Sunday, September 28, 2008

How much longer can Kmart survive?

I live in one of the very few "under-stored" areas of the United States. We have no major malls or even significant strip malls or power centers in the immediate vicinity. I have to go about six or seven miles (the horror!) to get to the nearest Wal-Mart, and even further to Target.

I offer this information to explain why I shop fairly often at Kmart -- it's the only major retailer close by (about a mile and a half).

When I tell folks I shop at Kmart, they look at me in wonder. I'm not discussing the coastal elite types who would never shop at any discounter, or perhaps visit Target occasionally when they feel like slumming (and make tired references to "Tarjay"). Even ordinary folks are aghast at the idea of visiting Kmart, a fact that is testified to by the emptiness of the parking lots.

And, I can testify, their feelings are fully justified -- the stores are awful. The one I visit is old, and it shows its age. It's dirty and poorly lit. But worse is the products it sells and the service it provides. The shelves are frequently empty, the merchandise assortment peculiar, pricing information is missing or wrong, there are never enough checkout lines open, and the lines are frequently delayed because items won't scan .A couple years ago, they put in self-checkout lanes, but they couldn't make them work, so they pulled them out.

Just about every time I go there, I leave swearing, "Never again!" But I keep going back, partly because of the lack of alternatives and partly because I get a perverse pleasure out of seeing just how bad a retailer can be.

Unfortunately for Kmart, there are relatively few customers who have no alternatives, and even fewer who get their kicks out of studying how not to run a store.

With sales and profits continuing to plummet* at Sears Holdings ...
Beleaguered retailer Sears Holdings Corp. reported a hefty drop in second-quarter profit as sales slumped, despite a restructuring aimed at drawing back shoppers who've taken their checkbooks elsewhere.*
... we return to the question posed in the title: how much longer can they keep going? I can't see how they last another year, but what do I know? Well, actually I know one thing -- when they go under, they'll blame it on the economy.

* The positive: plummeting profits are better than no profits at all. The negative: they manage to get profits in the face of declining sales only by cutting costs -- see comments about checkout lines above.

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