Blue Light At the End of the Tunnel

Kmart Corp. (Troy, Mich.), reported a 1.7 percent same-store sales increase for its first quarter ending May 2, 2001 and “generally positive trends in merchandise in-stock position and customer service.” However, the retail giant also reported a net loss of $25 million for the 13-week period.

“These results are in-line with our plan to fix our business by taking decisive, aggressive and focused steps to transform our company,” insisted chairman and ceo Chuck Conaway, who also promised an ongoing campaign to “differentiate ourselves from our competitors.”

That effort includes a “top-priority” campaign to improve many of the chain's more than 2100 stores. In a report to securities analysts yesterday, Conaway announced that two-thirds of the chain's stores are undergoing renovations and that Kmart plans to spend nearly $2 billion on infrastructure improvements at stores.

“Kmart's top priorities include fixing its supply chain, enhancing its marketing, cutting expenses and improving its 250 least-performing stores,” Conaway said. He also said that the company “is pushing to increase it frequency, or the number of times a customer comes into its stores.

“The Holy Grail for Kmart is frequency,” he said. “This is a constant march to the sea as we fix our frequency business.”