<PAGE>

                                                   Exhibit 13

THE VONS COMPANIES, INC. AND SUBSIDIARIES
-----------------------------------------
   
     Five-Year Selected Financial Data

     The following five-year selected financial data 
should be read in conjunction with the Consolidated 
Financial Statements. 

     The operations acquired from Williams Bros. are 
included in operating results from January 28, 1992.  
During 1992, the Company changed its method of 
accounting for income taxes to comply with the provisions 
of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes."  The change in accounting 
method has been applied retroactively to June 28, 1987
by restating prior years' consolidated financial statements.
During 1992, the Company implemented the provisions of Statement
of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," effective
January 3, 1993.<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                                                As of and     As of and
                                                               for the 53    for the 52
                        As of and for the 52 Weeks Ended       Weeks Ended   Weeks Ended
(in millions of     ----------------------------------------  ------------  ------------
 dollars except     December 31,   January 1,    January 2,    January 3,   December 29,
 share data)            1995          1995          1994          1993          1991
                    ------------  ------------  ------------  ------------  ------------
<S>                 <C>           <C>           <C>           <C>           <C>
Summary of 
 Operations:
  Sales             $    5,070.7  $    4,996.6  $    5,074.5  $    5,595.5  $    5,350.2
  Restructuring 
    charges                   -           33.0          56.9            -             -   
  Operating 
    income                 194.1         125.8         135.8         219.1         197.1  
  Interest
    expense, net            67.3          70.8          66.0          71.5          86.4  
  Income before 
    income tax
    provision              126.8          55.0          69.8         147.6         110.7  
  Income before
    extraordinary
    item and 
    cumulative
    effect of
    change in
    accounting
    for retiree 
    medical 
    benefits                68.1          26.6          33.0          82.1          66.4
  Income before
    cumulative
    effect of
    change in 
    accounting
    for retiree
    medical 
    benefits                68.1          26.6          31.6          69.3          60.1
  Net income                68.1          26.6          31.6          53.8          60.1
  Income
    applicable to
    common 
    shareholders            68.1          26.6          31.6          53.8          60.1  
  Income per 
    common and
    common equivalent
    share before
    extraordinary
    item and
    cumulative
    effect of
    change in
    accounting
    for retiree
    medical 
    benefits                1.55           .61           .76          1.89          1.60
  Income per 
    common and
    common equivalent
    share before
    cumulative 
    effect of
    change in
    accounting
    for retiree
    medical 
    benefits                1.55           .61           .73          1.60          1.45  
  Net income per
    common and
    common equivalent
    share                   1.55           .61           .73          1.24          1.45  
  Dividends paid
    on common 
    stock                     -             -             -             -             -

Financial
 Position:
  Working capital
    (deficit)             (141.1)         (96.1)        (69.3)        (74.9)        (64.2)
 Total assets            2,186.5        2,222.0       2,249.5       2,066.0       1,863.2
    Long-term debt: 
    Capital lease
      obligations           53.4           58.0          62.7          56.4          42.3
    Senior debt            298.8          426.2         497.2         389.2         272.2
     Subordinated 
      debt, net            305.7          319.6         322.1         342.5         376.8 
   Common
    shareholders'
    equity                 623.3          552.4         524.9         493.2         437.7 
   Shareholders'
    equity per  
    common share           14.32          12.73         12.11         11.38         10.12 

Other Data:
  Weighted
    average
    common 
    shares during
    year, 
    including 
    common share
    equivalents       43,948,000     43,560,000    43,501,000    43,512,000    41,583,000
   Outstanding
    common 
    shares at
    year end          43,533,000     43,383,000    43,342,000    43,335,000    43,246,000
 

/TABLE
<PAGE>
<PAGE>

THE VONS COMPANIES, INC. AND SUBSIDIARIES
-----------------------------------------
     Management's Discussion and Analysis of Financial Condition
     and Results of Operations
     
     Results of Operations

<TABLE>

     The following table sets forth the consolidated statements of operations data (in
millions of dollars and as a percentage of sales except share data):

<CAPTION>
                                                Fifty-Two Weeks Ended
                                                ---------------------
                              December 31, 1995    January 1, 1995     January 2, 1994
                              -----------------   -----------------   -----------------
<S>                           <C>         <C>     <C>         <C>     <C>         <C> 
Sales                         $5,070.7    100.0%  $4,996.6    100.0%  $5,074.5    100.0%
Costs and expenses:
  Cost of sales, buying 
    and occupancy              3,790.2     74.8    3,767.2     75.4    3,801.4     74.9
  Selling and
    administrative
    expenses                   1,071.4     21.1    1,055.5     21.1    1,065.4     21.0
  Amortization of excess
    cost over net assets
    acquired                      15.0       .3       15.1       .3       15.0       .3
  Restructuring charges             -        -        33.0       .7       56.9      1.1
Operating income                 194.1      3.8      125.8      2.5      135.8      2.7
Interest expense, net             67.3      1.3       70.8      1.4       66.0      1.3
Income before income  
  tax provision                  126.8      2.5       55.0      1.1       69.8      1.4
Income tax provision              58.7      1.2       28.4       .6       36.8       .7
Income before
  extraordinary item              68.1      1.3       26.6       .5       33.0       .7
Extraordinary item                  -        -          -        -        (1.4)     (.1)
Net income                        68.1      1.3       26.6       .5       31.6       .6
Income per common and
  common equivalent
  share:
    Income before 
      extraordinary item          1.55                 .61                 .76
    Extraordinary item             -                   -                  (.03)       
    Net income                    1.55                 .61                 .73        

</TABLE>

<PAGE>
<PAGE>
     In late 1993, Vons began a company-wide cost containment and
strategic restructuring program to improve sales and
profitability.  The program generated cost savings which were
reinvested in shelf pricing, promotions and customer service. 
The most significant savings were generated from the accelerated
closure of 26 underperforming stores, the elimination of 700
administrative and support staff positions and the closing of a
distribution facility (see Note 14 to the Consolidated Financial
Statements included elsewhere herein).  With the closing of the
Company's San Diego distribution facility in third quarter of
1995, substantially all of the cost containment and strategic
restructuring initiatives have been executed.  However, key to
the Company's ongoing strategy is its commitment to cost
containment, productivity and efficiency in order to maintain its
competitive position.

     The Company's marketing focus and its commitment to a low
cost structure are long-term strategies, which are initially
intended to benefit sales by funding lower prices, which in turn
will improve the Company's ability to achieve strong, sustainable
earnings growth.

     The 1995 merger of two of the Company's major 
competitors, Food 4 Less Supermarkets, Inc. and Ralphs 
Grocery Company, resulted in a change in the composition 
of the Company's competitors as certain trade names were
eliminated and store format conversions occurred.  The 
Company does not believe that the merger or its effect 
on the already competitive marketplace will have a 
material impact on the Company's sales and earnings 
prospects.  

     Comparison of Fifty-Two Weeks Ended December 31, 1995 with
     Fifty-Two Weeks Ended January 1, 1995

     Sales.  Sales for 1995 were $5,070.7 million, an increase 
of $74.1 million, or 1.5%, over 1994.  Same store sales 
increased 3.5% over 1994 sales.  The increase in sales 
reflects the favorable consumer response to improved 
customer service, the "Vons Is Value" marketing campaign 
and the slowly improving economic environment in Southern
California offset by competitive new store, remodel and
conversion activity.  In 1995, the Company opened 13 new 
stores, closed 19 stores and completed 37 store remodel 
projects.

     Costs and Expenses.  Costs and expenses for 1995 
were $4,876.6 million, an increase of $5.8 million, or 
0.1%, over the comparable 1994 period.

     Cost of sales and buying and occupancy expenses 
as a percentage of sales for 1995 were 74.8%, a decrease 
of 0.6  percentage point from 1994.  The impact of lower 
prices has been more than offset by decreased product 
costs achieved through better utilization of category 
management, more effective promotional offerings and 
increased private brand sales.

     Selling and administrative expenses as a percentage of 
sales were 21.1% in 1995, comparable to 1994, which 
included a $5.0 million insurance deductible charge related 
to the Northridge earthquake.  This reflects higher 
service levels in the stores as well as negotiated union 
wage rate increases which were offset by a more efficient 
mix of store labor.

     The Company recorded restructuring charges of $33.0 
million, or $.45 per share, in 1994 (see Note 14 to 
the Consolidated Financial Statements included elsewhere 
herein).  

     Operating Income.  Operating income for 1995 was 
$194.1 million, an increase of $68.3 million, or 54.3%, 
over 1994.  Operating margin increased to 3.8% in 1995 
versus 2.5% in 1994.  Excluding the 1994 restructuring 
charges, results for 1994 were $158.8 million, or 3.2% 
of sales.  These increases primarily reflect an increase 
in gross margin.  Operating income before depreciation 
and amortization of property, amortization of goodwill 
and other assets, LIFO charge, earthquake deductible 
and restructuring charges ("FIFO EBITDA") was $315.0 
million, or 6.2% of sales, in 1995 compared with $284.3 
million, or 5.7% of sales, in 1994.

     Interest Expense.  Net interest expense for 1995 was 
$67.3 million, a decrease of $3.5 million, or 4.9%, from 
1994.  This decrease was due to lower average revolving 
debt borrowings partially offset by higher weighted 
average interest cost on revolving debt.  The ratio of 
FIFO EBITDA to net interest expense increased to 4.7 times 
in 1995 versus 4.0 times in 1994.

     Income Tax Provision.  The income tax provision in 1995 
was $58.7 million, or a 46.3% effective tax rate.  The income 
tax provision in 1994 was $28.4 million, or a 51.6% effective 
tax rate.  Excluding the restructuring charge, the effective 
tax rate for 1994 was 48%.  The decrease in the 1995 effective
tax rate reflects the increase in income before income 
tax provision.  The effective tax rate is impacted by
amortization of excess of cost over net assets acquired, the
majority of which is not deductible for tax purposes.

     Income.  Net income for 1995 was $68.1 million, or $1.55 
per share, compared with net income of $26.6 million, or $.61 
per share, for 1994.  In addition to improved operating results,
this increase reflects the impact of the 1994 restructuring
charges of $33.0 million, or $.45 per share. 

     New Pronouncements by Financial Accounting Standards 
Board.  The Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. 123 
("SFAS No. 123") "Accounting for Stock Based Compensation" 
in October 1995 which is effective for fiscal years 
beginning after December 15, 1995.  SFAS No. 123 
encourages companies to adopt the fair value method of 
accounting for employee stock compensation plans.  SFAS 
No. 123 allows companies to retain the current method of
accounting for stock compensation as set forth in 
Accounting Principles Board Opinion 25, "Accounting for 
Stock Issued to Employees."  SFAS No. 123 requires expanded
footnote disclosure for both methods of accounting.  The 
Company expects to retain the current method of accounting.
Accordingly, the expected impact of SFAS No. 123 on the 
Company's consolidated financial statements is expanded 
footnote disclosure.
 
     Comparison of Fifty-Two Weeks Ended January 1, 1995 with
     Fifty-Two Weeks Ended January 2, 1994

     Sales.  Sales for 1994 were $5.0 billion, a decrease of
$77.9 million, or 1.5%, from 1993.  Same store sales decreased
2.4% from 1993 sales.  Sales reflect reduced prices as a result
of the Vons Value Program, deflation in perishables, the
continuing weak overall economic environment in Southern
California, competitive new store and remodel activity and the
diminished customer base in neighborhoods impacted by the
Northridge earthquake.  In 1994, the Company opened six new
stores, closed 17 stores and completed 14 store remodel projects.

     Costs and Expenses.  Costs and expenses for 1994 were $4.9
billion, a decrease of $67.9 million, or 1.4%, from 1993. 

     Cost of sales and buying and occupancy expenses as a
percentage of sales for 1994 were 75.4%, an increase of 0.5
percentage point over 1993.  The increase reflects the impact of
lower prices, increased promotional activities, and higher
occupancy costs, primarily depreciation expense related 
to the capital expenditure program.  The impact of price
reductions in 1994 was partially offset by better inventory
management and more effective purchasing initiatives 
undertaken in connection with the strategic restructuring
program.

     Selling and administrative expenses as a percentage of 
sales were 21.1% in 1994, an increase of 0.1 percentage 
point over 1993.  This increase reflects a $5.0 million 
insurance deductible charge related to the Northridge 
earthquake.  Increased store labor expenses, related to the 
Vons Value Program, were substantially offset by a decrease 
in administrative expenses as a result of the reductions in 
work force and other cost savings initiatives in connection 
with the strategic restructuring program.  

     The Company recorded restructuring charges of $33.0 
million, or $.45 per share, and $56.9 million, or $.77 per 
share, in 1994 and 1993, respectively (see Note 14 to the
Consolidated Financial Statements included elsewhere herein).

     Operating Income.  Operating income for 1994 was 
$125.8 million, a decrease of $10.0 million, or 7.4%, from 
1993.  Operating margin decreased to 2.5% in 1994 versus 2.7% 
in 1993.  Excluding restructuring charges, results for 1994 
were $158.8 million, or 3.2% of sales, compared with $192.7
million, or 3.8% of sales for 1993. These decreases were 
due primarily to lower sales and lower gross margin as a 
result of price reductions and increased promotional 
activity.  FIFO EBITDA was $284.3 million, or 5.7% of sales, 
in 1994 compared with $305.8 million, or 6.0% of sales, in 
1993.

     Interest Expense.  Net interest expense for 1994 was 
$70.8 million, an increase of $4.8 million, or 7.3%, over 
1993.  This increase was due to higher weighted average 
interest cost on revolving debt and higher average debt
borrowings partially offset by repurchases of higher 
interest cost subordinated debt.  The ratio of FIFO EBITDA 
to net interest expense decreased to 4.0 times in 1994 versus 
4.6 times in 1993.

     Income Tax Provision.  The income tax provision in 1994 
was $28.4 million, or a 51.6% effective tax rate.  The income 
tax provision in 1993 was $36.8 million, or a 52.7% effective 
tax rate.  The effective tax rate in both years was impacted 
by a decrease in earnings before restructuring charges, which 
was not offset by a comparable decrease in amortization of 
excess cost over net assets acquired, the majority of which 
is not deductible for tax purposes.  The 1993 effective tax 
rate was also impacted by a $2.0 million deferred tax 
provision which increased the prior year deferred income 
tax balance to the new Federal statutory tax rate. 

     Income.  Net income for 1994 was $26.6 million, or $.61 
per share, compared with net income of $31.6 million, or $.73 
per share, for 1993.  Net income includes restructuring 
charges of $33.0 million, or $.45 per share, and $56.9 
million, or $.77 per share, in 1994 and 1993, respectively.  
The decrease in net income excluding restructuring charges 
was caused by the decline in sales and gross margin, 
primarily due to price decreases and increased promotional
activity.  Net income for 1993 included an extraordinary 
after tax charge of $1.4 million, or $.03 per share, arising 
from debt refinancing.

     Labor Contract Status

     In the fall of 1994, the Company negotiated a four-year
contract with the International Brotherhood of Teamsters Union. 
In the fall of 1995, the Company negotiated a four-year 
contract with the Southern California United Food and 
Commercial Workers International Unions.

     Liquidity and Capital Resources

     The Company's primary sources of liquidity are cash flows
from  operations and available credit under its Revolving Loan.
Management believes that these sources adequately provide for 
its working capital, capital expenditure and debt service 
needs. 

     Net cash provided by operating activities was $239.4 
million in 1995 compared with $179.8 million in 1994.  This
change primarily reflects an increase in net income and 
changes in  assets and liabilities generally reflecting 
the timing of receipts and disbursements.  The ratio of 
current assets to current liabilities was 0.76 to 1 at 
December 31, 1995 compared with 0.83 to 1 at January 1, 1995.
The decrease in the ratio of current assets to current
liabilities reflects the maturity of $15.6 million of the 
6-5/8% Senior Subordinated Debentures in May 1996.

     Net cash used for investing activities was $91.2 million 
in 1995 compared with $117.5 million in 1994.  This decrease
reflects lower than anticipated 1995 capital expenditures 
since certain store projects were delayed until 1996.  Total
capital expenditures in 1995, including the present value 
of commitments under operating leases, were $142.6 million.

     The Company anticipates that total 1996 capital expenditures
will be approximately $225 million, of which approximately 
$160 million will be cash capital expenditures and approximately
$65 million will represent the present value of commitments
under operating leases.  This capital expenditure level
contemplates the opening of approximately 16 new stores,
including ten replacement stores, and the completion of
approximately 30 store remodel projects.  The capital 
expenditure program has substantial flexibility and is 
subject to revision based on various factors; including, 
but not limited to, business conditions, changing time
constraints, cash flow requirements and competitive factors.

     It is anticipated that 1996 cash capital expenditures 
will be funded out of cash provided by operations, the 
Revolving Loan, and/or through operating leases, although 
no assurance can be given that such sources will be 
sufficient.  In the near term, if Vons were to reduce
substantially or postpone its capital expenditure program, 
there would be no substantial impact on current operations 
and it is likely that more cash would be available for 
debt servicing.  In the long-term, if these programs 
were substantially reduced, in the Company's opinion, 
its operating business and ultimately its cash flow would 
be adversely impacted.

     Net cash used by financing activities was $147.8 million 
in 1995 compared with $61.8 million in 1994.  The level of
borrowings under the Company's revolving debt is 
dependent primarily upon cash flows from operations and 
capital expenditure requirements.

     At December 31, 1995, the Company's revolving debt
borrowings totaled $177.8 million and the Company had 
available unused credit of $446.4 million.  The weighted 
average interest cost for 1995 on the Company's revolving 
debt was 7.5%.  At December 31, 1995, the corresponding 
bank prime rate was 8.5%.

     The Company's involvement with derivative financial
instruments has been limited to interest rate cap contracts 
to reduce the impact of increases in interest rates on 
revolving debt.

     Impact of Changing Prices

     Vons primary costs, inventory and labor, are affected 
by a number of factors that are beyond the Company's 
control, including availability and price of merchandise, 
the competitive climate and regional economic conditions.  
As is typical of the supermarket industry, the Company 
has generally been able to maintain margins by adjusting 
its retail prices, but competitive conditions may from time 
to time render it unable to do so while maintaining its 
market share.

     Cautionary Statement for Purposes of "Safe Harbor 
     Provisions" of the Private Securities Litigation Reform 
     Act of 1995

     Except for historical facts, all matters discussed in 
this report which are forwarded looking involve risks and
uncertainties.  Potential risks and uncertainties include,
but are not limited to, competitive pressures from other 
major supermarket operators, economic conditions in the 
Company's primary markets and the other uncertainties detailed
from time to time in the Company's Securities and Exchange
Commission filings.








<PAGE>

<TABLE> 
THE VONS COMPANIES, INC. AND SUBSIDIARIES 
----------------------------------------- 

     Consolidated Statements of Operations 

 
<CAPTION> 
 
                                                           Fiscal Year Ended 
                                               ----------------------------------------- 
All amounts except share data                   December 31,   January 1,    January 2,
in millions of dollars                             1995           1995          1994 
                                               -------------  ------------  ------------ 
<S>                                            <C>            <C>           <C>  
Sales                                          $     5,070.7  $    4,996.6  $    5,074.5 
                                               -------------  ------------  ------------ 
Costs and expenses: 
  Cost of sales, buying and  
    occupancy                                        3,790.2       3,767.2       3,801.4 
  Selling and administrative  
    expenses                                         1,071.4       1,055.5       1,065.4 
  Amortization of excess cost  
    over net assets acquired                            15.0          15.1          15.0 
  Restructuring charges                                   -           33.0          56.9
                                               -------------  ------------  ------------ 
                                                     4,876.6       4,870.8       4,938.7 
                                               -------------  ------------  ------------ 
Operating income                                       194.1         125.8         135.8 
Interest expense, net                                   67.3          70.8          66.0 
                                               -------------  ------------  ------------ 
Income before income tax provision                     126.8          55.0          69.8 
Income tax provision                                    58.7          28.4          36.8 
                                               -------------  ------------  ------------ 
Income before extraordinary item                        68.1          26.6          33.0 
Extraordinary item - debt 
  refinancing, net of tax benefit 
  of $1.0 million                                         -             -           (1.4) 
                                               -------------  ------------  ------------ 
Net income                                     $        68.1  $       26.6  $       31.6 
                                               -------------  ------------  ------------  
                                               -------------  ------------  ------------ 
Income per common and common
  equivalent share: 
  Income before extraordinary item             $        1.55  $        .61  $        .76 
  Extraordinary item                                     -             -            (.03)
                                               -------------  ------------  ------------ 
  Net income                                   $        1.55  $        .61  $        .73 
                                               -------------  ------------  ------------ 
                                               -------------  ------------  ------------ 
Weighted average common and  
  common equivalent shares                        43,948,000    43,560,000    43,501,000 
                                               -------------  ------------  ------------ 
                                               -------------  ------------  ------------ 
Dividends paid on common stock                     None           None          None 
                                               -------------  ------------  ------------ 
                                               -------------  ------------  ------------ 
<FN> 
See accompanying notes to these consolidated financial statements. 
</TABLE> 
 
<PAGE> 
<TABLE> 
THE VONS COMPANIES, INC. AND SUBSIDIARIES 
----------------------------------------- 

     Consolidated Balance Sheets 
  
 
<CAPTION> 
                                                         December 31,      January 1, 
All amounts except share data in millions of dollars         1995             1995     
                                                         ------------     ------------ 
<S>                                                      <C>              <C> 
Assets 
Current assets: 
  Cash                                                   $        9.4     $        9.0 
  Accounts receivable                                            31.7             45.4  
  Inventories                                                   350.7            359.3 
  Deferred taxes                                                 30.9             35.4
  Other                                                          29.6             18.7 
                                                         ------------     ------------ 
    Total current assets                                        452.3            467.8 
Property and equipment, net                                   1,192.5          1,203.0 
Excess of cost over net assets acquired, 
  net of accumulated amortization of $118.7
  million and $103.7 million, respectively                      482.8            497.8 
Other                                                            58.9             53.4 
                                                         ------------     ------------ 
  Total Assets                                           $    2,186.5     $    2,222.0 
                                                         ------------     ------------ 
                                                         ------------     ------------ 
Liabilities and Shareholders' Equity 
Current liabilities: 
  Current maturities of capital lease  
    obligations and long-term debt                       $       25.7     $        8.7 
  Accounts payable                                              304.2            308.4 
  Accrued liabilities                                           263.5            246.8 
                                                         ------------     ------------ 
    Total current liabilities                                   593.4            563.9 
Accrued self-insurance                                          128.0            110.9 
Deferred income taxes                                           118.9            121.9 
Other noncurrent liabilities                                     65.0             69.1 
Capital lease obligations                                        53.4             58.0 
Senior debt                                                     298.8            426.2 
Subordinated debt, net                                          305.7            319.6 
                                                         ------------     ------------ 
  Total liabilities                                           1,563.2          1,669.6 
                                                         ------------     ------------ 
Shareholders' equity: 
  Preferred stock - $.01 par value;  
    authorized 20,000,000 shares; 
    issued and outstanding - none                                  -                - 
  Common stock - $.10 par value; authorized  
    100,000,000 shares; issued and 
    outstanding - December 31, 1995: 
    43,533,000 shares; January 1, 1995: 
    43,383,000 shares                                             4.3              4.3 
  Paid-in capital                                               343.2            340.4 
  Retained earnings                                             275.9            207.8 
  Notes receivable for stock                                      (.1)             (.1) 
                                                         ------------     ------------ 
    Total shareholders' equity                                  623.3            552.4 
                                                         ------------     ------------ 
  Total Liabilities and Shareholders' Equity             $    2,186.5     $    2,222.0 
                                                         ------------     ------------ 
                                                         ------------     ------------ 
<FN> 
See accompanying notes to these consolidated financial statements. 
</TABLE> 
 
<PAGE> 
<TABLE> 
THE VONS COMPANIES, INC. AND SUBSIDIARIES 
----------------------------------------- 

     Consolidated Statements of Cash Flows 

 
<CAPTION> 
                                                       Fiscal Year Ended 
                                      -------------------------------------------------- 
                                      December 31,        January 1,         January 2, 
All amounts in millions of dollars        1995               1995               1994 
                                      ------------       ------------       ------------ 
<S>                                   <C>                <C>                <C>   
Cash flows from operating 
  activities: 
Net income                            $       68.1       $       26.6       $       31.6 
Adjustments to reconcile net 
  income to net cash provided by 
  operating activities: 
    Debt refinancing                            -                  -                 1.4 
    Restructuring charges                       -                33.0               56.9
    Depreciation and  
      amortization of property 
      and capital leases                     100.0              102.1               90.9 
    Amortization of excess cost 
      over net assets acquired 
      and other assets                        16.0               16.1               18.6 
    Amortization of debt 
      discount and deferred 
      financing costs                          6.8                6.2                6.2 
    LIFO charge                                4.9                2.3                3.6 
    Deferred income taxes                      1.5               (1.5)              15.9 
    Change in assets and 
      liabilities: 
        (Increase) decrease in 
          accounts receivable                 13.7               (9.1)               5.4  
        (Increase) decrease in  
          inventories at FIFO 
          costs                                3.7               21.9              (15.4) 
        (Increase) decrease in 
          other current assets               (10.9)               3.2                (.1)
        (Increase) decrease in  
          noncurrent assets                   (7.5)              (9.3)             (11.5) 
        Increase (decrease) in  
          accounts payable                    11.7              (25.5)              14.3  
        Increase (decrease) in 
          accrued liabilities                 16.7               23.3              (31.8) 
        Increase (decrease) in 
          noncurrent liabilities              14.7               (9.5)               (.4) 
                                      ------------       ------------       ------------ 
Net cash provided by operating 
  activities                                 239.4              179.8              185.6  
                                      ------------       ------------       ------------ 
Cash flows from investing 
  activities: 
    Addition of property, plant  
      and equipment                         (110.2)            (128.0)            (268.9)
    Disposal of property, plant  
      and equipment                           19.0               10.5                6.7 
                                      ------------       ------------       ------------ 
Net cash used by investing  
  activities                                 (91.2)            (117.5)            (262.2)
                                      ------------       ------------       ------------
Cash flows from financing  
  activities:  
    Net payments on revolving
      debt                                  (122.1)             (67.9)             (37.0) 
    Proceeds from Term Loan 
      Facility                                  -                  -               150.0
    Repurchases of senior  
      subordinated and  
      subordinated debentures                 (2.4)              (6.2)             (27.1) 
    Increase (decrease) in net 
      outstanding drafts                     (15.9)              19.4                 .5
    Payments on other debt and  
      capital lease obligations               (8.2)              (8.0)              (9.3) 
    Other                                       .8                 .9                (.3) 
                                      ------------       ------------       ------------ 
Net cash provided (used) by  
  financing activities                      (147.8)             (61.8)              76.8 
                                      ------------       ------------       ------------
Net cash increase                               .4                 .5                 .2
Cash at beginning of year                      9.0                8.5                8.3
                                      ------------       ------------       ------------ 
Cash at end of year                   $        9.4       $        9.0       $        8.5
                                      ------------       ------------       ------------
                                      ------------       ------------       ------------
Supplemental disclosures of  
  cash flow information: 
    Cash paid during the year for:    
      Interest                        $       59.8       $       64.9       $       60.0
                                      ------------       ------------       ------------
                                      ------------       ------------       ------------
      Income taxes                    $       56.0       $       33.7       $       26.1
                                      ------------       ------------       ------------
                                      ------------       ------------       ------------
Supplemental disclosure of 
  non-cash investing and 
  financing activity: 
    Capital leases                    $         -        $         .3       $       13.3 
                                      ------------       ------------       ------------ 
                                      ------------       ------------       ------------ 
<FN> 
See accompanying notes to these consolidated financial statements. 
</TABLE> 
 
<PAGE> 
<TABLE> 
THE VONS COMPANIES, INC. AND SUBSIDIARIES 
----------------------------------------- 

     Consolidated Statements of Shareholders' Equity


<CAPTION> 
                            Number          
                              of      Common    Paid-In    Retained  
All amounts in millions     Shares    Stock     Capital    Earnings     Notes     Total 
                            ------    ------    -------    ---------    ------    ------ 
<S>                         <C>       <C>       <C>        <C>          <C>       <C> 

Balance at January 3, 
  1993                        43.3    $  4.3    $ 339.4    $   149.6    $  (.1)   $493.2 
 
Net income                      -         -          -          31.6        -       31.6 
Stock options exercised         -         -          .1           -         -         .1 
                            ------    ------    -------    ---------    ------    ------ 
Balance at January 2,  
  1994                        43.3       4.3      339.5        181.2       (.1)    524.9 

Net income                      -         -          -          26.6        -       26.6 
Stock options exercised         .1        -          .9           -         -         .9
                            ------    ------    -------    ---------    ------    ------ 
Balance at January 1,   
  1995                        43.4       4.3      340.4        207.8       (.1)    552.4 

Net income                      -         -          -          68.1        -       68.1 
Stock options exercised         .1        -         2.8           -         -        2.8 
                            ------    ------    -------    ---------    ------    ------ 
Balance at December 31,   
  1995                        43.5    $  4.3    $ 343.2    $   275.9    $  (.1)   $623.3
                            ------    ------    -------    ---------    ------    ------
                            ------    ------    -------    ---------    ------    ------ 
<FN> 
See accompanying notes to these consolidated financial statements. 
</TABLE> 

<PAGE>
<PAGE> 
THE VONS COMPANIES, INC. AND SUBSIDIARIES 
----------------------------------------- 
     
     Notes to the Consolidated Financial Statements 


     Note 1. Basis of Presentation 

     At December 31, 1995, the Company operated 328 
supermarkets and food and drug combination retail stores 
under the names Vons and Pavilions.  The Company's 
marketing territory includes Southern and Central California 
and Clark County, Nevada.  The Company also operates a fluid 
milk processing facility, an ice cream plant, a bakery, 
and distribution facilities for meat, grocery, produce 
and general merchandise to support the store network. 

     The Company's fiscal year is based on a 52-53 week 
fiscal year ending on the Sunday closest to December 31.  
Fiscal years 1995, 1994 and 1993 included 52 weeks which 
ended on December 31, 1995, January 1, 1995 and 
January 2, 1994, respectively.  

     Note 2. Summary of Significant Accounting Policies 

     The preparation of financial statements in conformity 
with Generally Accepted Accounting Principles requires 
management to make estimates and assumptions that affect 
the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities as of December 31, 1995 
and the reported amounts of income and expenses for the fiscal
year ended December 31, 1995.  Actual results could differ 
from those estimates.

     The Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 121 ("SFAS No. 121")
"Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to Be Disposed Of" in March 1995 which 
is effective for fiscal years beginning after December 15, 1995.
SFAS No. 121 establishes accounting standards for the impairment
of long-lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used and 
for long-lived assets and certain identifiable intangibles 
to be disposed of.  The Company adopted the provisions of 
SFAS No. 121 in fiscal 1995 and experienced no financial 
impact on the consolidated financial statements.   

     Basis of Consolidation.  The consolidated financial
statements include the accounts of the Company and its
subsidiaries.  All significant intercompany accounts 
and transactions are eliminated in consolidation. 

  Inventories.  Inventories are stated at the lower of cost 
or market.  The cost of substantially all inventories is
determined using the last-in, first-out (LIFO) method.  
 
     Property and Depreciation.  Property and equipment,
including assets under capital leases, are recorded at cost 
and depreciated or amortized over forty years for buildings, 
up to ten years for fixtures and equipment and generally 
between fifteen and twenty-five years, but not to exceed 
the lease term, for leasehold improvements using principally 
the straight-line method for financial reporting purposes 
and accelerated methods for tax purposes.  Major renewals 
and improvements are capitalized.  Maintenance and repairs 
which do not improve or extend the life of the respective 
assets are charged to expense. 
 
     Amortization of Intangible Assets.  The excess of cost 
over net assets acquired is amortized on a straight-line 
basis over forty years.  The Company assesses the 
recoverability of the excess of cost over net assets 
acquired based on forecasted operating income.  Other 
noncurrent assets include an agreement not to compete acquired
in connection with the 1992 acquisition of the Williams Bros.
Markets, Inc. supermarket business.  The agreement not to 
compete is amortized on a straight-line basis over five years. 
     
     Income Tax Provision.  The income tax provision includes
amounts related to current taxable income and deferred income
taxes.  A deferred income tax asset or liability is determined 
by applying currently enacted tax laws and rates to the 
expected reversals of the cumulative temporary differences
between the carrying value of assets and liabilities for
financial statement and income tax purposes.  The deferred 
income tax provision is measured by the change in the net
deferred income tax asset or liability during the year.  
The Company accounts for general business tax credits using 
the flow-through method. 
 
     Income per Common and Common Equivalent Share.  Income 
per common and common equivalent share is based on the weighted
average number of common shares outstanding during each year and
common equivalent shares arising from stock options when the
effect is dilutive. 

     Disclosure About Fair Value of Financial Instruments.  The
fair value of the Company's financial instruments is based on 
the quoted market prices for the same or similar issues or on 
the current rates offered to the Company for financial
instruments of the same remaining maturities. 

     Derivatives.  Premiums paid for purchased interest rate 
cap contracts are amortized to interest expense over the terms 
of the contracts.  Unamortized premiums are included in other
assets in the accompanying consolidated balance sheets.  
Amounts earned under the interest rate cap contracts are
reflected as a reduction of interest expense.
 
     Note 3. Inventories 

     The excess of estimated current cost over LIFO carrying
value of inventories was $32.3 million and $27.4 million 
at December 31, 1995 and January 1, 1995, respectively. 
Application of the LIFO method resulted in a charge to 
cost of sales, buying and occupancy of $4.9 million, 
$2.3 million and $3.6 million for 1995, 1994 and 1993,
respectively. 

     Note 4. Property and Equipment 

     The components of property and equipment at 
December 31, 1995 and January 1, 1995 were as follows 
(in millions of dollars): 

<TABLE> 
<CAPTION> 

                                    December 31,    January 1, 
                                        1995           1995 
                                    ------------   ------------ 
<S>                                 <C>            <C> 
Land                                $      225.3   $      233.7 
Buildings                                  386.6          357.0 
Leasehold improvements                     319.1          302.2 
Fixtures and equipment                     714.6          682.3 
                                    ------------   ------------ 
                                         1,645.6        1,575.2 
Less: accumulated depreciation  
  and amortization                        (496.6)        (421.5) 
                                    ------------   ------------ 
  Net property owned                     1,149.0        1,153.7 
                                    ------------   ------------ 
Capital leases                              69.4           75.1 
Less: accumulated amortization             (25.9)         (25.8)
                                    ------------   ------------ 
  Net capital leases                        43.5           49.3 
                                    ------------   ------------ 
    Property and equipment, net     $    1,192.5   $    1,203.0 
                                    ------------   ------------ 
                                    ------------   ------------ 
</TABLE> 

     Note 5. Accrued Current Liabilities 

     The components of accrued current liabilities at 
December  31, 1995 and January 1, 1995 were as follows 
(in millions of dollars): 
 
<TABLE> 
<CAPTION> 
                                    December 31,    January 1, 
                                        1995           1995 
                                    ------------   ------------ 
<S>                                 <C>            <C> 
Accrued payroll, benefits and  
  related taxes                     $      134.6   $      118.1 
Accrued self-insurance                      37.2           42.2 
Other                                       91.7           86.5 
                                    ------------   ------------ 
  Accrued current liabilities       $      263.5   $      246.8 
                                    ------------   ------------ 
                                    ------------   ------------ 
</TABLE> 
 
     Note 6. Senior and Subordinated Debt 

     Senior and subordinated debt as of December 31, 1995 
and January 1, 1995 were as follows (in millions of dollars):

<TABLE> 
<CAPTION> 
                                    December 31,    January 1, 
                                        1995           1995 
                                    ------------   ------------ 
<S>                                 <C>            <C>
Senior debt: 
  Revolving Loan, interest at      
    prime or Eurodollar rate plus
    designated amounts, due 2000    $      177.8   $         -
  Revolving Credit Facility,                                     
    interest at prime, 
    certificate of deposit  
    or Eurodollar rate plus 
    designated amounts,  
    replaced in 1995                          -           149.8 
  Term Loan Facility, interest at 
    prime, certificate of deposit 
    or Eurodollar rate plus 
    designated amounts, 
    replaced in 1995                          -           150.0 
  Mortgage, 9.25%, secured by  
    real property, due in monthly 
    installments of $1.0 million 
    including interest, due 1997           113.0          115.0 
  Mortgages, 6.00% to 12.25%, 
    secured by real property, due 
    in varying monthly  
    installments with maturity 
    dates from 1997 to 2009                 13.5           14.6 
                                    ------------   ------------ 
      Total                                304.3          429.4 
  Less: current portion                      5.5            3.2 
                                    ------------   ------------ 
    Long-term portion               $      298.8   $      426.2 
                                    ------------   ------------ 
                                    ------------   ------------ 
Subordinated debt: 
  Senior subordinated  
    debentures, 6-5/8%, less 
    unamortized discount of 
    $7.2 million and $11.1      
    million at December 31, 1995 
    and January 1, 1995, 
    respectively, based on an 
    effective interest rate of 
    12.5%, interest due in 
    semiannual installments         $       70.9   $       69.6 
  Senior subordinated notes, 
    9-5/8%, interest due in  
    semiannual installments                150.0          150.0 
  Senior subordinated notes, 
    8-3/8%, interest due in  
    semiannual installments                100.0          100.0 
                                    ------------   ------------ 
      Total                                320.9          319.6 
  Less: current portion                     15.2             - 
                                    ------------   ------------ 
    Long-term portion               $      305.7   $      319.6
                                    ------------   ------------ 
                                    ------------   ------------ 
</TABLE> 

     On February 17, 1995, the Company entered into an agreement
with a group of banks for a $625 million Revolving Loan Agreement
(the "Revolving Loan").  The Revolving Loan replaces the
Company's $475 million revolving credit facility (the "Revolving
Credit Facility") and $150 million Senior Unsecured Term Loan
Facility (the "Term Loan Facility").  The Revolving Loan expires
on February 17, 2000; however, it provides that the Company may
request that the banks extend the maturity date by one year
beginning in September 1997 and each year thereafter.  Interest
for the revolving debt is at prime or Eurodollar rate plus
designated amounts.  At the Company's option, the revolving debt
may be used to support commercial paper borrowings, other
unsecured bank borrowings and standby letters of credit 
outside the revolving debt.  At December 31, 1995, borrowings
under the Revolving Loan were $177.8 million and available 
unused credit under the Revolving Loan was $446.4 million. 
Weighted average interest costs for 1995, including commitment
fees, for the Revolving Loan, Revolving Credit Facility and for
the Term Loan Facility were 7.5%.  At December 31, 1995, the
corresponding bank prime rate was 8.5%.  Commitment fees under
the Revolving Loan and Revolving Credit and Term Loan Facilities
were $1.2 million, $1.5 million and $1.5 million for 1995, 1994
and 1993, respectively.

     The Company's involvement with derivative financial
instruments has been limited to interest rate cap contracts 
to reduce the impact of increases in interest rates on 
revolving debt.  The contracts hedge principal amounts of 
$250 million for 1994, $200 million for 1995, and 
$100 million for 1996 and 1997 of interest rate exposure 
in excess of an approximate 8.375% effective borrowing rate 
under the revolving debt.  The Company records interest 
expense or interest income related to interest rate cap 
contracts on a monthly basis.  

     The Company's $113.0 million mortgage loan requires 
monthly principal and interest payments of approximately 
$1 million with a one-time payment of approximately $111 
million in July 1997. 

     The indenture related to the 6-5/8% Senior 
Subordinated Debentures (the "6-5/8% Debt") provides for
mandatory redemptions.  As of December 31, 1995, $15.6 
million, $25.0 million and $37.5 million are due on 
May 15, 1996, May 15, 1997 and May 15, 1998, respectively.
Interest on the 6-5/8% Debt is payable semiannually on 
May 15 and November 15.  The 6-5/8% Debt may be redeemed 
at any time at 100% of the principal amount plus accrued
interest.  The 6-5/8% Debt was issued at a discount which is
being amortized over the related term of the indebtedness. 

     The indenture related to the 9-5/8% Senior Subordinated
Notes (the "9-5/8% Debt") due April 1, 2002 provides for
principal repayment at maturity.  Interest on the 9-5/8% 
Debt is payable semiannually on April 1 and October 1.  
The 9-5/8% Debt may be redeemed at the Company's option 
any time on or after April 1, 1997, at varying percentages 
above par of the principal amount plus accrued interest.  
The Company is not required to make mandatory redemption or
sinking fund payments with respect to the 9-5/8% Debt prior 
to maturity. 

     The indenture related to the 8-3/8% Senior Subordinated
Notes (the "8-3/8% Debt") due October 1, 1999 provides 
for principal repayment at maturity.  Interest on the 8-3/8% 
Debt is payable semiannually on April 1 and October 1.  
The 8-3/8% Debt may be redeemed at the Company's option 
any time on or after October 1, 1997, at 100% of the 
principal amount plus accrued interest.  The Company 
is not required to make mandatory redemption or sinking 
fund payments with respect to the 8-3/8% Debt prior to maturity. 

     At December 31, 1995 and January 1, 1995, the carrying 
value of all financial instruments approximated fair value.

     During 1995, 1994 and 1993, the Company early retired
through repurchase and/or redemption $2.6 million, $6.8 million
and $27.1 million, respectively, of subordinated debt.  
These repurchases resulted in an extraordinary after tax 
charge of $1.4 million in 1993.

     The Company's debt agreements contain various 
restrictions on the incurrence of additional indebtedness,
payment or prepayment of senior subordinated and 
subordinated debt, investments, acquisitions, capital
expenditures, dividends, common stock redemptions and 
purchases and dispositions of assets.  The covenants also 
require the Company to meet certain shareholders' equity 
levels, debt leverage levels and fixed charge coverage 
ratios which can vary each fiscal year.  The Company is 
in compliance with these covenants as of December 31, 1995. 
Under its most restrictive debt agreement, the Company had 
$83.0 million available for dividends and distributions at
December 31, 1995.  

     Principal payments required in future years are as 
follows (in millions of dollars): 
 
<TABLE> 
<CAPTION> 
                                                   Principal  
                                                    Payments
                                                   ---------- 
<S>                                                <C> 
1996                                               $     21.1  
1997                                                    137.0 
1998                                                     38.6
1999                                                    101.1
2000                                                      1.2 
2001-2005                                               332.4
2006-2009                                                 1.0
                                                   ----------
  Total principal payments                              632.4
Less: current portion                                    21.1
                                                   ----------
  Long-term portion                                $    611.3
                                                   ----------
                                                   ----------
</TABLE> 

     Standby letters of credit, primarily for self-insurance
purposes, not reflected in the accompanying consolidated
financial statements, were approximately $73.3 million at
December 31, 1995.  

     Note 7. Leases 

     The Company currently leases certain of its stores,
distribution facilities, vehicles and equipment for periods 
up to 50 years with various renewal options.  The majority 
of such leases are noncancellable operating leases.  Certain
operating and capital leases require contingent rentals 
based upon a percentage of sales over a specified amount.  
Rental expense under operating leases was as follows 
(in millions of dollars): 
 
<TABLE> 
<CAPTION> 
                                  Fiscal Year Ended 
                     ------------------------------------------
                     December 31,     January 1,    January 2, 
                         1995           1995           1994 
                     ------------   ------------   ------------
<S>                  <C>            <C>            <C>    
Minimum rentals      $       55.7   $       60.9   $       76.9
Contingent rentals            7.3            7.5            8.3
Sublease rentals  
  received                   (6.4)          (4.7)          (4.2)
                     ------------   ------------   ------------
  Rental expense,
    net              $       56.6   $       63.7   $       81.0 
                     ------------   ------------   ------------ 
                     ------------   ------------   ------------ 
</TABLE> 

     Capital lease obligations, relating primarily to buildings,
vary in amounts with interest rates ranging from 6.7% to 12.5%.
Contingent rentals associated with capital leases were $1.5
million, $1.4 million and $2.0 million for 1995, 1994 and 1993,
respectively. 

     Future minimum lease payments under noncancellable operating
and capital leases, together with the present value of the 
net minimum lease payments, at December 31, 1995 were as 
follows (in millions of dollars): 
 
<TABLE> 
<CAPTION> 
                                       Operating       Capital 
                                         Leases         Leases  
                                       ---------       ------- 
<S>                                    <C>             <C>     
1996                                   $    68.8       $   9.3
1997                                        65.0           8.6 
1998                                        62.3           6.6
1999                                        59.6           5.9
2000                                        58.2           5.9 
2001-2005                                  252.4          28.3 
2006-2010                                  162.6          22.3 
2011-2015                                   64.4           9.7 
2016-2020                                   10.8           5.7 
2021-2025                                    1.4            .2
Thereafter                                    .6            -
                                       ---------       ------- 
  Total minimum lease commitments      $   806.1         102.5
                                       --------- 
                                       --------- 
Less: interest portion                                    44.1 
                                                       ------- 
  Present value of net minimum lease 
    commitments                                           58.4
Less: current portion                                      5.0
                                                       ------- 
  Long-term portion                                    $  53.4
                                                       ------- 
                                                       ------- 
 
</TABLE> 
 
     Minimum sublease rentals to be received in the future 
under noncancellable operating and capital leases 
totaled $77.3 million at December 31, 1995. 

     Effective September 1993, the Company became a partner 
of a California general partnership.  This partnership has
obligations for 16 retail leases for periods up to 21 years 
with various renewal options.  It is the partnership's intent 
to assign or sublease its leasehold interest in all of these
sites.  Future minimum lease payments of the partnership 
under noncancellable operating leases at December 31, 1995 
were as follows (in millions of dollars): 

<TABLE> 
<CAPTION> 
 
                                                  December 31,
                                                     1995 
                                                  ------------
<S>                                               <C> 
1996                                              $        3.5
1997                                                       3.4
1998                                                       3.4
1999                                                       3.4
2000                                                       3.2
2001-2005                                                 13.8
2006-2010                                                  9.2
2011-2015                                                  3.3
Thereafter                                                  .4
                                                  ------------
  Total minimum lease commitments                 $       43.6
                                                  ------------
                                                  ------------
</TABLE> 

     Minimum sublease rentals to be received by the partnership
under noncancellable operating leases totaled $7.4 million at
December 31, 1995.

     Note 8. Employee Benefit Plans 

     The Company sponsors a defined benefit pension plan for 
all nonunion employees.  An employee's benefit is based on 
years of credited service and the employee's final average 
pay calculated on the highest five years of compensation 
during the last ten years of employment.  The Company's 
funding policy is to contribute at least the minimum 
annual contribution required by Internal Revenue 
Service regulations. 

     The following table sets forth the defined benefit 
pension plan's funded status and amounts recognized in 
the Company's consolidated balance sheets at December 31, 1995
and January 1, 1995 (in millions of dollars): 
 
<TABLE> 
<CAPTION> 
                                   December 31,     January 1,
                                       1995            1995 
                                   ------------    ------------
<S>                                <C>             <C>  
Actuarial present value of 
  benefit obligation: 
  Accumulated benefit obligation, 
    including vested benefit of 
    $44.1 million at December 31,
    1995 and $35.5 million at 
    January 1, 1995                $      46.2     $       37.8 
                                   ------------    ------------ 
                                   ------------    ------------ 
Projected benefit obligation for 
  service rendered to date         $     (63.6)    $      (49.7) 
Plan assets at fair value, 
  primarily listed stocks and  
  U.S. bonds                              56.4             46.2 
                                   ------------    ------------ 
  Projected benefit obligation  
    in excess of plan assets              (7.2)            (3.5)
Unrecognized net (gain) loss from  
  past experience different from  
  that assumed, unrecognized  
  prior service cost and effects 
  of changes in assumptions               15.0             12.6 
                                   ------------    ------------ 
  Pension asset included in other 
    noncurrent assets              $       7.8     $        9.1 
                                   ------------    ------------ 
                                   ------------    ------------ 
</TABLE> 

     The discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.25% at
December 31, 1995 and 8.5% at January 1, 1995.  The expected
long-term rate of return on assets and rate of increase in
compensation levels were 9.0% and 4.5%, respectively, at
December 31, 1995 and January 1, 1995.  Net pension cost under
the defined benefit pension plan for 1995, 1994 and 1993 
included the following components (in millions of dollars): 

<TABLE> 
<CAPTION> 
                               Fiscal Year Ended 
                  --------------------------------------------
                  December 31,     January 1,      January 2,
                      1995            1995            1994 
                  ------------    ------------    ------------
<S>               <C>             <C>             <C>  
Service cost      $       2.3     $        3.4    $        2.5
Interest cost on  
  projected 
  benefit  
  obligation              4.0              4.0             3.6
Actual return on   
  plan assets           (10.6)              .9            (3.0) 
Net amortization 
  and deferral            6.9             (4.4)            (.7)
                  ------------    ------------    ------------ 
  Net pension 
    cost          $       2.6     $        3.9    $        2.4 
                  ------------    ------------    ------------ 
                  ------------    ------------    ------------ 
</TABLE> 

    The Company's supplemental executive retirement plan 
provides supplemental income payments for certain officers 
during retirement.  Total pension expense for all plans was 
$3.4 million, $5.1 million and $3.6 million for 1995, 1994 
and 1993, respectively. 

     The Company's contributory profit sharing plan for 
nonunion employees qualifies under Section 401(k) of the 
Internal Revenue Code.  For 1995, the Company's contribution 
to the profit sharing plan was equal to six percent of 
each eligible employee's pay.  In future years, the 
Company's contribution will be five percent of each 
eligible employee's pay plus a one percent matching 
contribution for each eligible employee who elects to 
contribute at least one percent of their pay.  For 1995, 
1994, and 1993 total expense related to the Company's 
profit sharing plan was $7.6 million, $5.3 million and 
$4.3 million, respectively.      

     The Company sponsors a retiree medical plan covering
substantially all nonunion employees who retire under 
certain age and service requirements.  The retiree medical 
plan provides outpatient, inpatient and various other 
covered services.  Participants in the retiree medical plan 
who retire after June 30, 1990 receive a benefit based upon 
years of service and a benefit value determined by the Company 
at the time of retirement.  Effective January 1, 1995, the
Company adopted modifications in its retiree medical plan 
which reduced the net retiree medical plan cost.  Unused 
benefits may be indexed each year to the social security 
cost of living, up to a maximum of 4.0%.  Such benefits 
are funded from the Company's general assets.  The Company 
has the right to modify or terminate the plan. 

     The accumulated postretirement benefit obligation for 
the retiree medical plan as of December 31, 1995 and 
January 1, 1995 was as follows (in millions of dollars): 

<TABLE> 
<CAPTION> 
                                     December 31,   January 1, 
                                         1995          1995 
                                     ------------  ------------ 
<S>                                  <C>           <C>  
Accumulated retiree medical benefit 
  obligation: 
    Retirees                         $       10.4  $        9.9
    Fully eligible active plan  
      participants                            1.7           3.5 
    Other active plan participants            5.9          12.0 
Unrecognized net gain from 
 unrecognized prior service
 cost and changes in  assumptions            13.5           6.9 
                                     ------------  ------------ 
  Accrued retiree medical benefit  
    obligation                       $       31.5  $       32.3 
                                     ------------  ------------  
                                     ------------  ------------ 
</TABLE> 

     For measurement purposes, a 7.0% increase in the cost 
of covered retiree medical benefits was assumed for 1995.  
The rate declined to 6.0% in 1996, and remained at that 
level thereafter.  A 1.0% increase in the retiree medical 
cost trend rate would increase the retiree medical benefit
obligation at December 31, 1995 by $.6 million and the 
1995 annual expense by $.1 million.  The weighted 
average discount rate used in determining the accumulated 
retiree medical benefit obligation was 7.25% and 8.5% at 
December 31, 1995 and January 1, 1995, respectively.  The 
net retiree medical plan cost for 1995, 1994 and 1993 
included the following components (in millions of dollars): 

<TABLE> 
<CAPTION> 
                                   Fiscal Year Ended 
                     ------------------------------------------
                     December 31,    January 1,     January 2, 
                         1995           1995           1994
                     ------------   ------------   ------------
<S>                  <C>            <C>            <C> 
Service cost         $         .3   $        1.2   $         .8
Interest cost                 1.3            2.1            2.4
Net amortization
  and deferral                (.9)            -              -
                     ------------   ------------   ------------
  Net retiree 
   medical plan 
   costs             $         .7   $        3.3   $        3.2
                     ------------   ------------   ------------
                     ------------   ------------   ------------

</TABLE> 

     The Company contributes to multi-employer joint 
pension plans and health and welfare plans administered 
by various trustees.  Contributions to these plans are based 
upon negotiated labor contracts.  The pension plans may be 
deemed to be defined benefit plans.  Information relating 
to accumulated benefits and fund assets as they may be 
allocable to the Company at December 31, 1995 is not 
available.  Total pension expense for the union plans was 
$19.8 million, $22.3 million and $30.3 million for 1995, 1994 
and 1993,  respectively.  The health and welfare plans provide
medical, dental and other benefits to certain employees covered
by union contracts.  Total health and welfare expense for 
these plans was $108.6 million, $125.9 million and $107.1 
million for 1995, 1994 and 1993, respectively.<PAGE>
     Note 9. Income Taxes 

<TABLE> 
     The provision for income taxes for 1995, 1994 and 1993 was comprised of the following
amounts (in millions of dollars): 
 
<CAPTION> 
                                                    Fiscal Year Ended 
                                      -------------------------------------------- 
                                      December 31,     January 1,      January 2, 
                                          1995            1995            1994 
                                      ------------    ------------    ------------
<S>                                   <C>             <C>             <C>  
Current: 
  Federal                             $       44.5    $       24.7    $       13.3 
  State                                       12.7             5.2             7.6 
                                      ------------    ------------    ------------ 
    Total current income tax  
      provision                               57.2            29.9            20.9 
                                      ------------    ------------    ------------ 
Deferred: 
  Federal                                       .7             (.7)           15.7 
  State                                         .8             (.8)             .2  
                                      ------------    ------------    ------------ 
    Total deferred income tax 
      provision                                1.5            (1.5)           15.9 
                                      ------------    ------------    ------------ 
      Total income tax provision      $       58.7    $       28.4    $       36.8 
                                      ------------    ------------    ------------ 
                                      ------------    ------------    ------------ 
</TABLE> 

<TABLE> 

     Reconciliation of the Federal statutory rate and effective rate for 1995, 1994 and 
1993 was as follows (in millions of dollars): 
 
<CAPTION> 
                                                          Fiscal Year Ended 
                                             ------------------------------------------ 
                                             December 31,    January 1,     January 2, 
                                                 1995           1995           1994 
                                             ------------   ------------   ------------ 
<S>                                          <C>            <C>            <C> 
Federal statutory expected provision         $       44.4   $       19.3   $       24.4 
Amortization of excess of cost over net  
  assets acquired                                     5.0            5.0            5.1 
State income taxes, net of Federal income 
  tax benefit                                         8.1            3.1            5.1 
Effect to beginning of year deferred income 
  tax balance for increase in Federal 
  statutory tax rate                                   -               -             2.0
Other                                                 1.2            1.0             .2 
                                             ------------   ------------   ------------ 
  Total income tax provision                 $       58.7   $       28.4   $       36.8 
                                             ------------   ------------   ------------ 
                                             ------------   ------------   ------------ 
</TABLE> 
<PAGE>
<TABLE> 

    Deferred income taxes consisted of future tax liabilities (assets) attributable to 
the following (in millions of dollars): 

<CAPTION>   
                                                           December 31,      January 1, 
                                                               1995             1995 
                                                           ------------     ------------ 
<S>                                                        <C>              <C>  
Deferred tax liabilities: 
  Excess of book over tax bases                            $      143.8     $      141.2
  Excess of tax over book depreciation                             92.8             84.1 
                                                           ------------     ------------ 
    Deferred tax liabilities                                      236.6            225.3 
                                                           ------------     ------------ 
Deferred tax assets:  
  Cash versus accrual basis                                      (144.0)          (136.6) 
  Other, net                                                       (4.6)            (2.2) 
                                                           ------------     ------------ 
    Deferred tax assets                                          (148.6)          (138.8) 
                                                           ------------     ------------ 
  Deferred income taxes, net                               $       88.0     $       86.5 
                                                           ------------     ------------ 
                                                           ------------     ------------ 
/TABLE
<PAGE>
     The Federal tax returns for all of the Company's fiscal
periods ended subsequent to and including December 31, 1989 
are open for examination by the Internal Revenue Service 
(the "IRS").  Additionally, certain tax returns of entities
acquired by the Company for earlier tax years are open for
examination by the IRS.  Management believes that any 
adjustments arising out of the examinations for which the 
Company would be liable would not have a material effect on 
the Company's consolidated financial position.  
 
     Note 10. Related Party Transactions 

     The Company leases a distribution facility from a 
California general partnership whose general partners are Vons
and a Texas general partnership, of which a director of the
Company is a general partner.  Vons and the Texas general
partnership each have a 50% interest in the California 
general partnership.  During 1995, 1994 and 1993, the 
Company paid rent of $1.9 million per year from which the
partnership distributed $250,000, $70,000 and $160,000 to 
the Texas general partnership in such years, respectively.  
This warehouse was closed in third quarter 1995 although 
rental obligations continue through 2002.

     A wholly owned subsidiary of Safeway owns approximately 
35% of the outstanding voting stock of the Company.  Safeway 
and its affiliates sold certain inventory and other items to 
the Company for an aggregate amount during 1995, 1994 and 1993 
of approximately $27.0 million, $21.3 million and $2.5 million,
respectively.  The Company sold certain inventory items to
Safeway and its affiliates for an aggregate amount during 1995,
1994 and 1993 of approximately $6.4 million, $6.6 million and
$2.4 million, respectively.  Three directors of the Company are
also directors of Safeway and a fourth director of the Company is
both a director and an officer of Safeway. 

     The Company leases eight properties from a partnership 
that is 80% owned by a subsidiary of Safeway and 20% owned by 
the principal stockholder of Safeway.  The rentals under the
leases were $.6 million, $.7 million and $.7 million in 1995,
1994 and 1993, respectively.  In addition, the Company is
secondarily liable to this partnership under four leases for
which the annual minimum rental is $.2 million, all of which is
currently being paid by assignees.  

     Another California general partnership whose general
partners include directors and management of the Company had 
the right to purchase several leaseholds of the Company.  The
Company paid the California general partnership $2.2 million 
in 1993 to cancel this purchase right. 

     A director of the Company borrowed a total of $118,000 
from the Company for the purchase of 5,000 shares of the
Company's common stock by notes dated January 3, 1992 
and July 22, 1992.  The notes are secured by a pledge of 
the 5,000 shares of common stock.  The notes accrue 
interest at the Federal mid term rate in effect under 
Internal Revenue Code Section 1274(d), compounded 
semiannually.  All payments of principal and interest 
are due and payable on December 31, 1997. 

     Note 11. Contingencies 

     The Company is a party to several pending legal 
proceedings and claims.  Although the outcome of such 
proceedings and claims cannot be determined with certainty,
management believes that their final outcome should not 
have a material adverse effect on the Company's consolidated 
financial position. 

     As a result of the disposal of certain leasehold 
interests by the Company and by a partnership of which 
the Company is a general partner, the Company is 
contingently liable to certain landlords.
 
     Note 12. Shareholders' Equity 

     The Company has various stock option plans.  Options 
under the 1987 Stock Option Plan are fully vested.  Options 
under the 1990 Stock Option Plan vest as determined by 
the Compensation Committee of the Board of Directors.  
Generally, options vest 25% one year from the date of grant 
and 25% per year thereafter.  However, options granted in 
May 1995 vest 15% per year beginning one year from the date 
of grant and 15% per year thereafter until the options are 
100% vested.  Additionally, a limited number of options vest 
20% at the date of grant and 20% per year thereafter and 
others vest 33-1/3% per year beginning one year after 
grant.  Options under the Directors' Stock Option Plan 
vest 25% six months from the date of grant and 25% on 
the anniversary of the date of grant thereafter.  For all 
plans, the options expire ten years from the date of grant. 


<TABLE> 
     Information regarding the Company's stock option plans is summarized below:
 
<CAPTION> 
                                        1987                1990             Directors' 
                                    Stock Option        Stock Option        Stock Option 
                                        Plan                Plan                Plan 
                                    ------------        ------------        ------------ 
<S>                                 <C>                 <C>                 <C>  
Shares authorized                        175,227           4,000,000             225,000 
                                    ------------        ------------        ------------ 
                                    ------------        ------------        ------------ 
Shares under option: 
  Outstanding at January 3, 1993          54,269           1,678,740              71,693 
    Granted                                   -              584,642              44,192 
    Exercised                              5,750               1,000                  - 
    Forfeited                                 -              218,985              16,842 
                                    ------------        ------------        ------------
  Outstanding at January 2, 1994          48,519           2,043,397              99,043
    Granted                                   -            1,164,009              52,028
    Exercised                              7,000              34,240                  - 
    Forfeited                                 -              431,063              20,144
                                    ------------        ------------        ------------ 
  Outstanding at January 1, 1995          41,519           2,742,103             130,927
    Granted                                   -              500,040              47,140
    Exercised                             22,801             130,783                  -
    Forfeited                                 -              338,046                  -
                                    ------------        ------------        ------------ 
  Outstanding at December 31, 1995        18,718           2,773,314             178,067
                                    ------------        ------------        ------------ 
                                    ------------        ------------        ------------ 

Range of option prices per 
  share: 
  At January 2, 1994                $       9.28        $ 2.50-27.55        $17.51-27.55
  At January 1, 1995                $       9.28        $ 2.50-27.55        $14.23-27.55 
  At December 31, 1995              $       9.28        $ 2.50-27.55        $14.23-27.55

Options exercisable: 
  At January 2, 1994                      48,519             765,054              37,022 
  At January 1, 1995                      41,519           1,031,428              62,864
  At December 31, 1995                    18,718           1,276,002             109,288
Average price of options 
  exercised: 
  Year ended January 2, 1994        $       9.28        $      21.35        $         -
  Year ended January 1, 1995        $       9.28        $       2.50        $         - 
  Year ended December 31, 1995      $       9.28        $       8.29        $         -
 
</TABLE> 
<PAGE>
     The Company's Employee Stock Purchase Plan (the "Stock
Purchase Plan") allows employees to purchase the Company's 
stock through payroll deductions.  The source of stock is 
weekly open market purchases by a third party administrator.
Administrative and purchase commission costs associated 
with the Stock Purchase Plan are borne and paid by the 
Company according to the agreement with the third party
administrator. 

     The Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 123 ("SFAS No. 123")
"Accounting for Stock Based Compensation" in October 1995 
which is effective for fiscal years beginning after 
December 15, 1995.  SFAS No. 123 encourages the fair value 
based method of accounting for employee stock compensation 
plans.  SFAS No. 123 allows companies to retain the 
current method of accounting for stock compensation as set 
forth in Accounting Principles Board Opinion 25 "Accounting 
for Stock Issued to Employees."  SFAS No. 123 requires 
expanded footnote disclosure for both methods of accounting.  
The Company expects to retain the current method of 
accounting.  Accordingly, the expected impact of 
SFAS No. 123 on the Company's consolidated financial 
statements is expanded footnote disclosure.

     Note 13. Advertising Expense

     The Company expenses the costs of advertising as 
incurred.  Total advertising expense was $44.1 million,
$42.8 million and $43.3 million in 1995, 1994 and 1993,
respectively.

     Note 14. Restructuring Charges

     During 1993, the Company recorded a restructuring charge 
of $56.9 million, or $.77 per share.  The 1993 charge 
reflected anticipated costs associated with a program 
to accelerate the closing of underperforming facilities,
including 11 stores, and to eliminate approximately 
300 administrative and support positions, which 
included 18 officers.  The 1993 restructuring charge 
included $42.7 million for expenses relating to facility 
closures and $14.2 million for severance and other 
related expenses. 

     In late 1994, the Company determined that the 
facility closures and reductions in work force undertaken 
in 1993 would not achieve the Company's cost reduction 
goals.  The Company undertook additional restructuring
initiatives resulting in further facility closures 
and reductions in work force.  During 1994, the Company 
recorded restructuring charges of $33.0 million, or $.45 
per share.  The 1994 restructuring charges included $27.4 
million for expenses related to facility closures, 
including 16 stores and the San Diego distribution center.  
The remaining $5.6 million of the charges relates to 
severance and other costs associated with the elimination 
of approximately 400 administrative and support positions.

     As of December 31, 1995, substantially all of the 
cost containment and strategic restructuring initiatives 
have been executed.  Of the total $89.9 million 
restructuring reserve, $72.1 million of costs and payments 
have been charged against the reserve as of December 31, 1995,
representing asset write-offs and lease obligations for 
closed facilities of $52.3 million and severance and other
related expenses of $19.8 million.
<PAGE>
     Note 15. Quarterly Financial Data (Unaudited) 
<TABLE> 
     The results of operations for 1995 and 1994 were as follows (in millions of 
dollars except share data): 

<CAPTION> 
                            First        Second         Third        Fourth 
                           Quarter       Quarter       Quarter       Quarter 
Fiscal Year 1995         (12 Weeks)    (12 Weeks)    (16 Weeks)    (12 Weeks) 
                         -----------   -----------   -----------   ----------- 
<S>                      <C>           <C>           <C>           <C>           
Sales                    $   1,142.5   $   1,139.5   $   1,565.3   $   1,223.4         
Gross profit (1)               291.5         289.6         390.7         308.7
Amortization of excess 
  cost over net assets 
  acquired                       3.4           3.5           4.7           3.4
Operating income                42.2          42.8          54.4          54.7
Interest expense, net           16.1          15.7          20.1          15.4
Net income                      14.0          14.5          18.5          21.1
                         -----------   -----------   -----------   ----------- 
                         -----------   -----------   -----------   ----------- 
Income per common
  and common equivalent
  share:
  Net income             $       .32   $       .33   $       .42   $       .48    
                         -----------   -----------   -----------   ----------- 
                         -----------   -----------   -----------   ----------- 
Weighted average 
  common and common
  equivalent shares       43,753,000    43,817,000    43,971,000    44,251,000
                         -----------   -----------   -----------   ----------- 
                         -----------   -----------   -----------   -----------  
</TABLE> 

<TABLE>
<CAPTION>  
                            First        Second         Third        Fourth 
                           Quarter       Quarter       Quarter       Quarter 
Fiscal Year 1994         (12 Weeks)    (12 Weeks)    (16 Weeks)    (12 Weeks) 
                         -----------   -----------   -----------   ----------- 
<S>                      <C>           <C>           <C>           <C>           
Sales                    $   1,144.0   $   1,160.2   $   1,516.2   $   1,176.2
Gross profit (1)               286.8         267.5         373.3         301.8
Amortization of excess 
  cost over net assets 
  acquired                       3.5           3.5           4.6           3.5
Restructuring charges             -             -           19.0          14.0
Operating income                32.7          25.3          32.1          35.7
Interest expense, net           15.7          16.8          21.7          16.6
Net income               $       9.0   $       4.5   $       4.0   $       9.1
                         -----------   -----------   -----------   ----------- 
                         -----------   -----------   -----------   ----------- 
Income per common
  and common 
  equivalent share:
  Net income             $       .21   $       .10   $       .09   $       .21
                         -----------   -----------   -----------   ----------- 
                         -----------   -----------   -----------   ----------- 
Weighted average 
  common and common
  equivalent shares       43,475,000    43,516,000    43,533,000    43,717,000
                         -----------   -----------   -----------   ----------- 
                         -----------   -----------   -----------   ----------- 
 

<FN> 
(1) Gross profit represents sales net of cost of sales, buying and occupancy 
    costs. 
 
</TABLE> <PAGE>
<PAGE>  
THE VONS COMPANIES, INC. AND SUBSIDIARIES 
----------------------------------------- 

     Independent Auditors' Report 

 
     The Board of Directors  
     The Vons Companies, Inc.:
 
     We have audited the accompanying consolidated balance sheets
of The Vons Companies, Inc. and subsidiaries as of December 31,
1995 and January 1, 1995, and the related consolidated statements
of operations, shareholders' equity and cash flows for the
fifty-two week periods ended December 31, 1995, January 1, 1995
and January 2, 1994.  These consolidated financial statements are
the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits. 

     We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our
opinion. 

     In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of The Vons Companies, Inc. and subsidiaries
at December 31, 1995 and January 1, 1995 and the results of their
operations and cash flows for the fifty-two week periods ended
December 31, 1995, January 1, 1995 and January 2, 1994,
in conformity with generally accepted accounting principles.


/S/ KPMG Peat Marwick LLP


Los Angeles, California 
February 20, 1996