Exhibit 99.1

SAFEWAY INC. ANNOUNCES

SECOND QUARTER

2011 RESULTS

Earnings per share increased 11%

Contact: Melissa Plaisance (925) 467-3136

Christiane Pelz (925) 467-3832

Pleasanton, CA – July 21, 2011

Results From Operations

Safeway Inc. today reported net income of $145.8 million ($0.41 per diluted share) for the second quarter of 2011 compared to $141.3 million ($0.37 per diluted share) for the second quarter of 2010.

“Second quarter earnings results exceeded our expectations,” said Steve Burd, Chairman, President and CEO. “Identical-store sales improved during the second quarter and into the third quarter. We remain focused on building customer loyalty and expect sales to continue to gradually improve through the second half of the year.”

“At the same time, our cost reduction and profit improvement efforts helped generate improved earnings results in the second quarter,” added Burd, “and we expect these efforts to contribute to earnings for the balance of the year.”

Sales and Other Revenue

Total sales increased 7.1% to $10.2 billion in the second quarter of 2011 from $9.5 billion in the second quarter of 2010 due primarily to higher fuel sales, the impact of reporting Blackhawk commissions on a gross basis,¹ a higher Canadian exchange rate and a 0.5% increase in identical-store sales, excluding fuel.

Gross Profit

Gross profit declined 155 basis points to 27.00% of sales in the second quarter of 2011 compared to 28.55% of sales in the second quarter of 2010. Excluding the 104 basis-point impact from fuel sales and the 32 basis-point impact from the accounting change in gift card commissions, gross profit decreased 19 basis points. This decline was largely the result of some delay in recovering cost increases and increased LIFO expense, partly offset by improved shrink and higher gross margin dollars from Blackhawk.

Operating and Administrative Expense

Operating and administrative expense decreased 127 basis points to 24.28% of sales in the second quarter of 2011 from 25.55% of sales in the second quarter of 2010. Excluding the 95 basis-point impact from fuel sales and the 28 basis-point impact from the accounting change in gift card commissions, operating and administrative expense margin decreased four basis points.

Interest Expense

Interest expense declined to $61.5 million in the second quarter of 2011 from $69.2 million in the second quarter of 2010 due to lower average borrowings and lower average interest rates.

Income Taxes

Income tax expense was 33.3% of pre-tax income in the second quarter of 2011 compared to 35.3% in the second quarter of 2010. The decline in the tax rate is due primarily to higher earnings from Canadian operations which have a lower tax rate.

24-Week Results

Net income for the first 24 weeks of 2011 declined to $171.0 million ($0.48 per diluted share) from $237.3 million ($0.61 per diluted share) in the first 24 weeks of 2010 primarily due to the $80.2 million ($0.22 per diluted share) tax expense on repatriated earnings from Canada recorded in the first quarter of 2011. Excluding this tax charge, net income would have been $251.2 million ($0.70 per diluted share).

The gross profit margin was 27.26% in the first 24 weeks of 2011 compared to 28.48% in the first 24 weeks of 2010. Operating and administrative expense margin was 24.78% in the first 24 weeks of 2011 compared to 25.83% in the first 24 weeks of 2010.

Guidance

Safeway is reaffirming guidance for the year of $1.45 to $1.65 earnings per diluted share (including the estimated $0.15 per diluted share negative impact from the Canadian dividend), operating profit margin change, excluding fuel, of flat to slightly positive and free cash flow of $0.75 billion to $0.85 billion. Identical-store sales are expected to gradually improve, approaching 1.0% for the year.

Stock Repurchases

During the second quarter of 2011, Safeway purchased 14.9 million shares of its common stock at an average price of $24.13 per share and a total cost of $360.8 million (including commissions). The remaining board authorization for stock repurchases at quarter-end was approximately $1.1 billion.

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Capital Expenditures

Safeway invested $209.0 million in capital expenditures in the second quarter of 2011. The company opened six new stores, completed seven Lifestyle remodels and closed 11 stores. For the year, Safeway plans to invest approximately $1.0 billion in capital expenditures, open 26 new Lifestyle stores and complete 30 Lifestyle remodels.

Cash Flow

Net cash flow provided by operating activities declined to $187.6 million in the first 24 weeks of 2011 compared to $309.1 million in the first 24 weeks of 2010 due primarily to taxes paid on the Canadian dividend and contributions to pension plans.

Net cash flow used by investing activities was $405.3 million in the first 24 weeks of 2011 compared to $393.6 million in the first 24 weeks of 2010.

Net cash flow from financing activities declined to a use of $429.5 million in the first 24 weeks of 2011 from a source of $155.6 million in the first 24 weeks of 2010 due primarily to a greater net addition to long-term borrowings in 2010 and increased purchases of treasury stock in 2011.

About Safeway

Safeway Inc. is a Fortune 100 company and one of the largest food and drug retailers in North America based on sales. The company operates 1,687 stores in the United States and Canada. The company’s common stock is traded on the New York Stock Exchange under the symbol SWY.

Safeway Conference Call

Safeway’s investor conference call discussing second quarter results will be broadcast live over the internet at www.safeway.com/investor_relations at 8:00 a.m. PT on July 21, 2011. Click on Webcast Events to access the call. A replay will be available via webcast for approximately one week following the conference call.

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This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements relate to, among other things, estimates of diluted earnings per share, sales growth, cost reduction and profit improvement efforts, capital expenditures, free cash flow, Lifestyle stores, margins and financial and operating results. Forward-looking statements are indicated by words or phrases such as “guidance,” “believes,” “expects,” “anticipates,” “estimates,” “plans,” “continuing,” “ongoing,” and similar words or phrases and the negative of such words and phrases. Forward-looking statements are based on our current plans and expectations and involve risks and uncertainties which are, in many instances, beyond our control, and which could cause actual results to differ materially from those included in or contemplated or implied by the forward-looking statements. Such risks and uncertainties include the following: general business and economic conditions in our operating regions, including the rate of inflation or deflation, consumer spending levels, currency valuations, population, employment and job growth and/or losses in our markets; sales volume levels and price per item trends; pricing pressures and competitive factors, which could include pricing strategies, store openings, remodels or acquisitions by our competitors; results of our programs to control or reduce costs, improve buying practices and control shrink; results of our programs to increase sales; results of our continuing efforts to expand corporate brands; results of our programs to improve our perishables departments; results of our promotional programs; results of our capital program; results of our efforts to improve working capital; results of any ongoing litigation in which we are involved or any litigation in which we may become involved; the resolution of uncertain tax positions; the ability to achieve satisfactory operating results in all geographic areas where we operate; changes in the financial performance of our equity investments; labor costs, including benefit plan costs and severance payments, or labor disputes that may arise from time to time and work stoppages that could occur in areas where certain collective bargaining agreements have expired or are on indefinite extensions or are scheduled to expire in the near future; failure to fully realize or delay in realizing growth prospects for new business ventures, including our Blackhawk and Property Development Centers subsidiaries; legislative, regulatory, tax, accounting or judicial developments, including with respect to Blackhawk; the cost and stability of fuel, energy and other power sources; the impact of the cost of fuel on gross margin and identical-store sales; discount rates used in actuarial calculations for pension obligations and self-insurance reserves; the rate of return on our pension assets; the availability and terms of financing, including interest rates; adverse developments with regard to food and drug safety and quality issues or concerns that may arise; loss of a key member of senior management; data security or other information technology issues that may arise; unanticipated events or changes in real estate matters, including acquisitions, dispositions and impairments; adverse weather conditions and effects from natural disasters; performance in new business ventures or other opportunities that we pursue; and the capital investment in and financial results from our Lifestyle stores. We undertake no obligation to update forward-looking statements to reflect developments or information obtained after the date hereof and disclaim any obligation to do so. Please refer to our reports and filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, as amended, subsequent Quarterly Reports on Form 10-Q and subsequent Current Reports on Form 8-K, for a further discussion of these risks and uncertainties.

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SAFEWAY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per-share amounts)

(Unaudited)

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SAFEWAY INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per-share amounts)

(Unaudited)

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SAFEWAY INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

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SAFEWAY INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

(Dollars in millions)

(Unaudited)

TABLE 1: CAPITAL EXPENDITURES AND OTHER STATISTICAL DATA

TABLE 2: RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

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SAFEWAY INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

(Dollars in millions)

(Unaudited)

TABLE 3: RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO ADJUSTED EBITDA

TABLE 4: RECONCILIATION OF GAAP CASH FLOW MEASURE TO FREE CASH FLOW*

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SAFEWAY INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

(Dollars in millions, except per share amounts)

(Unaudited)

TABLE 5: IDENTICAL-STORE SALES*

TABLE 6: RECONCILIATION OF GROSS PROFIT AND OPERATING AND ADMINISTRATIVE EXPENSE BASIS-POINT CHANGE EXCLUDING FUEL AND GROSS PRESENTATION OF GIFT CARD COMMISSIONS

TABLE 7: RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO SAFEWAY INC. TO NET INCOME EXCLUDING TAX ON REPATRIATED EARNINGS FROM CANADA

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