Note – Safeway Inc.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), OR A
NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

SAFEWAY INC.

3.400% Note Due 2016

$400,000,000

CUSIP No. 786514BT5

SAFEWAY INC., a Delaware corporation (the “Company”, which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received promises to pay to

		CEDE & CO.		, or registered assigns,
the principal sum of		FOUR HUNDRED MILLION		DOLLARS

on December 1, 2016, and to pay interest thereon from December 5, 2011, or
the most recent interest payment date to which interest has been paid or
provided for, as the case may be, payable on June 1 and December 1 (each, an
“Interest Payment Date”), beginning June 1, 2012, at the rate of 3.400% per
annum, until the principal hereof is paid or made available for payment, and (to
the extent that the payment of such interest is permitted by law) to pay
interest at the rate per annum borne by this Security on any overdue principal
and on any overdue installment of interest until paid. If any Interest Payment
Date falls on a date that is not a Business Day, interest will be paid on the
next succeeding Business Day. The interest so payable and punctually paid or
duly provided for on any Interest Payment Date will, except as otherwise
provided in the Indenture, be paid to the person in whose name this Security (or
one or more predecessor Securities) is registered at the close of business on
the regular record date for such interest, which shall be the May 15 and
November 15, respectively (whether or not a Business Day), immediately preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such regular
record date and may either

---

be paid to the person in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on a special record date for
the payment of such defaulted interest to be fixed by the Company, notice
whereof shall be given to the Trustee and the Holders not less than 10 days
prior to such special record date, or be paid at any time in any other lawful
manner. Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.

Principal of and interest on the Securities will be payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. The transfer of the Securities
will be registrable, the Securities may be presented for exchange, and notices
and demands to or upon the Company in respect of this Security and the Indenture
may be served, at the office or agency of the Company maintained for such
purpose (which initially will be The Bank of New York Mellon Trust Company, N.A.
at 700 South Flower Street, Suite 500, Los Angeles, CA 90017, Attention:
Corporate Trust Administration); provided that, unless all of the outstanding
Securities are Global Securities, the Company will at all times maintain an
office or agency for such purposes in Los Angeles, California; and provided,
further, that, except as provided in the next sentence, payment of interest may,
at the option of the Company, be made by check mailed to the address of the
person entitled thereto. If this Security is a Global Security, the interest
payable on this Security will be paid to Cede & Co., the nominee of the
Depositary, or its registered assigns as the registered owner of this Security,
by wire transfer of immediately available funds on each of the applicable
Interest Payment Dates.

Reference is hereby made to the further provisions of this Security which
further provisions shall for all purposes have the same effect as if set forth
at this place.

Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

---

IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.

Date: December 5, 2011

SAFEWAY INC.
BY		BY
Bradley S. Fox		Robert A. Gordon
Vice President and Treasurer		Senior Vice President, Secretary and
		Counsel

TRUSTEE153S CERTIFICATE

OF AUTHENTICATION

This is one of the 3.400% Notes Due 2016

described in the

within-mentioned Indenture.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

BY

AUTHORIZED SIGNATORY

---

SAFEWAY INC.

3.400% Note Due 2016

1.

General.

This Security is one of a duly authorized series of securities of the Company
issued and to be issued under an Indenture, dated as of September 10, 1997, as
amended, modified or supplemented from time to time (the “Indenture”), between
the Company and The Bank of New York Mellon Trust Company, N.A., formerly known
as The Bank of New York Trust Company, N.A., as successor to The Bank of New
York, as Trustee (the “Trustee”, which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, originally issued in $400,000,000 aggregate
principal amount, subject to increase in accordance with the Indenture (herein
called the “Securities”). All terms used but not defined in this Security shall
have the meanings assigned to them in the Indenture.

No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on this Security at
the times, places and rate, and in the coin or currency, herein prescribed.

2.	Indenture.

The terms of the Securities include those stated in the Indenture and those
made part of the Indenture by the Officers153 Certificate dated December 5, 2011
delivered pursuant thereto and the TIA. The Securities are subject to all such
terms, and the Securityholders are referred to the Indenture and said Act for a
statement of them.

3.	Sinking Fund.

The Securities are not subject to any sinking fund.

4.	Optional Redemption.

The Securities are redeemable in whole or in part at the option of the
Company at any time and from time to time at a redemption price equal to the
greater of (i) 100% of the principal amount of the Securities to be redeemed; or
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest on the Securities to be redeemed (exclusive of interest
accrued to the date of redemption) discounted to the date of redemption on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the then current Treasury Rate plus 40 basis points. In each case the Company
will pay accrued and unpaid interest on the principal amount being redeemed to
the date of redemption.

“Comparable Treasury Issue” means, with respect to any redemption date, the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Securities that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Securities.

“Comparable Treasury Price” means, with respect to any redemption date, (1)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (2) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers
that the Company appoints to act as the Independent Investment Banker from time
to time.

---

“Reference Treasury Dealer” means, with respect to any redemption date for
the Securities, Goldman, Sachs & Co., J.P. Morgan Securities LLC and Merrill
Lynch, Pierce, Fenner & Smith Incorporated and their respective successors,
and one other firm that is a primary U.S. Government securities dealer (each a
“Primary Treasury Dealer”) which the Company specifies from time to time;
provided, however, that if any of them ceases to be a Primary Treasury Dealer,
the Company will substitute another Primary Treasury Dealer.

“Reference Treasury Dealer Quotations” means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.

Notice of any optional redemption of any Securities will be mailed at least
15 but not more than 60 days before the redemption date to each Holder of the
Securities to be redeemed at its registered address. The notice of redemption
for the Securities will state, among other things, the amount of Securities to
be redeemed, the redemption date, the redemption price and the place or places
that payment will be made upon presentation and surrender of Securities to be
redeemed. Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on any Securities that have been called for
redemption at the redemption date.

5.	Offer to Purchase Upon a Change of Control Triggering Event.

If a Change of Control Triggering Event occurs, unless the Company has
exercised its option to redeem the Securities pursuant to the terms of the
Indenture, each Holder of this Security will have the right to require the
Company to repurchase all or any part (equal to $2,000 or an integral multiple
of $1,000 in excess thereof) of that Holder153s Securities pursuant to a Change of
Control Offer on the terms set forth in the Indenture.

6.	Denominations; Transfer; Exchange.

This Security is issuable only in registered form without coupons in minimum
denominations of U.S. $2,000 and integral multiples of $1,000 in excess thereof.

As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer, or the exchange for an equal principal amount,
of this Security is registrable with the Registrar upon surrender of this
Security for registration of transfer at the office or agency of the Registrar.

No service charge shall be made for any such registration of transfer or
exchange, but the Company may, subject to certain exceptions, require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

7.	Persons Deemed Owners.

Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Security is registered as the owner thereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

---

8.	Unclaimed Money.

The Trustee and any Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.

9.	Defeasance Prior to Maturity.

The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Securities or (ii) certain covenants and Events of Default
with respect to the Securities, in each case upon compliance with certain
conditions set forth therein.

10.	Amendment; Supplement; Waiver.

Subject to certain limitations described in the Indenture, the Indenture
permits the Company and the Trustee to enter into a supplemental indenture with
the written consent of the Holders of at least a majority in principal amount of
the outstanding Securities (including consents obtained in connection with a
tender offer or exchange offer for the Securities), for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Securityholders. Subject to certain limitations described in the
Indenture, the Holders of at least a majority in principal amount of the
outstanding Securities by notice to the Trustee (including consents obtained in
connection with a tender offer or exchange offer for the Securities) may waive
compliance by the Company with any provision of the Indenture or the Securities.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

11.	Restrictive Covenants.

The Indenture imposes certain limitations on the Company153s and its
Subsidiaries153 ability to create or incur certain Liens on any of their
respective properties or assets and to enter into certain sale and lease-back
transactions and on the Company153s ability to engage in mergers or consolidations
or the conveyance, transfer or lease of all or substantially all of its
properties and assets. These limitations are subject to a number of important
qualifications and exceptions and reference is made to the Indenture for a
description thereof.

12.	Defaults and Remedies.

If an Event of Default shall occur and be continuing, the principal of the
Securities may be declared (or, in certain cases, shall ipso facto
become) due and payable in the manner and with the effect provided in the
Indenture.

13.	Proceedings.

As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding, judicial or
otherwise, with respect to the Indenture or for the appointment of a receiver or
trustee, or for any other remedy under the Indenture, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities and unless also the Holders of at least a
majority in principal amount of the Securities at the time outstanding shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceedings as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of Securities at the time
outstanding a direction inconsistent with such request, and shall have failed to
institute such proceeding, within 60 days. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of the principal hereof or any interest hereon on or after the
respective due dates expressed herein.

---

14.	Trustee Dealings with Company.

The Trustee under the Indenture, in its individual or any other capacity, may
deal with the Company or an Affiliate of the Company with the same rights it
would have if it were not Trustee.

15.	No Recourse Against Others.

A past, present or future director, officer, employee, shareholder or
incorporator, as such, of the Company or any successor corporation shall not
have any liability for any obligations of the Company under this Security or the
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration of issuance of the Securities.

16.	Governing Law.

The internal laws of the State of New York shall govern the Indenture and the
Securities.

---

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
Security, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM – as tenants in common		UNIF GIFT MIN ACT –				Custodian
TEN ENT – as tenants by the entireties				(Cust)				(Minor)
JT TEN – as joint tenants with right of survivorship and not as tenants in common		under Uniform Gifts to Minors
		Act
		(State)

Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR

OTHER

IDENTIFYING NUMBER OF ASSIGNEE

| |

(Please print or typewrite name and address including postal
zip code of assignee)

this Security and all rights thereunder hereby irrevocably constituting and
appointing , Attorney, to transfer this Security on the books of the Trustee,
with full power of substitution in the premises.

Dated:

				Notice: The signature(s) on this Assignment must correspond with the name(s) as written upon the face of this Security in every particular, without alteration or enlargement or any change whatsoever.

---

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Security purchased by the Company pursuant
to Section 4.9 of the Indenture, check the box below:

¨

If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.9 of the Indenture, state the amount you elect to
have purchased: $

Date:						Your Signature:
								(Sign exactly as your name appears on the face of this Note)
						Tax Identification No:

SIGNATURE GUARANTEE

Participant in a Recognized Signature

Guarantee Medallion Program