Zeroing in on such diverse lures as a cheap gallon of milk and Martha Stewart’s line of house paint, Kmart Corp. is sinking $750 million into transforming its dowdy stores into bigger and brighter shopping meccas.
Under a new name–Big Kmart–these new-version discount stores will carry all of the things traditionally sold in Kmart stores, plus enough packaged foods to fill a small grocery store.
Troy, Mich.-based Kmart’s top management team–led by chairman and chief executive Floyd Hall and president and chief operating officer Warren Flick–on Wednesday unveiled Chicago’s first Big Kmart, located at Brickyard Mall, 6435 W. Diversey Ave.
Hall, who joined Kmart in 1995 when the company’s future looked bleak, said Wednesday that the Big Kmarts “signal a new beginning” and “hold great promise for our financial future.”
Kmart is now midway through the three-year program to convert most of its traditional stores to Big Kmarts or Super Kmart Centers.
Flick said the 297 stores already converted are enjoying increased sales volume of 16 to 18 percent–that’s 10 to 12 percent better in year-to-year volume than non-converted stores.
Another 330 will be converted by year-end. Kmart has 2,150 stores.
Of the 50 traditional Kmarts in the Chicago area, 40 stores will be converted to the new format by year-end. June will mark the official roll-out of additional Big Kmarts here when stores get the Big Kmart signs installed.
When Hall first talked of his “pantry concept” almost two years ago, the idea of putting impulse foods at the front door was ridiculed as “potato chip” retailing by some analysts. But, now with some 1,500 additional items, including eggs, margarine and milk, the convenience of being able to pick up some grocery basics while shopping for clothes is being lauded as a major drawing card.
“We don’t expect to replace the supermarket,” said Hall. But, if Kmart can offer milk at the cheapest price in town, “20 to 30 percent lower than other stores,” the Big Kmarts offer another convenience.
About 90 percent of the merchandise has been rearranged in the Big Kmarts, which are expected to produce 37 percent of total Kmart sales by Christmas.
Flick has been responsible for major changes in merchandise selections. For example, the number of bike models offered has been reduced from about 60 provided by six vendors to some 30 bikes, primarily from Huffy, and price categories shifted so that the majority are under $100 and the top of the line is about $139.
Martha Stewart home goods get major play because her mass-priced products are available only through Kmart, including her Sherwin-Williams paints. Every store, in fact, has its own “Mrs. Martha” who presides only in that section, wearing a distinctive apron and ready to assist devotees.
