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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                 Amendment No. 2

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended May 23, 1998


                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                           Commission File No. 1-13339


                                FRED MEYER, INC.
             (Exact name of registrant as specified in its charter)


                  Delaware                                      91-1826443
       (State or other jurisdiction of                       (I.R.S. Employer
       incorporation or organization)                       Identification No.)

             3800 SE 22nd Avenue
              Portland, Oregon                                     97202
  (Address of principal executive offices)                      (Zip Code)


                                 (503) 232-8844
              (Registrant's telephone number, including area code)


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

     Number of shares of Common Stock outstanding at June 6, 1998: 151,633,382


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<PAGE>
                                Table of Contents

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

Items of Form 10-Q                                                          Page

Part I - FINANCIAL INFORMATION

      Item 1   Financial Statements .......................................... 3

      Item 2   Management's Discussion and Analysis of Financial Condition
               and Results of Operations......................................11


Part II - OTHER INFORMATION

      Item 6   Exhibits and Reports on Form 8-K...............................16


Signatures ...................................................................17


<PAGE>
                         Part I - FINANCIAL INFORMATION

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


Item 1. Financial Statements.

<TABLE>
<CAPTION>
Consolidated Statements of Income (Unaudited)

                                                                                16 Weeks Ended
                                                                          ---------------------------
                                                                               May 23,         May 24,
(In thousands, except per share data)                                            1998            1997
                                                                          -----------     -----------
<S>                                                                       <C>             <C>
Net sales                                                                 $ 4,040,448     $ 1,593,437
Cost of goods sold                                                          2,855,193       1,121,353
                                                                          -----------     -----------
Gross margin                                                                1,185,255         472,084

Operating and administrative expenses                                         988,676         415,784
Amortization of goodwill                                                       22,302           1,003
Merger related costs                                                          158,501               -
                                                                          -----------     -----------
Income (loss) from operations                                                  15,776          55,297
Interest expense                                                               99,811          18,648
                                                                          -----------     -----------
Income (loss) before income taxes and extraordinary charge                    (84,035)         36,649
Provision (benefit) for income taxes                                          (15,453)         14,136
                                                                          -----------     -----------
Income (loss) before extraordinary charge                                     (68,582)         22,513
Extraordinary charge, net of taxes                                           (216,441)
                                                                          -----------     -----------
Net income (loss)                                                         $  (285,023)    $    22,513
                                                                          ===========     ===========
Basic earnings per common share:
  Income (loss) before extraordinary charge                               $     (0.47)    $      0.27
  Extraordinary charge                                                          (1.49)
                                                                          -----------     -----------
  Net income (loss)                                                       $     (1.96)    $      0.27
                                                                          ===========     ===========
  Basic weighted average number of common
    shares outstanding                                                        145,141          84,758
                                                                          ===========     ===========
Diluted earnings per common share:
  Income (loss) before extraordinary charge                               $     (0.47)    $      0.25
  Extraordinary charge                                                          (1.49)
                                                                          -----------     -----------
  Net income (loss)                                                       $     (1.96)    $      0.25
                                                                          ===========     ===========
  Diluted weighted average number of common and
    common equivalent shares outstanding                                      145,141          88,335
                                                                          ===========     ===========

See Notes to Consolidated Financial Statements.
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets (Unaudited)

                                                                                     May 23,     January 31,
(In thousands)                                                                         1998            1998
                                                                                -----------     -----------
<S>                                                                             <C>             <C>        
Assets

Current assets:
     Cash and cash equivalents                                                  $   163,773     $   117,311
     Receivables                                                                    123,745         108,496
     Inventories                                                                  1,795,974       1,240,866
     Prepaid expenses and other                                                      51,060          70,536
     Current portion of deferred taxes                                              253,178          90,804
                                                                                -----------     -----------
Total current assets                                                              2,387,730       1,628,013

Property and equipment--net                                                       3,500,583       2,432,040

Other assets:
     Goodwill--net                                                                3,593,444       1,279,130
     Long-term deferred tax assets                                                  222,271               -
     Other                                                                          167,633          83,753
                                                                                -----------     -----------
Total other assets                                                                3,983,348       1,362,883
                                                                                -----------     -----------
Total assets                                                                    $ 9,871,661     $ 5,422,936
                                                                                ===========     ===========
Liabilities and Stockholders' Equity

Current liabilities:
     Bank overdrafts                                                            $   298,083     $   175,799
     Accounts payable                                                               863,339         590,879
     Current portion of long-term debt and lease obligations                         44,967          19,650
     Accrued expenses and other                                                   1,082,143         407,167
                                                                                -----------     -----------
Total current liabilities                                                         2,288,532       1,193,495

Long-term debt                                                                    4,815,013       2,184,794
Capital lease obligations                                                           189,886          82,782
Deferred lease transactions                                                          34,659          38,556
Deferred income taxes                                                                     -          83,183
Other long-term liabilities                                                         437,608         137,766

Stockholders' equity
     Common stock                                                                     1,526           1,288
     Additional paid-in capital                                                   1,861,676       1,173,760
     Notes receivable from officers                                                    (359)           (298)
     Unearned compensation                                                           (3,255)           (466)
     Retained earnings                                                              246,375         528,076
                                                                                -----------     -----------
Total stockholders' equity                                                        2,105,963       1,702,360
                                                                                -----------     -----------
Total liabilities and stockholders' equity                                      $ 9,871,661     $ 5,422,936
                                                                                ===========     ===========

See Notes to Consolidated Financial Statements.
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows (Unaudited)

                                                                                          16 Weeks Ended
                                                                                    ---------------------------
                                                                                         May 23,         May 24,
(In thousands)                                                                             1998            1997
                                                                                    -----------     -----------
<S>                                                                                 <C>             <C>        
Cash flows from operating activities:
     Income (loss) before extraordinary charge                                      $   (68,582)    $    22,513
     Adjustments to reconcile income (loss) before extraordinary
        charge to net cash provided by operating activities:
        Depreciation and amortization of property and equipment                         106,198          46,236
        Amortization of goodwill                                                         22,302           1,003
        Deferred lease transactions                                                      (3,977)         (4,771)
        Deferred income taxes                                                           (17,803)            300
        Changes in operating assets and liabilities:
          Receivables                                                                    (8,114)          2,969
          Inventories                                                                   (27,302)        (20,078)
          Other current assets                                                           32,639          11,136
          Accounts payable                                                               53,019           5,302
          Accrued expenses                                                               (5,143)          7,503
          Income taxes                                                                        -           3,946
          Other liabilities                                                               8,137             272
        Other                                                                             9,821             253
                                                                                    -----------     -----------
Net cash provided by operating activities                                               101,195          76,584

Cash flows from investing activities:
     Cash acquired in acquisitions                                                       83,203               -
     Payments made for acquisitions                                                           -        (394,134)
     Purchases of property and equipment                                               (121,186)       (121,165)
     Proceeds from sale of property and equipment                                         9,996           5,465
     Other                                                                               10,108            (874)
                                                                                    -----------     -----------
Net cash used for investing activities                                                  (17,879)       (510,708)

Cash flows from financing activities:
     Issuance of common stock - net                                                      29,828         206,789
     Collection of notes receivable                                                         962               -
     Increase in notes receivable                                                             -            (139)
     Increase in bank overdrafts                                                         23,171          21,489
     Payment of deferred financing fees                                                 (65,566)              -
     Long-term financing:
        Borrowings                                                                    4,168,900         454,257
        Repayments                                                                   (4,189,167)       (197,400)
     Other                                                                               (4,982)              -
                                                                                    -----------     -----------
Net cash provided by (used for) financing activities                                    (36,854)        484,996
                                                                                    -----------     -----------
Net increase in cash and cash equivalents for the period                                 46,462          50,872
Cash and cash equivalents at beginning of year                                          117,311          63,340
                                                                                    -----------     -----------
Cash and cash equivalents at end of period                                          $   163,773     $   114,212
                                                                                    ===========     ===========

See Notes to Consolidated Financial Statements.
</TABLE>

                                       5
<PAGE>
Notes to Consolidated Financial Statements


1.   Summary of Significant Accounting Policies

        Amended Form 10-Q--The Company amended its first quarter 10-Q to revise
     the accounting for its plan to dispose of Santee Dairy. The amended 10-Q
     reflects a change in the accounting treatment to recognize the loss on
     disposition when a definitive agreement for the sale of the dairy has been
     reached. The original filing reflected management's estimate of the loss
     that is anticipated upon disposition of the dairy. The impact of the
     amendment on the first quarter 10-Q was a $44.3 million reduction of merger
     related costs and a corresponding decrease in net loss of $27.0 million.

        Basis of Presentation--The accompanying unaudited consolidated financial
     statements of Fred Meyer, Inc., a Delaware corporation, and its
     wholly-owned subsidiaries ("Fred Meyer") have been prepared in accordance
     with generally accepted accounting principles for interim financial
     information and in accordance with the instructions to Form 10-Q and
     Article 10 of Regulation S-X. Accordingly, the statements do not include
     all of the information and notes required by generally accepted accounting
     principles for complete financial statements. In the opinion of management,
     all adjustments of a normal recurring nature which are considered necessary
     for a fair presentation have been included. The consolidated results of
     operations presented herein are not necessarily indicative of the results
     to be expected for the year due to the seasonality of the Company's (as
     defined) business. These consolidated financial statements should be read
     in conjunction with the financial statements and related notes incorporated
     by reference in the Company's latest annual report filed on Form 10-K.

        On March 9, 1998, Fred Meyer issued 41.2 million shares of Fred Meyer
     common stock for all the outstanding stock of Quality Food Centers, Inc.
     ("QFC"), a supermarket chain operating 89 stores in the Seattle/Puget Sound
     region of Washington state and 56 Hughes Family Market stores in Southern
     California as of the date of the merger. As a result, QFC became a wholly
     owned subsidiary of Fred Meyer. All references to the "Company" hereafter
     shall mean the consolidated company. On March 10, 1998, Fred Meyer acquired
     Food 4 Less Holdings, Inc. ("Ralphs/Food 4 Less") in a transaction
     accounted for as a purchase (see Note 3). The merger of Fred Meyer and QFC
     was accounted for as a pooling of interests and the accompanying financial
     statements reflect the consolidated results of Fred Meyer and QFC for all
     years presented. The amounts included in the results of operations from
     Fred Meyer (including Ralphs/Food 4 Less since March 10, 1998) and QFC are
     as follows (in thousands):

<TABLE>
<CAPTION>
                                                                       Fred Meyer           QFC         Total
                                                                       Historical    Historical       Company
                                                                       ----------    ----------    ----------
     <S>                                                               <C>           <C>           <C>       
     First Quarter of 1998

       Net sales                                                       $3,460,519    $  579,929    $4,040,448
       Loss before extraordinary charge                                   (65,202)       (3,380)      (68,582)
       Net loss                                                          (265,430)      (19,593)     (285,023)
       Diluted earnings per common share
         Loss before extraordinary charge                                   (0.63)        (0.08)        (0.47)
         Net loss                                                           (2.56)        (0.47)        (1.96)

     First Quarter of 1997

       Net sales                                                        1,193,936       399,501     1,593,437
       Net income                                                          13,259         9,254        22,513
       Diluted earnings per common share                                     0.24          0.28          0.25
</TABLE>

        Inventories--Inventories consist principally of merchandise held for
     sale and substantially all inventories are stated at the lower of last-in,
     first-out (LIFO) cost or market. Inventories on a first-in, first-out
     method, which approximates replacement cost, would have been higher by
     $57.8 million at May 23, 1998 and $51.8 million at January 31, 1998. The
     pretax LIFO charge was $6.0 million in 1998 and $2.0 million in 1997.

        Goodwill--Goodwill is being amortized on a straight-line basis over 15
     to 40 years. Goodwill recorded in connection with the acquisition of
     Ralphs/Food 4 Less, Smith's Food & Drug Centers, Inc. ("Smith's"), Hughes
     Markets, Inc. ("Hughes"), and Keith Uddenberg, Inc. ("KUI")(see Note 3) is
     being amortized over 40 years. Goodwill recorded in connection with the Fox
     Jewelry Company ("Fox") acquisition is being amortized over 15 years. Other
     previously recorded goodwill continues to be amortized over 30 years.
     Management periodically 

                                       6
<PAGE>
     evaluates the recoverability of goodwill based upon current and anticipated
     net income and undiscounted future cash flows.

        Use of Estimates--The preparation of financial statements in conformity
     with generally accepted accounting principles requires management to make
     estimates and assumptions that affect the reported amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the financial statements. Actual results could differ from those
     estimates.

        Income Taxes--Deferred income taxes are provided for those items
     included in the determination of income or loss in different periods for
     financial reporting and income tax purposes. Targeted jobs and other tax
     credits are recognized in the year realized.

        Deferred income taxes are recognized for the tax consequences in future
     years of differences between the tax bases of assets and liabilities and
     their financial reporting amounts at each year end based on enacted tax
     laws and statutory tax rates applicable to the periods in which the
     differences are expected to affect taxable income. Income tax expense is
     the tax payable for the period and the change during the period in deferred
     tax assets and liabilities.

        Deferred tax assets recognized by the Company are presented net of any
     deferred tax liabilities and valuation allowance and consist primarily of
     net operating loss carryforwards. The deferred tax assets will be used to
     offset future tax liability generated from taxable income. However, the
     amount available to offset the consolidated tax liability will be limited
     by each subsidiary's tax circumstances and availability of its net
     operating loss carryforwards.

        Earnings per Share--Basic earnings per common share are computed by
     dividing net income by the weighted average number of common shares
     outstanding. Diluted earnings per common share are computed by dividing net
     income by the weighted average number of common and common equivalent
     shares outstanding which consist of outstanding stock options and warrants.
     Common equivalent shares are excluded from the diluted weighted average
     share and common equivalent shares outstanding in 1998 due to the net loss.


2.   Comprehensive Income

        Effective February 1, 1998, the Company adopted Statement of Financial
     Accounting Standards No. 130, "Reporting Comprehensive Income," which
     requires items previously reported as a component of stockholders' equity
     to be more prominently reported in a separate financial statement as a
     component of comprehensive income. Components of comprehensive income
     include net income (loss) and the income tax benefit the Company receives
     upon the exercise of stock options. Comprehensive income (loss) was
     $(283.5) million in the first quarter of 1998 and $25.7 million in the
     first quarter of 1997.


3.   Acquisitions

        On March 9, 1998, the Company acquired QFC (see Note 1 for the QFC
     acquisition).

        On March 10, 1998, the Company acquired Ralphs/Food 4 Less, a
     supermarket chain operating 409 stores on that date primarily in Southern
     California, which became a wholly-owned subsidiary of the Company. The
     Company issued 21.7 million shares of common stock of the Company for all
     of the equity interests of Ralphs/Food 4 Less. The acquisition is being
     accounted for under the purchase method of accounting. The financial
     statements reflect the preliminary allocation of the purchase price and
     assumption of certain liabilities and include the operating results of
     Ralphs/Food 4 Less from the date of acquisition.

        On September 9, 1997, the Company succeeded to the businesses of Fred
     Meyer, Inc., now known as Fred Meyer Stores, Inc. ("Fred Meyer Stores"),
     and Smith's as a result of mergers pursuant to the Agreement and Plan of
     Reorganization and Merger, dated as of May 11, 1997 (the "Smith's
     Acquisition"). At the closing on September 9, 1997, Fred Meyer Stores and
     Smith's, a regional supermarket and drug store chain operating 152 stores
     in the Intermountain and Southwestern regions of the United States on that
     date, became wholly owned subsidiaries of the Company. The Company issued
     1.05 shares of common stock of the Company for each outstanding share of
     Class A Common Stock and Class B Common Stock of Smith's and one share of
     common stock of the Company for each outstanding share of common stock of
     Fred Meyer Stores.

        The Smith's Acquisition was accounted for under the purchase method of
     accounting. The financial statements reflect the allocation of the purchase
     price and assumption of certain liabilities and include the operating
     results of Smith's from the date of acquisition. In total, the Company
     issued 33.3 million shares of common stock to the Smith's stockholders.

                                       7
<PAGE>
        On August 17, 1997, the Company acquired substantially all of the assets
     and liabilities of Fox in exchange for common stock with a fair value of
     $9.2 million. The Fox acquisition was accounted for under the purchase
     method of accounting. The results of operations of Fox do not have a
     material effect on the consolidated operating results, and therefore are
     not included in the pro forma data presented.

        On March 19, 1997, the Company acquired the principal operations of
     Hughes, including the assets and liabilities related to 57 stores located
     in Southern California and a 50% interest in Santee Dairies, Inc., one of
     the largest dairy plants in California. The merger was effected through the
     acquisition of 100% of the outstanding voting securities of Hughes for
     approximately $360.5 million in cash and the assumption of approximately
     $33.2 million of indebtedness of Hughes. The Hughes acquisition was
     accounted for under the purchase method of accounting. The financial
     statements reflect the allocation of the purchase price and assumption of
     certain liabilities and include the operating results of Hughes from the
     date of acquisition.

        On February 14, 1997, the Company acquired the principal operations of
     KUI, including assets and liabilities related to 25 stores in the western
     and southern Puget Sound region of Washington. The merger was effected
     through the acquisition of 100% of the outstanding voting securities of KUI
     for $34.5 million cash, 1.7 million shares of common stock and the
     assumption of approximately $23.8 million of indebtedness of KUI. The KUI
     acquisition was accounted for under the purchase method of accounting. The
     financial statements reflect the allocation of the purchase price and
     assumption of certain liabilities and include the operating results of KUI
     from the date of acquisition.

        The following unaudited pro forma information presents the results of
     the Company's operations assuming the Ralphs/Food 4 Less, Smith's, QFC,
     KUI, and Hughes acquisitions occurred at the beginning of each period
     presented. In addition, the following unaudited pro forma information gives
     effect to refinancing certain debt as if such refinancing occurred at the
     beginning of each period presented (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                             16 Weeks Ended
                                                                      ---------------------------
                                                                          May 23,          May 24,
                                                                            1998             1997
                                                                      ----------       ----------
     <S>                                                              <C>              <C>       
     Net sales                                                        $4,585,980       $4,493,501
     Income before extraordinary charge                                 (129,350)          22,154
     Net income (loss)                                                  (345,791)        (194,287)
     Diluted earnings per common share:
       Income before extraordinary charge                                  (0.85)            0.15
       Net income (loss)                                                   (2.27)           (1.31)
</TABLE>

        The pro forma financial information does not reflect anticipated
     annualized operating savings and assumes all notes subject to the
     refinancings were redeemed pursuant to tender offers made. Additionally,
     each year includes an extraordinary charge of $216.4 million on the
     extinguishment of debt as a result of refinancing certain debt. The pro
     forma financial information is not necessarily indicative of the operating
     results that would have occurred had the acquisitions been consummated as
     of the beginning of each period nor is it necessarily indicative of future
     operating results.

        The supplemental schedule of business acquisition is as follows (in
     thousands):

<TABLE>
<CAPTION>
                                                                             16 Weeks Ended
                                                                      ---------------------------
                                                                          May 23,          May 24,
                                                                            1998             1997
                                                                      ----------       ----------
     <S>                                                              <C>              <C>       
     Fair value of assets acquired                                    $2,053,601       $  456,685
     Goodwill recorded                                                 2,314,299          194,414
     Value of stock issued                                              (652,514)         (36,965)
     Liabilities assumed                                              (3,715,386)        (220,000)
                                                                      ----------       ----------
     Cash paid                                                        $        -       $  394,134
                                                                      ==========       ==========
</TABLE>

                                       8
<PAGE>
4. Long-term Debt

        Long-term debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                                                    May 23,   January 31,
                                                                                                      1998          1998
                                                                                                ----------    ----------
      <S>                                                                                       <C>           <C>       
      1997 Senior Credit Facility                                                                             $1,300,000
      1998 Senior Credit Facility                                                               $2,415,000
      Senior notes, unsecured, due 2003 through 2008, fixed interest rate
        from 7.15% to 7.45%                                                                      1,750,000
      QFC Credit Facility                                                                                        214,293
      Commercial paper with maturities through July 1, 1998, classified as
        long-term, interest rates of 5.63% to 6.30% at January 31, 1998                            483,674       367,156
      QFC 8.7% Senior Subordinated Notes, principal due 2007 with interest
        payable semi-annually                                                                                    150,000
      Long-term notes secured by trust deeds, due through 2012, fixed interest
        rates from 9.00% to 9.52%                                                                   68,227        67,875
      Uncommitted bank borrowings classified as long-term                                                         79,000
      Senior subordinated notes, due 2002 through 2007, fixed interest rates
        from 9.0% to 13.75%                                                                         49,470
      Senior notes, unsecured, due 2000 through 2004, fixed interest rate
        of 10.45%                                                                                   18,391
      Other                                                                                         34,935        22,648
                                                                                                ----------    ----------
      Total                                                                                      4,819,697     2,200,972
      Less current portion                                                                           4,684        16,178
                                                                                                ----------    ----------
      Total                                                                                     $4,815,013    $2,184,794
                                                                                                ==========    ==========
</TABLE>

        In conjunction with the acquisitions of QFC and Ralphs/Food 4 Less in
     March 1998, the Company entered into new financing arrangements that
     refinanced a substantial portion of the Company's principal debt facilities
     and indebtedness assumed in the acquisitions. The new financing
     arrangements included a new bank credit facility and a public issue of
     $1.75 billion senior unsecured notes. The new bank credit facility (the
     "1998 Senior Credit Facility") provides a $1.875 billion five-year
     revolving credit agreement and a $1.625 billion five-year term note. All
     indebtedness under the 1998 Senior Credit Facility is guaranteed by certain
     of the Company's subsidiaries. The revolving portion of the 1998 Senior
     Credit Facility is available for general corporate purposes, including the
     support of the commercial paper program of the Company. Commitment fees are
     charged at .30% on the unused portion of the five year revolving credit
     facility. Interest on the 1998 Senior Credit Facility is at the Adjusted
     LIBOR plus a margin of 1.0%. At May 23, 1998, the interest rate was 6.7% on
     the five year revolving credit facility and five year term note.

        The unsecured senior notes issued on March 11, 1998, included $250
     million of five-year notes at 7.15%, $750 million of seven-year notes at
     7.38%, and $750 million of ten-year notes at 7.45% (the "Notes"). In
     connection with the issuance of the Notes, each of the Company's direct or
     indirect wholly-owned subsidiaries has jointly and severally guaranteed the
     Notes on a full and unconditional basis ("Subsidiary Guarantors"). The
     Subsidiary Guarantors constitute all of the Company's direct and indirect
     subsidiaries, other than inconsequential subsidiaries. The assets, equity,
     income and cash flows of all non-guaranteeing subsidiaries in the aggregate
     constitute less than a de minimus percentage of the respective consolidated
     amounts and are inconsequential, individually and in the aggregate, to the
     Company. The Company is a holding company with no assets or operations
     other than those relating to its investments in its subsidiaries. Separate
     financial statements of the Subsidiary Guarantors are not included because
     the guarantees are full and unconditional, the Subsidiary Guarantors are
     jointly and severally liable and because the separate financial statements
     and other disclosures concerning the Subsidiary Guarantors are not deemed
     material to investors by management of the Company. No restrictions exist
     on the ability of the Subsidiary Guarantors to make distributions to the
     Company, except, however, the obligations of each Guarantor under its
     Guarantee are limited to the maximum amount as will result in obligations
     of such Guarantor under its Guarantee not constituting a fraudulent
     conveyance or fraudulent transfer for purposes of Bankruptcy Law, the
     Uniform Fraudulent 

                                       9
<PAGE>
     Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal
     or state law (e.g. adequate capital to pay dividends under corporate laws).

        In conjunction with the Smith's Acquisition in September 1997, the
     Company entered into a bank credit facility (the "1997 Senior Credit
     Facility") that refinanced a substantial portion of the Company's
     indebtedness and indebtedness assumed in the Smith's Acquisition. The 1997
     Senior Credit Facility was refinanced by the 1998 Senior Credit Facility.

        The 1998 Senior Credit Facility requires the Company to comply with
     certain ratios related to indebtedness to earnings before interest, taxes,
     depreciation and amortization ("EBITDA") and fixed charge coverage. In
     addition, the 1998 Senior Credit Facility limits dividends on and
     redemption of capital stock.

        The Company has established uncommitted money market lines with three
     banks of $75.0 million. These lines, which generally have terms of
     approximately one year, allow the Company to borrow from the banks at
     mutually agreed upon rates, usually below the rates offered under the 1998
     Senior Credit Facility. The Company also has $600.0 million of unrated
     commercial paper facilities with three commercial banks. The Company has
     the ability to support commercial paper and other debt on a long-term basis
     through its bank credit facilities and therefore, based upon management's
     intent, has classified these borrowings, which totaled $483.7 million at
     May 23, 1998, as long-term debt.

        The Company has entered into interest rate swap, cap and collar
     agreements to reduce the impact of changes in interest rates on its
     floating rate long-term debt. At May 23, 1998, the Company had outstanding
     four interest rate contracts for a total notional principal amount of
     $180.0 million with commercial banks. One swap agreement effectively fixes
     the Company's interest rate on unrated commercial paper, floating rate
     facilities and uncommitted lines of credit at 5.20% on a notional principal
     amount of $15.0 million. This contract expires in 1998. Two cap agreements
     effectively limit the maximum interest rate the Company will pay at rates
     between 5.0% and 9.0% on notional principal amounts totaling $35.0 million.
     These contracts expire through 1999. One collar agreement effectively
     limits the maximum interest rate the Company will pay at 7.5% and limits
     the minimum interest rate the Company will pay at 5.3% on a notional
     principal amount of $130.0 million. This contract expires in 1998.

        The Company has entered into swap and cap agreements to reduce the
     impact of changes in rent expense on its two lease lines of credit. At May
     23, 1998, the Company had outstanding seven rent rate contracts, for a
     total notional principal amount of $80.0 million, with commercial banks.
     Three of these agreements effectively fix the Company's rental rate on the
     lease lines at rates between 6.28% and 6.54% on notional amounts of $40.0
     million. The remaining four agreements effectively limit the maximum rental
     rate the Company will pay at 7.25% on notional amounts totaling $40.0
     million. All seven of these contracts expire in 2000.

        Gains and losses on swaps and caps are amortized over the life of the
     instruments. The Company is exposed to credit loss in the event of
     nonperformance by the other parties to the interest rate swap and cap
     agreements. The Company requires an "A" or better rating of the
     counterparties and, accordingly, does not anticipate nonperformance by the
     counterparties.

        Annual long-term debt maturities for the five fiscal years subsequent to
     May 23, 1998 are $3.4 million in 1998, $6.9 million in 1999, $11.7 million
     in 2000, $3.1 million in 2001, and $5.0 million in 2002.

        The Company recorded in the first quarter of 1998 an extraordinary
     charge of $355.4 million less a $139.0 million income tax benefit which
     consisted of premiums paid in the prepayment of certain notes and bank
     facilities of Fred Meyer, QFC and Ralphs/Food 4 Less and the write-off of
     the related deferred financing costs. In the third quarter of 1997, the
     Company recorded an extraordinary charge of $148.3 million less a $57.1
     million income tax benefit which consisted of premiums paid in the
     prepayment of certain notes and bank facilities of Fred Meyer Stores and
     Smith's and the write-off of the related deferred financing costs.


5.   Commitments and Contingencies

        The Company and its subsidiaries are parties to various legal claims,
     actions and complaints, certain of which involve material amounts. Although
     the Company is unable to predict with certainty whether or not it will
     ultimately be successful in these legal proceedings or, if not, what the
     impact might be, management presently believes that disposition of these
     matters will not have a material adverse effect on the Company's
     consolidated financial statements.

                                       10
<PAGE>
Item 2. Management's Discussion and Analysis 
of Financial Condition and Results of Operations.

         The Company amended its first quarter 10-Q to revise the accounting for
     its plan to dispose of Santee Dairy. The amended 10-Q reflects a change in
     the accounting treatment to recognize the loss on disposition when a
     definitive agreement for the sale of the dairy has been reached. The
     original filing reflected management's estimate of the loss that is
     anticipated upon disposition of the dairy. The impact of the amendment on
     the first quarter 10-Q was a $44.3 million reduction of merger related
     costs and a corresponding decrease in net loss of $27.0 million.


Overview

         On March 9, 1998, Fred Meyer issued 41.2 million shares of Fred Meyer
     common stock for all the outstanding stock of QFC, a supermarket chain
     operating 89 stores in the Seattle/Puget Sound region of Washington state
     and 56 Hughes Family Market stores in Southern California as of that date.
     As a result, QFC became a wholly-owned subsidiary of Fred Meyer. The merger
     of Fred Meyer and QFC was accounted for as a pooling of interests.
     Accordingly, the results for 1998 and 1997 reflect the consolidated results
     of Fred Meyer and QFC. The assets and liabilities reflect the combined
     historical recorded values of Fred Meyer and QFC at the end of each
     quarter. All references to the "Company" hereafter shall mean the
     consolidated company.

         On March 10, 1998, the Company acquired Ralphs/Food 4 Less, a
     supermarket chain operating 409 stores as of that date primarily in
     Southern California, which became a wholly-owned subsidiary of the Company.
     The Company issued 21.7 million shares of common stock of the Company for
     all of the equity interests of Ralphs/Food 4 Less. The acquisition of
     Ralphs/Food 4 Less is being accounted for under the purchase method of
     accounting. Accordingly, the results for 1998 reflect only 11 weeks of
     operations from the Ralphs/Food 4 Less stores. As a result of the purchase,
     the assets and liabilities of Ralphs/Food 4 Less have been recorded at
     their fair value as of March 10, 1998. The purchase price in excess of the
     fair value of Ralphs/Food 4 Less's assets and liabilities is recorded as
     goodwill and is being amortized over a 40-year period.

         On September 9, 1997, the Company succeeded to the businesses of Fred
     Meyer, Inc., now known as Fred Meyer Stores, and Smith's as a result of
     mergers pursuant to the Agreement and Plan of Reorganization and Merger,
     dated as of May 11, 1997. At the closing, Fred Meyer Stores and Smith's, a
     regional supermarket and drug store chain operating 152 stores in the
     Intermountain and Southwestern regions of the United States on that date,
     became wholly owned subsidiaries of the Company. The Company issued 33.3
     million shares of common stock of the Company for all outstanding shares of
     common stock of Smith's.

         The Smith's Acquisition was accounted for under the purchase method of
     accounting. Accordingly, the results for 1998 reflect the operations from
     the Smith's stores for the entire period. As a result of the purchase, the
     assets and liabilities of Smith's have been recorded at their fair value as
     of September 9, 1997. The purchase price in excess of the fair value of
     Smith's assets and liabilities is recorded as goodwill and is being
     amortized over a 40-year period.

         On August 17, 1997, the Company acquired substantially all of the
     assets and liabilities of Fox, a regional jewelry store chain operating 44
     stores on that date, in exchange for common stock with a fair value of $9.2
     million. The Fox acquisition was accounted for under the purchase method of
     accounting. Accordingly, the results for 1998 reflect 16 weeks of
     operations from the Fox stores.

         On March 19, 1997, the Company acquired the principal operations of
     Hughes, including the assets and liabilities related to 57 stores located
     in Southern California and a 50% interest in Santee Dairies, Inc., one of
     the largest dairy plants in California. The merger was effected through the
     acquisition of 100% of the outstanding voting securities of Hughes for
     approximately $360.5 million cash and the assumption of approximately $33.2
     million of indebtedness of Hughes. The Hughes acquisition was accounted for
     under the purchase method of accounting. Accordingly, the results for 1997
     reflect only 9 weeks of operations from the Hughes stores. As a result of
     the purchase, the assets and liabilities of Hughes have been recorded at
     their fair value as of March 19, 1997. The purchase price in excess of the
     fair value of Hughes' assets and liabilities is recorded as goodwill and is
     being amortized over a 40-year period.

                                       11
<PAGE>
         On February 14, 1997, the Company acquired the principal operations of
     Keith Uddenberg, Inc. ("KUI"), including assets and liabilities related to
     25 stores in the western and southern Puget Sound region of Washington. The
     merger was effected through the acquisition of 100% of the outstanding
     voting securities of KUI for $34.5 million cash, 1.7 million shares of
     common stock and the assumption of approximately $23.8 million of
     indebtedness of KUI. The KUI Acquisition was accounted for under the
     purchase method of accounting. Accordingly, the results for 1997 reflect
     only 14 weeks of operations from the KUI stores. As a result of the
     purchase, the assets and liabilities of KUI have been recorded at their
     fair value as of February 14, 1997. The purchase price in excess of the
     fair value of KUI's assets and liabilities is recorded as goodwill and is
     being amortized over a 40-year period.

         The Company used the proceeds from a public issue of $1.75 billion
     senior unsecured notes and a new bank credit facility (the "1998 Senior
     Credit Facility") to refinance debt assumed in the acquisition of QFC and
     Ralphs/Food 4 Less and to repay a certain portion of the Company's existing
     indebtedness. The 1998 Senior Credit Facility provided a $1.875 billion
     five-year revolving credit agreement and a $1.625 billion five-year term
     note. The unsecured senior notes includes $250 million of five-year notes
     at 7.15%, $750 million of seven-year notes at 7.38%, and $750 million of
     ten-year notes at 7.45%. As a result of prepaying certain indebtedness, the
     Company recorded in the first quarter of 1998 an extraordinary charge, net
     of taxes, of $216.4 million consisting of fees incurred in the prepayment
     and the write-off of debt issuance costs.

         The Company also refinanced certain debt in conjunction with the
     Smith's Acquisition. As a result, the Company recorded in the third quarter
     of 1997 an extraordinary charge, net of taxes, of $91.2 million consisting
     of fees incurred in the prepayment and the write-off of debt issuance
     costs.

         The following discussion summarizes the Company's operating results for
     the first quarter ended May 23, 1998 ("1998") compared with the first
     quarter ended May 24, 1997 ("1997"). However, 1998 first quarter results
     are not comparable to prior year results due to the three recent
     acquisitions. The first quarter of 1998 results include the results from
     Fred Meyer Stores, Smith's and QFC for the full quarter and include
     Ralphs/Food 4 Less from March 10, 1998. The first quarter of 1997 results
     include only Fred Meyer Stores and QFC. Also included are discussions of
     the Company's liquidity and capital resources, effect of LIFO, effect of
     inflation and recent accounting changes. This discussion and analysis
     should be read in conjunction with the Company's consolidated financial
     statements.


Results of Operations -- 1998 Compared with 1997

         Net sales for 1998 increased $2.4 billion, or 153.6%, over $1.6 billion
     for 1997. The increase in sales was primarily caused by recent
     acquisitions. Sales at Fred Meyer Stores were up $129 million or 10.8% from
     the prior year. Sales at QFC were up $221 million from the prior year. QFC
     completed two acquisitions during the first quarter of the prior year which
     contributed to the sales increase. Sales at Smith's accounted for $951
     million of the increase and Ralphs/Food 4 Less accounted for $1.15 billion
     of the increase.

         Comparable store sales at Fred Meyer Stores increased 6.2% for 1998.
     Comparable food sales increased 7.1%, and comparable nonfood sales
     increased 4.9%. Comparable store sales at QFC were up 2.6% for 1998.

         Gross margin as a percent of net sales was 29.3% in 1998 compared with
     29.6% in 1997. Gross margin decreased primarily due to the increase in food
     sales compared to total sales as a result of the acquisitions.

         Operating and administrative expenses increased 137.8% to $988.7
     million in 1998 from $415.8 million in 1997, and as a percent of net sales
     were 24.5% in 1998 and 26.0% in 1997. Operating and administrative expenses
     decreased as a percent of sales primarily due to increased sales from the
     acquired companies and achieved economies of scale.

         Amortization of goodwill increased to $22.3 million in 1998 from $1.0
     million in 1997 as a result of goodwill recorded in the acquisition of
     Smith's and Ralphs/Food 4 Less.

         A charge for merger related costs and merger integration costs of
     $158.5 million was recorded in 1998 in conjunction with the recent
     acquisitions. Additional merger integration charges will be recorded in
     future quarters as expenditures are incurred.

         Net interest expense increased to $99.8 million in 1998 from $18.6
     million in 1997. The increase primarily reflects the increased amount of
     indebtedness incurred in conjunction with the acquisition of Smith's and
     Ralphs/Food 4 Less.

                                       12
<PAGE>
         The effective tax rate for the income tax benefit in 1998 was 18.4% and
     for the income tax expense in 1997 was 38.6%. The effective tax rate on the
     loss in 1998 was reduced by the effect of increased amortization of
     goodwill and certain merger costs which are not deductible for tax
     purposes.

         The loss before extraordinary charge was $68.6 million for 1998
     compared to income before extraordinary charge of $22.5 million for 1997.
     This decrease is primarily the result of the above-mentioned factors.

         The extraordinary charge of $216.4 million recorded in 1998 consists of
     fees incurred in the prepayment of certain indebtedness and write-off of
     debt issuance costs.

         The net loss was $285.0 million for 1998 compared to net income of
     $22.5 million for 1997. This decrease is primarily the result of the
     decrease in income before extraordinary charge and by the extraordinary
     charge.


Liquidity and Capital Resources

         The Company funded its working capital and capital expenditure needs in
     the first quarter of 1998 through internally generated cash flow and the
     issuance of unrated commercial paper, supplemented by borrowings under
     committed and uncommitted bank lines of credit and lease facilities.

         In conjunction with the acquisitions of Ralphs/Food 4 Less and QFC, the
     Company entered on March 11, 1998 into new financing arrangements which
     included a public issue of $1.75 billion of senior unsecured notes (the
     "Notes") and a bank credit facility (the "1998 Senior Credit Facility").
     The 1998 Senior Credit Facility includes a $1.875 billion five-year
     revolving credit agreement and a $1.625 billion five-year term loan. The
     Notes consist of $250 million of five-year notes at 7.15%, $750 million of
     seven-year notes at 7.38% and $750 million of ten-year notes at 7.45%. The
     1998 Senior Credit Facility and Notes contain certain restrictions on
     payments by the Company of cash dividends, repurchase of common stock, the
     handling of proceeds from the sale or disposition of assets, other than in
     the normal course of business, and require, among other things, that the
     Company maintain a maximum leverage ratio and a minimum fixed charge ratio.
     The leverage ratio compares debt to earnings before interest, taxes,
     depreciation and amortization ("EBITDA"). The fixed charge ratio compares
     EBITDA to interest expense. Each of the Company's direct or indirect
     wholly-owned subsidiaries has jointly and severally guaranteed the Notes on
     a full and unconditional basis. No restrictions exist on the ability of the
     Subsidiary Guarantors to make distributions to the Company, except,
     however, the obligations of each Subsidiary Guarantor under its Guarantee
     are limited to the maximum amount as will result in obligations of such
     Guarantor under its Guarantee not constituting a fraudulent conveyance or
     fraudulent transfer for purposes of Bankruptcy Law, the Uniform Fraudulent
     Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal
     or state law (e.g. adequate capital to pay dividends under corporate laws).
     The obligations of the Company under the 1998 Senior Credit Facility are
     guaranteed by certain subsidiaries and are also collateralized by the stock
     of certain subsidiaries.

         In addition to the 1998 Senior Credit Facility and Notes, the Company
     entered into a $500 million five-year operating lease facility, which
     refinanced $303 million in existing lease financing facilities. The balance
     of this lease facility will be used for land and construction costs for new
     stores. The obligations of the Company under the lease facility are
     guaranteed by certain subsidiaries and are also collateralized by the stock
     of certain subsidiaries.

         At May 23, 1998, the Company had $75.0 million of uncommitted money
     market lines with three banks and $600.0 million in unrated commercial
     paper facilities with three banks. The uncommitted money market lines and
     unrated commercial paper are used primarily for seasonal inventory
     requirements, new store construction and financing existing store
     remodeling, acquisition of land, and major projects such as management
     information systems. At May 23, 1998, the Company had borrowings under the
     1998 Senior Credit Facility of $2.9 billion which includes outstanding
     unrated commercial paper in the amount of $483.7 million. A total of
     approximately $563.7 million was available for borrowings under the 1998
     Senior Credit Facility and $75.0 million was available for borrowings from
     the uncommitted money market lines.

         The Company has entered into interest rate swap, cap and collar
     agreements to reduce the impact of changes in interest rates on its
     floating rate long-term debt and rent expense on its lease lines of credit.
     At May 23, 1998, the Company had outstanding four interest rate contracts
     for a total notional amount of $180.0 million, and seven rent rate
     contracts, for a total notional amount of $80.0 million. The interest rate
     contracts effectively fix the Company's interest rates between 5.0% and
     9.0% on the notional amount and expire through 1999. The rent rate
     contracts effectively fix the 

                                       13
<PAGE>
     Company's rental rates between 6.28% and 7.25% on the notional amount and
     expire through 2000. The Company is exposed to credit loss in the event of
     nonperformance by the counterparties of the interest rate and rent rate
     agreements. All contracts are with "A" rated or better commercial banks and
     the Company does not anticipate nonperformance by the counterparties.

         The Company had $42.3 million of outstanding Letters of Credit as of
     May 23, 1998. The Letters of Credit are used to support the importation of
     goods and to support the performance, payment, deposit or surety
     obligations of the Company. The Company pays annual commitment fees ranging
     form .25% to 1.25% on the outstanding portion of these Letters of Credit.

         The Company believes that the combination of cash flows from operations
     and borrowings under its credit facilities will permit it to finance its
     capital expenditure requirements for 1998, currently budgeted to be
     approximately $600 million, net of estimated real estate sales and stores
     financed on leases. If the Company determines that it is preferable, it may
     fund its capital expenditure requirements by mortgaging facilities,
     entering into sale/leaseback transactions, or by issuing additional debt or
     equity. The Company currently owns real estate with a net book value of
     approximately $3.5 billion.


Effect of LIFO

         During each year, the Company estimates the LIFO adjustment for the
     year based on estimates of three factors: inflation rates (calculated by
     reference to the Department Stores Inventory Price Index published by the
     Bureau of Labor Statistics for soft goods and jewelry and to internally
     generated indices based on Company purchases during the year for all other
     departments), expected inventory levels, and expected markup levels (after
     reflecting permanent markdowns and cash discounts). At year end, the
     Company makes the final adjustment reflecting the difference between the
     Company's prior quarterly estimates and actual LIFO amount for the year.


Effect of Inflation

         While management believes that some portion of the increase in sales is
     due to inflation, it is difficult to segregate and to measure the effects
     of inflation because of changes in the types of merchandise sold
     year-to-year and other pricing and competitive influences. By attempting to
     control costs and efficiently utilize resources, the Company strives to
     minimize the effects of inflation on its operations.


Recent Accounting Changes

         There are no issued and pending accounting changes which are expected
     to have a material effect on the Company's financial reporting.


Year 2000

         The Company has performed an analysis and is modifying its computer
     hardware and software to address year 2000 issues. The Company is also
     contacting major suppliers to determine the extent to which the Company may
     be vulnerable to third party year 2000 issues. Based on current
     information, management believes that all hardware and software
     modifications necessary to operate and effectively manage the Company will
     be performed by the year 2000 and that related costs will not have a
     material impact on the results of operations, cash flow, or financial
     condition of future periods.


Forward-looking Statements; Factors Affecting Future Results

         Certain information set forth in this report contains "forward-looking
     statements" within the meaning of federal securities laws. These
     forward-looking statements include information regarding the Company's
     plans for future operations, expectations relating to cost savings and the
     Company's integration strategy with respect to its recent mergers, store
     expansion and remodeling, capital expenditures, inventory reductions and
     expense reduction. The Company may make other forward-looking statements
     from time to time. The following factors, as well as those discussed below,
     are among the principal factors that could cause actual results to differ
     materially from the forward-looking statements: business and economic
     conditions generally and in the regions in which the Company's stores are
     located, including the rate of inflation; population, employment and job
     growth in the Company's markets; demands 

                                       14
<PAGE>
     placed on management by the substantial increase in the Company's size;
     loss or retirement of senior management of the Company or of its principal
     operating subsidiaries; changes in the availability of debt or equity
     capital and increases in borrowing costs or interest rates, especially
     since a substantial portion of the Company's borrowings bear interest at
     floating rates; competitive factors, such as increased penetration in the
     Company's markets by large national food and nonfood chains, large
     category-dominant stores and large national and regional discount retailers
     (whether existing competitors or new entrants) and competitive pressures
     generally, which could include price-cutting strategies, store openings and
     remodels; results of the Company's programs to decrease costs as a percent
     of sales; increases in labor costs and deterioration in relations with the
     union bargaining units representing the Company's employees; unusual
     unanticipated costs or unanticipated consequences relating to the recent
     mergers and integration strategy and any delays in the realization thereof;
     operational inefficiencies in distribution or other Company systems,
     including any that may result from the recent mergers; issues arising from
     addressing year 2000 information technology issues; legislative or
     regulatory changes adversely affecting the business in which the companies
     are engaged; and other opportunities or acquisitions which may be pursued
     by the Company.

         Leverage; Ability to Service Debt. The Company is highly leveraged. As
     of the end of the quarter, the Company has total indebtedness (including
     current maturities and capital lease obligations) of $5.0 billion. Total
     indebtedness consists of long-term debt, including borrowings under the
     1998 Senior Credit Facilities, notes and capitalized leases. Total
     indebtedness does not reflect certain commitments and contingencies of the
     Company, including operating leases under the lease facility and other
     operating lease obligations. The Company has significant interest and
     principal repayment obligations and significant rental payment obligations,
     and the ability of the Company to satisfy such obligations is subject to
     prevailing economic, financial and business conditions and to other
     factors, many of which are beyond the Company's control. A significant
     amount of the Company's borrowings and rental obligations bear interest at
     floating rates (including borrowings under the 1998 Senior Credit
     Facilities and obligations under the lease facility), which will expose the
     Company to the risk of increased interest and rental rates.

         Merger Integration. The significant increase in size of the Company's
     operations resulting from the recent mergers has substantially increased
     the demands placed upon the Company's management, including demands
     resulting from the need to integrate the accounting systems, management
     information systems, distribution systems, manufacturing facilities and
     other operations of Fred Meyer Stores, Smith's, QFC and Ralphs/Food 4 Less.
     In addition, the Company could experience unexpected costs from such
     integration and/or a loss of customers or sales as a result of the recent
     mergers, including as a result of the conversion of the Hughes Family
     Markets banner to Ralphs. There can also be no assurance that the Company
     will be able to maintain the levels of operating efficiency which Fred
     Meyer Stores, Smith's, QFC and Ralphs/Food 4 Less had achieved separately
     prior to the mergers. The failure to successfully integrate the operations
     of the acquired businesses, the loss of key management personnel and the
     loss of customers or sales could each have a material adverse effect on the
     Company's results of operations or financial position.

         Ability to Achieve Intended Benefits of the Recent Mergers. Management
     believes that significant business opportunities and cost savings are
     achievable as a result of the Smith's, QFC and Ralphs/Food 4 Less mergers.
     Management's estimates of cost savings are based upon many assumptions
     including future sales levels and other operating results, the availability
     of funds for capital expenditures, the timing of certain events as well as
     general industry, and business conditions and other matters, many of which
     are beyond the control of the Company. Estimates are also based on a
     management consensus as to what levels of purchasing and similar
     efficiencies should be achievable by an entity the size of the Company.
     Estimates of potential cost savings are forward-looking statements that are
     inherently uncertain. Actual cost savings, if any, could differ from those
     projected and such differences could be material; therefore, undue reliance
     should not be placed upon such estimates. There can be no assurance that
     unforeseen costs and expenses or other factors (whether arising in
     connection with the integration of the Company's operations or otherwise)
     will not offset the estimated cost savings or other components of the
     Company's plan or result in delays in the realization of certain projected
     cost savings.

         Competition. The retail merchandising business in general, and the
     supermarket industry in particular, is highly competitive and generally
     characterized by narrow profit margins. The Company's competitors in each
     of its operating divisions include national and regional supermarket
     chains, discount stores, independent and specialty grocers, drug and
     convenience stores, large category-dominant stores and the newer
     "alternative format" food stores, including warehouse club stores, deep
     discount drug stores, "supercenters" and conventional department stores.
     Competitors of the Company 

                                       15
<PAGE>
     include, among others, Safeway, Albertson's, Lucky, Costco, Wal-Mart and
     Target. Retail businesses generally compete on the basis of location,
     quality of products and service, price, product variety and store
     condition. The Company's ability to compete depends in part on its ability
     to successfully maintain and remodel existing stores and develop new stores
     in advantageous locations.

         Labor Relations. The Company is party to more than 166 collective
     bargaining agreements with local unions covering approximately 58,000
     employees representing approximately 70% of the Company's total employees.
     Among the contracts that have expired or will expire in 1998 are those
     covering 15,500 employees. Typical agreements are three years in duration,
     and as such agreements expire, the Company expects to negotiate with the
     unions and to enter into new collective bargaining agreements. There is no
     assurance, however, that such agreements will be reached without work
     stoppages. A prolonged work stoppage affecting a substantial number of
     stores could have a material adverse effect on the Company's results of
     operations or financial position.


         The Company may make other forward-looking statements from time to
     time. Forward-looking statements speak only as of the date made. The
     Company undertakes no obligation to publicly release the result of any
     revisions to any forward-looking statements which may be made to reflect
     subsequent events or circumstances or to reflect the occurrence of
     unanticipated events.


Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

         3A*   Restated Certificate of Incorporation, as amended, of
               Fred Meyer, Inc.

         11    Restated Statement Re Computation of Per Share Earnings.

         27A   Restated Financial Data Schedule.

         27C*  Restated Financial Data Schedule for each fiscal quarter of 1996.

         27D*  Restated Financial Data Schedule for each fiscal quarter of 1997.

         *  Previously filed with the Form 10-Q or Amendment No. 1 to which
            this Amendment No. 2 relates.

      (b) Reports on Form 8-K

         The Company filed reports on Form 8-K dated February 13, 1998, February
     20, 1998, March 4, 1998 and March 12, 1998 to disclose information under
     Item 5.

         The Company filed a report on Form 8-K dated February 27, 1998
     including certain financial statement disclosure relating to an
     accountant's consent under Item 7 and other disclosures under Item 5.

         The Company filed a report on Form 8-K dated March 9, 1998 to disclose
     information relating to recent acquisitions required by Items 2 and 7.

                                       16
<PAGE>
                                   Signatures

         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.

                                       FRED MEYER, INC.





     Date:  March 4, 1999              By JOHN STANDLEY
                                          --------------------------------------
                                          John Standley
                                          Senior Vice President and
                                          Chief Financial Officer

                                       17