company") for the 12 weeks ended March 26,
1994, and March 27, 1993, are unaudited and, in the opinion of management,
contain all adjustments that are of a normal and recurring nature necessary to
present fairly the financial position and results of operations for such
periods. The condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
contained in the Company's 1993 Annual Report to Stockholders. The results of
operations for the 12 weeks ended March 26, 1994, are not necessarily
indicative of the results expected for the full year.

NOTE B - INVENTORY

The results of operations reflect the application of the LIFO method of valuing
certain domestic inventories, based upon estimated annual inflation ("LIFO
Indices"). LIFO expense was $2.3 million and $3.2 million in the first quarter
of 1994 and 1993. Actual LIFO Indices are calculated during the fourth quarter
of the year based upon a statistical sampling of inventories.

NOTE C - INVESTMENTS IN AFFILIATES

Investments in affiliates consist of a 35% interest in The Vons Companies, Inc.
("Vons") which operates approximately 345 supermarkets located mostly in
southern California and a 49% interest in Casa Ley, S.A. de C.V. which operates
57 stores in western Mexico.

The Company's recorded investment in Vons at March 26, 1994, was $231.6
million, including goodwill of $47.9 million that is being amortized over a 40
year life. Income from Safeway's equity investment in Vons, recorded on a
one-quarter delay basis, was $6.3 million for the first quarter of 1994
compared to $9.7 million for the same period in 1993.

At March 26, 1994, the Company's 15.1 million shares of the outstanding common
stock of Vons had an aggregate market value of $264.7 million as quoted on the
New York Stock Exchange.

7
<PAGE> 8
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE C - INVESTMENTS IN AFFILIATES (CONTINUED)

Summarized financial information derived from Vons' financial reports to the
Securities and Exchange Commission is as follows (in millions):

January 2, January 3,
1994 1993
---------- ----------
<S> <C> <C>
FINANCIAL POSITION
Current assets $ 473.4 $ 464.7
Property and capital leases 1,215.6 1,032.2
Other assets 560.5 569.1
-------- --------
Total assets $2,249.5 $2,066.0
======== ========
Current liabilities $ 542.7 $ 556.5
Long-term obligations 1,181.9 1,016.3
Shareholders' equity 524.9 493.2
-------- --------
Total liabilities and
shareholders' equity $2,249.5 $2,066.0
======== ========
</TABLE>

<TABLE>
<CAPTION>
12 Weeks Ended 13 Weeks Ended
January 2, January 3,
1994 1993
-------------- --------------
<S> <C> <C>
RESULTS OF OPERATIONS
Sales $ 1,170.5 $ 1,359.6
Cost of sales and other expenses (1,151.6) (1,332.0)
--------- ---------
Income before extraordinary item 18.9 27.6
Extraordinary item -- (0.1)
--------- ---------
Net income $ 18.9 $ 27.5
========= =========
</TABLE>

Vons reported that its decline in net income for the quarter ended January 2,
1994, reflected the impact of both a 7.7% decline in same-store sales and an
extra week in the quarter ended January 3, 1993.

8
<PAGE> 9
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE D - FINANCING

Notes and debentures were composed of the following at March 26, 1994, and
January 1, 1994 (in millions):
<TABLE>
<CAPTION>
March 26, 1994 January 1, 1994
------------------------ -----------------------
Long-term Current Long-term Current
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Bank Credit Agreement, secured $ 30.0 $ 35.0
Working Capital Credit Agreement, secured 309.6 340.3
9.30% Senior Secured Debentures due 2007 100.0 100.0
10% Senior Notes due 2002, unsecured 74.0 74.0
10% Senior Subordinated Notes due 2001, secured 300.0 300.0
9.875% Senior Subordinated Debentures due 2007, secured 150.0 150.0
9.65% Senior Subordinated Debentures due 2004, secured 300.0 300.0
9.35% Senior Subordinated Notes due 1999, secured 250.0 250.0
Mortgage notes payable, secured 482.3 $ 63.1 494.5 $ 72.8
Other notes payable, unsecured 242.3 81.8 243.9 81.8
Other bank borrowings, unsecured -- -- -- 34.0
-------- ------ -------- ------
$2,238.2 $144.9 $2,287.7 $188.6
======== ====== ======== ======
</TABLE>

Note B to the Company's consolidated financial statements on pages 25 through
27 of the 1993 Annual Report to Stockholders, and the information appearing
under the caption "Terms of Outstanding Indebtedness" in Item 1 of the
Company's 1993 Form 10-K describe all of the material restrictive covenants of
the Company's subordinated indebtedness.

In April 1994, the Company revised the Bank Credit Agreement and Working
Capital Credit Agreement (together the "Bank Agreements"). The revisions
extend the maturity of the Bank Agreements by one year to 1998. The revisions
also include a $150 million voluntary reduction of the borrowing capacity under
the Bank Agreements, which decreases the annual commitment fees by $0.6 million
and leaves remaining commitments of $1.25 billion. The revisions permit the
Company to purchase its Senior Subordinated Debt up to $300 million per year,
or $500 million over the life of the Bank Agreements. Since the end of the
first quarter through May 2, 1994, using cash from operations and borrowings
under the Bank Agreements, Safeway purchased $102.9 of Senior Subordinated
Debt, consisting of $18.1 million of 10% Senior Subordinated Notes due 2001,
$33.0 million of 9.875% Senior Subordinated Debentures due 2007, $36.9 million
of 9.65% Senior Subordinated Debentures due 2004, and $14.9 million of 9.35%
Senior Subordinated Notes due 1999.

Since the end of the first quarter through May 2, 1994, the Company also
purchased $9.5 million of 10% Senior Notes due 2002 using cash from
operations and borrowings under the Bank Agreements.

The Company will record extraordinary losses for the amount of premiums paid to
purchase debt and the write-off of related deferred finance costs. The Company
may from time to time make additional purchases of its Senior Subordinated Debt
and Senior Debt through privately negotiated or open market transactions.

9
<PAGE> 10
SAFEWAY INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE E - CONTINGENCIES

Note H to the Company's consolidated financial statements, under the caption
"Legal Matters" on pages 32 and 33 of the 1993 Annual Report to Stockholders,
provides information on significant claims and litigation in which the Company
is involved. In April 1994, the parties filed, and the court granted
preliminary approval of, a proposed voluntary consent decree in settlement of
the class action lawsuits reported in Note H. The settlement covers over
20,000 current and former employees at more than 200 store locations in
Northern California and provides for a fund of $5.0 million for payments to
certain class members and an additional payment of $2.5 million in attorneys'
fees and costs. The consent decree includes provisions for enhancing the
Company's equal opportunity programs by setting additional affirmative action
goals for certain retail positions, tracing the distribution of hours of work
and training opportunities, and continuing a system for posting job vacancies.
The court has scheduled a hearing in June 1994 to determine the fairness
of the proposed settlement.

10
<PAGE> 11
SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Safeway's net income for the first quarter (12 weeks) ended March 26, 1994, was
$41.9 million ($0.34 per share) compared to a loss of $1.7 million ($0.02 per
share) in the first quarter of 1993. The first-quarter 1993 results were
reduced by a $27.5 million after-tax charge ($0.24 per share) for a voluntary
employee buyout program in Safeway's Alberta, Canada division.

Sales were $3.5 billion in the first quarter of 1994 compared to sales of $3.4
billion in the same period of 1993. Same-store sales increased 4.2% in the
first quarter of 1994 (excluding the effect of the Canadian exchange rate),
continuing a six-quarter trend of improving same-store sales. Despite low food
price inflation, Safeway achieved sales growth in the first quarter of 1994.
The savings from efforts to lower the Company's fundamental cost of doing
business were reinvested into improved service and more competitive pricing.
The Company has simplified work methods in the stores, streamlined the support
functions at corporate headquarters and retail division offices, achieved labor
cost parity through competitive labor contracts signed in Alberta, and improved
inventory management.

Gross profit was 27.26% of sales in the first quarter of 1994 compared to
27.19% in the first quarter of 1993. LIFO expense decreased to $2.3 million in
the first quarter of 1994 from $3.2 million in the first quarter of 1993,
reflecting the Company's expectation of low inflation for the year.

Operating and administrative expense was 23.89% of sales in the first quarter
of 1994 compared to 25.95% of sales in the first quarter of 1993. Excluding
the $50.0 million pretax charge for the 1993 Alberta buyout, operating and
administrative expense was 24.48% of sales in the first quarter of 1993.
Higher sales, competitive labor contracts in Alberta, and programs to control
expenses have combined to reduce operating and administrative expense as a
percent of sales in 1994.

Interest expense fell $7.4 million to $55.8 million in the first quarter of
1994, primarily because of reduced short-term borrowings and lower short-term
interest rates. Short-term borrowings decreased due to increased operating
cash flow and improved working capital management.

Equity in earnings of unconsolidated affiliates, recorded on a one-quarter
delay basis, decreased to $10.5 million in the first quarter of 1994 from $16.1
million in the first quarter of 1993 primarily because of reduced income from
Safeway's 35% equity investment in Vons, the leading supermarket chain in
southern California. Vons reported that its net income for the quarter ended
January 2, 1994, reflected the impact of both a 7.7% decline in same-store
sales and an extra week in the prior year. Income from Safeway's 49% equity
investment in Casa Ley was down slightly in the first quarter of 1994 compared
to 1993 due to changes in the competitive environment in Mexico.

11
<PAGE> 12
SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND FINANCIAL RESOURCES

Since the end of the first quarter through May 2, 1994, the Company also
purchased $9.5 million of 10% Senior Notes due 2002 using cash from
operations and borrowings under the Bank Agreements.

Operating cash flow, as presented below, provides a measure of the Company's
ability to generate cash to pay interest and fixed charges, and facilitates the
comparison of Safeway's results of operations with those of companies having
different capital structures. Safeway's computation of operating cash flow is
as follows (dollars in millions):
<TABLE>
<CAPTION>
12 Weeks Ended
---------------------------
March 26, March 27,
1994 1993
-------- --------
<S> <C> <C>
Income (loss) before income taxes $ 73.5 $ (3.1)
LIFO expense 2.3 3.2
Interest expense 55.8 63.2
Depreciation and amortization 74.7 76.3
Equity in earnings of unconsolidated affiliates (10.5) (16.1)
------ ------
Operating cash flow $195.8 $123.5
====== ======
As a percent of sales 5.61% 3.63%
====== ======
As a multiple of interest expense 3.51 1.95
====== ======
</TABLE>

Excluding the Alberta buyout charge, operating cash flow for the first quarter
of 1993 was 5.10% of sales and a 2.75 multiple of interest expense.

Cash flow from operations supplemented by credit available under the Bank
Agreements are the Company's primary sources of short-term liquidity. At March
26, 1994, the Company had available unused borrowing capacity of $907.5 million
under the Bank Agreements. After the April revisions to the Bank Agreements,
which decreased the commitments thereunder to $1.25 billion, unused borrowing
capacity was $757.5 million. Management believes that this amount is adequate
to meet the Company's requirements.

12
<PAGE> 13
SAFEWAY INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAPITAL EXPENDITURE PROGRAM

A key component of the Company's long-term strategy is its capital expenditure
program. In order to enhance the quality of projects and to focus on near-term
operating challenges, Safeway scaled back its capital expenditure program in
1993, investing $290.2 million to open 14 stores and complete 45 major
remodels. During 1994, the Company expects to invest approximately $400
million for capital expenditures, while opening 15 to 20 new stores and
completing 50 to 60 remodels. For the first 12 weeks of 1994, capital
expenditures totaled $48.2 million. Safeway expects to increase its level of
capital expenditures gradually over time.

13
<PAGE> 14
SAFEWAY INC. AND SUBSIDIARIES

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

14
<PAGE> 15
SAFEWAY INC. AND SUBSIDIARIES

ITEM 6(a). EXHIBITS

<TABLE>
<S> <C>
Exhibit 4(i).1 Form of Warrant Agreement between the Company and The
First National Bank of Boston as Warrant Agent relating
to Warrants to purchase shares of common stock of the
Company (incorporated by reference to Exhibit 4.5 to
Registration Statement No. 33-9913) and Amendment to the
Warrant Agreement between the Company and The First
National Bank of Boston as Warrant Agent relating to
Warrants to purchase shares of common stock of the
Company (incorporated by reference to Exhibit 4(i).6 to
Registrant's Form 10-K for the year ended December 30,
1989).

Exhibit 4(i).2 Specimen Warrant (incorporated by reference to Exhibit
4(i).5 to Registration Statement No. 33-33388).

Exhibit 4(i).3 Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4(i).2 to Registration Statement
No. 33-33388).

Exhibit 4(i).4 Registration Rights Agreement dated November 25, 1986,
between the Company and certain limited partnerships
(incorporated by reference to Exhibit 4(i).4 to
Registration Statement No. 33-33388).

Exhibit 4(i).5 Indenture dated as of November 20, 1991, among the
Company and The Bank of New York as Trustee relating to
the Company's Senior Subordinated Debt Securities
(incorporated by reference to Exhibit 4.1 of Registrant's
Form 8-K dated November 13, 1991).

Exhibit 4(i).6 Form of Officers' Certificate establishing the terms of
the 10% Senior Subordinated Notes due December 1, 2001,
including the form of Note (incorporated by reference to
Exhibit 4.4 of Registrant's Form 8-K dated November 13,
1991).

Exhibit 4(i).7 Form of Officers' Certificate establishing the terms of
the 9.65% Senior Subordinated Debentures due January 15,
2004, including the form of Debenture (incorporated by
reference to Exhibit 4.1 of Registrant's Form 8-K dated
January 15, 1992).

Exhibit 4(i).8 Indenture dated as of February 1, 1992, between the
Company and The First National Bank of Chicago as Trustee
relating to the Company's 9.30% Senior Secured Debentures
due 2001, including the form of Debenture and the forms of
Deed of Trust and Environmental Indemnity Agreement
attached as exhibits thereto (incorporated by reference to
Exhibit 4(i).14 to Registrant's Form 10-K for the year
ended December 28, 1991).

Exhibit 4(i).9 Indenture dated as of March 15, 1992, between the Company
and Harris Trust and Savings Bank as Trustee relating to
the Company's Senior Subordinated Debt Securities
(incorporated by reference to Exhibit 4.1 of Registrant's
Form 8-K dated March 17, 1992).

Exhibit 4(i).10 Form of Officers' Certificate establishing the terms of
the 9.35% Senior Subordinated Notes due March 15, 1999,
and the 9.875% Senior Subordinated Debentures due March
15, 2007, including the form of Note and form of Debenture
(incorporated by reference to Exhibit 4.2 of Registrant's
Form 8-K dated March 17, 1992).

Exhibit 4(i).11 Indenture dated as of September 1, 1992, between the
Company and The Chase Manhattan Bank (National Association),
as Trustee relating to the Company's Debt Securities
(incorporated by reference to Exhibit 4.1 of Registrant's
Form 8-K dated September 16, 1992).
</TABLE>

15
<PAGE> 16
SAFEWAY INC. AND SUBSIDIARIES

ITEM 6(a). EXHIBITS (CONTINUED)

<TABLE>
<S> <C>
Exhibit 4(i).12 Form of Officers' Certificate relating to the Company's
Fixed Rate Medium-Term Notes and the Company's Floating
Rate Medium-Term Notes, form of Fixed Rate Note and form
of Floating Rate Note (incorporated by reference to
Exhibits 4.2, 4.3 and 4.4 of Registrant's Form 8-K dated
September 16, 1992).

Exhibit 4(i).13 Form of Officers' Certificate establishing the terms of
a separate series of Safeway Inc.'s Medium-Term Notes
entitled 10% Senior Notes due November 1, 2002, including
the form of Note (incorporated by reference to Exhibits
4.1 and 4.2 of Registrant's Form 8-K dated November 5,
1992).

Exhibit 4(i).14 Form of Officers' Certificate establishing the terms of
a separate series of Safeway Inc.'s Medium-Term Notes
entitled Medium-Term Notes due June 1, 2003 (Series
OPR-1), including the form of Note (incorporated by
reference to Exhibits 4.1 and 4.2 of Registrant's
Form 8-K dated June 1, 1993).

Exhibit 4(i).15 Company Pledge Agreement dated as of November 24, 1986,
between the Company and Bankers Trust Company, as
collateral agent, form of First Amendment thereto dated
as of June 12, 1990, and form of Second Amendment thereto
dated as of November 8, 1991 (incorporated by reference
to Exhibit 4.5 of Registrant's Form 8-K dated November
13, 1991) and Third Amendment dated as of January 28,
1992, to Company Pledge Agreement between the Company and
Bankers Trust Company, as collateral agent and interest
rate exchanger (incorporated by reference to Exhibit 4.3
of Registrant's Form 8-K dated March 17, 1992).

Exhibit 4(i).16 Trademark Security Agreement and Conditional Assignment
dated as of November 24, 1986, between the Company and
Bankers Trust Company, as collateral agent, form of First
Amendment thereto dated as of June 12, 1990, and form of
Second Amendment thereto dated as of November 8, 1991
(incorporated by reference to Exhibit 4.6 of Registrant's
Form 8-K dated November 13, 1991) and Third Amendment
dated as of January 28, 1992, to Safeway Pledge Agreement
between the Company and Bankers Trust Company, as
collateral agent and interest rate exchanger (incorporated
by reference to Exhibit 4.4 of Registrant's Form 8-K
dated March 17, 1992).

Exhibit 4(i).17 Pledge and Security Agreement dated as of November 26, 1986,
between the Company and Bankers Trust Company, as
collateral agent, form of First Amendment thereto dated
as of June 12, 1990, and form of Second Amendment thereto
dated as of November 8, 1991 (incorporated by reference
to Exhibit 4.7 of Registrant's Form 8-K dated November 13,
1991) and Third Amendment dated as of January 28, 1992,
to Company Pledge and Security Agreement (Inventory)
between the Company and Bankers Trust Company, as
collateral agent and interest rate exchanger (incorporated
by reference to Exhibit 4.5 of Registrant's Form 8-K
dated March 17, 1992).

</TABLE>

16
<PAGE> 17
SAFEWAY INC. AND SUBSIDIARIES

ITEM 6(a). EXHIBITS (CONTINUED)

<TABLE>
<S> <C>
Exhibit 4(i).18 Intercreditor Agreement (Company Pledge) dated as of
November 24, 1986, among the Company, Bankers Trust Company,
as agent and collateral agent, Harris Trust and Savings Bank
and Norwest Bank Minneapolis, N.A., and form of First
Amendment thereto dated as of November 8, 1991 (incorporated
by reference to Exhibit 4.8 of Registrant's Form 8-K dated
November 13, 1991) and Second Amendment dated as of January 28,
1992, to Intercreditor Agreement (Company Pledge), among
the Company, Bankers Trust Company, as agent, collateral
agent and interest rate exchanger, Harris Trust and Savings
Bank, Norwest Bank Minneapolis, N.A., and The Bank of New
York (incorporated by reference to Exhibit 4.6 of Registrant's
Form 8-K dated March 17, 1992).

Exhibit 4(i).19 Intercreditor Agreement (Substitute Collateral) dated as
of November 24, 1986, among the Company, Bankers Trust
Company, as agent and collateral agent, Harris Trust and
Savings Bank, and Norwest Bank Minneapolis, N.A., and
form of First Amendment thereto dated as of November 8,
1991 (incorporated by reference to Exhibit 4.9 of
Registrant's Form 8-K dated November 13, 1991) and
Second Amendment dated as of January 28, 1992, to
Intercreditor Agreement (Substitute Collateral)
among the Company, Bankers Trust Company, as agent,
collateral agent and interest rate exchanger, Harris
Trust and Savings Bank, Norwest Bank Minneapolis, N.A.,
and The Bank of New York (incorporated by reference to
Exhibit 4.7 of Registrant's Form 8-K dated March 17, 1992).

Exhibit 4(i).20 Form of Second Amended and Restated Credit Agreement
dated as of June 12, 1990, incorporating changes through
the Third Amendment dated as of August 7, 1991, the
Fourth Amendment dated November 8, 1991, and the Fifth
Amendment dated January 28, 1992, among the Company, the
banks listed therein, and Bankers Trust Company as Lead
Manager and Agent (incorporated by reference to Exhibit
4(i).19 to Registrant's Form 10-K for the year ended
January 2, 1993), and the Extension Agreement and Sixth
Amendment dated March 31, 1994.

Exhibit 4(i).21 Form of Second Amended and Restated Working Capital
Credit Agreement dated as of June 14, 1990, incorporating
changes through the Third Amendment dated as of August
7, 1991, the Fourth Amendment dated November 8, 1991,
and the Fifth Amendment dated January 28, 1992, among
the Company, the Banks listed therein, and Bankers Trust
Company as Lead Manager and Agent (incorporated by
reference to Exhibit 4(i).20 to Registrant's Form 10-K
for the year ended January 2, 1993), and the Extension
Agreement and Sixth Amendment dated March 31, 1994.

Exhibit 4(iii) Registrant agrees to provide the Securities and Exchange
Commission, upon request, copies of instruments defining
the rights of holders of long-term debt of Registrant
and all of its subsidiaries for which consolidated financial
statements are required to be filed with the Securities
and Exchange Commission.

Exhibit 10(iii).1* Safeway Inc. Outside Director Equity Purchase Plan
(incorporated by reference to Exhibit 4.1 to Registration
Statement No. 33-36753).

</TABLE>

____________________________________
* Management contract, or compensatory plan or arrangement.

17
<PAGE> 18
SAFEWAY INC. AND SUBSIDIARIES

ITEM 6(a). EXHIBITS (CONTINUED)

Exhibit 10(iii).2* Share Appreciation Rights Plan of Canada Safeway Limited
(incorporated by reference to Exhibit 10(iii).17 to
Registrant's Form 10-K for the year ended December 29,
1990) and Amendment No. 1 thereto dated December 13, 1991
(incorporated by reference to Exhibit 10(iii).17 to
Registrant's Form 10-K for the year ended December 28,
1991).

Exhibit 10(iii).3* Share Appreciation Rights Plan of Lucerne Foods Ltd.
(incorporated by reference to Exhibit 10(iii).18 to
Registrant's Form 10-K for the year ended December 29,
1990) and Amendment No. 1 thereto dated December 13,
1991 (incorporated by reference to Exhibit 10(iii).18
to Registrant's Form 10-K for the year ended December 28,
1991).

Exhibit 10(iii).4* Letter Agreement dated March 24, 1993, between the
Company and Peter A. Magowan (incorporated by reference
to Exhibit 10(iii).6 to Registrant's Form 10-Q for the
quarterly period ending June 19, 1993).

Exhibit 10(iii).5* Settlement Agreement and General Release of Claims dated
October 6, 1993, between the Company and Robert H. Kinnie
(incorporated by reference to Exhibit 10(iii).8 to
Registrant's Form 10-Q for the quarterly period ending
September 11, 1993).

Exhibit 10(iii).6* Stock Option Plan for Consultants of Safeway Inc.
(incorporated by reference to Exhibit 10(iii).7 to
Registrant's Form 10-Q for the quarterly period ending
June 19, 1993).

Exhibit 10(iii).7* First Amendment to the Stock Option Plan for Consultants
of Safeway Inc. (incorporated by reference to Exhibit
10(iii).7 to Registrant's Form 10-K for the year ended
January 1, 1994).

Exhibit 10(iii).8* 1994 Amended and Restated Stock Option and Incentive Plan
for Key Employees of Safeway Inc. (incorporated by
reference to Exhibit 10(iii).8 to Registrant's Form
10-K for the year ended January 1, 1994).

Exhibit 10(iii).9* Operating Performance Bonus Plan for Executive Officers
of Safeway Inc. (incorporated by reference to Exhibit
10(iii).9 to Registrant's Form 10-K for the year ended
January 1, 1994).

Exhibit 10(iii).10* Capital Performance Bonus Plan (incorporated by reference
to Exhibit 10(iii).10 to Registrant's Form 10-K for the
year ended January 1, 1994).

Exhibit 10(iii).11* Retirement Restoration Plan of Safeway Inc. (incorporated
by reference to Exhibit 10(iii).11 to Registrant's Form
10-K for the year ended January 1, 1994).

Exhibit 11.1 Computation of Earnings Per Common Share and Common
Share Equivalent.

Exhibit 27.1 Financial Data Schedule.
</TABLE>

____________________________________
* Management contract, or compensatory plan or arrangement.

ITEM 6(B). REPORTS ON FORM 8-K.

On March 11, 1994, the Company filed a Form 8-K listing under item 7 (Exhibits)
its Computation of Ratio of Earnings to Fixed Charges for the fourth quarter of
1993.

18
<PAGE> 19
SAFEWAY INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

Date: May 5, 1994 \s\ Steven A. Burd
---------------- ------------------
Steven A. Burd
President and Chief Executive Officer

Date: May 5, 1994 \s\ Julian C. Day
---------------- ------------------
Julian C. Day
Executive Vice President and
Chief Financial Officer

<PAGE> 1

Exhibit 4(i).20

SAFEWAY INC.
EXTENSION AGREEMENT AND
SIXTH AMENDMENT
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF MARCH 31, 1994

This EXTENSION AGREEMENT AND SIXTH AMENDMENT dated as of March 31, 1994
(this "Amendment") to the Second Amended and Restated Credit Agreement dated as
of June 12, 1990, as amended by a First Amendment dated as of March 22, 1991, a
Second Amendment dated as of June 7, 1991, a Third Amendment dated as of August
7, 1991, a Fourth Amendment and Consent to Documents dated as of November 8,
1991 and a Fifth Amendment to Second Amended and Restated Credit Agreement and
Consent to Documents dated as of January 28, 1992 (as so amended, the "Credit
Agreement"), is by and among Safeway Inc., a Delaware corporation ("Company"),
the financial institutions named on the signature pages hereof ("Banks"),
Bankers Trust Company ("Bankers"), as Lead Manager and Agent for Banks
("Agent"), the Managers named on the signature pages hereof ("Managers"), the
Co-Managers named on the signature pages hereof ("Co-Managers"), the Guarantors
named on the signature pages hereof ("Guarantors") and the Pledgors named on
the signature pages hereof ("Pledgors"). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.

RECITALS

WHEREAS, Company and Canadian Borrowers propose to reduce voluntarily the
Working Capital Commitments by $150,000,000 and, in connection with such
reduction, Company is requesting that the First Commitment Reduction Date, the
Second Commitment Reduction Date and the Commitment Termination Date be
extended for one year and that Requisite Banks agree to amend the Credit
Agreement to amend various covenants and to eliminate various provisions which
are obsolete;

WHEREAS, subject to the terms and conditions contained herein, Banks,
Managers, Co-Managers and Agent are willing to grant such extension and to
agree to such amendments to the Credit Agreement;

WHEREAS, Guarantors desire expressly to consent to this Amendment and to
reaffirm the effectiveness of the First Tier Guaranty, the Second Tier
Guaranty, the Guaranty and Assumption Agreement and the Contribution Agreement;
and

<PAGE> 2
WHEREAS, Pledgors desire expressly to consent to this Amendment and to
reaffirm the effectiveness of the Company Pledge Agreement, the Safeway Pledge
Agreement, the Inventory Pledge Agreement, the First Tier Pledge Agreements and
the Second Tier Pledge Agreements.

AGREEMENT

NOW, THEREFORE, in consideration of the terms and conditions herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

SECTION 1. REQUEST TO EXTEND COMMITMENTS.

Company hereby requests that the First Commitment Reduction Date, the Second
Commitment Reduction Date and the Commitment Termination Date be extended for
one year as contemplated by subsection 2.12 of the Credit Agreement. Each Bank
electing to consent to such extension shall for the purposes of subsection 2.12
of the Credit Agreement be deemed to consent to such extension upon its
execution and delivery to Agent of a consent to such extension in the form
attached as Annex A to this Amendment.

SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT.

A. Subsection 1.1 of the Credit Agreement is hereby amended by deleting the
defined terms "Senior Subordinated Notes" and "Subordinated Debentures"
therefrom in their entirety and by amending and restating the definitions of
First Tier Guaranty, First Tier Pledge Agreement, Second Tier Guaranty, Second
Tier Pledge Agreement and Permitted Refinancing Applications in their entirety
as follows:

"'FIRST TIER GUARANTY' means, collectively, the Guaranty Agreement dated as
of August 28, 1986, executed and delivered by the First Tier Subsidiaries (as
defined in the Initial Credit Agreement) pursuant to the Initial Credit
Agreement, a conformed copy of which is annexed hereto as EXHIBIT X, the
Guaranty Agreement dated as of August 7, 1991, executed by Safeway Warehouse,
Inc. having provisions substantially similar to those set forth in EXHIBIT X
annexed hereto, and any other Guaranty Agreement substantially in the form of
EXHIBIT X annexed hereto executed after the date hereof by any other direct
Subsidiary of Company (which Subsidiary shall, in connection with the
execution of such Guaranty Agreement, take such actions as are necessary to
become a "Guarantor" party to the Contribution Agreement), in each case as
such Guaranty Agreements may be amended, supplemented or otherwise modified
from time to time."

<PAGE> 3
"'FIRST TIER PLEDGE AGREEMENTS' means, collectively, the Pledge Agreements
dated as of November 24, 1986, conformed copies of which are annexed as
EXHIBIT XVI hereto, executed and delivered by each First Tier Subsidiary (as
defined in the Initial Credit Agreement), and any other Pledge Agreement
substantially in the form of the Pledge Agreements annexed as EXHIBIT XVI
hereto executed after the date hereof by any direct Subsidiary of Company
which executes and delivers a First Tier Guaranty after the date hereof and
which has any Subsidiaries, in each case as such First Tier Subsidiary Pledge
Agreements may be amended, supplemented or otherwise modified from time to
time, including pursuant to the form of Pledge Agreement Amendment annexed as
EXHIBIT XXIII hereto."

"'PERMITTED REFINANCING APPLICATIONS' means, for the purposes of subsection
6.1(xiv) with respect to the application of the proceeds of any Refinancing
Indebtedness, the repayment, redemption or repurchase and cancellation of
secured and unsubordinated Indebtedness of Company or its Subsidiaries
(including, without limitation, the Obligations and Working Capital
Obligations); provided that "Permitted Refinancing Applications" shall also
include, in the case of any Refinancing Indebtedness that is unsecured and
unsubordinated, the repayment, redemption or repurchase and cancellation of
unsecured and unsubordinated Indebtedness of Company and its Subsidiaries
and, in the case of any Refinancing Indebtedness that is Subordinated
Indebtedness, the repayment, redemption or repurchase and cancellation of any
other Indebtedness of Company and its Subsidiaries."

"'SECOND TIER GUARANTY' means, collectively, the Guaranty Agreement dated as
of August 28, 1986, executed and delivered by the Domestic Second Tier
Subsidiaries (as defined in the Initial Credit Agreement) and Australian
Second Tier Subsidiary (as defined in the Initial Credit Agreement), a
conformed copy of which is annexed as EXHIBIT XI hereto, and any other
Guaranty Agreement substantially in the form of EXHIBIT XI annexed hereto
executed after the date hereof by any other indirect Subsidiary of Company
(which Subsidiary shall, in connection with the execution of such Guaranty
Agreement, take such actions as are necessary to become a "Guarantor" party
to the Contribution Agreement), in each case as such Guaranty Agreements may
be amended, supplemented or otherwise modified from time to time."

3
<PAGE> 4
"'SECOND TIER PLEDGE AGREEMENTS' means, collectively, the Pledge Agreements
dated as of November 24, 1986, executed and delivered by the Second Tier
Subsidiaries (as defined in the Initial Credit Agreement), a form of which is
annexed as EXHIBIT XVII hereto, and any other Pledge Agreement substantially in
the form of the Pledge Agreement annexed as EXHIBIT XVII hereto executed after
the date hereof by any other indirect Subsidiary of Company which executes and
delivers a Second Tier Guaranty after the date hereof and which has any
Subsidiaries, in each case as such Pledge Agreements may hereafter be amended,
supplemented or otherwise modified from time to time, including pursuant to the
form of Pledge Agreement Amendment to the Second Tier Pledge Agreements annexed
as EXHIBIt XXIII hereto."

B. Subsection 1.1 of the Credit Agreement is hereby further amended by
adding thereto the following defined terms in the appropriate alphabetical
order:

"'WORKING CAPITAL CONTRIBUTION AGREEMENT' has the meaning assigned to the
term 'Contribution Agreement' in the Working Capital Credit Agreement."

"'WORKING CAPITAL FIRST TIER GUARANTY' has the meaning assigned to the term
'First Tier Guaranty' in the Working Capital Credit Agreement."

"'WORKING CAPITAL GUARANTOR' means any Subsidiary of Company party to (a) a
Working Capital First Tier Guaranty or a Working Capital Second Tier Guaranty
and (b) the Working Capital Contribution Agreement."

"'WORKING CAPITAL SECOND TIER GUARANTY' has the meaning assigned to the term
'Second Tier Guaranty' in the Working Capital Credit Agreement."

C. Subsection 2.7A of the Credit Agreement is hereby amended by deleting
the final sentence thereof in its entirety.

D. Subsection 5.1(i) of the Credit Agreement is hereby amended and restated
in its entirety as follows:

"(i) [Intentionally Omitted];"

E. Subsection 5.1(iv) of the Credit Agreement is hereby amended by deleting
the phrase "subdivisions (i), (ii), and (iii) above" therefrom and substituting
the phrase "subdivisions (ii) and (iii) above" therefor.

F. Subsection 5.1(vi) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

<PAGE> 5
"(vi) promptly upon receipt thereof, a copy of each comment letter
submitted by independent public accountants to Company's or Safeway Canada's
board of directors in connection with any annual audit conducted by such
accountants;"

G. Subsection 5.1(vii) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

"(vii) promptly upon their becoming available, copies of all reports filed
by Company on SEC Forms 10-K, 10-Q and 8-K and copies of all registration
statements (and all amendments thereto) on SEC Forms S-1, S-3 and S-4 filed
under the Securities Act."

H. Subsection 5.1(xiii) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

I. Subsection 6.1(ii) of the Credit Agreement is hereby amended by amending
and restating the proviso at the end thereof in its entirety as follows:

"provided that all such refinancing Indebtedness shall be unsecured and shall
be money market or similar Indebtedness having a maturity of less than one
year and shall be permitted under the indentures for the Senior Subordinated
Debt;"

J. Subsection 6.1(iii) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

"(iii) Company may remain liable with respect to the Indebtedness
evidenced by the Senior Subordinated Debt;"

K. Subsection 6.1(xii) of the Credit Agreement is hereby amended by
amending and restating the proviso at the end thereof in its entirety as
follows:

"provided that (a) all such Indebtedness permitted under this clause (xii)
must be permitted under the indentures pursuant to which the Senior
Subordinated Debt was issued, (b) the principal amount of all such
Indebtedness shall never cause the Total Utilization of Commitments to exceed
the Commitments and (c) Company shall not at any time be liable with respect
to more than $250,000,000 of commercial paper sold in the United States;"

5
<PAGE> 6
L. Subsection 6.3 of the Credit Agreement is hereby amended by deleting the
word "and" at the end of subdivision (xiii) thereof and by deleting subdivision
(xiv) thereof and the final proviso thereof in their entirety and substituting
the following subdivisions (xiv) and (xv) and proviso therefor:

"(xiv) Safeway Canada and Lucerne may purchase common stock of Company
from Company to the extent such purchase is permitted pursuant to subsection
6.5(v); and

(xv) In addition to the Investments permitted by clauses (i) - (xiv),
Company and its Subsidiaries may make and own Investments with an aggregate
fair market value of $100,000,000;

provided that notwithstanding anything to the contrary in this Agreement,
neither Company nor any of its Subsidiaries may make or own any Investments
in any Margin Stock (other than Vons Stock permitted under subsection 6.3
(xi), capital stock permitted under subsection 6.3(xii) or common stock of
Company permitted under subsection 6.3(xiv))."

M. Subsection 6.5 of the Credit Agreement is hereby amended and restated in
its entirety as follows:

"6.5 RESTRICTED JUNIOR PAYMENTS

Company will not, and will not permit any of its Subsidiaries to, directly
or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment except:

(i) Company may make Restricted Junior Payments in respect of the Senior
Subordinated Debt in accordance with the terms of, and only to the extent
required by, the indenture pursuant to which such Indebtedness was issued
which indenture has been previously approved by Agent and Requisite Banks
excluding, however, any voluntary prepayments or voluntary redemptions that
are not expressly permitted under clause (ii) below;

6
<PAGE> 7
(ii) So long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, Company may redeem,
repay or repurchase Senior Subordinated Debt (a) with the proceeds of
Refinancing Indebtedness constituting Subordinated Indebtedness or (b) with
other funds (including, without limitation, the proceeds of Loans); provided
that the aggregate principal amount of all such redemptions, repayments or
repurchases pursuant to this clause (b) shall not exceed $300,000,000 in any
fiscal year or $500,000,000 during the term of this Agreement;

(iii) Company may make Restricted Junior Payments to cancel or repurchase
stock or stock options granted to any Management Investor pursuant to a
Subscription Agreement in the event of death, disability, termination of
employment or retirement of any such Management Investor;

(iv) Company may make cash payments, in an aggregate amount not exceeding
$1,000,000, to the holders of Warrants in lieu of issuing fractional shares
of its common stock in connection with the exercise of Warrants by such
holders; and

(v) any Canadian Borrower may purchase common stock of Company from Company,
in an aggregate number of shares not exceeding one percent (1%) of the number
of shares of Company's common stock issued and outstanding as of January 1,
1994, for the purpose of granting and permitting the exercise of stock awards
or options."

N. Subsection 6.7(ii) of the Credit Agreement is hereby amended by
inserting, immediately after the words "Company or any" and immediately
preceding the term "wholly-owned" in the second and eighth lines thereof, the
term "direct or indirect".

O. Subsection 6.7(v) of the Credit Agreement is hereby amended by amending
and restating the proviso at the end thereof in its entirety as follows:

"provided that notwithstanding the foregoing, Company and its Subsidiaries
(a) may transfer property or assets with an aggregate fair market value not
in excess of $15,000,000 to Canadian Second Tier Subsidiary and (b) may
otherwise transfer property or assets to Company or any direct or indirect
wholly-owned Subsidiary of Company that is a Guarantor and a Working Capital
Guarantor and, in the event such Subsidiary has any Subsidiaries, a party to
a Pledge Agreement; provided however that Company shall not pursuant to this
clause (b) transfer property or assets having an aggregate fair market value
in excess of $500,000,000 to its Subsidiaries;"

P. Subsection 6.7(vi) of the Credit Agreement is hereby amended by amending
and restating the proviso at the end thereof in its entirety as follows:

<PAGE> 8
"provided that the aggregate amount of proceeds received from all such sales
or dispositions from and after January 1, 1994, shall not exceed $275,000,000
in the aggregate;"

SECTION 3. AMENDMENTS TO EXHIBIT VIII TO THE CREDIT AGREEMENT.

Exhibit VIII to the Credit Agreement (Form of Compliance Certificate) is
hereby amended by deleting such Exhibit in its entirety from the Credit
Agreement and by substituting in lieu thereof Exhibit VIII as annexed to this
Amendment.

SECTION 4. REPRESENTATIONS AND WARRANTIES.

In order to induce Banks to enter into this Amendment and to consent to the
extension requested in Section 1, Company represents and warrants to each Bank
that:

A. No event would result from the execution of this Amendment and, after
giving effect to this Amendment, no event has occurred or is continuing which
constitutes an Event of Default or Potential Event of Default;

B. After giving effect to this Amendment, the representations and
warranties of Company contained in the Credit Agreement, as amended by this
Amendment (the "Amended Credit Agreement") are true, correct and complete in
all material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except that the representations and
warranties need not be true and correct to the extent that changes in the
facts and conditions on which such representations and warranties are based
are required or permitted under the Credit Agreement;

8
<PAGE> 9
C. This Amendment, the Amended Credit Agreement, and the consummation of
the transactions contemplated hereby or thereby do not and will not (i)
violate any provisions of law applicable to Company or any of its
Subsidiaries, the Certificate of Incorporation or Bylaws of Company or any of
its Subsidiaries, or any order, judgment or decree of any court or other
agency of government binding on Company or any of its Subsidiaries, or (ii)
conflict with, result in a breach of, or constitute (with due notice or lapse
of time or both) a default under, the indentures pursuant to which any
outstanding Subordinated Indebtedness (including, without limitation, the
Senior Subordinated Debt) has been issued (the "Indentures") or any term of
any other material agreement or instrument to which Company or any of its
Subsidiaries is a party or by which any of their properties or assets are
bound;

D. If the Commitments were fully utilized as of the date hereof, all
Indebtedness of Company with respect to the Loans under the Amended Credit
Agreement would be within the definition of "Senior Indebtedness" contained
in the Indentures, the definition of "Senior Secured Obligations" contained
in the Company Pledge Agreement, the Inventory Pledge Agreement and the
Safeway Pledge Agreement, the definition of "Secured Obligations" contained
in the First Tier Pledge Agreements and the Second Tier Pledge Agreements and
the definition of "Guarantied Obligations" contained in the First Tier
Guaranty, the Second Tier Guaranty, the Guaranty and the Assumption Agreement
and the Contribution Agreement;

E. Each Loan Party has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement and this Amendment
provide shall be performed by it on or before the date hereof;

F. The Guarantors mean and include Company and all of the First Tier
Subsidiaries, the Second Tier Subsidiaries (including ICC Subsidiary but
excluding the Canadian Second Tier Subsidiary) and the Domestic Third Tier
Subsidiaries presently owned either directly or indirectly by Company;

G. The Pledgors mean and include Company and all of the First Tier
Subsidiaries and all of the Second Tier Subsidiaries (including ICC
Subsidiary but excluding the Canadian Second Tier Subsidiary);

H. The execution, delivery and performance by Company of this Amendment are
within the corporate power of Company and have been duly authorized by all
necessary corporate action on the part of Company, and this Amendment and the
Amended Credit Agreement constitute the valid and binding obligations of
Company enforceable against Company in accordance with their respective
terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally; and

9
<PAGE> 10
I. Each Loan Guaranty and the Contribution Agreement shall continue in full
force and effect and remain the valid and binding obligations of the Guarantors
party thereto enforceable against the Guarantors party thereto in accordance
with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally. The Pledge Agreements shall
continue in full force and effect and remain the valid and binding obligations
of the Pledgors party thereto, enforceable against the Pledgors party thereto
in accordance with their respective terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditors' rights generally.

SECTION 5. CONDITIONS TO EFFECTIVENESS.

This Amendment shall become effective on the first date Agent, on behalf of
Banks, shall have received all of the following, in form and substance
satisfactory to Agent (the "Sixth Amendment Effective Date"):

A. Resolutions of the Board of Directors of Company authorizing and
approving the execution, delivery and performance of this Amendment and
resolutions of the Board of Directors of each Guarantor and each Pledgor
authorizing and approving the execution and delivery of this Amendment, in
each case certified by the corporate secretary or an assistant secretary of
Company, each Guarantor and each Pledgor, as the case may be, as of the Sixth
Amendment Effective Date;

B. A certificate of the corporate secretary or an assistant secretary of
Company, each Guarantor and each Pledgor which shall certify, as of the Sixth
Amendment Effective Date, the names and offices of the officers of Company,
each Guarantor and each Pledgor authorized to sign this Amendment;

C. A counterpart hereof executed by a duly authorized officer of Company,
Requisite Banks, Agent, each Guarantor and each Pledgor, or in the case of
any Bank, telecopy or telephone confirmation from such Bank of its execution
hereof;

10
<PAGE> 11
D. An executed original irrevocable written notice of Company and Canadian
Borrowers to Agent and Canadian Agents specifying, in accordance with the
provisions of subsection 2.4E of the Working Capital Credit Agreement, that
the Working Capital Commitments shall be permanently reduced by $150,000,000
on the date specified in such notice, which date shall be on or before the
Sixth Amendment Effective Date; and

E. Copies of an amendment to the Working Capital Credit Agreement executed
by Requisite Banks (as defined therein) approving, among other things, the
transactions contemplated by this Amendment.

SECTION 6. THE GUARANTIES AND THE CONTRIBUTION AGREEMENT.

In order to induce Banks to enter into this Amendment, each Guarantor
represents and warrants to each Bank that the execution, delivery and
performance by such Guarantor of this Amendment are within the corporate power
of such Guarantor and have been duly authorized by all necessary corporate
action on the part of such Guarantor and that this Amendment constitutes the
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally.

Each Guarantor agrees to and acknowledges the terms and provisions of this
Amendment and confirms that each Loan Guaranty to which it is a party will,
from and after the Sixth Amendment Effective Date, continue to guaranty to the
fullest extent possible the payment and performance of the Guarantied
Obligations (as that term is defined in each Loan Guaranty) and furthermore,
that from and after the Sixth Amendment Effective Date, each such Loan Guaranty
will also guaranty, to the fullest extent possible, the performance of all
obligations (including, without limitation, due and punctual payment of all
amounts) under, referred to in, or contemplated by this Amendment by Company
and the Guarantied Obligations (as defined in each Loan Guaranty) shall include
all such obligations of Company. Each Guarantor agrees and acknowledges that
the Contribution Agreement will continue to establish the rights and
obligations of contribution among Guarantors with respect to the payment and
performance of all Guarantied Obligations (as that term is defined in the
Contribution Agreement), including, without limitation, the payment and
performance of all Obligations of Company now or hereafter existing under or in
respect of the Amended Credit Agreement. Without limiting the generality of
the foregoing, each Guarantor hereby acknowledges and confirms the
understanding and intent of such Guarantor that, upon the effectiveness of this
Amendment, as a result of this Amendment, the definition of "Obligations"
contained in the Credit Agreement includes the obligations of Company set forth
in the Amended Credit Agreement and that the obligations of Company guarantied
under any Loan Guaranty shall include the obligations of Company under the
Amended Credit Agreement.

<PAGE> 12
Each Guarantor agrees and acknowledges that each Loan Guaranty to which it
is a party and the Contribution Agreement shall continue in full force and
effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or affected by the execution of this
Amendment. Each Guarantor represents and warrants that all representations and
warranties contained in this Amendment and the Loan Guaranty to which it is a
party are true, correct and complete as of the date hereof to the same extent
as though made on such date except that the representations and warranties need
not be true and correct to the extent that changes in the facts and conditions
on which such representations and warranties are based are required or
permitted under such agreements.

SECTION 7. THE PLEDGE AGREEMENTS.

In order to induce Banks to enter into this Amendment, each Pledgor
represents and warrants to each Bank that the execution, delivery and
performance by each Pledgor of this Amendment are within the corporate power of
such Pledgor and have been duly authorized by all necessary corporate action on
the part of such Pledgor and that this Amendment constitutes the valid and
binding obligation of such Pledgor, enforceable against such Pledgor in
accordance with its terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally.

Each Pledgor agrees to and acknowledges the terms and provisions of this
Amendment and confirms that the Pledge Agreement(s) to which it is a party and
the Pledged Collateral (as that term is defined in each such Pledge Agreement)
will continue to secure to the fullest extent possible the payment and
performance of all Senior Secured Obligations (as that term is defined in the
Company Pledge Agreement, the Safeway Pledge Agreement and the Inventory Pledge
Agreement) and all Secured Obligations (as that term is defined in each First
Tier Pledge Agreement and each Second Tier Pledge Agreement), including,
without limitation, the payment and performance of all Obligations of Company
now or hereafter existing under or in respect of the Amended Credit Agreement.
Without limiting the generality of the foregoing, each Pledgor hereby
acknowledges and confirms the understanding and intent of such Pledgor that,
upon the effectiveness of this Amendment, as a result of this Amendment, the
definition of "Obligations" contained in the Credit Agreement includes the
obligations of Company set forth in the Amended Credit Agreement.

<PAGE> 13
Each Pledgor agrees and acknowledges that the Pledge Agreements to which it
is a party shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired
or affected by the execution of this Amendment. Each Pledgor represents and
warrants that all representations and warranties contained in this Amendment
and the Pledge Agreement to which it is a party are true, correct and complete
as of the date hereof to the same extent as though made on such date except
that the representations and warranties need not be true and correct to the
extent that changes in the facts and conditions on which such representations
and warranties are based are required or permitted under such agreements.

SECTION 8. COUNTERPARTS.

This Amendment may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.

SECTION 9. EFFECT OF AMENDMENT.

It is hereby agreed that, except as specifically provided herein, this
Amendment does not in any way affect or impair the terms and conditions of the
Credit Agreement, and all terms and conditions of the Credit Agreement are to
remain in full force and effect unless otherwise specifically amended, waived
or changed pursuant to the terms and conditions of this Amendment.

SECTION 10. APPLICABLE LAW.

THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND ALL
OTHER ASPECTS HEREOF SHALL BE DEEMED TO BE MADE UNDER, SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK.

[Remainder of Page Intentionally Left Blank]

<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written, by their respective officers
thereunto duly authorized.

<TABLE>
<S> <C>
SAFEWAY INC.

By ___________________________________
Name:
Title:

BANKERS TRUST COMPANY,
individually and as Agent

By ___________________________________
Name:
Title:

CITIBANK, N.A.,
individually and as Manager

By ___________________________________
Name:
Title:

THE CHASE MANHATTAN BANK, N.A.
individually and as Manager

By ___________________________________
Name:
Title:

BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
individually and as Manager

By ___________________________________
Name:
Title:
</TABLE>

S-14

<PAGE> 15
<TABLE>
<S> <C>
THE BANK OF NOVA SCOTIA,
individually and as Manager

By ___________________________________
Name:
Title:

BANK OF MONTREAL,
individually and as Manager

By ___________________________________
Name:
Title:

UNITED STATES NATIONAL BANK OF OREGON

By ___________________________________
Name:
Title:

CIBC INC.

By ___________________________________
Name:
Title:

THE BANK OF NEW YORK

By ___________________________________
Name:
Title:

CONTINENTAL BANK, N.A.

By ___________________________________
Name:
Title:
</TABLE>

S-15

<PAGE> 16
<TABLE>
<S> <C>
NATIONSBANK OF TEXAS, N.A.

By ___________________________________
Name:
Title:

THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED

By ___________________________________
Name:
Title:

THE FIRST NATIONAL BANK OF CHICAGO

By ___________________________________
Name:
Title:

THE FUJI BANK, LIMITED

By ___________________________________
Name:
Title:

UNION BANK

By ___________________________________
Name:
Title:

ROYAL BANK OF CANADA

By ___________________________________
Name:
Title:
</TABLE>

S-16

<PAGE> 17
<TABLE>
<S> <C>
WESTPAC BANKING CORPORATION

By ___________________________________
Name:
Title:

SOCIETE GENERALE

By ___________________________________
Name:
Title:

CHEMICAL BANK

By ___________________________________
Name:
Title:

ARAB BANK, PLC

By ___________________________________
Name:
Title:

THE TOKAI BANK LTD., LOS ANGELES
AGENCY

By ___________________________________
Name:
Title:

THE DAI-ICHI KANGYO BANK, LIMITED
(SAN FRANCISCO AGENCY)

By ___________________________________
Name:
Title:
</TABLE>

S-17

<PAGE> 18
<TABLE>
<S> <C>
ROYAL BANK OF SCOTLAND

By ___________________________________
Name:
Title:

CREDIT LYONNAIS SAN FRANCISCO BRANCH

By ___________________________________
Name:
Title:

THE YASUDA TRUST & BANKING CO., LTD.
(Los Angeles Agency)

By ___________________________________
Name:
Title:

BARCLAYS BANK PLC

By ___________________________________
Name:
Title:

BANK OF HAWAII

By ___________________________________
Name:
Title:

CREDIT SUISSE

By ___________________________________
Name:
Title:
</TABLE>

S-18

<PAGE> 19
<TABLE>
<S> <C>
THE NIPPON CREDIT BANK, LTD.,
(Los Angeles Agency)

By ___________________________________
Name:
Title:

BANQUE NATIONALE DE PARIS

By ___________________________________
Name:
Title:

BANCA DI ROMA

By _________________________________
Name:
Title:

ABN AMRO BANK, N.V.

By _________________________________
Name:
Title:

WESTDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK BRANCH

By _________________________________
Name:
Title:

FIRST NATIONAL BANK OF MARYLAND

By________________________________
Name:
Title:
</TABLE>

S-19

<PAGE> 20
<TABLE>
<S> <C>
GIROZENTRALE VIENNA

By________________________________
Name:
Title:

BANK HAPOALIM

By________________________________
Name:
Title:

BANQUE INDOSUEZ

By________________________________
Name:
Title:

BANK OF IRELAND - GRAND CAYMAN BRANCH

By________________________________
Name:
Title:

THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY

By________________________________
Name:
Title:

THE MITSUI TRUST & BANKING CO., LTD.,
LOS ANGELES AGENCY

By________________________________
Name:
Title:
</TABLE>

S-20

<PAGE> 21

<TABLE>
<S> <C>
FIRST SECURITY BANK OF IDAHO, N.A.

By________________________________
Name:
Title:

THE FIRST NATIONAL BANK OF BOSTON

By________________________________
Name:
Title:

PNC BANK, NATIONAL ASSOCIATION

By________________________________
Name:
Title:

STANDARD CHARTER BANK

By________________________________
Name:
Title:

GUARANTORS AND PLEDGORS:

SAFEWAY INC.

By _______________________________
Name:
Title:
</TABLE>

S-21

<PAGE> 22
<TABLE>
<S> <C>
SAFEWAY AUSTRALIA HOLDINGS, INC.
SAFEWAY CANADA HOLDINGS, INC.
SAFEWAY U.S. HOLDINGS, INC.
SAFEWAY WAREHOUSE, INC.

By ___________________________________
As an authorized officer of each of
the foregoing First Tier Subsidiaries

SAFEWAY SOUTHERN CALIFORNIA, INC.
SAFEWAY DENVER, INC.
SAFEWAY RICHMOND, INC.
SAFEWAY DALLAS, INC. (formerly named
"SAFEWAY WASHINGTON, D.C., INC.")
SAFEWAY SUPPLY, INC.
SAFEWAY CORPORATE, INC.
SAFEWAY TRUCKING, INC.

By __________________________________
As an authorized officer of each of
the foregoing Domestic Second Tier
Subsidiaries
</TABLE>

S-22

<PAGE> 23
<TABLE>
<S> <C>
SAFEWAY STORES 18, INC. SAFEWAY STORES 72, INC.
SAFEWAY STORES 26, INC. SAFEWAY STORES 73, INC.
SAFEWAY STORES 28, INC. SAFEWAY STORES 74, INC.
SAFEWAY STORES 31, INC. SAFEWAY STORES 75, INC.
SAFEWAY STORES 42, INC. SAFEWAY STORES 76, INC.
SAFEWAY STORES 43, INC. SAFEWAY STORES 77, INC.
SAFEWAY STORES 44, INC. SAFEWAY STORES 78, INC.
SAFEWAY STORES 45, INC. SAFEWAY STORES 79, INC.
SAFEWAY STORES 46, INC. SAFEWAY STORES 80, INC.
SAFEWAY STORES 47, INC. SAFEWAY STORES 81, INC.
SAFEWAY STORES 48, INC. SAFEWAY STORES 82, INC.
SAFEWAY STORES 49, INC. SAFEWAY STORES 85, INC.
SAFEWAY STORES 50, INC. SAFEWAY STORES 86, INC.
SAFEWAY STORES 58, INC. SAFEWAY STORES 87, INC.
SAFEWAY STORES 59, INC. SAFEWAY STORES 88, INC.
SAFEWAY STORES 64, INC. SAFEWAY STORES 89, INC.
SAFEWAY STORES 67, INC. SAFEWAY STORES 90, INC.
SAFEWAY STORES 68, INC. SAFEWAY STORES 91, INC.
SAFEWAY STORES 69, INC. SAFEWAY STORES 92, INC.
SAFEWAY STORES 70, INC. SAFEWAY STORES 96, INC.
SAFEWAY STORES 71, INC. SAFEWAY STORES 97, INC.
SAFEWAY STORES 98, INC.
</TABLE>

By __________________________________
As an authorized officer of each
of the foregoing Domestic Third
Tier Subsidiaries

S-23

<PAGE> 24
EXHIBIT VIII

[FORM OF COMPLIANCE CERTIFICATE]

THE UNDERSIGNED HEREBY CERTIFY THAT:

(1) We are the duly elected [Title] and [Title] of Safeway Inc., a
Delaware corporation ("Company"):

(2) We have reviewed the terms of the Second Amended and Restated
Credit Agreement dated as of June 12, 1990 among Company, the Banks party
thereto, the Managers party thereto, the Co-Managers party thereto and Bankers
Trust Company, as Lead Manager and Agent, as amended to the date hereof (as
amended, modified or otherwise supplemented from time to time, the "Credit
Agreement"), and we have made, or have caused to be made, under our
supervision, a review in reasonable detail of the transactions and condition of
Company and its Subsidiaries during the accounting period covered by the
attached financial statements; and

(3) The examination described in paragraph (2) did not disclose and
we have no knowledge of the existence of any condition or event which
constitutes an Event of Default or Potential Event of Default during or at the
end of the accounting period covered by the attached financial statements or as
of the date of this Certificate, except as set forth below.

Set forth below (or in a separate attachment to this Certificate) are the
exceptions, if any, to paragraph (3) listed, so as to detail the nature of the
condition or event, the period during which it has existed and the action
Company has taken, is taking, or proposes to take with respect to each such
condition or event:

_________________________________________________________________

VIII-11
<PAGE> 25
The foregoing certifications, together with the computations set forth in
Attachment No. 1 hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of _______,
19__ pursuant to subsection 5.1(iv) of the Credit Agreement. Capitalized terms
used herein shall have the meanings set forth in the Credit Agreement.

SAFEWAY INC.

By ___________________________
Name:______________________
Title:_____________________

VIII-12
<PAGE> 26
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE

(The Certificate attached hereto is as of _____ and pertains to the period
from ______ to _____.)

Capitalized terms used herein shall have the meanings set forth in the
Second Amended and Restated Credit Agreement dated as of June 12, 1990 among
Safeway Inc., the Banks party thereto, the Managers party thereto, the
Co-Managers party thereto and Bankers Trust Company, as Lead Manager and Agent,
as amended to the date hereof (as amended, modified or otherwise supplemented
from time to time, the "Credit Agreement"). Subsection references herein
relate to the subsections of the Credit Agreement.

A. USE OF PROCEEDS
<TABLE>
<S> <C> <C>
1. Amount of proceeds of outstanding Loans
used to finance acquisitions permitted
under subsection 6.3(xiii) or 6.7(viii) . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum amount of proceeds of
outstanding Loans permitted under
subsection 2.7A to be used to finance
acquisitions permitted under subsection
6.3(xiii) or 6.7(viii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000,000
</TABLE>

B. INDEBTEDNESS
<TABLE>
<S> <C> <C>
1. Indebtedness secured by real or
personal property which refinances
unsecured Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum amount permitted under
subsection 6.1(vi)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000,000

3. Indebtedness secured by real or
personal property which refinances
secured Existing Indebtedness as of
August 22, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

4. Secured Replacement Indebtedness
(Item B1+Item B3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

5. Maximum amount of Secured
Replacement Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600,500,000

6. Secured Replacement Indebtedness
secured solely by Liens on personal
property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________
</TABLE>

VIII-13

<PAGE> 27
<TABLE>
<S> <C> <C>
7. Maximum Secured Replacement
Indebtedness secured solely by
Liens on personal property . . . . . . . . . . . . . . . . . . . . . . . . . . . . $190,000,000

8. Indebtedness of Foreign Entities
described in subsection 6.1(vii)
in Dollar Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

9. Maximum Indebtedness permitted
under subsection 6.1(vii)
in Dollar Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000

10. Additional Indebtedness incurred in
fiscal year to finance Consolidated
Capital Expenditures as permitted
under subsection 6.1(viii)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

11. Maximum additional Indebtedness
permitted in fiscal year to finance
Consolidated Capital Expenditures
under subsection 6.1(viii)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,000,000

12. Aggregate principal amount of
additional Indebtedness for
Consolidated Capital Expenditures
incurred under subsection 6.1(viii)(b) . . . . . . . . . . . . . . . . . . . . . . $___________

13. Maximum aggregate principal amount
of additional Indebtedness for
Consolidated Capital Expenditures
permitted under 6.1(viii)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . $400,000,000

14. Indebtedness described in
subsection 6.1(xii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

15. Aggregate principal amount of
all outstanding Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

16. Maximum Indebtedness permitted
under subsection 6.1(xii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

17. Principal amount of all
outstanding commercial paper sold
in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

18. Maximum amount of outstanding
commercial paper sold in the
United States permitted as
Indebtedness under subsection
6.1(xii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000,000

19. Other Indebtedness permitted by
subsection 6.1(xiii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________
</TABLE>

VIII-14

<PAGE> 28
<TABLE>
<S> <C>
20. Maximum Indebtedness permitted by
subsection 6.1(xiii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000

21. Refinancing Indebtedness permitted by
subsection 6.1(xiv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

22. Maximum Refinancing Indebtedness
permitted by subsection 6.1(xiv) . . . . . . . . . . . . . . . . . . . . . . . $1,000,000,000

23. Refinancing Indebtedness denominated in
Canadian Dollars permitted by subsection
6.1(xiv)(in Dollar Equivalents as of the
date of incurrence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

24. Maximum Refinancing Indebtedness in
Dollar Equivalents permitted to be
issued in Canadian Dollars or by Canadian
Borrowers under subsection 6.1(xiv) . . . . . . . . . . . . . . . . . . . . . . . $100,000,000

25. Refinancing Indebtedness not constituting
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

26. Maximum Refinancing Indebtedness not
constituting Subordinated Indebtedness
permitted under subsection 6.1(xiv) . . . . . . . . . . . . . . . . . . . . . . . $500,000,000
</TABLE>

C. LIENS
<TABLE>
<S> <C> <C>
1. Aggregate fair market value of
property or assets subject to Liens
permitted by subsection 6.2(xvi) . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum permitted under subsection
6.2(xvi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000
</TABLE>

D. INVESTMENTS
<TABLE>
<S> <C> <C>
1. Aggregate Investments in promissory
notes issued by Management
Investors in connection with
Subscription Agreements permitted
under subsection 6.3(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum permitted under
subsection 6.3(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000,000

3. Aggregate amount of Investments (including
assumed Contingent Obligations described i
subsection 6.4(xiii) in Joint Ventures ope
in the United States and engaged primarily
the construction and operation of Safeway
stores and shopping centers, and warehouse
and distribution centers related to
Safeway retail grocery operations permitted
</TABLE>

VIII-15

<PAGE> 29
<TABLE>
<S> <C> <C>
by subsection 6.3(vii)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

4. Maximum amount of Investments described
in the preceding Item D3 permitted under
subsection 6.3(vii)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000,000

5. Aggregate amount of additional Investments
in Joint Ventures operating in the United
States or Canada permitted under
subsection 6.3(vii)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

6. Maximum amount of Investments described in
the preceding Item D5 permitted under
subsection 6.3(vii)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000,000

7. Aggregate fair value of Investments
in connection with Asset Sales
permitted by subsection 6.3(viii) . . . . . . . . . . . . . . . . . . . . . . . . $___________

8. Maximum permitted under
subsection 6.3(viii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000,000

9. Aggregate fair market value of
other Investments permitted under
subsection 6.3(xv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

10. Maximum permitted under
subsection 6.3(xv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000,000
</TABLE>

E. CONTINGENT OBLIGATIONS
<TABLE>
<S> <C> <C>
1. Aggregate contingent reimbursement
obligations under Commercial Letters
of Credit, Standby Letters of Credit and
Letters of Credit permitted under
subsection 6.4(v)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum permitted under
subsection 6.4(v)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $650,000,000

3. Guaranties of obligations of
suppliers, customers, franchisees
and licensees permitted under
subsection 6.4(viii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

4. Maximum permitted under subsection
6.4(viii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000

5. Other Contingent Obligations
permitted under subsection 6.4(xv) . . . . . . . . . . . . . . . . . . . . . . . . $___________

6. Maximum permitted under
subsection 6.4(xv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000,000
</TABLE>

VIII-16

<PAGE> 30
<TABLE>
<S> <C> <C>
F. FIXED CHARGE COVERAGE RATIO
FOR THE PRECEDING FISCAL QUARTER ENDING
__________, 19__

1. Consolidated cash flow from operations
without regard to changes in working
capital items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Consolidated Cash Interest
Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

3. Current portion of consolidated income tax
expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

4. Consolidated Rental Payments (excluding
Capital Lease payments) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

5. Consolidated Cash Flow Available for
Fixed Charges (Item F1+Item F2+
Item F3+Item F4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

6. Consolidated Fixed Charges
(Item F2+Item F3+Item F4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

7. Fixed Charge Coverage Ratio
(Item F5:Item F6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ___:1.00

8. Minimum Fixed Charge Coverage
Ratio permitted under
subsection 6.6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ___:____
</TABLE>

G. FIXED CHARGE COVERAGE RATIO
FOR THE PRECEDING 12-MONTH PERIOD ENDING
__________, 19__

<TABLE>
<S> <C> <C>
1. Consolidated cash flow from operations
without regard to changes in working
capital items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Consolidated Cash Interest
Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

3. Current portion of consolidated income tax
expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

4. Consolidated Rental Payments (excluding
Capital Lease payments) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

5. Consolidated Cash Flow Available for
Fixed Charges (Item G1+Item G2+
Item G3+Item G4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

6. Consolidated Fixed Charges
(Item G2+Item G3+Item G4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________
</TABLE>

VIII-17

<PAGE> 31
<TABLE>
<S> <C> <C>
7. Fixed Charge Coverage Ratio
(Item G5:Item G7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ___:1.00

8. Minimum Fixed Charge Coverage
Ratio permitted under
subsection 6.6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ___:____
</TABLE>

H. MAXIMUM LEVERAGE RATIO FOR THE PRECEDING
FISCAL QUARTER ENDING ____________, 19__
<TABLE>
<S> <C> <C>
1. Consolidated Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Consolidated Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

3. Leverage Ratio (Item H1:Item H2) . . . . . . . . . . . . . . . . . . . . . . . . . . . ___:1.00

4. Maximum Leverage Ratio permitted
under subsection 6.6C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ___:1.00
</TABLE>

I. FUNDAMENTAL CHANGES
<TABLE>
<S> <C> <C>
1. Aggregate fair market value of assets
transfered to Canadian Second Tier
Subsidiary pursuant to proviso of
subsection 6.7(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum amount of assets that may
be transferred to Canadian Second Tier
Subsidiary pursuant to proviso of
subsection 6.7(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000,000

3. Aggregate fair market value of assets
transfered to Guarantors pursuant to
clause (b) of proviso of subsection 6.7 . . . . . . . . . . . . . . . . . . . . . . $___________

4. Maximum amount of assets that may
be transferred to Guarantors
pursuant to clause (b) of proviso of
subsection 6.7(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500,000,000

5. Proceeds from sales of grocery
stores or facilities for fiscal
year-to-date permitted under
subsection 6.7(vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

6. Maximum amount permitted under
subsection 6.7(vi) for fiscal year . . . . . . . . . . . . . . . . . . . . . . . . $100,000,000

7. Aggregate amount of proceeds from sales
of grocery stores or facilities to date
permitted under subsection 6.7(vi) . . . . . . . . . . . . . . . . . . . . . . . $___________

8. Maximum aggregate amount permitted
under subsection 6.7(vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $275,000,000
</TABLE>

VIII-18

<PAGE> 32
<TABLE>
<S> <C> <C>
9. Aggregate consideration (including
assumed Indebtedness and Contingent
Obligations) paid for all acquisitions
permitted under subsections 6.7(viii)
and 6.3(xii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

10. Maximum aggregate consideration
for acquisitions permitted under
subsections 6.7(viii) and 6.3(xii) . . . . . . . . . . . . . . . . . . . . . . . . $250,000,000

11. Aggregate consideration paid for
acquisitions in fiscal year
permitted under subsection 6.7(ix) . . . . . . . . . . . . . . . . . . . . . . . $____________

12. Maximum aggregate consideration
for acquisitions in fiscal year
permitted under subsection 6.7(ix) . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000,000
</TABLE>

J. LEASES
<TABLE>
<S> <C> <C>
1. Consolidated Rental Payments
under subsection 6.9 for fiscal
year-to-date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum amount permitted under
subsection 6.9 for fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . $___________
</TABLE>

K. SALE OR DISCOUNT OF RECEIVABLES
<TABLE>
<S> <C> <C>
1. Aggregate face amount of notes
relating to real property owned
and sold prior to August 29, 1986,
prepaid at less than face value
pursuant to subsection 6.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

2. Maximum aggregate face amount of
notes relating to real property
owned and sold prior to August 29,
1986 to be prepaid at less than
face value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000,000
</TABLE>

L. CAPITAL EXPENDITURES
<TABLE>
<S> <C> <C>
1. Consolidated Capital Expenditures
for fiscal year-to-date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $___________

A. aggregate amount of expenditures
for property, plant or equipment . . . . . . . . . . . . . . . . . . . . . $___________

B. aggregate amount of Investments
in Joint Ventures engaged primarily
in construction and development of
facilities relating to Safeway
retail grocery operations . . . . . . . . . . . . . . . . . . . . . . . . $_____________
</TABLE>

VIII-19

<PAGE> 33
<TABLE>
<S> <C> <C>
C. Total (Item L1A+Item L1B) . . . . . . . . . . . . . . . . . . . . . . . . . $_____________

2. Consolidated Capital Expenditures
for immediately preceding fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_____________

3. Maximum Amount of Consolidated
Capital Expenditures permitted
in any two consecutive fiscal
years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,300,000,000

4. Maximum Amount of Consolidated
Capital Expenditures permitted
under subsection 6.14 for any fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 700,000,000
</TABLE>

VIII-20

<PAGE> 34

ANNEX A

March __, 1994

Bankers Trust Company, as Agent
333 South Grand Avenue
41st Floor
Los Angeles, California 90071

Attention: James B. Miles, Vice President

Re: Safeway Credit Agreement: Consent to Extension

To whom it may concern:

The undersigned, being a "Bank" under that certain Second
Amended and Restated Credit Agreement dated as of June 12, 1990, as amended to
the date hereof (as so amended, the "Credit Agreement"), by and among Safeway
Inc., a Delaware corporation, the banks named on the signature pages thereof,
Bankers Trust Company, as Lead Manager and Agent for Banks ("Agent"), the
Managers named on the signature pages thereof, the Co-Managers named on the
signature pages thereof, hereby notifies the Agent, pursuant to subsection 2.12
of the Credit Agreement, of the undersigned Bank's consent to a one year
extension of "First Commitment Reduction Date," the "Second Commitment
Reduction Date" and the "Commitment Termination Date," as such terms are
defined in the Credit Agreement.

Very truly yours,

____________________________
NAME OF BANK

By__________________________
Title_______________________

<PAGE> 1
Exhibit 4(i).21

SAFEWAY INC.
CANADA SAFEWAY LIMITED
LUCERNE FOODS LTD.

EXTENSION AGREEMENT AND
SIXTH AMENDMENT AND CONSENT
DATED AS OF MARCH 31, 1994
TO SECOND AMENDED AND RESTATED
WORKING CAPITAL CREDIT AGREEMENT

This EXTENSION AGREEMENT AND SIXTH AMENDMENT AND CONSENT dated as of March
31, 1994 (this "Amendment") to the Second Amended and Restated Working Capital
Credit Agreement dated as of June 14, 1990, as amended by a First Amendment and
Consent dated as of March 22, 1991, a Second Amendment and Consent dated as of
June 7, 1991, a Third Amendment and Consent dated as of August 7, 1991, a
Fourth Amendment and Consent dated as of November 8, 1991, and a Fifth
Amendment and Consent dated as of January 28, 1992 (as so amended, "Working
Capital Credit Agreement") is by and among Safeway Inc., a Delaware corporation
("Company"), Canada Safeway Limited, an Alberta corporation ("Safeway Canada"),
Lucerne Foods Ltd., an Alberta corporation ("Lucerne"), the financial
institutions named on the signature pages hereof ("Banks"), The Bank of Nova
Scotia, as paying agent with respect to the Canadian Loans and Bankers'
Acceptance Facility ("Canadian Paying Agent"), BT Bank of Canada, as
administrative agent with respect to the Canadian Loans and Bankers' Acceptance
Facility ("Canadian Administrative Agent"), Bankers Trust Company, as Lead
Manager and Agent for the Banks ("Agent"), the Guarantors named on the
signature pages hereof ("Guarantors") and the Pledgors named on the signature
pages hereof ("Pledgors"). Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Working Capital Credit
Agreement.

RECITALS

WHEREAS, Company, Safeway Canada and Lucerne propose to reduce voluntarily
the Working Capital Commitments by $150,000,000 and, in connection with such
reduction, are requesting that the Commitment Reduction Date and the Expiry
Date be extended by one year and that the Requisite Banks agree to amend the
Working Capital Credit Agreement as set forth herein for the purpose of, among
other things, changing the Canadian Reference Banks for the purpose of
determining the Average Effective Discount Rate with respect to Bankers'
Acceptances;

<PAGE> 2
WHEREAS, Company proposes to amend the Acquisition Credit Agreement and has
requested that Banks consent to the amendments to the Acquisition Credit
Agreement (as amended prior to the date hereof by a First Amendment dated as of
March 22, 1991, a Second Amendment dated as of June 7, 1991, Third Amendment
dated as of August 7, 1991, a Fourth Amendment dated as of November 8, 1991 and
a Fifth Amendment to Second Amended and Restated Credit Agreement and Consent
to Documents dated as of January 28, 1992) to be effected by that certain
Extension Agreement and Sixth Amendment to Second Amended and Restated Credit
Agreement dated as of the date hereof (the "Sixth ACA Amendment") by and among
Company, the Acquisition Banks, the managers party thereto, the co-managers
party thereto, the Acquisition Agent, the guarantors party thereto and the
pledgors party thereto;

WHEREAS, subject to the terms and conditions of this Amendment, Requisite
Banks, Canadian Paying Agent, Canadian Administrative Agent and Agent are
willing to agree to such extension and amendments, it being understood that,
pursuant to the definition of Requisite Banks under the Working Capital Credit
Agreement, each Domestic Bank having a Canadian Bank Affiliate under the
Working Capital Credit Agreement is entitled to execute this Amendment on
behalf of its Canadian Bank Affiliate;

WHEREAS, Guarantors desire expressly to consent to this Amendment and to
reaffirm the effectiveness of the First Tier Guaranty, the Second Tier
Guaranty, the Safeway Guaranty, the Safeway New Canada Guaranty, the Safeway
Canada Guaranty, the Lucerne Guaranty and the Contribution Agreement; and

WHEREAS, Pledgors desire expressly to consent to this Amendment and to
reaffirm the effectiveness of the Company Pledge Agreement, the Safeway Pledge
Agreement, the Inventory Pledge Agreement, the First Tier Pledge Agreements,
the Second Tier Pledge Agreements, the Safeway Canada Pledge Agreement and the
Safeway New Canada Pledge Agreement (collectively, the "Pledge Agreements");

AGREEMENT

SECTION 1. AGREEMENT TO EXTEND COMMITMENTS. The Borrowers hereby request
that the Commitment Reduction Date and the Expiry Date be extended for one year
as contemplated by subsection 2.1F of the Working Capital Credit Agreement.
Each Bank electing to consent to such extension shall for the purposes of
subsection 2.1F of the Working Capital Credit Agreement be deemed to consent to
such extension upon its execution and delivery to Agent of a

<PAGE> 3
consent to such extension in the form attached as Annex B to this Amendment.

SECTION 2. AMENDMENTS TO THE WORKING CAPITAL CREDIT AGREEMENT.

A. Subsection 1.1 of the Working Capital Credit Agreement is hereby amended
by adding thereto the following defined terms in the appropriate alphabetical
order:

"'SCHEDULE I BANK' means any Canadian Bank that is a bank referred to in
Schedule I to the Bank Act (Canada), R.S.C. 1985, C, B-1, as amended."

"'SCHEDULE I REFERENCE BANKS' means BNS, The Royal Bank of Canada and Bank
of Montreal."

"'SCHEDULE II BANK' means any Canadian Bank that is not a Schedule I Bank."

"'SCHEDULE II REFERENCE BANKS' means BT Canada, Bank of America Canada and
The Sumitomo Bank of Canada."

B. Subsection 1.1 of the Working Capital Credit Agreement is hereby further
amended by (a) amending and restating the definitions of "Average Effective
Discount Rate", "First Tier Guaranty" and "Second Tier Guaranty" in their
entirety as follows:

"'AVERAGE EFFECTIVE DISCOUNT RATE' means, (a) in respect of any Bankers'
Acceptances or Drafts to be purchased by a Schedule I Bank pursuant hereto,
the arithmetic average of the discount rates (calculated on an annual basis
and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1%
being rounded up) quoted by each Schedule I Reference Bank at 10:00 a.m.
(Toronto time) as the discount rate at which such Schedule I Reference Bank
would purchase, on the relevant Drawing Date, its own Bankers' Acceptances
having an aggregate Face Amount equal to and with a term to maturity the same
as the Bankers' Acceptances or Drafts to be acquired by such Schedule I Bank
on such Drawing Date or (b) in respect of any Bankers' Acceptances or Drafts
to be purchased by a Schedule II Bank or any other Person (other than a
Schedule I Bank) pursuant hereto, the arithmetic average of the discount
rates (calculated on an annual basis and rounded to the nearest one-hundredth
of 1%, with five-thousandths of 1% being rounded up) quoted by each Schedule
II Reference Bank at 10:00 a.m. (Toronto time) as the discount rate at which
such Schedule II Reference Bank would purchase, on the relevant Drawing Date,
its own Bankers' Acceptances having an aggregate Face Amount

<PAGE> 4
equal to and with a term to maturity the same as the Bankers' Acceptances or
Drafts to be acquired by such Schedule II Bank or other Person on such
Drawing Date. If any Schedule I Reference Bank or Schedule II Reference Bank
fails to provide its quotation to Canadian Administrative Agent, the Average
Effective Discount Rate shall be determined on the basis of the quotation(s)
by the other Schedule I Reference Bank(s) or Schedule II Reference Bank(s),
as applicable."

"'FIRST TIER GUARANTY' means, collectively, the First Amended and Restated
Guaranty Agreement executed and delivered by the First Tier Subsidiaries, a
conformed copy of which is annexed hereto as EXHIBIT XIV, the Guaranty
Agreement dated as of August 7, 1991, executed by Safeway Warehouse, Inc.
having provisions substantially similar to those set forth in EXHIBIT XIV
annexed hereto, and any other Guaranty Agreement substantially in the form of
EXHIBIT XIV annexed hereto executed after the date hereof by any other direct
Subsidiary of Company (which Subsidiary shall, in connection with the
execution of such Guaranty Agreement, take such actions as are necessary to
become a "Guarantor" party to the Contribution Agreement), in each case as
such Guaranty Agreements may be amended, supplemented or otherwise modified
from time to time."

"'SECOND TIER GUARANTY' means, collectively, the First Amended and Restated
Guaranty Agreement executed and delivered by the Domestic Second Tier
Subsidiaries, a conformed copy of which is annexed as EXHIBIT XV hereto, and
any other Guaranty Agreement substantially in the form of EXHIBIT XV annexed
hereto executed after the date hereof by any other indirect Subsidiary of
Company (which Subsidiary shall, in connection with the execution of such
Guaranty Agreement, take such actions as are necessary to become a
"Guarantor" party to the Contribution Agreement), in each case as such
Guaranty Agreements may be amended, supplemented or otherwise modified from
time to time."

and (b) inserting the word "applicable" in clause (x) of the definition of
Drawing Purchase Price, immediately preceding the term "Average Effective
Discount Rate".

C. Subsection 2.5F (having the heading that reads, "Average Effective
Discount Rate Determination") of the Working Capital Credit Agreement is hereby
amended and restated in its entirety as follows:

"F. AVERAGE EFFECTIVE DISCOUNT RATE DETERMINATION. (1) Each Schedule I
Reference Bank or Schedule II Reference Bank, as the case may be, agrees to
furnish to Canadian Administrative Agent timely

<PAGE> 5
information for purposes of determining each Average Effective Discount Rate.
If any one or more of the Schedule I Reference Banks or Schedule II Reference
Banks shall not furnish such information to Canadian Administrative Agent for
its determination of an applicable Average Effective Discount Rate, Canadian
Administrative Agent shall determine such Average Effective Discount Rate on
the basis of timely information furnished by the remaining Schedule I
Reference Banks or Schedule II Reference Banks, as applicable.

(2) Canadian Administrative Agent shall give prompt notice to Safeway
Canada, Canadian Banks, Canadian Paying Agent and Company of each Average
Effective Discount Rate determined by Canadian Administrative Agent for an
applicable Drawing Date and the applicable discount rates, if any, furnished
by each Schedule I Reference Bank or Schedule II Reference Bank for
determining any applicable Average Effective Discount Rate."

SECTION 3. INCORPORATION BY REFERENCE FROM ACQUISITION CREDIT AGREEMENT OF
THE SIXTH ACA AMENDMENT.

Requisite Banks hereby agree and consent to the Sixth ACA Amendment,
substantially in the form attached hereto as Annex A, and to all of the
amendments and modifications to the Acquisition Credit Agreement effected by
the Sixth ACA Amendment. It is hereby agreed that all definitions,
representations, warranties, covenants and other provisions contained in the
Acquisition Credit Agreement which are incorporated in the Working Capital
Credit Agreement by reference (the "Incorporated Provisions") are so
incorporated in the form in which such Incorporated Provisions exist in the
Acquisition Credit Agreement, as amended by the Sixth ACA Amendment, subject to
the proviso set forth in subsection 1.5 of the Amended Working Capital Credit
Agreement.

SECTION 4. REPRESENTATIONS AND WARRANTIES.

In order to induce Banks to consent to the extension requested in Section 1
and to enter into this Amendment, Company, Safeway Canada, and Lucerne each
represent and warrant (which representations and warranties in the case of
Safeway Canada and Lucerne, as the case may be, shall be limited to Safeway
Canada and its Subsidiaries and Lucerne and its Subsidiaries, respectively, and
other facts and circumstances known to Safeway Canada and its Subsidiaries, or
Lucerne and its Subsidiaries, as the case may be) to each Bank that:

<PAGE> 6
A. No event would result from the execution of this Amendment and, after
giving effect to this Amendment, no event has occurred or is continuing which
constitutes an Event of Default or Potential Event of Default;

B. The representations and warranties of Company contained in the Working
Capital Credit Agreement, as amended by this Amendment (the "Amended Working
Capital Credit Agreement") are true, correct and complete in all material
respects on and as of the date hereof to the same extent as though made on
and as of the date hereof except that the representations and warranties need
not be true and correct to the extent that changes in the facts and
conditions on which such representations and warranties are based are
required or permitted under the Amended Working Capital Credit Agreement;

C. This Amendment, the Amended Working Capital Credit Agreement, and the
consummation of the transactions contemplated hereby or thereby do not and
will not (i) violate any provisions of law applicable to Company or any of
its Subsidiaries, the Certificate of Incorporation or Bylaws of Company or
any of its Subsidiaries, or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, or
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under, the indentures pursuant to which any
outstanding Subordinated Indebtedness (including, without limitation, the
Senior Subordinated Indebtedness) has been issued (the "Indentures") or any
term of any other material agreement or instrument to which Company or any of
its Subsidiaries is a party or by which any of their properties or assets are
bound;

D. If the Working Capital Commitments were fully utilized as of the date
hereof, all indebtedness of Company with respect to the Loans under the
Amended Working Capital Credit Agreement and all indebtedness of Company
under the Company Guaranty with respect to (i) monies borrowed by the
Canadian Borrowers under the Amended Working Capital Credit Agreement and
(ii) amounts owed by Safeway Canada with respect to repayment of Drafts,
Bankers' Acceptances and Bankers' Acceptance Equivalent Notes issued under
the Amended Working Capital Credit Agreement would be within the definition
of "Senior Indebtedness" contained in the Indentures;

E. All monetary obligations of Company, Safeway Canada and Lucerne now or
hereafter existing under or

<PAGE> 7
in respect of the Amended Working Capital Credit Agreement, whether for
principal, interest, fees or otherwise, are within the definition of
"Guarantied Obligations" contained in the Contribution Agreement, the First
Tier Guaranty, the Second Tier Guaranty and the Safeway Guaranty and all such
monetary obligations of Company are within the definition of "Senior Secured
Obligations" contained in the Company Pledge Agreement and the Inventory
Pledge Agreement and the Collateral Agent is entitled to the benefit of the
Liens created pursuant to the Collateral Documents referred to in this
sentence with respect to all such obligations of Company. The obligations of
each First Tier Subsidiary and each Domestic Second Tier Subsidiary under the
First Tier Guaranty and the Second Tier Guaranty, respectively, are within
the definition of "Secured Obligations" contained in the First Tier Pledge
Agreements and the Second Tier Pledge Agreements and the Collateral Agent is
entitled to the benefit of the Liens created pursuant to the Collateral
Documents referred to in this sentence to which such First Tier Subsidiary or
Domestic Second Tier Subsidiary is a party with respect to all such
obligations of such Subsidiary;

F. All monetary obligations of Safeway Canada or Lucerne now or hereafter
existing under or in respect of the Amended Working Capital Credit Agreement,
whether for principal, interest, fees or otherwise, are within the definition
of "Guarantied Obligations" contained in the Safeway Canada Guaranty and the
Lucerne Guaranty, as applicable, and, with the exception of the
aforementioned obligations of Lucerne, are within the definition of "Secured
Obligations" contained in the Safeway Canada Pledge Agreement and the
Canadian Administrative Agent is entitled to the benefit of the Liens created
pursuant to the Collateral Documents referred to in this sentence with
respect to all such obligations of Safeway Canada or Lucerne;

G. Each Loan Party has performed in all material respects all agreements
and satisfied all conditions which the Working Capital Credit Agreement and
this Amendment provide shall be performed by it on or before the date hereof;

H. The Guarantors mean and include Company, Safeway New Canada, Safeway
Canada, Lucerne and all of the First Tier Subsidiaries, Safeway Warehouse,
Inc., all of the Second Tier Subsidiaries (including ICC Subsidiary) and all
of the Domestic Third Tier Subsidiaries presently owned either directly or
indirectly by Company;

<PAGE> 8
I. The Pledgors mean and include Company, Safeway New Canada, Safeway
Canada and all of the First Tier Subsidiaries and all of the Second Tier
Subsidiaries (including ICC Subsidiary);

J. The execution, delivery and performance by Company of this Amendment are
within the corporate power of Company and have been duly authorized by all
necessary corporate action on the part of Company, and this Amendment and the
Amended Working Capital Credit Agreement constitute the valid and binding
obligations of Company enforceable against Company in accordance with their
respective terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally; and

K. Each Working Capital Guaranty and the Contribution Agreement shall
continue in full force and effect and remain the valid and binding
obligations of the Guarantors party thereto enforceable against the
Guarantors party thereto in accordance with their respective terms, subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
generally. The Pledge Agreements shall continue in full force and effect and
remain the valid and binding obligations of the Pledgors party thereto,
enforceable against the Pledgors party thereto in accordance with their
respective terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally.

SECTION 5. CONDITIONS TO EFFECTIVENESS.

This Amendment shall become effective as of the first date Agent, on behalf
of Banks, shall have received all of the following in form and substance
satisfactory to Agent (the "Sixth Amendment Effective Date"):

A. Resolutions of the Board of Directors of Company, Safeway Canada and
Lucerne authorizing and approving the execution, delivery and performance of
this Amendment and resolutions of the Board of Directors of each Guarantor
and each Pledgor authorizing and approving the execution and delivery of this
Amendment, in each case certified by the corporate secretary or an assistant
secretary of Company, Safeway Canada, Lucerne, each Guarantor and each
Pledgor, as the case may be, as of the Sixth Amendment Effective Date;

<PAGE> 9
B. A certificate of the corporate secretary or an assistant secretary of
Company, Safeway Canada, Lucerne, each Guarantor and each Pledgor which shall
certify, as of the Sixth Amendment Effective Date, the names and offices of
the officers of Company, Safeway Canada, Lucerne, each Guarantor and each
Pledgor authorized to sign this Amendment;

C. A counterpart hereof executed by a duly authorized officer of Company,
Requisite Banks, Canadian Paying Agent, Canadian Administrative Agent and
Agent, each Guarantor and each Pledgor or in the case of any Bank, telecopy
or telephone confirmation from such Bank of its execution hereof;

D. An executed original irrevocable written notice of Borrowers to Agent
and Canadian Agents specifying, in accordance with the provisions of
subsection 2.4E of the Working Capital Credit Agreement, that the Working
Capital Commitments shall be permanently reduced by $150,000,000 on the date
specified in such notice, which date shall be on or before the Sixth
Amendment Effective Date; and

E. The Sixth ACA Amendment, which shall have become effective in accordance
with its terms.

SECTION 6. THE WORKING CAPITAL GUARANTIES AND THE CONTRIBUTION AGREEMENT.

Each Guarantor agrees to and acknowledges the terms and provisions of this
Amendment and acknowledges and confirms that each Working Capital Guaranty to
which it is a party will, from and after the Sixth Amendment Effective Date,
continue to guaranty to the fullest extent possible the payment and performance
of the Guarantied Obligations (as that term is defined in each Working Capital
Guaranty) and, furthermore, that from and after the Sixth Amendment Effective
Date, each such Working Capital Guaranty will also guaranty, to the fullest
extent possible, the performance of

<PAGE> 10
all obligations (including, without limitation, due and punctual payment of all
amounts) under, referred to in, or contemplated by this Amendment by the
principal debtor(s) whose obligations are guaranteed by the particular
Guarantor and the Guarantied Obligations (as defined in each Working Capital
Guaranty) shall include all such obligations of the principal debtor(s). Each
Guarantor (other than Safeway Canada and Lucerne) agrees and acknowledges that
the Contribution Agreement will continue to establish the rights and
obligations of contribution among Guarantors with respect to the payment and
performance of all Guarantied Obligations (as that term is defined in the
Contribution Agreement). Without limiting the generality of the foregoing,
each Guarantor hereby acknowledges and confirms the understanding and intent of
such Guarantor that, upon the effectiveness of this Amendment, as a result of
this Amendment, the definition of "Working Capital Obligations" contained in
the Working Capital Credit Agreement includes the obligations of Borrowers set
forth in the Amended Working Capital Credit Agreement and that the obligations
of any Borrower guarantied under any Working Capital Guaranty shall include the
obligations of such Borrower under the Amended Working Capital Credit
Agreement.

Each Guarantor agrees and acknowledges that each Working Capital Guaranty to
which it is a party and, to the extent that such Guarantor is also a party
thereto, the Contribution Agreement shall continue in full force and effect and
that all of its obligations thereunder shall be valid and enforceable and shall
not be impaired or affected by the execution of this Amendment. Each Guarantor
represents and warrants that all representations and warranties contained in
this Amendment and the Working Capital Guaranty to which it is a party are
true, correct and complete as of the date hereof to the same extent as though
made on such date except that the representations and warranties need not be
true and correct to the extent that changes in the facts and conditions on
which such representations and warranties are based are required or permitted
under such agreements.

SECTION 7. THE PLEDGE AGREEMENTS.

<PAGE> 11

Each Pledgor agrees to and acknowledges the terms and provisions of this
Amendment and confirms that the Pledge Agreements to which it is a party and
the Pledged Collateral (as that term is defined in each such Pledge Agreement)
will continue to secure to the fullest extent possible the payment and
performance of all Senior Secured Obligations (as that term is defined in the
Company Pledge Agreement, the Safeway Pledge Agreement and the Inventory Pledge
Agreement) and all Secured Obligations (as that term is defined in the Safeway
Canada Pledge Agreement, the Safeway New Canada Pledge Agreement, each First
Tier Pledge Agreement and each Second Tier Pledge Agreement), and furthermore,
that from and after the Sixth Amendment Effective Date, each such Pledge
Agreement will also secure, to the fullest extent possible, the performance of
all obligations (including, without limitation, due and punctual payment of all
amounts) under, referred to in, or contemplated by this Amendment of each
Borrower or Pledgor whose Working Capital Obligations are secured by any such
Pledge Agreement. Without limiting the generality of the foregoing, each
Pledgor hereby acknowledges and confirms the understanding and intent of such
Pledgor that, upon the effectiveness of this Amendment, as a result of this
Amendment, the definition of "Working Capital Obligations" contained in the
Working Capital Credit Agreement includes the obligations of Borrowers set
forth in the Amended Working Capital Credit Agreement and that the obligations
of any Borrower secured under any Pledge Agreement shall include the
obligations of such Borrower under the Amended Working Capital Credit
Agreement.

Each Pledgor agrees and acknowledges that the Pledge Agreement to which it
is a party shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired
or affected by the execution of this Amendment. Each Pledgor represents and
warrants that all representations and warranties contained in this Amendment
and the Pledge Agreement to which it is a party are true, correct and complete
as of the date hereof to the same extent as though made on such date except
that the representations and warranties need not be true and correct to the
extent that changes in the facts and conditions on which such representations
and warranties are based are required or permitted under such agreements.

SECTION 8. COUNTERPARTS.

This Amendment may be executed in any number of counterparts, and by
different parties hereto in separate

<PAGE> 12
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

SECTION 9. EFFECT OF AMENDMENT.

It is hereby agreed that, except as specifically provided herein, this
Amendment does not in any way affect or impair the terms and conditions of the
Working Capital Credit Agreement, and all terms and conditions of the Working
Capital Credit Agreement are to remain in full force and effect unless
otherwise specifically amended, waived or changed pursuant to the terms and
conditions of this Amendment.

SECTION 10. APPLICABLE LAW.

[Remainder of Page Intentionally Left Blank]

<PAGE> 13
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.

SAFEWAY INC., (as a Borrower,
Guarantor and Pledgor)

By __________________________________
Name:
Title:

CANADA SAFEWAY LIMITED, (as a
Borrower, Guarantor and Pledgor)

By __________________________________
Name:
Title:

LUCERNE FOODS LTD., (as a Borrower
and Guarantor)

By __________________________________
Name:
Title:

BANKERS TRUST COMPANY, individually
as a Domestic Bank and as Agent and
on behalf of its Canadian Bank
Affiliate

By __________________________________
Name:
Title:

BT BANK OF CANADA, individually as a
Canadian Bank and as Canadian
Administrative Agent

By __________________________________
Name:
Title:

S-13

<PAGE> 14
THE BANK OF NOVA SCOTIA,
individually as a Domestic Bank and
Canadian Bank and as Canadian Paying
Agent

By __________________________________
Name:
Title:

BANK OF MONTREAL, as a Domestic Bank
and a Canadian Bank

By __________________________________
Name:
Title:

CHEMICAL BANK, as a Domestic Bank
and on behalf of its Canadian Bank
Affiliate

By __________________________________
Name:
Title:

ROYAL BANK OF CANADA, as a Domestic
and Canadian Bank

By __________________________________
Name:
Title:

THE CHASE MANHATTAN BANK, N.A., as a
Domestic Bank and on behalf of its
Canadian Bank Affiliate

By __________________________________
Name:
Title:

S-14

<PAGE> 15
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Domestic
Bank and on behalf of its Canadian
Bank Affiliate

By __________________________________
Name:
Title:

CITIBANK, N.A., as a Domestic Bank
and on behalf of its Canadian Bank
Affiliate

By __________________________________
Name:
Title:

THE BANK OF TOKYO - SAN FRANCISCO
AGENCY, as a Domestic Bank and on
behalf of its Canadian Bank Affiliate

By __________________________________
Name:
Title:

BARCLAYS BANK OF CANADA, as a
Domestic Bank and a Canadian Bank

By __________________________________
Name:
Title:

THE SUMITOMO BANK, LIMITED, as a
Domestic Bank and on behalf of its
Canadian Bank Affiliate

By __________________________________
Name:
Title:

S-15

<PAGE> 16
CREDIT LYONNAIS SAN FRANCISCO
BRANCH, as a Domestic Bank and on
behalf of its Canadian Bank Affiliate

By __________________________________
Name:
Title:

ABN AMRO N.V., as a Domestic Bank
and on behalf of its Canadian Bank
Affiliate

By __________________________________
Name:
Title:

THE INDUSTRIAL BANK OF JAPAN, LTD.,
as a Domestic Bank

By __________________________________
Name:
Title:

THE INDUSTRIAL BANK OF JAPAN
(CANADA), as a Canadian Bank

By __________________________________
Name:
Title:

BANQUE NATIONALE DE PARIS, as a
Domestic Bank and on behalf of its
Canadian Bank Affiliate

By __________________________________
Name:
Title:

BANQUE NATIONALE DE PARIS (CANADA),
as a Canadian Bank

By __________________________________
Name:
Title:

S-16

<PAGE> 17

CIBC INC., as a Domestic Bank

By __________________________________
Name:
Title:

CANADIAN IMPERIAL BANK OF COMMERCE,
as a Canadian Bank

By __________________________________
Name:
Title:

BANK HAPOALIM, as a Domestic Bank
and on behalf of its Canadian Bank
Affiliate

By __________________________________
Name:
Title:

THE SAKURA BANK, LIMITED, as a
Domestic Bank

By __________________________________
Name:
Title:

SAKURA BANK (CANADA), as a Canadian
Bank

By __________________________________
Name:
Title:

S-17

<PAGE> 18
GUARANTORS AND PLEDGORS:

SAFEWAY NEW CANADA, INC.

By ___________________________________
Name:
Title:

FIRST TIER SUBSIDIARIES:

SAFEWAY AUSTRALIA HOLDINGS, INC.

SAFEWAY CANADA HOLDINGS, INC.

SAFEWAY U.S. HOLDINGS, INC.

SAFEWAY WAREHOUSE, INC.

By ___________________________________
As an authorized officer of each
of the foregoing First Tier
Subsidiaries

DOMESTIC SECOND TIER SUBSIDIARIES:

SAFEWAY SOUTHERN CALIFORNIA, INC.

SAFEWAY DENVER, INC.

SAFEWAY RICHMOND, INC.

SAFEWAY DALLAS, INC. (formerly named
"SAFEWAY WASHINGTON, D.C., INC.")

SAFEWAY SUPPLY, INC.

SAFEWAY CORPORATE, INC.

SAFEWAY TRUCKING, INC.

By __________________________________
As an authorized officer of each
of the foregoing Domestic Second
Tier Subsidiaries

S-18

<PAGE> 19
DOMESTIC THIRD TIER SUBSIDIARIES:

<TABLE>
<S> <C>
SAFEWAY STORES 18, INC. SAFEWAY STORES 72, INC.
SAFEWAY STORES 26, INC. SAFEWAY STORES 73, INC.
SAFEWAY STORES 28, INC. SAFEWAY STORES 74, INC.
SAFEWAY STORES 31, INC. SAFEWAY STORES 75, INC.
SAFEWAY STORES 42, INC. SAFEWAY STORES 76, INC.
SAFEWAY STORES 43, INC. SAFEWAY STORES 77, INC.
SAFEWAY STORES 44, INC. SAFEWAY STORES 78, INC.
SAFEWAY STORES 45, INC. SAFEWAY STORES 79, INC.
SAFEWAY STORES 46, INC. SAFEWAY STORES 80, INC.
SAFEWAY STORES 47, INC. SAFEWAY STORES 81, INC.
SAFEWAY STORES 48, INC. SAFEWAY STORES 82, INC.
SAFEWAY STORES 49, INC. SAFEWAY STORES 85, INC.
SAFEWAY STORES 50, INC. SAFEWAY STORES 86, INC.
SAFEWAY STORES 58, INC. SAFEWAY STORES 87, INC.
SAFEWAY STORES 59, INC. SAFEWAY STORES 88, INC.
SAFEWAY STORES 64, INC. SAFEWAY STORES 89, INC.
SAFEWAY STORES 67, INC. SAFEWAY STORES 90, INC.
SAFEWAY STORES 68, INC. SAFEWAY STORES 91, INC.
SAFEWAY STORES 69, INC. SAFEWAY STORES 92, INC.
SAFEWAY STORES 70, INC. SAFEWAY STORES 96, INC.
SAFEWAY STORES 71, INC. SAFEWAY STORES 97, INC.
SAFEWAY STORES 98, INC.
</TABLE>

By ____________________________________
As an authorized officer of each of
the foregoing Domestic Third Tier
Subsidiaries

S-19

<PAGE> 20
ANNEX A

FIFTH ACA AMENDMENT

[ATTACHED]

A-8
<PAGE> 21
ANNEX B
March __, 1994

Bankers Trust Company, as Agent
333 South Grand Avenue, 41st Floor
Los Angeles, California 90071

Attention: James B. Miles, Vice President

Re: Safeway Working Capital Credit Agreement: Consent to Extension

To whom it may concern:

The undersigned, being a "Bank" under that certain Second Amended
and Restated Working Capital Credit Agreement dated as of June 12, 1990, as
amended to the date hereof (as so amended, the "Working Capital Credit
Agreement"), by and among Safeway Inc., a Delaware corporation, Canada Safeway
Limited, an Alberta corporation, Lucerne Foods Ltd., an Alberta corporation,
the banks named on the signature pages thereof, The Bank of Nova Scotia, as
paying agent, BT Bank of Canada, as administrative agent, and Bankers Trust
Company, as Lead Manager and Agent ("Agent"), hereby notifies Agent, pursuant
to subsection 2.1F of the Working Capital Credit Agreement, of the undersigned
Bank's consent to a one year extension of "Commitment Reduction Date" and the
"Expiry Date," as such terms are defined in the Working Capital Credit
Agreement. Any Affiliate Bank of the undersigned Bank (if any), by its
execution of this letter in the space provided below, hereby also consents to
the foregoing extension.*

Very truly yours,

____________________________
NAME OF BANK

By__________________________
Title_______________________

____________________________
NAME OF AFFILIATE BANK

By__________________________
Title_______________________

____________

* A Bank that has a commitment to fund loans in the United States and in Canada
has no "Affiliate Bank." Many Banks originally structured their commitments so
a United States affiliate would commit to fund loans in the United States and a
Canadian affiliate would commit to fund loans in Canada.

<PAGE> 1
Exhibit 11.1

SAFEWAY INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
and Common Share Equivalent
(in millions, except per share amounts)

<TABLE>
<CAPTION>
12 Weeks Ended
------------------------------------------------
March 26,1994 March 27, 1993
----------------------- ----------------------
Fully Fully
Diluted Primary Diluted Primary
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net income (loss) $ 41.9 $ 41.9 $ (1.7) $ (1.7)
====== ======= ====== ========
Weighted average common shares outstanding 102.3 101.7 99.0 98.9
Common share equivalents 22.6 22.3 1.4 1.4
------ ------- ------ --------
Weighted average common shares and common
share equivalents 124.9 124.0 100.4 100.3
====== ======= ====== ========
Earnings (loss) per common share and common
share equivalent $ 0.34 $ 0.34 $(0.02) $ (0.02)
====== ======= ====== ========
Calculation of common share equivalents:
Options and warrants to purchase common shares 28.6 29.3 1.7 1.7
Common shares assumed purchased with potential
proceeds (6.0) (7.0) (0.3) (0.3)
------ ------- ------ --------
Common share equivalents 22.6 22.3 1.4 1.4
====== ======= ====== ========
Calculation of common shares assumed purchased with
potential proceeds:
Potential proceeds from exercise of options and
warrants to purchase common shares $155.1 $ 158.3 $ 4.2 $ 4.2
Common stock price used under the treasury
stock method $25.75 $ 22.64 $13.63 $ 13.10
Common shares assumed purchased with
potential proceeds 6.0 7.0 0.3 0.3
</TABLE>

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

EXHIBIT 27.1

SAFEWAY INC. AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE
(In millions except per-share amounts)

This schedule contains summary financial information extracted from the
condensed consolidated balance sheets and condensed consolidated statements of
income on pages 3 through 5 of the Company's Form 10-Q for the quarterly period
ending March 26, 1994, and is qualified in its entirety by reference to such
financial statements.

<CAPTION>
March 26,
Item Number Item Description 1994
- - ----------- ---------------- ---------
<S> <C> <C>
5-02(1) Cash and cash items $ 36.3
5-02(2) Marketable securities --
5-02(3)(a)(1) Notes and accounts receivable - trade 124.9
5-02(4) Allowances for doubtful accounts --
5-02(6) Inventory 1,092.8
5-02(9) Total current assets 1,347.1
5-02(13) Property, plant and equipment 4,202.2
5-02(14) Accumulated depreciation (1,686.2)
5-02(18) Total assets 4,935.2
5-02(21) Total current liabilities 1,590.7
5-02(22) Bonds, mortgages and similar debt 2,425.5
5-02(28) Preferred stock - mandatory redemption --
5-02(29) Preferred stock - no mandatory redemption --
5-02(30) Common stock 1.0
5-02(31) Other stockholders' equity 421.8
5-02(32) Total liabilities and stockholders' equity 4,935.2

<CAPTION>
12 Weeks Ended
Item Number Item Description March 26, 1994
- - ----------- ---------------- --------------
<S> <C> <C>
5-03(b)1(a) Net sales of tangible products $ 3,491.8
5-03(b)1 Total revenues 3,491.8
5-03(b)2(a) Cost of tangible goods sold (2,540.1)
5-03(b)2 Total costs and expenses applicable to sales and revenues (2,540.1)
5-03(b)3 Other costs and expenses --
5-03(b)5 Provision for doubtful accounts and notes --
5-03(b)(8) Interest and amortization of debt discount (55.8)
5-03(b)(10) Income before taxes and other items 73.5
5-03(b)(11) Income tax expense (31.6)
5-03(b)(14) Income/loss continuing operations 41.9
5-03(b)(15) Discontinued operations --
5-03(b)(17) Extraordinary items --
5-03(b)(18) Cumulative effect - changes in accounting principles --
5-03(b)(19) Net income or loss 41.9
5-03(b)(20) Earnings per share - primary 0.34
5-03(b)(20) Earnings per share - fully diluted 0.34

</TABLE>