Nearly a year after signing a deal with Safeway Inc. to open as many as 450 supermarket branches in several western states, Wells Fargo & Co. said last week it plans to open 122 of them by yearend.

Analysts speculated that the $101 billion-asset banking company has not opened such branches as quickly as it may have initially planned due to its preoccupation with integrating First Interstate Bancorp.

That merger, which closed in April 1996, took Wells outside of California for the first time, into nine additional western states. "Certainly they are seeing more customer resistance than they had expected in these new markets," said Raphael Soifer, bank analyst at Brown Brothers, Harriman & Co. "And perhaps what we're seeing here are some midcourse corrections."

A Wells spokesman, Rod Sherrell, dismissed that notion, pointing out that while there have been no new supermarket branches in Safeways in the past 11 months, the bank had opened in-store branches in other supermarket chains, primarily in Arizona.

He added, however, that "we did have that little conversion, and that took from July until the end of the year. To get our people running in all those other states takes a little while and some planning."

Among recent changes in the bank's supermarket strategy are new configurations for in-store branches, he said. It used to have just two options, big and small.

"Wells Fargo never lacks for innovation," he said. "They're always trying things, and some of them work and some of them don't. Those that do are launched around the system, and those that don't never see the light of day."

Of the 122 new supermarket branches planned this year, 50 are to be in Oregon, 36 in California, 25 in Arizona, and 11 in Washington. Many will be opened by the end of summer, the bank said. Wells has had branches in Safeway stores since 1990, and they now total 76.

Despite the slowdown, Wells is still considered the bank that is moving most aggressively in supermarket branching, analysts said. Excluding the planned additions, Wells has 751 supermarket branches, or about 38% of its network, according to Mr. Sherrell. Of its California branches, about half are in supermarkets, he said.

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