Company executives, who discussed the financial results in aconference call with Wall Street analysts, said the storeremodeling program was on track to remodel 280 locations into thecompany's Lifestyle format during the year. Safeway expects tospend $1.6 billion in capital expenditures for the year.

The Safeway Lifestyle format, which it is implementing in astore remodeling program and also in all of its new locations,features a decor designed to be more inviting, with subduedlighting, an emphasis on high-quality fresh products and, in manycases, a large selection of natural and organic foods. ManyLifestyle stores also feature full-service meat counters, bakeriesand floral design centers as well as sushi and olive bars.

The Lifestyle format is one of the factors that companyexecutives cited for the supermarket chain's positive financialresults for the quarter ended March 25, in which Safeway earned$142.9 million, compared with $131.3 million in the first fiscalquarter of last year. The income worked out to 32 cents per dilutedshare, compared with 29 cents a share in last year's firstquarter.