From the Publisher: Learning from history

The chronicles of Walmart, Target and Kmart can serve as a textbook for other retailers looking to make a mark in today’s tough retail environment.


It was a very good year. The Yankees beat the San Francisco Giants in an exciting seven-game World Series, President John F. Kennedy managed to avoid a nuclear war with the Soviet Union over missiles in Cuba and John Glenn became the first American to orbit the earth.

Oh yeah, Walmart, Target and Kmart were all founded that year.

At the time, few in the retail world could have realized what the birth of these three mass merchandise chains would have on the overall retail world in coming years. Yet, by the late 1980s, all three, stressing a one-stop shopping platform, had or were becoming national players and their merchandise strategies were changing the way other retailers went to market.

This month, Grocery Headquarters discusses the history of these chains. It is our hope that other retailers will use this information to understand what made these chains successful, and in one case, led to its downfall. Whether big or small, corporately-owned or a family business, every retailer must look over its shoulder and wonder how they can stay successful in spite of Walmart, Target and Kmart.

The good news for other retailers is that being big is no guarantee of being successful. Kmart is a great example of this. Formed with the backing of the S.S. Kresge variety store operation, Kmart got off to a fast start in the world of mass retailing. Within a decade or so, it became a dominant retail force and put a number of competitors out of business. But sales started to slow in the late 1980s as Walmart and Target ascended to dominance and Kmart, hampered by older stores and poor locations, began its steady and ongoing slide into possible retail oblivion soon after.

Today, the once giant chain is a shadow of its former self and serves more as the butt of jokes on CNBC and other financial networks than anything. One competing retailer said recently that people at his company have a pool on when Kmart will finally throw in the towel.

On the flip side, Target, in particular, and Walmart seem to be unable to do much wrong. Both chains have developed and implemented successful national rollout programs that have put them squarely in the consumer’s eye. While Walmart officials toy around with exactly who they are trying to attract to their stores, Target has clearly established itself as a leader in the upper end of the mass merchandise world.

Walmart has not done too badly itself. Using a low-price leader strategy, the chain has become the darling of many cash-strapped consumers.

So where does that leave the rest of the retail world? As stated above, the trials and tribulations of Kmart show that nothing lasts forever, especially if leadership does not pay attention to the day-to-day business of running a chain and the events that can change things up.

Those retailers that find their own niche in the marketplace will be the ones that survive alongside these giant chains. Learning how these chains got started and became successful can only make others more aware of what they need to do to stay afloat. 

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