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

Jul 31, 2014 9:48PM
I only shop at the super K that is a 15 minute drive out of the way. I live right between 2 grocery stores and about 10 minutes from a walmart. The grocery stores are WAY to expensive and at walmart the employees are VERY rude, prices are rarely marked and when they are they are usually WRONG. I Love my kmart. Everyone is friendly and helpful. The store is always neat and orderly. When I check out I don't have to wait forever to do so ( last time I went to walmart I went to buy a gift I could only find there It took me almost 2 hours? It was a Saturday afternoon,  24 registers and 3 were open.)
Apr 12, 2014 5:07PM

I'm still finding Kmart/Sears to be good for online deals on appliances and TVs. I had 2 Kmarts and 2 Sears near me, and within the last 2 years 1 Sears closed and 1 Kmart is about to close. When I went to the Kmart it seemed like the layout was no different than it was in the 70's and 80's. The Kmart pantry is not competitively priced compared to Walmart.

I'm not ready to give up on Sears/Kmart but basically I don't have much interest in visiting their stores, only online shopping

Apr 13, 2013 1:04AM




Mar 12, 2013 12:10AM
Our Walmart is very high on prices. I think they are out of control and it sucks to see Kmart may be coming to its end. I went to walmart the other day to grocery shop which I never do but I needed to get something specific and just did my shopping. My bill came to 82.00 and at krogers the same bill would have been around 50.00. The hamburger meat I bought was $5 more and they have nasty meat, milk .30 more, eggs $1 more, not one item on my list was cheaper then Kroger. what is wrong with this picture? We need to keep stores like kmart open to keep walmart from going way overboard. Walmart is always the first to up prices then everyone else follows. Start standing up to Walmart and stop letting them treat customers like crap. They also have the worst most disrespectful employees. At my local Kmart there is maybe 1 person on the floor, at walmart more then 20. Kmart you get help and friendly service quick, walmart you get ignored and treated like a moron when you attempt to talk to them.
Feb 8, 2013 7:08PM
I recently walked into a near by closing KMart. Most items were on sale for 20%. After browsing the entire store I only walked out with 2 boxes of Kleenex originally priced at $1.99. After going to Wal-Mart shortly after the same boxes of Kleenex were cheaper than the discounted boxes. Yes, it is time for Kmart to Go.
Jan 28, 2013 11:50PM
I totally agree with the article. I worked for Kmart for nearly 10 years in Hawaii and Kmart here is no different. I knew its fate would someday come to this; that day is now, sad to say. I remember the day I started. It was very difficult to maneuver in the aisle because of shoppers. As years went by Walmart came into the scene and competition was fierce. K-Mart resorted in cutting personnel and it was fine. The manager would report sales were up despite the presence of Walmart. As the years went by they kept cutting down personnel until I thought they no longer would, but they did. I worked so hard back then, because the work load became too much for an associate to handle. I just thought "selfishness" was driving Kmart in operating its business. I can list some reason why Kmart is the way they are these days.

*Due to lost of sales, they cut down on workers while they raise prices to make up for its loss.
*Instead of investing in the right count of people to work on the floor, they cut down on too much personnel that resulted in the way the article described. As a result, items are not priced, and no ones around to check on the price. Believe me, that price checker on the post does not come to you if you wanted to see the price of an item and its very inconvenient if everything is not priced! The guys who work very hard does not get recognize because his job isn't completed; too much load. The supervisor gets the pat in the back for "managing" his guys. But manage who? How many personnel? Very few if any to handle the load! The hard-worker hoping to get raise finally realize he's at a dead end job and quit. Then he gets replaced by a novice who can't answer customer's question but he's the only one around! K-Mart does not believe in staff investment to take care of its stores. That's their downfall. And from the CEO's point of view, they'll never see it that way.

Needless to say I went to college and now enjoying a career in Telecommunications. But since Kmart is closer to my home, I would visit them to check an item that Walmart currently does not have in stock and usually end up disappointed. I still go by Kmart sometimes if need be. But the feelings I get is shameful because the store has gotten so much worse and I am thinking how foolish the customers are; that includes myself! I usually make it quick and get out.

Customers are always making comparison. So if potential customers are willing to drive farther for something better, Kmart....its time to close!
Jan 28, 2013 7:58PM

I hope that Kmart sticks around. I am not aware of other locations but their store in Honesdale, PA is a far cry better than the Walmart across the street. The staff is superior, the shelves are generally full of product and it is cleaner. The cashiers are friendly and intelligent and it seems to be managed far better than any Walmart that I have been to. That is my experience!

Jan 28, 2013 7:49PM
I haven't been in the nearest K-mart in years ...   it's dark, dirty and cluttered.  And there's a WalMart right across the street ...  clean, well lighted, with aisles wide enough for two carts to pass each other comfortably and neat, well stocked shelves.    Everything K-Mart isn't. 
Jan 28, 2013 6:37PM
Sears is not any better. Both Kmart and Sears have been slow to keep up with the rest of the big chains and it isn't a surprise that they are both doing badly.
Jan 28, 2013 8:46AM
You investors are just like the computer people!  Too small doesn't make enough money!  Lol!.............
Jan 28, 2013 5:42AM
Kmart is like that other POS corporation Blockbuster.  It took a long time for them to die too.
Jan 27, 2013 11:41PM
can't find employees in Wal-Mart either!!  Have a problem driving 30 minutes to a wal-mart and stand in line that long also, K-mart does need an upgrade and I do find prices lower in K-mart vs. Wal-mart. 
Jan 27, 2013 10:48PM
If they just lower their prices as low as walmart and stay open as long as walmart then maybe they might bounce back, I love the quality of the products because they last twice as long as the junk from walmart, they just need to lower thier prices on everything and stay open longer.
Jan 27, 2013 8:51PM
This article is so true. The Kmart I go to is dirty, staff is no where to be found, clothes are everywhere, staff isn't helpful. I used to like Kmart when I was younger. I have also seen that its more expensive them Wal-Mart. Wal-Mart has way more products with great prices. I wouldn't be surprised if Kmart does go out of business.
Jan 27, 2013 8:06PM
I worked there for a short time and I hated it. I applied for a bookkeepers job, stating I was looking for a desk job as I had trouble standing for long periods of time. I was hired for cash register, after a month I was then added to the cafeteria staff. I got ill and couldn't keep up with the full 8 hour shifts as I found I had fibroid tumors. My last day of work I was in the cafeteria and I collapsed. I was not allowed to go home, I had to finish my shift, a customer said that she had copd and if she got sick she would sue. Still not allowed to go home. At Kmart you are allowed 3 times to call in with less than a 24 hour notice. I still had one more time to do this . At the end of my shift at 9:00 I informed my manager that I would not be in the next morning at 8. I was fired.........
Jan 27, 2013 2:45PM
The amount of Buisness k mart gets  thats not believable
Jan 27, 2013 1:53PM
  kmart doesn't have good deals. the staff (what staff?) is not friendly or helpful. and the stores look totally gross. they look like they are all going out of business. pegboard lining the entire perimeter of unfriendly cinderblock walls. it looks like a board full of old timers runs the place and they are so set in their ways that they refuse to make changes to adapt to current times. "ive been in this business for 50 years and noone is gonna tell me how to run my business". i live in metro detroit and it sounds like its the same all across the country. walmart and meijer are stomping kmart into the ground around here and target IS the new kmart.
Jan 27, 2013 11:06AM
Sears was the worst thing that could happen to KMart.  Sears has always been RETAIL and has historically had HIGH prices on their goods.  Lambert could have KMarted SEARS but chose to SEARS KMart.  Doesn't take a rocket scientist to predict the outcome.  A KMart death waiting to happen.
Jan 26, 2013 9:16PM

Our experience is ust the opposite of the report. Our K-Mart is spotless, Friendly employees. They carry a much better

quality than Walmart etc. Although the store is not usually very busy thats a plus for us, it's like having your own personal store sometimes. Plenty of parking nearby. and of course they have many grocery items. Not positive for the success of the store

unfortunately but good for the customers.

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