Giant Food, Inc., one of metropolitan Washington's two largest food retailers, yesterday reported a 10 per cent increase in profits for the 12 weeks ended May 21.

Company president Joseph B. Danzansky also announced expansion plans for his company and the appointment of Odonna Mathews to succeed Esther Peterson as consumer adviser to the company. Peterson has joined the Carter administration as the White House's consumer affairs adviser.

Danzansky also criticized the District government in a speech last night for "continuing to err in its approach to economic development and in its struggle to provide a better life for all our fellow citizens."

Profits for Giant's first fiscal quarter were a record $2.77 million (86 cents a share) compared with $2.51 million (76 cents) in the same period last year. Sales rose 8 per cent to a record $214 million, and Giant's profits edged up to 1.29 per cent of sales from 1.27 per cent.

To offset the effects of inflation, Giant charged $1.18 million against pre-tax profits in the recent quarter compared with a charge of $760,000 in the same period last year to account for existing inventory on the last-in, first-out basis.

Danzansky said his firm plans to build seven stores in the current fiscal year in addition to three Pants Corrals, apparel specialty stores that feature Levi Strauss products. Giant now operates 112 food stores, 7 carpet centers, 36 drug stores, 7 optical centers, 2 gas stations, 26 Pants Corrals, 3 garden centers and 4 department stores.

The Giant president said 22 of his supermarkets now have computerized checkout systems, by far the most throughout the retail food industry. He also said that under a new promotion program called "EDP" for "everyday discount prices," Giant had slashed prices on "thousands" of items.

Mathews, the new consumer adviser, joined the firm as an intern in 1971 while attending the University of Maryland. She became a fulltime employee in 1972, working for Peterson as a consumer specialist.

A board member of the Maryland Citizens Consumer Council, Mathews said plans now are in progress for Giant to work on nutrition and special dietary labeling, credit policies, metric conversion, product safety and the needs of inner-city, Spanish-speaking customers.

Danzanksy, in a speech last night to the Washington Urban League, said the District needs to implement immediately a new business development office, already authorized by Mayor Walter E. Washington.

At the same time, Danzansky said the "prognosis is very good" for the city's economic future.Many of the problems can be solved if the government makes it possible for people to "compete for the privilege of doing business in the city," he added.

Corporate prosperity depends upon a stable community and business has a responsbility to help bring it about, the Giant executive stated.

Specifically, many grocery stores in the inner city are closed becuase they are only marginal in terms of profits "and the capital can be more advantageously invested elsewhere," he added.