It has been a slow, painful death, and unfortunately, it’s still ongoing.
Kmart, the storied discount retailer that boasted thousands of locations, is down to its last 34 stores, according to Forbes. From its humble beginnings in Detroit as the S.S. Kresge Company, the chain, which changed its name to Kmart in 1977, once dominated the discount store market, according to the New York Times, and owned a variety of other major retailers, including the Walden Book Company, the Borders bookstore chain, Membership Warehouse and Sports Authority.
But in 1990, the newer discount chain Wal-Mart (later renamed Walmart) surpassed Kmart. And just 12 years later, Kmart entered bankruptcy protection for the first time, according to the New York Times. In 2019, Kmart’s parent company, Sears Holdings, which operated Sears and Kmart stores, entered bankruptcy protection again.
What emerged — a weak network of poorly-performing stores — likely still exists only because the new owner, Transformco, has received no good offers for the chain’s real estate and other assets, according to CNN Business.
Today, as Kmart struggles in its final moments, Walmart is the biggest retailer in the world and one of the largest public companies, according to Forbes.
The writing has been on the wall for Kmart for a long time. According to the Harvard Business Review in 2010, Kmart struggled to articulate a clear branding strategy, describing itself in generic terms as a ‘mass merchandising company’ that offered customers ‘quality products.’ With no clear concept or strategy for appealing to consumers, the chain floundered. While Walmart responded to the rise of the internet and the birth of e-commerce, Kmart resisted innovation, according to Alabrava.
While Kmart struggled, Walmart appealed to customers’ budget concerns with its ‘always low prices’ marketing for all consumer items, combined with cost-effective supply chains and responsiveness to local trends and needs.
Despite its status as the reigning discount giant, Walmart has faced its own struggles. According to the Motley Fool, the retailer saw stagnant growth by the mid-2010s, and some stores fell into the red, and its efforts overseas largely flopped. Still, the long-term survival of Walmart is a relative certainty, while Kmart will soon be a relic of the past.