NEWS WATCH: SAFEWAY EYEING DOMINICK'S SALE TO KKR: REPORTS...OAKLAND, CALIF., CITY COUNCIL BARS SUPERCENTERS...FEDS ARREST 300 WORKERS AT WAL-MARTS

SAFEWAY EYEING DOMINICK'S SALE TO KKR: REPORTS

e surfaced that Safeway here may be interested in pursuing a deal with Kohlberg Kravis Roberts, the New York-based investment firm, to acquire Dominick's Finer Foods and install R. Randall Onstead Jr. as its top executive. Safeway has been trying to sell Dominick's since late last year when it was unable to reach a new labor agreement. Onstead is the former president and chief executive officer of Randalls Super Markets, Houston, which was owned by KKR before Safeway acquired Randalls in 1999. Safeway recently said Onstead was hired to help the chain improve its perishables operation, based on what chain officials said was his "merchandising flair." KKR declined to comment.

OAKLAND, CALIF., CITY COUNCIL BARS SUPERCENTERS

OAKLAND, Calif. -- The city council here voted 7 to 1 last week to approve a measure that would essentially prohibit Wal-Mart from opening supercenters here. The new ordinance bars retail stores that have full-service supermarkets and exceed 100,000 square feet. A spokeswoman for Wal-Mart Stores, Bentonville, Ark., said the company was "evaluating all options" for a response. The company previously said it plans to roll out 40 supercenters -- which average nearly 200,000 square feet -- in California during the next four to six years. Nearby Contra Costa County also has banned supercenters, but Wal-Mart is seeking to overturn the rule with a voter referendum set for March.

FEDS ARREST 300 WORKERS AT WAL-MARTS

BENTONVILLE, Ark. -- Federal officials last week arrested more than 300 allegedly illegal workers at units operated by Wal-Mart Stores here, according to published reports. The reports said the workers were members of cleaning crews at 61 stores in 21 states that Wal-Mart hired through a contractor. The reports also noted that some Wal-Mart executives were aware that the workers, mainly Eastern European immigrants, were in the country illegally and that federal grand jury subpoenas have been issued for the executives to testify. Representatives of Wal-Mart and the Bureau of Immigration and Customs Enforcement were not available for comment.