SAFEWAY SALES, NET RISE DESPITE LABOR DISPUTES

PLEASANTON, Calif. -- Despite two labor disputes during 1996, Safeway here said sales and earnings increased for the year and fourth quarter ended Dec. 28.

arter, net income was up 35.5% to $151.6 million, while sales rose 6.2% to $5.5 billion and same-store sales increased 4.9% -- the 14th consecutive quarter that same-store sales increases have exceeded 3%, the company noted.

The company said labor disputes during the year in Denver and Vancouver combined to reduce 1996 net income by approximately 14 cents per share, while a labor dispute in northern California in 1995 reduced that year's net income by about 2.5 cents per share. Earnings for the fourth quarter of 1995 were also affected by an extraordinary item of $2 million for early retirement of debt.

The increase in same-store sales for the year reflects results at stores operating during the entire period in both 1996 and 1995, including stores that remained open during strikes or lockouts.

4TH-QUARTER RESULTS

Qtr Ended 12/28/96 12/30/95

Sales $5.5 billion $5.2 billion

Change 6.2%

Same-store 4.9%

Net Income $151.6 million $111.9 million

Change 35.5%

Inc/Share 63 cents 47 cents

52 Weeks 1996 1995

Sales $17.3 billion $16.4 billion

Change 5.3%

Same-store 5.1%*

Net Income $460.6 million $326.3 million

Change 41.2%

Inc/Share $1.93 $1.34

Same-store sales include results for stores open during strikes and lockouts but exclude 86 stores in Vancouver, British Columbia, which were closed for 40 days during a strike-lockout.