FORM 10-Q






                       SECURITIES AND EXCHANGE COMMISSION


                             Washington, D.C. 20549





                         -------------------------------


                                    FORM 10-Q



                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


   For 39 Weeks Ended: November 1, 2001     Commission File Number: 1-6187



                                ALBERTSON'S, INC.
              -----------------------------------------------------
             (Exact name of Registrant as specified in its charter)


           Delaware                                      82-0184434
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


250 Parkcenter Blvd., P.O. Box 20, Boise, Idaho                          83726
-----------------------------------------------                       ----------
                 (Address)                                            (Zip Code)


     Registrant's telephone number, including area code:  (208) 395-6200
                                                          --------------


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

     Number of Registrant's $1.00 par value
     common shares outstanding at December 5, 2001:  406,307,964


                                       1
<PAGE>
                                                                       FORM 10-Q

                          PART I. FINANCIAL INFORMATION

                                ALBERTSON'S, INC.
                              CONSOLIDATED EARNINGS
                       (in millions except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                             13 WEEKS ENDED                          39 WEEKS ENDED
                                                   ----------------------------------    ----------------------------------
                                                      November 1,       November 2,         November 1,       November 2,
                                                             2001              2000                2001              2000
                                                   ---------------- -----------------    ---------------- -----------------

<S>                                                <C>              <C>                  <C>              <C>
Sales                                                     $ 9,363           $ 8,991            $ 28,271          $ 27,218
Cost of sales                                               6,708             6,438              20,243            19,507
                                                   ---------------- -----------------    ---------------- -----------------
Gross profit                                                2,655             2,553               8,028             7,711

Selling, general and administrative expenses                2,235             2,168               6,813             6,528
Restructuring charges and other                                 1                                   511
Merger-related charges (credits)                                                  1                 (15)                2
                                                   ---------------- -----------------    ---------------- -----------------
Operating profit                                              419               384                 719             1,181

Other (expense) income:
  Interest, net                                              (113)              (99)               (332)             (281)
  Other, net                                                   (7)               (1)                (19)                3
                                                   ---------------- -----------------    ---------------- -----------------
Earnings before income taxes                                  299               284                 368               903
Income tax expense                                            123               112                 157               358
                                                   ---------------- -----------------    ---------------- -----------------

NET EARNINGS                                              $   176           $   172            $    211          $    545
                                                   ================ =================    ================ =================

EARNINGS PER SHARE:
  Basic                                                    $ 0.43            $ 0.41              $ 0.52            $ 1.29
  Diluted                                                    0.43              0.41                0.52              1.29

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
  Basic                                                       406               417                 406               421
  Diluted                                                     409               417                 408               421
</TABLE>






















See Notes to Consolidated Financial Statements.

                                       2
<PAGE>
                                                                       FORM 10-Q


                                ALBERTSON'S, INC.
                           CONSOLIDATED BALANCE SHEETS
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                  November 1, 2001             February 1,
                                                                                       (unaudited)                    2001
                                                                              ----------------------     -------------------
<S>                                                                           <C>                        <C>
                   ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                              $     50                $     57
   Accounts and notes receivable                                                               625                     547
   Inventories                                                                               3,511                   3,364
   Prepaid expenses                                                                             84                     155
   Property held for sale                                                                      242                     113
   Deferred income taxes                                                                       199                      70
   Refundable income taxes                                                                      39                      36
                                                                              ----------------------     -------------------
                TOTAL CURRENT ASSETS                                                         4,750                   4,342

LAND, BUILDINGS AND EQUIPMENT (net of accumulated depreciation and
  amortization of $5,662 and $5,372, respectively)                                           9,340                   9,580

GOODWILL AND INTANGIBLES, net                                                                1,619                   1,705

OTHER ASSETS                                                                                   410                     451
                                                                              ----------------------     -------------------
                                                                                          $ 16,119                $ 16,078
                                                                              ======================     ===================

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                                       $  2,370                $  2,163
   Salaries and related liabilities                                                            537                     561
   Taxes other than income taxes                                                               198                     141
   Self-insurance                                                                              238                     218
   Unearned income                                                                              98                     112
   Merger related reserves                                                                       4                      13
   Restructuring reserves                                                                       47
   Current portion of capitalized lease obligations                                             18                      20
   Current maturities of long-term debt                                                        135                      62
   Other current liabilities                                                                   165                     105
                                                                              ----------------------     -------------------
                TOTAL CURRENT LIABILITIES                                                    3,810                   3,395

LONG-TERM DEBT                                                                               5,347                   5,715

CAPITALIZED LEASE OBLIGATIONS                                                                  258                     227

SELF-INSURANCE                                                                                 247                     216

DEFERRED INCOME TAXES                                                                           80                     116

OTHER LIABILITIES AND DEFERRED CREDITS                                                         666                     715

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock - $1.00 par value; authorized - 10 shares; issued - none
   Common stock - $1.00 par value; authorized - 1,200 shares; issued -
     406 shares and 405 shares, respectively                                                   406                     405
   Capital in excess of par value                                                               84                      48
   Retained earnings                                                                         5,221                   5,241
                                                                              ----------------------     -------------------
                                                                                             5,711                   5,694
                                                                              ----------------------     -------------------
                                                                                          $ 16,119                $ 16,078
                                                                              ======================     ===================
</TABLE>

See Notes to Consolidated Financial Statements.

                                       3
<PAGE>
                                                                       FORM 10-Q


                                ALBERTSON'S, INC.
                             CONSOLIDATED CASH FLOWS
                                  (in millions)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                              39 WEEKS ENDED
                                                                              -----------------------------------------------
                                                                                     November 1,                November 2,
                                                                                            2001                       2000
                                                                              --------------------       --------------------

<S>                                                                           <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings                                                                         $    211                   $    545
     Adjustments to reconcile net earnings to net cash provided by
     operating activities:
       Depreciation and amortization                                                         737                        695
       Goodwill amortization                                                                  43                         42
       Noncash restructuring charges and other                                               450
       Noncash merger-related (credits) charges                                              (13)                         6
       Net loss on asset sales                                                                15                          1
       Net deferred income taxes and other                                                  (149)                        29
       Decrease (increase) in cash surrender value of Company-owned life
         insurance                                                                            21                         (3)
       Changes in operating assets and liabilities:
         Receivables and prepaid expenses                                                     16                        111
         Inventories                                                                        (183)                       (46)
         Accounts payable                                                                    206                        310
         Other current liabilities                                                           131                       (117)
         Self-insurance                                                                       51                         (1)
         Unearned income                                                                     (25)                        14
         Other long-term liabilities                                                         (37)                       (21)
                                                                              --------------------       --------------------
   Net cash provided by operating activities                                               1,474                      1,565

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures, net of proceeds from disposals                                   (1,052)                    (1,167)
   Decrease in other assets                                                                   99                         19
                                                                              --------------------       --------------------
   Net cash used in investing activities                                                    (953)                    (1,148)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term borrowings                                                        613                        527
   Payments on long-term borrowings                                                          (70)                      (371)
   Net commercial paper and bank line activity                                              (859)                      (187)
   Proceeds from stock options exercised                                                      19                          5
   Cash dividends paid                                                                      (231)                      (237)
   Stock purchased and retired                                                                                         (350)
                                                                              --------------------       --------------------
   Net cash used in financing activities                                                    (528)                      (613)
                                                                              --------------------       --------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                     (7)                      (196)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                              57                        245
                                                                              --------------------       --------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                              $     50                    $    49
                                                                              ====================       ====================
</TABLE>








See Notes to Consolidated Financial Statements.

                                       4
<PAGE>
                                                                       FORM 10-Q


                                ALBERTSON'S, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (dollars in millions, except per share data)
                                   (unaudited)

Description of Business
   Albertson's,  Inc. (the Company) is incorporated  under the laws of the State
of Delaware  and is the  successor  to a business  founded by J.A.  Albertson in
1939.  Based on sales,  the Company is one of the world's  largest food and drug
retailers.

   As of November  1, 2001,  the Company  operated  2,528  stores in 36 Western,
Midwestern,  Eastern and Southern  states.  Retail  operations  are supported by
19 major Company distribution operations, strategically located in the Company's
operating markets.  The Company continues to expand its fuel centers in existing
and new stores. As of November 1, 2001, the Company operated 197 fuel centers.

Basis of Presentation
   The accompanying  unaudited  consolidated  financial  statements  include the
results of  operations,  account  balances and cash flows of the Company and its
subsidiaries. All material intercompany balances have been eliminated.

   In  the  opinion  of  management,  the  accompanying  unaudited  consolidated
financial statements include all adjustments necessary to present fairly, in all
material  respects,  the  results of  operations  of the Company for the periods
presented.  The  statements  have been  prepared by the Company  pursuant to the
rules  and  regulations  of the  Securities  and  Exchange  Commission.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America have been  condensed or omitted  pursuant to such rules
and regulations. It is suggested that these consolidated financial statements be
read in conjunction with the consolidated  financial statements and accompanying
notes included in the Company's  2000 Annual  Report.  The results of operations
for the 39 weeks  ended  November 1, 2001,  are not  necessarily  indicative  of
results for a full year.

   The  balance  sheet at  February  1, 2001,  has been  taken from the  audited
consolidated financial statements at that date.

   The  preparation  of the  Company's  consolidated  financial  statements,  in
conformity with accounting principles generally accepted in the United States of
America, requires management to make estimates and assumptions.  These estimates
and  assumptions  affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from these estimates.

Inventory
   Net  income  reflects  application  of the LIFO  method  of  valuing  certain
inventories, based upon estimated annual inflation ("LIFO Indices"). Albertson's
recorded  pretax LIFO expense of $23 and $20 for the 39 weeks ended  November 1,
2001,  and November 2, 2000,  respectively.  Actual LIFO Indices are  calculated
during the fourth  quarter of the year  based  upon a  statistical  sampling  of
inventories.


                                       5
<PAGE>
                                                                       FORM 10-Q


Earnings Per Share ("EPS")

   Basic EPS is based on the weighted average outstanding common shares. Diluted
EPS is based on the weighted average  outstanding shares reduced by the dilutive
effect of stock options(3.2 million and 40 thousand potential shares outstanding
for the 13 weeks and 2.5 million and 109 thousand  potential shares  outstanding
for the 39 weeks ended  November 1, 2001,  and November 2, 2000,  respectively).
Outstanding   options   excluded   from  the   calculation   because  they  were
anti-dilutive  amounted to 7.9 million and 16.6 million  shares for the 13 weeks
and 8.9 million and 16.3 million shares for the 39 weeks ended November 1, 2001,
and November 2, 2000, respectively.

Comprehensive Income
   Comprehensive  income is net income adjusted for certain other items that are
recorded directly to stockholders'  equity.  Comprehensive income consisted only
of reported net earnings for the periods ended November 1, 2001, and November 2,
2000, as there were no significant items of other comprehensive income.

Reclassifications
   Certain reclassifications have been made in prior year's financial statements
to conform to classifications used in the current year.

Reporting Periods
   The  Company's  quarterly  reporting  periods  are  generally  13  weeks  and
periodically  consist of 14 weeks  because the fiscal year ends on the  Thursday
nearest to January 31 each year.

Goodwill
   Under the Company's  current  accounting  policies,  goodwill is allocated to
certain markets based on prior acquisitions.  As part of normal, on-going review
of performance of markets,  the Company  reviews  long-lived  assets  (including
goodwill) for impairment  whenever  events and  circumstances  indicate that the
carrying amount of the assets may not be recoverable.  For example,  significant
assets  removed  from a market would  trigger a review for  possible  impairment
based on the future expected cash flows of the remaining  assets.  If the sum of
the undiscounted  expected future cash flows is less than the carrying amount of
the assets,  the Company  recognizes an impairment  loss.  Impairments and costs
incurred to close stores or markets,  including  lease  termination  costs,  are
recorded at the time  executive  management  approves  and commits to closing or
relocating such assets.


                                       6
<PAGE>
                                                                       FORM 10-Q


Restructuring
   On July 17, 2001, the Company's  Board of Directors  approved a restructuring
plan  designed  to  improve  future  financial   results  and  to  drive  future
competitiveness.  The plan includes certain exit costs and employee  termination
benefits,  as described below,  that will be incurred within  approximately  one
year of the board approval date.

<TABLE>
<S>  <C>                                                           <C>
     Action                                                        Status

     Reduction in administrative and corporate overhead            In Progress

     Closing of 165 underperforming retail stores                  In Progress

     Consolidation  and  elimination  of  four  division           Completed
        offices

     Process streamlining                                          In Progress
</TABLE>


   As a result of the  restructuring  plan, the Company recorded pre-tax charges
of $514  ($309  after tax or $0.76 per  diluted  share)  for the 39 weeks  ended
November 1, 2001.  In the current  quarter,  the Company  recorded $4 of pre-tax
charges  related  to  restructuring,  of which  $3 was  included  with  selling,
general, and administrative  expenses.  The following table presents the pre-tax
charges, incurred by category of expenditure,  and related restructuring reserve
accruals included in the Company's Consolidated Balance Sheets:

<TABLE>
<CAPTION>
                                      --------------- ------------------ ------------------- ---------- ----------
                                            Employee                                  Lease
                                           Severance               Asset        Termination
                                               Costs         Impairments              Costs      Other      Total
                                      --------------- ------------------ ------------------- ---------- ----------
<S>                                   <C>             <C>                <C>                 <C>        <C>
Additions                                       $ 44              $ 425                $ 37        $ 8       $514
Utilization                                       30                425                   4          8        467
                                      --------------- ------------------ ------------------- ---------- ----------
Balance at November 1, 2001                     $ 14              $                    $ 33        $         $ 47
                                      =============== ================== =================== ========== ==========
</TABLE>

   Employee  severance costs consist of severance pay, health care  continuation
costs,  and  outplacement  service costs for employees who  participated  in the
Company's  Voluntary  Separation  Plan and for employees who were  terminated or
notified of  termination  under the  Company's  Involuntary  Severance  Plan. In
accordance with the  restructuring  plan,  1,341  managerial and  administrative
positions  above  store  level  have  been  identified  for  termination.  As of
November 1, 2001, 951 positions have been terminated.

   As part  of the  Company's  restructuring  plan,  all  stores  were  reviewed
utilizing  a  methodology  based on return on  invested  capital.  Based on this
review,   the   Company   identified   and   committed   to  close  and  dispose
165 underperforming stores in 25 states.  All stores identified for closure were
evaluated for asset  impairment by comparing the fair value,  less selling cost,
to the recorded book value.  Fair value used in the impairment  calculation  was
based on third  party  offers or market  value for  comparable  properties.  For
stores under  operating  lease  agreements,  the present values of any remaining
liability  under the lease,  net of sublease  recoveries,  or lease  termination
costs were expensed. As of November 1, 2001, 43 stores have been closed.

   Assets to be disposed of include land,  buildings,  equipment,  and leasehold
improvements  for  stores  and  division  offices  that  were  included  in  the
restructuring discussed above. These assets are recorded at their estimated fair
value,  less  selling  costs,  and  reported  as  property  held for sale in the
Company's Consolidated Balance Sheets.

                                       7
<PAGE>
                                                                       FORM 10-Q


   Other costs include  various  expenses  related to the Company's  decision to
exit certain  insignificant  businesses  and the  consolidation  of the division
offices.

Closed Store Reserves
   When  executive  management  approves and commits to closing or  relocating a
store, the remaining investment in land, building,  leasehold,  and equipment is
reviewed for impairment  and the  difference  between book value and fair market
value,  less selling costs,  is expensed.  For properties  under operating lease
agreements, the present value of any remaining liability under the lease, net of
expected sublease recovery,  is expensed.  The following table shows the pre-tax
expense, and related reserves, for closed stores and other surplus property:

<TABLE>
<CAPTION>
                                         --------------------- ---------------------- --------------------
                                                      Lease                  Asset
                                                Liabilities            Impairments                Total
                                         --------------------- ---------------------- --------------------
<S>                                      <C>                   <C>                    <C>
Balance at February 1, 2001                             $22                   $                    $ 22

    Additions                                             4                     10                   14
    Adjustments                                           3                    (10)                  (7)
    Adjustments - restructuring                          22                     26                   48
    Utilization                                          (7)                   (26)                 (33)
                                         --------------------- ---------------------- --------------------
Balance at November 1, 2001                             $44                   $                    $ 44
                                         ===================== ====================== ====================
</TABLE>

   The restructuring plan included actions to accelerate the disposal of surplus
property  which  included  terminating  leases  through  negotiated  buyouts and
selling  owned  properties  through  auctions.  The  $48  pre-tax  restructuring
adjustments  recorded  during  the second  quarter  are the  additional  charges
expected to be incurred as a result of these actions. This charge is included in
selling,  general  and  administrative  expenses in the  Company's  Consolidated
Earnings.  $36 of the reserve  balance as of November 1, 2001,  is included with
accounts  payable and the  remaining $8 is included with other  liabilities  and
deferred  credits in the  Company's  Consolidated  Balance  Sheets.  The related
assets are  recorded at their  estimated  fair value,  less selling  costs,  and
reported as property held for sale in the Company's Consolidated Balance Sheets.

Merger Related and Exit Costs
   As a result of the Company's merger with American Stores Company,  results of
operations  for the 39 weeks  ended  November  1,  2001,  include a net of $7 of
merger-related  credits ($4 after tax). The following table presents the pre-tax
(credits)  charges,  incurred  by category of  expenditure,  and  merger-related
accruals included in the Company's Consolidated Balance Sheets:

<TABLE>
<CAPTION>
                                   ------------------ ---------------- ------------------- -----------
                                              Asset                         Integration
                                        Impairments        Severance          And Other        Total
                                   ------------------ ---------------- ------------------- -----------
<S>                                <C>                <C>              <C>                 <C>
Balance at February 1, 2001                   $                $ 11                $ 2         $ 13

Additions                                                         2                  6            8
Adjustments                                    (15)                                             (15)
Utilization                                     15               (9)                (8)          (2)
                                   ------------------ ---------------- ------------------- -----------
Balance at November 1, 2001                   $                $  4                $           $  4
                                   ================== ================ =================== ===========
</TABLE>


                                       8
<PAGE>
                                                                       FORM 10-Q


   Asset  impairments  include the loss on disposal of duplicate  and  abandoned
facilities,   including  administrative  offices,  intangibles  and  information
technology  equipment  which were  abandoned by the Company.  Operations for the
39 weeks ended  November 1, 2001,  included $15 of credits  associated  with the
reversal  of previous  impairment  charges  related to the sale of the  American
Stores' Tower in Salt Lake City,  Utah.  The Company  closed on the sale of this
property on May 15, 2001, thus completing the asset dispositions  resulting from
the merger.

   Severance consists of retention costs for certain individuals and termination
benefit liabilities for individuals who have already been terminated.

   Integration and other costs consist  primarily of incremental  transition and
integration  costs associated with integrating the operations of Albertson's and
American  Stores Company and are being expensed as incurred.  These include such
costs as labor  associated  with system  conversions and training and relocation
costs.

Indebtedness
   The Company has two revolving credit  agreements which provide for borrowings
up to  $1,650  and a  committed  bank line for $100.  These  agreements  contain
certain  covenants,  the most  restrictive  of which  requires  the  Company  to
maintain  consolidated tangible net worth, as defined, of at least $2,100. As of
November 1, 2001,  $25 was  outstanding  under the committed bank line agreement
and no amounts were outstanding under the revolving credit agreements.

   On May 1, 2001, the Company issued $600 of term notes and debentures  under a
shelf registration  statement filed with the Securities and Exchange  Commission
in February 2001 (the "2001 Registration Statement"). The notes are comprised of
$200 of principal  bearing interest at 7.25% due May 2013 and the debentures are
comprised of $400 of principal bearing interest at 8.00% due May 2031.  Proceeds
were used to repay  amounts  outstanding  under the Company's  commercial  paper
program and other general corporate purposes. Additional securities up to $2,400
of principal remain available for issuance under the Company's 2001 Registration
Statement.

Supplemental Cash Flow Information
   Selected cash payments and noncash activities were as follows:

<TABLE>
<CAPTION>
                                                                       39 Weeks Ended              39 Weeks Ended
                                                                     November 1, 2001           November 2,  2000
                                                                ------------------------    ------------------------
<S>                                                             <C>                         <C>
     Cash payments for:
        Income taxes                                                            $ 324                       $ 414
        Interest, net of amounts capitalized                                      249                         254
     Noncash transactions:
        Capitalized leases incurred                                                55                          50
        Capitalized leases terminated                                              13                           2
        Tax effects related to stock options                                       (3)                        (11)
        Decrease (increase) in cash surrender value of
           Company-owned life insurance                                            21                          (3)
</TABLE>


                                       9
<PAGE>
                                                                       FORM 10-Q


Capital Stock
   During fiscal 2000, the Company  purchased and retired 18.7 million shares of
its  common  stock at a total cost of $451,  or an  average  price of $24.15 per
share,  under a Board  authorization  which  expired on  December  6,  2001.  No
purchases  were made  during the 39 weeks ended  November 1, 2001.  The Board of
Directors  adopted a program on December 3, 2001,  authorizing,  at management's
discretion,  the  Company to  purchase  and  retire up to $500 of the  Company's
common stock beginning December 7, 2001 through December 31, 2002.

Certain Accounting Matters
   On February 2, 2001, the Company  adopted  Statement of Financial  Accounting
Standards No. 133 ("SFAS  133"),  "Accounting  for  Derivative  Instruments  and
Hedging  Activities,"  as amended.  This new standard,  as amended,  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
It  requires  that an entity  recognize  all  derivatives  as  either  assets or
liabilities in the statement of financial position and measure those instruments
at  fair  value.  The  adoption  of this  statement  resulted  in no  transition
adjustment or significant impact on financial results.

   The Company utilizes derivative  contracts,  such as treasury rate locks, for
hedging  interest  rate risk  associated  with  issuances  of debt.  During  the
39 weeks ended  November 1, 2001,  there  were no  transactions.  There  were no
outstanding derivative contracts as of November 1, 2001.

   In  June  2001,  the  Financial  Accounting  Standards Board  issued  two new
pronouncements:  Statement of Financial  Accounting  Standards ("SFAS") No. 141,
"Business  Combinations"  and SFAS  No.  142,  "Goodwill  and  Other  Intangible
Assets."  SFAS No. 141,  which is effective  for  acquisitions  initiated  after
June 30, 2001, prohibits the use of the pooling-of-interest  method for business
combinations and establishes the accounting and financial reporting requirements
for business  combinations  accounted for by the purchase  method.  SFAS No. 142
requires that an intangible asset that is acquired shall be initially recognized
and measured based on its fair value.  The statement also provides that goodwill
should not be amortized,  but shall be tested for impairment  annually,  or more
frequently if circumstances indicate potential impairment,  through a comparison
of fair value to its carrying  amount.  Existing  goodwill  will  continue to be
amortized  through the remainder of fiscal 2001 at which time  amortization will
cease and the Company will perform a transitional goodwill impairment test. SFAS
No. 142 is effective for fiscal periods  beginning  after December 15, 2001. The
Company is currently  evaluating the impact of the new  accounting  standards on
existing goodwill and other intangible assets.  While the ultimate impact of the
new accounting standards has yet to be determined, goodwill amortization expense
for the 39 weeks ended November 1, 2001, was $43, or $0.10 per diluted share.

   In July 2001, the Financial  Accounting  Standards Board issued SFAS No. 143,
"Accounting  for  Asset  Retirement  Obligations."  SFAS  No.  143  will  become
effective  for  Albertson's  on January  31,  2003.  The  Company  is  currently
analyzing the effect that this standard will have on its financial statements.

   In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting  for the Impairment or Disposal of Long-Lived  Assets." SFAS No. 144
will become  effective  for  Albertson's  on  February  1, 2002.  The Company is
currently  analyzing  the effect that this  standard  will have on its financial
statements.


                                       10
<PAGE>
                                                                       FORM 10-Q


Legal Proceedings
   On April 5, 2000, a class action  complaint was filed against  Albertson's as
well as American Stores Company, American Drug Stores, Inc., Sav-on Drug Stores,
Inc. and Lucky Stores,  Inc.,  wholly-owned  subsidiaries of the Company, in the
Superior Court for the County of Los Angeles,  California (Mario Gardner, et al.
v. American  Stores  Company,  Albertson's,  Inc.,  American Drug Stores,  Inc.,
Sav-on Drug Stores,  Inc. and Lucky Stores,  Inc.) seeking  recovery of overtime
due to plaintiffs'  allegation  that they were  improperly  classified as exempt
under  California  law. A class  action with  respect to Sav-on  Drug  assistant
managers was  certified  by the court.  A case with very  similar  claims,  also
involving the assistant drug managers and operating managers,  was filed against
the Company's  subsidiary Sav-on Drug Stores, Inc. in Los Angeles Superior Court
(Rocher,  Dahlein et. al. v. Sav-on Drug Stores, Inc.) and was also certified as
a class action.  The Company has strong defenses against these lawsuits,  and is
vigorously   defending  them.   Although  these  lawsuits  are  subject  to  the
uncertainties  inherent  in the  litigation  process,  based on the  information
presently  available  to the  Company,  management  does not expect the ultimate
resolution of these actions to have a material  adverse  effect on the Company's
financial condition.

   On August 23, 2000, a class action  complaint  was filed  against  Jewel Food
Stores, Inc., a wholly-owned  subsidiary of the Company, in the Circuit Court of
Cook County,  Illinois  (Maureen Baker,  et al., v. Jewel Food Stores,  Inc. and
Dominick's  Finer Foods,  Inc., Case No. 00L 009664) alleging milk price fixing.
The  Company  has  strong  defenses  against  this  lawsuit,  and is  vigorously
defending it. Although this lawsuit is subject to the uncertainties  inherent in
the litigation  process,  based on the  information  presently  available to the
Company,  management  does not expect the ultimate  resolution of this action to
have a material adverse effect on the Company's financial condition.

   An agreement has been reached,  and court approval  granted,  to settle eight
purported  multi-state  cases  combined in the United States  District  Court in
Boise,  Idaho,  which  raise  various  issues  including  "off the  clock"  work
allegations.  Under the settlement  agreement,  current and former employees who
meet  eligibility  criteria are in the process of  presenting  their claims to a
settlement  administrator.  While the Company cannot specify the exact amount of
their claims,  the $37 pre-tax ($22 after-tax) charge recorded by the Company in
1999  is the  Company's  current  estimate  of  the  total  monetary  liability,
including  attorney fees, for all eight cases.  During the first quarter of 2001
this liability was reduced by an $18 cash payment for legal expenses.

   The Company is also involved in routine litigation  incidental to operations.
The  Company  utilizes  various  methods  of  alternative   dispute  resolution,
including settlement discussions, to manage the costs and uncertainties inherent
in the litigation process. In the opinion of management, the ultimate resolution
of these  legal  proceedings  will not have a  material  adverse  effect  on the
Company's financial condition.


                                       11
<PAGE>
                                                                       FORM 10-Q


Subsequent Event
   On December 5, 2001,  the Company  entered into a definitive  agreement  with
Maxi Drug, Inc., a Delaware Corp., d/b/a Brooks Pharmacy. The agreement provides
that  Brooks will  acquire  from  Albertson's  eighty Osco Drug stores in Maine,
Massachusetts,  and New Hampshire, for approximately $240. Fiscal 2000 sales for
these stores represent an insignificant percentage of the Company's consolidated
sales. The sale of these stores is expected to close in January 2002, subject to
government review and approvals.

                                       12
<PAGE>
                                                                       FORM 10-Q


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  (dollars in millions, except per share data)


Results of Operations - Third Quarter
   The following table sets forth certain  income statement components expressed
as a percent to sales  and the year-to-year percentage changes in the amounts of
such components:

<TABLE>
<CAPTION>
                                                          Percent to Sales                  Percentage
                                                           13 weeks ended                    Increase
                                                       11-1-01          11-2-00             (Decrease)
                                                  ---------------- ----------------     ------------------

<S>                                                     <C>              <C>                      <C>
    Sales                                               100.00%          100.00%                   4.1%
    Gross profit                                         28.35            28.40                    4.0
    Selling, general and administrative expenses         23.87            24.11                    3.1
    Operating profit                                      4.47             4.28                    8.8
    Interest expense, net                                (1.20)           (1.11)                  12.8
    Earnings before income taxes                          3.19             3.16                    5.3
    Net earnings                                          1.88             1.91                    2.6
</TABLE>


   Increases in sales are primarily attributable to the continued development of
new stores and identical and comparable store sales  increases.  Identical store
sales  increased  1.7% and  comparable  store sales,  which include  replacement
stores,  increased  2.3%.  During the quarter the Company  opened 21 combination
food and drug stores,  3 warehouse stores and 24 stand alone  drugstores,  while
closing 15 combination food and drug stores, 15 conventional stores, 1 warehouse
store and 29  drugstores.  Of the total 60 store  closings,  38  related  to the
Company's  restructuring  plan. Net retail square footage increased by 2.4% from
the prior  year.  Management  estimates  that  there was  overall  inflation  in
products the Company sells of slightly over 1.0%  (annualized).  Sales inflation
is being primarily driven by pharmacy products.

   During fiscal year 2000,  the Company  changed the alignment of the marketing
organizational  structure.  Benefits continue to be realized from this change as
promotion  and  merchandising  is  tailored  to  fit  individual  markets.   The
Company-wide  "Focus on Fresh," has become a principal marketing target for this
year and has  created a new level of  satisfaction  for  shoppers  who enter our
supermarkets.

   The Company  announced a new customer  service  program in March and finished
the last rollout meeting in May. This program,  "Service First, Second to None,"
puts best  practices  from across the Company  into a brand new package and into
tools the stores can use to achieve the highest standards of customer service.


                                       13
<PAGE>
                                                                       FORM 10-Q


   Albertson's  has also  increased  focus on loyalty  programs  such as the new
Associate  Advantage Loyalty Card Program,  and has entered a national agreement
with Catalina  Marketing  Corporation to extend their program to all Albertson's
combination food and drug stores. Subsequent to November 1, 2001, a loyalty card
program was  launched in the  Dallas/Fort  Worth  division.  The Company is also
expanding  its dual  branding  concept (a food and drug store under one roof) by
opening Albertson's/Osco  combination food and drug stores in Tucson, AZ as well
as Albertson's/Sav-on combo stores in Reno, NV.

   Gross profit,  as a percent to sales,  decreased as a result of the Company's
initiative  to drive sales  through more  aggressive  promotional  pricing.  The
continued  utilization of Company  distribution  facilities and increased buying
efficiencies  partially  offset this  decrease.  The pre-tax LIFO charge reduced
gross profit by $8 (0.08% to sales) for the 13 weeks ended November 1, 2001, and
for the 13 weeks ended November 2, 2000.

   Selling,  general and administrative  (SG&A) expenses, as a percent to sales,
decreased due to the  Company's  increased  emphasis on cost control.  Decreases
resulted from lower labor and impairment charges. These decreases were partially
offset by increased  health and welfare  benefit  costs.  SG&A  expenses for the
13 weeks ended November 1, 2001, included $5 of restructuring and merger-related
costs as compared to $19 for the 13 weeks ended November 2, 2000.

   The increase in net interest expense for the 13 weeks ended November 1, 2001,
resulted from higher average  outstanding debt and higher average interest rates
during the 13 weeks ended  November  1, 2001,  as compared to the 13 weeks ended
November 2, 2000.


                                       14
<PAGE>
                                                                       FORM 10-Q


   Due to the significance of the costs associated with the  restructuring  plan
and merger-related  costs and their effect on operating  results,  the following
table is presented to assist in the  comparison of income  statement  components
without these costs:

<TABLE>
<CAPTION>
                             --------------------------------------------------- --------------------------------------------------
                                      13 Weeks Ended November 1, 2001                      13 Weeks Ended November 2, 2000
                             --------------------------------------------------- --------------------------------------------------
                                                            Without     Percent                               Without      Percent
                                       As      Adjust-      adjust-          To           As     Adjust-      adjust-           To
                                 Reported        ments        ments       Sales     Reported       ments        ments        Sales
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
<S>                          <C>          <C>          <C>          <C>          <C>         <C>         <C>          <C>
Sales                              $9,363                    $9,363      100.00%      $8,991                   $8,991       100.00%
Cost of sales                       6,708                     6,708       71.65        6,438        $ (7)       6,431        71.52
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Gross profit                        2,655                     2,655       28.35        2,553           7        2,560        28.48
Selling, general and
 administrative expenses            2,235         $ (4)       2,231       23.82        2,168         (18)       2,150        23.91
Restructuring charges and
 other                                  1           (1)
Merger-related charges                                                                     1          (1)
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Operating profit                      419            5          424        4.53          384          26          410         4.57
Interest, net                        (113)                     (113)      (1.20)         (99)                     (99)       (1.11)
Other (expense) income, net            (7)                       (7)      (0.08)          (1)                      (1)       (0.01)
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Earnings before income taxes          299            5          304        3.26          284          26          310         3.45
Income tax expense                    123            1          124        1.33          112          11          123         1.36
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Net earnings                       $  176         $  4       $  180        1.92%      $  172        $ 15       $  187         2.09%
                             ============ ============ ============ ============ =========== =========== ============ =============

Earnings per share:
   Basic                            $0.43        $0.01        $0.44                    $0.41       $0.04        $0.45
   Diluted                           0.43         0.01         0.44                     0.41        0.04         0.45
</TABLE>


                                       15
<PAGE>
                                                                       FORM 10-Q


Results of Operations - Year-to-Date
   The following table sets forth certain income statement  components expressed
as a percent to sales and the year-to-year  percentage changes in the amounts of
such components:

<TABLE>
<CAPTION>
                                                          Percent to Sales                  Percentage
                                                           39 weeks ended                    Increase
                                                        11-1-01          11-2-00            (Decrease)
                                                  ---------------- ----------------     ------------------

<S>                                                      <C>              <C>                   <C>
     Sales                                               100.00%          100.00%                 3.9%
     Gross profit                                         28.40            28.33                  4.1
     Selling, general and administrative
        expenses                                          24.10            23.98                  4.4
     Restructuring charges and other                       1.81                                   n.m.
     Merger-related (credits) charges                     (0.05)            0.01                  n.m.
     Operating profit                                      2.54             4.34                (39.2)
     Interest expense, net                                (1.17)           (1.03)                17.9
     Earnings before income taxes                          1.30             3.32                (59.2)
     Net earnings                                          0.75             2.00                (61.3)

     n.m. - not meaningful
</TABLE>

   Increases in sales are primarily attributable to the continued development of
new stores and identical and comparable store sales  increases.  Identical store
sales  increased  1.3% and  comparable  store sales,  which include  replacement
stores,  increased 1.7%. During the 39 weeks ended November 1, 2001, the Company
opened 60 combination  food and drug stores,  1 conventional  store, 3 warehouse
stores and 54 stand-alone drugstores, while closing 27 combination food and drug
stores,  25 conventional  stores, 5 warehouse  stores and 45 drugstores.  Of the
total 102 store closings,  43 related to the Company's  restructuring  plan. The
new stores include 6 stores that were acquired in three  separate  transactions.
Net retail  square  footage  increased  by 2.4% from the prior year.  Management
estimates  that there was overall  inflation  in products  the Company  sells of
slightly over 1.0%  (annualized).  Sales inflation is being primarily  driven by
pharmacy products.

   Sales  results for the 39 weeks ended  November 1, 2001,  were the results of
trends  and  programs  similar  to  those  experienced  for the 13  weeks  ended
November 1, 2001, which are discussed in Results of Operations - Third Quarter.

   Gross profit,  as a percent to sales,  increased as a result of the continued
utilization of Company distribution  facilities,  increased buying efficiencies,
and lower  advertising  costs due to the elimination of incremental  advertising
costs incurred in the prior year associated with the Lucky banner change.  Gross
margin  increases  were  partially  offset by the Company's  initiative to drive
sales  through  more  aggressive  promotional  pricing.  The pre-tax LIFO charge
reduced gross profit by $23 (0.08% to sales) for the 39 weeks ended  November 1,
2001,  as compared  to $20 (0.07% to sales) for the 39 weeks  ended  November 2,
2000.


                                       16
<PAGE>
                                                                       FORM 10-Q


   Selling,  general and administrative  (SG&A) expenses, as a percent to sales,
increased  primarily due to costs  associated  with asset  impairments and lease
terminations  related to the  acceleration  of the disposal of surplus  property
(refer to  "Restructuring  Plan" below).  Increases in other components of SG&A,
such as energy costs,  health and welfare  benefits,  and  depreciation  expense
associated  with the Company's  expansion  program,  were offset by lower labor,
maintenance,  supplies and travel costs. In addition, the increase was partially
offset by a $20 charge recorded during first quarter 2000 for certain previously
assigned leases and subleases to tenants who were in bankruptcy.

   The increase in net interest expense for the 39 weeks ended November 1, 2001,
resulted  primarily  from higher  average  outstanding  debt and higher  average
interest  rates during the 39 weeks ended  November 2, 2001,  as compared to the
39 weeks ended  November  2, 2000.  This  comparison  also is  impacted by a $16
interest expense  reversal due to a favorable income tax settlement  recorded in
the first quarter of 2000.

Restructuring Plan
   On July 17, 2001, the Company's  Board of Directors  approved a restructuring
plan  designed  to  improve  future  financial   results  and  to  drive  future
competitiveness.   Major   components   of  the  plan  include  the  closure  of
165 underperforming retail stores, the reduction in administrative and corporate
overhead,   consolidating   and  eliminating   four  division  offices  and  the
acceleration of the disposal of surplus  property.  In accordance with the plan,
the Company recorded pre-tax charges of $514 to cover employee  severance costs,
asset impairments,  lease terminations, and other. In addition to these charges,
the Company recorded (in selling,  general and administrative  expenses) pre-tax
costs of $48 for asset  impairments and lease  terminations  associated with the
accelerated  disposal  of  surplus  property.  These  combined  actions  reduced
operating  profit  for the 39 weeks  ended  November  1,  2001,  by $562 and net
earnings by $337.

   The Company expects to incur additional  pre-tax charges of approximately $35
in future periods for certain  actions  related to the  restructuring  plan that
have not yet been implemented.

Merger-Related and Exit Costs
   Results of operations for the 39 weeks ended November 1, 2001,  include a net
of $7 of merger related credits ($4 after tax).

   The merger-related costs of integrating Albertson's, Inc. and American Stores
Company  have  resulted in  significant  non-recurring  charges and  incremental
expenses.  These  costs  have had a  significant  effect on the prior two years'
results of  operations  of the  Company.  Non-recurring  charges and expenses of
implementing  integration actions were originally  estimated to total $700 after
income tax benefits.  On an after-tax basis, and subsequent to the first quarter
of 1999,  the  Company  has  incurred  $634 of  merger-related  costs.  With the
exception of some system conversions,  the integration is substantially complete
and the Company does not expect to incur significant  additional charges related
to the merger.

                                       17
<PAGE>
                                                                       FORM 10-Q


Unusual Items
   During the quarter  ended May 3, 2001,  the  Company  recorded  (in  selling,
general and  administrative  expenses) $9 of compensation  related costs for the
executive management changes.

   During the quarter  ended May 4, 2000, a $20 charge was incurred and included
in selling,  general and  administrative  expenses  for  liabilities  related to
certain  previously  assigned  leases  and  subleases  to  tenants  who  are  in
bankruptcy.

   Due to the significance of the costs associated with the  restructuring  plan
and  merger-related  costs and other unusual items and their effect on operating
results,  the following table is presented to assist in the comparison of income
statement components without these costs:

<TABLE>
<CAPTION>
                             --------------------------------------------------- --------------------------------------------------
                                      39 Weeks Ended November 1, 2001                      39 Weeks Ended November 2, 2000
                             --------------------------------------------------- --------------------------------------------------
                                                            Without     Percent                               Without      Percent
                                       As      Adjust-      adjust-          To           As     Adjust-      adjust-           To
                                 Reported        ments        ments       Sales     Reported       ments        ments        Sales
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
<S>                          <C>          <C>          <C>          <C>          <C>         <C>         <C>          <C>
Sales                             $28,271                   $28,271      100.00%     $27,218                  $27,218       100.00%
Cost of sales                      20,243                    20,243       71.60       19,507       $ (30)      19,477        71.56
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Gross profit                        8,028                     8,028       28.40        7,711          30        7,741        28.44
Selling, general and
 administrative expenses            6,813        $ (67)       6,746       23.86        6,528         (97)       6,431        23.63
Restructuring charges and
 other                                511         (511)
Merger-related (credits)
 charges                              (15)          15                                     2          (2)
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Operating profit                      719          563        1,282        4.54        1,181         129        1,310         4.81
Interest, net                        (332)                     (332)      (1.17)        (281)                    (281)       (1.03)
Other (expense) income, net           (19)                      (19)      (0.07)           3                        3         0.01
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Earnings before income taxes          368          563          931        3.29          903         129        1,032         3.79
Income taxes                          157          224          381        1.35          358          50          408         1.50
                             ------------ ------------ ------------ ------------ ----------- ----------- ------------ -------------
Net Earnings                      $   211        $ 339      $   550        1.94%     $   545       $  79      $   624         2.29%
                             ============ ============ ============ ============ =========== =========== ============ =============

Earnings per share:
   Basic                            $0.52        $0.83        $1.35                    $1.29       $0.19        $1.48
   Diluted                           0.52         0.83         1.35                     1.29        0.19         1.48
</TABLE>


                                       18
<PAGE>
                                                                       FORM 10-Q


Liquidity and Capital Resources
   Cash provided by operating  activities  during the 39 weeks ended November 1,
2001 was $1,474 as compared to $1,565 in the prior year.  Net earnings  adjusted
for  noncash  charges,  changes in deferred  income  taxes and changes in income
taxes payable for the 39 weeks ended  November 1, 2001,  was $497 as compared to
$491 in the prior  year.  The  increase  in cash  attributable  to the  adjusted
operations is offset by the changes in operating assets and liabilities.

   The implementation of the strategic imperative to maximize return on invested
capital (see Operational  Initiatives) is expected to enhance working capital by
eliminating  unproductive  assets,  reducing  inventory and accounts  receivable
levels and increasing accounts payable leverage. These improvements are expected
to reduce the cash  requirements of the business.  Future sales of property held
for sale over the next  several  quarters  is  expected  to provide  significant
positive cash flow for the Company.

   During fiscal 2000, the Company  purchased and retired 18.7 million shares of
its  common  stock at a total cost of $451,  or an  average  price of $24.15 per
share,  under a Board  authorization  which  expired on  December  6,  2001.  No
purchases  were made  during the 39 weeks ended  November 1, 2001.  The Board of
Directors  adopted a program on December 3, 2001,  authorizing,  at management's
discretion,  the  Company to  purchase  and  retire up to $500 of the  Company's
common stock beginning December 7, 2001 through December 31, 2002.

   The Company utilizes its commercial paper and bank line programs primarily to
supplement cash requirements for seasonal fluctuations in working capital and to
fund its capital  expenditure  program.  Accordingly,  commercial paper and bank
line borrowings will fluctuate between reporting  periods.  The Company had $294
of commercial paper and bank line borrowings outstanding as of November 1, 2001,
compared to $1,153 as of February 1, 2001, and $1,441 as of November 1, 2000.

   The Company has two revolving credit  agreements which provide for borrowings
up to $1,650 and a committed bank line of $100. These agreements contain certain
covenants,  the most  restrictive  of which  requires  the  Company to  maintain
consolidated  tangible net worth (CTNW), as defined,  of at least $2,100. At the
end of third quarter 2001, CTNW, as defined,  was  approximately  $4,100.  As of
November 1, 2001,  $25 was  outstanding  under the committed bank line agreement
and no amounts were outstanding under the revolving credit agreements.

   On May 1, 2001, the Company issued $600 of term notes and debentures  under a
shelf registration  statement filed with the Securities and Exchange  Commission
in February 2001 (the "2001 Registration Statement"). The notes are comprised of
$200 of principal  bearing interest at 7.25% due May 2013 and the debentures are
comprised of $400 of principal bearing interest at 8.00% due May 2031.  Proceeds
were used to repay  amounts  outstanding  under the Company's  commercial  paper
program and for other general corporate  purposes.  Additional  securities up to
$2,400 of principal  remain  available  for issuance  under the  Company's  2001
Registration Statement.


                                       19
<PAGE>
                                                                       FORM 10-Q


Operational Initiatives
   The  Company  is  focused  on five  strategic  imperatives  with  the goal of
achieving the Company's full potential.

1)   Aggressive  cost and  process  control  has  been  implemented.  Each  main
     category of expense,  including labor, is being  rigorously  monitored by a
     member of executive  management.  As a result of these actions, the Company
     will  reduce  administrative  and  corporate  overhead  through  the  Board
     approved  Voluntary  Separation Plan and  Involuntary  Severance Plan. As a
     result of these  effects,  the Company's SG&A as a percent to sales trended
     lower than prior year levels. The Company is still focused in driving costs
     out of the business.

2)   A formal process to review and measure investments,  starting with a review
     of significant assets in the Company and using a return on invested capital
     approach, has been implemented.  This review resulted in the identification
     of 165 underperforming  stores which the Company has committed to close and
     dispose of. The  Company has closed 43 stores at the end of third  quarter.
     The Company  plans to sell or close the  remaining 122 stores by the end of
     July, 2002. In addition, the Company has formulated plans to accelerate the
     disposal of surplus property through an auction process.

3)   A  customer-focused  approach to growth is being  implemented  by examining
     elements  of the  customer  proposition.  The  Company  plans to  re-direct
     non-value added dollars saved from the expense and process control programs
     back into the  marketplace  in order to impact  customers and drive growth.
     Subsequent to November 1, 2001, the Company launched a loyalty card program
     in the Dallas/Fort Worth division.

4)   The Company plans to commit a greater share of its capital  expenditures to
     information  and process  technology over the next three to five years with
     the goal of becoming an industry leader in technology.

5)   The Company will strive to make Albertson's an employer of choice with less
     bureaucracy,  fewer layers of management,  stronger  communication,  better
     training  programs and exciting new reward programs.  To instill a sense of
     ownership at the store level the Company announced that all store directors
     and  pharmacy  mangers are now  eligible for stock  options  subsequent  to
     November 1, 2001.

Environmental
   The  Company  has  identified   environmental   contamination  sites  related
primarily to underground  petroleum storage tanks and ground water contamination
at various store,  warehouse,  office and manufacturing  facilities  (related to
current  operations as well as previously  disposed of businesses).  The Company
conducts  an ongoing  program for the  inspection  and  evaluation  of new sites
proposed  to be  acquired  by the  Company  and  the  remediation/monitoring  of
contamination at existing and previously owned sites. Undiscounted reserves have
been established for each environmental contamination site unless an unfavorable
outcome is remote.  Although the ultimate  outcome and expense of  environmental
remediation is uncertain,  the Company  believes that required  remediation  and
continuing  compliance with  environmental  laws, in excess of current reserves,
will not have a  material  adverse  effect  on the  financial  condition  of the
Company.  Charges  against  earnings  for  environmental  remediation  were  not
material  for the 39  weeks  ended  November  1,  2001,  or the 39  weeks  ended
November 2, 2000.


                                       20
<PAGE>
                                                                       FORM 10-Q


Cautionary Statement for Purposes of "Safe Harbor Provisions"
of the Private Securities Litigation Reform Act of 1995
   From time to time, information provided by the Company,  including written or
oral  statements  made  by  its  representatives,  may  contain  forward-looking
information as defined in the Private Securities  Litigation Reform Act of 1995.
All  statements,  other than  statements  of  historical  facts,  which  address
activities,  events or developments that the Company expects or anticipates will
or may  occur  in the  future,  including  such  things  as  integration  of the
operations  of  acquired  or  merged  companies,  expansion  and  growth  of the
Company's  business,  future  capital  expenditures  and the Company's  business
strategy, contain forward-looking  information. In reviewing such information it
should be kept in mind that  actual  results  may differ  materially  from those
projected or suggested in such forward-looking information. This forward-looking
information  is  based  on  various  factors  and  was  derived  using  numerous
assumptions. Many of these factors have previously been identified in filings or
statements made by or on behalf of the Company.

   Important  assumptions  and other  important  factors that could cause actual
results  to  differ  materially  from  those  set  forth in the  forward-looking
information  include  changes  in  the  general  economy,  changes  in  consumer
spending, competitive factors and other factors affecting the Company's business
in or beyond the Company's control. These factors include changes in the rate of
inflation,  changes  in state or  federal  legislation  or  regulation,  adverse
determinations   with  respect  to   litigation   or  other  claims   (including
environmental  matters),  labor  negotiations,  the cost and stability of energy
sources, the Company's ability to recruit and develop employees,  its ability to
develop  new stores or complete  remodels as rapidly as planned,  its ability to
implement new technology successfully, stability of product costs, the Company's
ability to  integrate  the  operations  of  acquired  or merged  companies,  the
Company's ability to execute its  restructuring  plan, and the Company's ability
to achieve its five strategic imperatives.

   Other  factors  and  assumptions  not  identified  above could also cause the
actual results to differ materially from those set forth in the  forward-looking
information.   The  Company  does  not   undertake  to  update   forward-looking
information contained herein or elsewhere to reflect actual results,  changes in
assumptions  or  changes  in  other  factors   affecting  such   forward-looking
information.

Quantitative and Qualitative Disclosures About Market Risk
   There have been no  material  changes  regarding  the  Company's  market risk
position  from the  information  provided  under the caption  "Quantitative  and
Qualitative  Disclosures  About Market Risk" on pages 27 and 28 of the Company's
2000 Annual Report to Stockholders.

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
   The  information  required  under  this  item is  included  in the  Notes  to
Consolidated  Financial  Statements  under the caption  "Legal  Proceedings"  on
page 11 of Part I,  Financial  Information  of this  Report on Form  10-Q.  This
information is incorporated herein by this reference thereto.

Item 2.  Changes in Securities
   In accordance  with the Company's  $1,650  revolving  credit  agreement,  the
Company's  consolidated  tangible net worth, as defined,  shall not be less than
$2,100.

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<PAGE>
                                                                       FORM 10-Q


Item 3.  Defaults upon Senior Securities
   Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders
   Not applicable.

Item 5.  Other Information
   On November 20, 2001, Robert J. Dunst, Jr. was named Executive Vice President
and Chief Technology Officer.

   On September 17, 2001, Kathy Herbert was named as Executive Vice President of
Human Resources.

   On  December 3, 2001,  to be  effective  on January 1, 2001,  the size of the
Board of Directors was  increased to fourteen,  and Bonnie G. Hill was appointed
to the Board as a Class II Director to a term expiring on the date of the Annual
Meeting of Shareholders in 2003.

Item 6.  Exhibits and Reports on Form 8-K
   a.    Exhibits

         10.41          Amended and Restated 1995 Stock Based Incentive Plan.

         10.41.1        Form of 1995 Amended and Restated  Stock-Based Incentive
                        Plan Stock Option Agreement.

         10.42          Employment  agreement between  the Company and Robert J.
                        Dunst, Jr., dated November 16, 2001.


   b.    There  were  no  reports  on  Form 8-K  filed  during the quarter ended
         November 1, 2001.



                                    SIGNATURE


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



                                                     ALBERTSON'S, INC.
                                       -----------------------------------------
                                                       (Registrant)



Date:    December 12, 2001             /S/ Felicia D. Thornton
                                       -----------------------------------------
                                       Felicia D. Thornton
                                       Executive Vice President
                                         and Chief Financial Officer





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