What are you known for?
Kmart opened their first store in 1925 in Detroit
Known as a discount department store they experienced explosive growth and by 1981 there were 2000 locations.
Throughout the 80’s and 90’s Kmart was seen as a retail giant, buying up smaller companies including Walden Book Company, Builders Square, PayLess Drug Stores Northwest, PACE Membership Warehouse, the Borders bookstore chain and the Sports Authority.
It’s no secret that Sam Walton (founder of Walmart) worried about them as a competitor. He would fly over Kmarts parking lot and then fly over the parking lot of the closest Walmart and count how many shopping carts are inside the store.
If Kmart had more carts in the store than Walmart he would visit the store and see what was going on, what could they do better. (that story was told to me by an early Walmart employee who was on the small planes with Sam!)
In 1990 Walmart passed Kmart in sales.
In an attempt to copy Walmarts super store “Super Kmart” was opened in 1991 offering groceries, fresh foods and was open 24/7.
In 1994, to raise money, Kmart was forced to sell off many assets that were acquired in the 80’s and early 90’s like Office Max and Sports Authority.
By 1995 they were forced to close more than 200 stores and by 2002 they filed for bankruptcy
What the heck happened?!
What happened to Kmart is they tried to be known for “Low Prices”.
When that’s your goal all it takes to knock you off the top spot is a competitor willing to go lower on margin or has the ability to go lower than you ever can, because they’re running a leaner, more cost efficient company.. in Kmarts case, that was Walmart.
What are you known for?
Make sure it isn’t as simple as “Low Prices”.
Someone is always willing to go lower.