K Mart launches super center; retailer unveils multi-subsidiary power complex

Discount Store News, August 20, 1990 by Laura Liebeck

Kmart Launches Super Center

TROY, Mich. - K mart will take the wraps off its newest venture into the world of grocery retailing early next year: its first Super Center, a 147,000 - square - foot grocery and general merchandise store, will open in Medina, Ohio, near Cleveland.

Wholly owned by K mart, the store will feature a 59,000 - square - foot grocery section and a 91,000-square-foot Future Store, K mart's latest general merchandise prototype.

The Super Center represents K mart's current thinking on food and general merchandise combination stores. It is the exact same size as K mart's newest American Fare hypermarket, located in Jackson, Miss.

Set to open Aug. 23, American Fare in Jackson is 147,000 square feet - 50,000 square feet of grocery and 97,000 square feet of general merchandise. The Jackson unit has 108,000 sku's.

The introduction of the Super Center, at the same size as the latest hypermarket, signals a shift in K mart's experimentation with food merchandising away from the mammoth American Fare to a smaller size and format.

American Fare in Jackson also appears to be the last of K mart's hypermarkets. According to spokeswomen for both K mart and Bruno's, K mart's partner in American Fare, no other hypermarkets are currently planned.

That's not a surprise since consumers throughout the country have shown a reluctance to shop most of the new hypermarkets that have appeared in the last couple of years. Wal-Mart has already remerchandised its Hypermart USAs and appears to have diverted its efforts toward its more successful WalMart Supercenter concept.

In addition to the plans for the Super Center and the latest American Fare, K mart announced late last month that it will open the first of 20 planned K mart/multisubsidiary shopping centers next summer in Rochester, N.Y., followed by a smaller version in Cleveland.

The Rochester project will feature a 104,000-square-foot K mart discount department store - a relocated unit - plus a 108,000-square-foot Builders Square and a 90,000-square-foot Pace Membership Warehouse Club. The Cleveland center will feature just two K mart subsidiaries, a 90,000-square-foot Builders Square and a 108,000-square-foot Pace. A K mart discount store is nearby.

The remaining 18 multisubsidiary shopping centers are in various stages of development and so far there is no timetable for their opening.

A K mart multi-subsidiary shopping center features three of K mart's retail subsidiaries: K mart discount department stores, Builders Square home centers, Pace Membership Warehouse clubs, Waldenbooks, The Sports Authority and Pay Less Drug Stores Northwest.

Already dubbed "power centers" by industry analysts, each center will feature those subsidiaries most suited to a community, according to K mart spokesman Jan Potter.

"This is the wave of the future," said Fred Wintzer Jr., retail analyst with Alex Brown & Associates, Baltimore. "Thus is the hottest thing in shopping centers, the power centers."

Jeff Edelman, retail analyst with Barkleys deZoete Wedd, New York, added, "The complex becomes a destination mall and K mart may find themselves with the luxury of not having to get the best retail sites available."

Unlike the new shopping center concept that relies on the combined strengths of K mart's subsidiaries to draw crowds, the Super Center is intended to broaden K mart's overall appeal and customer base by introducing a new retailing concept to consumers.

K mart Super Center is the discounter's next generation of Super K's. K mart introduced grocery and general merchandise combination stores in 1988 in Kankakee, I11., and Clinton, Ohio, and dubbed them Super K's for their 25,000 grocery sku's.

The discounter always planned to expand the Super K test program to a larger store format with more grocery sku's.

Through the Kankakee and Clinton test stores, K mart learned that groceries attract customers to the store while helping to encourage them to buy higher-margin general merchandise. The combination store also has shown its ability to increase customer visits. (DSN's Food Merchandising edition, Winter 1990).

The new Super Center features K mart's Future Store layout for general merchandise plus a drive-through garden center, fresh bakery, delipharmacy and 28 central checkouts.

Years of planning and experimentation went into the design and features of both the Super Center and multisubsidiary shopping centers.

In 1987, K mart chairman Joseph Antonini indicated that combining formats and pooling company strengths was a discretion the discounter was pursuing. Introducing grocery departments became a priority as the warehouse concept strengthened.

Last month at a press conference to formally unveil the discounter's Long Island strategy, Antonini again reiterated K mart's plan to combine subsidiary organizations into a unified shopping environment, creating power centers.

The first such center, located in the Rochester, N.Y., community of Henrietta, is being developed on a 32-acre location at a cost of $18 million, excluding fixtures and inventory. The development will be built across from Marketplace Mall, a busy retail shopping mall and the heart of the bustling retail community.