Kmart sales slide raises new fears
US discounter reduces price cutting
December 8 2003
US retail giant Kmart has reduced price discounts, seen by some as key to competing with market leader Wal-Mart, as it struggles to cope with falling sales.
Kmart has focused on “profitable sales” since it emerged from bankruptcy earlier this year, concntrating on exclusive brands such as Martha Stewart homeware and Thalia clothing rather than deep price cuts.
However, with fewer discounts on offer, many shoppers have deserted the buisness.
Kmart said last week it operated profitably in November, but confirmed that same-store sales were down by around 15 per cent. Third quarter sales fell 21.2 percent to $5.08bn.
Kmart filed the largest-ever retail bankruptcy in January 2002. The business now has a new management team and a smaller estate, with more than 300 stores closed, over a quarter of the total.
Kmart has said its slimmed down, refocused operation offers a stronger chance to compete, but some observers are concerned that it has reduced its ability to take on rivals such as Wal-Mart and Target.
