No New SuperK’s to be Built

Discussion
Oct 24, 2002
George Anderson

By George Anderson


Kmart is not building any new supercenters while it attempts to emerge from Chapter 11 protection. A company spokesman, Jack Ferry told the Detroit Free Press, “It’s really due to being able to conserve cash during bankruptcy.”


While some would question why Kmart would take a step back from supercenters that have proven so popular with consumers, Ulysses Yannas, analyst, Buckman, Buckman & Reid thinks it is the right move at this time. “Why be in an area where you can never be competitive? As long as you are not competitive, why stay in the game?”


Mr Yannas believes that Kmart’s supercenters are too isolated geographically for the chain to achieve distribution efficiency. He also said that Kmart can not compete on price with Wal-Mart nor deliver the service and selection of the large supermarket chains.


Moderator’s Comment: Should Kmart be in the supercenter
business?


Let’s just say that if they are going to stay in it. They
need to get together with Fleming and get things worked out – yesterday. [George
Anderson – Moderator
]

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