Super Kmart Center: appetizing foray - K Mart Corp.'s Super Kmart Center, Medina, Ohio - editorial

Discount Store News, August 5, 1991 by Tony Lisanti

Super Kmart Center: Appetizing Foray

Has Kmart finally found the winning formula for its foray into the food business?

Well, if its latest super center prototype, which debuted a week ago in Medina, Ohio, is any indication, then the answer is a resounding yes! But it has taken the giant discounter several years of experimentation to bring the concept to the point where management now believes it has an "established model" that can be rolled out nationwide.

The R&D of this new Super Kmart Center began more than a year ago. In fact, I recall a meeting with Larry Parkin at Kmart headquarters last November when he rolled out the blueprints for the Medina store on his desk with much excitement and enthusiasm. (Parkin, a 30-year Kmart veteran, was formerly exec vp of warehouse/grocery operations. He retired this past January.) He said that the Medina store would be different, a totally new shopping experience. He was right.

Previous tests such as Super K and American Fare were "warehouse-style" operations; the new super center is not. And this distinction is not only the key factor in the total integration of food and general merchandise, but it may prove to be the key to customer acceptance as well. The new Super Kmart Center effectively brings the supermarket and the discount store together into one cohesive store that does not overwhelm or intimidate the shopper. In fact, it subtly encourages shoppers to browse the aisles.

Here are some other key factors I believe make this new super center concept a winner:

* Aggressive pricing. A few quick comparisons around the store as well as from its TPR (Temporary Price Reduction) circular indicate Kmart will be a tough competitor. * Food service. One Kmart exec said at the opening the store needed a "little theater." And food kiosks, which offer an array of prepared entrees, salads, snacks and desserts, provide just enough fun, excitement and convenience. Obviously, Kmart studied many chains including Minneapolis-based Byerly's, a progressive supermarket chain known for its food service. * Cross-merchandising. Parkin stressed the importance of product mix. And so did Dave Marsico, now general manager of combination stores. For example, there is a Gatorade stack-out adjacent to sporting goods and baby food in the infants department. The transition from supermarket to discounter is smooth and comfortable. * Convenience. The store is well lit; the aisles wide. Every product is easily accessible and clearly priced. * Excitement. TV monitors in key cross aisles and entranceways, as well as the food kiosks, enhance the "fun" aspect of shopping the store.

Yet, one lingering question remains. Will customers accept the one-stop shopping concept? Will they shop "both sides" of the store?

Furthermore, Wal-Mart has achieved a similar level of confidence with its latest super center in Batesville, Ark. And don't forget other competitors including Twin Valu, Meijer and other supermarket chains such as Kroger. It will not be easy to expand the super center concept, but the potential pay-off is staggering. A conservative estimate based upon opening 10 super centers a year with sales of $50 million could easily make this a $2.5 billion business in five years.

The stage is set for battle of the super centers in the 1990s.