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
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?
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801Comments
Jan 24, 2013 8:41PM
Ive had such a horrible experience the last three times I went there. First was on Black Friday. I asked about a toy I wanted for my daughter that I couldnt find. A sales person brought me a siliamr toy and told me it was the same one,at the same price. It wasnt and then another sales person and customer service had me paged to sell me the wrond item again. Then they advertised a sweater on a display rack for $14.99 but when it was rung up it was $29.99. Turns out a sales person put the wrong price sign on the display. They wouldnt honor it and 2 of the cashiers actually started yelling at me in front of customers. I was so mad when I left about how I was treated and how poorly they ran their store that I went back the next day and returned my $350 worth of toys I bought and went over to Walmart and repurchased the same toys and saved myself $55. That was another problem,I got back about a dollar less then what I paid for each item bc they claimed they had given me reward points so instead of taking the points off, they had to reduct the money instead. Finally, my last time in there and the only reason I went back was bc I had recieved a $5 gift card for a camcorder I bought on Black Friday as well..not included in the $350. When I went to go use it at the register it wouldnt work. Here the cashier never swiped the gift card to activate when I got it. I had to pay for my purchase then go to customer service and have the card activated for the next time...Well no next time. I returned my items and threw the Gift card on the counter along with my rewards card!!!
Jan 24, 2013 8:40PM
that is because this clown of a president we have is killing the middle class who shop at these stores as our pay checks just got smaller i will not raise taxes on the middle class what a lair .he could have not let the bush tax expire and cut the entitlements to all the bums who wont work but he says up there's the ones who are working did not vote for me so as we cut coupons from the sunday paper to save some scratch they cut nothing
Jan 24, 2013 8:40PM
Jan 24, 2013 8:38PM
Jan 24, 2013 8:37PM
everythign yuo want to buy is at walmart, and all the employes seem to know everything about the location they work at. Where everything is in the store, how to help you as needed. The 1 Kmart left in my area is just rediculous. Walk in and is like walking into a dust storm, store is dirty nothing every stocked, everuthing over priced, and no working there has any idea where things are. O yay i can use my sears credit card there, but nothing there to buy. Kmart dont even have name brand TVs last i looked. Walmart is the way to go, better yet if your willing to wait for what you want, order it of amazon, that will most likly be the cheapestand best product for your money
Jan 24, 2013 8:37PM
Anybody remember Target about 30 years ago? They were a complete mess, too. Their stores were filthy and dumpy, their customer service sucked, and in the Midwest they were losing out to the likes of Pamida. They managed to get a good management team in place and look at them now. The same thing could happen to K-Mart, but it will probably have to be sold to make it work.
Jan 24, 2013 8:37PM
I worked for Kmart from 1965 to 1990 during the time of growth and profits. Stock split multiple times during the first 10-15 years. Store managers ran their stores with a certain amount of freedom to order and sell what their customers wanted. The Kresge/Kmart Spirit was offer the quality goods at a fair price, give customers service and then make the checkout process convenient and pleasant.
As the company got bigger, the bean counters took over and the merchant managers were ignored. Financial analysts advised that the stores needed to appeal to a higher income customer and displays reflected that along with higher priced goods that chased the lower income customer away..
Then, the president started looking at Wal Mart(then far behind in sales) worrying that they would catch Kmart. We started to copy Wal Mart but also pressure was put on payroll year after year. Move ahead a few years and the then president decides that managers are getting older and are being paid too much. Demotions and firings then led to low morale among those that were left. Experienced managers that knew the cycles of sales were gone and HQ then controlled everything.
If you don't have customer service, you have nothing. Fewer employees led to poor service, empty shelves, dirty stores and fewer and fewer sales. No sales, no profit.
RIP Kmart but keep the pension coming.
Jan 24, 2013 8:37PM
Jan 24, 2013 8:36PM
First off Kmart bought out Sears, second if they got their buyers to buy less items that dont sell and spend less "decorating" their stores with useless signs then maybe they would have a chance. They sell better items then Walmart, most of Walmarts selection is cheap and falls apart. Kmart needs to wake the hell up and realize in order to keep their customers you need prices lowered and get back to your customer service which has not only lacked in Kmarts but seems to be a trend everywhere you go now!!!
Jan 24, 2013 8:33PM
I don't know how they stayed open this long. Detroiters came in to this suburbia store and steals it blind! At least twice a week they are arresting someone for theft. Women are being jumped in the parking lot. Cars are being stolen all of the time. I don't feel comfortable shopping at the store that I shopped in all of my life anymore.
Jan 24, 2013 8:33PM
Over the past couple of years, every K-Mart store I've been in have been all the same. Whether they were in Washington, Idaho, Wyoming, Montana. South Dakota or Nebraska, the same thing. Cluttered or empty shelves; only one or two check out lines open; discourteous or disinterested employees; you name it!
It's like they have taken a page out of the movie Electric Dreams where the store clerk tells Miles that for $4.95 an hour, I don't know any more than I have to! It's like the employees know K-Mart is a dying entity, and they are just zombies meandering about their tasks until the coroner declares the final death confirmation.
Any more, I usually avoid going to any K-Mart, as it's just not worth the time and hassle. I say close them all and turn them into something useful like a Jimmy Johns or something!
It's like they have taken a page out of the movie Electric Dreams where the store clerk tells Miles that for $4.95 an hour, I don't know any more than I have to! It's like the employees know K-Mart is a dying entity, and they are just zombies meandering about their tasks until the coroner declares the final death confirmation.
Any more, I usually avoid going to any K-Mart, as it's just not worth the time and hassle. I say close them all and turn them into something useful like a Jimmy Johns or something!
Jan 24, 2013 8:33PM
K-Mart in Lawton, OK is great!! I can stil lay-a-way the things I need during the entire year. Wal-mart is a poor alternative....no lay-a-way until Christmas and most of the time the electronics I buy need to be taken back. The store is clean here and I love the sales (both announced and unannounced). Closing K-mart here would be a very bad idea indeed........
Jan 24, 2013 8:32PM
98% of men don't wash their hands at price chopper or pretty much any store.. I wouldn't know about the women. I have a friend who works there and says it's a problem but you can't make these people wash their hands. It is very sick to see people walk out and not wash their hands and touching produce and other products.
Price chopper best in fresh low prices( not true) and gas savings(only reason people go to the store)
Jan 24, 2013 8:31PM
Jan 24, 2013 8:31PM
I worked for K-mart for over 2 years and K-mart is worthless. They do not give raises and the place is a mess, dirty and management gets paid way to much for doing Nothing. The associates that get paid by the hour do more work than management. All of the K-Mart stores should be shut down. They are not making a profit and have no reason being open if there is no future for the employees. K-Mart is horrible!
Jan 24, 2013 8:30PM
That is so sad......when I was a youngster, Kmart was fun shopping. We didn't have much - the clothes we usually got were hand-me-downs or Good will, unless we had enough, we got to buy some clothes and tennis shoes at K-mart; loved their sub sandwiches - 3 for $1 - the blue light specials - they had everything there and we would spend hours there. Back then, it was the store for us.
Jan 24, 2013 8:30PM
The Kmart in my Pekin, IL home town is very clean and nice, however I don't understand the refusal to price match. Wasn't Kmart one of the first stores to do this several years ago? I have no desire to step foot in another Walmart ever again and Kmart is a great alternative. Unfortunately, as long as there are less expensive places to shop, that's where the customers will go.
Jan 24, 2013 8:29PM
Jan 24, 2013 8:28PM
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