SAFEWAY SALES RISE 6.4%; PICKUP IN CANADA IS CITED

PLEASANTON, Calif. -- Safeway here said last week strong store operations and the pickup of sales in Alberta, Canada, after a 1997 strike, helped boost sales 6.4% for the second quarter ended June 20.

ajority control of Safeway in 1986.

Safeway said sales for the 12-week second quarter rose 6.4% to $5.6 billion and earnings jumped 48.7% to $193.2 million.

Excluding replacement stores, identical-store sales were up 7.4%, while comparable-store sales rose 8% for the quarter.

The company said net income for last year's second quarter included an extraordinary loss of $4.2 million for early retirement of debt and also reflected the effect of the 75-day labor dispute in Canada that affected 74 stores in Alberta. Safeway also said the combined effect of the strike and the timing of the Easter holiday increased same-store sales comparisons by approximately 3.4%.

For the 24-week first half sales rose 17.6% to $11 billion and net income increased 41.8% to $358 million.

Safeway also restated sales for the half on a pro forma basis to reflect its merger with Vons Cos. during last year's second quarter, noting that, had the companies reported combined sales from the beginning of the prior year, sales would have been up 3.8% for the first half of this year.

2nd-QUARTER RESULTS

Qtr Ended 6/20/98 6/14/97

Sales $5.6 billion $5.2 billion

Change 6.4%

Same-store 7.4%

Net Income $193.2 million $129.9 million

Change 48.7%

Inc/share 38 cents 26 cents

24 Weeks 1998 1997

Sales $11.0 billion $9.3 billion

Change 17.6%

Same-store N/A

Net Income $358.0 million $252.4 million

Change 41.8%

Inc/Share 71 cents 51 cents