Page 129 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes

Task Being an individual of visual merchandising, gather as many as information relating
to buying department.

Case Study A Case Study of ‘Big Kmart’ – A Scenario of Retail

Formats in Operation

ig Kmart signals a different kind of Kmart. These stores are bigger brighter and
offer big savings big value, big selection, and big convenience. Big Kmart stores
Bare designed to increase store sales by increasing the frequency of customer visits.
The format focuses on three distinct businesses – home fashions, children’s apparel and
consumables and features an expanded food area known as the Pantry

The layouts make it easier for customers to shop by placing the departments their customers
want to shop in near one another and closer to the front of the store. Few facts about Big
Kmart are:
1. The average Big Kmart carries nearly 100,000 stock keeping units (SKUs).
2. Big Kmart stores average between 84,000 to 120,000 sq ft. in size.
3. The first Big Kmart opened in Chicago, Illinois on April 23, 1997.

Kmart Super Centers Kmart Super Centers are combination full service grocery and general
merchandise stores. Most Kmart Super Centers (KSC) operate 24 hours a day and offer
special services. Kmart Super Centers range in size from 140,000 to 190,000 sq ft. KSC
feature in house bakeries, USDA fresh meats, and fresh seafood delivered daily of course
a full delicatessen and a variety of specialty food kiosks.
Some facts:
1. The average KSC carries between 100,000 and 150,000 SKUs.
2. There are currently 59 KSC.

3. Traditional Kmart stores – The traditional Kmart store is the most people recognize.
4. Traditional Kmart stores average between 80,000 and 110,000 sq ft. in size.
5. Kmart stores carry a full selection of general merchandise and include a pharmacy.
6. The average Kmart store carries between 60,000 and 80,000 SKUs.

7. The first Kmart store opened in garden City, Michigan in March 1962.
Promotional pricing to blame: Promotional pricing had always been the forte at Kmart. In
the year 1990, arch rival Wal-Mart over took Kmart in sales. When Mr Conaway arrived
on the scene, he tried to wean the company away from the strategy. Rashly, Kmart reduced
its aggressive newspaper advertising too rapidly and lost customers in drives as a result.
At the same time, it cut prices on 38,000 items and promoted them with expensive television
commercials, which failed to lure younger shoppers. Then Wal-Mart countered by using
its greater efficiency and economies of scale to fight back in pricing The outcome was a 1%
drop in Kmart’s same store sale sin December and an 8% increase in those of Wal-Mart.
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