Is it time to close Kmart?

The chain is losing money, and sales are sliding. Is there any reason for it to stay in business?

By Kim Peterson Jan 24, 2013 6:28PM
Pedestrians pass a Kmart location in New York ( Frank Franklin II/AP Photo)Sears Holdings (SHLD) is trying to fix its operations and has made some progress along the way. But the company is being dragged down by Kmart, raising questions about whether that discount chain's time has come and gone.

Would Sears be better off closing Kmart? At the rate things are going, the answer is yes.

Kmart is stuck in a rut. Sales at its stores open at least a year fell 3.8% over the crucial holiday shopping season, The Wall Street Journal reports. Now it has just 0.6% of the nongrocery retail market. In the first nine months of its current fiscal year, the chain posted a $98 million operating loss and saw sales slide 5.5%.

We won't know for a while whether Kmart made a profit in 2012, but it lost money on an operating basis in 2011.

The Kmart stores that I've been to are remarkably similar. They're dirty. The shelves are cluttered, yet the customers are gone. Employees are nowhere to be found.

The Journal found a similar scene at a Kmart in Manhattan, where it reported abandoned carts full of merchandise, unevenly stacked towels and unfolded pajama sets lying about. "The tile floors looked as though they hadn't been mopped in some time, and clothes were piled in the corners of the dressing rooms," Dana Mattioli wrote.

Kmart stores in New Jersey took that a step further, selling expired infant formula and over-the-counter drugs. The chain will pay more than $300,000 in fines and be subject to inspections as a result.

Kmart used to fill an important role for budget-conscious shoppers. But those customers have many more places now that can meet their needs. Dollar stores sell groceries and household necessities. Wal-Mart (WMT) has a bigger selection than Kmart, often at lower prices.

In fact, the Journal cited data showing Kmart's prices were higher than Wal-Mart's and Target's (TGT) in five out of six items it checked at all stores.

Granted, that's a pretty small sample. But if that holds true and Kmart isn't necessarily cheaper than competitors, then what is Kmart's reason for existing?

More in moneyNOW

Jan 25, 2013 12:39PM
I went to Kmart for a tv. No one was waiting on electronic dep. After 25 minutes an employee show up. We had to wait 45 until tv box came from storage. It was my last trip to Kmart. .
Jan 25, 2013 12:38PM
If they brought back what made the store interesting, (and fun), it may have a chance!  Bring back the cheesy "Blue Light Specials", with the actual blue revolving police light!  Bring back the managers on the intercom with actual personality and gusto to announce mundane items on sale!  Bring back the deli counter with actual fresh-popped popcorn smell wafting throughout the store!  Shopping at Kmart as a kid was more of an adventure, and less like all the other stores!
Jan 25, 2013 12:38PM
When I come to CT 30 years agi, Kmart ha a nice, clean store on the area was atendet for white polite girs (cashiers) whe tne economy down in the first recesion 1983 everithings star to change, some people move away, new people take his place, minorithies (hispanics, blacks...) so the employes change color and adtitudes and the CUSTOMERS, I SEE THE STORES NEGLETS everywere and kid running free taken bikes, toys, open products, return products (after use) missing parts, meanwhile they receibe the strong support of the government (politically correct) UTOPIA is BORN !  in black areas Kmart  stores close first because buy there is stupid, the new imigrants on the area was prepared to be responsable in NOTHING with the bless of the democratic goverment, I blame the policies of the governments mess with EVERYTHING !
Jan 25, 2013 12:37PM

When your in the tank for somebody, you'll say anything to destroy the competition.  Wal-Mart has had it's minions' spreading lies and half truths about Kmart for at least 20 years.  5 out of 6 products were higher at kmart.  Which products did they test?  I know that with some to most of the high volume items the Wal-Mart price ends in .97 and the Kmart price ends in .99.  Where that then makes the comment literally true, does that mean that Kmart is overpriced like the article insinuates?   Everyone has an agenda, and this hack piece makes me wonder what Mrs. Peterson's agenda is.  I'm guessing that she is heavily invested in Wal-Mart stock.

Jan 25, 2013 12:32PM
KMart was a lousy, substandard retailer before its affiliation with Sears. Even with great prices on many items, it was clear that if you bought something at KMart it was a risk. Returning anything was a hassle and it was nearly impossible to find replacement parts for items (example: String trimmer) bought originally at the store. I once thought that the customers were part of the problem, but it appears that now both Sears and KMart share the traits of dirty stores, nonexistent or indifferent employees, and a depressing feeling from having no customers at all. Let's not forget that the quality of merchandise is lousy as well. I don't need a $8 shirt that looks, feels and wears poorly. KMart and Sears should all become "Sears Home/Auto/Garden" stores and drop the rest. Perhaps bring back the popcorn...
Jan 25, 2013 12:30PM
When I was 15 they had cigarette machines that you could walk right up to and buy smokes... recently they sent me an offer on a job   starting pay? 7.65 an hour... Are there any homeowners out there who have a mortgage that could survive on 7.65 an hr? If so tell me how you do it!
Jan 25, 2013 12:29PM
Used to work at Kmart many years ago.....Went in one this last Christmas for a kids Backpack Sleeping Bag. So disappointed with what I saw.....It was an over "crowded resale shop"  They did it to themselves. You buy cheap items, you sale cheap items, you attract cheap customers. Needless to say...walked out went to Target....Believe me close second to Kmart, but it was a bit more of a quality product.
Jan 25, 2013 12:28PM

Both our local K-Marts are absolutely the most disgusting places to shop that I have ever been in.  Service is terrible, displays lacking appeal and information, employees who work harder to avoid you then help you and checkout wait times that will make you late for dinner every time.


Disgusting is all I can say.


Goodbye KMart, good riddance

Jan 25, 2013 12:27PM
k mart is like the rest of sears problems. sears lost its spot as a family store when they stupidly did away with their catalog!! now k mart, no longer carries major items, than, too, the stupidity of the classless people who do not know how to put items back on shelves rather than leave them lay where idiots drop them. a company canot clean up after these idiots who will not simply clean up after their own messes.  hate to see how their own pigstys may look. 
Jan 25, 2013 12:26PM

Unfortunately KMart priced theirselves out of business. They are probably one of the highest price stores in that category going. So no one is to blame but theirselves.


Jan 25, 2013 12:25PM
I just hope they look at the whole picture.  There are communities in ND and MT that rely on their KMart for not only employment but also as an important part of their community.  Not all KMarts have the horror stories like the ones in the article above.
Jan 25, 2013 12:25PM

In the famous words of Rain Man: Kmart sucks!


Jan 25, 2013 12:24PM
I really miss our Super-Ks here in Central Texas.  We furnished our infant daughter's nursery with their excellent crib and wardrobe, bought a stroller/carseat combo that worked great, and the most beautiful Christmas tree ever, all for excellent prices.  Ten years later, the wardrobe is fully operational and looks great in the girl's room.  The clothes weren't all that fashionable, but most everything else was just fine.  I miss K-Mart, and I miss having an alternative to Walmart.  I've seen some dirty and dishevelled stores, but ours here were quite nice.  Certainly no worse than Walmart. 
Jan 25, 2013 12:24PM
If Kmart would close its doors, it would be in the summer,so that there clearence sales would be a  Sidewalk sale.That way they would only have to have ONE register open as a check out.....
Jan 25, 2013 12:23PM
K Mart is like many stores that believe all they have to do is open their doors and people will walk in. Low prices and advertisement is not enough. Customers want good service, and clean stores as well. Consistent in any one of the aforementioned. will sustain any business, but will never be a front runner. K-Mart has let themselves go to the point of no return. Sears should know better by reading history. What is the last business that did well by buying a losing business. Some think by buying up a competitor will solve their own business. All they get is more headaches.
Jan 25, 2013 12:22PM

I like our Kmart store because you can find things there that Walmart does not have.  I have started shopping there a lot more than I used to.  Some of their prices are a lot lower also.

Also our store is not old and dirty. 

I certainly hope that our Kmart store does not close.

Besides Walmart and Kmart there is no other place to shop in our town.

Jan 25, 2013 12:20PM
I don't shop there anyway, let it close...
Jan 25, 2013 12:19PM
We tried like crazy to buy all of our appliances at sears in 2007 (because of Extreme home makeover) they would not come off the prices to even be competitive. All we were wanting was the same product for the same price, I ended up going to Brandsmart for close to 1500 less on all the appliances.
Jan 25, 2013 12:18PM
I am an "Ol" store manager from the 1960's and left the company seeing what was happening even back then.  When the "Bean Counters" took over management from the "Sales dept" it started going down hill.  We use to say,  "Promotion is Motion" and I think they lost their motion!  We had a lot of freedom to promote in those days with truck load sales, and local promotions that we use to think up as well as doing a lot of our own ads plus carrying stock that was localized.  Our Kmart near by now is Closing.  I had a conversation with the store manager and he agreed, they had little control over promotion and just were "turn key" managers today but he was sticking it out until retirement.  Even in their "Going out of Business" sales it is sad.  10% off on most things in the store....Wow!   No customers  now either as their prices were always higher than competition.  What happened to the Blue Light Special etc.  I and several others thought that promotion up in Fargo N.D. but called it the Red Light Special back then and got $100 for the idea.  Sad to see them go!   Sears is next. 
Jan 25, 2013 12:17PM

The Kmart stores that I've been to are remarkably similar. They're dirty. The shelves are cluttered, yet the customers are gone. Employees are nowhere to be found.

Sounds like any Walmart in east New Jersey except. Walmart has customers.

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