I went shopping at Kmart for the first time in a long time. I remember going to Kmart when I was younger but I have only been to Kmart one time in the last four years. I am a bigger fan of Costco and prefer to shop there. I actually bought stock in Costco a few years ago because I like the business model, management team and employee friendly policies. So, why did I stop at Kmart? It was close to my house and the parking lot was empty so I figured I could get in and out quickly. I had also heard about the remodeled stores and was curious to see how different Kmart looked from my last visit.
Kmart looked about the same from the last time that I had been in the store. The interior was a little cleaner but the displays were still poorly organized. The store was dimly lit and there was a cold impersonal feel to it. Kmart is just not as appealing as a Target store. The customer service left a lot to be desired. The store was understaffed and the lines were very long. It took about 10 minutes to check out with less than 50 people in the whole store. The one good thing about Kmart are the prices. The prices at Kmart have gotten much more competitive with Walmart.
For years Kmart has struggled to compete against discount retailers Walmart, Costco and Target. It seems that Kmart can’t find the right niche to compete with the larger retailers. Walmart is the low cost leader in the industry and offers the cheapest prices. Costco prides itself on offering higher quality products and the best customer service. Target lands somewhere in between Costco and Walmart with its “cheap chic” strategy. Kmart’s place in retail is still undefined.
Does Kmart want to be the cheapest of the discount retailers? If so, Kmart will have to lower prices even cheaper then Walmart to attract customers. Or does Kmart want to compete against Target and Costco? If so, then Kmart will have to do a lot more than just slap some paint on the walls. Kmart must commit to better customer service and a wholesale remodeling.
It seems to me that Kmart has undertaken small steps to become more relevant in the retail industry. But without a major restructuring of its business model; Kmart’s days could be numbered.
Photo by XISMZERO
Well, you better tell that to the hundreds of thousands of shoppers that took advantage of Kmart layaway this year. Kmart doesn’t have to be like Target or Wal-Mart, they just need to be themselves.
And, Kmart stocks more “Made in the USA” merchandise. Quite frankly, I drive 35 miles to shop there before I give a nickel to “Made in China” Wal-Mart.
yeah, its almost like a prophecy they will die off soon or get bought out. They were the first big box big discount retailer. If you know what the DOW Jones or S&P 500 for that matter looked like 100 years ago only about 1 or two companies are still going.
well maybe there’s a handful that changed names. Exxon, Phillip Morris and RJR and some drugs. People aren’t addicted to Kmart and there isn’t a big barrier to entry so…..actually nevermind. I think Sears Holdings has kmart. haha
@mark
That combination has yet to yield any results. i think the most valuable part is the real estate. The best thing about Sears Holdings is that Eddie Lampert owns it and he has deep pockets.
yeah, i remember every value investor on the planet just about getting burned in Sears. They all thought he was the next Buffett. He’s no Buffett.
@mark
I remember that too when the stock was at $150. Quite true. I like Lampert but he hasn’t been able to turnaround Sears or Kmart.