The plug was finally pulled on Kmart in continental US at the weekend when the country’s last full-size store closed its doors for good — but thousands of kilometres away in Australia the chain’s legacy continues to thrive.
Kmart, which opened in Michigan in 1962, was once a prospering brand that sold celebrity-endorsed products, sponsored NASCAR races and enticed shoppers with its blue light specials.
Kmart did not invent the discount store concept but experts say “nobody did it bigger or better right from the start”.
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“In the 1960s, discount store shopping became a way of American suburban life. But Kmart wasn’t just about shopping, it was cheap entertainment,” leading US retail historian Michael Lisicky told 7NEWS.com.au.
“It was about spending an afternoon or an evening walking the aisles of a massive store with your family. Kmart had everything from tools to toy trucks, along with its famous blue light specials and a full and fun snack bar.
“Going to a Kmart, when it was at its best, was about piling into station wagons and having a fun family excursion to a place that furnished the American suburbs.”
But that is no longer the case after the shutters were pulled down on the chain’s Bridgehampton store in New York, the last full-size mainland outlet.
Kmart’s once wide-ranging US footprint of more than 2000 stores has been reduced to a single pharmacy-sized operation in Miami that sells limited items. It also has stores in the US Virgin Islands and Guam.
Its decline has been attributed to several factors, including an inability to halt sliding sales, smarter and more agile competitors, poor corporate moves and changing shopping habits.
In 2002 Kmart filed for bankruptcy and later merged with Sears, a move that ultimately failed to resurrect either brand.
“In some ways, Kmart stumbled when it was at its strongest. Its formula was based on getting bigger and bigger, almost at any cost. And as it got bigger, its original fleet of stores became older and older,” Lisicky said.
‘It became a freak show’
“By the 1980s, it lost its way and started diversifying into hardware stores, book stores, sporting goods stores, all at the expense of its core business model.
“As Kmart faltered, Walmart grew, always with (founder) Sam Walton’s eye at beating Kmart.
“With a strengthened and defined fashion model for Target, and the power of Walmart, Kmart was lost and confused.
“It was panic from this point forward. The 2002 bankruptcy did nothing more than solidify its demise, but it was the slowest, most humiliating demise in retail history. It became a freak show, not a discount store.”
RMIT senior marketing lecturer Jason Pallant said Kmart’s downfall in the US was “not hugely surprising” when looking at current market conditions.
“Department stores as a whole have struggled. They operate in a space where they’re a little bit of everything but not the best at anything,” Pallant told 7NEWS.com.au.
“The US level of competition is different. There are really large players in that space, particularly Walmart, a much larger footprint of Costco, their version of Target, and of course Amazon with much quicker deliveries than we have here.
“The online impacts have also been felt. It’s hard to be a generic retailer when online mega-retailers such as Amazon, and even marketplaces like eBay, can stock all the same things.”
Kmart Australia
Kmart opened its first Australian store in Burwood East, Melbourne in 1969, as part of a joint venture between S.S. Kresge Company (Kmart Corporation) and G.J Coles & Coy Limited (Coles).
Nine years later, Kresge sold Kmart’s majority stake in the Australian venture, leaving control to grocery powerhouse Coles.
Wesfarmers, one of Australia’s biggest conglomerates, bought Coles Group in 2007 and transformed Kmart into what Australian consumers see today.
“The Kmart US hasn’t had the focus and strategy like we have in Australia,” Pallant said.
“Australian Kmart focuses on experience and connection to consumers, whereas the US stayed price-based and on promotions.
“Australian Kmarts have everyday low prices, rather than limited-time sales. So, you know when you visit, you find a lot of things at low prices.
“But it’s not just prices. They’ve invested a lot to make their stores look nice to walk into and not look budget like the US stores did. They’re very different to walk into.”
Kmart in Australia has also benefited from social media, with consumers sharing their favourite purchases or the duplicate goods scored at the chain on the cheap, and countless groups springing up based on good deals and hacks.
In August, a home decorating expert raved about a $12 Kmart copy of a $1820 shoulder bag in a video watched more than 30,000 times on TikTok.
And hashtags including #kmartfinds and #kmarthack feature in thousands of posts across all major social platforms.
“We’ve all seen the memes about Kmart and discovery — you walk in for one thing and walk out with a load more,” Pallant said.
“It’s not quite Ikea-level but their stores are somewhat inspiring.
“They’ve really leaned into consumers. The now famous 1000 Mums campaign kicked off a community of loyal shoppers, a true community that thrived off discovery and low prices and they’ve continued to build on that.
“They’re very different businesses (Australia and US). Wesfarmers has invested a lot in connection with its customers and their experience.”
‘Kmart was a pioneer’
Kmart currently operates 325 stores in Australia and New Zealand.
Managing director Ian Bailey said the discount retailer was focused on low prices and quality, with “product affordability” helping it foster an emotional connection to its customers.
“We recognised that we needed our customers to trust us. When they shop with us, we wanted to ensure prices would not move from one week to the next. Keep pricing simple. Make everyday living brighter,” Ian Bailey told the Australian Retailers Association in January.
“We now understand that our customer base comes from all income levels.”
Lisicky said most Americans feel like Kmart “died decades ago” but the chain — through its blue light special and “Attention Kmart shoppers” promotion — gave “the store a permanent place in America’s history and culture”.
“Kmart was a pioneer but pioneers rarely succeed long term. They are studied, imitated, copied, perfected. They are the test, the guinea pig,” he said.