Steve Burd, Safeway's chairman, president and CEO pointed outthat the company opened five new Lifestyle stores and completed 80Lifestyle remodels in the first half of 2006. For the year, thecompany expects to spend approximately $1.6 billion in capitalexpenditures, open approximately 20 new Lifestyle stores, andcomplete approximately 280 Lifestyle remodels.

Through the end of the second quarter, 31% of the stores hadbeen converted to or opened in the Lifestyle format, Burd noted.The company has invested $741.3 million in capital expenditures inthe first 24 weeks of 2006 in its efforts to remodel and to openthe new Lifestyle locations.

In answer to a question from an analyst about whether Safewaywould be interested in acquiring any of the Albertson's stores thatare being closed, Burd declined to comment specifically, citing"competitive and other reasons." However, he commented that, "Ifyou think about the stores that they announced the closings on,they are small-volume stores and the reason they closed them ratherthan tried to market them was because they were probably thebleeders." Such stores "are probably not attractive" to othersupermarket chains, although they might appeal to some"nonconventional operators."