SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

                                    FORM 10-Q

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

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


       For 13 Weeks Ended: October 30, 2003 Commission File Number: 1-6187



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


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


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

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

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

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

     There  were  366,920,089  shares  with  a  par  value  of  $1.00  per share
outstanding at December 2, 2003.


                                       1
<PAGE>






                                ALBERTSON'S INC.
                                      INDEX



PART I        FINANCIAL INFORMATION

<TABLE>
<S>           <C>                                                                                                          <C>
Item 1.       Financial Statements (Unaudited)
                  Condensed Consolidated Earnings Statements for the 13 weeks ended October 30, 2003 and
                  October 31, 2002                                                                                          3

                  Condensed Consolidated Earnings Statements for the 39 weeks ended October 30, 2003 and
                  October 31, 2002                                                                                          4

                  Condensed Consolidated Balance Sheets as of October 30, 2003 and January 30, 2003                         5

                  Condensed Consolidated Cash Flow Statements for the 39 weeks ended October 30, 2003 and
                  October 31, 2002                                                                                          6

                  Notes to Condensed Consolidated Financial Statements                                                      7

                  Independent Accountants' Report                                                                          14

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

Item 3.       Quantitative and Qualitative Disclosures About Market Risk                                                   20

Item 4.       Controls and Procedures                                                                                      20

PART II       OTHER INFORMATION

Item 1.       Legal Proceedings                                                                                            21

Item 2.       Changes in Securities and Use of Proceeds                                                                    22

Item 3.       Defaults upon Senior Securities                                                                              22

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

Item 5.       Other Information                                                                                            22

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



                                       2
<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

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

<TABLE>
<CAPTION>
                                                                                           13 weeks ended
                                                                              ------------------------------------------
                                                                                   October  30,            October 31,
                                                                                           2003                   2002
                                                                              -------------------    -------------------

<S>                                                                                    <C>                    <C>
Sales                                                                                  $  8,796               $  8,657
Cost of sales                                                                             6,270                  6,128
                                                                              -------------------    -------------------
Gross profit                                                                              2,526                  2,529

Selling, general and administrative expenses                                              2,267                  2,151
Restructuring charges (credits)                                                               4                     (7)
                                                                              -------------------    -------------------
Operating profit                                                                            255                    385

Other (expenses) income:
  Interest, net                                                                             (99)                   (88)
  Other, net                                                                                 (7)                     1
                                                                              -------------------    -------------------
Earnings from continuing operations before income taxes                                     149                    298
Income tax expense                                                                           57                    108
                                                                              -------------------    -------------------

Earnings from continuing operations                                                          92                    190
                                                                              -------------------    -------------------
Discontinued operations:
  Operating loss                                                                             -                     (10)
  Gain on disposal                                                                           -                       7
  Income tax benefit                                                                         -                       1
                                                                              -------------------    -------------------
 Loss from discontinued operations                                                           -                      (2)
                                                                              -------------------    -------------------

Net earnings                                                                           $     92               $    188
                                                                              ===================    ===================


Earnings (loss) per share:
  Basic
     Continuing operations                                                               $ 0.25                 $ 0.48
     Discontinued operations                                                                  -                  (0.01)
                                                                              -------------------    -------------------
     Net earnings                                                                        $ 0.25                 $ 0.47
                                                                              ===================    ===================

  Diluted
     Continuing operations                                                               $ 0.25                 $ 0.48
     Discontinued operations                                                                  -                  (0.01)
                                                                              -------------------    -------------------
     Net earnings                                                                        $ 0.25                 $ 0.47
                                                                              ===================    ===================

Weighted average number of common shares outstanding:
     Basic                                                                                  368                    396
     Diluted                                                                                369                    397
</TABLE>


See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                           39 weeks ended
                                                                              ------------------------------------------
                                                                                    October 30,            October 31,
                                                                                           2003                   2002
                                                                              -------------------    -------------------

<S>                                                                                    <C>                    <C>
Sales                                                                                  $ 26,789               $ 26,519
Cost of sales                                                                            19,063                 18,736
                                                                              -------------------    -------------------
Gross profit                                                                              7,726                  7,783

Selling, general and administrative expenses                                              6,732                  6,420
Restructuring credits                                                                       (11)                   (29)
                                                                              -------------------    -------------------
Operating profit                                                                          1,005                  1,392

Other (expenses) income:
  Interest, net                                                                            (307)                  (296)
  Other, net                                                                                 (6)                   (16)
                                                                              -------------------    -------------------
Earnings from continuing operations before income taxes                                     692                  1,080
Income tax expense                                                                          266                    415
                                                                              -------------------    -------------------

Earnings from continuing operations                                                         426                    665
                                                                              -------------------    -------------------
Discontinued operations:
  Operating loss                                                                             -                     (49)
  Loss on disposal                                                                           -                    (388)
  Income tax benefit                                                                         -                     146
                                                                              -------------------    -------------------
Loss from discontinued operations                                                            -                    (291)
                                                                              -------------------    -------------------
Earnings before cumulative effect of change in accounting principle                         426                    374
Cumulative effect of change in accounting principle (net of tax $60)                         -                     (94)
                                                                              -------------------    -------------------
Net earnings                                                                           $    426               $    280
                                                                              ===================    ===================


Earnings (loss) per share:
  Basic
     Continuing operations                                                              $  1.16                $  1.64
     Discontinued operations                                                                 -                   (0.72)
     Cumulative effect of change in accounting principle (net of tax $0.15)                  -                   (0.23)
                                                                              -------------------    -------------------
     Net earnings                                                                       $  1.16                $  0.69
                                                                              ===================    ===================

  Diluted
     Continuing operations                                                              $  1.16                $  1.64
     Discontinued operations                                                                 -                   (0.72)
     Cumulative effect of change in accounting principle (net of tax $0.15)                  -                   (0.23)
                                                                              -------------------    -------------------
     Net earnings                                                                       $  1.16                $  0.69
                                                                              ===================    ===================

Weighted average number of common shares outstanding:
     Basic                                                                                  368                    403
     Diluted                                                                                369                    405
</TABLE>


See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>




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

<TABLE>
<CAPTION>
                                                                                               October 30,          January 30,
                                                                                                      2003                 2003
                                                                                            -----------------    -----------------
         ASSETS

<S>                                                                                               <C>                  <C>
Current Assets:
   Cash and cash equivalents                                                                      $     43             $    162
   Accounts and notes receivable, net                                                                  660                  647
   Inventories                                                                                       3,191                2,973
   Assets held for sale                                                                                 68                  120
   Prepaid and other                                                                                   238                  366
                                                                                            -----------------    -----------------
     Total Current Assets                                                                            4,200                4,268

Land, buildings and equipment (net of accumulated depreciation and
  amortization of $6,682 and $6,158, respectively)                                                   9,158                9,029

Goodwill, net                                                                                        1,400                1,399

Intangibles, net                                                                                       196                  214

Other assets                                                                                           293                  301
                                                                                            -----------------    -----------------

Total Assets                                                                                      $ 15,247             $ 15,211
                                                                                            =================    =================

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                                               $  1,898             $  2,009
   Salaries and related liabilities                                                                    565                  599
   Self-insurance                                                                                      263                  244
   Current maturities of long-term debt and capital lease obligations                                  516                  119
   Other current liabilities                                                                           539                  477
                                                                                            -----------------    -----------------
     Total Current Liabilities                                                                       3,781                3,448

Long-term debt                                                                                       4,448                4,950

Capital lease obligations                                                                              313                  307

Self-insurance                                                                                         428                  367
Other long-term liabilities and deferred credits                                                       951                  942

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 - 367 shares
     and 372 shares, respectively                                                                      367                  372
   Capital in excess of par                                                                            147                  128
   Accumulated other comprehensive loss                                                                (96)                 (96)
   Retained earnings                                                                                 4,908                4,793
                                                                                            -----------------    -----------------
     Total Stockholders' Equity                                                                      5,326                5,197
                                                                                            -----------------    -----------------
Total Liabilities and Stockholders' Equity                                                        $ 15,247             $ 15,211
                                                                                            =================    =================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       5
<PAGE>


                                ALBERTSON'S, INC.
                   CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
                                  (in millions)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                  39 weeks ended
                                                                                    --------------------------------------------
                                                                                        October 30,               October 31,
                                                                                               2003                      2002
                                                                                    ------------------     ---------------------
<S>                                                                                         <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings                                                                             $   426                   $   280
     Adjustments to reconcile net earnings to net cash
           provided by operating activities:
       Depreciation and amortization                                                            729                       708
       Net deferred income taxes and other                                                       18                        41
       Discontinued operations noncash charges                                                   -                        372
       Cumulative effect of change in accounting principle                                       -                         94
       (Increase) decrease in cash surrender value of insurance                                  (3)                       17
         Changes in operating assets and liabilities:
         Receivables, prepaid expenses and other                                                 82                       190
         Inventories                                                                           (218)                       36
         Accounts payable                                                                      (102)                       -
         Other current liabilities                                                               32                       (39)
           Self-insurance                                                                        79                        41
           Other                                                                                 17                       (15)
                                                                                    ------------------     ---------------------
                    Net cash provided by operating activities                                 1,060                     1,725

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                        (892)                   (1,050)
   Proceeds from disposal of land, buildings and equipment                                       56                        91
   Proceeds from disposal of assets held for sale                                                98                       472
   Other                                                                                         (8)                       10
                                                                                    ------------------     ---------------------
                    Net cash used in investing activities                                      (746)                     (477)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash dividends paid                                                                         (210)                     (232)
    Payments on long-term borrowings                                                           (115)                     (116)
   Stock purchases and retirements                                                             (108)                     (547)
   Proceeds from stock options exercised                                                         -                         16
                                                                                    ------------------     ---------------------
                    Net cash used in financing activities                                      (433)                     (879)

Net (Decrease) Increase in Cash and Cash Equivalents                                           (119)                      369

Cash and Cash Equivalents at Beginning of Period                                                162                        61
                                                                                    ------------------     ---------------------

Cash and Cash Equivalents at End of Period                                                  $    43                   $   430
                                                                                    ==================     =====================
</TABLE>



See Notes to Condensed Consolidated Financial Statements.

                                       6
<PAGE>


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


NOTE A - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

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

As of October 30, 2003, the Company  operated 2,312 stores in 31 states.  Retail
operations  were  supported  by  17  major  Company   distribution   operations,
strategically  located in the  Company's  operating  markets.  The Company  also
operated 227 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.  These condensed consolidated financial statements have been prepared
by the  Company  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included  in  financial   statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the United  States  have been  condensed  or
omitted  pursuant to such rules and  regulations.  These condensed  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and  accompanying  notes  included in the Company's  2002
Annual Report on Form 10-K filed with the Securities and Exchange  Commission on
April 24, 2003.  The  results  of  operations  for  the  13  and  39 weeks ended
October 30, 2003, are not necessarily indicative of results for a full year.

The Company's operating results and cash flows for the quarter ended October 31,
2002 differ from the previously reported results due to the impact of the change
in the  Company's  method of accounting  for vendor  funds,  as discussed in the
Company's  2002 Annual  Report on Form 10-K.  The  information  presented in the
financial  statements  reflects  the  adoption  of  Emerging  Issues  Task Force
("EITF") Issue No. 02-16,  "Accounting by a Customer  (Including a Reseller) for
Certain  Consideration  Received from a Vendor"  ("EITF  02-16"),  in the fourth
quarter of 2002, retroactive to the beginning of 2002.

The Company's Condensed  Consolidated  Balance Sheet as of January 30, 2003, has
been derived from the audited Consolidated Balance Sheet as of that date.

Use of Estimates
The  preparation  of  the  Company's  consolidated   financial  statements,   in
conformity with accounting  principles  generally accepted in the United States,
requires  management to make estimates and assumptions.  Some of these estimates
require  difficult,  subjective  or complex  judgments  about  matters  that are
inherently  uncertain.  As a result,  actual  results  could  differ  from these
estimates. These estimates and assumptions affect the reported amounts of assets
and liabilities  and the disclosure of contingent  assets and liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses during the reporting period.

Vendor Funds
The Company  receives  funds from many of the vendors whose products the Company
buys for resale in its stores.  These  vendor funds are provided to increase the
sell-through of the related  products.  The Company receives funds for a variety
of merchandising activities: placement of the vendor's products in the Company's
advertising;  placement of the vendor's  products in prominent  locations in the
Company's stores;  introduction of new products into the Company's  distribution
system and retail stores;  exclusivity  rights in certain  categories  that have
slower-turning  products;  and to  compensate  for  temporary  price  reductions
offered to customers  on products  held for sale at retail  stores.  The Company
also  receives  vendor funds for buying  activities,  such as volume  commitment
rebates and credits for purchasing  products in advance of their need. The terms
of vendor funds  arrangements vary in length,  from short term arrangements that
are completed within a quarter,  to long term  arrangements that are expected to
be completed within ten years.


                                       7
<PAGE>


Accounting  for  vendor  funds is  discussed  in EITF  02-16,  in which the EITF
reached  consensus on two issues in November 2002 and provided  transition rules
on those  issues in January 2003 and March 2003.  As a result of this  guidance,
the  Company  adopted  a  new  method  for  recognizing  the  vendor  funds  for
merchandising activities. As of the beginning of 2002, the Company recognizes as
a reduction of cost of sales vendor funds for merchandising  activities when the
related   products  are  sold.   Under  the  previous   accounting   method  for
merchandising vendor funds, these credits were recognized as a reduction to cost
of sales when the  merchandising  activity was performed in accordance  with the
underlying  agreements.  In  connection  with  the  implementation  of this  new
accounting  method,  the  Company  recorded a charge in 2002 of $94,  net of tax
benefit of $60.

The amount of vendor funds reducing the Company's inventory ("inventory offset")
as of October  30,  2003 was $134,  an increase of $3 from the end of the second
quarter of 2003 and a decrease  of $18 from the  beginning  of 2003.  The vendor
funds  inventory  offset as of October 31, 2002 was $143, an increase of $8 from
the end of the second  quarter of 2002 and a decrease of $15 from the  beginning
of 2002. The inventory offset was determined by estimating the average inventory
turnover  rates  by  product  category  for  the  Company's   grocery,   general
merchandise   and   lobby   departments   (these   departments   received   over
three-quarters  of the Company's vendor funds in 2002) and by average  inventory
turnover rates by department for the Company's remaining inventory.

Inventory
Net earnings  reflects  the  application  of the LIFO method of valuing  certain
inventories.   Quarterly  inventory  determinations  under  LIFO  are  based  on
assumptions as to projected inventory levels at the end of the year and the rate
of inflation for the year. Albertsons recorded pretax LIFO expense of $4 and $12
for the 13 week and 39 week periods ended October 30, 2003, respectively, and $0
and  $10  for  the  13  week  and  39  week  periods  ended  October  31,  2002,
respectively.

Procurement, Distribution and Merchandising Costs
Cost of sales include,  among other things,  purchasing,  inbound freight costs,
product  quality  testing costs,  warehousing  costs,  internal  transfer costs,
advertising,  private label program costs and strategic  sourcing program costs.
Selling,  general and  administrative  expenses  include,  among  other  things,
merchandising   planning  and  management  costs,   store-based  purchasing  and
receiving costs and inventory management costs.

Stock-Based Compensation
The Company  accounts for  stock-based  compensation  using the intrinsic  value
method  prescribed  in  Accounting  Principles  Board  ("APB")  Opinion  No. 25,
"Accounting for Stock Issued to Employees," and has adopted the  disclosure-only
alternative  of Statement of Financial  Accounting  Standards  ("SFAS") No. 123,
"Accounting for  Stock-based  Compensation,"  and SFAS No. 148,  "Accounting for
Stock-Based Compensation - Transition and Disclosure."

The following table represents the effect on net earnings and earnings per share
that would have  resulted if the Company had applied the fair value based method
and recognition provisions of SFAS No. 123 to stock-based employee compensation:


<TABLE>
<CAPTION>
                                                         13 weeks ended                   39 weeks ended
                                                  October 30,     October 31,      October 30,     October 31,
                                                         2003            2002             2003            2002
--------------------------------------------- ----------------- --------------- ---------------- ---------------
<S>                                                    <C>             <C>              <C>             <C>
Net earnings as reported                               $   92          $  188           $  426          $  280

Add:   Stock-based    compensation   expense
  included in reported net earnings,  net of
  related tax effects                                       4               3               12               9

Deduct:   Total   stock-based   compensation
  expense  determined under fair value based
  method  for  all  awards,  net of  related
  tax effects                                             (11)            (11)             (34)            (35)
--------------------------------------------- ----------------- --------------- ---------------- ---------------
Net earnings  - pro forma                              $   85          $  180           $  404          $  254
============================================= ================= =============== ================ ===============

Basic earnings per share:
  As reported                                          $ 0.25          $ 0.47           $ 1.16          $ 0.69
  Pro forma                                              0.23            0.45             1.10            0.63
============================================= ================= =============== ================ ===============

Diluted earnings per share:
  As reported                                          $ 0.25          $ 0.47           $ 1.16          $ 0.69
  Pro forma                                              0.23            0.45             1.10            0.63
============================================= ================= =============== ================ ===============
</TABLE>

                                       8
<PAGE>

Reclassifications
Certain  reclassifications have been made to prior periods to conform to current
year presentations.

NOTE B - NEW AND RECENTLY ADOPTED ACCOUNTING STANDARDS

In  July 2001  the  Financial  Accounting  Standards Board ("FASB") issued  SFAS
No. 143, "Accounting for Asset Retirement Obligations." This statement addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs.  SFAS No. 143 became  effective for the Company on January 31, 2003,  and
did not have a material effect on the Company's condensed consolidated financial
statements for the 39 weeks ended October 30, 2003.

In January 2003 the FASB issued Interpretation No. 46 ("FIN 46"), "Consolidation
of  Variable  Interest  Entities  - an  Interpretation  of ARB No.  51."  FIN 46
requires  certain variable  interest  entities to be consolidated by the primary
beneficiary of the entity if the equity  investors in the entity do not have the
characteristics  of a controlling  financial  interest or do not have sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial  support  from other  parties.  The  provisions  of this
interpretation became effective for the Company on January 31, 2003, and did not
have  a  material  effect  on the  Company's  condensed  consolidated  financial
statements for the 39 weeks ended October 30, 2003.

In May 2003 the FASB  issued  SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
requires that certain financial instruments, which under previous guidance could
be accounted  for as equity,  be  classified  as  liabilities  in  statements of
financial position.  SFAS No. 150 is effective for financial instruments entered
into or modified after May 31, 2003, and was effective for the Company in the 13
week period ended October 30, 2003.  The adoption of SFAS No. 150 did not have a
material effect on the Company's condensed consolidated financial statements for
the 13 weeks ended October 30, 2003.

In  November  2003 the EITF  confirmed  as a  consensus  EITF  Issue No.  03-10,
"Application  of EITF Issue No. 02-16,  'Accounting  by a Customer  (Including a
Reseller)  for Certain  Consideration  Received  from a Vendor,' by Resellers to
Sales Incentives  Offered to Consumers by  Manufacturers"  ("EITF 03-10").  EITF
03-10 will not impact the Company's  existing  accounting and reporting policies
for  manufacturers'  coupons that can be presented at any retailer  that accepts
coupons.  For arrangements  with vendors that are entered into or modified after
the start of fiscal  year 2004,  we will  record the vendor  reimbursement  as a
reduction of cost of sales (instead of sales) if the coupon can only be redeemed
at a Company  retail store.  This  modification  to our accounting and reporting
policies  will only impact sales and cost of sales  beginning  in the  Company's
first quarter of 2004.

NOTE C - RESERVES FOR RESTRUCTURING ACTIVITIES, MARKET EXITS AND CLOSED STORES

In 2001 the Company  recorded a pre-tax charge to earnings of $107 primarily for
lease  settlements  and severance  costs in  connection  with the closure of 165
stores  and  the  reduction  of  overhead  functions  (the  "2001  restructuring
activities").  As of January 30, 2003,  an accrual of $28 was recorded for these
settlements and costs.  During the 13 week and 39 week periods ended October 30,
2003,  the  Company  paid  $3 and $7,  respectively,  and  had  favorable  lease
termination  settlements of $0 and $6,  respectively,  recorded in restructuring
charges (credits) in the condensed  consolidated earnings statements,  leaving a
balance of $15 as of October 30, 2003.

In 2002 the Company  recorded a pre-tax  charge to earnings of $51 primarily for
lease  settlements  and severance  costs in  connection  with the exit from four
underperforming  markets (the "2002 market  exits").  As of January 30, 2003, an
accrual of $11 was recorded for these settlements and costs.  During the 13 week
and 39  week  periods  ended  October  30,  2003,  the  Company  paid $0 and $3,
respectively, leaving a balance of $8 as of October 30, 2003.

As of January 30, 2003, the Company had an accrual of $30 for closed store lease
termination costs. During the 13 week period ended October 30, 2003, the Company
recorded additional reserves of $3, had favorable lease termination  settlements
of $3 and paid $2. During the 39 week period ended October 30, 2003, the Company
recorded additional reserves of $5, had favorable lease termination  settlements
of $9 and paid $8, leaving a balance of $18 as of October 30, 2003.

The  Company  also  sold  certain  closed  stores  in the 39 week  period  ended
October 30, 2003 which resulted in a gain of $6 (reflected in "Selling,  general
and administrative expenses" in the condensed consolidated earnings statement).

                                       9
<PAGE>


NOTE D - INTANGIBLES

The carrying amount of intangibles was as follows:

<TABLE>
<CAPTION>
                                                                          October 30,            January 30,
                                                                                 2003                   2003
                                                                   --------------------   --------------------


<S>                                                                              <C>                     <C>
            Amortizing:
               Favorable acquired operating leases                               $215                    $231
               Customer lists and other contracts                                  56                      53
                                                                   --------------------   --------------------
                                                                                  271                     284
            Accumulated amortization                                             (179)                   (173)
                                                                   --------------------   --------------------
                                                                                   92                     111
            Non-Amortizing:
               Liquor licenses                                                     40                      39
               Pension related intangible assets                                   64                      64
                                                                   --------------------   --------------------
                                                                                  104                     103
                                                                   --------------------   --------------------
                                                                                 $196                    $214
                                                                   ====================   ====================
</TABLE>

NOTE E - CONTINGENCIES

Lawsuits,  claims and other legal matters
In March 2000 a class action  complaint was filed against  Albertsons as well as
American Stores Company,  American Drug Stores,  Inc., Sav-on Drug Stores,  Inc.
and  Lucky  Stores,  Inc.,  wholly-owned  subsidiaries  of the  Company,  in the
Superior  Court for the County of Los Angeles,  California  (Gardner,  et al. v.
Albertson's,  Inc.,  et al.) by  bonus-eligible  managers  seeking  recovery  of
additional  bonus  compensation  based  upon  plaintiffs'  allegation  that  the
calculation  of profits on which their  bonuses were based  improperly  included
expenses for workers' compensation costs, cash shortages, premises liability and
"shrink"  losses in  violation  of  California  law.  In October  2001 the court
granted summary  judgment  against Sav-on Drug Stores,  finding one of its bonus
plans unlawful under plaintiffs' liability theory. In August 2001 a class action
complaint with very similar claims, also involving  bonus-eligible managers, was
filed  against  Albertsons  as well as Lucky  Stores,  Inc. and American  Stores
Company, wholly-owned subsidiaries of the Company, in the Superior Court for the
County of Los  Angeles,  California  (Petersen,  et al. v. Lucky  Stores,  Inc.,
et al.).  In June 2002 the cases were  consolidated  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  Albertsons as well as
American Stores Company,  American Drug Stores,  Inc., Sav-on Drug Stores,  Inc.
and  Lucky  Stores,  Inc.,  wholly-owned  subsidiaries  of the  Company,  in the
Superior  Court for the County of Los Angeles,  California  (Gardner,  et al. v.
American  Stores  Company,  et al.) by assistant  managers  seeking  recovery of
overtime  pay based  upon  plaintiffs'  allegation  that  they  were  improperly
classified  as exempt  under  California  law.  In May 2001 a class  action with
respect to Sav-on Drug Stores  assistant  managers was certified by the court. A
case with very  similar  claims,  involving  the Sav-on  Drug  Stores  assistant
managers  and  operating  managers,  was also  filed in April 2000  against  the
Company's  subsidiary  Sav-on Drug Stores,  Inc. in the  Superior  Court for the
County of Los Angeles, California (Rocher, Dahlin, et al. v. Sav-on Drug Stores,
Inc.)  and was also  certified  as a class  action.  In April  2002 the Court of
Appeal of the State of California Second Appellate  District reversed the Rocher
class certification,  leaving only two plaintiffs.  The California Supreme Court
has accepted plaintiffs' request for review of this class  decertification.  The
Gardner case is on hold  pending the review of the Rocher class  decertification
issue by 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.



                                       10
<PAGE>


An agreement was reached,  and court approval granted, to settle eight purported
class and/or  collective  actions which were  consolidated  in the United States
District  Court in Boise,  Idaho,  and which  raised  various  issues  including
"off-the-clock"  work  allegations and allegations  regarding  certain  salaried
grocery  managers' exempt status.  Under the settlement  agreement,  current and
former employees who met eligibility criteria have been allowed to present their
off-the-clock work claims to a settlement administrator.  Additionally,  current
and  former  grocery  managers  employed  in the State of  California  have been
allowed to present their exempt status claims to a settlement administrator. The
Company  mailed  notices of the  settlement  and claims  forms to  approximately
80,000 associates and former  associates.  Approximately  6,000 claim forms were
returned,   of  which   approximately   5,000  were  deemed  by  the  settlement
administrator  to be incapable of valuation,  presumed  untimely,  or both.  The
claims  administrator was able to assign a value to approximately  1,000 claims,
which  amount to a total of  approximately  $14,  although  the value of many of
those  claims is still  subject to  challenge  by the  Company.  A second  claim
process  was ordered by the court,  but the parties are still  waiting for final
instructions  from the Court.  The Company is presently  unable to determine the
number of individuals who may ultimately submit valid claims or the amounts that
it may  ultimately be required to pay with respect to such claims.  Based on the
information  presently  available  to it,  management  does not expect  that the
satisfaction  of valid claims  submitted  pursuant to the settlement will have a
material  adverse  effect  on the  Company's  financial  condition,  results  of
operations or cash flows.

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

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

Contingent Lease Obligations
The  Company is  contingently  liable for  certain  operating  leases  that were
assigned  to third  parties  in  connection  with  various  store  closures  and
dispositions.  If any of  these  third  parties  were to fail to  perform  their
obligations  under the lease,  the Company  could be  responsible  for the lease
obligations.  The Company was notified  that certain of these third parties have
become  insolvent and are seeking  bankruptcy  protection.  At October 30, 2003,
approximately 23 store leases for which the Company is contingently  liable were
subject to the  bankruptcy  proceedings of such third parties and 20 of such had
been rejected by the applicable  third party.  The Company has recorded  pre-tax
charges of $15 and $22 for the 13 week and 39 week  periods  ended  October  30,
2003,  respectively,  which represents the remaining  minimum lease payments and
other payment  obligations under the 20 rejected leases, less estimated sublease
income and discounted at the Company's  credit-adjusted risk free interest rate.
Based on an internal  analysis of the current  status of the remaining  assigned
operating  leases,  the Company  expects that any  potential  future  losses for
rejected  assigned  operating leases would not have a material adverse effect on
its financial condition, results of operations or cash flows.


                                       11
<PAGE>


Note F- Computation of Earnings Per Share

<TABLE>
<CAPTION>
                                                                              13 weeks ended
                                                    -------------------------------------------------------------------
                                                           October 30, 2003                   October 31, 2002
                                                       Basic            Diluted            Basic            Diluted
                                                    -------------     -------------    ---------------    -------------
<S>                                                         <C>              <C>                <C>              <C>
Earnings (loss) from:
   Continuing operations                                   $ 92              $ 92               $190             $190
   Discontinued operations                                    -                 -                 (2)              (2)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                         $ 92              $ 92               $188             $188
                                                    =============     =============    ===============    =============

Weighted average common shares outstanding                  368               368                396              396
                                                    =============                      ===============
Potential common share equivalents                                              1                                   1
                                                                      -------------                       -------------
Weighted average shares outstanding                                           369                                 397
                                                                      =============                       =============

Earnings (loss) per common share and common share
equivalents:
   Continuing operations                                  $0.25             $0.25              $0.48            $0.48
   Discontinued operations                                    -                 -              (0.01)           (0.01)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $0.25             $0.25              $0.47            $0.47
                                                    =============     =============    ===============    =============

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

Calculation of potential common shares
   assumed purchased with potential proceeds
    Potential proceeds from exercise of options
      to purchase common shares                                               $43                                $147
    Common stock price used under treasury
      stock method                                                         $20.54                              $26.03
                                                                      -------------                       -------------
    Potential common shares assumed
      purchased with potential proceeds                                         2                                   6
                                                                      =============                       =============

Anti-dilutive shares excluded from potential
   common share equivalents                                                    29                                  20
                                                                      =============                       =============
</TABLE>










                                       12
<PAGE>



<TABLE>
<CAPTION>
                                                                              39 weeks ended
                                                    -------------------------------------------------------------------
                                                           October 30, 2003                   October 31, 2002
                                                       Basic            Diluted            Basic             Diluted
                                                    -------------     -------------    ---------------    -------------
<S>                                                        <C>               <C>                <C>              <C>
Earnings (loss) from:
   Continuing operations                                   $426              $426               $665             $665
   Discontinued operations                                    -                 -               (291)            (291)
   Cumulative effect of change in
    accounting principle                                      -                 -                (94)             (94)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                         $426              $426               $280             $280
                                                    =============     =============    ===============    =============

Weighted average common shares outstanding                  368               368                403              403
                                                    =============                      ===============
Potential common share equivalents                                              1                                   2
                                                                      -------------                       -------------
Weighted average shares outstanding                                           369                                 405
                                                                      =============                       =============

Earnings (loss) per common share and common share
equivalents:
   Continuing operations                                  $1.16             $1.16              $1.64            $1.64
   Discontinued operations                                    -                 -              (0.72)           (0.72)
   Cumulative effect of change in
    accounting principle                                      -                 -              (0.23)           (0.23)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $1.16             $1.16              $0.69            $0.69
                                                    =============     =============    ===============    =============

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

Calculation of potential common shares
   assumed purchased with potential proceeds
    Potential proceeds from exercise of options
      to purchase common shares                                               $48                                $215
    Common stock price used under treasury
      stock method                                                         $19.90                              $29.61
                                                                      -------------                       -------------
    Potential common shares assumed
      purchased with potential proceeds                                         2                                   7
                                                                      =============                       =============

Anti-dilutive shares excluded from potential
   common share equivalents                                                    30                                  19
                                                                      =============                       =============
</TABLE>



                                       13
<PAGE>













INDEPENDENT ACCOUNTANTS' REPORT


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

We have  reviewed  the  accompanying  condensed  consolidated  balance  sheet of
Albertson's,  Inc. and subsidiaries  ("Albertsons")  as of October 30, 2003, and
the related condensed  consolidated earnings statements and cash flow statements
for the  thirteen  and  thirty-nine  week  periods  ended  October  30, 2003 and
October 31, 2002. These interim financial  statements are the  responsibility of
Albertson's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information  consists  principally of applying analytical  procedures and making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially  less in scope than an audit conducted in accordance with auditing
standards  generally accepted in the United States of America,  the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

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

We have  previously  audited,  in accordance with auditing  standards  generally
accepted in the United  States of America,  the  consolidated  balance  sheet of
Albertsons as of January 30, 2003,  and the related  consolidated  statements of
earnings,  stockholders'  equity,  and cash  flows for the year then  ended (not
presented  herein);  and in our report  dated March 20,  2003,  we  expressed an
unqualified opinion on those consolidated financial statements.  In our opinion,
the information set forth in the  accompanying  condensed  consolidated  balance
sheet as of January 30, 2003, is fairly  stated,  in all material  respects,  in
relation to the consolidated balance sheet from which it has been derived.




/S/ DELOITTE & TOUCHE LLP

Boise, Idaho
December 4, 2003

                                       14
<PAGE>


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


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

Results of Operations

Results  of  operations  for the 13 week  period  ended  October  30,  2003 were
unfavorably impacted by two labor disputes,  primarily the ongoing labor dispute
in Southern  California (the "Labor  Dispute"),  and, to a much lesser degree, a
contract  renewal  at one of  our  Midwest  distribution  centers.  These  labor
disputes resulted in decreased sales in our Southern California combination food
and drug and  conventional  stores  and  decreased  gross  margin as a result of
inventory shrink, sales mix changes and increased distribution costs.

Pursuant  to the  terms of a  multi-employer  bargaining  arrangement  among the
Company, The Kroger Co. and Safeway Inc. (the "Retailers"),  the Company "locked
out"  its  retail  union  associates  in  Southern  California  food  stores  on
October 12, 2003. This followed the United Food and Commercial Workers' ("UFCW")
decision  to  conduct  a strike  at  Safeway  Inc.'s  Southern  California  Vons
Supermarket  stores on October 11, 2003. In connection  with the decision of the
Retailers to engage in  multi-employer  bargaining  with the UFCW, the Retailers
entered  into  agreements  which  provide  for "lock outs" in the event that any
Retailer is struck at any or all of its facilities  when the other Retailers are
not and  contain  a  provision  designed  to  prevent  the  union  from  placing
disproportionate  pressure on one or more Retailer by picketing such Retailer(s)
but not the other  Retailer(s).  No  payments  are made or  received  under said
provision of the agreements until the conclusion of the Labor Dispute,  at which
time only net amounts  will be paid.  Amounts  accrued  under  these  agreements
during  the  current  quarter  did not have a material  effect on the  Company's
financial position,  results of operations or cash flows. However,  there can be
no assurance as to the future impact of these agreements on the Company.

On November 26, 2003, the Company received notice from the State of California's
Attorney  General's  Office that it had opened an  investigation  into  possible
antitrust  violations  related to the agreements  referred to above. The Company
believes that the  agreements  are lawful,  and that similar  agreements are not
uncommon  in joint  bargaining  situations.  The Company  intends to  vigorously
defend itself in any proceedings related to this investigation.

Following the start of the "lock out", the Company implemented its labor dispute
operations  plan which  included the hiring and  training of temporary  workers,
temporarily reassigning key associates from other divisions and increasing store
security. As of December 8, 2003 the Labor Dispute is on-going.

13 week period ended October 30, 2003

Sales were $8,796 and $8,657 in the 13 week periods  ended  October 30, 2003 and
October 31,  2002,  respectively.  The sales growth for the 13 week period ended
October 30, 2003 as compared to the prior year was generated  primarily by sales
at stores opened during the past year,  partially  offset by reductions in sales
in Southern California as a result of the Labor Dispute.  Comparable store sales
for the total Company,  which includes  sales at replacement  stores,  decreased
0.8% and identical store sales decreased 1.1%. Excluding food and drug stores in
our  Southern  California  Division  for the last 19 days of the 13 week periods
ended October 30, 2003 and October 31, 2002,  comparable  store sales  increased
0.7% and identical store sales increased 0.3%.

The following table reconciles actual comparable store sales and identical store
sales to adjusted  comparable store sales and identical store sales as presented
herein.  The Company  presents  these  non-GAAP  financial  measures  because it
believes  a  comparison  of actual to  adjusted  store  sales  data is useful to
investors to communicate  management's belief of the impact of the Labor Dispute
on trends in sales experienced during the majority of the third quarter.

                                       15
<PAGE>




<TABLE>
<CAPTION>
                                                            Actual            Labor                Adjusted
                                                          Comparable         Dispute              Comparable
                                                         Store Sales       Adjustment             Store Sales
------------------------------------------------------ ------------------ --------------- ----- ------------------
<S>                                                         <C>                 <C>        <C>       <C>
  13 weeks ended October 30, 2003                           $  8,460            $ (280)    (1)       $ 8,180
  13 weeks ended October 31, 2002                              8,528              (402)    (2)         8,126
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Year to year change                                            (68)                                     54
  13 weeks ended October 31, 2002                              8,528                                   8,126
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Comparable store sales percent                                (0.8)%                                   0.7%
====================================================== ================== =============== ===== ==================


                                                       Actual Identical       Labor                Adjusted
                                                         Store Sales         Dispute               Identical
                                                                           Adjustment             Store Sales
------------------------------------------------------ ------------------ --------------- ----- ------------------
  13 weeks ended October 30, 2003                           $  8,348            $ (274)    (3)       $ 8,074
  13 weeks ended October 31, 2002                              8,443              (397)    (4)         8,046
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Year to year Change                                            (95)                                     28
  13 weeks ended October 31, 2002                              8,443                                   8,046
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Identical store sales percent                                 (1.1)%                                   0.3%
====================================================== ================== =============== ===== ==================
</TABLE>

(1) Represents the change in comparable  Southern  California  Division food and
drug store sales in 2003 during the last 19 days of the third quarter.  Includes
the effect of minimal  incremental  benefits in Southern  California  drug store
sales during the last 19 days of the quarter that the Company  believes were due
primarily to the Labor  Dispute.  The third  quarter  labor  dispute  outside of
Southern California did not impact sales.

(2) Represents the change in comparable  Southern  California  Division food and
drug store sales in 2002 during the last 19 days of the third quarter.

(3) Represents  the change in identical  Southern  California  Division food and
drug store sales in 2003 during the last 19 days of the third quarter.  Includes
the effect of minimal  incremental  benefits in Southern  California  drug store
sales during the last 19 days of the quarter that the Company  believes were due
primarily to the Labor  Dispute.  The third  quarter  labor  dispute  outside of
Southern California did not impact sales.

(4) Represents  the change in identical  Southern  California  Division food and
drug store sales in 2002 during the last 19 days of the third quarter.

During  the  13  week  period  ended  October  30,  2003,   the  Company  opened
12 combination food and drug stores,  seven stand-alone  drugstores and two fuel
centers,  while closing two combination food and drug stores, three conventional
stores,  and seven  stand-alone  drugstores.  Management  estimates that overall
inflation in products the Company sells was  approximately  1.1% over the twelve
months ended  October 30,  2003,  as compared to deflation of 0.7% in the twelve
months ended October 31, 2002.

Gross profit,  as a percentage of sales, in the 13 week period ended October 30,
2003  declined 49 basis  points to 28.7% as compared to the 13 week period ended
October 31, 2002. This was a result of decreased sales leverage due to the Labor
Dispute  and the  Company's  decision  to invest  gross  margin  in key  product
categories  (primarily in the grocery and general  merchandise  departments) and
selected  geographic  markets to maintain  market  share,  as well as  increased
Company-wide  promotional  pricing.  The effect of lower  pricing was  partially
offset by realized  cost  savings as part of the  Company's  strategic  sourcing
program and private label sales growth.  The pharmacy  department's gross profit
as a percentage of sales improved in 2003 versus 2002 primarily due to increased
generic substitution.

Selling,  general and administrative  expenses, as a percent of sales, increased
to 25.8% for the 13 week period ended October 30, 2003, as compared to 24.9% for
the 13  week  period  ended  October  31,  2002.  This  increase  was  primarily
attributable  to the lack of sales  leverage due to the Labor Dispute as well as
higher employee benefit costs, depreciation,  contingent lease charges, salaries
and wages and workers'  compensation  costs.  Labor Dispute costs were primarily
related  to the hiring and  training  of  temporary  workers,  travel  costs for
temporarily  reassigned key associates from other Company  divisions,  increased
store security and legal costs. The higher benefit costs experienced  during the
quarter  are  due,  in  part,  to  increases  in  mandatory   contributions   to
multi-employer  health care and pension plans to which the Company  contributes.
Contribution amounts are established under the Company's  collective  bargaining
agreements,  which are up for  renewal  at varying  times over the next  several
years.  If the  health  care and  pension  plan  provisions  of certain of these
collective bargaining agreements cannot be renegotiated in a manner that reduces
the  prospective  health  care and  pension  costs of the Company as the Company
intends,  the  Company's  selling,  general and  administrative  expenses  could
continue to increase, possibly significantly, in the future.

Restructuring  charges  during the 13 week period ended October 30, 2003 totaled
$4 as  compared  to  credits  of $7 in the  corresponding  period  in 2002.  The
increase in  restructuring  charges in 2003 as opposed to 2002 was primarily due
to losses on  disposition  of assets and reductions in the estimated fair market
values  of  assets  to be  sold  related  to the  Company's  2001  restructuring
activities.

                                       16
<PAGE>

The decrease in other (expenses)  income, net of $8 for the 13 week period ended
October 30, 2003, as compared to the  corresponding  period in 2002,  relates to
losses in the earnings of minority equity investments.

Interest,  net,  during the 13 week period ended October 30, 2003 totaled $99 as
compared with $88 for the corresponding  period in the prior year. This increase
was  attributable to less interest being  capitalized on  construction  projects
during  2003.  The  decrease  in  capitalized  interest  was  due to an  overall
reduction in capital expenditures, particularly for new stores.

Earnings  from  continuing  operations  were  $92 for the 13 week  period  ended
October 30, 2003 compared to $190 for the 13 week period ended October 31, 2002.
This  decrease  was due to a  reduction  in  identical  store  sales of 1.1%,  a
decrease in gross  margin,  the impact of the labor  disputes,  and increases in
employee benefit costs,  depreciation,  contingent  lease charges,  salaries and
wages and workers' compensation costs.

The  Company's  effective tax rate for the 13 week period ended October 30, 2003
was 38.4% as compared to 36.4% for the 13 week period  ended  October 31,  2002.
For the 13 week period ended October 31, 2002,  the rate was reduced to 36.4% to
reflect  updated  estimates  of federal and state taxes in 2002 which were lower
than amounts previously estimated.

Net  earnings  were $92 or $0.25 per diluted  share for the 13 week period ended
October 30, 2003,  compared to net  earnings of $188 or $0.47 per diluted  share
for the 13 week period ended  October 31,  2002.  This decline was the result of
the decrease in earnings from continuing operations.

39 week period ended October 30, 2003
Sales were  $26,789 and $26,519 for the 39 week periods  ended  October 30, 2003
and  October 31,  2002,  respectively.  The sales  growth for the 39 week period
ended October 30, 2003 as compared to the prior year was generated  primarily by
sales at stores  opened in the past  year,  partially  offset by a  decrease  in
comparable  store sales of 0.9% and a decrease in identical  store sales of 1.3%
for the 39 week period  ended  October 30,  2003.  Also  impacting  results were
reduced sales in Southern California as a result of the Labor Dispute. Excluding
food and drug stores in Southern  California for the last 19 days of the 39 week
periods  ended  October 30, 2003 and October 31,  2002,  comparable  store sales
decreased 0.5% and identical store sales decreased 0.8%.

The following table reconciles actual comparable store sales and identical store
sales to adjusted  comparable store sales and identical store sales as presented
herein.  The Company  presents  these  non-GAAP  financial  measures  because it
believes  a  comparison  of actual to  adjusted  store  sales  data is useful to
investors to communicate  management's belief of the impact of the Labor Dispute
on trends in sales experienced during the majority of the third quarter.

<TABLE>
<CAPTION>
                                                            Actual             Labor                Adjusted
                                                          Comparable          Dispute              Comparable
                                                         Store Sales        Adjustment             Store Sales
------------------------------------------------------ ------------------ --------------- ----- ------------------
<S>                                                       <C>                   <C>        <C>      <C>
  39 weeks ended October 30, 2003                         $   25,586            $ (276)    (1)      $ 25,310
  39 weeks ended October 31, 2002                             25,824              (398)    (2)        25,426
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Year to year change                                           (238)                                   (116)
  39 weeks ended October 31, 2002                             25,824                                  25,426
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Comparable store sales percent                                (0.9)%                                  (0.5)%
====================================================== ================== =============== ===== ==================
</TABLE>


<TABLE>
<CAPTION>
                                                       Actual Identical        Labor                Adjusted
                                                         Store Sales          Dispute               Identical
                                                                            Adjustment             Store Sales
------------------------------------------------------ ------------------ --------------- ----- ------------------
<S>                                                       <C>                   <C>        <C>      <C>
  39 weeks ended October 30, 2003                         $  25,172             $ (269)    (3)      $ 24,903
  39 weeks ended October 31, 2002                            25,504               (392)    (4)        25,112
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Year to year change                                          (332)                                    (209)
  39 weeks ended October 31, 2002                            25,504                                   25,112
------------------------------------------------------ ------------------ --------------- ----- ------------------
  Identical store sales percent                                (1.3)%                                   (0.8)%
====================================================== ================== =============== ===== ==================
</TABLE>

(1) Represents the change in comparable  Southern  California  Division food and
drug store sales in 2003 during the last 19 days of the third quarter.  Includes
the effect of minimal  incremental  benefits in Southern  California  drug store
sales during the last 19 days of the quarter that the Company  believes were due
primarily to the Labor  Dispute.  The third  quarter  labor  dispute  outside of
Southern California did not impact sales.

(2) Represents the change in comparable  Southern  California  Division food and
drug store sales in 2002 during the last 19 days of the third quarter.

(3) Represents  the change in identical  Southern  California  Division food and
drug store sales in 2003 during the last 19 days of the third quarter.  Includes
the effect of minimal  incremental  benefits in Southern  California  drug store
sales during the last 19 days of the quarter that the Company  believes were due
primarily to the Labor  Dispute.  The third  quarter  labor  dispute  outside of
Southern California did not impact sales.

(4) Represents  the change in identical  Southern  California  Division food and
drug store sales in 2002 during the last 19 days of the third quarter.

                                       17
<PAGE>

For the 39 week period ended October 30, 2003, the Company opened 52 combination
food and drug stores,  21  stand-alone  drugstores  and 28 fuel  centers,  while
closing  11  combination  food and  drug  stores,  17  conventional  stores  and
20 stand-alone drugstores.

Gross  profit,  as a  percentage  of sales,  decreased  51 basis  points for the
39 week period ended October 30, 2003 to 28.8% as compared to the  corresponding
period in 2002.  This  decrease in gross profit  resulted from the lack of sales
leverage  due to the Labor  Dispute  and the  Company's  decision to lower sales
prices  in  key  product  categories  (primarily  in  the  grocery  and  general
merchandise   departments)   and   selected   geographic   markets  to  maintain
market-share, as well as increased promotional pricing Company-wide.  The effect
of lower  pricing was  partially  offset by realized cost savings as part of the
Company's  strategic  sourcing  program and  private  label  sales  growth.  The
pharmacy  department's  gross profit as a percentage  of sales  improved in 2003
versus 2002 primarily due to increased generic substitution.

Selling,  general  and  administrative  expenses  for the 39 week  period  ended
October 30, 2003, as a percent of sales, increased to 25.1% as compared to 24.2%
in the  corresponding  period in the prior year. This increase was primarily due
to lack  of  sales  leverage  due to the  Labor  Dispute  as  well as  increased
depreciation,  employee  benefits,  workers'  compensation  costs and contingent
lease charges.

Earnings  from  continuing  operations  were $426 for the 39 week  period  ended
October 30, 2003,  compared to earnings from  continuing  operations of $665 for
the 39 week period ended  October 31, 2002.  This decrease was due to a decrease
in identical  store sales of 1.3%, a decrease in gross margin and an increase in
depreciation,  employee  benefits,  workers'  compensation  costs and contingent
lease charges.

The  decrease  in  other  expenses  from  $16 in 2002 to $6 in 2003  relates  to
unfavorable  market  adjustments  in the prior year of $17 to the cash surrender
value of  company  owned  life  insurance  policies  used to fund the  Company's
obligations under deferred  compensation  plans for its officers,  key employees
and directors,  partially offset by increased losses in the earnings of minority
interest equity investments in 2003.

Interest,  net, during the 39 week period ended October 30, 2003 totaled $307 as
compared  with $296 in the prior year.  This increase was  attributable  to less
interest being capitalized on construction projects during 2003. The decrease in
capitalized   interest   was  due  to  an  overall   reduction  in  the  capital
expenditures, particularly for new stores.

Net earnings  were $426 or $1.16 per diluted  share for the 39 week period ended
October 30, 2003,  compared to net  earnings of $280 or $0.69 per diluted  share
for the 39 week period ended  October 31, 2002.  The  improvement  in 2003 was a
result of a charge  of $291 in 2002  related  to a  strategic  decision  to exit
underperforming markets and a charge of $94 in 2002 related to the adoption of a
new accounting  principle for the recognition of vendor funds,  partially offset
by the reduction in earnings from continuing operations in 2003.

Critical Accounting Policies
The preparation of financial  statements  requires  management to make estimates
and judgments that affect the reported amounts of assets, liabilities,  revenues
and expenses and related  disclosure of contingent  assets and liabilities.  The
accompanying  condensed consolidated financial statements are prepared using the
same critical  accounting policies discussed in the Company's 2002 Annual Report
on Form 10-K.

Vendor Funds
The Company  receives  funds from many of the vendors whose products the Company
buys for resale in its stores.  These  vendor funds are provided to increase the
sell-through of the related  products.  The Company receives funds for a variety
of merchandising activities: placement of the vendor's products in the Company's
advertising;  placement of the vendor's  products in prominent  locations in the
Company's stores;  introduction of new products into the Company's  distribution
system and retail stores;  exclusivity  rights in certain  categories  that have
slower-turning  products;  and to  compensate  for  temporary  price  reductions
offered to customers  on products  held for sale at retail  stores.  The Company
also  receives  vendor funds for buying  activities,  such as volume  commitment
rebates and credits for purchasing  products in advance of their need. The terms
of vendor funds  arrangements vary in length,  from short term arrangements that
are completed within a quarter,  to long term  arrangements that are expected to
be completed within ten years.

Accounting  for  vendor  funds is  discussed  in EITF  02-16,  in which the EITF
reached  consensus on two issues in November 2002 and provided  transition rules
on those  issues in January 2003 and March 2003.  As a result of this  guidance,
the  Company  adopted  a  new  method  for  recognizing  the  vendor  funds  for
merchandising activities. As of the beginning of 2002, the Company recognizes as
a reduction of cost of sales vendor funds for merchandising  activities when the
related   products  are  sold.   Under  the  previous   accounting   method  for
merchandising vendor funds, these credits were recognized as a reduction to cost
of sales when the  merchandising  activity was performed in accordance  with the
underlying  agreements.  In  connection  with  the  implementation  of this  new
accounting  method,  the  Company  recorded a charge in 2002 of $94,  net of tax
benefit of $60.

                                       18
<PAGE>

The amount of vendor funds reducing the Company's inventory ("inventory offset")
as of October  30,  2003 was $134,  an increase of $3 from the end of the second
quarter of 2003 and a decrease  of $18 from the  beginning  of 2003.  The vendor
funds  inventory  offset as of October 31, 2002 was $143, an increase of $8 from
the end of the second  quarter of 2002 and a decrease of $15 from the  beginning
of 2002. The inventory offset was determined by estimating the average inventory
turnover  rates  by  product  category  for  the  Company's   grocery,   general
merchandise   and   lobby   departments   (these   departments   received   over
three-quarters  of the Company's vendor funds in 2002) and by average  inventory
turnover rates by department for the Company's remaining inventory.

Recent Accounting Standards
In July 2001 the  Financial  Accounting  Standards  Board  ("FASB")  issued SFAS
No. 143, "Accounting for Asset Retirement Obligations." This statement addresses
financial   accounting  and  reporting  for  obligations   associated  with  the
retirement of tangible  long-lived  assets and the associated  asset  retirement
costs.  SFAS No. 143 became  effective for the Company on January 31, 2003,  and
did not have a material effect on the Company's condensed consolidated financial
statements for the 39 weeks ended October 30, 2003.

In January 2003 the FASB issued Interpretation No. 46 ("FIN 46"), "Consolidation
of  Variable  Interest  Entities  - an  Interpretation  of ARB No.  51."  FIN 46
requires  certain variable  interest  entities to be consolidated by the primary
beneficiary of the entity if the equity  investors in the entity do not have the
characteristics  of a controlling  financial  interest or do not have sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial  support  from other  parties.  The  provisions  of this
interpretation became effective for the Company on January 31, 2003, and did not
have  a  material  effect  on the  Company's  condensed  consolidated  financial
statements for the 39 weeks ended October 30, 2003.

In May 2003 the FASB  issued  SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
requires that certain financial instruments, which under previous guidance could
be accounted  for as equity,  be  classified  as  liabilities  in  statements of
financial position.  SFAS No. 150 is effective for financial instruments entered
into or modified  after May 31, 2003,  and was  effective for the Company in the
13 week period ended October 30, 2003. The adoption of SFAS No. 150 did not have
a material effect on the Company's condensed  consolidated  financial statements
for the 13 weeks ended October 30, 2003.

In  November  2003 the EITF  confirmed  as a  consensus  EITF  Issue No.  03-10,
"Application  of EITF Issue No. 02-16,  'Accounting  by a Customer  (Including a
Reseller)  for Certain  Consideration  Received  from a Vendor,' by Resellers to
Sales  Incentives  Offered  to  Consumers  by  Manufacturers"   ("EITF  03-10").
EITF 03-10 will not impact  the  Company's  existing  accounting  and  reporting
policies for  manufacturers'  coupons that can be presented at any retailer that
accepts coupons. For arrangements with vendors that are entered into or modified
after the start of fiscal year 2004, we will record the vendor  reimbursement as
a  reduction  of cost of sales  (instead  of  sales) if the  coupon  can only be
redeemed at a Company  retail store.  This  modification  to our  accounting and
reporting  policies  will only impact  sales and cost of sales  beginning in the
Company's first quarter of 2004.

Liquidity and Capital Resources
Cash provided by operating activities during the 39 weeks ended October 30, 2003
was  $1,060  compared  to $1,725  for the same  period in the  prior  year.  The
decrease  in 2003,  as  compared  to 2002,  was due  primarily  to a decrease in
earnings from continuing operations; an increase in inventories due to increased
store count and increased safety stock attributable to the Labor Dispute;  and a
decrease in accounts payable due to timing of disbursements.

Cash flow used by  investing  activities  during the 39 weeks ended  October 30,
2003  increased to $746 compared to $477 in 2002.  This increase was a result of
2002  investing  activities  that  included  proceeds  from the  sale of  assets
(associated  with the 2001  restructuring  activities and the 2002 market exits)
that were $409  greater  than asset sale  proceeds  received in 2003,  partially
offset by lower  capital  expenditures  in 2003.  The Company is  continuing  to
implement its 2003 capital  expenditure  plan,  which  includes  outlays for new
stores, store remodels and information technology.

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  borrowings  outstanding  at October  30, 2003 and January 30,
2003.

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 no less than 2.7 times. As of October 30,
2003, the Company was in compliance with these requirements.  No borrowings were
outstanding under these credit facilities as of October 30, 2003.

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

                                       19
<PAGE>

corporate  purposes,  including the potential  purchase of outstanding shares of
Albertsons common stock. As of October 30, 2003, up to $2,400 of debt securities
remain available for issuance under the Company's 2001 Registration Statement.

The Company's Board of Directors extended the Company's 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. In the first quarter of 2003,  the
Company  repurchased  5.3  million  shares  of  its  common  stock  for a  total
expenditure  of $108 at an average  price of $20.26 per share.  During the first
three quarters of 2002, 20.9 million shares were purchased and retired under the
buyback  program for a total  expenditure  of $547 at an average price of $26.18
per share.  Since the first quarter of 2003 the Company has not  repurchased any
shares of its common stock.

Contractual Obligations and Commercial Commitments
The Company  had  outstanding  letters of credit of $91 as of October 30,  2003,
consisting  of $76 of standby  letters  of credit  covering  primarily  workers'
compensation or performance  obligations and $15 of commercial letters of credit
supporting the Company's merchandise import program.

Except  as  disclosed  under  "Contingent  Lease  Obligations"  in Note E to the
unaudited condensed consolidated financial statements included elsewhere in this
report,  there  have been no other  material  changes  regarding  the  Company's
contractual obligations and commercial commitments from the information provided
in Note Y "Contractual Obligations and Commitments" in the Company's 2002 Annual
Report on Form 10-K.

Off-Balance Sheet Arrangements
The Company had no significant  off-balance sheet arrangements (including equity
method  investments) as of October 30, 2003.  Investments that are accounted for
under  the  equity  method  have no  liabilities  associated  with them that are
material to the Company.

Related Party Transactions
There were no  material  related  party  transactions  during the 39 week period
ended October 30, 2003.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes regarding the Company's market risk position
from the information  provided under the caption  "Quantitative  and Qualitative
Disclosures about Market Risk" in the Company's 2002 Annual Report on Form 10-K.

Item 4.  Controls and Procedures
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-15e) as of October 30, 2003.  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.

In October 2003,  the Company  implemented a new general  ledger  system,  which
included  new  hardware  and  software.  This is the first phase of a multi-year
effort to improve the  Company's  financial  systems.  This  implementation  has
resulted  in  certain  changes  to  business  processes  and  internal  controls
impacting  financial  reporting.  Management  is taking the  necessary  steps to
monitor and maintain appropriate internal controls during this period of change.
These steps include  deploying  resources to mitigate  internal  control  risks,
processing  the new system  parallel  with the legacy system for five months and
performing multiple levels of reconciliations.

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

PART II.  OTHER INFORMATION

Cautionary  Statement  for Purposes of "Safe Harbor  Provisions"  of the Private
Securities Litigation Reform Act of 1995
All statements  other than  statements of historical  fact contained in this and
other documents disseminated by the Company,  including statements regarding the
Company's expected financial  performance,  are  forward-looking  information as
defined in the Private  Securities  Litigation  Reform Act of 1995. In reviewing
such information about the future performance of the Company,  it should be kept
in mind that  actual  results  may differ  materially  from those  projected  or
suggested in such forward-looking information since predictions regarding future
results  of  operations   and  other  future  events  are  subject  to  inherent
uncertainties.  These  statements  may relate to, among other  things:  non-GAAP
financial measures included in this filing;  statements of expectation regarding
the third quarter 2003 results had the Labor Dispute in Southern  California not
occurred;  investing  to  increase  sales;  changes in cash flow;  increases  in
insurance  and employee  benefit  costs;  attainment  of cost  reduction  goals;
impacts of the Southern California Labor Dispute;  achieving sales increases and

                                       20
<PAGE>

increases in comparable and identical sales;  opening and remodeling stores; and
the Company's  five  strategic  imperatives.  These  statements are indicated by
words or phrases such as "expects," "plans," "believes," "estimate," and "goal."
In reviewing such information  about the future  performance of the Company,  it
should be kept in mind that  actual  results  may differ  materially  from those
projected or suggested in such forward-looking information.

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

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

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

In March 2000 a class action  complaint was filed against  Albertsons as well as
American Stores Company,  American Drug Stores,  Inc., Sav-on Drug Stores,  Inc.
and  Lucky  Stores,  Inc.,  wholly-owned  subsidiaries  of the  Company,  in the
Superior  Court for the County of Los Angeles,  California  (Gardner,  et al. v.
Albertson's,  Inc.,  et al.) by  bonus-eligible  managers  seeking  recovery  of
additional  bonus  compensation  based  upon  plaintiffs'  allegation  that  the
calculation  of profits on which their  bonuses were based  improperly  included
expenses for workers' compensation costs, cash shortages, premises liability and
"shrink"  losses in  violation  of  California  law.  In October  2001 the court
granted summary  judgment  against Sav-on Drug Stores,  finding one of its bonus
plans unlawful under plaintiffs' liability theory. In August 2001 a class action
complaint with very similar claims, also involving  bonus-eligible managers, was
filed  against  Albertsons  as well as Lucky  Stores,  Inc. and American  Stores
Company, wholly-owned subsidiaries of the Company, in the Superior Court for the
County of Los Angeles,  California  (Petersen,  et al. v. Lucky Stores, Inc., et
al.). In June 2002 the cases were consolidated 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  Albertsons as well as
American Stores Company,  American Drug Stores,  Inc., Sav-on Drug Stores,  Inc.
and  Lucky  Stores,  Inc.,  wholly-owned  subsidiaries  of the  Company,  in the
Superior  Court for the County of Los Angeles,  California  (Gardner,  et al. v.
American  Stores  Company,  et al.) by assistant  managers  seeking  recovery of
overtime  pay based  upon  plaintiffs'  allegation  that  they  were  improperly
classified  as exempt  under  California  law.  In May 2001 a class  action with
respect to Sav-on Drug Stores  assistant  managers was certified by the court. A
case with very  similar  claims,  involving  the Sav-on  Drug  Stores  assistant
managers  and  operating  managers,  was also  filed in April 2000  against  the
Company's  subsidiary  Sav-on Drug Stores,  Inc. in the  Superior  Court for the
County of Los Angeles, California (Rocher, Dahlin, et al. v. Sav-on Drug Stores,
Inc.)  and was also  certified  as a class  action.  In April  2002 the Court of
Appeal of the State of California Second Appellate  District reversed the Rocher
class certification,  leaving only two plaintiffs.  The California Supreme Court
has accepted plaintiffs' request for review of this class  decertification.  The
Gardner case is on hold  pending the review of the Rocher class  decertification
issue by 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.

An agreement was reached,  and court approval granted, to settle eight purported
class and/or  collective  actions which were  consolidated  in the United States
District  Court in Boise,  Idaho,  and which  raised  various  issues  including
"off-the-clock"  work  allegations and allegations  regarding  certain  salaried
grocery  managers' exempt status.  Under the settlement  agreement,  current and
former employees who met eligibility criteria have been allowed to present their
off-the-clock work claims to a settlement administrator.  Additionally,  current
and  former  grocery  managers  employed  in the State of  California  have been

                                       21
<PAGE>

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 claim forms were
returned,   of  which   approximately   5,000  were  deemed  by  the  settlement
administrator  to be incapable of valuation,  presumed  untimely,  or both.  The
claims  administrator was able to assign a value to approximately  1,000 claims,
which  amount to a total of  approximately  $14,  although  the value of many of
those  claims is still  subject to  challenge  by the  Company.  A second  claim
process  was ordered by the court,  but the parties are still  waiting for final
instructions  from the Court.  The Company is presently  unable to determine the
number of individuals who may ultimately submit valid claims or the amounts that
it may  ultimately be required to pay with respect to such claims.  Based on the
information  presently  available  to it,  management  does not expect  that the
satisfaction  of valid claims  submitted  pursuant to the settlement will have a
material  adverse  effect  on the  Company's  financial  condition,  results  of
operations or cash flows.

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

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

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

Item 2.  Changes in Securities and Use of Proceeds
None.

Item 3.  Defaults upon Senior Securities
None.

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

Item 5.  Other Information
None.

Item 6.  Exhibits and Reports on Form 8-K

a.       Exhibits


             10.47        Form of Director Indemnification Agreement*

             15           Letter re: Unaudited Interim Financial Statements

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

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

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

           --------------
           * Management contract required to be filed as an exhibit hereto.


                                       22
<PAGE>



b.  The following reports on Form 8-K were filed or furnished during the quarter
    ended October 30, 2003.

           Current report on Form 8-K dated September 26, 2003 filed pursuant to
           Item  5,   Other  Events,   regarding  amendments  to  the  Company's
           stockholder rights plan.

           Current report on Form 8-K dated September 4, 2003 furnished pursuant
           to Item 12, Results of Operations and Financial Condition,  including
           the Company's  press release  which discussed the Company's sales and
           earnings for the second quarter of 2003.




                                       23
<PAGE>



                                    SIGNATURE

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

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



Date: December 8, 2003     /S/ Felicia D. Thornton
                           -----------------------------------------------------
                           Felicia D. Thornton
                           Executive Vice President
                             and Chief Financial Officer




                                       24