SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

                                    FORM 10-Q

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

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


       For 13 Weeks Ended: October 31, 2002 Commission File Number: 1-6187



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



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


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


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


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

     There  were  379,151,128  shares  with  a par  value  of  $1.00  per  share
outstanding at December 6, 2002.



<PAGE>


                                ALBERTSON'S INC.
                                      INDEX

<TABLE>
<CAPTION>
<S>           <C>                                                                              <C>

PART I        FINANCIAL INFORMATION

Item 1.       Financial Statements (Unaudited)
                  Condensed Consolidated Earnings for the 13 and 39  weeks ended
                  October 31, 2002 and November 1, 2001                                         3

                  Condensed Consolidated Balance Sheets as of October 31, 2002
                  and January 31, 2002                                                          4

                  Condensed  Consolidated  Cash  Flows  for  the  39 weeks ended
                  October 31, 2002 and November 1, 2001                                         5

                  Notes to the Condensed Consolidated Financial Statements                      6

Item 2.       Management's  Discussion  and  Analysis of Financial Condition and
              Results of Operations                                                             14

Item 3.       Quantitative and Qualitative Disclosures About Market Risk                        22

Item 4.       Controls and Procedures                                                           23

PART II       OTHER INFORMATION

Item 1.       Legal Proceedings                                                                 23

Item 2.       Changes in Securities                                                             23

Item 6.       Exhibits and Reports on Form 8-K                                                  23
</TABLE>




<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                                ALBERTSON'S, INC.
                         CONDENSED CONSOLIDATED EARNINGS
                       (in millions except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                            13 WEEKS ENDED                             39 WEEKS ENDED
                                                 --------------------------------------    ----------------------------------------
                                                      October 31,         November 1,            October 31,          November 1,
                                                             2002                2001                   2002                 2001
                                                 ------------------ -------------------    -------------------- -------------------
<S>                                                         <C>                <C>                    <C>                <C>
Sales                                                       $8,657             $9,036                 $26,519            $27,265
Cost of sales                                                6,120              6,466                  18,751             19,537
                                                 ------------------ -------------------    -------------------- -------------------
Gross profit                                                 2,537              2,570                   7,768              7,728

Selling, general and administrative expenses                 2,152              2,152                   6,421              6,562
Restructuring (credits) charges and other                       (7)                 1                     (29)               476
Merger-related credits                                                                                                       (15)
                                                 ------------------ -------------------    -------------------- -------------------
Operating profit                                               392                417                   1,376                705

Other expenses:
  Interest, net                                                (87)              (110)                   (295)              (326)
  Other, net                                                                       (7)                    (17)               (19)
                                                 ------------------ -------------------    -------------------- -------------------
Earnings from continuing operations before
  income taxes                                                 305                300                   1,064                360
Income tax expense                                             111                123                     408                153
                                                 ------------------ -------------------    -------------------- -------------------

Net earnings from continuing operations                        194                177                     656                207
Discontinued operations:
  Operating (loss) profit                                       (3)                (1)                   (437)                 8
  Income tax (benefit) expense                                  (1)                                      (145)                 4
                                                 ------------------ -------------------    -------------------- -------------------
Net (loss) earnings from discontinued
  operations                                                    (2)                (1)                   (292)                 4
                                                 ------------------ -------------------    -------------------- -------------------
NET EARNINGS                                               $   192            $   176               $     364          $     211
                                                 ------------------ -------------------    -------------------- -------------------


EARNINGS (LOSS) PER SHARE:
  Basic
         Continuing operations                              $ 0.49             $ 0.44                   $1.63             $ 0.51
         Discontinued operations                             (0.01)             (0.01)                  (0.73)              0.01
                                                 ------------------ -------------------    -------------------- -------------------
         Net earnings                                       $ 0.48             $ 0.43                   $0.90             $ 0.52
                                                 ================== ===================    ==================== ===================

  Diluted
         Continuing operations                              $ 0.49             $ 0.43                   $1.63             $ 0.51
         Discontinued operations                             (0.01)                                     (0.73)              0.01
                                                 ------------------ -------------------    -------------------- -------------------
         Net earnings                                       $ 0.48             $ 0.43                   $0.90             $ 0.52
                                                 ================== ===================    ==================== ===================

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
  Basic                                                        396                406                     403                406
  Diluted                                                      397                409                     405                408
</TABLE>





See Notes to Condensed Consolidated Financial Statements.



<PAGE>


                                ALBERTSON'S, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                         (in millions except par value)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                October 31,          January 31,
                                                                                                       2002                 2002
                                                                                            -----------------    -----------------
<S>                                                                                                  <C>                   <C>
        ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                                         $  430                $  61
   Accounts and notes receivable, net                                                                   575                  696
   Inventories                                                                                        3,180                3,196
   Prepaid expenses and other                                                                           102                  172
   Refundable income taxes                                                                               17
   Assets held for sale                                                                                 189                  326
   Deferred income taxes                                                                                 97                  172
                                                                                            -----------------    -----------------
                  TOTAL CURRENT ASSETS                                                                4,590                4,623

LAND, BUILDINGS AND EQUIPMENT (net of accumulated depreciation and
  amortization of $6,022 and $5,753, respectively)                                                    8,964                9,282

GOODWILL, net                                                                                         1,399                1,468

INTANGIBLES, net                                                                                        184                  210

OTHER ASSETS                                                                                            332                  398
                                                                                            -----------------    -----------------
                                                                                                   $ 15,469             $ 15,981
                                                                                            =================    =================

         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                                                  $2,101               $2,107
   Salaries and related liabilities                                                                     557                  584
   Taxes other than income taxes                                                                        194                  153
   Income taxes payable                                                                                                       51
   Self-insurance                                                                                       212                  198
   Unearned income                                                                                       85                   88
   Restructuring reserves                                                                                44                   61
   Current portion of capitalized lease obligations                                                      14                   14
   Current maturities of long-term debt                                                                 127                  123
   Other                                                                                                244                  217
                                                                                            -----------------    -----------------
                TOTAL CURRENT LIABILITIES                                                             3,578                3,596

LONG-TERM DEBT                                                                                        4,953                5,060

CAPITALIZED LEASE OBLIGATIONS                                                                           296                  276

SELF-INSURANCE                                                                                          334                  307

DEFERRED INCOME TAXES                                                                                    29                   71

OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS                                                        744                  756

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 - 386
     shares and 407 shares, respectively                                                                386                  407
   Capital in excess of par                                                                             125                   94
   Accumulated other comprehensive loss                                                                 (19)                 (19)
   Retained earnings                                                                                  5,043                5,433
                                                                                            -----------------    -----------------
                                                                                                      5,535                5,915
                                                                                            -----------------    -----------------
                                                                                                    $15,469             $ 15,981
                                                                                            =================    =================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


<PAGE>


                                ALBERTSON'S, INC.
                      CONDENSED CONSOLIDATED CASH FLOWS
                                  (in millions)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                                  39 WEEKS ENDED
                                                                                    --------------------------------------------
                                                                                        October 31,               November 1,
                                                                                               2002                      2001
                                                                                    ------------------     ---------------------
<S>                                                                                          <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings                                                                             $   364                  $    211
     Adjustments to reconcile net earnings to net cash provided by operating
     activities:
       Depreciation and amortization                                                            730                       737
       Goodwill amortization                                                                                               43
       Discontinued operations noncash charges                                                  347
       Restructuring and other noncash (credits) charges                                         (2)                      450
       Noncash merger-related credits                                                                                     (13)
       Net (gain) loss on asset sales                                                            (1)                       15
       Net deferred income taxes and other                                                       48                      (149)
       Decrease in cash surrender value of Company-owned life insurance                          17                        21
     Changes in operating assets and liabilities:
         Receivables, prepaid expenses and other                                                190                        16
         Inventories                                                                             51                      (196)
         Accounts payable                                                                        (6)                      205
         Other current liabilities                                                              (39)                      131
         Self-insurance                                                                          41                        51
         Unearned income                                                                         (3)                      (25)
         Other long-term liabilities                                                            (12)                      (36)
                                                                                    ------------------     ---------------------
   Net cash provided by operating activities                                                  1,725                     1,461

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                      (1,050)                   (1,108)
   Proceeds from disposal of land, buildings and equipment                                       91                        67
   Proceeds from disposal of assets held for sale                                               472                        97
   Other                                                                                         10                         2
                                                                                    ------------------     ---------------------
   Net cash used in investing activities                                                       (477)                     (942)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term borrowings                                                                                     613
   Net commercial paper and bank line activity                                                                           (859)
   Payments on long-term borrowings                                                            (116)                      (70)
   Cash dividends paid                                                                         (232)                     (231)
   Proceeds from stock options exercised                                                         16                        19
   Common Stock purchased and retired                                                          (547)
                                                                                    ------------------     ---------------------
   Net cash used in financing activities                                                       (879)                     (528)
                                                                                    ------------------     ---------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                            369                        (9)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                 61                        37
                                                                                    ------------------     ---------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                  $   430                  $     28
                                                                                    ==================     =====================


</TABLE>

See Notes to Condensed Consolidated Financial Statements.


<PAGE>


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


NOTE A - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

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

     As of October 31, 2002,  the Company  operated  2,285 stores in 31 Western,
Midwestern,   Eastern  and  Southern   states  and  17   distribution   centers,
strategically  located in the  Company's  operating  markets.  The Company  also
operated 189 fuel centers near existing stores.

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. The statements have been prepared by the Company pursuant
to the rules and regulations of the Securities and Exchange Commission.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States  have  been  condensed  or  omitted  pursuant  to such  rules and
regulations.  It  is  suggested  that  these  condensed  consolidated  financial
statements be read in conjunction with the consolidated financial statements and
accompanying  notes  included in the  Company's  2001 Annual Report on Form 10-K
filed with the Securities and Exchange Commission on April 18, 2002. The results
of  operations  for the 39 weeks ended  October 31,  2002,  are not  necessarily
indicative of results for a full year.

     The Company's Condensed  Consolidated Balance Sheet as of January 31, 2002,
has been derived from the audited Consolidated Balance Sheet as of that date.

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

     The  financial   statement   presentation   includes  the  results  of  two
significant  restructuring  initiatives  that have been  implemented in 2001 and
2002.  On  July  18,  2001,  the  Company's   Board  of  Directors   approved  a
restructuring  plan that  included  the  closure of 165  underperforming  retail
stores, reduction of administrative and corporate overhead and consolidation and
elimination  of four division  offices (refer to "Note E -  Restructuring").  On
March 13, 2002,  the Company's  Board of Directors  approved the second phase of
the restructuring plan which included the complete exit of four  underperforming
markets  resulting  in the sale or  closure  of 95 stores  and two  distribution
centers (refer to "Note D -  Discontinued  Operations/Market  Exits").  Although
these  decisions were similar,  the adoption of SFAS No. 144 "Accounting for the
Impairment  or  Disposal  of  Long-Lived  Assets" on February 1, 2002 caused the
financial statement presentation of these actions to be dissimilar (SFAS No. 144
does not allow for the retroactive application of its provisions). The Company's
2001  financial  statements  have been  restated  to  classify  the  results  of
operations  for the 95 stores  and two  distribution  centers  as  "discontinued
operations";   their  net  sales,  cost  of  sales,  and  selling,  general  and
administrative  expenses have been reflected on a net basis in the "discontinued
operations:   operating  profit  (loss)"  line  in  the  accompanying  condensed
consolidated  earnings  statements.  The net sales,  cost of sales, and selling,
general and administrative  expenses generated by the 165 stores are included in
those  respective  lines in the  accompanying  condensed  consolidated  earnings
statements for the periods prior to their sale or closure.

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

Inventory
     Net earnings reflects the application of the LIFO method of valuing certain
inventories.  Quarterly inventory  determinations under LIFO are partially based
on assumptions as to projected  inventory  levels at the end of the year and the
rate of inflation for the year.  Albertson's recorded pretax LIFO expense of $10
and  $23 for the 39  weeks  ended  October  31,  2002,  and  November  1,  2001,
respectively.

Earnings Per Share ("EPS")
     Basic  EPS is based on the  weighted  average  outstanding  common  shares.
Diluted EPS is based on the weighted average  outstanding common shares adjusted
by the dilutive effect of stock options.

   The following table details the computation of EPS (shares in millions):
<TABLE>
<CAPTION>

                                                     13 Weeks Ended                               39 Weeks Ended
                                        ------------------------------------------    ----------------------------------------
                                             October 31,             November 1,          October 31,             November 1,
                                                    2002                    2001                 2002                    2001
                                        -------------------    -------------------   ------------------    -------------------
<S>                                                <C>                     <C>                  <C>                     <C>
Basic EPS:
    Net earnings                                   $ 192                   $ 176                $ 364                   $ 211
                                        ===================    ===================   ==================    ===================
    Weighted average common shares
       outstanding                                   396                     406                  403                     406
                                        -------------------    -------------------   ------------------    -------------------
    Basic EPS                                      $0.48                   $0.43                $0.90                   $0.52
                                        ===================    ===================   ==================    ===================

Diluted EPS:
    Net earnings                                   $ 192                   $ 176                $ 364                   $ 211
                                        ===================    ===================   ==================    ===================
    Weighted average common shares
       outstanding                                   396                     406                  403                     406
    Potential common share equivalents                 1                       3                    2                       2
                                        -------------------    -------------------   ------------------    -------------------
    Weighted average shares
       outstanding                                   397                     409                  405                     408
                                        -------------------    -------------------   ------------------    -------------------
    Diluted  EPS                                   $0.48                   $0.43                $0.90                   $0.52
                                        ===================    ===================   ==================    ===================


Calculation of potential common share equivalents:
    Options to purchase potential common
       shares                                         7                       17                    9                      17
    Common shares assumed purchased with
       potential proceeds                            (6)                     (14)                  (7)                    (15)
                                              -------------      -----------------    ------------------    -------------------
    Potential common share equivalents                1                        3                    2                       2
                                              =============      =================    ==================    ===================

Calculation of potential common shares assumed purchased with potential
  proceeds:
    Potential proceeds from exercise of
       options to purchase common shares           $147                     $477                 $215                    $460
    Common stock price used under the
       treasury stock method                     $26.03                   $33.16               $29.61                  $30.88
    Potential common shares assumed
       purchased with potential proceeds              6                       14                    7                      15
</TABLE>

     Outstanding options to purchase shares excluded from potential common share
equivalents  (option price  exceeded the average market price during the period)
amounted  to 19.9  million  and 7.9  million  shares  for the 13 weeks  and 19.4
million and 8.9  million  shares for the 39 weeks ended  October 31,  2002,  and
November 1, 2001, respectively.



<PAGE>


Comprehensive Income
     Comprehensive  income refers to revenues,  expenses,  gains and losses that
are  not  included  in  net  earnings  but  rather  are  recorded   directly  in
stockholders' equity. Items of comprehensive income other than net earnings were
insignificant for the periods ended October 31, 2002, and November 1, 2001.

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

NOTE B - RECENTLY ADOPTED ACCOUNTING STANDARDS
     In June 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting Standard (`SFAS") No. 142 "Goodwill and Other
Intangible  Assets" which  requires  that an  intangible  asset that is acquired
shall  be  initially  recognized  and  measured  based on its  fair  value.  The
statement also provides that goodwill and indefinite life intangibles should not
be amortized, but shall be tested for impairment annually, or more frequently if
circumstances indicate potential impairment,  through a comparison of fair value
to its carrying amount.

     The Company adopted the provisions of SFAS No. 142 on February 1, 2002, and
accordingly no goodwill amortization was recorded for the 39 weeks ended October
31, 2002. The Company has completed its  transitional  impairment  review of its
goodwill as of February 1, 2002. The review was performed based on the Company's
reporting  units which have been defined as the  Company's 11 current  operating
divisions. Historically,  goodwill balances from business combinations accounted
for as purchases were allocated to each acquired store.  When this statement was
adopted, the aggregate of the goodwill allocated to the stores in each reporting
unit became the reporting  units' goodwill  balance.  In order to determine if a
reporting  unit's  goodwill was impaired,  a combination  of internal  analysis,
focusing on each reporting unit's implied EBITDA multiple, and estimates of fair
value from a  valuation  specialists  firm were used.  Based on these  analyses,
there was no  impairment  of goodwill at the  adoption  date.  The Company  will
analyze  goodwill for impairment  annually  beginning in the fourth quarter 2002
unless  circumstances change that would warrant an interim review as required by
the statement.

     The  Company  adopted  SFAS No.  144,  "Accounting  for the  Impairment  or
Disposal  of  Long-Lived  Assets,"  effective  February  1,  2002.  SFAS No. 144
replaces SFAS No. 121  regarding  impairment  losses on long-lived  assets to be
held and used or to be disposed of. The adoption of this standard did not have a
material  impact on the  Company's  impairment  policy.  However,  the  standard
broadens the definition of what constitutes a discontinued operation and how the
results of a  discontinued  operation  are to be measured  and  presented.  This
resulted  in  classifying  the  operations  of  certain  stores as  discontinued
operations in the Company's Condensed  Consolidated  Earnings Statements.  Under
this standard, a discontinued  operation is based on identifiable cash flows and
therefore is defined as an individual store.  Individual discontinued operations
resulting from normal store  closures are not  significant in the aggregate and,
therefore,  are not presented as discontinued  operations.  Activity  associated
with the Company's  market exit plan  involving the sale or closure of 95 stores
and two  distribution  centers has been  presented  as  discontinued  operations
(refer to "Note D - Discontinued Operations/Market Exits.")

NOTE C - GOODWILL
     Albertsons adoption of SFAS No. 142 eliminated the amortization of goodwill
beginning in the first quarter of 2002.  The following  table adjusts net income
and net income per share for the adoption of SFAS No. 142:
<TABLE>
<CAPTION>
                                                        13 Weeks Ended                            39 Weeks Ended
                                              -----------------------------------      --------------------------------------
                                                 October 31,           November 1,         October 31,          November 1,
                                                        2002                  2001                2002                 2001
                                              ----------------    -----------------    -----------------    -----------------
<S>                                                     <C>                  <C>                  <C>                 <C>
Net earnings as reported                                $192                 $ 176                $364                $ 211
Add back goodwill amortization, net of tax                                      14                                       41
                                              ----------------    -----------------    -----------------    -----------------
Adjusted net earnings                                   $192                 $ 190                $364                $ 252
                                              ================    =================    =================    =================


Basic EPS                                              $0.48                $ 0.43               $0.90                $0.52
Add back goodwill amortization, net of tax                                    0.03                                     0.10
                                              ----------------    -----------------    -----------------    -----------------
Adjusted Basic EPS (a)                                 $0.48                $ 0.47               $0.90                $0.62
                                              ================    =================    =================    =================
Diluted EPS                                            $0.48                 $0.43               $0.90                $0.52
Add back goodwill amortization, net of tax                                    0.03                                     0.10
                                              ----------------    -----------------    -----------------    -----------------
Adjusted Diluted EPS                                   $0.48                $ 0.46               $0.90                $0.62
                                              ================    =================    =================    =================
</TABLE>
(a) Due to rounding, the  individual components do not sum to the total adjusted
basic earnings per share for the 13 weeks ended November 1, 2001.


<PAGE>

   Changes in the net carrying amount of goodwill were as follows:
<TABLE>
<CAPTION>
<S>     <C>                                                         <C>
         Goodwill as of January 31, 2002                           $1,467
         Write-off due to market exits                                (68)
                                                            ---------------
         Goodwill as of October 31, 2002                           $1,399
                                                            ===============
</TABLE>
     In connection  with the complete exit of certain markets  discussed  below,
the Company  wrote off $68 of goodwill,  net for the quarter  ended May 2, 2002.
The goodwill  written off arose from the original  acquisition  of the operating
assets in those markets.

     The carrying  amount of  intangible  assets as of October 31, 2002,  was as
follows:
<TABLE>
<CAPTION>
<S>       <C>                                                       <C>
           Amortized:
                  FMV of operating leases                           $ 233
                  Customer lists and other contracts                   52
                                                              -------------
                                                                      285
           Accumulated amortization                                  (169)
                                                              -------------
                                                                      116
           Non-Amortized:
                  Liquor licenses                                      39
                  Pension related intangible assets                    29
                                                              -------------
                                                                       68
                                                              -------------
                                                                    $ 184
                                                              =============
</TABLE>

     Amortized intangible assets have remaining useful lives from 2 to 38 years.
Projected amortization expense for intangible assets is: $24, $21, $18, $12, and
$7, for Fiscal 2002, 2003, 2004, 2005 and 2006, respectively.

NOTE D - DISCONTINUED OPERATIONS/MARKET EXITS
     On March 13, 2002,  the  Company's  Board of Directors  approved the second
phase of the Company's  restructuring  plan designed to improve future financial
results and to drive future competitiveness. This phase of the plan included the
complete exit of four underperforming markets:  Memphis,  Tennessee;  Nashville,
Tennessee;  Houston,  Texas; and San Antonio,  Texas.  This involved the sale or
closure of 95 stores and two distribution centers. These sales and closures were
evaluated  for lease  liability  or asset  impairment,  including  goodwill,  in
accordance with the Company's policy. The operating results and gains and losses
related to these market exits have been included in  discontinued  operations in
the Company's Condensed  Consolidated Earnings Statements.  Restatement of prior
year  operating  activity  was  required  for  the  operations  of the  business
presented as discontinued operations in connection with the adoption of SFAS No.
144.

     The discontinued  operations  generated sales of $290 and $1,006 for the 39
weeks ended  October  31,  2002,  and  November  1, 2001,  respectively,  and an
operating  loss of $437 and  operating  profit of $8,  respectively.  For the 39
weeks ended October 31, 2002, the discontinued operations operating loss of $437
consisted of operating losses of $49 and asset  impairments,  lease  liabilities
and other costs of $388 as described in the following table:

<TABLE>
<CAPTION>
                                                                 Asset                  Lease           Other
                                                           Impairments            Liabilities           Costs       Total
                                                    -------------------    -------------------    -----------    -----------
<S>                                                              <C>                    <C>            <C>           <C>
     Additions                                                   $ 401                   $ 26           $ 17          $ 444
     Adjustments                                                   (54)                   (10)             8            (56)
     Utilization                                                  (347)                    (3)           (25)          (375)
                                                    -------------------    -------------------    -----------    -----------
  Reserve Balance at October 31, 2002                            $  -                    $ 13           $  -          $  13
                                                    ===================    ===================    ===========    ===========
</TABLE>

     The reserve  balance of $13 as of October  31,  2002 is  included  with the
restructuring reserves, in the Company's Condensed Consolidated Balance Sheet.

     Asset  impairment  adjustments  resulted from the Company  realizing  sales
proceeds in excess of amounts  originally  estimated  on stores  disposed of and
increases to net  realizable  values for stores under  contract for sale.  Lease
liability adjustments  represent more favorable negotiated  settlements than had
been originally estimated.
<PAGE>

     Assets related to  discontinued  operations are recorded at their estimated
net  realizable  value of $81 as of October 31, 2002 and are  reported as assets
held for sale in the  Company's  Condensed  Consolidated  Balance  Sheet.  These
assets include land,  buildings,  equipment and leasehold  improvements  and are
being  actively  marketed.  As of  October  31,  2002,  all 95  stores  and both
distribution  centers had been sold or closed. In addition,  77 of the 95 stores
and one distribution  center had been sold or were under contract for sale as of
October 31, 2002.

     Other  costs  consist  of  amounts  paid in  connection  with  notification
regulations and negotiated contract terminations.

     In connection with the market exit plan, the Company  recorded pre-tax loss
from  discontinued  operations of $3 during the 13 weeks ended October 31, 2002.
Pre-tax credits of $9 were recognized for asset impairment adjustments resulting
from the  Company  realizing  sales  proceeds  in excess of  amounts  originally
estimated  on stores  disposed of and  increases  to net  realizable  values for
stores under contract for sale.  Pre-tax charges of $1 were recognized for lease
liability  adjustments.  Pre-tax  charges of $11 were  recognized  for operating
losses.  During the 13 weeks ended November 1, 2001 the Company recorded pre-tax
operating losses of $1 for these discontinued operations.

NOTE E - RESTRUCTURING
     On July 17, 2001,  the  Company's  Board of Directors  approved the initial
phase of a restructuring  plan designed to improve future financial  results and
to drive  future  competitiveness.  The plan  included  certain  exit  costs and
employee termination benefits, as described below.
<TABLE>
<CAPTION>

<S>     <C>                                                            <C>
         Action                                                        Status

         Reduction in administrative and corporate overhead            Substantially complete

         Closure of 165 underperforming retail stores                  158 closed as of October 31, 2002

         Consolidation and elimination of four division offices        Completed

         Process streamlining                                          Ongoing
</TABLE>
     In connection with this  restructuring  plan, the Company  recorded pre-tax
credits of $19, consisting of $27 of restructuring credits and $8 of other costs
included with selling,  general and  administrative  expenses,  for the 39 weeks
ended October 31, 2002. The following  table presents the pre-tax  restructuring
credits  and  charges,  incurred by  category  of  expenditure,  and the related
restructuring  reserves included in the Company's Condensed Consolidated Balance
Sheets:
<TABLE>
<CAPTION>
                                                        Employee
                                                       Severance                 Asset             Lease
                                                           Costs           Impairments       Liabilities            Total
                                                  --------------    ------------------    --------------    -------------
  <S>                                                      <C>                    <C>              <C>              <C>
  Balance at January 31, 2002                              $ 11                   $ -              $ 50             $ 61
     Adjustments                                              2                   (21)               (8)             (27)
     Utilization                                            (12)                   21               (12)              (3)
                                                  --------------    ------------------    --------------    -------------
  Balance at October 31, 2002                              $  1                   $ -              $ 30             $ 31
                                                  ==============    ==================    ==============    =============
</TABLE>
     Employee severance costs consist of severance pay, health care continuation
costs,  and  outplacement  service costs for employees who  participated  in the
Company's  Voluntary  Separation  Plan and for employees who were  terminated or
notified of termination under the Company's  Involuntary  Severance Plan. In the
initial phase of the  restructuring  plan, 1,341  managerial and  administrative
positions above store level were identified for  termination.  As of October 31,
2002, 1,292 positions had been terminated.

     Asset  impairment  adjustments  resulted from the Company  realizing  sales
proceeds in excess of amounts  originally  estimated  on stores  disposed of and
increases to the net realizable values for stores under contract for sale. Lease
liability adjustments  represent more favorable negotiated  settlements than had
been originally estimated.

     Assets  related  to  restructuring  include  land,  buildings,   equipment,
leasehold  improvements  and  inventory  for stores  that were  included  in the
initial  phase of the  restructuring  plan.  These  assets are recorded at their
estimated net realizable value of $46 as of October 31, 2002 and are reported as
assets held for sale in the Company's Condensed Consolidated Balance Sheet.

     As  part  of  the  Company's  restructuring  plan,  all  stores'  financial
performance  were reviewed  utilizing a methodology  based on return on invested
capital.  Based on these reviews,  the Company identified and committed to close
and dispose 165  underperforming  stores in 25 states. All stores identified for
closure  were  evaluated  for lease  liability  or asset  impairment,  including
goodwill,  in accordance with the Company's  policy. As of October 31, 2002, 158
stores had been closed.  The Company  will close the  majority of the  remaining
stores by fiscal year end.
<PAGE>

     For the 13 weeks ended October 31, 2002,  the Company  recorded net pre-tax
credits of $7 for the  restructuring  plan. Pretax credits of $5 were recognized
for assets  impairment  adjustments  resulting from the Company  realizing sales
proceeds in excess of amounts  originally  estimated  on stores  disposed of and
increases  to net  realizable  values for  stores  under  contract  for sale and
pre-tax credits of $2 were recognized for severance  liability  adjustments.  In
the third quarter of the prior year the Company  recorded  pre-tax charges of $4
consisting of $1 for assets writedown and $3 of severance costs.

NOTE F - CLOSED STORE RESERVES
     When executive  management  approves and commits to closing or relocating a
store, the remaining investment in land, building,  leasehold,  and equipment is
reviewed for impairment and the difference between book value and estimated fair
market  value,  less  selling  costs,  is  recorded  in  selling,   general  and
administrative  expenses.  For properties under long-term lease agreements,  the
present  value of any  remaining  liability  under the lease,  discounted  using
risk-free  rates and net of  expected  sublease  recovery,  is  recognized  as a
liability  and  expensed.  The following  table shows the pre-tax  expense,  and
related reserves, for closed stores and other surplus property:
<TABLE>
<CAPTION>

                                                                    Lease                      Asset
                                                              Liabilities                Impairments               Total
                                                   ----------------------     ----------------------     ---------------
<S>                                                                 <C>                       <C>                  <C>
Balance at January 31, 2002                                         $ 39                      $   -                $ 39
    Additions                                                          8                         17                  25
    Adjustments                                                        1                         10                  11
    Utilization                                                      (12)                       (27)                (39)
                                                   ----------------------     ----------------------     ---------------
Balance at October 31, 2002                                         $ 36                      $   -                $ 36
                                                   ======================     ======================     ===============
</TABLE>
     As of October 31,  2002,  $33 of the  reserve  balance  was  included  with
accounts  payable  and  the  remaining  $3 was  included  with  other  long-term
liabilities and deferred credits in the Company's Condensed Consolidated Balance
Sheet.  The related assets are recorded at their estimated  realizable  value of
$29 as of October 31, 2002 and reported as assets held for sale in the Company's
Condensed Consolidated Balance Sheet.

NOTE G - INDEBTEDNESS
     In support of the Company's commercial paper program, the Company has three
credit facilities  totaling $1,400.  These agreements contain certain covenants,
the most  restrictive  of which  requires  the Company to maintain  consolidated
tangible net worth, as defined,  of at least $3,000 and a fixed charge coverage,
as  defined,  of at least 2.7  times.  As of October  31,  2002,  the  Company's
consolidated  tangible net worth, as defined, was approximately  $3,928, and its
fixed charge coverage, as defined, was 4.3 times. No borrowings were outstanding
under these credit facilities as of October 31, 2002.

NOTE H - SUPPLEMENTAL CASH FLOW INFORMATION
   Selected cash payments and noncash activities were as follows:
<TABLE>
<CAPTION>

                                                                                   39 Weeks Ended
                                                              --------------------------------------------------------
                                                                      October 31, 2002              November 1, 2001
                                                              --------------------------    ---------------------------
<S>                                                                              <C>                           <C>
     Cash payments for:
        Income taxes                                                             $ 302                         $ 324
        Interest, net of amounts capitalized                                       253                           251
     Noncash transactions:
        Capitalized leases incurred                                                 46                            55
        Capitalized leases terminated                                               14                            13
        Tax benefits related to stock options                                        2                             3
        Decrease in cash surrender value of Company-owned
           life insurance                                                           17                            21
        Deferred stock units expense                                                14                            14

</TABLE>

NOTE I - CAPITAL STOCK
     The Board of Directors adopted a program on December 3, 2001,  authorizing,
at management's discretion, the Company to purchase and retire up to $500 of the
Company's common stock beginning  December 6, 2001 through December 31, 2002. On
September 5, 2002, the Board of Directors authorized an increase of $500 to this
program  for a total  of  $1,000  of the  Company's  common  stock  that  may be
purchased and retired by the Company through December 31, 2002.  Through October
31, 2002, 20.9 million shares were purchased and retired for $547, at an average
price of $26.18 per share under this program. Subsequent to October 31, 2002 and
through  December 6, 2002,  the Company had  purchased and retired an additional
7.2 million shares for $157 under this program at an average price of $21.86.
<PAGE>

     The Board of Directors adopted a stock buyback program on December 9, 2002,
authorizing,  at management's discretion,  the Company to purchase and retire up
to $500 of the  Company's  common  stock  beginning  January  1, 2003 and ending
December 31, 2003.

NOTE J - 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  Albertson's  as
well as American Stores Company, American Drug Stores, Inc., Sav-on Drug Stores,
Inc. and Lucky Stores,  Inc.,  wholly-owned  subsidiaries of the Company, in the
Superior Court for the County of Los Angeles,  California (Mario Gardner, et al.
v.  Albertson's,  Inc.,  American  Stores Company,  American Drug Stores,  Inc.,
Sav-on Drug Stores,  Inc. and Lucky Stores,  Inc.) by bonusing  managers seeking
recovery of additional bonus payments based upon plaintiffs' allegation that the
net profit upon which their bonuses were calculated improperly included workers'
compensation  costs, cash shortages,  premises  liability and "shrink" losses in
violation of California law. In October 2001 the court granted summary  judgment
in favor of the Sav-on Drug  Stores  plaintiffs  on this  liability  theory.  In
August 2001 a class action  complaint with very similar  claims,  also involving
the bonusing  managers,  was filed against  Albertson's 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  (Taft Petersen et
al. v. Lucky Stores,  Inc.,  American Stores Company and Albertson's,  Inc.). In
June 2002 the cases were  consolidated  and in August  2002 a class  action with
respect to the  consolidated  case was  certified by the court.  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 action 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  Albertson's  as
well as American Stores Company, American Drug Stores, Inc., Sav-on Drug Stores,
Inc. and Lucky Stores,  Inc.,  wholly-owned  subsidiaries of the Company, in the
Superior Court for the County of Los Angeles,  California (Mario Gardner, et al.
v. American  Stores  Company,  Albertson's,  Inc.,  American Drug Stores,  Inc.,
Sav-on Drug Stores,  Inc.  and Lucky  Stores,  Inc.) by  assistant  managers and
operating   managers   seeking  recovery  of  overtime  based  upon  plaintiffs'
allegation that they were improperly  classified as exempt under California law.
A class  action  with  respect to Sav-on  Drug  Stores  assistant  managers  was
certified by the court.  A case with very similar  claims,  also  involving  the
assistant  managers and  operating  managers,  was filed  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
decertification  of the  Gardner  case  is on hold  pending  the  result  in the
California  Supreme  Court.  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., a wholly-owned  subsidiary of the Company, in the Circuit Court of
Cook County,  Illinois  (Maureen Baker,  et al., v. Jewel Food Stores,  Inc. and
Dominick's Supermarkets,  Inc., Case No. 00L 009664) alleging milk price fixing.
In December 2001 the Company's motion for summary judgment was denied, and leave
to  appeal  was  denied  in April  2002.  In July  2002 a class  was  certified,
consisting  of all people  residing in the  Chicagoland  area who bought milk at
retail from either or both of the defendants  between August 23, 1996 and August
23, 2000.  Trial is scheduled for January 2003. 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 action will have a material  adverse  effect on
the Company's financial condition, results of operations, or cash flows.
<PAGE>

     An agreement has been 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,  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 meet  eligibility  criteria  have been allowed to present
their 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  80,000
associates  and  former  associates.   Approximately  6,000  claims  forms  were
returned,   of  which   approximately   5,000  were  deemed  by  the  settlement
administrator to be untimely or incapable of valuation.  The court will consider
the  manner in which  claimants  may cure  such  defects.  Based on  information
received from the claims administrator,  the Company estimates that the value of
the  approximately  1,000 other  claims is up to $13.5,  although  many of those
claims  amounts are still  subject to challenge  by the Company.  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 in
respect  of valid  claims.  Subject  to these and other  uncertainties,  the $37
pre-tax  ($22  after-tax)  charge  recorded by the Company in 1999  continues to
reflect  the  Company's  current  estimate  of  its  total  monetary  liability,
including  attorney  fees payable to counsel for the  plaintiff  class,  for all
eight cases. During the first quarter of 2001 this accrual was reduced by an $18
cash payment of attorney fees to counsel for the plaintiff class.

     The statements above reflect management's current expectations based on the
information presently available to the Company.  However, these expectations are
subject to  various  uncertainties,  and if the  outcome of one or more of these
matters is unfavorable, the adverse effect on the Company's financial condition,
results of operations or cash flows could be material.

     The Company is also  involved in routine  legal  proceedings  incidental to
operations.   The  Company  utilizes  various  methods  of  alternative  dispute
resolution,   including  settlement   discussions,   to  manage  the  costs  and
uncertainties  inherent in the litigation  process.  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.

NOTE K - NEW ACCOUNTING STANDARDS
     In July  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations."  SFAS No. 143 will become effective for Albertson's on
January  31,  2003.  The  Company is  currently  analyzing  the effect that this
standard will have on its financial statements.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." SFAS No. 146 addresses  financial
accounting and reporting for costs  associated with exit or disposal  activities
and nullifies EITF Issue No. 94-3,  "Liability  Recognition for Certain Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs  Incurred in a  Restructuring)."  SFAS No. 146 requires  recognition  of a
liability for the costs  associated  with an exit or disposal  activity when the
liability is incurred,  as opposed to when the entity commits to an exit plan as
required  under EITF Issue No.  94-3.  The Company is required to adopt SFAS No.
146 for exit or disposal  activities that are initiated after December 31, 2002.
SFAS No.  146 will  primarily  impact  the  timing of the  recognition  of costs
associated with any future exit or disposal activities.



<PAGE>


                     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 Operating

Operational Initiatives
     The Company  continues to be focused on its five  strategic  imperatives as
discussed  on  pages  49  and  50  of  the  Company's   2001  Annual  Report  to
Stockholders.

1)   Aggressive  Cost  and  Process  Control.  Through  the  continued  focus on
     expenses, overhead and store processes the Company has achieved its initial
     target of $250 in  annualized  expense  reductions  and remains on track to
     reduce costs by a total of $500 by the second  quarter of 2003. The tougher
     than expected  economy coupled with a more robust  competitive  environment
     has driven the Company to increase its annualized  expense reduction target
     to $750.

2)   Maximize Return on Invested Capital.  The  restructuring  plan announced on
     July  18,  2001,   that  involved  the  closing  and   disposition  of  165
     underperforming  stores is proceeding  as planned.  As of October 31, 2002,
     158 of these  stores had been sold or closed.  The  Company  will close the
     majority of  remaining  stores by fiscal year end. In  connection  with the
     Company's  market exit plan  announced on March 13,  2002,  the Company has
     sold  or  closed  95  stores  and  two  distribution   centers  located  in
     non-strategic markets.

3)   Customer-focused  Approach  to  Growth.  The  Company's  "Focus  on  Fresh"
     initiative has resulted in strong gross profit performance in the Company's
     fresh  departments.  During  2002 the Company  rolled out the loyalty  card
     programs in four  divisions  and converted to the dual brand concept in two
     markets.  The Company is  studying  consumer  preferences  related to these
     programs and will develop future roll-out plans based on this research.


4)   Company-wide  Focus on Technology.  The Company has embraced a company-wide
     focus on  technology  with the goal of  becoming an  industry  leader.  The
     Company  has  committed  a greater  share of its  capital  expenditures  to
     information and process technology to serve customers and improve operating
     efficiencies.  The Company  extended its  Albertsons.com  on-line  shopping
     service  to four  markets  in the  current  year and  plans to roll out the
     service to additional markets in the future.

5)   Energized   Associates.   The  Company  has  continued  to  build  stronger
     communication   systems,   improve  training  programs  and  implement  new
     performance-based reward programs in order to energize associates.

Comparability of Company's Operating Results
     The financial  statement  presentation  for two  significant  restructuring
initiatives  that  have  been  implemented  in the  past  two  years  should  be
considered in analyzing the Company's accompanying operating results in 2002 and
2001. Even though the Company's decision to sell or close 165 stores on July 18,
2001 was similar to its decision to sell or close 95 stores and two distribution
centers on March 13,  2002,  the  adoption of SFAS No. 144  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets" after the first phase but before
the  second  phase  of  the   restructuring   caused  the  financial   statement
presentation of these actions to be dissimilar. (SFAS No. 144 does not allow for
retroactive  application of its provisions,  so each phase of the  restructuring
plan followed  different  reporting  guidelines.)  The Company's  2001 financial
statements  have been restated to classify the results of operations  for the 95
stores and two  distribution  centers as  "discontinued  operations";  their net
sales, cost of sales, and selling, general and administrative expenses have been
reflected  on a net  basis in the  "discontinued  operations:  operating  profit
(loss)" line in the condensed  consolidated earnings statements.  The net sales,
cost of sales, and selling, general and administrative expenses generated by the
165 stores are included in those respective lines in the condensed  consolidated
earnings statements for the periods prior to their sale or closure.



<PAGE>


Results of Operations - Third Quarter
     The following table sets forth earnings  components  expressed as a percent
to  sales  and  the  year-to-year  percentage  changes  in the  amounts  of such
components:
<TABLE>
<CAPTION>
                                                                      Percent to Sales
                                                                       13 weeks ended                     Percentage
                                                         ------------------------------------------       in Dollars
                                                            October 31,           November 1,               Increase
                                                                   2002                  2001             (Decrease)
                                                         -------------------    -------------------    --------------

<S>                                                              <C>                   <C>                    <C>
    Sales                                                        100.00%               100.00%                (4.2)%
    Gross profit                                                  29.31                 28.45                 (1.3)
    Selling, general and administrative expenses                  24.86                 23.82                  0.0
    Restructuring (credits) charges and other                     (0.08)                 0.01                  n.m.
    Operating profit                                               4.53                  4.62                 (6.3)
    Interest, net                                                 (1.01)                (1.22)               (21.2)
    Other expenses, net                                                                 (0.08)                 n.m.
    Earnings from continuing operations before income
       taxes                                                       3.52                  3.32                  1.5
    Net earnings from continuing operations                        2.24                  1.96                  9.4
    Net loss from discontinued operations                         (0.02)                (0.01)                 n.m.
    Net earnings                                                   2.22                  1.95                  8.7

n.m. - not meaningful
</TABLE>
     Sales for the 13 weeks  ended  November  1, 2001  have been  restated  from
previously  reported  amounts  to exclude  sales  associated  with  discontinued
operations  which  represent  sales of the 95 stores  included in the  Company's
market  exit  plan.  The  decrease  in  reported  sales is  attributable  to the
Company's  restructuring plan initiated in July 2001, which included the sale or
closure of 165 stores,  and the sale of 80 New England  Osco  drugstores  in the
fourth  quarter of 2001.  (These stores' sales are included in the 2001 and 2002
periods  until  their  closure.)  The sales  decrease  was offset in part by the
Company's  capital  expansion  program.  Sales were also  impacted by  declining
consumer confidence and escalating  competitive activity.  Identical store sales
decreased 2.0% and comparable  store sales,  which include  replacement  stores,
decreased  1.5%.  During  the  third  quarter  of 2002,  the  Company  opened 19
combination  food  and  drug  stores,  2  warehouse  stores,  and 7 stand  alone
drugstores,  while closing 4 combination  food and drug stores,  2  conventional
stores, 2 warehouse stores, and 2 drugstores.  Of the total 10 store closings, 3
related to the Company's  restructuring  plan. As of the end of third quarter of
2002,  net retail  square  footage  decreased  by 8.3% from the end of the third
quarter of 2001. Management estimates that from the end of third quarter of 2001
to to the end of the current quarter,  overall deflation in products the Company
sells  was  approximately  0.7%,  as  compared  to  inflation  of  1.2%  in  the
corresponding period ended November 1, 2001.

     In addition to store  development,  the Company has increased sales through
its  continued  implementation  of best  practices  across its divisions and its
customer-focused  approach  to growth.  These  programs  include:  the "Focus on
Fresh"  initiative;  a renewed  focus on customer  service  through the "Service
First, Second to None" program; expansion of the preferred loyalty card program;
dual branded combination stores; and expansion of the on-line shopping service.

     Gross  profit,  as a  percent  to  sales,  increased  as a result of strong
performance  in  the  fresh   departments  and   improvements  in  the  pharmacy
department.  Improvements  in the pharmacy  department  resulted from  increased
generic  substitution and improved procurement  practices.  There was no pre-tax
LIFO charge for the 13 weeks  ended  October  31,  2002.  For the 13 weeks ended
November 1, 2001, the pre-tax LIFO charge reduced gross profit by $8 or 0.08% to
sales.

     Total selling,  general and administrative expenses, as a percent to sales,
increased in third  quarter of 2002 as compared to the prior year  primarily due
to higher employee  benefits and insurance  costs. The impact of the elimination
of goodwill  amortization  in 2002 due to the adoption of SFAS 142 was offset by
increased depreciation expense associated with the Company's capital expenditure
programs.

     Net interest expense for the 13 weeks ended October 31, 2002 included a $10
interest  reserve  reversal  due  to  updated   estimates  of  interest  payable
associated  with  certain  federal and state taxes.  In  addition,  net interest
expense  decreased  as compared  to the prior year as a result of lower  average
outstanding debt balances.

     The effective  income tax rate from  continuing  operations  decreased from
41.0% for the 13 weeks  ended  November  1, 2001 to 36.4% for the 13 weeks ended
October  31,  2002.  The  decrease  was caused by the  elimination  of  goodwill
amortization and the reflection of updated  estimates of federal and state taxes
which were lower than amounts previously estimated. For the 13 week period ended
October  31,  2002,  the rate was  reduced to 36.4% to bring the rate for the 39
week period ended  October 31, 2002 down to 38.4% from the 39.2%  estimate  used
for the 26 week period ended August 1, 2002.


<PAGE>


Discontinued Operations, Restructuring and Other Non-Routine Items
     Discontinued  Operations / Market Exits - On March 13, 2002,  the Company's
Board of Directors approved the second phase of the Company's restructuring plan
designed   to   improve   future   financial   results   and  to  drive   future
competitiveness. As a result, the Company completely exited four underperforming
markets:  Memphis,  Tennessee;  Nashville,  Tennessee;  Houston,  Texas; and San
Antonio,  Texas.  These market exits were accomplished  through a combination of
store closures and store sales and involved a total of 95 stores.  In connection
with the market exits,  Albertson's sold its Tulsa, Oklahoma distribution center
to Fleming Companies,  Inc. and closed its Houston,  Texas distribution  center.
The operations and resulting gains and losses related to these market exits have
been  presented as  discontinued  operations in accordance  with the adoption of
SFAS No. 144.

     In  connection  with the market  exit plan,  the Company  recorded  pre-tax
losses from discontinued  operations of $3 during the 13 weeks ended October 31,
2002.  Pre-tax  credits of $9 were recognized for asset  impairment  adjustments
resulting  from the  Company  realizing  sales  proceeds  in excess  of  amounts
originally  estimated  on stores  disposed of and  increases  to net  realizable
values for stores under contract for sale. Pre-tax charges of $1 were recognized
for lease  liability  adjustments.  Pre-tax  charges of $11 were  recognized for
operating  losses.  During  the 13 weeks  ended  November  1,  2001 the  Company
recorded pre-tax operating losses of $1 for these discontinued operations.

     Restructuring - On July 17, 2001, the Company's Board of Directors approved
a restructuring  plan designed to improve future financial  results and to drive
future  competitiveness.  The plan  included  certain  exit  costs and  employee
termination benefits as described below.
<TABLE>
<CAPTION>

<S>     <C>                                                              <C>
         Action                                                          Status

         Reduction in administrative and corporate overhead              Substantially complete

         Closure of 165 underperforming retail stores                    158 closed as of October 31, 2002

         Consolidation and elimination of four division offices          Completed

         Process streamlining                                            Ongoing
</TABLE>

     In  connection  with this  restructuring  plan,  the Company  recorded  net
pre-tax credits of $7 for the 13 weeks ended October 31, 2002. Pretax credits of
$5 were recognized for assets impairment  adjustments resulting from the Company
realizing  sales  proceeds in excess of amounts  originally  estimated on stores
disposed of and increases to net realizable values for stores under contract for
sale  and  pre-tax  credits  of  $2  were  recognized  for  severance  liability
adjustments. In the third quarter of the prior year the Company recorded pre-tax
charges of $4 consisting of $1 for assets writedown and $3 of severance costs.


<PAGE>


     Summary of Discontinued  Operations,  Restructuring  and Other  Non-Routine
Items  - Due to  the  significance  of  discontinued  operations,  restructuring
charges, other non-routine items and the discontinuance of goodwill amortization
on  operating  results,  the  following  table is  presented  to  assist  in the
comparison of selected earnings statement components as reported and as provided
supplementally  to reflect  adjustments  to exclude the effects of these charges
and credits:

<TABLE>
<CAPTION>

                                                          13 Weeks Ended                              13 Weeks Ended
                                                         October 31, 2002                            November 1, 2001
                                              --------------------------------------    ---------------------------------------
                                                         As                       As              As                         As
                                                   Reported    Adj.         Adjusted        Reported      Adj.         Adjusted
                                              ------------- ------- ----- ----------    ------------ --------- -- -------------
<S>                                                  <C>       <C>            <C>             <C>         <C>            <C>
Sales                                                $8,657                   $8,657          $9,036                     $9,036

Cost of sales                                         6,120                    6,120           6,466                      6,466


Selling, general and administrative expenses          2,152                    2,152           2,152      $ (3)(a)        2,133
                                                                                                           (14)(b)
                                                                                                            (2)(c)

Restructuring (credits) charges and other                (7)   $  7 (a)            -               1        (1)(a)            -

Other expenses:
 Interest, net                                          (87)                     (87)           (110)                      (110)
 Other, net                                               -                        -              (7)                        (7)

Income tax expense                                      111      (3)(d)          108             123         3 (d)          126

Discontinued operations:
 Operating (loss) income                                 (3)      3 (e)            -              (1)        1 (e)            -
 Tax (benefit) expense                                   (1)      1 (e)            -               -                          -

</TABLE>

(a)  Relates  to the  Company's  restructuring  plan  adopted  on July 17,  2001
(b)  Adjustment to exclude goodwill amortization
(c)  Other costs and adjustments  related to the Company's  merger with American
     Stores Company
(d)  Tax effect of the various adjustments
(e)  Relates to the Company's market exit plan adopted on March 13, 2002.

Note:  Net earnings per share was not impacted by these  supplemental  items for
       the 13 weeks ended  October 31,  2002.  The impact of these  supplemental
       items was a decrease to reported  diluted net earnings per share of $0.04
       for the 13 weeks ended November 1, 2001.



<PAGE>


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

                                                                      Percent to Sales
                                                                       39 weeks ended                       Percentage
                                                         ------------------------------------------         in Dollars
                                                             October 31,             November 1,              Increase
                                                                    2002                    2001            (Decrease)
                                                         --------------------     -----------------    ---------------

<S>                                                              <C>                     <C>                    <C>
    Sales                                                        100.00%                 100.00%                (2.7)%
    Gross profit                                                  29.29                   28.35                  0.5
    Selling, general and administrative expenses                  24.21                   24.07                 (2.2)
    Restructuring (credits) charges and other                     (0.11)                   1.74                  n.m.
    Merger-related credits                                                                (0.05)                 n.m.
    Operating profit                                               5.19                    2.59                 95.0
    Interest, net                                                 (1.11)                  (1.20)                (9.6)
    Other expenses, net                                           (0.06)                  (0.07)               (16.2)
    Earnings from continuing operations before income
       taxes                                                       4.02                    1.32                195.7
    Net earnings from continuing operations                        2.48                    0.76                216.7
    Net (loss) earnings from discontinued operations              (1.11)                   0.02                  n.m.
    Net earnings                                                   1.37                    0.78                 72.5

n.m. - not meaningful
</TABLE>

     Sales for the 39 weeks  ended  November  1, 2001  have been  restated  from
previously  reported  amounts  to exclude  sales  associated  with  discontinued
operations  which  represent  sales of the 95 stores  included in the  Company's
market exit plan.  The decrease in reported sales is primarily  attributable  to
the Company's restructuring plan initiated in July 2001, which included the sale
or closure of 165 stores,  and the sale of 80 New England Osco drugstores in the
fourth  quarter of 2001.  (These stores' sales are included in the 2001 and 2002
periods  until  their  closure.)  The sales  decrease  was offset in part by the
Company's  capital  expansion  program.  Sales were also  impacted by  declining
consumer confidence and escalating  competitive activity.  Identical store sales
decreased 0.7% and comparable  store sales,  which include  replacement  stores,
decreased  0.1%.  During the 39 weeks ended October 31, 2002, the Company opened
46  combination  food and drug  stores,  2  warehouse  stores and 26 stand alone
drugstores,  while closing 138 combination food and drug stores, 20 conventional
stores, 5 warehouse  stores and 47 drugstores.  Of the total 210 store closings,
174 related to the Company's restructuring plans. As of the end of third quarter
of 2002, net retail square  footage  decreased by 8.3% from the end of the third
quarter of 2001.  Management estimates that from the end of the third quarter of
2001 to the end of the  current  quarter,  overall  deflation  in  products  the
Company  sells was  approximately  0.7%, as compared to inflation of 1.2% in the
corresponding period ended November 1, 2001.

     Sales  results for the 39 weeks  ended  October 31,  2002,  were  favorably
affected by trends and programs  similar to those  experienced  for the 13 weeks
ended  October 31, 2002,  which are  discussed in Results of  Operations - Third
Quarter.

     Gross  profit,  as a  percent  to  sales,  increased  as a result of strong
performance  in  the  fresh   departments  and   improvements  in  the  pharmacy
department.  Improvements  in the pharmacy  department  resulted from  increased
generic substitution and improved procurement practices. The pre-tax LIFO charge
reduced  gross profit by $10 (0.04% to sales) for the 39 weeks ended October 31,
2002, and $23 (0.08% to sales) for the 39 weeks ended November 1, 2001.

     Total selling,  general and administrative expenses, as a percent to sales,
increased  as  compared  to the prior  year  primarily  due to  higher  employee
benefits and insurance costs. The increase was partially offset by a decrease in
salaries.

     Net interest expense for the 39 weeks ended October 31, 2002 included a $10
interest  reserve  reversal  due  to  updated   estimates  of  interest  payable
associated  with  certain  federal and state taxes.  In  addition,  net interest
expense  decreased  as compared  to the prior year as a result of lower  average
outstanding debt balances.

     The effective  income tax rate from  continuing  operations  decreased from
42.5% for the 39 weeks  ended  November  1, 2001 to 38.4% for the 39 weeks ended
October 31, 2002.  The decrease was caused by higher  earnings  from  continuing
operations,  the  elimination  of goodwill  amortization  and the  reflection of
updated  estimates  of federal  and state  taxes  which were lower than  amounts
previously estimated.

<PAGE>


Discontinued Operations, Restructuring and Other Non-Routine Items
     Discontinued Operations / Market exits - In connection with the market exit
plan, the Company recorded pre-tax charges from discontinued  operations of $437
during the 39 weeks ended October 31, 2002. The pre-tax charges are comprised of
$347 of charges on the write-down of assets to estimated net  realizable  value,
$16 of charges on lease  liabilities  in excess of  related  estimated  sublease
income,  $49 of  operating  losses and $25 of other  costs.  During the 39 weeks
ended November 1, 2001, the Company  recorded  pre-tax earnings of $8 associated
with the discontinued operations.

     Restructuring  - In connection  with the  restructuring  plan,  the Company
recorded  net pre-tax  credits of $19 for the 39 weeks ended  October 31,  2002.
Pre-tax  credits  of  $21  were  recognized  for  asset  impairment  adjustments
resulting  from the  Company  realizing  sales  proceeds  in excess  of  amounts
originally  estimated on stores  disposed of and increases to the net realizable
values for stores under contract for sale. Pre-tax credits of $8 were recognized
for lease liability adjustments where more favorable negotiated settlements have
been  reached than had been  originally estimated.  Pre-tax  charges of $10 were
recognized for severance and other costs. In the prior year the Company recorded
pre-tax  charges of $561  consisting of $35 for inventory  write-downs,  $416 of
charges for the write-down of assets to estimated net realizable  value,  $63 of
charges for lease liabilities in excess of related sublease income and $47 of
severance and other costs.

     Merger-Related  and Exit  Costs - Results  of  operations  for the 39 weeks
ended November 1, 2001,  include $8 of net merger related credits  consisting of
$15 of credits  associated with the reversal of previous  impairment charges and
$7 of additional severance and integration costs.

     Other Non-Routine Items - During the quarter ended May 3, 2001, the Company
recorded $9 of compensation related costs for the executive management changes.



<PAGE>


     Summary of Discontinued  Operations,  Restructuring  and Other  Non-Routine
Items  - Due to  the  significance  of  discontinued  operations,  restructuring
charges,  merger-related  charges  (credits),  other  non-routine  items and the
discontinuance  of goodwill  amortization  on operating  results,  the following
table is presented to assist in the  comparison of selected  earnings  statement
components as reported and as provided  supplementally to reflect adjustments to
exclude the effects of these charges and credits:
<TABLE>
<CAPTION>

                                                         39 Weeks Ended                                39 Weeks Ended
                                                        October 31, 2002                              November 1, 2001
                                           -------------------------------------------     ---------------------------------------
                                                     As                             As             As                           As
                                               Reported           Adj.        Adjusted       Reported            Adj.     Adjusted
                                           ------------- ------------- ---- -----------    ------------- ------------ --- ---------
<S>                                             <C>               <C>           <C>                <C>         <C>          <C>
Sales                                            $26,519                        $26,519         $27,265                     $27,265

Cost of sales                                     18,751                         18,751          19,537         $(35) (a)    19,502

Selling, general and administrative
 expenses                                          6,421           (8) (a)        6,413           6,562          (51) (a)     6,452
                                                                                                                 (42) (b)
                                                                                                                 (17) (c)

Restructuring (credits) charges and other            (29)          27  (a)            -             476         (476) (a)         -
                                                                    2  (c)
Merger-related credits                                                                              (15)          15  (c)         -

Other expenses:
 Interest, net                                      (295)                          (295)           (326)                       (326)
 Other, net                                          (17)                           (17)            (19)                        (19)

Income tax expense                                   408           (8) (d)          400             153          227  (d)       380

Discontinued operations:
 Operating (loss)income                             (437)         437  (e)            -               8           (8) (e)         -
 Tax (benefit) expense                              (145)         145  (e)            -               4           (4) (e)         -
</TABLE>


(a)    Relates to the Company's restructuring plan adopted on July 17, 2001
(b)    Adjustment to exclude goodwill amortization
(c)    Other  costs  and  adjustments   related  to  the  merger  and  executive
       management changes
(d)    Tax effect of the various adjustments
(e)    Relates to the Company's market exit plan adopted on March 13, 2002

Note:  The impact of these supplemental items was a decrease to reported diluted
       earnings per share of $0.69 and $0.92 for the 39 weeks ended  October 31,
       2002 and November 1, 2001, respectively.

       The costs of the  Company's  restructuring  and  market  exit  plans have
       resulted in significant charges and incremental expenses. These costs had
       significant effects on the results of operations of the Company.  Through
       October 31, 2002,  the Company has  recognized  total pre-tax  charges of
       $978 ($624 after tax)  associated  with the Company's  restructuring  and
       market exit plans. The total noncash portion of these charges amounted to
       $761  and  the  Company   expects  to  generate  net  cash   proceeds  of
       approximately $600 (before tax) when all of the related assets are sold.


<PAGE>



Liquidity and Capital Resources
     Cash provided by operating activities during the 39 weeks ended October 31,
2002, was $1,725 compared to $1,461 in the prior year.  Free cash flow,  defined
as cash  provided by operating  activities  plus proceeds from disposal of land,
buildings  and  equipment,  and proceeds  from disposal of assets held for sale,
less net capital expenditures,  dividends paid, and common stock purchases,  was
$459 for the 39 weeks  ended  October  31,  2002,  compared to $286 in the prior
year.  The increase in free cash flows  resulted  primarily  from the  Company's
initiative to sell underperforming  stores,  assets related to market exits, and
surplus property, offset by purchases of its common stock.

     The implementation of the Company's strategic imperative to maximize return
on invested capital (see Operational Initiatives) is expected to further enhance
working capital by eliminating  unproductive  assets and reducing  inventory and
accounts receivable levels. Future sales of assets held for sale are expected to
continue to provide positive cash flow for the Company.

     The Company utilizes its commercial paper and bank line programs  primarily
to supplement cash required for seasonal  fluctuations in working capital and to
fund its capital  expenditure  program.  Accordingly,  commercial paper and bank
line  borrowings may fluctuate  between  reporting  periods.  The Company had no
commercial  paper or bank line  borrowings  outstanding  at October 31, 2002, or
January 31, 2002.

     In support of the Company's commercial paper program, the Company has three
credit facilities  totaling $1,400.  These agreements contain certain covenants,
the most  restrictive  of which  requires  the Company to maintain  consolidated
tangible net worth, as defined,  of at least $3,000 and a fixed charge coverage,
as  defined,  of at least 2.7  times.  As of October  31,  2002,  the  Company's
consolidated  tangible net worth, as defined, was approximately  $3,928, and its
fixed charge coverage, as defined, was 4.3 times. No borrowings were outstanding
under these credit facilities as of October 31, 2002.

     The Company filed a shelf  registration  statement  with the Securities and
Exchange  Commission,  which  became  effective  in  February  2001  (the  "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
Albertson's  common  stock.  As of  October  31,  2002,  up to  $2,400  of  debt
securities  remain available for issuance under the Company's 2001  Registration
Statement.

     The Board of Directors adopted a program on December 3, 2001,  authorizing,
at management's discretion, the Company to purchase and retire up to $500 of the
Company's common stock beginning  December 6, 2001 through December 31, 2002. On
September 5, 2002, the Board of Directors authorized an increase of $500 to this
program  for a total  of  $1,000  of the  Company's  common  stock  that  may be
purchased and retired by the Company through December 31, 2002.  Through October
31, 2002, 20.9 million shares were purchased and retired for $547, at an average
price of $26.18 per share under this program. Subsequent to October 31, 2002 and
through  December 6, 2002,  the Company had  purchased and retired an additional
7.2 million shares for $157, at an average price of $21.86 under this program.

     The Board of Directors adopted a stock buyback program on December 9, 2002,
authorizing,  at management's discretion,  the Company to purchase and retire up
to $500 of the  Company's  common  stock  beginning  January  1, 2003 and ending
December 31, 2003.

Contractual Obligations and Commercial Commitments
     There have been no material  changes  regarding the  Company's  contractual
obligations and commercial  commitments from the information  provided under the
caption "Contractual  Obligations and Commercial  Commitments" on page 58 and 59
of the Company's 2001 Annual Report to Stockholders.

Letters of Credit
     The  Company  had  outstanding  Letters of Credit of $132 as of October 31,
2002, all of which were issued under separate bilateral agreements with multiple
financial  institutions.  Of the $132 outstanding at October 31, 2002, $126 were
standby  letters  of  credit  covering   primarily   workers'   compensation  or
performance  obligations.  The  remaining $6 were  commercial  letters of credit
supporting the Company's  merchandise import program.  The Company pays issuance
fees that vary, depending on type, which average 0.7% of the outstanding balance
of the letters of credit.

Off Balance Sheet Arrangements
     The Company has no  significant  off balance sheet  arrangements  including
equity method  investments.  Investments that are accounted for under the equity
method  have no  liabilities  associated  with  them  that  would be  considered
material to the Company.

Related Party Transactions
     There were no material related party transactions during the 39 weeks ended
October 31, 2002, or November 1, 2001.


<PAGE>

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

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." SFAS No. 146 addresses  financial
accounting and reporting for costs  associated with exit or disposal  activities
and nullifies EITF Issue No. 94-3,  "Liability  Recognition for Certain Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs  Incurred in a  Restructuring)."  SFAS No. 146 requires  recognition  of a
liability for the costs  associated  with an exit or disposal  activity when the
liability is incurred,  as opposed to when the entity commits to an exit plan as
required  under EITF Issue No.  94-3.  The Company is required to adopt SFAS No.
146 for exit or disposal  activities that are initiated after December 31, 2002.
Statement  146 will  primarily  impact  the timing of the  recognition  of costs
associated with any future exit or disposal activities.

Environmental
     The Company has various identified environmental liabilities,  the majority
of which are  related to soil and  groundwater  contamination  from  underground
petroleum  storage tanks and former dry cleaning  operations  at certain  store,
warehouse,  office and manufacturing facilities. Such liabilities affect current
operations as well as previously  divested  properties.  The Company conducts an
ongoing  program for the  inspection  and evaluation of new sites proposed to be
acquired by the  Company  and the  remediation/monitoring  of  contamination  at
existing and previously owned sites. Undiscounted reserves have been established
for each identified  environmental  liability  unless an unfavorable  outcome is
remote.  Although  the  ultimate  outcome  and  expense  of these  environmental
liabilities is uncertain,  the Company  believes that required  remediation  and
continuing  compliance with  environmental  laws, in excess of current reserves,
will not have a material adverse effect on the financial  condition,  results of
operations  or  cash  flows  of  the  Company.   Charges  against  earnings  for
environmental  remediation  were not material for the 39 weeks ended October 31,
2002, or November 1, 2001.

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

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

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

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" on page 60 of the  Company's  2001
Annual Report to Stockholders.
<PAGE>

Item 4.  Controls and Procedures
     Albertson's  management,  including the Chief  Executive  Officer and Chief
Financial Officer,  have evaluated the effectiveness of the Company's disclosure
controls and  procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) as
of a date  within  90 days  prior to the  filing of this  report.  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  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified by the
Securities and Exchange Commission's rules and forms.  Subsequent to the date of
this  evaluation,  there have not been any significant  changes in the Company's
internal  controls or, to  management's  knowledge,  in other factors that could
significantly affect the Company's internal controls.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings
         The  information  required  under this item is included in the Notes to
Condensed  Consolidated  Financial  Statements under the caption "Note J - Legal
Proceedings" on page 12 of Part I, Financial  Information of this Report on Form
10-Q. This information is incorporated herein by this reference thereto.

Item 2.  Changes in Securities
         In accordance with the Company's $1,400  revolving  credit  agreements,
the Company's  consolidated  tangible net worth,  as defined,  shall not be less
than $3,000.

Item 3.  Defaults upon Senior Securities
         Not applicable.

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

Item 5.  Other Information
         None.

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

a.        Exhibits
<S>          <C>          <C>
             10.42        Albertsons Severance Plan for Officers effective October 1, 2002.

             10.43        Albertsons Change of Control Severance  Agreement for Chief Operating Officer and Executive
                          Vice President effective November 1, 2002.

             10.44        Albertsons Change of Control Severance  Agreement for Senior Vice Presidents and Group Vice
                          Presidents effective November 1, 2002.

             10.45        Albertsons Change of Control Severance Agreement for Vice Presidents effective  November 1,
                          2002.

             10.46        Albertsons  Amended and  Restated  1995  Stock-Based  Incentive  Plan as amended  effective
                          December 9, 2002.

             10.46.1      Form of Award of Stock Option.

             10.46.2      Form of Award of Deferred Stock Units.

             99.1         Certification  of CEO and CFO Pursuant to 18 U.S.C.  Section 1350,  as Adopted  Pursuant to
                          Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>
<PAGE>

b.       The following  reports  under Item 9. Regulation FD  Disclosure on Form
         8-K were filed during the quarter ended October 31, 2002:

           Current report on Form  8-K dated September 4, 2002, including  sworn
           statements submitted to the SEC from each of  the Principal Executive
           Officer,  Lawrence  R. Johnston,  and  Principal  Financial  Officer,
           Felicia  D.  Thornton,  pursuant  to  the  Securities  and  Exchange
           Commission Order No. 4-460.

           Current report on  Form 8-K  dated  October 31, 2002, summarizing the
           press release issued on October 31, 2002 which lowered  third quarter
           and fiscal year 2002 earnings per share guidance.



                                    SIGNATURE

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

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



Date: December 11, 2002        /S/ Felicia D. Thornton
                               -------------------------------------------------
                               Felicia D. Thornton
                               Executive Vice President
                                and Chief Financial Officer





<PAGE>


CERTIFICATIONS

I, Lawrence R. Johnston, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Albertson's, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) Designed such disclosure controls and procedures to ensure that material
        information  relating  to the  registrant,  including  its  consolidated
        subsidiaries,  is made  known to us by  others  within  those  entities,
        particularly  during the period in which this quarterly  report is being
        prepared;
     b) Evaluated the effectiveness of the registrant's  disclosure controls and
        procedures  as of a date within 90 days prior to the filing date of this
        quarterly report (the "Evaluation Date"); and
     c) Presented  in  this   quarterly   report  our   conclusions   about  the
        effectiveness  of the disclosure  controls and  procedures  based on our
        evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a) All  significant  deficiencies  in the design or  operation  of internal
        controls  which  could  adversely  affect  the  registrant's  ability to
        record, process, summarize and report financial data and have identified
        for the  registrant's  auditors  any  material  weaknesses  in  internal
        controls; and
     b) Any fraud,  whether or not material,  that involves  management or other
        employees  who  have a  significant  role in the  registrant's  internal
        controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.




Date: December 11, 2002         /S/ Lawrence R. Johnston
                                ------------------------------------------------
                                Lawrence R. Johnston
                                Chairman of the Board and
                                 Chief Executive Officer





<PAGE>



I, Felicia D. Thornton, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Albertson's, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) Designed such disclosure controls and procedures to ensure that material
        information  relating  to the  registrant,  including  its  consolidated
        subsidiaries,  is made  known to us by  others  within  those  entities,
        particularly  during the period in which this quarterly  report is being
        prepared;
     b) Evaluated the effectiveness of the registrant's  disclosure controls and
        procedures  as of a date within 90 days prior to the filing date of this
        quarterly report (the "Evaluation Date"); and
     c) Presented  in  this   quarterly   report  our   conclusions   about  the
        effectiveness  of the disclosure  controls and  procedures  based on our
        evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a) All  significant  deficiencies  in the design or  operation  of internal
        controls  which  could  adversely  affect  the  registrant's  ability to
        record, process, summarize and report financial data and have identified
        for the  registrant's  auditors  any  material  weaknesses  in  internal
        controls; and
     b) Any fraud,  whether or not material,  that involves  management or other
        employees  who  have a  significant  role in the  registrant's  internal
        controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: December 11, 2002           /S/ Felicia D. Thornton
                                  ----------------------------------------------
                                  Felicia D. Thornton
                                  Executive Vice President
                                   and Chief Financial Officer