<PAGE>



                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

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


                                      FORM 10-Q

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

                         For the quarter ended March 16, 1997


                            Commission file Number 0-20449


                               PRICE ENTERPRISES, INC.
                (Exact name of registrant as specified in its charter)

             DELAWARE                                        33-0628740
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)


                                4649 MORENA BOULEVARD
                             SAN DIEGO, CALIFORNIA  92117
                       (Address of principal executive offices)

                                    (619) 581-4530
                 (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
                                       ---        ---

The registrant had 23,347,454 common shares, par value $.0001, outstanding at
April 21, 1997.

<PAGE>

                               PRICE ENTERPRISES, INC.
                                   AND SUBSIDIARIES

                                  INDEX TO FORM 10-Q


                            PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS                                        PAGE

    Consolidated Balance Sheets.......................................3

    Consolidated Statements of Income.................................4

    Consolidated Statements of Cash Flows.............................5

    Notes to Consolidated Financial Statements........................6

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS..........................10



                             PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS............................................15

ITEM 2 - CHANGES IN SECURITIES........................................15

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES..............................15

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY
         HOLDERS......................................................15

ITEM 5 - OTHER INFORMATION............................................16

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.............................16



                                          2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS


                               PRICE ENTERPRISES, INC.
                             CONSOLIDATED BALANCE SHEETS
                                    (in thousands)

<TABLE>
<CAPTION>

                                                 MARCH 16,      AUGUST 31,
                                                   1997             1996
                                              ------------      -------------
<S>                                            <C>             <C>
ASSETS                                         (unaudited)        (Note)
Current Assets
  Cash and cash equivalents                    $ 29,452         $ 15,458
  Accounts receivable, net                        9,516            7,019
  Merchandise inventories                         6,190            2,011
  Prepaid expenses and other current assets       3,286            7,512
                                              ------------    --------------
     Total current assets                        48,444           32,000

Real Estate Assets
  Land and land improvements                    182,359          179,639
  Building and improvements                     193,396          190,969
  Fixtures and equipment                          7,556            5,958
  Construction in progress                          562              328
                                              ------------    --------------
                                                383,873          376,894
  Less accumulated depreciation                 (40,818)         (35,831)
                                              ------------    --------------
                                                343,055          341,063

Other Assets
  Property held for sale, net                    44,582           55,951
  City notes receivable                          25,076           29,091
  Atlas and other notes receivable               47,790           48,328
  Deferred income taxes                          22,414           25,640
  Deferred rents and leasing costs, net          16,831           15,867
                                              ------------    --------------
                                                156,693          174,877
                                              ------------    --------------
Total Assets                                   $548,192         $547,940
                                              ------------    --------------
                                              ------------    --------------

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
  Accounts payable                             $  4,714         $  3,042
  Accrued expenses                                5,592            6,038
  Other current liabilities                       5,521            4,216
                                              ------------    --------------
     Total current liabilities                   15,827           13,296

Minority Interest                                 5,486            1,745

Stockholders' Equity
  Common stock                                        2                2
  Additional paid-in capital                    534,668          534,004
  Retained earnings (deficit)                    (7,791)          (1,107)
                                              ------------    --------------
     Total stockholders' equity                 526,879          532,899
                                              ------------    --------------
Total Liabilities and Stockholders' Equity     $548,192         $547,940
                                              ------------    --------------
                                              ------------    --------------


</TABLE>

Note:  The balance sheet at August 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

SEE ACCOMPANYING NOTES.


                                          3

<PAGE>

                               PRICE ENTERPRISES, INC.

                          CONSOLIDATED STATEMENTS OF INCOME
              (Unaudited - amounts in thousands, except per share data)


<TABLE>
<CAPTION>
 
                                                            SECOND QUARTER              YEAR-TO-DATE
                                                              (12 WEEKS)                 (28 WEEKS)
                                                        -------------------------  -------------------------
                                                          MARCH 16,    MARCH 17,     MARCH 16,   MARCH 17,
                                                           1997          1996          1997          1996
                                                       -----------  ------------  ------------  -----------
<S>                                                    <C>          <C>           <C>           <C>
REVENUES
 Real estate                                             $14,166       $14,152       $28,503      $27,287
 Gain on sale of real estate, net                            910           179         1,349          657
 Merchandise sales                                        11,604         5,205        32,172       22,702
 Other revenues                                            1,587           420         2,976          793
                                                       -----------  ------------  ------------  -----------
    Total revenues                                        28,267        19,956        65,000       51,439

OPERATING EXPENSES
 Real estate:
  Operating, maintenance and administrative expenses       2,486         3,100         5,483        5,558
  Property taxes                                           2,366         2,250         4,301        4,166
  Depreciation and amortization                            2,444         2,494         4,929        4,986
 Merchandising:
  Cost of sales                                           10,578         5,775        31,051       21,743
  Operating expenses                                       3,761         5,356         9,512       12,027
 General and administrative                                  882           843         1,985        1,783
 Provision for asset impairments                             ---         1,000           ---        1,000
                                                       -----------  ------------  ------------  -----------
    Total operating expenses                              22,517        20,818        57,261       51,263
                                                       -----------  ------------  ------------  -----------
Operating income                                           5,750          (862)        7,739          176

INTEREST AND OTHER
  Interest income, net                                     2,131         1,741         4,026        3,429
  Gain on sale of investment                                 722           ---           722          ---
  Minority interest                                         (109)        2,110          (109)       4,133
                                                       -----------  ------------  ------------  -----------
    Total interest and other                               2,744         3,851         4,639        7,562
                                                       -----------  ------------  ------------  -----------

Income before provision for income taxes                   8,494         2,989        12,378        7,738
Provision for income taxes                                 3,483         1,225         5,075        3,881
                                                       -----------  ------------  ------------  -----------
Net Income                                              $  5,011      $  1,764      $  7,303     $  3,857
                                                       -----------  ------------  ------------  -----------
                                                       -----------  ------------  ------------  -----------

Net Income Per Share                                       $.21          $.08          $.31         $.17
                                                       -----------  ------------  ------------  -----------
                                                       -----------  ------------  ------------  -----------

Average number of shares outstanding                      23,327        23,256        23,310       23,244
 
</TABLE>

SEE ACCOMPANYING NOTES.



                                          4

<PAGE>

                               PRICE ENTERPRISES, INC.

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Unaudited - amounts in thousands)


<TABLE>
<CAPTION>

                                                           YEAR-TO-DATE
                                                            (28 WEEKS)
                                                      ----------------------
                                                        MARCH 16,   MARCH 17,
                                                         1997          1996
                                                      ----------  ----------
<S>                                                   <C>         <C>
OPERATING ACTIVITIES
Net income                                              $ 7,303     $3,857
Adjustments to reconcile net income to net cash
 provided by operating activities:
    Depreciation and amortization                         5,615      5,926
    Gain on sale of real estate assets                   (1,358)      (462)
    Provision for asset impairments                         ---      1,000
    Minority interest                                       109     (4,133)
    Change in accounts receivable and other assets          775      6,506
    Change in accounts payable and other liabilities      2,531       (138)
    Deferred rents and leasing costs                       (964)    (1,579)
                                                      ----------  ----------
      Net cash flows provided by operating activities    14,011     10,977

INVESTING ACTIVITIES
Additions to real estate assets                          (8,154)   (12,728)
Proceeds from sale of real estate assets                 13,275      9,953
Additions to notes receivable                               ---     (1,080)
Payments of notes receivable                              4,553      1,058
                                                      ----------  ----------
    Net cash flows provided by (used in)                  9,674     (2,797)
     investing activities

FINANCING ACTIVITIES
Line of credit repayments                                   ---     (1,001)
Contributions by Panama joint venture partner             3,632        ---
Proceeds from exercise of stock options including
    tax benefit                                             664        484
Dividends paid                                          (13,987)       ---
                                                      ----------  ----------
    Net cash flows used in financing activities          (9,691)      (517)
                                                      ----------  ----------

    Net increase in cash                                 13,994      7,663
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
                                                         15,458        ---
                                                      ----------  ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD              $29,452     $7,663
                                                      ----------  ----------
                                                      ----------  ----------

</TABLE>

SEE ACCOMPANYING NOTES


                                          5

<PAGE>

                               PRICE ENTERPRISES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)

                                    March 16, 1997

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION
Price Enterprises, Inc. (PEI or the Company) became a publicly-traded company on
December 21, 1994, following an exchange offer in which approximately 23.2
million shares of PriceCostco, Inc. were exchanged for shares of PEI.  However,
since August 31, 1994 PEI has operated as a separate company.

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the 28 weeks ended March 16, 1997 are not necessarily
indicative of the results that may be expected for the year ending August 31,
1997.

The preparation of the 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 and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

BUSINESS SEGMENTS AND FISCAL YEAR
The Company has investments in two business segments: (1) real estate
operations, and (2) certain merchandising businesses.  The Company's real estate
business reports on a fiscal year which ends on August 31; whereas, the
merchandising businesses report on a 52/53 week fiscal year which ends on the
Sunday nearest August 31.  For ease of presentation, all fiscal years in this
report are referred to as having ended on August 31.

With respect to the real estate segment, each fiscal quarter includes three
calendar months of operating results; however, the merchandising segment's
fiscal quarters are as follows: first quarter -- 16 weeks, second quarter -- 12
weeks, third quarter -- 12 weeks, fourth quarter -- 12 or 13 weeks, depending
upon whether the fiscal year has 52 or 53 weeks.


                                          6

<PAGE>

                               PRICE ENTERPRISES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                     (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

ASSET IMPAIRMENTS
The Company regularly evaluates the estimated fair value of its assets and
records appropriate provisions for asset impairments.  The various notes
receivable are evaluated in accordance with Statement of Financial Accounting
Standards (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan."
Beginning with fiscal 1996, SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," has been adopted
and applied to real estate assets.

REAL ESTATE ASSETS
Real estate assets are recorded at PEI's historical costs as adjusted for
recognition of impairment losses.

Real estate assets are depreciated using the straight-line method over their
estimated useful lives, which are as follows:

    Land improvements                            15 - 25 years
    Buildings and improvements                   10 - 25 years
    Leasehold improvements                       Term of lease
    Tenant improvements              Term of lease or 10 years
    Fixtures and equipment                             5 years
    Certain MIS assets                                 3 years

MERCHANDISE INVENTORIES
Merchandise inventories, which include merchandise for resale and display
samples, are valued at the lower of cost (average cost) or market.

REAL ESTATE RENTALS AND DEFERRED RENTS
All leases are classified as operating leases.  Rentals are recognized using the
straight-line method over the terms of the leases.  Deferred rents represent the
excess of real estate rentals recognized on the straight-line basis over cash
received under the applicable lease provisions.  Common area maintenance fees
are included in rental income.

DEFERRED LEASING COSTS
Costs incurred in connection with leasing space to tenants are deferred and
amortized using the straight-line method over the term of the related lease.
Unamortized leasing costs are charged to expense upon early termination of the
lease.


                                          7

<PAGE>

                               PRICE ENTERPRISES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                     (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

INCOME TAXES

Income taxes have been provided for in accordance with Statement of Financial
Accounting Standard (SFAS) No. 109, "Accounting for Income Taxes."  SFAS No. 109
requires companies to account for deferred taxes using the asset and liability
method and, accordingly, deferred income taxes are provided to reflect temporary
differences between financial and tax reporting.

The operations of the Company for the first quarter of fiscal 1995 were included
in the consolidated tax returns of PriceCostco.  The provision for income taxes
since that date have been computed for PEI as a stand-alone entity, therefore,
losses incurred by 51% owned subsidiaries were not accorded any tax benefit.  As
of November 27, 1995 both Price Quest and Price Global were restructured as
limited liability companies which are treated as partnerships for income tax
purposes.


NOTE 2 - NOTES RECEIVABLE

Notes receivable are recorded at PEI's historical cost as adjusted for
recognition of impairment losses.  They include amounts loaned to municipalities
and agencies (City Notes) to facilitate real property acquisitions and
improvements.  The City Notes bear interest at rates which range from 7% to 10%.
Repayment of the majority of these notes is generally based on that
municipality's allocation of sales tax revenues generated by retail businesses
located on a particular property associated with such City Note.

The Company holds a note receivable from Atlas Hotels, Inc. (Atlas) with a
carrying value of $41.2 million as of March 16, 1997, which is collateralized by
a hotel and convention center located in San Diego, California.  On April 3,
1995 the debt obligation was restructured and key provisions included: required
repayment of all outstanding indebtedness within five years, accrual of interest
at 10% per annum, payment of interest at LIBOR plus 2.5% per annum (not to
exceed 8% per annum through December 1, 1996), payment of certain minimum annual
amounts, and the right for PEI to receive any cash balances in excess of $1.0
million at the end of each fiscal year.


                                          8

<PAGE>

                               PRICE ENTERPRISES, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                     (UNAUDITED)


NOTE 3 - COMMITMENTS AND CONTINGENCIES

IN RE PRICE/COSTCO SHAREHOLDER LITIGATION, United States District Court for the
Western District of Washington, No. C94-1874C: This consolidated action was
commenced on December 19, 1994 alleging the violation of certain state and
federal laws arising from the spin-off of the Company from PriceCostco, Inc. and
the prior merger between The Price Company and Costco Wholesale Corporation.
The defendants named in the Second Amended Complaint were the Company,
PriceCostco and the members of PriceCostco's Board of Directors at the time of
the spin-off transaction.  A tentative settlement has been reached, which is
subject to final court approval.  The settlement involves certain agreements
between the Company and PriceCostco regarding Price Global Trading, LLC and
Price Quest, LLC, including the elimination of certain non-compete and operating
agreements and the Company's assumption of sole ownership of those entities.  In
addition, certain trademark and license agreements between the Company and
PriceCostco will be terminated and an agreement regarding the Company's use of
the mark "PriceSmart" will become effective.  For Price Global Trading the
remaining non-compete restrictions and trademark rights involving the Company
and PriceCostco relate to Panama, Guam and the Northern Mariana Islands.  For
Price Quest the remaining non-compete restrictions and obligations involving the
Company and PriceCostco relate to the automobile advertising/referral and travel
businesses.  Plaintiffs' counsel will seek an award of attorneys' fees of up to
$4.25 million, of which the Company has agreed to contribute $1.25 million which
was accrued for in fourth quarter fiscal 1996; the Company's payment will be
decreased proportionally if the actual award is lower.


NOTE 4 - LINE OF CREDIT FACILITY

The Company has a revolving credit facility with a commercial bank for up to $25
million in unsecured advances through June 29, 1998.  Interest is charged at the
bank's base rate, or at rates slightly higher than LIBOR pricing, at the
Company's election. There were no outstanding borrowings on this facility as of
March 16, 1997.

NOTE 5 - RESERVE

During the first half of fiscal 1997 reserves of $2.7 million were recorded
primarily associated with writing down the book value of assets of the kiosk-
based electronic shopping business.  Of the $2.7 million year-to-date amount,
$1.8 million was recorded in merchandising operating expenses and $0.9 was
recorded in cost of sales.

NOTE 6 - SUBSEQUENT EVENT

Subsequent to March 16, 1997 the Company declared a cash dividend of $0.30 per
share, totaling approximately $7.0 million, payable on May 15, 1997 to
stockholders of record on May 1, 1997.


                                          9

<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

    The following discussion and analysis compares the results of operations
for the second quarter and year-to-date periods of fiscal 1997 ended March 16,
1997 to the second quarter and year-to-date periods of fiscal 1996 ended March
17, 1996.  The Company invests in real estate and related assets, in addition to
certain merchandising businesses which include Price Quest, Price Global Trading
and Price Ventures activities.  Where appropriate, the financial results for
these two business segments are discussed separately.  In those instances where
changes are attributed to more than one factor, the factors are presented in
descending order of importance.  All dollar amounts are in thousands.  The
following discussion should be read in conjunction with the consolidated
financial statements and the notes thereto.


<TABLE>
<CAPTION>

REAL ESTATE RENTAL OPERATIONS
                           Revenue   Percent   Operating            Percent
                            Amount    Change    Income     Change    Change
                         ---------- --------- ---------- --------- --------
<S>                      <C>         <C>       <C>       <C>        <C>
2nd Quarter - FY 1997     $14,166        0%    $  6,870   $  562        9%
2nd Quarter - FY 1996      14,152       --        6,308       --       --

Year-to-date - FY 1997    $28,503        4%    $ 13,790   $1,213       10%
Year-to-date - FY 1996     27,287       --       12,577       --       --

</TABLE>

    Each fiscal quarter reflects 3 calendar months of activity for the real
estate segment.  For purposes of this discussion, operating income is defined as
rental revenue, including common area expense reimbursements, less the related
real estate expenses including all unreimburseable expenses associated with
unimproved land and certain developed properties with vacant space.  In
addition, operating income reflects depreciation expense, but it does not
reflect provisions for asset impairments or gains (losses) on sale of real
estate.

    During the second quarter and year-to-date periods, the increase in revenue
and operating income was primarily due to completion of development and lease-up
of the property located in Dallas (TX).  The increase was somewhat offset by the
loss of revenue from the Seekonk (MA) property as a result of the Bradlees
bankruptcy during the past year, as well as the loss of revenue from Richmond
(CA) which was sold in the latter part of fiscal 1996.


<TABLE>
<CAPTION>
 
ADJUSTED FUNDS FROM OPERATIONS

                                            Less              Add         Adjusted
                          Operating    Straight-line    Depreciation    Funds from     Percent
                            Income         Rentals          Expense      Operations    Change
                          -----------  ---------------  --------------  ------------  ---------
<S>                      <C>          <C>              <C>             <C>           <C>
2nd Quarter - FY 1997      $ 6,870      $  (384)          $2,444         $ 8,930         10%
2nd Quarter - FY 1996        6,308         (666)           2,494           8,136         --

Year-to-date - FY 1997     $13,790      $(1,148)          $4,929         $17,571          9%
Year-to-date - FY 1996      12,577       (1,446)           4,986          16,117         --
 
</TABLE>

    Real estate industry analysts generally consider funds from operations
(FFO) to be a supplemental measure of performance for real estate-oriented
companies.  As defined by the National Association for Real Estate Investment
Trusts (NAREIT), it is the pretax income determined in accordance with generally
accepted accounting principles (GAAP), excluding


                                          10

<PAGE>

gains (losses) from sales of property, after adding back depreciation and
amortization expense.  Due to the significance of straight-line rent accruals,
which represent noncash revenues associated with fixed future minimum rent
increases, the Company has adjusted the NAREIT definition to eliminate straight-
line rents when computing its adjusted FFO.

    Adjusted FFO does not represent cash flows from operations as defined by
GAAP and should not be considered as an alternative to net income as an
indicator of the Company's operating performance or to cash flows as a measure
of liquidity.

    The growth in adjusted FFO reflects many of the factors mentioned in the
revenue and operating income discussion above.



GAINS ON SALE OF REAL ESTATE
<TABLE>
<CAPTION>

                                                           Percent
                               Amount        Change        Change
                             ----------   -----------   -----------
<S>                          <C>          <C>           <C>
2nd Quarter - FY 1997          $  910        $731          408%
2nd Quarter - FY 1996             179         ---          ---

Year-to-date - FY 1997         $1,349        $692          105%
Year-to-date - FY 1996            657         ---          ---

</TABLE>

    During the second quarter of fiscal 1997, gains on the sale of real estate
related primarily to the sale of property in Schaumburg (IL).  The fiscal 1997
year-to-date amount also reflects gains on the sales of properties in Colton
(CA), and Concord (CA).

    During the second quarter of fiscal 1996, gains on the sale of real estate
include a gain on the sale of property in San Diego, (Convoy Ct.) (CA).  The
fiscal 1996 year-to-date amount also includes gains on the sales of properties
in S.W. Denver (CO) and North Highlands (CA), partially offset by a loss on the
sale of property in West Palm Beach (FL) during the first quarter.



MERCHANDISING OPERATIONS
<TABLE>
<CAPTION>

                              Sales     Percent    Gross     % of
                            Amount      Change    Margin      Sales
                           ---------  ---------  ---------  -------

<S>                        <C>        <C>        <C>        <C>
2nd Quarter - FY 1997       $11,604     123%      $1,026      8.8%
2nd Quarter - FY 1996         5,205      --         (570)   -11.0%

Year-to-date - FY 1997      $32,172      42%      $1,121      3.5%
Year-to-date - FY 1996       22,702      --          959      4.2%

</TABLE>

    Merchandise sales include the Price Quest and international trading
businesses.  Gross margin is defined as merchandise sales less the related
merchandise costs.

    For the 12-week period of the second quarter the increase in sales is
attributed to a 230% increase in international sales, from $3.4 million in
second quarter fiscal 1996 to $11.2 million for the same period in fiscal 1997,
primarily as a result of increased sales to the Saipan and Guam locations as
well as consolidated sales of the 51% owned Panama location which opened during
the first quarter of the current year.

    The increase in gross margin as a percent of sales during second quarter
fiscal 1997 was primarily due to consolidating Panama sales which have a gross
margin of approximately 14%,


                                          11

<PAGE>

somewhat offset by negative gross margin at Price Quest due to a mark-down
reserve of $0.2 million taken during the quarter.  The negative gross margin in
fiscal year 1996 was due to the impact of reserves related to Price Quest.
During the 28-week year-to-date period the decrease in gross margin was a result
of an additional reserve of $0.7 million taken during first quarter fiscal 1997
for Price Quest inventory.



MERCHANDISING OPERATING EXPENSES
                                                      Percent
                            Amount        Change      Change
                         -----------    ----------  ----------
2nd Quarter - FY 1997      $ 3,761        $(1,595)      -30%
2nd Quarter - FY 1996        5,356             --        --

Year-to-date - FY 1997     $ 9,512        $(2,515)      -21%
Year-to-date - FY 1996      12,027             --        --

    During the second quarter of fiscal 1997 the decrease in merchandising
operating expenses was primarily due to a substantial decrease in operating
expenses for Price Quest of $2.2 million and reduction in severance expense, of
which $0.7 million was recorded in the prior year second quarter and for which
no comparable amount was recorded in the current year.  These decreases were
somewhat offset by increased operating expenses for the international businesses
of $1.3 million over the prior year.  The year-to-date decrease was a result of
the same factors as the second quarter.



GENERAL AND ADMINISTRATIVE EXPENSES
                                                      Percent
                            Amount        Change      Change
                         -----------    ---------   -----------
2nd Quarter - FY 1997      $   882         $  39          5%
2nd Quarter - FY 1996          843            --         --

Year-to-date - FY 1997     $ 1,985         $ 202         11%
Year-to-date - FY 1996       1,783            --         --

    During the second quarter and year-to-date periods, the increase in
expenses is due to an increase in professional fees and the addition of
management, somewhat offset by a reduction in legal fees, insurance costs and
fees paid to PriceCostco for administrative services, compared to the prior
year.



INTEREST INCOME (NET)
                                                      Percent
                            Amount        Change      Change
                         -----------    ---------  ----------
2nd Quarter - FY 1997      $ 2,131         $ 390         22%
2nd Quarter - FY 1996        1,741           --          --

Year-to-date - FY 1997     $ 4,026         $ 597         17%
Year-to-date - FY 1996       3,429           --          --

    The increase in interest income for both the second quarter and year-to-
date periods, was due to higher interest income on invested cash balances as
well as a reduction in interest expense related to the PriceCostco note payable
that was repaid during the fourth quarter of fiscal 1996.  This net improvement
was somewhat offset by a reduction in interest income from the City


                                          12

<PAGE>

Notes due to principal reductions of $4.0 million to various notes, and a
reduction in capitalized interest due to less construction activity in the
current fiscal year.

GAIN ON SALE OF INVESTMENT
                                                      Percent
                            Amount        Change      Change
                         -----------    ---------  ----------
2nd Quarter - FY 1997      $   722         $ 722        100%
2nd Quarter - FY 1996           --            --         --

Year-to-date - FY 1997     $   722         $ 722        100%
Year-to-date - FY 1996          --            --         --

    The gain on sale of investment in second quarter fiscal 1997 relates to the
sale of the Company's preferred stock investment in Sneaker Stadium, a
privately-held specialty retailer.



MINORITY INTEREST
                                                      Percent
                            Amount        Change      Change
                         -----------    ---------   ----------
2nd Quarter - FY 1997      $ (109)       $(2,219)       -105%
2nd Quarter - FY 1996       2,110           --            --

Year-to-date - FY 1997     $ (109)       $(4,242)       -103%
Year-to-date - FY 1996      4,133           --            --

    Minority interest in the current year represents the 49% of earnings
allocated to the Panamanian joint venture partner, whereas in the prior year it
represents the allocation of Price Quest and Price Global Trading losses to
PriceCostco.  PEI began absorbing 100% of the losses in these companies during
third quarter fiscal 1996 because cumulative allocations of losses to
PriceCostco's minority interest had matched PriceCostco's cumulative capital
contributions, such that the book value of its investment in these businesses
reached zero, therefore there has been no allocation of losses to PriceCostco
during fiscal 1997.



PROVISION FOR INCOME TAXES
                                                 Percent   Effective
                             Amount    Change    Change    Tax Rate
                            --------- --------- --------- ------------
2nd Quarter - FY 1997        $3,483    $2,258     184%        41%
2nd Quarter - FY 1996         1,225       --       --         41%

Year-to-date - FY 1997       $5,075    $1,194      31%        41%
Year-to-date - FY 1996        3,881       --       --         50%

    During much of the first quarter of fiscal 1996, losses from Price Quest
and Price Global Trading were not deductible for income tax purposes.  Prior to
the end of that quarter, these businesses were restructured as limited liability
companies and subsequent to that date have been treated as partnerships for
income tax purposes.  Since the restructuring PEI has recognized tax benefits
for its share of any tax losses.


                                          13

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

    While the Company is well positioned to finance its business activities
through a variety of sources, it expects to satisfy short-term liquidity
requirements through net cash provided by real estate operations and through
borrowings under the unsecured revolving line of credit facility.  Approximately
$45 million of the Company's real estate assets are being held for sale, and the
cash flow that may ultimately be generated by sales of these properties
represents a major source of additional capital resources.  To the extent that
investment opportunities exceed available cash flow from these sources, the
Company's unleveraged balance sheet should enable it to access significant
amounts of capital through bank credit facilities and/or securitized debt
offerings, or the Company may choose to seek additional funds through future
public equity offerings.

    The Company has a revolving credit facility with a commercial bank for up
to $25 million in unsecured advances through June 29, 1998.  Advances bear
interest, at the Company's option, at either LIBOR plus 0.40% or the bank's Base
Rate, as defined.  The agreement requires that the Company not sell or pledge
certain property with a net book value of $178 million as of August 31, 1996,
that the Company maintain certain net worth and debt-to-equity ratios, and that
a facility fee of 0.15% of the commitment amount be paid annually.  As of March
16, 1997, there was no outstanding balance on the credit facility.

    Consistent with historical trends, operating income from real estate
activities increases as properties are developed and declines as properties are
sold.  The Company's liquidity is primarily affected by the timing and magnitude
of rental property acquisition, development and disposition.  In addition, the
Company's liquidity may be affected by the anticipated payment of quarterly cash
dividends to stockholders in the future.



INFLATION

    Because a substantial number of the Company's leases contain provisions for
rent increases based on changes in various consumer price indices, based on
fixed rate increases, or based on percentage rent if tenant sales exceed certain
base amounts, inflation is not expected to have a significant material impact on
future net income or cash flow from developed and operating properties.  In
addition, substantially all leases are "triple net," whereby specific operating
expenses and property taxes are passed through to the tenant.  For undeveloped
or under-developed properties, inflation could increase the Company's cost of
carrying and developing the properties; however, inflation would likely increase
the future sales value of the properties.


                                          14

<PAGE>

                             PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS ---

    IN RE PRICE/COSTCO SHAREHOLDER LITIGATION, United States District Court for
the Western District of Washington, No. C94-1874C: This consolidated action was
commenced on December 19, 1994 alleging the violation of certain state and
federal laws arising from the spin-off of the Company from PriceCostco, Inc. and
the prior merger between The Price Company and Costco Wholesale Corporation.
The defendants named in the Second Amended Complaint were the Company,
PriceCostco and the members of PriceCostco's Board of Directors at the time of
the spin-off transaction.  A tentative settlement has been reached, which is
subject to final court approval.  The settlement involves certain agreements
between the Company and PriceCostco regarding Price Global Trading, LLC and
Price Quest, LLC, including the elimination of certain non-compete and operating
agreements and the Company's assumption of sole ownership of those entities.  In
addition, certain trademark and license agreements between the Company and
PriceCostco will be terminated and an agreement regarding the Company's use of
the mark "PriceSmart" will become effective.  For Price Global Trading the
remaining non-compete restrictions and trademark rights involving the Company
and PriceCostco relate to Panama, Guam and the Northern Mariana Islands.  For
Price Quest the remaining non-compete restrictions and obligations involving the
Company and PriceCostco relate to the automobile advertising/referral and travel
businesses.  Plaintiffs' counsel will seek an award of attorneys' fees of up to
$4.25 million, of which the Company has agreed to contribute $1.25 million which
was accrued for in fourth quarter fiscal 1996; the Company's payment will be
decreased proportionally if the actual award is lower.

    The Company is a party to other routine litigation incident to its business
and to which its property is subject.  The Company's management does not believe
that the ultimate resolution of any of these matters will have a material
adverse impact on the financial position of the Company.

ITEM 2.  CHANGES IN SECURITIES ---
    None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES ---
    None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ---
    The annual meeting of the Company's stockholders was held on January 14,
1997.  As of the record date there were 23,301,294 shares outstanding.

    The following Directors were elected at the meeting:

                                       Votes For           Votes Withheld
                                    -----------------   -------------------
         William P. Dickey             21,373,266               17,758
         Murray L. Galinson            21,373,428               17,596
         Katherine L. Hensley          21,373,166               17,858
         Leon C. Janks                 21,373,236               17,788
         Paul A. Peterson              21,372,968               18,056
         Robert E. Price               21,373,268               17,756


                                          15

<PAGE>

ITEM 5.  OTHER INFORMATION ---
    None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K ---

    (a)  The following exhibits are included herein or incorporated by
         reference:
         (15.1) Independent Accountants' Review Report
         (15.2) Letter re: Unaudited Interim Financial Information
         (27) Financial Data Schedules

    (b)  No reports on Form 8-K were filed for the 12 weeks ended March 16,
         1997.


                                          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.

                                                 PRICE ENTERPRISES, INC.
                                                 Registrant


Date: April 24, 1997                             /s/ Robert E. Price
                                                 -------------------
                                                 Robert E. Price
                                                 PRESIDENT & CHIEF EXECUTIVE
                                                 OFFICER


Date: April 24, 1997                             /s/ Daniel T. Carter
                                                 --------------------
                                                 Daniel T. Carter
                                                 EXECUTIVE VICE PRESIDENT,
                                                 CHIEF FINANCIAL OFFICER


                                          17