11-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

(Mark One)

X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

OR

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-00041

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

THE VONS COMPANIES INC.

PHARMACISTS' 401(k) PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

SAFEWAY INC.

5918 Stoneridge Mall Road, Pleasanton, California, 94588-3229

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

REQUIRED INFORMATION

1. Not required to be furnished by the plan.

2. Not required to be furnished by the plan.

3. Not applicable.

4. Plan financial statements and schedules prepared in accordance with the financial reporting requirements of ERISA are attached hereto as Exhibit A.

EXHIBITS

Exhibit A. Plan financial statements and schedules.

Exhibit B. Consent of Independent Registered Public Accounting Firm.

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Benefit Plans Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	June 27, 2012	By:	/s/ David F. Bond
			David F. Bond
			Benefit Plans Committee Member
	June 27, 2012		/s/ Russell M. Jackson
			Russell M. Jackson
			Benefit Plans Committee Member

EX-99.A

The Vons Companies Inc.

Pharmacists' 401(k) Plan

Financial Statements as of and for the Years Ended December 31, 2011 and 2010,

Supplemental Schedule as of December 31, 2011, and Report of Independent

Registered Public Accounting Firm

THE VONS COMPANIES, INC. PHARMACISTS' 401(k) PLAN

TABLE OF CONTENTS

		Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		2
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010:
	Statements of Net Assets Available for Benefits	3
	Statements of Changes in Net Assets Available for Benefits	4
	Notes to Financial Statements	5
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2011
	Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)	20

NOTE: All other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Safeway Benefit Plans Committee and Participants of The Vons Companies, Inc. Pharmacists' 401(k) Plan:

We have audited the accompanying statements of net assets available for benefits of The Vons Companies, Inc. Pharmacists' 401(k) Plan (the “Plan”) as of December 31, 2011 and 2010, and the related statements of changes in net assets available for benefits for the years then ended.  These financial statements are the responsibility of the Plan's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental schedule of assets (held at end of year) as of December 31, 2011 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  This schedule is the responsibility of the Plan's management.  Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2011 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

/s/ Deloitte & Touche LLP

San Francisco, California

June 27, 2012

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THE VONS COMPANIES, INC. PHARMACISTS’ 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2011 AND 2010
(In thousands)
	2011			2010
ASSETS:
Investments at fair value —
Plan's interest in investments of the Safeway Inc.
Defined Contribution Plans Master Trust (Note 3)	$	42,505		$	41,512
Other assets (liabilities) of the Safeway Inc. Defined Contribution Plans
Master Trust:
Due from broker for securities sold	79			—
Due to broker for securities purchased	(53		)	—
Total interest in net assets of the Safeway Inc. Defined
Contribution Plans Master Trust	42,531			41,512
Notes receivable from participants	693			613
Employer contributions receivable	226			230
Total assets	43,450			42,355
LIABILITIES	25			—
NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE	43,425			42,355
ADJUSTMENT FROM FAIR VALUE TO CONTRACT VALUE FOR
FULLY BENEFIT-RESPONSIVE INVESTMENT CONTRACTS	(229		)	(13		)
NET ASSETS AVAILABLE FOR BENEFITS	$	43,196		$	42,342
See notes to financial statements.

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THE VONS COMPANIES, INC. PHARMACISTS’ 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
(In thousands)
	2011			2010
ADDITIONS:
Investment (loss) income — Plan’s interest in Safeway Inc. Defined
Contribution Plans Master Trust investment income (Note 3)	$	(636	)	$	4,292
Interest income on notes receivable from participants	29			26
Participant contributions	2,940			2,939
Rollover contributions	110			548
Employer contributions	225			230
Total additions	2,668			8,035
DEDUCTIONS:
Benefits paid to participants	(1,805		)	(1,644		)
Administrative expenses	(9		)	(7		)
Total deductions	(1,814		)	(1,651		)
INCREASE IN NET ASSETS	854			6,384
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year	42,342			35,958
End of year	$	43,196		$	42,342
See notes to financial statements.

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THE VONS COMPANIES, INC. PHARMACISTS' 401(K) PLAN

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2011 AND 2010

1. DESCRIPTION OF THE PLAN

The following description of The Vons Companies, Inc. Pharmacists' 401(k) Plan (the “Plan”) is provided for general information only. Participants should refer to the Summary Plan Description for more complete information about the Plan's provisions. The following description reflects all Plan amendments through December 31, 2011. The Plan Sponsor is Vons Companies, Inc. (the “Company” or “Vons”), which is a wholly-owned subsidiary of Safeway Inc. The Plan Administrator is the Safeway Benefit Plans Committee.

General - The Plan is a defined contribution plan, which generally covers eligible employees of Vons who are age 21 or older. Eligible employees are defined as any non-probationary pharmacist (i.e. full-time pharmacist who has been employed at least 45 days and any part-time pharmacist who has either been employed at least 60 days or has worked at least 261 hours for the Company, whichever occurs first) who is employed by Vons and who is a member of the United Food and Commercial Workers International Union. Any employee meeting the eligibility requirements, including having attained the age of 21, may enroll in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). A portion of the Plan is designated as an employee stock ownership plan (“ESOP”). The ESOP portion of the Plan permits each participant who has an investment in Safeway Inc. common stock to elect to receive dividends paid as cash or reinvested in additional shares of Safeway Inc. common stock. The Safeway Benefit Plans Committee controls and manages the operation and administration of the Plan.

Contributions - Participants may elect to contribute between 1% to 25% of their eligible pay, up to a maximum contribution of $16,500 for both 2011 and 2010, according to the Internal Revenue Code (the “Code”) limitations. Participant contributions are not currently taxable to participants pursuant to Section 401(k) of the Code. The Company makes an annual matching contribution equal to the lesser of (a) 50% of the employee's contribution for the plan year; (b) $1,000; or (c) for any participant who works less than 1,800 straight-time hours in the plan year, a pro rata portion of $1,000 based on hours worked.

Trustee and Recordkeeper - The trustee of the Plan is JPMorgan Chase Bank, N.A. and the recordkeeper is J.P. Morgan Retirement Plan Services.

Investment Options - Participants may direct their accounts in any one or combination of investment funds and Safeway Inc. common stock. The Plan's current investment offerings include mutual funds, Safeway Inc. common stock, common collective trusts and the Interest Income Fund (see Note 4). Participants may change their investment options on a daily basis.

Allocations and Vesting - Earnings on amounts held in the investment funds are allocated to individual accounts daily, based on the proportion each account bears to the total of all account balances in the specific investment fund. Participants are 100% vested in their contributions and earnings. Participants vest in the Plan Sponsor's matching contributions made for Plan years commencing prior to January 1, 2004, as follows:

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Years of Vesting Service	Percentage Vested
Less than 3	0	%
3	20
4	40
5	60
6	80
7 or more	100

Participants vest in the Plan Sponsor's matching contributions made for Plan years commencing on or after January 1, 2004, as follows:

Years of Vesting Service	Percentage Vested
Less than 2	0	%
2	20
3	40
4	60
5	80
6 or more	100

Forfeited amounts are used to restore forfeited balances of rehired participants and to reduce the Plan Sponsor's contribution. Forfeitures were $16,988 in 2011 and $6,661 in 2010.

Participant Accounts - Individual accounts are maintained for each Plan participant. Each participant's account is adjusted for the participant's contributions, Plan Sponsor matching contributions, income or loss thereon and withdrawals. Payment for Plan administrative expenses is paid in part by the investment funds based on revenue sharing agreements between the Plan and the investment funds. In addition, participants are charged up to $4 per month for administrative expenses. The benefit to which a participant is entitled is the value of the participant's vested account.

Participant Loans - Participants may borrow a minimum of $1,000 up to a maximum of the lesser of $50,000 or 50% of their vested account balance. The loan term cannot exceed four years, except where the loan is issued to purchase a primary residence, in which case the loan period may extend to 15 years. Loans are secured by the balance in the participant's account. The interest rate charged on participant loans will be equal to the sum of 1% plus the prime rate published in The Wall Street Journal on the last business day of the preceding calendar month. Principal and interest payments are made through payroll deductions. Participants may make loan payments directly to the recordkeeper after termination of employment. Participants may only have one loan outstanding at a time and are charged a one-time loan check fee of $50.00 and a $10.50 servicing fee each quarter for the term of the loan. At December 31, 2011 and 2010, there were 43 and 40 loans outstanding, respectively, with interest rates ranging from 4.25% to 9.25%.

Participant loans are held by the Plan outside the Master Trust arrangement. (See Note 3)

In-Service Withdrawals - An active or inactive participant may withdraw all or any portion of their rollover account at any time. Hardship withdrawals are not permitted.

Payment of Benefits - Upon termination of employment, a participant may elect (a) to leave the balance of his or her account in the Plan until April 1 of the year following the year in which the participant turns age 70 1/2,

6

(b) to receive an immediate lump sum distribution as cash, as Safeway Inc. common stock (up to the amount invested in Safeway Inc. common stock) or as a rollover to another qualified plan or Individual Retirement Account, or (c) to receive a portion in an immediate lump sum and the remainder to be distributed later, or (d) to receive a series of payments over a period not to exceed the joint life expectancy of the participant and his or her beneficiary. If a participant's balance is $1,000 or less, and the participant does not elect a distribution of funds as a direct rollover or to be payable to the participant, the account will be distributed in accordance with plan provisions to be payable to the participant, subject to income tax withholding. If the participant's balance is $5,000 or less but greater than $1,000, and the participant does not elect a distribution of funds as a direct rollover or to be payable to the participant, the account will be automatically rolled over into an IRA designated by the Plan administrator in accordance with plan provisions.

Plan Termination - Although the Company has not expressed any intent to terminate the Plan, it may do so at any time, subject to the provisions set forth in ERISA. In the event of termination of the Plan, the assets of the Plan would be distributed to the participants in accordance with the fair value of their individual investment accounts.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Investment Valuation and Income Recognition - The fair value of the Plan's interest in the Safeway Inc. Defined Contribution Plans Master Trust (the "Master Trust") is based on the beginning of year value of the Plan's interest in the Master Trust, plus actual contributions and allocated investment income, less actual distributions and allocated administrative expenses, plus or minus changes in unrealized gains and losses. The Master Trust's investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). See Note 3 for discussion of fair value measurements.

In accordance with GAAP, the statements of net assets available for benefits present investment contracts at fair value, as well as an additional line item showing an adjustment of the fully benefit-responsive contracts from fair value to contract value. The statements of changes in net assets available for benefits are presented on a contract value basis.

Purchases and sales of securities are recorded on the trade date. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Management fees and operating expenses charged to the Plan for investments in mutual funds, Safeway Inc. common stock, common collective trusts and the Interest Income Fund are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment returns for such investments.

Concentrations of Risk - The Master Trust investments at December 31, 2011, include a mutual fund with a year-end fair value of $64.9 million that the Master Trust has a 99.9% beneficial ownership of the outstanding institutional shares.

Payment of Benefits - Benefit payments to participants are recorded upon distribution. There were no participants, who have elected to withdrawal from the Plan, but have not yet been paid at December 31, 2011 and 2010.

Notes Receivable from Participants - Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are recorded as distributions based on the terms of the Summary Plan Description.

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Excess Contributions Payable - The Plan is required to return contributions received during the Plan year in excess of the Code limits.

Administrative Expenses - The Plan's administrative expenses are primarily allocated to participant accounts.

Use of Estimates - The preparation of financial statements in conformity with GAAP 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 additions to and deductions from net assets available for benefits during the reporting period. Actual results could differ from these estimates.

The estimated fair value of traditional guaranteed investment contracts presented in Note 3 and Note 4 are based on assumptions about the market for such investments because quoted market prices are unavailable. Such estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions could have a material effect on the estimated fair values. Additionally, the fair values were estimated as of year-end, and current estimates may differ from the amounts presented.

Risks and Uncertainties - The Plan invests in the Master Trust which utilizes various investment instruments, including common stock, mutual funds, common collective trusts and the Interest Income Fund. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and such changes could materially affect the amounts reported in the financial statements.

New Accounting Standard Not Yet Effective - In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which amends ASC 820, Fair Value Measurement. ASU 2011-04 also requires the categorization by level for items that are only required to be disclosed at fair value and information about transfers between Level 1 and Level 2. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The ASU requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The new guidance is effective for reporting periods beginning after December 15, 2011. The adoption is not expected to have a material effect on the statement of net assets available for benefits and statement of changes in net assets available for benefits. Plan management has not determined the impact on the disclosures in the financial statements.

3. MASTER TRUST FINANCIAL INFORMATION

The Plan participates in a master trust arrangement with the Master Trust. The Trustee holds the Master Trust's investment assets, provides administrative functions for each of the Plans participating in the Master Trust, and executes investment transactions as directed by participants.

Use of the Master Trust permits the commingling of Plan assets with the assets of the Safeway 401(k) Savings Plan (prior to June 24, 2011 when this plan was merged into the Plan), the Safeway 401(k) Plan and the Dominick's Finer Foods, LLC 401(k) Retirement Plan for Union Employees. Although assets of each of the plans are commingled in the Master Trust, the Trustee maintains supporting records for each participating plan. The net investment income of the investment assets is allocated daily by the Trustee to each participating plan based on the relationship of the interest in each plan to the total of the interests of all four participating plans.

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The following presents the investment securities of the Master Trust, and the Plan's share of investment securities, as of December 31, 2011 and 2010 (in thousands):

	2011			2010
Investments at fair value:
Safeway Inc. common stock	$	152,609		$	155,884
Mutual Funds (outside of Interest Income Fund)	561,943			602,072
Common/collective trusts (outside of Interest Income Fund)	406,932			402,068
Interest Income Fund (see Note 4):
Synthetic guaranteed investment contracts (“GICs”):
Underlying investments	362,773			347,034
Wrapper contracts	30			278
Traditional guaranteed investment contracts	33,569			47,786
Stable Asset Fund	98,490			100,295
Mutual Fund	23,861			6,620
Investment securities in Trust at fair value	$	1,640,207		$	1,662,037
Other net assets	3,099			—
Total net assets of Master Trust	1,643,306			1,662,037
Plan’s interest in investment securities in Trust, at fair value	$	42,505		$	41,512
Plan’s percentage interest in investment securities
in Trust, at fair value	2.6		%	2.5		%

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The following presents the (decrease) increase in the Master Trust's assets, and the Plan's share of the (decrease) increase in the Master Trust's assets, for the years ended December 31, 2011 and 2010 (in thousands):

	2011			2010
Investment income:
Income from Safeway Inc. common stock:
Dividends on Safeway Inc. common stock	$	3,715		$	3,013
Net (loss) gain in market value of Safeway Inc. common stock	(8,383		)	8,288
Income from mutual funds:
Dividend income	14,309			16,380
Net investment (loss) gain	(35,435		)	57,783
Income from common/collective trusts (outside of Interest
Income Fund) — net investment gain	3,161			50,921
Income from Interest Income Fund:
Interest income	9,803			11,730
Net investment loss	(1,252		)	(2,149		)
(Decrease) increase in trust assets derived from investment activities	$	(14,082	)	$	145,966
Plan’s interest in Trust investment activities	$	(636	)	$	4,292

The Plan's interest in the Master Trust's investments that represent five percent or more of the Plan's net assets available for benefits at year-end 2011 and 2010, are as follows (in thousands):

SSgA S&P 500 Fund	$	7,475	$	7,587
PIMCO Total Return Fund	6,557		5,967
Dodge & Cox Stock Fund	4,290		4,754
RS Partners Fund	3,759		3,996
American EuroPacific Growth Fund	2,964		3,852

Fair Value Measurements - The accounting guidance for fair value measurements defines fair value, established a framework for measuring fair value, and requires disclosures about fair value measurements. The guidance prioritizes the inputs for measuring fair value into the following hierarchy:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

Level 3 - Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The level within the fair value hierarchy is based on the lowest level of any input which is deemed significant to the fair value measurement. The Plan's policy is to recognize significant transfers between levels at the beginning of the reporting period.

In accordance with the accounting guidance for fair value measurements, the table below includes the major categorization for debt and equity securities on the basis of nature and risk.

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Assets measured at fair value on a recurring basis consisted of the following as of December 31, 2011 (in thousands):

		Master Trust Fair Value Measurements
				Quoted
				Prices in
				Active
				Markets		Significant		Significant
				for Identical		Observable		Unobservable
				Assets		Inputs		Inputs
	Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
*	Safeway Inc. common stock	$	152,609	$	152,609	$	—	$	—
	Mutual funds (outside of
	Interest Income Fund):
	Bond fund	187,969		187,969		—		—
	Domestic stock funds	286,156		286,156		—		—
	International stock fund	87,818		87,818		—		—
**	Common/collective trusts
	(outside of Interest Income
	Fund)	406,932		—		406,932		—
	Interest Income Fund:
	Synthetic GICs — underlying
	investments:
*	Mutual Fund	13,032		13,032		—		—
***	Commercial trust	29,803		—		29,803		—
	Mortgage-and other-
	asset backed securities	127,283		—		127,283		—
	U.S. government securities	150,433		—		150,433		—
	Other securities	42,222		—		42,222		—
	Wrapper contracts	30		—		—		30
	Traditional GICs	33,569		—		33,569		—
****	Stable Asset Fund	98,490		—		98,490		—
*	Mutual Fund	23,861		23,861		—
	Total Investment Securities	$	1,640,207	$	751,445	$	888,732	$	30
	Other Net Assets	3,099
	Total Trust Assets	$	1,643,306
*	Represents a party-in-interest transaction (see Note 6)
**	Contains 9 common/collective trusts totaling $199.9 million that represents party-in-interest transactions (see Note 6)
***	Contains 17 securities totaling $454 thousand that represents party-in-interest transactions (see Note 6)
****	Contains 8 securities totaling $2.6 million that represents party-in-interest transactions (see Note 6)
	For the year ended December 31, 2011, there were no significant transfers in or out of Levels 1, 2 or 3 except for certain U.S. Treasury securities transferring from Level 1 to Level 2. The Plan's policy is to record transfers at the end of the Plan year.

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Assets measured at fair value on a recurring basis consisted of the following as of December 31, 2010 (in thousands):

		Master Trust Fair Value Measurements
				Quoted
				Prices in
				Active
				Markets		Significant		Significant
				for Identical		Observable		Unobservable
				Assets		Inputs		Inputs
	Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
*	Safeway Inc. common stock	$	155,884	$	155,884	$	—	$	—
	Mutual funds (outside of
	Interest Income Fund):
	Bond fund	186,681		186,681		—		—
	Domestic stock funds	305,134		305,134		—		—
	International stock fund	110,257		110,257		—		—
	Common/collective trusts
	(outside of Interest Income
	Fund)	402,068		—		402,068		—
	Interest Income Fund:
	Synthetic GICs — underlying
	investments:
*	Mutual Fund	15,836		15,836		—		—
	Mortgage-and other-
	asset backed securities	130,231		—		130,231		—
	U.S. government securities	167,670		88,954		78,716		—
	Other securities	33,297		—		33,297		—
	Wrapper contracts	278		—		—		278
	Traditional GICs	47,786		—		47,786		—
**	Stable Asset Fund	100,295		—		100,295		—
*	Mutual Fund	6,620		6,620		—		—
	Total Trust Assets	$	1,662,037	$	869,366	$	792,393	$	278
*	Represents a party-in-interest transaction (see Note 6)
**	Contains 13 securities totaling $57.8 million that represents party-in-interest transactions (see Note 6)
	For the year ended December 31, 2010, there were no significant transfers in or out of Levels 1, 2 or 3. The Plan's policy is to record transfers at the end of the Plan year.

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A reconciliation of the beginning and ending balances for Level 3 assets for the year ended December 31, 2011 and 2010, follows (in thousands):

	2011			2010
Balance as of January 1	$	278		$	188
Additions	—			—
Settlements	(84		)	(97		)
Unrealized (losses) gains	(164		)	187
Balance as of December 31	$	30		$	278

Below is a description of the valuation methodologies used for the fair value measurements.

Safeway Inc. Common Stock - Safeway Inc. common stock is valued at the closing price as reported on the New York Stock Exchange Composite Tape.

Mutual Funds - These investments are publicly traded investments which are valued using the Net Asset Value ("NAV"). The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund's liabilities, expressed on a per-share basis.

Common/Collective Trusts (Outside of Interest Income Fund) - Common/collective trusts invest primarily in a pool of investments, including contracts that are issued by insurance companies and commercial banks and in contracts that are backed by high quality bonds, bond trusts and bond mutual funds. The overall fair value of the common/collective trusts are based on observable inputs.

Investment Contracts - The fair value of traditional GICs is calculated by discounting the related cash flows based on current yields of similar instruments with comparable durations. Synthetic GICs include underlying investments that are stated at fair value. Fair value of the underlying investments is determined based on quoted market prices or yields currently available on comparable securities of issuers with similar credit ratings. Synthetic GICs also include wrapper contracts which guarantee that there will be no loss of principal or accrued interest. Fair market value of the wrapper contracts is estimated by converting the basis points assigned to the wrap fees into dollars and comparing cost to replacement value.

Stable Asset Fund - This fund is valued based on the NAV of the underlying investments. The beneficial interest of each participant is represented by units. Units are issued and redeemed daily at a constant NAV of $1 per unit.

4. INTEREST INCOME FUND

The Master Trust maintains an Interest Income Fund (the “Fund”) that invests in a mutual fund, a stable asset fund, traditional GICs and synthetic GICs, as described below. The GICs and common collective trust are fully-benefit responsive and are recorded in the financial statements at fair value and then adjusted to contract value.

Mutual Fund - The Fund invests in the JPM U.S. Treasury Plus Money Market Fund. The Fund seeks current income with liquidity and stability of principal. The Fund invests exclusively in U.S. Treasury bills, notes and other obligations issued or guaranteed by the U.S. Treasury, and repurchase agreements collateralized by such obligations.

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Stable Asset Fund - The Fund invests in a Stable Asset Fund, a common collective trust. The beneficial interest of each participant is represented by units which are issued and redeemed daily at the constant NAV of $1 per unit. Distribution to the unit holders are declared daily from the net investment income and automatically reinvested in the Stable Asset Fund on a monthly basis, when paid. Although it is not guaranteed, best efforts are used to maintain a constant NAV of $1 per unit.

Participants ordinarily may direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the Stable Asset Fund, plus earnings, less participant withdrawals and administrative expenses. Plan management believes that the occurrence of events that would cause the Stable Asset Fund to transact at less than contract value is not probable.

Redemption Restrictions of the Stable Asset Fund - The Stable Asset Fund had redemption restrictions for participant-directed transfers to competing investment options, permitted participant withdrawals and transfers, and plan sponsor-directed withdrawals or liquidations.

• Permitted participant withdrawals and transfers are typically processed daily, the fund trustee may request such evidence as it deems appropriate of entitlement to such withdrawal pursuant to certain procedures and may deny any application for withdrawal if satisfactory evidence is not provided.

• Plan sponsor directed withdrawals or liquidations require a 12 month advance written notice.

Traditional GICs - Traditional GICs are backed by the general account of the issuer. The Fund deposits a lump sum with the issuer and receives a guaranteed interest rate for a specified time. Interest is accrued on either a simple interest or fully compounded basis and paid either periodically or at the end of the contract term. The issuer guarantees that all qualified participant withdrawals will occur at contract value (principal plus accrued interest). The traditional GICs in the Fund provide a fixed rate of interest over the term to maturity of the contract; therefore, crediting rates do not reset.

Synthetic GICs - A synthetic GIC is an investment contract (otherwise known as a wrap contract) issued by an insurance company or bank, backed by a portfolio of bonds that are owned by the Fund. The Fund has five synthetic GICs, as of December 31, 2011, with four having a pro-rata share of one wrapped portfolio and one having its own wrap. The assets underlying the synthetic GICs are maintained separate from the contract issuer's general assets, usually by a third party custodian. These contracts typically provide that realized and unrealized gains and losses on the underlying assets are not reflected immediately in the net assets of the Fund, but rather are amortized, usually over time to maturity or the duration of the underlying investments, through adjustments to the future interest crediting rate. The issuer guarantees that all qualified participant withdrawals will occur at contract value. Crediting rates of synthetic GICs can be impacted by variables which include the current yield of the assets within the wrap contract, the duration of the assets covered by the wrap contract and the existing difference between the market value and contract value of the assets within the wrap contract. For synthetic contracts, the Fund uses crediting rate calculations which adjust the current yield of the bonds by a portion of the current gain or loss that is built into the wrap contracts at the measurement date. These crediting rates are reset quarterly and cannot be less than zero. The crediting rate of synthetic contracts will track current market yields on a trailing basis. The rate reset allows the contract value of the portfolio to converge to the market value over time, assuming the market value continues to earn the current portfolio yield for a period of time equal to the current portfolio duration.

With regards to both traditional and synthetic GICs, certain potential events could limit the ability of the Fund to transact at contract value with the issuer. Such events include the following: (i) amendments to the Plan documents; (ii) changes to Fund's prohibition on competing investment options by participating plans or deletion of equity wash provisions; (iii) complete or partial termination of the Fund or its merger with another fund; (iv) the failure of the Plan to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA; (v) unless made in accordance with the withdrawal provisions of the Fund, the redemption of all or a portion of the interests in the Fund held by a participating plan at the direction of the participating plan sponsor, including withdrawals due to the removal of a specifically identifiable group of employees from coverage under the participating plan (such as a group layoff or early retirement incentive

14

program), or the closing or sale of a subsidiary, employing unit or affiliate, the bankruptcy or insolvency of a plan sponsor, the merger of the Plan with another plan, or the Plan sponsor's establishment of another tax-qualified defined contribution plan; (vi) any change in law, regulation, ruling, administrative or judicial position or accounting requirement, in any case applicable to the Fund or participating plans, and (vii) the delivery of any communication to Plan participants designed to influence a participant not to invest in the Fund. The Plan Administrator does not believe that the occurrence of any such market value event which would limit the Fund's ability to transact at contract value with participants is probable.

Guaranteed investment contracts in the Fund do not permit issuers to terminate the agreement prior to the scheduled maturity date. The wrap contracts are evergreen contracts that contain termination provisions. Wrap agreements permit the Fund's investment manager or issuer to terminate upon notice at any time at market value and provide for automatic termination of the wrap contract if the book value or the market value of the contract equals zero. The issuer is not excused from paying the excess contract value when the market value equals zero. Wrap contracts that permit the issuer to terminate at market value generally provide that the Fund may elect to convert such termination to an Amortization Election as described below. In addition, if the Fund defaults in its obligations under the agreement (including the issuer's determination that the agreement constitutes a nonexempt prohibited transaction as defined under ERISA) and such default is not cured within the time permitted by any cure period, then the wrap contract may be terminated by the issuer and the Fund will receive the market value as of the date of termination. Also, wrap contracts permit the issuer or investment manager to elect at any time to convert the wrapped portfolio to a declining duration strategy whereby the contract would terminate at a date which corresponds to the duration of the underlying fixed-income portfolio on the date of the amortization election (“Amortization Election”). After the effective date of an Amortization Election, the fixed-income portfolio must conform to the guidelines agreed upon by the wrap issuer and the investment manager for the Amortization Election period. Such guidelines are intended to result in contract value equaling market value of the wrapped portfolio by such termination date.

The average yield on guaranteed investment contracts was computed by dividing the annualized one-day actual earnings of the contract on the last day of the Plan year by the fair value of the investments on the same date. For 2011 and 2010, the average yield for the Master Trust was 1.20% and 1.96%, respectively.

The average crediting interest rate was computed by dividing the annualized one-day earnings credited to participants on the last day of the Plan year by the fair value of the investments on the same date. The average crediting interest rate for the Master Trust was 1.90% and 2.21% at December 31, 2011 and 2010, respectively.

15

The portfolio holdings of the Interest Income Fund in the Master Trust at December 31, 2011, is shown below (in thousands):

	As of December 31, 2011
				Wrapper
	Rating	Investments		Contracts		Adjustment to
	S&P/	at		at Fair		Contract
	Moody’s	Fair Value		Value		Value
Mutual Fund — JPM U.S. Treasury
Plus Money Market Fund	AAA/Aaa	$	23,861			$	—
Traditional Guaranteed Investment
Contracts:
Metropolitan Life GAC 32173	AA-/Aa3	6,633				(250		)
Metropolitan Life GAC 32333	AA-/Aa3	5,168				(66		)
Metropolitan Life GAC 29850	AA-/Aa3	6,166				(127		)
Monumental SV-04728-Q	AA-/Aa3	4,628				(141		)
Monumental SV-04747-Q	AA-/Aa3	6,394				(414		)
Prudential GA 62069-212	AA-/Aa3	4,580				(90		)
Common/Collective Trust — SEI Stable
Asset Fund #190-783	AA+/Aa1	98,490				455
Synthetic Guaranteed Investment
Contracts:
Prudential #GA-62379	AA/Aa2	29,803				(799		)
CDC-IXIS #WR-1027-01	AA+/Aa1	98,205				(3,185		)
Monumental MDA #01046TR	AA+/Aa1	116,780				(3,789		)
Wrapper				$	30	—
State Street Bank #97044	AA+/Aa1	99,377				(3,224		)
State Street Bank #99002	AA+/Aa1	18,608				(604		)
Total		$	518,693	$	30	$	(12,234	)

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The portfolio holdings of the Interest Income Fund in the Master Trust at December 31, 2010, is shown below (in thousands):

	As of December 31, 2010
				Wrapper
	Rating	Investments		Contracts		Adjustment to
	S&P/	at		at Fair		Contract
	Moody’s	Fair Value		Value		Value
Mutual Fund — JPM U.S. Treasury
Plus Money Market Fund	AAA/Aaa	$	6,620			$	—
Traditional Guaranteed Investment
Contracts:
Metropolitan Life GAC 32173	AA-/Aa3	6,525				(335		)
Metropolitan Life GAC 32333	AA-/Aa3	5,086				(65		)
Metropolitan Life GAC 29850	AA-/Aa3	6,130				(367		)
Monumental SV-04728-Q	AA-/Aa3	4,602				(356		)
Monumental SV-04747-Q	AA-/Aa3	6,289				(585		)
Pacific Life G-27325.01	A+/A1	5,821				(116		)
Prudential GA 62069-211	AA-/Aa3	8,782				(272		)
Prudential GA 62069-212	AA-/Aa3	4,551				(303		)
Common/Collective Trust — SEI Stable
Asset Fund #190-783	AAA/Aaa	100,295				4,869
Synthetic Guaranteed Investment
Contracts:
Bank of America 002-126	AAA/Aaa	28,664				(274		)
Wrapper				$	84	—
CDC-IXIS WR-1027-01	AAA/Aaa	93,903				(898		)
Wrapper				28		—
Monumental MDA #01046TR	AAA/Aaa	111,666				(1,068		)
State Street Bank #97044	AAA/Aaa	95,010				(909		)
Wrapper				140		—
State Street Bank #99002	AAA/Aaa	17,791				(170		)
Wrapper				26		—
Total		$	501,735	$	278	$	(849	)

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5. COMMON/ COLLECTIVE TRUSTS (OUTSIDE OF INTEREST INCOME FUND)

The Fund invests in the JPMCB SmartRetirement Passive Blend Funds and the SSgA S&P 500 Index NL-A Fund which are common collective trusts. Fair value of these investments has been estimated using the NAV per share of the investment. Plan participants had the ability to redeem these investments with the investee at NAV per share at December 31, 2011 and 2010.

There were no unfunded commitments, normal course of business redemption restrictions, or other redemption restrictions on these funds at December 31, 2011 or 2010.

6. PARTY-IN-INTEREST TRANSACTIONS

The Plan's investments include Safeway Inc. common stock, which qualify as exempt party-in-interest transactions. At December 31, 2011 and 2010, the Plan held 39,339 and 34,419 shares, respectively, of Safeway Inc. common stock, with a cost basis of $975,165 and $901,106, respectively. During 2011 and 2010, the Plan received $18,801 and $16,196, respectively, of dividend income on Safeway Inc. common stock.

Certain Plan investments are managed or significantly influenced by J.P. Morgan Chase Bank N.A., trustee of the Plan. As J.P. Morgan Retirement Plan Services provides recordkeeping services to the plan, these transactions qualify as party-in-interest transactions. Administrative fees paid to J.P. Morgan Retirement Plan Services for recordkeeping were $9,548 in 2011 and $2,076 in 2010.

7. INCOME TAXES

The Internal Revenue Service (“IRS”) issued a Determination Letter dated July 17, 2002 stating that the Plan and related trust, as then designed, qualified under the Code. Subsequent to this determination by the IRS, the Plan was amended and restated in its entirety, effective January 1, 2005. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. In 2010, the Plan applied for an updated Determination Letter. In January 2011, the IRS confirmed receipt of the application and it is currently being processed by the IRS. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended and restated, is qualified and the related trust is tax exempt as of the financial statement date. Therefore, no provision for income taxes has been included in the Plan's financial statements.

GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2011, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2005.

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8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following is a reconciliation of the Statement of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits per the financial statements to the Form 5500 (in thousands):

	December 31, 2011		December 31, 2010
Net assets available for benefits per the financial statements	$	43,196	$	42,342
Adjustment from contract to fair value for fully
benefit-responsive investment contracts	229		13
Net assets available for benefits per the Form 5500	$	43,425	$	42,355
	December 31, 2011		December 31, 2010
Increase in net assets per the financial statements	$	854	$	6,384
Adjustment from contract to fair value for fully
benefit-responsive investment contracts	216		116
Net income per Form 5500	$	1,070	$	6,500

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THE VONS COMPANIES, INC. PHARMACISTS 401(k) PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i — SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
12/31/2011
(In thousands)
	Current
Asset Name and Description	Value
* Notes receivable from participants, maturing in 2012–2026 (43 loans, interest rates
ranging from 4.25% to 9.25%)	$	693
TOTAL	$	693
* Represents a party-in-interest transaction

20

EX-99.B

Exhibit B

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-64354 and 333-169021 of Safeway Inc., each on Form S-8, of our report dated June 27, 2012, relating to the financial statements and financial statement schedule of The Vons Companies, Inc. Pharmacists' 401(k) Plan appearing in the Annual Report on Form 11-K of The Vons Companies, Inc. Pharmacists' 401(k) Plan for the year ended December 31, 2011.

/s/ Deloitte & Touche LLP

San Francisco, California

June 27, 2012