Kmart Banks on Santa Claus

Sep 20, 2002

Kmart is looking to get a head start on the competition for the upcoming Christmas
selling season, according to Tom Walsh of the Detroit Free Press.

Mr. Walsh recounted a recent driving trip in Michigan where he stopped at two Kmart stores as well as one Meijer and Wal-Mart. According to Walsh, “At both Kmarts, the entire Garden Shop areas have been cleared of plants and lawn care goods and are now decked out for Christmas. Fake trees of many sizes and prices are trimmed with ornaments, plugged in and rotating in their displays. Shelves are stocked with colorful lights and merry Martha goods.”

In stark contrast, Meijer was merchandising around college football themes highlighting the Spartans of Michigan State and the Wolverines of Michigan University. The store was also running a clearance sale on plants and garden products.

Wal-Mart merchandised around fall themes and Halloween according to the columnist. The store had few small racks of Christmas items but these were not prominently displayed.

The upcoming holiday selling season may be more important to Kmart than the company is willing to admit. “Kmart officials insist the company has plenty of cash, and that the upcoming holiday season is not a do-or-die event. But,” Mr. Walsh adds, “It’s darn important.”

Moderator’s Comment: Will Kmart’s early start on holiday
merchandising help it bump up third quarter sales or improve upon its fourth
quarter expectations?

As we understand it, many of Kmart’s core customers are
living on a check-to-check basis. Putting product in a store that doesn’t address
the needs of the moment seems like a losing third quarter proposition to us.
We’re not sure it is going to have much impact on the last quarter, either.

Tom Walsh’s column made another important point. Once
the holiday season is over, what will Kmart’s message be for the rest of the
year? There does not seem to be any message… not at the moment anyway. [George
Anderson – Moderator

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