Until I went to Syracuse for graduate school in 1971, I had never stepped inside a Kmart. For that matter, in 1977 when I moved back to the New York area to join Lebhar-Friedman’s Nation’s Restaurant News as a field editor, no one on staff had been inside a Wendy’s, much less had eaten one of its juicy square hamburgers or enjoyed a Frosty, despite the company being McDonald’s most dramatic challenger for fast food supremacy back in the 1970s. Let’s call it the Big Apple Bubble. While the rest of the country patronized chain retail and foodservice stores, New York City residents were clueless to first hand experience of the mass market consumerism sweeping the nation half a century ago.
October 1978 was a milestone month for me. I started writing about Kmart that month after I was transferred to Chain Store Age General Merchandise Edition. For the next three decades, as chief editor and then publisher, Chain Store Age would be my professional link to Kmart and all forms of retailing.
More importantly, on October 20, 1978, our son Dan was born.
Now, 46 years later, in the swanky resort area of the Long Island Hamptons where millionaires and billionaires, and wannabe minions, flock every summer, the last domestic full-line United States Kmart store, in Bridgehampton, will close—wait for it—October 20!
Indulge me a little nostalgic look back on the fortunes and misfortunes of the polyester and plastic palace that was Kmart, at one time the second largest retailer in the world behind only Sears, Roebuck and Co., it, too, now just a shell of its once glorious prominence.
Kmart was an offshoot of the S.S. Kresge Corporation, second to Woolworth in the variety store field. It was the brainchild of Harry Cunningham. Harry opened the first Kmart in 1962 in Garden City, Michigan, outside Detroit.
1962 was a gestational year for discount stores. Among other chains started that year as retailers scurried to capitalize on consumer interest in the self-serve discount format were Woolco, an offshoot of Woolworth; Target, conceived by Dayton Hudson department stores; and Walmart, the progeny of Sam Walton, at the time the largest Ben Franklin variety store franchisee who foresaw diminishing prospects for his existing holdings.
Of all the emerging discount store companies Kmart invested most aggressively in growth for growth’s sake. Through new construction and the purchase of competitors, even if their locations were less than optimum, Kmart became the first national discount store chain. Its “blue light” specials mesmerized shoppers. It ran national ad campaigns. It was ubiquitous. So much so that when the 1988 “Rain Man” film needed a foil understood by all Americans, it was Kmart that Dustin Hoffman’s Raymond character disparaged. Keep in mind, in 1988, Walmart had yet to penetrate many major markets.
Kmart’s sales in 1987 totaled $25.6 billion. Walmart’s were $16.0 billion. Kmart had 2,307 stores, Walmart 1,381. Kmart’s net income was $692 million. Walmart’s $628 million.
Unbridled growth meant more sales but not maximum profits. Let me do the math for you: Walmart’s profit margin was 3.9% of sales, while Kmart’s was a mere 2.7%.
Kmart failed to renovate and modernize stores. It lacked inventory discipline and store personnel and housekeeping standards. It failed to offer a compelling reason to shop for apparel which could generate more profit margins than hards goods like housewares and electronics.
Gradually, regional discount stores led by Target in metropolitan markets and Walmart, first in rural areas and then in suburbia, outclassed Kmart with newer, sleeker stores, better inventory control, more dedicated store personnel, sharper product assortments.
From 1978, when our son was born, through the turn of the 21st century, I met all of Kmart’s chief executives. They were nice men. They tried innovative programs, like inaugurating a female apparel line featuring original “Charlie’s Angel” Jaclyn Smith, setting up an exclusive household lines with Martha Stewart, starting Designer Depot, an off-price retail chain, and emulating Walmart’s entry into the supercenter format combining a full-line discount store with a full-size supermarket. The company also tried diversifying, buying or opening other formats including Sports Authority, Builders Square, Borders, and Waldenbooks.
Sometimes the profit needle pointed up. In December 1980 Chain Store Age devoted a full issue to Kmart’s past, present and future. The American Society of Magazine Editors in association with the Columbia University Graduate School of Journalism cited our December report as one of the five best single topic issues of the year of any American magazine, trade or consumer.
Nothing, however, could reverse Kmart’s downward spiral as Target and most prominently Walmart outmuscled it.
Eventually, Wall Street financier Eddie Lampert bought Kmart and another retail giant turned weakling, Sears. He promised resurrection but really reaped revenues only by selling off real estate locations.
I retired 15 years ago. Sadly, at least from my perspective, many of the retail companies and shopping centers they inhabited that I followed daily no longer exist. Those that are still around open fewer doors. With each passing week more announcements herald closings and layoffs.
I never regularly patronized Kmart as an active shopper. But its presence was part of my professional life. I walked its stores in most cities I visited. I don’t travel throughout America as I did before retirement. I will miss Kmart in the abstract.
For a report on how Long Islanders are reacting to the Bridgehampton store closing, click on the link to this New York Times article: https://www.nytimes.com/2024/10/14/business/kmart-closing-long-island.html?smid=url-share
