Safeway's 2nd-quarter net income falls 40 percent

National grocery operator Safeway Inc.'s second-quarter net income fell 40 percent and the company lowered its outlook on Thursday in the face of tough competition and declining retail prices.

The chain doesn't expect prices to rebound until the fourth quarter.

Quarterly net income fell to $141.3 million, or 37 cents per share, matching the average expectation of analysts surveyed by Thomson Reuters. It earned $238.6 million, or 57 cents per share, a year earlier. However, that figure included a benefit of 14 cents per share related to a tax issue.

Its revenue rose less than 1 percent to $9.52 billion, topping expectations for $9.47 billion.

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