SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

                                    FORM 10-Q

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

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


        For 13 Weeks Ended: April 29, 2004 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 of principal executive offices)                          (Zip Code)

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

     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

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes x   No

     The number of shares of the  registrant's  common  stock,  $1.00 par value,
outstanding at June 1, 2004 was 367.8 million.






                                     Page 1
<PAGE>






                                ALBERTSON'S INC.
                                      INDEX



PART I        FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S>           <C>                                                                                                <C>
Item 1.       Financial Statements (Unaudited)
                  Condensed Consolidated Earnings Statements for the 13 weeks ended April 29, 2004
                  and May 1, 2003                                                                                 3

                  Condensed Consolidated Balance Sheets as of April 29, 2004 and January 29, 2004                 4

                  Condensed Consolidated Cash Flow Statements for the 13 weeks ended April 29, 2004
                  and May 1, 2003                                                                                 5

                  Notes to Condensed Consolidated Financial Statements                                            6

                  Report of Independent Registered Public Accounting Firm                                        14

Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations              15

Item 3.       Quantitative and Qualitative Disclosures About Market Risk                                         19

Item 4.       Controls and Procedures                                                                            19

PART II       OTHER INFORMATION

              Cautionary Statement                                                                               19

Item 1.       Legal Proceedings                                                                                  20

Item 2.       Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities                   22

Item 3.       Defaults Upon Senior Securities                                                                    22

Item 4.       Submission of Matters to a Vote of Security Holders                                                22

Item 5.       Other Information                                                                                  22

Item 6.       Exhibits and Reports on Form 8-K                                                                   22
</TABLE>




                                     Page 2
<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                                ALBERTSON'S, INC.
                   CONDENSED CONSOLIDATED EARNINGS STATEMENTS
                      (in millions, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                        13 weeks ended
                                                                           ------------------------------------------
                                                                                   April 29,                 May 1,
                                                                                        2004                   2003
                                                                           -------------------    -------------------
<S>                                                                                 <C>                    <C>

Sales                                                                               $  8,688               $  8,910
Cost of sales                                                                          6,240                  6,372
                                                                           -------------------    -------------------
Gross Profit                                                                           2,448                  2,538

Selling, general and administrative expenses                                           2,255                  2,162
Restructuring credits                                                                      -                     (7)
                                                                           -------------------    -------------------
Operating profit                                                                         193                    383

Other expenses (income):
  Interest, net                                                                          103                    103
  Other, net                                                                               -                     (1)
                                                                           -------------------    -------------------
Earnings from continuing operations before income taxes                                   90                    281
Income tax expense                                                                        34                    108
                                                                           -------------------    -------------------

Earnings from continuing operations                                                       56                    173
Discontinued operations:
  Operating loss                                                                          (2)                    (2)
  Loss on disposal                                                                       (30)                     -
  Income tax benefit                                                                      12                      1
                                                                           -------------------    -------------------
Loss from discontinued operations                                                        (20)                    (1)
                                                                           -------------------    -------------------
Net earnings                                                                        $     36               $    172
                                                                           ===================    ===================

Earnings (loss) per share:
  Basic
     Continuing operations                                                            $ 0.15                 $ 0.47
     Discontinued operations                                                           (0.05)                  -
                                                                           -------------------    -------------------
     Net earnings                                                                     $ 0.10                 $ 0.47
                                                                           ===================    ===================

  Diluted
     Continuing operations                                                            $ 0.15                 $ 0.47
     Discontinued operations                                                           (0.05)                  -
                                                                           -------------------    -------------------
     Net earnings                                                                     $ 0.10                 $ 0.47
                                                                           ===================    ===================

Weighted average common shares outstanding:
     Basic                                                                               369                    368
     Diluted                                                                             371                    369

</TABLE>


See Notes to Condensed Consolidated Financial Statements

                                     Page 3
<PAGE>




                                ALBERTSON'S, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (in millions, except par value data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                          April 29,          January 29,
                                                                                               2004                 2004
                                                                                      ----------------     ----------------
                                    ASSETS
<S>                                                                                     <C>                 <C>
Current Assets:
   Cash and cash equivalents                                                               $  2,033           $      289
   Accounts and notes receivable, net                                                           746                  683
   Inventories                                                                                2,971                3,035
   Assets held for sale                                                                          82                   69
   Prepaid and other                                                                            258                  343
                                                                                      ----------------     ----------------
     Total Current Assets                                                                     6,090                4,419

Land, buildings and equipment (net of accumulated depreciation and
  amortization of $7,039 and $6,845, respectively)                                            9,063                9,145

Goodwill                                                                                      1,400                1,400

Intangibles, net                                                                                125                  130

Other assets                                                                                    299                  300
                                                                                      ----------------     ----------------

Total Assets                                                                               $ 16,977           $   15,394
                                                                                      ================     ================

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                                        $  1,828           $    1,774
   Salaries and related liabilities                                                             533                  659
   Self-insurance                                                                               266                  262
   Current maturities of long-term debt and capital lease obligations                           521                  520
   Other current liabilities                                                                    532                  470
                                                                                      ----------------     ----------------
     Total Current Liabilities                                                                3,680                3,685

Long-term debt                                                                                6,055                4,452

Capital lease obligations                                                                       362                  352

Self-insurance                                                                                  481                  469

Other long-term liabilities and deferred credits                                              1,041                1,055

Commitments and contingencies                                                                     -                    -

Stockholders' Equity
   Preferred stock - $1.00 par value; authorized - 10 shares; designated - 3
     shares of Series A Junior Participating; issued - none                                       -                    -
   Common stock - $1.00 par value; authorized - 1,200 shares; issued - 368 shares
     and 368 shares, respectively                                                               368                  368
   Capital in excess of par                                                                     165                  155
   Accumulated other comprehensive loss                                                        (109)                (109)
   Retained earnings                                                                          4,934                4,967
                                                                                      ----------------     ----------------
     Total Stockholders' Equity                                                               5,358                5,381
                                                                                      ----------------     ----------------
Total Liabilities and Stockholders' Equity                                                 $ 16,977           $   15,394
                                                                                      ================     ================
</TABLE>


See Notes to Condensed Consolidated Financial Statements


                                     Page 4
<PAGE>


                                ALBERTSON'S, INC.
                   CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
                                  (in millions)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                             13 weeks ended
                                                                               --------------------------------------------
                                                                                     April 29,                    May 1,
                                                                                          2004                      2003
                                                                               -------------------    ---------------------
<S>                                                                                   <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings                                                                       $     36                  $    172
     Adjustments to reconcile net earnings to net cash
       provided by operating activities:
         Depreciation and amortization                                                     246                       239
         Net deferred income taxes                                                          90                         7
         Discontinued operations noncash charges                                            33                        -
         Other noncash charges                                                              15                        13
         Stock-based compensation                                                            5                         6
         Net loss (gain) on asset disposals                                                  2                        (9)
         Restructuring credits                                                               -                        (7)
     Changes in operating assets and liabilities:
       Receivables and prepaid expenses                                                    (70)                       63
       Inventories                                                                          60                        29
       Accounts payable                                                                     54                       (46)
       Other current liabilities                                                          (102)                      (98)
       Self-insurance                                                                       15                        13
       Unearned income                                                                       1                        (8)
       Other long-term liabilities                                                          22                         6
                                                                               -------------------    ---------------------
                    Net cash provided by operating activities                              407                       380

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                   (220)                     (330)
   Proceeds from disposal of land, buildings and equipment                                   5                         9
   Proceeds from disposal of assets held for sale                                           27                        30
   Other                                                                                    (9)                       (8)
                                                                               -------------------    ---------------------
                    Net cash used in investing activities                                 (197)                     (299)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from commercial paper borrowings                                             1,603                        50
   Cash dividends paid                                                                     (70)                      (71)
   Payments on long-term borrowings                                                         (5)                       (7)
   Proceeds from stock options exercised                                                     6                         -
   Stock purchases and retirements                                                           -                      (108)
                                                                                -------------------    ---------------------
                    Net cash provided by (used in) financing activities                  1,534                      (136)

Net Increase (Decrease) in Cash and Cash Equivalents                                     1,744                       (55)

Cash and Cash Equivalents at Beginning of Period                                           289                       162
                                                                               -------------------    ---------------------

Cash and Cash Equivalents at End of Period                                            $  2,033                   $   107
                                                                               ===================    =====================

</TABLE>

See Notes to Condensed Consolidated Financial Statements

                                     Page 5
<PAGE>


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


NOTE 1 - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business
Albertson's, Inc. ("Albertsons" or 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 largest retail food
and drug chains in the world.

As of April 29,  2004,  the  Company  operated  2,307  stores in 31 states.  The
Company also operated 232 fuel centers near existing stores.  Retail  operations
are supported by 17 major Company distribution operations, strategically located
in the Company's operating markets.

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

In the opinion of management,  the accompanying unaudited condensed 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.  These condensed consolidated financial 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  have been  condensed  or
omitted  pursuant to such rules and  regulations.  These condensed  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and  accompanying  notes  included in the Company's  2003
Annual Report on Form 10-K filed with the  Securities  and Exchange  Commission.
The  results  of  operations  for the 13 weeks  ended  April 29,  2004,  are not
necessarily indicative of results for a full year.

The Company's Condensed  Consolidated  Balance Sheet as of January 29, 2004, has
been derived from the audited Consolidated Balance Sheet as of that date.

Use of Estimates
The  preparation  of  the  Company's  consolidated   financial  statements,   in
conformity with accounting  principles  generally accepted in the United States,
requires  management to make estimates and assumptions.  Some of these estimates
require  difficult,  subjective  or complex  judgments  about  matters  that are
inherently  uncertain.  As a result,  actual  results  could  differ  from these
estimates. 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.

Inventory
Net  earnings reflect  the  application  of the LIFO  method of valuing  certain
inventories.   Quarterly  inventory  determinations  under  LIFO  are  based  on
assumptions as to projected inventory levels at the end of the year and the rate
of inflation for the year.  Albertsons  recorded  pre-tax LIFO expense of $6 for
the 13 week period  ended April 29, 2004 and $4 for the 13 week period ended May
1, 2003.

The amount of vendor funds reducing the Company's inventory ("inventory offset")
as of April 29, 2004 was $130,  a decrease of $25 from  January  29,  2004.  The
vendor funds inventory  offset as of May 1, 2003 was $146, a decrease of $6 from
January 30, 2003. The inventory  offset was determined by estimating the average
inventory turnover rates by product category for the Company's grocery,  general
merchandise   and   lobby   departments   (these   departments   received   over
three-quarters  of the Company's vendor funds in 2003) and by average  inventory
turnover rates by department for the Company's remaining inventory.

                                     Page 6
<PAGE>



Stock-Based Compensation
The Company  accounts for  stock-based  compensation  using the intrinsic  value
method  prescribed  in  Accounting  Principles  Board  Opinion  ("APB")  No. 25,
"Accounting  for  Stock  Issued  to  Employees"  and  related   Interpretations.
Accordingly, expense associated with stock-based compensation is measured as the
excess, if any, of the quoted market price of the Company's stock at the date of
the grant over the option  exercise price and is charged to operations  over the
vesting period.  Income tax benefits attributable to stock options exercised are
credited to capital in excess of par value.  Statement of  Financial  Accounting
Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation" as amended
by SFAS No. 148,  "Accounting  for  Stock-Based  Compensation  - Transition  and
Disclosure - An Amendment to FASB Statement No. 123",  encourages,  but does not
require,   companies  to  record  compensation  cost  for  stock-based  employee
compensation plans at fair value. If the fair value-based  accounting method was
utilized for stock-based compensation,  the Company's pro forma net earnings and
earnings per share would have been as follows:

<TABLE>
<CAPTION>
                                                                              13 weeks ended
                                                               ---------------------------------------
                                                                     April 29,               May 1,
                                                                          2004                 2003
                                                               ------------------     ----------------
<S>                                                                     <C>                  <C>
         Net Earnings as reported                                       $   36               $  172

         Add: Stock-based compensation expense included in
            reported net earnings, net of related tax effects                3                    4
         Deduct: Total stock-based compensation expense
            determined under fair value based method for all
            awards, net of  related tax effects                            (11)                 (11)
                                                               ------------------     ----------------
         Pro Forma Net Earnings                                         $   28               $  165
                                                               ==================     ================
         Basic Earnings Per Share:
            As Reported                                                 $ 0.10               $ 0.47
            Pro Forma                                                     0.08                 0.45
                                                               ==================     ================
         Diluted Earnings Per Share:
            As Reported                                                 $ 0.10               $ 0.47
            Pro Forma                                                     0.08                 0.45
                                                               ==================     ================
</TABLE>

The pro forma net earnings  resulted  from  reported net earnings less pro forma
after-tax  compensation  expense.  The pro forma  effect on net  earnings is not
representative  of the pro forma  effect on net  earnings  in future  years.  To
calculate  pro forma  stock-based  compensation  expense under SFAS No. 123, the
Company  estimated  the fair  value of each  option  grant on the date of grant,
using the Black-Scholes option pricing model with the following weighted average
assumptions used for grants in 2004 and 2003:  risk-free  interest rate of 3.01%
and  3.56%,   respectively,   expected   dividend  yield  of  3.35%  and  3.74%,
respectively,  expected lives of 6.0 and 5.7 years,  respectively,  and expected
stock price volatility of 38.9% and 39.4%, respectively.

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

NOTE 2 - NEW AND RECENTLY ADOPTED ACCOUNTING STANDARDS

In  November  2003 the  Emerging  Issues  Task  Force  ("EITF")  confirmed  as a
consensus  EITF  Issue  No.  03-10,   "Application  of  EITF  Issue  No.  02-16,
`Accounting  by a Customer  (Including  a Reseller)  for  Certain  Consideration
Received from a Vendor,' by Resellers to Sales  Incentives  Offered to Consumers
by  Manufacturers"  ("EITF  03-10").  EITF 03-10 did not  impact  the  Company's
existing  accounting and reporting policies for manufacturers'  coupons that can
be presented at any retailer  that  accepts  coupons.  Under EITF 03-10,  vendor
coupons  that  provide  for direct  reimbursement,  are  negotiated  between the
retailer and the vendor and which can only be redeemed at a specific  retailer's
store are  recorded as a  reduction  of cost of sales  (instead of sales).  This
modification  to the Company's  accounting  and reporting  policies,  adopted in
Company's first quarter of 2004, did not have a material impact on sales or cost
of sales.

                                     Page 7
<PAGE>



In December  2003 the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 132 (Revised  2003),
"Employers'  Disclosure  about Pensions and Other  Postretirement  Benefits - An
Amendment  of FASB  Statements  No. 87, 88 and 106"  ("SFAS No.  132(R)").  This
statement  increases  the existing  disclosure  requirements  by requiring  more
details  about pension plan assets,  benefit  obligations,  cash flows,  benefit
costs and related  information.  The Company  adopted SFAS No. 132(R) in January
2004. The newly  required  quarterly  disclosures  are included in Note 6 to the
Condensed Consolidated Financial Statements - Employee Benefit Plans.

In March 2004 the FASB issued  Staff  Position  No. FAS 106-b,  "Accounting  and
Disclosure  Requirements Related to the Medicare Prescription Drug,  Improvement
and  Modernization  Act of 2003" ("SFAS No. 106-b").  SFAS No. 106-b  supersedes
SFAS No. 106-1,  "Accounting and Disclosure Requirements Related to the Medicare
Prescription  Drug,  Improvement  and  Modernization  Act of 2003" and  provides
guidance on the accounting and disclosure  related to the Medicare  Prescription
Drug,  Improvement and Modernization  Act of 2003 (the "Act"),  which was signed
into law in December 2003. SFAS No. 106-b is expected to be effective  beginning
in the third fiscal quarter of 2005. The Company is in the process of evaluating
the impact, if any, of the Act and SFAS No. 106-b on the Company.

NOTE 3 - DISCONTINUED OPERATIONS

In April 2004 the Company announced its plan to sell, close or otherwise dispose
of its operations in the New Orleans  market,  which consist of seven  operating
stores  and three  non-operating  properties.  Results of  operations  for those
stores and  properties  have been  reclassified  and  presented as  discontinued
operations for the 13 week periods ended April 29, 2004 and May 1, 2003.

The  discontinued  operations  generated  sales  of $24  and $27 for the 13 week
periods  ended  April  29,  2004 and May 1,  2003,  respectively.  The loss from
discontinued  operations  of $20 for the 13 week  period  ended  April 29,  2004
consisted  of a loss from  operations  of $2, a write  down of fixed  assets and
lease  settlements  of $30,  and an income  tax  benefit  of $12.  The loss from
discontinued operations of $1 for the 13 week period ended May 1, 2003 consisted
of a loss from  operations  of $2 and an  income  tax  benefit  of $1. A reserve
balance of $7 as of April 29, 2004 is included in "Other current liabilities" in
the accompanying Condensed Consolidated Balance Sheet related to lease liability
adjustments.

Assets related to  discontinued  operations are recorded at their estimated fair
value,  less  selling  costs,  of $24 as of April 29,  2004 and are  reported in
"Assets held for sale" in the accompanying Condensed Consolidated Balance Sheet.
These include four operating properties and one non-operating property for which
definitive  agreements  for sale have  been  entered  into and  three  operating
properties and two non-operating properties that are being actively marketed.

NOTE 4 - RESERVES  FOR 2001  RESTRUCTURING  ACTIVITIES,  2002  MARKET  EXITS AND
CLOSED STORES

In 2001 the Company  recorded a pre-tax charge to earnings of $107 primarily for
lease  settlements  and severance  costs in  connection  with the closure of 165
stores and the  reduction  of overhead  functions.  As of January 29,  2004,  an
accrual of $19  remained  for these  settlements  and costs.  During the 13 week
period ended April 29, 2004, the Company paid $1, leaving a balance of $18 as of
April 29, 2004.

In 2002 the Company  recorded a pre-tax  charge to earnings of $51 primarily for
lease  settlements  and severance  costs in  connection  with the exit from four
underperforming  markets.  As of January 29, 2004, an accrual of $8 remained for
these settlements and costs. During the 13 week period ended April 29, 2004, the
Company  paid $2 and  recorded  charges  related to the exit of the New  Orleans
markets of $7, leaving a balance of $13 as of April 29, 2004.

As of January 29, 2004, the Company had an accrual of $20 for closed store lease
termination  costs.  During the 13 week period ended April 29, 2004, the Company
recorded additional reserves of $4, had favorable lease termination  settlements
of $3 and paid $1, leaving a balance of $20 as of April 29, 2004.

                                     Page 8
<PAGE>

NOTE 5 - INTANGIBLES

The carrying amount of intangibles was as follows:
<TABLE>
<CAPTION>
                                                                            April 29,            January 29,
                                                                                 2004                   2004
                                                                   --------------------   --------------------
<S>                                                                              <C>                    <C>
            Amortizing:
               Favorable acquired operating leases                               $217                   $221
               Customer lists and other contracts                                  57                     56
                                                                   --------------------   --------------------
                                                                                  274                    277
            Accumulated amortization                                             (189)                  (186)
                                                                   --------------------   --------------------
                                                                                   85                     91
            Non-Amortizing:
               Liquor licenses                                                     40                     39
                                                                   --------------------   --------------------
                                                                                   40                     39
                                                                   --------------------   --------------------
                                                                                 $125                   $130
                                                                   ====================   ====================
</TABLE>

NOTE 6 - EMPLOYEE BENEFIT PLANS

The  following   represents   the   components  of  net  periodic   pension  and
postretirement  benefit costs in  accordance  with SFAS No. 132(R) (see Note 2 -
New and Recently  Adopted  Accounting  Standards to the  Condensed  Consolidated
Financial Statements):
<TABLE>
<CAPTION>
                                                           Pension Benefits                  Other Benefits
                                                            13 weeks ended                   13 weeks ended
                                                     ------------------------------    -----------------------------
                                                        April 29,          May 1,        April 29,          May 1,
                                                             2004            2003             2004            2003
                                                     --------------    ------------    -------------     -----------
<S>                                                           <C>             <C>              <C>             <C>
  Service cost - benefits earned during the period            $ 4             $ 3              $ -             $ 1
  Interest cost on projected benefit obligations               11              10                -               1
  Expected return on assets                                   (10)             (8)               -               -
  Amortization of prior service cost (credit)                  (2)             (2)               -               -
  Recognized net actuarial loss                                 4               6                -               -
  Curtailment gain                                              -              (7)               -               -
                                                     --------------    ------------    -------------     -----------
    Net periodic benefit expense                              $ 7             $ 2              $ -             $ 2
                                                     ==============    ============    =============     ===========
</TABLE>

In April 2004 the  President  of the United  States  signed new  pension  relief
legislation  that allows  companies to use a corporate bond index rate specified
by the U.S.  Treasury  Department for purposes of calculating  required  minimum
contributions.  Under the new  legislation,  the  Company's  estimated  required
minimum contributions for 2004 remained unchanged from January 29, 2004, at $65,
which the Company expects to contribute during the remainder of 2004.

NOTE 7 - INDEBTEDNESS

At April 29, 2004, the Company had four  revolving  credit  facilities  totaling
$2,800.  The first  agreement,  a 364-Day  revolving  credit facility with total
availability  of $100,  will expire in February  2005. The second  agreement,  a
revolving credit facility with total  availability of $350, was extended through
July 2004. The third  agreement,  a five-year  facility for $950,  expires March
2005. The fourth  agreement,  an interim credit facility  totaling  $1,400,  was
entered into in April 2004 to finance the  acquisition  of Shaw's (see Note 10 -
Subsequent Events to the Condensed  Consolidated  Financial  Statements - Shaw's
Acquisition).  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,  a fixed charge coverage,  as defined,  of no less
than 2.7 times and a consolidated  leverage ratio,  as defined,  of no more than
4.5 times.  As of April 29,  2004,  the  Company  was in  compliance  with these
requirements  (see Note 10 -  Subsequent  Events to the  Condensed  Consolidated
Financial Statements - Shaw's Acquisition). No borrowings were outstanding under
these  credit  facilities  as of April 29, 2004.  On May 12,  2004,  the Company
terminated its $1,400 interim credit  facility upon the close of the offering of
$1,000 of Hybrid  Income Term  Security  Units  (HITS) (see Note 10 - Subsequent
Events to the Condensed Consolidated Financial Statements - HITS Offering).  The
Company is in the process of renewing  its  remaining  $1,400  senior  revolving
credit facilities. The renewal is expected to be completed in early June.

                                     Page 9
<PAGE>

NOTE 8 - CONTINGENCIES

Lawsuits, Claims and Other Legal Matters
The Company is subject to various lawsuits,  claims and other legal matters that
arise in the ordinary course of conducting business.

In March 2000 a class action  complaint was filed against  Albertsons 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  (Gardner,  et al. v.
Albertson's,  Inc.,  et al.) by  bonus-eligible  managers  seeking  recovery  of
additional  bonus  compensation  based  upon  plaintiffs'  allegation  that  the
calculation  of profits on which their  bonuses were based  improperly  included
expenses for workers' compensation costs, cash shortages, premises liability and
"shrink"  losses in violation of  California  law. In August 2001 a class action
complaint with very similar claims, also involving  bonus-eligible managers, was
filed  against  Albertsons  as well as Lucky  Stores,  Inc. and American  Stores
Company, wholly-owned subsidiaries of the Company, in the Superior Court for the
County of Los Angeles,  California  (Petersen,  et al. v. Lucky Stores, Inc., et
al.). In June 2002 the cases were consolidated  ("Gardner/Petersen case") and in
August 2002 a class action with respect to the  consolidated  case was certified
by the court. On May 26, 2004 Albertsons  entered into an agreement in principle
to settle the consolidated  Gardner/Petersen  case. The settlement  agreement is
subject to approval by the California  Superior Court.  Based on the information
presently available to the Company, management does not expect that the payments
under this  settlement  will have a  material  adverse  effect on the  Company's
financial condition, results of operations or cash flows.

In April 2000 a class action  complaint was filed against  Albertsons 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  (Gardner,  et al. v.
American  Stores  Company,  et al.) by assistant  managers  seeking  recovery of
overtime  pay based  upon  plaintiffs'  allegation  that  they  were  improperly
classified  as exempt  under  California  law.  In May 2001 a class  action with
respect to Sav-on Drug Stores  assistant  managers was certified by the court. A
case with very  similar  claims,  involving  the Sav-on  Drug  Stores  assistant
managers  and  operating  managers,  was also  filed in April 2000  against  the
Company's  subsidiary  Sav-on Drug Stores,  Inc. in the  Superior  Court for the
County of Los Angeles, California (Rocher, Dahlin, et al. v. Sav-on Drug Stores,
Inc.)  and was also  certified  as a class  action.  In April  2002 the Court of
Appeal of the State of California Second Appellate  District reversed the Rocher
class certification,  leaving only two plaintiffs.  The California Supreme Court
has accepted plaintiffs' request for review of this class  decertification.  The
California  Supreme Court heard oral  arguments on June 1, 2004. 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 that the ultimate  resolution of these lawsuits will
have a material adverse effect on the Company's financial condition,  results of
operations or cash flows.

In August 2000 a class action  complaint  was filed  against  Jewel Food Stores,
Inc., an indirect wholly owned  subsidiary of the Company,  and Dominick's Finer
Foods,  Inc. in the Circuit Court of Cook County,  Illinois  alleging milk price
fixing  (Maureen Baker et al. v. Jewel Food Stores,  Inc. and  Dominick's  Finer
Foods,  Inc.,  Case No. 00L 009664).  In February 2003, the trial court found in
favor of the defendants and dismissed the case with prejudice.  Thereafter,  the
plaintiffs appealed. Briefs have now been filed for the appeal and the matter is
pending in the Illinois Appellate Court. 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 that the ultimate
resolution of this action will have a material  adverse  effect on the Company's
financial condition, results of operations or cash flows.


                                     Page 10
<PAGE>

In September 2000 an agreement was reached and court approval  granted to settle
eight purported class and/or  collective  actions which were consolidated in the
United States  District  Court in Boise,  Idaho and which raised  various issues
including  "off-the-clock"  work allegations and allegations  regarding  certain
salaried  grocery  managers'  exempt  status.  Under the  settlement  agreement,
current and former  employees who met eligibility  criteria have been allowed to
present  their   off-the-clock  work  claims  to  a  settlement   administrator.
Additionally,  current  and former  grocery  managers  employed  in the State of
California  have  been  allowed  to  present  their  exempt  status  claims to a
settlement  administrator.  The Company  mailed  notices of the  settlement  and
claims  forms  to  approximately   70,500  associates  and  former   associates.
Approximately 6,000 claim forms were returned, of which approximately 5,000 were
deemed by the settlement  administrator  to be incapable of valuation,  presumed
untimely,  or both.  The  claims  administrator  was  able to  assign a value to
approximately  1,000  claims,  which  amount  to a total of  approximately  $14,
although the value of many of those claims is still  subject to challenge by the
Company.  A second claim  process was ordered by the court,  but the parties are
still waiting for final  instructions  from the Court.  The Company is presently
unable to determine the number of individuals  who may  ultimately  submit valid
claims or the amounts that it may  ultimately be required to pay with respect to
such claims. Based on the information presently available to it, management does
not expect  that the  satisfaction  of valid  claims  submitted  pursuant to the
settlement  will  have a  material  adverse  effect on the  Company's  financial
condition, results of operations or cash flows.

On November 20, 2003,  three consumers filed an action in California state court
(Kerner, et al. v. Albertsons,  Inc.; Ralphs Grocery Company;  and Safeway Inc.,
dba Vons, a Safeway  Company,  Los Angeles Superior Court,  Case No.  BC306456),
claiming  that  certain   provisions  of  the  agreements  (the  "Labor  Dispute
Agreements")  between  the  Company,  The  Kroger  Co.  and  Safeway  Inc.  (the
"Retailers")  which provided for  "lock-outs" in the event that any Retailer was
struck  at any or all of its  southern  California  facilities  when  the  other
Retailers were not and contained a provision  designed to prevent the union from
placing  disproportionate  pressure on one or more Retailer(s) by picketing such
Retailer(s) but not the other Retailer(s),  violate California's  Cartwright Act
and the Unfair Competition Law. The lawsuit sought unspecified  monetary damages
and injunctive relief. This lawsuit was dismissed on April 21, 2004.

On February 2, 2004, the Attorney  General for the State of California  filed an
action in Los Angeles federal court (California, ex rel Lockyer v. Safeway, Inc.
dba Vons, a Safeway  Company, Albertsons,  Inc. and Ralphs  Grocery  Company,  a
division of The Kroger Co.,  United States  District  Court Central  District of
California,  Case No. CV04-0687)  claiming that certain  provisions of the Labor
Dispute  Agreements  violate  section 1 of the Sherman  Act.  The lawsuit  seeks
declarative and injunctive  relief. The Company filed its answer on February 24,
2004.  The Company has strong  defenses  against this lawsuit and is  vigorously
defending it. Although this lawsuit is subject to uncertainties  inherent in the
litigation process, based on the information presently available to the Company,
management does not expect that the ultimate resolution of this action will have
a material  adverse  effect on the  Company's  financial  condition,  results of
operations or cash flows.

In March 2004 a lawsuit seeking class action status was filed against Albertsons
in the  Superior  Court of the  State of  California  in and for the  County  of
Alameda,  California  (Dunbar, et al. v. Albertsons) by grocery managers seeking
recovery including overtime pay based upon plaintiffs' allegation that they were
improperly  classified as exempt under California law. This case is currently in
discovery;  however 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 that the ultimate resolution of this
lawsuit  will  have  a  material  adverse  effect  on  the  Company's  financial
condition, results of operations or cash flows.

The Company is also  involved in routine  legal  proceedings  incidental  to its
operations.  Management  does not expect that the ultimate  resolution  of these
legal proceedings will have a material adverse effect on the Company's financial
condition, results of operations or cash flows.

The statements  above reflect  management's  current  expectations  based on the
information presently available to the Company. However, predicting the outcomes
of claims and  litigation  and  estimating  related costs and exposures  involve
substantial  uncertainties that could cause actual outcomes, costs and exposures
to vary materially from current expectations. In addition, the Company regularly
monitors its exposure to the loss  contingencies  associated  with these matters
and may from time to time change its  predictions  with  respect to outcomes and
its estimates with respect to related costs and  exposures.  It is possible that
material differences in actual outcomes, costs and exposures relative to current
predictions and estimates, or material changes in such predictions or estimates,
could have a  material  adverse  effect on the  Company's  financial  condition,
results of operations or cash flows.

                                     Page 11
<PAGE>



NOTE 9 - COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
                                                                             13 weeks ended
                                                    -------------------------------------------------------------------
                                                           April 29, 2004                       May 1, 2003
                                                        Basic            Diluted            Basic            Diluted
                                                    -------------     -------------    ---------------    -------------
<S>                                                      <C>               <C>                 <C>              <C>
Earnings (loss) from:
   Continuing operations                                 $   56            $   56              $ 173            $ 173
   Discontinued operations                                  (20)              (20)                (1)              (1)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                       $   36            $   36              $ 172            $ 172
                                                    =============     =============    ===============    =============

Weighted average common shares outstanding                  369               369                368              368
                                                    =============                      ===============
Potential common share equivalents                                              2                                   1
                                                                      -------------                       -------------
Weighted average shares outstanding                                           371                                 369
                                                                      =============                       =============

Earnings (loss) per common share and common
   share equivalents:
    Continuing operations                                 $0.15             $0.15              $0.47            $0.47
    Discontinued operations                               (0.05)            (0.05)             (0.00)           (0.00)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $0.10             $0.10              $0.47            $0.47
                                                    =============     =============    ===============    =============

Calculation of potential common share equivalents:
   Options to purchase potential common shares                                 20                                   2
   Potential common shares assumed purchased
    with potential proceeds                                                   (18)                                 (1)
                                                                      -------------                       -------------
   Potential common share equivalents                                           2                                   1
                                                                      =============                       =============

Calculation of potential common shares
   assumed purchased with potential proceeds:
    Potential proceeds from exercise of options
      to purchase common shares                                              $407                                 $29
    Common stock price used under treasury
      stock method                                                         $23.19                              $19.31
                                                                      -------------                       -------------
    Potential common shares assumed
      purchased with potential proceeds                                        18                                   1
                                                                      =============                       =============

</TABLE>

Outstanding  options  excluded for the 13 week periods  ended April 29, 2004 and
May 1, 2003,  because the option price  exceeded the average market price during
the  period,   amounted  to  17.9  million  shares  and  30.1  million   shares,
respectively.

NOTE 10 - SUBSEQUENT EVENTS

Shaw's Acquisition
On April 30, 2004, the Company acquired all of the outstanding  capital stock of
the entity which conducts J Sainsbury  plc's U.S.  retail grocery store business
("Shaw's") for $2,100 in cash, as well as the assumption of  approximately  $368
in capital  leases.  The Company  used a  combination  of  cash-on-hand  and the
proceeds  of  the  issuance  of  $1,603  of  commercial  paper  to  finance  the
acquisition. The Company used the proceeds from a subsequent offering (see "HITS
Offering"  below) to repay  $1,119 of such  commercial  paper.  The  outstanding
commercial  paper  is  currently   backed  by  the  Company's   existing  credit
facilities.

The operations  acquired consist of approximately  200 grocery stores in the New
England area operated under the banners of Shaw's and Star Markets. These stores
had sales of  approximately  $4,600 for the fiscal year ended  February 28, 2004
and approximately $4,400 for the fiscal year ended March 1, 2003.


                                     Page 12
<PAGE>


As a result of the goodwill generated from the acquisition, the Company obtained
prospective  waivers from the lenders under two of the Company's existing credit
facilities in order to remain in compliance with the  consolidated  tangible net
worth  covenant  contained in the agreements  underlying  these  facilities.  No
amounts were outstanding under these facilities as of April 29, 2004.

Hybrid Income Term Security Units ("HITS") Offering
In May 2004 the Company  completed  a public  offering  of  40,000,000  of 7.25%
Hybrid Income Term Security  Units ("HITS" or "Corporate  Units"),  yielding net
proceeds  of  $973.  In June  2004  the  underwriters  purchased  an  additional
6,000,000  Corporate  Units pursuant to an  overallotment  option,  yielding net
proceeds of $146.  Each  Corporate  Unit  consists of a purchase  contract  and,
initially, a 2.5% ownership interest in one of the Company's senior notes with a
principal  amount of one thousand  dollars,  which  corresponds to a twenty-five
dollar principal amount of the Company's senior notes. The ownership interest in
the senior  notes is initially  pledged to secure the  Corporate  Unit  holder's
obligation to purchase Company common stock under the related purchase contract.
The senior notes are scheduled to mature in February 2009 and bear interest at a
rate of 3.75% per year.  The purchase  contracts bear interest at a rate of 3.5%
per year on the stated amount of twenty-five dollars.

Each  purchase  contract  obligates  the holder to purchase,  and the Company to
sell,  at a  purchase  price  of  twenty-five  dollars  in cash,  shares  of the
Company's  common  stock on or  before  May 16,  2007  (the  "Purchase  Contract
Settlement Date").  Generally, the number of shares each holder of the Corporate
Units is obligated to purchase depends on the average closing price per share of
Company's  common stock over a 20-day trading period ending on the third trading
day immediately  preceding the Purchase  Contract  Settlement  Date,  subject to
anti-dilution  adjustments.  If the average closing price is equal to or greater
than  $28.82  per share,  the  settlement  rate will be 0.8675  shares of common
stock.  If the average  closing  price is less than $28.82 per share but greater
than  $23.06 per share,  the  settlement  rate is equal to  twenty-five  dollars
divided by the average  closing  price of the  Company's  common  stock.  If the
average closing price is less than $23.06 per share, the settlement rate will be
1.0841 shares of common stock. The holders of Corporate Units have the option to
settle their obligations under the purchase contracts at any time on or prior to
the fifth business day immediately  preceding the Purchase  Contract  Settlement
Date. Prior to the Purchase  Contract  Settlement Date, the senior notes will be
remarketed.  If the  remarketing is successful,  the interest rate on the senior
notes  will  increase  to a rate  selected  by the  remarketing  agent,  and the
maturity of the senior notes will be extended to a date  selected by the Company
that is either two or three years from the date such interest rate is increased.
If the  remarketing  of the senior  notes is not  successful,  the  maturity and
interest  rate of the senior notes will not change and holders of the  Corporate
Units will have the  option of  putting  their  senior  notes to the  Company to
satisfy their obligations under the purchase contracts.

The purchase  contracts are forward  transactions in the Company's common stock.
Upon  issuance,  a liability  for the  present  value of the  purchase  contract
adjustment   payments  of  $113  was   recorded  as  a  reduction   (charge)  to
stockholders'  equity,  with an offsetting  increase (credit) to other long-term
liabilities. Subsequent contract adjustment payments will reduce this liability.
Upon settlement of each purchase  contract,  the Company will receive the stated
amount of  twenty-five  dollars  on the  purchase  contract  and will  issue the
requisite  number of shares of common stock.  The stated amount received will be
recorded as an increase (credit) to stockholders' equity.

Before the issuance of common stock upon  settlement of the purchase  contracts,
the Corporate Units will be reflected in diluted earnings per share calculations
using the treasury  stock  method.  Under this  method,  the number of shares of
common  stock  used in  calculating  diluted  earnings  per share  (based on the
settlement  formula applied at the end of the reporting  period) is deemed to be
increased  by the  excess,  if any, of the number of shares that would be issued
upon  settlement of the purchase  contracts less the number of shares that could
be  purchased  by the Company in the market (at the average  market price during
the period) using the proceeds  receivable upon  settlement.  Consequently,  the
Company  anticipates  that there will be some  dilutive  effect on earnings  per
share for periods when the average  market price of the  Company's  common stock
for the  reporting  period  is  above  $28.82,  but no  dilutive  effect  in the
Company's  earnings per share for periods when the average market price is equal
to or below $28.82.


                                     Page 13
<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of Albertson's, Inc.
Boise, Idaho

We have  reviewed  the  accompanying  condensed  consolidated  balance  sheet of
Albertson's,  Inc. and subsidiaries ("Albertsons") as of April 29, 2004, and the
related condensed  consolidated earnings statements and cash flow statements for
the  thirteen-week  periods ended April 29, 2004 and May 1, 2003.  These interim
financial statements are the responsibility of Albertsons management.

We conducted  our review in  accordance  with  standards  of the Public  Company
Accounting  Oversight  Board  (United  States).  A review of  interim  financial
information  consists  principally of applying analytical  procedures and making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially less in scope than an audit conducted in accordance with standards
of the Public Company Accounting  Oversight Board (United States), the objective
of which is the  expression of an opinion  regarding  the  financial  statements
taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to such condensed  consolidated interim financial statements for them to
be in conformity with  accounting  principles  generally  accepted in the United
States of America.

We have previously  audited,  in accordance with standards of the Public Company
Accounting  Oversight Board (United States),  the consolidated  balance sheet of
Albertsons as of January 29, 2004,  and the related  consolidated  statements of
earnings,  stockholders'  equity,  and cash  flows for the year then  ended (not
presented  herein);  and in our report  dated March 25,  2004,  we  expressed an
unqualified  opinion and included  explanatory  paragraphs related to changes in
the methods of accounting for goodwill,  closed stores and vendor funds,  and to
the  agreement  to  purchase  all of the  outstanding  capital  stock  of JS USA
Holdings  Inc. In our opinion,  the  information  set forth in the  accompanying
condensed  consolidated  balance sheet as of January 29, 2004, is fairly stated,
in all material  respects,  in relation to the  consolidated  balance sheet from
which it has been derived.




/S/ DELOITTE & TOUCHE LLP

Boise, Idaho
June 3, 2004

                                     Page 14
<PAGE>


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


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Overview

Results  of  operations  for  the 13 week  period  ended  April  29,  2004  were
unfavorably  impacted by the labor  dispute in southern  California  (the "Labor
Dispute").  Although  the  Labor  Dispute  ended  with the  ratification  of new
collective  bargaining  agreements on February 28, 2004, the impact on operating
results for the 13 week period ended April 29, 2004  extended  through the first
quarter and continues to impact operating results.  Sales for the quarter in the
Company's  southern  California  combination food and drug and conventional food
stores  decreased  as did margins for the 13 week period ended April 29, 2004 as
compared  to the  13  week  period  ended  May 1,  2003.  The  Company  incurred
additional  costs  as  part  of the  Labor  Dispute  settlement  and  is  making
significant investments to win back and acquire customers in southern California
in the form of pricing promotions and advertising.  These impacts were partially
offset by reduced labor expenses in the affected stores during the Labor Dispute
and the benefit  from certain  multi-employer  bargaining  agreements  discussed
below.

Southern California Labor Dispute
As previously  disclosed,  in connection  with the decision of the Company,  The
Kroger  Co. and  Safeway  Inc.  (the  "Retailers")  to engage in  multi-employer
bargaining  with the United Food and Commercial  Workers in connection  with the
southern California labor dispute, the Retailers entered into agreements ("Labor
Dispute  Agreements")  which,  among other things,  were designed to prevent the
union from placing disproportionate  pressure on one or more Retailer. The Labor
Dispute  Agreements  provided for payments  from any of the Retailers who gained
from such  disproportionate  pressure to any of the  Retailers who suffered from
such disproportionate pressure. Amounts earned by the Company under the terms of
the Labor  Dispute  Agreements  totaled  $17,  $43 and $3 in the 13 week periods
ended April 29,  2004,  January 29,  2004 and  October 30,  2003,  respectively.
Amounts   earned  were   recorded  as  a  reduction  to  selling,   general  and
administrative  costs in each of the  respective  periods and all  amounts  were
collected subsequent to April 29, 2004.

In  November  2003 three  consumers  filed an action in  California  state court
claiming  that the Labor  Dispute  Agreements  violate  antitrust  and  consumer
protection  laws. This lawsuit was dismissed on April 21, 2004. In February 2004
the  California  Attorney  General  filed suit in federal  court  claiming  that
certain  provisions of the Labor Dispute  Agreements  violate antitrust law. The
Company  believes that similar  agreements are not uncommon in joint  bargaining
situations  and that the Labor  Dispute  Agreements  are lawful.  The Company is
vigorously defending itself in this proceeding.

Shaw's Acquisition
On April 30, 2004, the Company acquired all of the outstanding  capital stock of
the entity which conducts J Sainsbury  plc's U.S.  retail grocery store business
("Shaw's") for $2,100 in cash, as well as the assumption of  approximately  $368
in capital  leases.  The Company  used a  combination  of  cash-on-hand  and the
proceeds  from the  issuance  of  $1,603  of  commercial  paper to  finance  the
acquisition.  The Company used the proceeds from a subsequent offering (see Note
10 - Subsequent Events to the Condensed Consolidated Financial Statements - HITS
Offering) to repay $1,119 of such commercial  paper. The outstanding  commercial
paper is currently backed by the Company's existing credit facilities.

The operations  acquired consist of approximately  200 grocery stores in the New
England area operated under the banners of Shaw's and Star Markets. These stores
had sales of  approximately  $4,600 for the fiscal year ended  February 28, 2004
and approximately $4,400 for the fiscal year ended March 1, 2003.

As a result of the goodwill generated from the acquisition, the Company obtained
prospective  waivers from the lenders under two of the Company's existing credit
facilities in order to remain in compliance with the  consolidated  tangible net
worth  covenant  contained in the agreements  underlying  these  facilities.  No
amounts were outstanding under these facilities as of April 29, 2004.


                                     Page 15
<PAGE>

Results of Operations

Results  of  operations  for  the 13 week  period  ended  April  29,  2004  were
unfavorably  impacted  by the Labor  Dispute.  The  Labor  Dispute  resulted  in
decreased sales in the Company's southern  California  combination food and drug
and  conventional  stores and  decreased  gross  margin as a result of decreased
volume, increased inventory shrink, sales mix changes and increased distribution
costs.  Additional  costs  incurred  in  connection  with  the  terms of the new
collective bargaining agreements included funding a one-time contribution to the
union health and welfare fund of $36 and strike  ratification  bonus payments of
$10.  These  amounts  were charged to earnings in the 13 week period ended April
29, 2004.

Sales were  $8,688 and $8,910 for the 13 week  periods  ended April 29, 2004 and
May 1, 2003,  respectively.  The decrease in sales was due to decreased sales in
southern  California  as a result of the Labor  Dispute.  Identical  store sales
decreased  4.1% for the 13 week period  ended April 29, 2004  compared to the 13
week period ended May 1, 2003.  Identical stores are defined as stores that have
been in operation for both full fiscal periods.  Comparable  store sales,  which
uses the same store base as the  identical  store  sales  computation  except it
includes sales at replacement stores,  decreased 3.7%.  Excluding food stores in
the Company's Southern  California  Division for the 13 week periods ended April
29, 2004 and May 1, 2003,  identical  store sales  decreased 0.1% and comparable
store sales  increased  0.3%.  Management  estimates  that overall  inflation in
products the Company sells was approximately  0.8% and 0.2% in the twelve months
ended April 29, 2004 and May 1, 2003, respectively.

The following table reconciles actual identical store sales and comparable store
sales to adjusted  identical store sales and comparable store sales as presented
herein.  The Company  presents  these  non-GAAP  financial  measures  because it
believes  a  comparison  of actual to  adjusted  store  sales  data is useful to
investors to communicate  management's belief of the impact of the Labor Dispute
on  trends in sales  experienced  during  the 13 weeks  ended  April  29,  2004,
including  the portion of the period the Labor Dispute was ongoing and the weeks
following its resolution.
<TABLE>
<CAPTION>
                                                            Actual               Labor                   Adjusted
                                                         Identical             Dispute                  Identical
                                                       Store Sales          Adjustment                Store Sales
                                                  ------------------     ---------------         ------------------
<S>                                                        <C>                  <C>       <C>             <C>
13 weeks ended April 29, 2004                             $  8,333              $ (953)   (1)             $ 7,380
13 weeks ended May 1, 2003                                   8,691              (1,302)   (2)               7,389
                                                  ------------------                             ------------------
Year to year change                                           (358)                                            (9)
13 weeks ended May 1, 2003                                   8,691                                          7,389
                                                  ------------------                             ------------------
Identical store sales percentage change                     (4.1)%                                         (0.1)%
                                                  ==================                             ==================

                                                            Actual               Labor                   Adjusted
                                                        Comparable             Dispute                 Comparable
                                                       Store Sales          Adjustment                Store Sales
                                                  ------------------     ---------------      -- ------------------
13 weeks ended April 29, 2004                             $  8,443              $ (962)  (3)              $ 7,481
13 weeks ended May 1, 2003                                   8,771              (1,309)  (4)                7,462
                                                  ------------------                             ------------------
Year to year change                                           (328)                                            19
13 weeks ended May 1, 2003                                   8,771                                          7,462
                                                  ------------------                             ------------------
Comparable store sales percentage change                    (3.7)%                                           0.3%
                                                  ==================                             ==================
</TABLE>
(1)  Represents  the  identical  Southern  California  Division food store sales
during the 13 weeks ended April 29, 2004.
(2)  Represents  the  identical  Southern  California  Division food store sales
during the 13 weeks ended May 1, 2003.
(3)  Represents the comparable  Southern  California  Division  food store sales
during the 13 weeks ended April 29, 2004.
(4)  Represents  the comparable  Southern  California  Division food store sales
during the 13 weeks ended May 1, 2003.

During  the 13  week  period  ended  April  29,  2004,  the  Company  opened  19
combination  food and drug stores,  three  stand-alone  drugstores and four fuel
centers,  while closing six combination  food and drug stores,  six conventional
stores, two warehouse stores and six stand-alone drugstores.

Gross profit,  as a percentage of sales,  for the 13 week period ended April 29,
2004  decreased  to 28.2% from 28.5% for the 13 week  period  ended May 1, 2003.
This was a result of decreased  sales  leverage as a result of the Labor Dispute
and continued  planned  investments  in pricing and promotion in key markets and
categories  to drive  sales  growth and market  share.  These  investments  were
partially  offset by savings  generated  from  strategic  sourcing  initiatives,
increased pharmacy gross margins as a result of a new supply contract and higher
Company-sourced generic substitution and increased private label sales growth.

                                     Page 16
<PAGE>

Selling,  general and administrative  expenses, as a percent of sales, increased
to 26.0% for the 13 week period ended April 29,  2004,  as compared to 24.3% for
the 13 week period ended May 1, 2003.  This increase was primarily  attributable
to increased employee compensation and benefits costs primarily as the result of
a one-time  contribution  to the union health and welfare fund of $36 and strike
ratification  bonus  payments of $10 paid under the terms of the new  collective
bargaining agreements in southern California; lack of sales leverage as a result
of the Labor Dispute;  increased legal costs related to California but unrelated
to the Labor  Dispute;  higher  depreciation  costs  associated  with  continued
investment  in  infrastructure,  particularly  in  information  technology;  and
increased  workers  compensation  costs,  which were partially offset by amounts
earned under the Labor Dispute Agreements.

Restructuring  credits  during the 13 week  period  ended May 1, 2003 of $7 were
primarily  related to gains on  disposition  of assets and an  adjustment  for a
pension curtailment related to the Company's restructuring activities in 2001.

Earnings from continuing  operations were $56 for the 13 week period ended April
29,  2004  compared  to $173 for the 13 week  period  ended  May 1,  2003.  This
decrease was primarily due to a reduction in identical store sales of 4.1% and a
decrease in gross margin as a result of the Labor  Dispute,  increased  employee
salaries and benefits costs  primarily as the result of a one-time  contribution
to the union  health  and  welfare  fund of $36 and  strike  ratification  bonus
payments of $10 paid under the terms of the new collective bargaining agreements
in  southern  California,  increased  legal  costs  related  to  California  but
unrelated  to the Labor  Dispute,  higher  depreciation  and  increased  workers
compensation costs.

The Company's  effective  tax rate from  continuing  operations  for the 13 week
period  ended  April  29,  2004 was 37.5% as  compared  to 38.4% for the 13 week
period ended May 1, 2003.  For the 13 week period ended April 29, 2004, the rate
decreased  as  compared to the prior year as a result of  implementation  of tax
saving initiatives resulting in lower estimated federal and state income tax.

Net  earnings  were $36 or $0.10 per diluted  share for the 13 week period ended
April 29, 2004,  compared to net earnings of $172 or $0.47 per diluted share for
the 13 week  period  ended  May 1,  2003.  This  decline  was the  result of the
decrease in earnings from continuing  operations and the loss from  discontinued
operations as a result of the Company's decision to exit the New Orleans market.

Critical Accounting Policies
The preparation of financial  statements  requires  management to make estimates
and judgments that affect the reported amounts of assets, liabilities,  revenues
and expenses and related  disclosure of contingent  assets and liabilities.  The
accompanying  condensed consolidated financial statements are prepared using the
same critical  accounting policies discussed in the Company's 2003 Annual Report
on Form 10-K.

Liquidity and Capital Resources
Cash provided by operating  activities during the 13 week period ended April 29,
2004 was $407,  compared  to $380 for the same  period in the  prior  year.  The
increase in cash provided by operations in the first quarter of 2004 as compared
to 2003 was due primarily to decreasing  inventory  levels as a result of normal
seasonal  purchasing  patterns and supply chain initiatives,  a reduction in the
Company tax accounts due to lower  earnings and  implementation  of tax planning
initiatives  in 2003 and 2004 and  higher  levels  of  accounts  payable  due to
increased  purchases in southern California as a result of the resolution of the
Labor  Dispute.  These  sources of cash were  partially  offset by  increases in
accounts receivable related to the Labor Dispute Agreements.

Cash flow used in investing activities during the 13 week period ended April 29,
2004  decreased  to $197  compared to $299 for the 13 week  period  ended May 1,
2003.  This decrease was a result of lower  capital  expenditures  in 2004.  The
Company is  continuing  to implement its 2004 capital  expenditure  plan,  which
includes outlays for new stores, store remodels and information technology.  The
Company's  capital  expenditure  budget  for 2004 is  approximately  $1,600  and
includes approximately $100 in new capital and operating leases and $300 for the
recently acquired Shaw's operations.

Cash flows  provided by  financing  activities  during the 13 week period  ended
April  29,  2004  were  $1,534  as  compared  to cash  flows  used in  financing
activities  of $136 during the 13 week period  ended May 1, 2003.  The change is
due to  commercial  paper  borrowings  of $1,603 during the 13 week period ended
April 29, 2004 in anticipation of the closing of the Shaw's acquisition on April
30, 2004 and cash used for the purchase and  retirement of the Company's  common
stock in the 13 week period ended May 1, 2003.


                                     Page 17
<PAGE>
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.  Proceeds from the
issuance  of  commercial  paper  backed  by a $1,400  interim  revolving  credit
facility and the Company's  existing  revolving  credit  facilities were used to
finance the Shaw's acquisition,  which closed on April 30, 2004. Proceeds from a
subsequent   offering  (see  Note  10  -  Subsequent  Events  to  the  Condensed
Consolidated  Financial Statements - HITS Offering) were used to repay a portion
of such commercial  paper. The Company had $1,603 in commercial paper borrowings
outstanding at April 29, 2004, and no outstanding  commercial  paper  borrowings
outstanding at January 29, 2004.

At April 29, 2004, the Company had four  revolving  credit  facilities  totaling
$2,800.  The first  agreement,  a 364-Day  revolving  credit facility with total
availability  of $100,  will expire in February  2005. The second  agreement,  a
revolving credit facility with total  availability of $350, was extended through
July 2004. The third  agreement,  a five-year  facility for $950,  expires March
2005. The fourth  agreement,  an interim credit facility  totaling  $1,400,  was
entered into in April 2004 to finance the  acquisition  of Shaw's (see Note 10 -
Subsequent Events to the Condensed  Consolidated  Financial  Statements - Shaw's
Acquisition).  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,  a fixed charge coverage,  as defined,  of no less
than 2.7 times and a consolidated  leverage ratio,  as defined,  of no more than
4.5 times.  As of April 29,  2004,  the  Company  was in  compliance  with these
requirements  (see Note 10 -  Subsequent  Events to the  Condensed  Consolidated
Financial Statements - Shaw's Acquisition). No borrowings were outstanding under
these  credit  facilities  as of April 29, 2004.  On May 12,  2004,  the Company
terminated its $1,400 interim credit  facility upon the close of the offering of
$1,000 of Hybrid  Income Term  Security  Units  (HITS) (see Note 10 - Subsequent
Events to the Condensed Consolidated Financial Statements - HITS Offering).  The
Company is in the process of renewing  its  remaining  $1,400  senior  revolving
credit facilities. The renewal is expected to be completed in early June.

The  Company  filed a shelf  registration  statement  with  the  Securities  and
Exchange  Commission,  which  became  effective  on  February  13,  2001  ("2001
Registration  Statement"),  to  authorize  the  issuance of up to $3,000 in debt
securities.  The Company  intends to use the net proceeds of any securities sold
pursuant to the 2001  Registration  Statement for retirement of debt and general
corporate  purposes,  including the potential  purchase of outstanding shares of
Albertsons  common stock. As of April 29, 2004, $2,400 of debt securities remain
available for issuance under the 2001 Registration Statement;  however there can
be no  assurance  that the Company will be able to issue debt  securities  under
this registration statement at terms acceptable to the Company.

The Company filed a  registration  statement  with the  Securities  and Exchange
Commission,  which  became  effective  on March  29,  2004  ("2004  Registration
Statement"),  to authorize the issuance of $1,150 in Hybrid Income Term Security
Units  ("HITS") (see Note 10 - Subsequent  Events to the Condensed  Consolidated
Financial Statements - HITS Offering). On May 7, 2004, the Company issued $1,000
of HITS  under the 2004  Registration  Statement  and used the net  proceeds  to
reduce a portion of the  outstanding  commercial  paper  borrowings  incurred in
connection  with the  Shaw's  acquisition.  On June 2,  2004,  the  underwriters
purchased  an  additional  $150 of HITS,  pursuant to an  overallotment  option,
yielding  net  proceeds  of $146 which were used to further  reduce  outstanding
commercial paper borrowings.

During the 13 week period ended May 1, 2003, the Company repurchased 5.3 million
shares of its common stock for a total  expenditure  of $108 at an average price
of $20.26 per share. On December 5, 2003, the Board of Directors  reauthorized a
program authorizing management,  at its discretion, to purchase and retire up to
$500 of the  Company's  common stock  through  December  31, 2004.  No shares of
common  stock were  repurchased  during the 13 weeks ended April 29,  2004.  The
Company may continue, or from time to time suspend,  purchasing shares under its
stock purchase program.

Contractual Obligations, Commercial Commitments and Guarantees

Contractual Obligations and Guarantees
For information on contractual  obligations  and  guarantees,  see the Company's
2003 Annual Report on Form 10-K. At April 29, 2004,  there have been no material
changes  regarding the Company's  contractual  obligations  outside the ordinary
course of  business  or  material  changes to  guarantees  from the  information
disclosed  in the  Company's  2003  Annual  Report on Form 10-K  except  for the
issuance of $1,603 of commercial paper used to acquire the operations of Shaw's.
In May 2004 and June 2004,  the Company  successfully  issued HITS  yielding net
proceeds of $973 and $146, respectively. The senior notes that comprise the HITS
are  initially  due in 2009 (see Note 10 -  Subsequent  Events to the  Condensed
Consolidated  Financial  Statements - HITS Offering).  The net proceeds from the
HITS  offering  were  used  to  pay  down a  portion  of  the  commercial  paper
outstanding at April 29, 2004.


                                     Page 18
<PAGE>

Commercial Commitments
The Company had  outstanding  letters of credit of $90 as of April 29, 2004, all
of  which  were  issued  under  separate   agreements  with  multiple  financial
institutions.  These  agreements  are not associated  with the Company's  credit
facilities.  Of the $90  outstanding at April 29, 2004, $81 were standby letters
of credit covering primarily workers'  compensation or performance  obligations.
The  remaining $9 were  commercial  letters of credit  supporting  the Company's
merchandise  import  program.  The  Company  paid  issuance  fees  that  varied,
depending  on type,  up to 0.90% of the  outstanding  balance  of the  letter of
credit.

Off Balance Sheet Arrangements
At April  29,  2004,  the  Company  had no  significant  investments  that  were
accounted for under the equity method in accordance with  accounting  principles
generally  accepted in the United  States.  Investments  that were accounted for
under the equity method at April 29, 2004,  had no liabilities  associated  with
them that were guaranteed by or that would be considered material to Albertsons.
Accordingly,  the Company does not have any off balance sheet  arrangements with
unconsolidated entities.

Related Party Transactions
There were no  material  related  party  transactions  during the 13 week period
ended April 29, 2004.

Item 3.  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" in the Company's 2003 Annual Report on Form 10-K.

Item 4.  Controls and Procedures
Management of the Company,  including the Chief Executive  Officer and the Chief
Financial  Officer of the  Company,  have  evaluated  the  effectiveness  of the
Company's  disclosure  controls and procedures (as defined in Rules 13a-15(e) of
the  Securities  Exchange  Act of  1934)  as of April  29,  2004.  Based on this
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that the Company's  disclosure  controls and procedures are effective to provide
reasonable assurance that information required to be disclosed by the Company in
the reports that it files or submits under the  Securities  Exchange Act of 1934
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified by the Securities and Exchange Commission's rules and forms.

In February 2004 the Company  implemented  several new modules to complement its
new general ledger system,  including modules related to property and equipment,
accounts payable and procurement.  This implementation included new hardware and
software.  This is the  second  phase of a  multi-year  effort  to  upgrade  the
technology  supporting the Company's  financial systems.  These  implementations
have resulted in certain  changes to business  processes  and internal  controls
impacting  financial  reporting.  Management  is taking the  necessary  steps to
monitor and maintain appropriate internal controls during this period of change.
These steps include  deploying  resources to mitigate internal control risks and
performing multiple levels of reconciliations.

Other than as described above,  there were no changes in the Company's  internal
control  over  financial  reporting  that  occurred  during the  Company's  most
recently  completed  fiscal  quarter  that  have  materially  affected,  or  are
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

PART II.  OTHER INFORMATION

Cautionary  Statement  for Purposes of "Safe Harbor  Provisions"  of the Private
Securities Litigation Reform Act of 1995
All statements  other than  statements of historical  fact contained in this and
other documents disseminated by the Company,  including statements regarding the
Company's expected financial  performance,  are  forward-looking  information as
defined in the Private  Securities  Litigation  Reform Act of 1995. In reviewing
such information about the future performance of the Company,  it should be kept
in mind that  actual  results  may differ  materially  from those  projected  or
suggested in such forward-looking information since predictions regarding future
results  of  operations   and  other  future  events  are  subject  to  inherent
uncertainties. These statements may relate to, among other things: statements of
expectation  regarding  the  results  of  operations  had the labor  dispute  in
southern California not occurred;  investing to increase sales;  changes in cash
flow;  increases in general  liability costs,  workers'  compensation  costs and
employee  benefit  costs;  attainment of cost  reduction  goals;  impacts of the
southern California labor dispute;  impacts of the completion of the acquisition
of Shaw's;  achieving  sales increases and increases in comparable and identical
sales;   opening  and  remodeling  stores;  and  the  Company's  five  strategic
imperatives.  These  statements  are  indicated  by  words  or  phrases  such as
"expects,"  "plans,"  "believes,"  "estimate,"  and "goal".  In  reviewing  such
information  about the future  performance of the Company,  it should be kept in
mind that actual results may differ materially from those projected or suggested
in such forward-looking information.

                                     Page 19
<PAGE>
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  consumer  spending;  actions  taken by new or
existing competitors (including nontraditional competitors),  particularly those
intended  to  improve  their  market  share  (such as  pricing  and  promotional
activities);   labor  negotiations;   adverse  determinations  with  respect  to
litigation or other claims (including  environmental matters);  employee benefit
costs;  the  Company's  ability to recruit,  retain and develop  employees;  the
Company's  ability to  develop  new stores or  complete  remodels  as rapidly as
planned;  the  Company's  ability  to  implement  new  technology  successfully;
stability of product costs; the Company's ability to integrate the operations of
acquired or merged companies, including Shaw's; the Company's ability to execute
its  restructuring  plans;  the Company's  ability to achieve its five strategic
imperatives; and other factors affecting the Company's business in or beyond the
Company's control. These other factors include changes in the rate of inflation;
changes in state or federal legislation or regulation; the cost and stability of
energy sources; changes in the general economy; and changes in interest rates.

Other factors and assumptions  not identified  above could also cause the actual
results  to  differ   materially  from  those  projected  or  suggested  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  predictions,  assumptions,  estimates  or changes in other
factors affecting such forward-looking information.

Item 1.  Legal Proceedings
The Company is subject to various lawsuits,  claims and other legal matters that
arise in the ordinary course of conducting business.

In March 2000 a class action  complaint was filed against  Albertsons 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  (Gardner,  et al. v.
Albertson's,  Inc.,  et al.) by  bonus-eligible  managers  seeking  recovery  of
additional  bonus  compensation  based  upon  plaintiffs'  allegation  that  the
calculation  of profits on which their  bonuses were based  improperly  included
expenses for workers' compensation costs, cash shortages, premises liability and
"shrink"  losses in violation of  California  law. In August 2001 a class action
complaint with very similar claims, also involving  bonus-eligible managers, was
filed  against  Albertsons  as well as Lucky  Stores,  Inc. and American  Stores
Company, wholly-owned subsidiaries of the Company, in the Superior Court for the
County of Los Angeles,  California  (Petersen,  et al. v. Lucky Stores, Inc., et
al.). In June 2002 the cases were consolidated  ("Gardner/Peterson case") and in
August 2002 a class action with respect to the  consolidated  case was certified
by the court. On May 26, 2004 Albertsons  entered into an agreement in principle
to settle the consolidated  Gardner/Petersen  case. The settlement  agreement is
subject to approval by the California  Superior Court.  Based on the information
presently available to the Company, management does not expect that the payments
under this  settlement  will have a  material  adverse  effect on the  Company's
financial condition, results of operations or cash flows.

In April 2000 a class action  complaint was filed against  Albertsons 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  (Gardner,  et al. v.
American  Stores  Company,  et al.) by assistant  managers  seeking  recovery of
overtime  pay based  upon  plaintiffs'  allegation  that  they  were  improperly
classified  as exempt  under  California  law.  In May 2001 a class  action with
respect to Sav-on Drug Stores  assistant  managers was certified by the court. A
case with very  similar  claims,  involving  the Sav-on  Drug  Stores  assistant
managers  and  operating  managers,  was also  filed in April 2000  against  the
Company's  subsidiary  Sav-on Drug Stores,  Inc. in the  Superior  Court for the
County of Los Angeles, California (Rocher, Dahlin, et al. v. Sav-on Drug Stores,
Inc.)  and was also  certified  as a class  action.  In April  2002 the Court of
Appeal of the State of California Second Appellate  District reversed the Rocher
class certification,  leaving only two plaintiffs.  The California Supreme Court
has accepted plaintiffs' request for review of this class  decertification.  The
California  Supreme Court heard oral  arguments on June 1, 2004. 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 that the ultimate  resolution of these lawsuits will
have a material adverse effect on the Company's financial condition,  results of
operations or cash flows.

In August 2000 a class action  complaint  was filed  against  Jewel Food Stores,
Inc., an indirect wholly owned  subsidiary of the Company,  and Dominick's Finer
Foods,  Inc. in the Circuit Court of Cook County,  Illinois  alleging milk price
fixing  (Maureen Baker et al. v. Jewel Food Stores,  Inc. and  Dominick's  Finer
Foods,  Inc.,  Case No. 00L 009664).  In February 2003, the trial court found in
favor of the defendants and dismissed the case with prejudice.  Thereafter,  the
plaintiffs appealed. Briefs have now been filed for the appeal and the matter is
pending in the Illinois Appellate Court. 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 that the ultimate
resolution of this action will have a material  adverse  effect on the Company's
financial condition, results of operations or cash flows.

                                     Page 20
<PAGE>
In September 2000 an agreement was reached and court approval  granted to settle
eight purported class and/or  collective  actions which were consolidated in the
United States  District  Court in Boise,  Idaho and which raised  various issues
including  "off-the-clock"  work allegations and allegations  regarding  certain
salaried  grocery  managers'  exempt  status.  Under the  settlement  agreement,
current and former  employees who met eligibility  criteria have been allowed to
present  their   off-the-clock  work  claims  to  a  settlement   administrator.
Additionally,  current  and former  grocery  managers  employed  in the State of
California  have  been  allowed  to  present  their  exempt  status  claims to a
settlement  administrator.  The Company  mailed  notices of the  settlement  and
claims  forms  to  approximately   70,500  associates  and  former   associates.
Approximately 6,000 claim forms were returned, of which approximately 5,000 were
deemed by the settlement  administrator  to be incapable of valuation,  presumed
untimely,  or both.  The  claims  administrator  was  able to  assign a value to
approximately  1,000  claims,  which  amount  to a total of  approximately  $14,
although the value of many of those claims is still  subject to challenge by the
Company.  A second claim  process was ordered by the court,  but the parties are
still waiting for final  instructions  from the Court.  The Company is presently
unable to determine the number of individuals  who may  ultimately  submit valid
claims or the amounts that it may  ultimately be required to pay with respect to
such claims. Based on the information presently available to it, management does
not expect  that the  satisfaction  of valid  claims  submitted  pursuant to the
settlement  will  have a  material  adverse  effect on the  Company's  financial
condition, results of operations or cash flows.

On November 1, 2001, the Environmental  Protection Agency ("EPA") notified Jewel
Food Stores,  Inc.,  an indirect  wholly-owned  subsidiary  of the  Company,  of
alleged  violations of the Clean Air Act. No notice of violation was issued, but
the Company and the EPA entered into  discussions that are expected to result in
a consent decree establishing technical protocols for the refrigerant management
program;  setting a penalty  of $0.1;  and  requiring  Jewel to  accelerate  the
industry's future obligation to substitute  non-ozone depleting  refrigerant for
existing refrigerant in some of the Jewel stores.

On November 20, 2003,  three consumers filed an action in California state court
(Kerner, et al. v. Albertsons,  Inc.; Ralphs Grocery Company;  and Safeway Inc.,
dba Vons, a Safeway  Company,  Los Angeles Superior Court,  Case No.  BC306456),
claiming  that  certain   provisions  of  the  agreements  (the  "Labor  Dispute
Agreements")  between  the  Company,  The  Kroger  Co.  and  Safeway  Inc.  (the
"Retailers")  which provided for  "lock-outs" in the event that any Retailer was
struck  at any or all of its  southern  California  facilities  when  the  other
Retailers were not and contained a provision  designed to prevent the union from
placing  disproportionate  pressure on one or more Retailer(s) by picketing such
Retailer(s) but not the other Retailer(s),  violate California's  Cartwright Act
and the Unfair Competition Law. The lawsuit sought unspecified  monetary damages
and injunctive relief. This lawsuit was dismissed on April 21, 2004.

On February 2, 2004, the Attorney  General for the State of California  filed an
action in Los Angeles federal court (California, ex rel Lockyer v. Safeway, Inc.
dba Vons, a Safeway  Company,  Albertsons,  Inc. and Ralphs Grocery  Company,  a
division of The Kroger Co.,  United States  District  Court Central  District of
California,  Case No. CV04-0687)  claiming that certain  provisions of the Labor
Dispute  Agreements  violate  section 1 of the Sherman  Act.  The lawsuit  seeks
declarative and injunctive  relief. The Company filed its answer on February 24,
2004.  The Company has strong  defenses  against this lawsuit and is  vigorously
defending it. Although this lawsuit is subject to uncertainties  inherent in the
litigation process, based on the information presently available to the Company,
management does not expect that the ultimate resolution of this action will have
a material  adverse  effect on the  Company's  financial  condition,  results of
operations or cash flows.

In March 2004 a lawsuit seeking class action status was filed against Albertsons
in the  Superior  Court of the  State of  California  in and for the  County  of
Alameda,  California  (Dunbar, et al. v. Albertsons) by grocery managers seeking
recovery including overtime pay based upon plaintiffs' allegation that they were
improperly  classified as exempt under California law. This case is currently in
discovery;  however 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 that the ultimate resolution of this
lawsuit  will  have  a  material  adverse  effect  on  the  Company's  financial
condition, results of operations or cash flows.

The Company is also  involved in routine  legal  proceedings  incidental  to its
operations.  Management  does not expect that the ultimate  resolution  of these
legal proceedings will have a material adverse effect on the Company's financial
condition, results of operations or cash flows.



                                     Page 21
<PAGE>

The statements  above reflect  management's  current  expectations  based on the
information presently available to the Company. However, predicting the outcomes
of claims and  litigation  and  estimating  related costs and exposures  involve
substantial  uncertainties that could cause actual outcomes, costs and exposures
to vary materially from current expectations. In addition, the Company regularly
monitors its exposure to the loss  contingencies  associated  with these matters
and may from time to time change its  predictions  with  respect to outcomes and
its estimates with respect to related costs and  exposures.  It is possible that
material differences in actual outcomes, costs and exposures relative to current
predictions and estimates, or material changes in such predictions or estimates,
could have a  material  adverse  effect on the  Company's  financial  condition,
results of operations or cash flows.

Item 2. Changes in  Securities,  Use of Proceeds and Issuer  Purchases of Equity
Securities
On December 5, 2003, the Board of Directors  reauthorized a program  authorizing
management,  at its  discretion,  to  purchase  and  retire  up to  $500  of the
Company's  common stock  through  December 31,  2004.  No shares of common stock
have been  repurchased  through April 29, 2004 under this  program.  The Company
may continue,  or from time to time suspend,  purchasing  shares under its stock
purchase program.

Item 3.  Defaults Upon Senior Securities
None.

Item 4.  Submission of Matters to a Vote of Security Holders
None.

Item 5.  Other Information
None.

Item 6.  Exhibits and Reports on Form 8-K

a.       Exhibits

          15   Letter re: Unaudited Interim Financial Statements

          31.1 Certification   of   CEO   Pursuant   to   Section   302  of  the
               Sarbanes-Oxley Act of 2002

          31.2 Certification   of   CFO   Pursuant   to   Section   302  of  the
               Sarbanes-Oxley Act of 2002

          32   Certification  Pursuant  to 18 U.S.C.  Section  1350,  as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


b.       The following reports on Form 8-K were filed or furnished during the 13
         week period ended April 29, 2004:

          Current report on Form 8-K dated March 9, 2004  furnished  pursuant to
          Item 12, Results of Operations and Financial Condition,  including the
          Company's  press  release  which  discussed  the  Company's  sales and
          earnings for the 2003 fourth quarter and full fiscal year.

                                     Page 22
<PAGE>



                                    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: June 4, 2004                          /S/ Felicia D. Thornton
                                            ------------------------------------
                                            Felicia D. Thornton
                                            Executive Vice President
                                             and Chief Financial Officer




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