SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

                                    FORM 10-Q

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

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


        For 13 Weeks Ended: July 31, 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)                                               (Zip Code)


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


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

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

     There  were  366,915,811,  shares  with a par  value  of  $1.00  per  share
outstanding at August 29, 2003.


                                     Page 1
<PAGE>






                                ALBERTSON'S INC.
                                      INDEX


<TABLE>
<S>           <C>                                                                                                           <C>
PART I        FINANCIAL INFORMATION

Item 1.       Financial Statements (Unaudited)
                  Condensed Consolidated Earnings Statements  for the 13 weeks ended July 31, 2003 and August 1, 2002       3

                  Condensed Consolidated Earnings Statements  for the 26 weeks ended July 31, 2003 and August 1, 2002       4

                  Condensed Consolidated Balance Sheets as of July 31, 2003 and January 30, 2003                            5

                  Condensed Consolidated Cash Flow Statements for the 26 weeks ended July 31, 2003 and August 1, 2002       6

                  Notes to Condensed Consolidated Financial Statements                                                      7

                  Independent Accountants' Report                                                                          13

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

Item 3.       Quantitative and Qualitative Disclosures About Market Risk                                                   16

Item 4.       Controls and Procedures                                                                                      17

PART II       OTHER INFORMATION

Item 1.       Legal Proceedings                                                                                            17

Item 2.       Changes in Securities and Use of Proceeds                                                                    18

Item 3.       Defaults upon Senior Securities                                                                              18

Item 4.       Submission of Matters to a Vote of Security Holders                                                          19

Item 5.       Other Information                                                                                            19

Item 6.       Exhibits and Reports on Form 8-K                                                                             20
</TABLE>



                                     Page 2
<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

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

<TABLE>
<CAPTION>

                                                                                                 13 WEEKS ENDED
                                                                              ------------------------------------------

                                                                                       July 31,              August 1,
                                                                                           2003                   2002
                                                                              -------------------    -------------------
<S>                                                                           <C>                    <C>
Sales                                                                                    $9,053                 $8,941
Cost of sales                                                                             6,397                  6,310
                                                                              -------------------    -------------------
Gross Profit                                                                              2,656                  2,631

Selling, general and administrative expenses                                              2,295                  2,148
Restructuring credits and other                                                              (8)                   (37)
                                                                              -------------------    -------------------
Operating profit                                                                            369                    520

Other (expenses) income:
  Interest, net                                                                            (105)                  (103)
  Other, net                                                                                  -                    (14)
                                                                              -------------------    -------------------
Earnings from continuing operations before income taxes                                     264                    403
Income tax expense                                                                          102                    160
                                                                              -------------------    -------------------

Earnings from continuing operations                                                         162                    243
                                                                              -------------------    -------------------
Discontinued operations:
  Operating loss                                                                              -                    (17)
  Gain on disposal                                                                            -                     37
  Income tax expense                                                                          -                      6
                                                                              -------------------    -------------------
Earnings from discontinued operations                                                         -                     14
                                                                              -------------------    -------------------

Net earnings                                                                            $   162                $   257
                                                                              ===================    ===================


Earnings per share:
  Basic
     Continuing operations                                                               $ 0.44                 $ 0.60
     Discontinued operations                                                                  -                   0.03
                                                                              -------------------    -------------------
     Net earnings                                                                        $ 0.44                 $ 0.63
                                                                              ===================    ===================

  Diluted
     Continuing operations                                                               $ 0.44                 $ 0.60
     Discontinued operations                                                                  -                   0.03
                                                                              -------------------    -------------------
     Net earnings                                                                        $ 0.44                 $ 0.63
                                                                              ===================    ===================

Weighted average number of common shares outstanding:
  Basic                                                                                     368                    407
  Diluted                                                                                   368                    409


See Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                     Page 3
<PAGE>


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

                                                                                                 26 WEEKS ENDED
                                                                                ------------------------------------------
                                                                                         July 31,              August 1,
                                                                                             2003                   2002
                                                                                -------------------    -------------------
<S>                                                                             <C>                    <C>
Sales                                                                                     $17,993                $17,862
Cost of sales                                                                              12,784                 12,608
                                                                                -------------------    -------------------
Gross profit                                                                                5,209                  5,254

Selling, general and administrative expenses                                                4,474                  4,269
Restructuring credits and other                                                               (15)                   (22)
                                                                                -------------------    -------------------
Operating profit                                                                              750                  1,007

Other (expenses) income:
  Interest, net                                                                              (208)                  (208)
  Other, net                                                                                    1                    (17)
                                                                                -------------------    -------------------
Earnings from continuing operations before income taxes                                       543                    782
Income tax expense                                                                            209                    307
                                                                                -------------------    -------------------

Earnings from continuing operations                                                           334                    475
                                                                                -------------------    -------------------
Discontinued operations:
  Operating loss                                                                                -                   (467)
  Gain on disposal                                                                              -                     33
  Income tax benefit                                                                            -                   (145)
                                                                                -------------------   --------------------
Loss from discontinued operations                                                               -                   (289)
                                                                                -------------------   -------------------
Earnings before cumulative effect of change in accounting principle                           334                    186
                                                                                -------------------   -------------------
Cumulative effect of change in accounting principle (net of tax $60)                            -                    (94)
                                                                                -------------------    -------------------
Net earnings                                                                              $   334               $     92
                                                                                ===================    ===================

Earnings (loss) per share:
  Basic
     Continuing operations                                                                 $ 0.90                 $ 1.17
     Discontinued operations                                                                    -                  (0.71)
     Cumulative effect of change in accounting principle (net of tax $0.15)                     -                  (0.23)
                                                                                -------------------    -------------------
     Net earnings                                                                          $ 0.90                 $ 0.23
                                                                                ===================    ===================

  Diluted
     Continuing operations                                                                 $ 0.90                 $ 1.16
     Discontinued operations                                                                    -                  (0.71)
     Cumulative effect of change in accounting principle (net of tax $0.15)                     -                  (0.22)
                                                                                -------------------    -------------------
     Net earnings                                                                          $ 0.90                 $ 0.23
                                                                                ===================    ===================


Weighted average number of common shares outstanding:
  Basic                                                                                       371                    407
  Diluted                                                                                     371                    409


See Notes to Condensed Consolidated Financial Statements.
</TABLE>
                                     Page 4

<PAGE>



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

                                                                                                  July 31,          January 30,
                                                                                                      2003                 2003
                                                                                            -----------------    -----------------
         ASSETS
<S>                                                                                         <C>                  <C>
Current Assets:
   Cash and cash equivalents                                                                        $  123               $  162
   Accounts and notes receivable, net                                                                  634                  647
   Inventories                                                                                       2,974                2,973
   Assets held for sale                                                                                104                  120
   Prepaid and other                                                                                   274                  366
                                                                                            -----------------    -----------------
     Total Current Assets                                                                            4,109                4,268

Land, buildings and equipment (net of accumulated depreciation and
   amortization of $6,486 and $6,158, respectively)                                                  9,147                9,029

Goodwill, net                                                                                        1,399                1,399

Intangibles, net                                                                                       207                  214

Other assets                                                                                           297                  301
                                                                                            -----------------    -----------------

Total Assets                                                                                      $ 15,159             $ 15,211
                                                                                            =================    =================

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                                                $ 1,941              $ 2,009
   Salaries and related liabilities                                                                    535                  599
   Self-insurance                                                                                      258                  244
   Current maturities of long-term debt and capital lease obligations                                  215                  119
   Other current liabilities                                                                           492                  477
                                                                                            -----------------    -----------------
     Total Current Liabilities                                                                       3,441                3,448

Long-term debt                                                                                       4,750                4,950

Capital lease obligations                                                                              307                  307

Self-insurance                                                                                         408                  367

Other long-term liabilities and deferred credits                                                       957                  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                                                                            140                  128
   Accumulated other comprehensive loss                                                                (96)                 (96)
   Retained earnings                                                                                 4,885                4,793
                                                                                            -----------------    -----------------
     Total stockholders' equity                                                                      5,296                5,197
                                                                                            -----------------    -----------------
Total Liabilities and Stockholders' Equity                                                        $ 15,159             $ 15,211
                                                                                            =================    =================

See Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                     Page 5
<PAGE>


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

                                                                                                  26 WEEKS ENDED
                                                                                    --------------------------------------------
                                                                                           July 31,                 August 1,
                                                                                               2003                      2002
                                                                                    ------------------         -----------------
<S>                                                                                 <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net earnings                                                                             $   334                   $    92
     Adjustments to reconcile net earnings to net cash
       provided by operating activities:
       Depreciation and amortization                                                            478                       496
       Net deferred income taxes and other                                                       24                        14
       Discontinued operations noncash charges                                                    -                       356
       Cumulative effect of change in accounting principle                                        -                        94
       Decrease (increase) in cash surrender value of insurance                                  (1)                       18
       Changes in operating assets and liabilities:
         Receivables, prepaid expenses and other                                                 72                       159
         Inventories                                                                             (2)                      222
         Accounts payable                                                                       (53)                      (96)
         Other current liabilities                                                              (42)                     (140)
         Self-insurance                                                                          54                        21
         Other                                                                                   13                       (18)
                                                                                    ------------------     ---------------------
   Net cash provided by operating activities                                                    877                     1,218

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                                        (643)                     (683)
   Proceeds from disposal of land, buildings and equipment                                       29                        78
   Proceeds from disposal of assets held for sale                                                62                       430
   Other                                                                                         (5)                       21
                                                                                    ------------------     ---------------------
   Net cash used in investing activities                                                       (557)                     (154)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash dividends paid                                                                         (141)                     (155)
   Payments on long-term borrowings                                                            (110)                     (107)
   Stock purchases and retirements                                                             (108)                      (75)
   Proceeds from stock options exercised                                                          -                        15
                                                                                    ------------------     ---------------------
     Net cash used in financing activities                                                     (359)                     (322)

Net (Decrease) Increase in Cash and Cash Equivalents                                            (39)                      742

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

Cash and Cash Equivalents at End of Period                                                  $   123                   $   803
                                                                                    ==================     =====================



See Notes to Condensed Consolidated Financial Statements.
</TABLE>



                                     Page 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 July 31, 2003,  the Company  operated  2,305  stores in 31 states.  Retail
operations   are  supported  by  17  major  Company   distribution   operations,
strategically  located in the  Company's  operating  markets.  The Company  also
operated 225 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 26 weeks ended July 31,
2003, are not necessarily indicative of results for a full year.

The Company's  operating  results and cash flows for the quarter ended August 1,
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 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.

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 $5
for the 13 weeks ended July 31, 2003, and August 1, 2002,  respectively,  and $8
and $10 for the 26 weeks ended July 31, 2003, and August 1, 2002, respectively.

The  Company's  vendor  funds  inventory  offset as of July 31, 2003 was $131, a
decrease of $15 from the end of the first  quarter of 2003 and a decrease of $21
from the beginning of 2003.  The vendor funds  inventory  offset as of August 1,
2002 was $135, a decrease of $7 from the end of the first  quarter of 2002 and a
decrease of $23 from the beginning of 2002.

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."

                                     Page 7
<PAGE>


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                   26 Weeks Ended
                                                           July 31,        August 1,        July 31,        August 1,
                                                               2003             2002            2003             2002
       --------------------------------------------- ---------------- ---------------- --------------- ----------------
<S>                                                          <C>              <C>             <C>             <C>
        Net earnings as reported                              $  162           $  257          $  334          $    92

       Add:   Stock-based    compensation   expense
         included in reported net earnings,  net of
         related tax effects                                      4                3               8                6

       Deduct:   Total   stock-based   compensation
         expense  determined under fair value based
         method  for  all  awards,  net of  related
         tax effects                                            (12)             (12)            (23)             (24)
       --------------------------------------------- ---------------- ---------------- --------------- ----------------
       Net earnings  - pro forma                             $  154           $  248          $  319          $    74
       ============================================= ================ ================ =============== ================

       Basic earnings per share:

         As reported                                         $ 0.44           $ 0.63          $ 0.90           $ 0.23

         Pro forma                                             0.42             0.61            0.86             0.18
       ============================================= ================ ================ =============== ================

       Diluted earnings per share:

         As reported                                         $ 0.44           $ 0.63          $ 0.90           $ 0.23

         Pro forma                                             0.42             0.61            0.86             0.18
       ============================================= ================ ================ =============== ================
</TABLE>


Reclassifications
Certain  reclassifications  have  been  made to the  August  1,  2002  financial
statements to conform to classifications in the current quarter.

NOTE B - 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 26 weeks ended July 31, 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 26 weeks ended July 31, 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 is otherwise  effective for the Company
in the third  quarter of 2003.  The Company does not expect the adoption of SFAS
No.  150 to  have a  significant  impact  on the  Company's  future  results  of
operations or financial condition.

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 26 week  periods  ended July 31,
2003,  the  Company  paid  $2 and $4,  respectively,  and  had  favorable  lease
termination settlements of $4 and $6, respectively,  leaving a balance of $18 as
of July 31, 2003.


                                     Page 8
<PAGE>


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 26  week  periods  ended  July  31,  2003,  the  Company  paid  $2  and  $3,
respectively, leaving a balance of $8 as of July 31, 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 July 31, 2003,  the Company
had favorable  lease  termination  settlements  of $4 and paid $3. During the 26
week period ended July 31, 2003, the Company recorded additional reserves of $2,
had favorable lease termination settlements of $6 and paid $6, leaving a balance
of $20 as of July 31, 2003.  The Company also sold certain  closed stores in the
26 week period ended July 31, 2003 which  resulted in a gain of $6 (reflected in
"Selling,  general and  administrative  expenses" on the condensed  consolidated
earnings statement).

NOTE D - INTANGIBLES
The carrying amount of intangibles was as follows:
<TABLE>
<CAPTION>

                                                                             JULY 31,            JANUARY 30,
                                                                                 2003                   2003
                                                                   --------------------   --------------------
<S>                                                                <C>                    <C>
            Amortizing:
               Favorable acquired operating leases                               $231                   $231
               Customer lists and other contracts                                  56                     53
                                                                   --------------------   --------------------
                                                                                  287                    284
            Accumulated amortization                                             (183)                  (173)
                                                                   --------------------   --------------------
                                                                                  104                    111
            Non-Amortizing:
               Liquor licenses                                                     39                     39
               Pension related intangible assets                                   64                     64
                                                                   --------------------   --------------------
                                                                                  103                    103

                                                                                 $207                   $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. On August 4,
2003,  notices  were  sent  to  approximately  21,000  potential  class  members
notifying  them of the existence of the lawsuit and allowing them to voluntarily
opt out of the class.  The opt out requests must be returned by potential  class
members by October  10,  2003.  The  Company has strong  defenses  against  this
lawsuit, and is vigorously defending it. Although this lawsuit is subject to the
uncertainties  inherent  in the  litigation  process,  based on the  information
presently available to the Company, management does not expect that the ultimate
resolution of this action will have a material  adverse  effect on the Company's
financial condition, results of operations or cash flows.

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 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.

                                     Page 9
<PAGE>

An agreement  has been  reached,  and court  approval  granted,  to settle eight
purported class and/or collective  actions which were consolidated in the United
States District Court in Boise, Idaho, 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
court is  considering  the status and handling of these 5,000  claims  including
terms under which  claimants  will be  permitted  to cure  deficient or untimely
claims.  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.  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.   The  Company  utilizes  various  methods  of  alternative  dispute
resolution,   including  settlement   discussions,   to  manage  the  costs  and
uncertainties  inherent in the litigation  process.  Management  does not expect
that the ultimate  resolution  of these legal  proceedings  will have a material
adverse effect on the Company's  financial  condition,  results of operations or
cash flows.

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 July 31,  2003,
approximately 60 store leases for which the Company is contingently  liable were
subject to the  bankruptcy  proceedings  of such third parties and eight of such
had been  rejected by the  applicable  third  party.  The Company has recorded a
reserve of $7, which  represents the remaining  minimum lease payments and other
payment  obligations  under the eight 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.

                                    Page 10
<PAGE>


Note F- Computation of Earnings Per Share
<TABLE>
<CAPTION>

                                                                              13 Weeks Ended
                                                    -------------------------------------------------------------------
                                                            July 31, 2003                      August 1, 2002
                                                       BASIC            DILUTED            BASIC            DILUTED
                                                    -------------     -------------    ---------------    -------------
<S>                                                 <C>               <C>              <C>                <C>
Earnings from:
   Continuing operations                                  $ 162             $ 162              $ 243            $ 243
   Discontinued operations                                    -                 -                 14               14
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $ 162             $ 162              $ 257            $ 257
                                                    =============     =============    ===============    =============

Weighted average common shares outstanding                  368               368                407              407
Potential common share equivalents                                              -                                   2
                                                                      -------------                       -------------
Weighted average shares outstanding                                           368                                 409
                                                                      =============                       =============

Earning per common share and common share equivalents:
   Continuing operations                                  $0.44             $0.44              $0.60            $0.60
   Discontinued operations                                    -                 -               0.03             0.03
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $0.44             $0.44              $0.63            $0.63
                                                    =============     =============    ===============    =============

Calculation of potential common share equivalents:
   Options to purchase potential common shares                                  3                                  16
   Potential common shares assumed purchased
      with potential proceeds                                                  (3)                                (14)
                                                                      -------------                       -------------
   Potential common share equivalents                                           -                                   2
                                                                      =============                       =============

Calculation of potential common shares assumed
   purchased with potential proceeds
    Potential proceeds from exercise of options
      to purchase common shares                                               $48                                $429
    Common stock price used under treasury
      stock method                                                         $19.84                              $31.08
                                                                      -------------                       -------------
    Potential common shares assumed purchased
      with potential proceeds                                                   3                                  14
                                                                      =============                       =============

Anti-dilutive shares excluded from potential
   common share equivalents                                                  29.7                                12.5
                                                                      =============                       =============
</TABLE>


                                    Page 11


<PAGE>

<TABLE>
<CAPTION>
                                                                              26 Weeks Ended
                                                    -------------------------------------------------------------------
                                                            July 31, 2003                      August 1, 2002
                                                       BASIC            DILUTED            BASIC            DILUTED
                                                    -------------     -------------    ---------------    -------------
<S>                                                 <C>               <C>              <C>                <C>
Earnings (loss) from:
   Continuing operations                                  $ 334             $ 334              $ 475            $ 475
   Discontinued operations                                    -                 -               (289)            (289)
   Cumulative effect of change in
     accounting principle                                     -                 -                (94)             (94)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $ 334             $ 334             $   92           $   92
                                                    =============     =============    ===============    =============

Weighted average common shares outstanding                  371               371                407              407
Potential common share equivalents                                              -                                   2
                                                                      -------------                       -------------
Weighted average shares outstanding                                           371                                 409
                                                                      =============                       =============

Earning per common share and common
   share equivalents:
   Continuing operations                                  $0.90             $0.90              $1.17            $1.16
   Discontinued operations                                    -                 -              (0.71)           (0.71)
   Cumulative effect of change in
     accounting principle                                     -                 -              (0.23)           (0.22)
                                                    -------------     -------------    ---------------    -------------
      Net earnings                                        $0.90             $0.90              $0.23            $0.23
                                                    =============     =============    ===============    =============

Calculation of potential common share equivalents:
   Options to purchase potential common shares                                  3                                  16
   Potential common shares assumed purchased
     with potential proceeds                                                   (3)                                (14)
                                                                      -------------                       -------------
   Potential common share equivalents                                           -                                   2
                                                                      =============                       =============

Calculation of potential common shares assumed
   purchased with potential proceeds
    Potential proceeds from exercise of options
      to purchase common shares                                               $48                                $439
    Common stock price used under treasury
      stock method                                                         $19.58                              $31.42
                                                                      -------------                       -------------
    Potential common shares assumed purchased
      with potential proceeds                                                   3                                  14
                                                                      =============                       =============

Anti-dilutive shares excluded from potential
   common share equivalents                                                  29.9                                12.6
                                                                      =============                       =============
</TABLE>


                                    Page 12
<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 July 31, 2003, and the
related condensed  consolidated earnings statements and cash flow statements for
the thirteen and twenty-six week periods ended July 31, 2003 and August 1, 2002.
These  interim  financial   statements  are  the  responsibility  of  Albertsons
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
September 3, 2003


                                    Page 13
<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

13 week period ended July 31, 2003

Sales  were  $9,053 and $8,941 in the 13 week  periods  ended July 31,  2003 and
August 1, 2002,  respectively.  The slight  sales  growth for the 13 week period
ended July 31,  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, which includes sales at replacement  stores, of 0.9% and
a decrease in  identical  store sales of 1.3%.  During the 13 week period  ended
July 31, 2003,  the Company  opened 20  combination  food and drug  stores,  two
stand-alone  drugstores and 13 fuel centers,  while closing six combination food
and drug  stores,  six  conventional  stores,  and two  stand-alone  drugstores.
Management  estimates  that overall  inflation in products the Company sells was
approximately  0.7% over the twelve  months ended July 31, 2003,  as compared to
deflation of 0.5% in the twelve months ended August 1, 2002.

Gross  profit,  as a percentage  of sales,  in the 13 week period ended July 31,
2003 declined nine basis points to 29.3% as compared to the 13 week period ended
August 1, 2002.  This was a result of 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. The pharmacy  department's gross profit as
a  percentage  of sales  improved in 2003 versus 2002 due to  increased  generic
substitution.

Selling,  general and administrative  expenses, as a percent to sales, increased
to 25.3% for the 13 week period  ended July 31,  2003,  as compared to 24.0% for
the 13 week  period  ended  August 1,  2002,  primarily  due to higher  workers'
compensation, employee benefits, occupancy, and salaries and wages costs.

Restructuring  credits  during the 13 week period ended July 31, 2003 totaled $8
as compared to $37 in the  corresponding  period in the prior year. The decrease
in restructuring credits is primarily due to reduced activity in 2003 as opposed
to 2002 related to the Company's 2001 restructuring activities.

The decrease in other (expense) income,  net of $14 for the 13 week period ended
July 31,  2003,  as compared  to the  corresponding  period in 2002,  relates to
unfavorable  market adjustments in the prior year 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.

Earnings from continuing operations were $162 or $0.44 per diluted share for the
13 week period ended July 31, 2003  compared to $243 or $0.60 per diluted  share
for the 13 week period ended August 1, 2002,  a decrease of 33%.  This  decrease
was due to a decrease  in  identical  store  sales of 1.3%,  a decrease in gross
margin and increases in workers'  compensation,  employee benefits and occupancy
costs.

The Company's  effective tax rate for the 13 week period ended July 31, 2003 was
38.4% as  compared  to 39.4% for the 13 week period  ended  August 1, 2002.  The
decrease  in the  Company's  effective  tax  rate is  primarily  due to the 2002
non-deductible loss associated with company owned life insurance policies.

Net earnings  were $162 or $0.44 per diluted  share for the 13 week period ended
July 31, 2003,  compared to net earnings of $257 or $0.63 per diluted  share for
the 13 week  period  ended  August 1, 2002.  This  decline was the result of the
decrease in earnings from continuing operations.

26 week period ended July 31, 2003

Sales were $17,993 and $17,862 for the 26 week  periods  ended July 31, 2003 and
August 1, 2002,  respectively.  The slight  sales  growth for the 26 week period
ended July 31,  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
identical  store sales for the 26 week period  ended July 31, 2003 of 1.3%.  For
the 26 week period ended July 31, 2003, the Company  opened 40 combination  food
and drug stores, 14 stand-alone  drugstores and 26 fuel centers, while closing 9
combination  food and drug stores,  14 conventional  stores,  and 13 stand-alone
drugstores.


                                    Page 14
<PAGE>


Gross  profit,  as a percentage  of sales,  decreased 46 basis points for the 26
week period ended July 31, 2003 to 28.9% as compared to the corresponding period
in 2002. This decrease in gross profit  resulted from 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.

Selling,  general and  administrative  expense for the 26 week period ended July
31, 2003, as a percent to sales,  increased to 24.9% as compared to 23.9% in the
corresponding  period in the prior year.  This  increase  was  primarily  due to
increased occupancy, employee benefits, and workers' compensation costs.

Earnings from continuing operations were $334 or $0.90 per diluted share for the
26 week  period  ended July 31,  2003,  compared  to  earnings  from  continuing
operations  of $475 or $1.16  per  diluted  share for the 26 week  period  ended
August 1, 2002,  a  decrease  of 30%.  This  decrease  was due to a decrease  in
identical  store sales of 1.3%,  a decrease  in gross  margin and an increase in
occupancy, employee benefits, and workers' compensation costs.

The decrease in other (expense) income,  net of $18 for the 26 week period ended
July 31,  2003,  as compared  to the  corresponding  period in 2002,  relates to
unfavorable  market adjustments in the prior year 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.

The Company's  effective tax rate for the 26 week period ended July 31, 2003 was
38.4% as  compared  to 39.2% for the 26 week period  ended  August 1, 2002.  The
decrease  in the  Company's  effective  tax  rate is  primarily  due to the 2002
non-deductible loss associated with company owned life insurance policies.

Net earnings  were $334 or $0.90 per diluted  share for the 26 week period ended
July 31, 2003,  compared to net  earnings of $92 or $0.23 per diluted  share for
the 26 week period ended  August 1, 2002.  The  improvement  was a result of two
charges in 2002:  $289 related to a strategic  decision to exit  underperforming
markets,  and $94 related to the adoption of a new accounting  principle for the
recognition of vendor funds.

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.

The  Company's  vendor  funds  inventory  offset as of July 31, 2003 was $131, a
decrease of $15 from the end of the first  quarter of 2003 and a decrease of $21
from the beginning of 2003.  The vendor funds  inventory  offset as of August 1,
2002 was $135, a decrease of $7 from the end of the first  quarter of 2002 and a
decrease of $23 from the beginning of 2002.

Recent Accounting Standards
In July 2001 the Financial  Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("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 26 weeks ended
July 31, 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 26 week period ended July 31, 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 is otherwise  effective for the Company
in the third  quarter of 2003.  The Company does not expect the adoption of SFAS
No.  150 to  have a  significant  impact  on the  Company's  future  results  of
operations or financial condition.


                                    Page 15
<PAGE>


Liquidity and Capital Resources
Cash  provided by operating  activities  during the 26 weeks ended July 31, 2003
was $877 compared to $1,218 for the same period in the prior year.  The decrease
in 2003, as compared to 2002, is due primarily to a decrease in earnings  before
discontinued operations; a decrease in receivables,  prepaid expenses and other;
and an  increase  in  inventories;  partially  offset by  decreases  in accounts
payable and other current liabilities.

Cash flow used by investing  activities  during the 26 weeks ended July 31, 2003
increased  to $557  compared  to $154 in  2002.  The 2002  investing  activities
included   proceeds  from  the  sale  of  assets   (associated   with  the  2001
restructuring  activities and the 2002 market exits) that were $417 greater than
asset sale proceeds received 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 July 31, 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 July 31,
2003, the Company was in compliance with these requirements.  No borrowings were
outstanding under these credit facilities as of July 31, 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
corporate  purposes,  including the potential  purchase of outstanding shares of
Albertsons  common stock.  As of July 31, 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. The Company did not repurchase any
shares of its common stock during the 13 week period ended July 31, 2003.

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

Letters of Credit
The  Company  had  outstanding  letters  of credit of $104 as of July 31,  2003,
consisting  of $73 of standby  letters  of credit  covering  primarily  workers'
compensation or performance  obligations and $31 of commercial letters of credit
supporting the Company's merchandise import program.

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

Related Party Transactions
There were no  material  related  party  transactions  during the 26 week period
ended July 31, 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" of the Company's 2002 Annual Report on Form 10-K.


                                    Page 16
<PAGE>

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 July 31, 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.  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 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: investing to increase sales;
changes in cash  flow;  increases  in  insurance  and  employee  benefit  costs;
attainment of cost reduction  goals;  achieving sales increases and increases in
identical sales; opening and remodeling stores; and the Company's five strategic
imperatives;  and 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 the general economy;  changes in interest rates;
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);  and other
factors  affecting  the Company's  business in or beyond the Company's  control.
These  factors  include  changes in the rate of  inflation;  changes in state or
federal  legislation  or  regulation;  adverse  determinations  with  respect to
litigation   or  other   claims   (including   environmental   matters);   labor
negotiations; the cost and stability of energy sources; the Company's ability to
recruit,  retain and develop  employees;  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; and the Company's ability
to achieve its five strategic imperatives.

Other factors and assumptions  not identified  above could also cause the actual
results  to  differ   materially  from  those  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. On August 4,
2003,  notices  were  sent  to  approximately  21,000  potential  class  members
notifying  them of the existence of the lawsuit and allowing them to voluntarily
opt out of the class.  The opt out requests must be returned by potential  class
members by October  10,  2003.  The  Company has strong  defenses  against  this
lawsuit, and is vigorously defending it. Although this lawsuit is subject to the
uncertainties  inherent  in the  litigation  process,  based on the  information
presently available to the Company, management does not expect that the ultimate
resolution of this action will have a material  adverse  effect on the Company's
financial condition, results of operations or cash flows.

                                    Page 17
<PAGE>

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 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  has been  reached,  and court  approval  granted,  to settle eight
purported class and/or collective  actions which were consolidated in the United
States District Court in Boise, Idaho, 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
court is  considering  the status and handling of these 5,000  claims  including
terms under which  claimants  will be  permitted  to cure  deficient or untimely
claims.  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.  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.   The  Company  utilizes  various  methods  of  alternative  dispute
resolution,   including  settlement   discussions,   to  manage  the  costs  and
uncertainties  inherent in the litigation  process.  Management  does not expect
that the ultimate  resolution  of these legal  proceedings  will have a material
adverse effect on the Company's  financial  condition,  results of operations or
cash flows.

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.

                                    Page 18
<PAGE>


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

The Company held its Annual  Meeting of  Shareholders  on June 6, 2003,  and the
shareholders considered and voted on the following matters:
<TABLE>
<CAPTION>

         (1) Election of Class II Directors:
<S>              <C>                               <C>                            <C>
                 Nominee                           Votes For                      Votes Withheld
                 -------                           ---------                      --------------
                 A. Gary Ames                      260,150,320                    80,352,432
                 Henry I. Bryant                   259,300,248                    81,202,504
                 Paul I. Corddry                   259,954,139                    80,548,613
                 Jon C. Madonna                    327,982,375                    12,520,377
                 Beatriz Rivera                    259,969,987                    80,532,765

             Continuing Class III Directors (Term expiring in 2004):

                 Cecil D. Andrus                   J.B. Scott
                 Pamela G. Bailey                  Will M. Storey

             Continuing Class I Directors (Term expiring in 2005):

                 Teresa Beck                       Lawrence R. Johnston
                 Bonnie G. Hill                    Peter L. Lynch

         (2) Ratification of Appointment of Independent Auditors:

                 Votes For                         Votes Against                  Abstentions
                 ---------                         -------------                  -----------
                 332,518,576                       5,553,411                      2,430,765

         (3) Approval of the Albertsons Long-term Incentive Plan:

                 Votes For                         Votes Against                  Abstentions
                 ---------                         -------------                  -----------
                 321,288,524                       15,841,432                     3,372,796

         (4) Shareholder proposal regarding simple majority vote:

                 Votes For                         Votes Against                  Abstentions
                 ---------                         -------------                  -----------
                 164,226,515                       126,193,099                    3,589,743

         (5) Shareholder proposal regarding independent board chairman:

                 Votes For                         Votes Against                  Abstentions
                 ---------                         -------------                  -----------
                 83,634,867                        204,655,302                    5,719,188

         (6) Shareholder proposal regarding stock option expensing accounting methods:

                 Votes For                         Votes Against                  Abstentions
                 ---------                         -------------                  -----------
                 145,812,951                       138,835,122                    9,361,284
</TABLE>

Item 5.  Other Information

On July 24, 2003,  Peter L. Lynch  resigned his  positions as  President,  Chief
Operating Officer and member of the Board of Directors.  Concurrently,  Lawrence
R. Johnston,  Chairman of the Board and Chief Executive  Officer of the Company,
assumed the additional  responsibilities of President, and the size of the Board
of Directors was decreased to twelve effective as of July 24, 2003.


                                    Page 19
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

a.   Exhibits


          10.36.2*      Letter agreement  between the Company and Peter L. Lynch
                        dated July 24, 2003.

          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.

                        *Identifies management contract

b.   The following  reports  under Item 9.  Regulation FD Disclosure on Form 8-K
     were filed during the quarter ended July 31, 2003.

          Current  report  on Form  8-K  dated  June  20,  2003,  including  the
          Company's press release regarding an unsolicited "mini tender" offer.

          Current report on Form 8-K dated June 5, 2003, including the Company's
          press  release which  discussed  the Company's  earnings for the first
          quarter of 2003 and the  Company's  revised  2003  earnings  guidance,
          intended  to be  included  under  "Item 12.  Disclosure  of Results of
          Operations  and  Financial  Condition"  and  included  under Item 9 in
          accordance  with  Securities  and  Exchange   Commission  Release  No.
          33-8216.


                                    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: September 5, 2003                            /S/ Felicia D. Thornton
                                                   -----------------------------
                                                   Felicia D. Thornton
                                                   Executive Vice President
                                                     and Chief Financial Officer










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