<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 JUNE 8, 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 23,405,529 common shares, par value $.0001, outstanding at 
July 14, 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..........................11

   ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT 
            MARKET RISK..................................................16

                         PART II - OTHER INFORMATION
                                     
   ITEM 1 - LEGAL PROCEEDINGS............................................16

   ITEM 2 - CHANGES IN SECURITIES........................................16

   ITEM 3 - DEFAULTS UPON SENIOR SECURITIES..............................16

   ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY 
            HOLDERS......................................................16

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

   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.............................17


                                       2
<PAGE>
                                     
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
                                     
                          PRICE ENTERPRISES, INC.
                        CONSOLIDATED BALANCE SHEETS
                               (in thousands)
                                     

                                                         JUNE 8,    AUGUST 31,
                                                          1997         1996
                                                       ----------   ----------
                                                       (unaudited)    (Note)
ASSETS                                   
Current Assets
  Cash and cash equivalents                             $ 82,750     $ 15,458
  Accounts receivable, net                                 8,972        7,019
  Merchandise inventories                                  4,179        2,011
  Prepaid expenses and other current assets               11,077        7,512
                                                       ----------   ----------
  Total current assets                                   106,978       32,000

Real Estate Assets
  Land and land improvements                             186,996      179,639
  Building and improvements                              198,047      190,969
  Fixtures and equipment                                   4,847        5,958
  Construction in progress                                   821          328
                                                       ----------   ----------
                                                         390,711      376,894
  Less accumulated depreciation                          (42,906)     (35,831)
                                                       ----------   ----------
                                                         347,805      341,063

Other Assets
  Property held for sale, net                             26,186       55,951
  City notes receivable                                   24,027       29,091
  Atlas and other notes receivable                         6,598       48,328
  Deferred income taxes                                   13,410       25,640
  Deferred rents and leasing costs, net                   17,332       15,867
                                                       ----------   ----------
                                                          87,553      174,877
Total Assets                                            $542,336     $547,940
                                                       ----------   ----------
                                                       ----------   ----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities       
  Accounts payable                                      $  4,720     $  3,042
  Accrued expenses                                         3,856        6,038
  Other current liabilities                                3,884        4,216
                                                       ----------   ----------
    Total current liabilities                             12,460       13,296

Minority Interest                                          5,450        1,745

Stockholders' Equity         
  Common stock                                                 2            2
  Additional paid-in capital                             534,890      534,004
  Retained earnings (deficit)                            (10,466)      (1,107)
                                                       ----------   ----------
                                                         524,426      532,899
                                                       ----------   ----------
Total Liabilities and Stockholders' Equity              $542,336     $547,940
                                                       ----------   ----------
                                                       ----------   ----------

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>
                                                         THIRD QUARTER           YEAR-TO-DATE
                                                           (12 weeks)              (40 weeks)
                                                      --------------------    --------------------
                                                       June 8,     June 9,     June 8,    June 9,
                                                        1997        1996        1997       1996
                                                      --------    --------    --------   ---------

<S>                                                     <C>        <C>        <C>        <C>

REVENUES
  Real estate                                           $14,223    $14,536    $42,726    $41,823
  Gain (loss) on sale of real estate, net                  (450)        92        899        749
  Merchandise sales                                      14,067      6,875     46,239     29,577
  Other revenues                                          1,027        373      4,003      1,166
                                                       ---------   --------   --------   --------
       Total revenues                                    28,867     21,876     93,867     73,315

OPERATING EXPENSES
  Real estate:                                        
    Operating, maintenance and administrative expenses    2,546      3,307      8,029      8,865
    Property taxes                                        1,927      2,097      6,228      6,263
    Depreciation and amortization                         2,454      2,581      7,383      7,567
  Merchandising:
    Cost of sales                                        13,058      6,560     44,109     28,303
    Operating expenses                                    2,818      4,028     12,330     16,055
  General and administrative                                952        890      2,937      2,673
  Provision for asset impairments                           ---        ---        ---      1,000
                                                       ---------   --------   --------   --------       
       Total operating expenses                          23,755     19,463     81,016     70,726
                                                       ---------   --------   --------   --------
Operating income                                          5,112      2,413     12,851      2,589

INTEREST AND OTHER
  Interest income, net                                    2,130      1,993      6,156      5,422
  Gain on sale of investment                                 60        ---        782        ---
  Minority interest                                          36        454        (73)     4,587
                                                       ---------   --------   --------   --------       
       Total interest and other                           2,226      2,447      6,865     10,009
                                                       ---------   --------   --------   --------

Income before provision for income taxes                  7,338      4,860     19,716     12,598
Provision for income taxes                                3,009      1,993      8,084      5,874
                                                       ---------   --------   --------   --------
Net Income                                              $ 4,329    $ 2,867    $11,632    $ 6,724
                                                       ---------   --------   --------   --------
                                                       ---------   --------   --------   --------
Net Income Per Share                                      $.19       $.12       $.50       $.29
                                                       ---------   --------   --------   --------
                                                       ---------   --------   --------   --------
Average number of shares outstanding                     23,346     23,280     23,321     23,255
Dividends per share                                       $.30       $.00       $.90       $.00
</TABLE>

SEE ACCOMPANYING NOTES.


                                      4
<PAGE>     
                                     
                            PRICE ENTERPRISES, INC.
                                     
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Unaudited - amounts in thousands)
                                      
                                                               YEAR-TO-DATE
                                                                (40 WEEKS)
                                                         ----------------------
                                                          JUNE 8,       JUNE 9,
                                                           1997          1996
                                                         ---------     --------
OPERATING ACTIVITIES
Net income                                                $11,632       $6,724
Adjustments to reconcile net income to net cash 
  provided by operating activities:      
    Depreciation and amortization                           8,165        8,759
    Gain on sale of real estate assets                       (899)        (553)
    Provision for asset impairments                           ---        1,000
    Minority interest                                          73       (4,587)
    Change in accounts receivable and other assets          4,546        8,112
    Change in accounts payable and other liabilities          203        1,898
    Deferred rents and leasing costs                       (1,465)      (2,953)
                                                         ---------     --------
      Net cash flows provided by operating activities      22,255       18,400

INVESTING ACTIVITIES
Additions to real estate assets                            (9,460)     (16,445)
Proceeds from sale of real estate assets                   24,176       24,431
Additions to notes receivable                                 ---       (1,836)
Payments of notes receivable                               46,794        2,323
                                                         ---------     --------
    Net cash flows provided by investing activities        61,510        8,473

FINANCING ACTIVITIES
Line of credit repayments                                     ---       (1,001)
Equity contributions to subsidiaries by minority investors  3,632        1,470
Proceeds from exercise of stock options including
  tax benefit                                                 886          671
Dividends paid                                            (20,991)         ---
                                                         ---------     --------
    Net cash flows provided by (used in) financing
      activities                                          (16,473)       1,140
                                                         ---------     --------

    Net increase in cash                                   67,292       28,013
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD           15,458          ---
                                                         ---------     --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $82,750      $28,013
                                                         ---------     --------
                                                         ---------     --------

SEE ACCOMPANYING NOTES.

                                     
                                     5
<PAGE>
                          PRICE ENTERPRISES, INC.
                                     
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (UNAUDITED)
                                     
                               June 8, 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 40 weeks ended June 8, 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

CONSOLIDATION

The consolidated financial statements include the accounts of the Company and 
all majority owned subsidiaries.  With the commencement of operations in 
Panama during first quarter fiscal 1997, the operations of the 51% owned 
Panama joint venture have been consolidated.  All significant intercompany 
accounts and transactions have been eliminated in consolidation.

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.


                                      7
<PAGE>

                          PRICE ENTERPRISES, INC.
                                     
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                (UNAUDITED)
                                     
                                     
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
(CONTINUED)

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.

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.


                                     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.  A final settlement was reached and approved by the court. 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 Costco have been 
terminated and an agreement regarding the Company's use of the mark 
"PriceSmart" has become effective.  During the third quarter, the Company 
contributed $1.25 million to the award of attorneys' fees which was accrued 
for in fourth quarter fiscal 1996.

NOTE 4 - LINE OF CREDIT FACILITY 

The Company had a revolving credit facility with a commercial bank for up to 
$25 million in unsecured advances through June 29, 1998. The Company 
communicated its intent to terminate the credit facility prior to the June 
1998 date with the bank during the third quarter, effective shortly after the 
third quarter of fiscal 1997. Interest was 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 June 8, 1997.

NOTE 5 - RESERVES

During the year-to-date period 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 - REVIEW BY INDEPENDENT ACCOUNTANTS

A review of the data presented was made by Ernst & Young LLP, independent 
accountants, in accordance with established professional standards and 
procedures, and their report is included herein.


                                     9
<PAGE>
                          PRICE ENTERPRISES, INC.
                                     
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                (UNAUDITED)
                                     
NOTE 7 - SUBSEQUENT EVENT

Subsequent to June 8, 1997 the Company declared a cash dividend of $0.30 per 
share, totaling approximately $7.0 million, payable on August 15, 1997 to 
stockholders of record on August 1, 1997.

On July 2, 1997 the Company announced a corporate restructuring plan to 
separate its real estate and merchandising businesses into two separate 
publicly-held companies.  A special dividend of one share in PriceSmart (the 
merchandising businesses) for every four shares held in PEI is expected to be 
distributed on August 29, 1997, or as soon as possible thereafter.  Final 
approval of the PriceSmart dividend is subject to various conditions and the 
Price Enterprises board of directors has reserved the right to abandon, defer 
or modify the proposed restructuring at any time prior to the declaration and 
distribution of the special dividend.  The special dividend is expected to be 
a taxable distribution to PEI stockholders.

Upon consummation of the restructuring, the Company's merchandising business 
will be classified as a discontinued operation. Merchandising revenues and 
operating loss for the third quarter of 1997 were $15.1 million and $.7 
million, respectively, and $7.2 million and $2.9 million, respectively, for 
the third quarter of 1996.  For the 40-week year-to-date period of 1997, 
merchandising revenues and operating loss were $50.2 million and $6.3 million 
compared to $30.7 million and $9.0 million for the comparable period of 1996.


                                      10
<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 third quarter and year-to-date periods of fiscal 1997 ended June 8, 
1997 to the third quarter and year-to-date periods of fiscal 1996 ended June 
9, 1996.  The Company invests in real estate and related assets, and operates 
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.

REAL ESTATE RENTAL OPERATIONS
                           Revenue   Percent  Operating             Percent
                           Amount    Change    Income     Change    Change
                           -------   -------  ---------   ------    -------
3rd Quarter - FY 1997      $14,223     (2%)     $7,296    $  745       11%
3rd Quarter - FY 1996       14,536     ---       6,551       ---       ---

Year-to-date - FY 1997     $42,726      2%     $21,086    $1,958       10%
Year-to-date - FY 1996      41,823     ---      19,128       ---       ---

    Each fiscal quarter reflects three 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.

    The slight decrease in revenue during the third quarter of fiscal 1997 
was primarily due to the loss of revenue from the Seekonk (MA) property as a 
result of the Bradlees bankruptcy during the past year as well as the 
write-off of related receivables associated with Bradlees.  The decrease was 
also a result of loss of revenue from the Richmond (CA) location which was 
sold in the latter part of fiscal 1996.  These decreases were almost entirely 
offset by an increase in revenue from the Dallas (TX) location as a result of 
its completion during fourth quarter fiscal 1996 and subsequent lease-up, as 
well as increased revenue at the Signal Hill (CA) location and other 
properties.  During the third quarter the increase in operating income was 
primarily due to the completion and lease-up of the Dallas (TX) property.  

    During the year-to-date period, 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.


                                      11
<PAGE>

ADJUSTED FUNDS FROM OPERATIONS

<TABLE>
<CAPTION>
                                       Less           Add        Adjusted    
                        Operating  Straight-line  Depreciation  Funds from  Percent
                         Income       Rentals       Expense     Operations  Change
                        ---------  -------------  ------------  ----------  -------
<S>                     <C>          <C>            <C>          <C>        <C>
3rd Quarter - FY 1997    $7,296        $(692)        $2,454        $9,058     9.5%
3rd Quarter - FY 1996     6,551         (859)         2,581         8,273     ---

Year-to-date - FY 1997  $21,086      $(1,839)        $7,383       $26,630     9.2%
Year-to-date - FY 1996   19,128       (2,306)         7,567        24,389     ---
</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), FFO is the pretax income determined in accordance with 
generally accepted accounting principles (GAAP), excluding 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.

GAIN (LOSS) ON SALE OF REAL ESTATE

                                                           Percent
                                   Amount      Change      Change
                                   ------      ------      -------
3rd Quarter - FY 1997              $(450)      $(542)        ---
3rd Quarter - FY 1996                 92         ---         ---

Year-to-date - FY 1997              $899        $150         20%
Year-to-date - FY 1996               749         ---         ---

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

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

MERCHANDISING OPERATIONS

                             Sales     Percent    Gross     % of     Percent
                             Amount    Change     Margin    Sales    Change
                             -------   -------    ------    -----    -------
3rd Quarter - FY 1997        $14,067     105%     $1,009     7.2%     220% 
3rd Quarter - FY 1996          6,875     ---         315     4.6%     ---

Year-to-date - FY 1997       $46,239      56%     $2,130     4.6%      67%
Year-to-date - FY 1996        29,577     ---       1,274     4.3%     ---


                                      12
<PAGE>

    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 third quarter the increase in sales is 
attributed to a 173% increase in international sales, from $5.2 million in 
third quarter fiscal 1996 to $14.1 million for the same period in fiscal 
1997, primarily as a result of sales from the 51% owned Panama location which 
opened during the first quarter of the current year, as well as increased 
sales to the Saipan, Guam, Indonesia and China locations.  A second Indonesia 
location was opened during the quarter, bringing the total number of 
international locations to six.

    The 40-week year-to-date increase in sales is due to a 125% increase in 
international sales partially offset by a decline of 90% in Price Quest sales 
due to the discontinuation of the electronic shopping business in January 
1997.

    The increase in gross margin as a percent of sales during the third 
quarter was primarily due to sales from the Panama location which has a gross 
margin of approximately 11%.  During the year-to-date period the increase in 
gross margin was also attributed to a higher gross margin on Panama sales, 
but was somewhat offset by negative gross margin for Price Quest due to 
reserves of $0.9 million taken during the first two quarters of fiscal 1997 
associated with markdowns to sell certain returned and discontinued 
merchandise.

MERCHANDISING OPERATING EXPENSES

                                                          Percent
                                   Amount      Change     Change
                                  -------     --------    ------
3rd Quarter - FY 1997              $2,818     $(1,210)     (30%)
3rd Quarter - FY 1996               4,028         ---       ---

Year-to-date - FY 1997            $12,330     $(3,725)     (23%)
Year-to-date - FY 1996             16,055         ---       ---

    During the third 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 somewhat offset by increased 
operating expenses for the international businesses of $1.0 million over the 
prior year due to the consolidation of the Panama joint venture operating 
expenses. The year-to-date decrease was a result of the same factors as the 
third quarter.

GENERAL AND ADMINISTRATIVE EXPENSES

                                                          Percent
                                   Amount      Change     Change
                                  -------     --------    ------
3rd Quarter - FY 1997                $952        $62         7%
3rd Quarter - FY 1996                 890        ---        ---

Year-to-date - FY 1997             $2,937       $264        10%
Year-to-date - FY 1996              2,673        ---       ---

    During the third quarter, the increase in expenses is due to an increase 
in professional fees related to strategic corporate matters, somewhat offset 
by a reduction in insurance costs, compared to the prior year.  During the 
year-to-date period, the increase in expense is also due to the increase in 
professional fees as well as addition of management, somewhat offset by a 
reduction in fees paid to Costco for administrative services.


                                      13
<PAGE>

INTEREST INCOME (NET)


                                                          Percent
                                   Amount      Change     Change
                                  -------     --------    ------
3rd Quarter - FY 1997              $2,130       $137         7%
3rd Quarter - FY 1996               1,993        ---        ---

Year-to-date - FY 1997             $6,156       $734        14%
Year-to-date - FY 1996              5,422        ---        ---

    The increase in interest income for both the third 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 Costco 
note payable that was repaid during the fourth quarter of fiscal 1996.  This 
net improvement was somewhat offset by reductions in interest income from the 
Atlas note due to its repayment during the third quarter as well as the City 
Notes due to principal reductions of $4.7 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
                                  -------     --------    ------
3rd Quarter - FY 1997               $ 60        $ 60        100%
3rd Quarter - FY 1996                ---         ---        ---

Year-to-date - FY 1997              $782        $782        100%
Year-to-date - FY 1996               ---         ---        ---

    The gain on sale of investment in third quarter fiscal 1997 relates to 
the sale of the Company's options to purchase stock in Car Club.  The 
year-to-date amount also includes the gain on the sale of the Company's 
preferred stock investment in Sneaker Stadium, a privately-held specialty 
retailer.

MINORITY INTEREST

                                                          Percent
                                   Amount      Change     Change
                                  -------     --------    ------
3rd Quarter - FY 1997             $   36      $  (418)     (92%)
3rd Quarter - FY 1996                454          ---       ---

Year-to-date - FY 1997            $  (73)     $(4,660)    (102%)
Year-to-date - FY 1996             4,587          ---       ---

    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.


                                      14
<PAGE>
PROVISION FOR INCOME TAXES

                                                          Percent    Effective
                                   Amount      Change     Change      Tax Rate
                                  -------     --------    ------     ---------
3rd Quarter - FY 1997              $3,009      $1,016       51%         41%
3rd Quarter - FY 1996               1,993         ---       ---         41%

Year-to-date - FY 1997             $8,084      $2,210       38%         41%
Year-to-date - FY 1996              5,874         ---       ---         47%

    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.

LIQUIDITY AND CAPITAL RESOURCES

   The Company currently holds cash of $83 million and is well positioned to 
finance its business activities through a variety of additional sources.  It 
expects to satisfy short-term liquidity requirements through net cash 
provided by real estate operations.  

    On July 2, 1997 the Company announced a corporate restructuring plan to 
separate its real estate and merchandising businesses into two separate 
publicly-held companies.  A special dividend of one share in PriceSmart (the 
merchandising businesses) for every four shares held in PEI is expected to be 
distributed on August 29, 1997, or as soon as possible thereafter.  Final 
approval of the PriceSmart dividend is subject to various conditions and the 
Price Enterprises board of directors has reserved the right to abandon, defer 
or modify the proposed restructuring at any time prior to the declaration and 
distribution of the special dividend. If the planned restructuring is 
consummated, the Company will retain 27 investment properties with a net book 
value of approximately $340 million and approximately $40 million in cash. 
The unleveraged real estate portfolio should enable it to access significant 
amounts of capital through bank credit facilities or debt offerings.

    Should the restructuring not occur, the Company will retain $83 million 
in cash as well as approximately $26 million of real estate assets which are 
currently being held for sale.  The cash flow that may ultimately be 
generated by sales of these properties represents an additional source of 
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 or debt offerings, or the Company may choose to seek 
additional funds through future public equity offerings.

    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. 


                                      15
<PAGE>
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.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---
    None.


                        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. A final settlement was reached and approved by the 
court. 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 Costco have 
been terminated and an agreement regarding the Company's use of the mark 
"PriceSmart" has become effective.  During the third quarter, the Company 
contributed $1.25 million to the award of attorneys' fees which was accrued 
for in fourth quarter fiscal 1996.

   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 ---
    None.

ITEM 5.  OTHER INFORMATION ---
    None.


                                      16
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K ---
    (a)  The following exhibits are included herein or incorporated by 
         reference:
         (10.1) Employment Agreement, dated as of June 17, 1997,
                by and between Price Enterprises, Inc. and Daniel T. Carter.
         (10.2) Employment Agreement, dated as of June 18, 1997, by and between
                Price Enterprises, Inc. and Jack McGrory. 
         (10.3) Employment Agreement, dated as of September 20, 1994, by and 
                between Price Enterprises, Inc. and Robert M. Gans 
                (incorporated by reference to Exhibit 10.14 to Amendment No. 1 
                to the Registration Statement on Form S-4 of Price Enterprises,
                Inc. filed with the Commission on November 3, 1994).
         (10.4) Amendment to Employment Agreement, dated as of April 28, 1997, 
                by and between Price Enterprises, Inc. and Robert M. Gans.
         (10.5) Agreement Concerning Transfer of Certain Assets dated as of 
                November ___, 1996 by and among Price Enterprises, Inc., Costco
                Companies, Inc. and certain of their respective subsidiaries 
                (incorporated by reference to Exhibit 10.2 to the Registration 
                Statement on Form 10 of PriceSmart, Inc. filed with the 
                Commission on July 3, 1997).
         (15.1) Independent Accountants' Review Report.
         (15.2) Letter re: Unaudited Interim Financial Information.
         (27)   Financial Data Schedule.
    (b)  No reports on Form 8-K were filed for the 12 weeks ended June 8, 1997.
                                     
                                     
                                     17
<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: July 16, 1997                        /S/ ROBERT E. PRICE
                                           -----------------------------------
                                           Robert E. Price
                                           PRESIDENT & CHIEF EXECUTIVE OFFICER


Date: July 16, 1997                        /S/ DANIEL T. CARTER
                                           -----------------------------------
                                           Daniel T. Carter
                                           EXECUTIVE VICE PRESIDENT,  
                                           CHIEF FINANCIAL OFFICER


                                    18