Kmart tinkers with high frequency

Discount Store News, April 1, 1997

PARSIPPANY, N.J. -- The new Kmart that opened here two weeks ago, a 108,000-sq.-ft. relocation from a nearby 57,000-sq.-ft. store dating from 1958, reflects the latest thinking in Kmart's high frequency store layout. Here are the highlights:

* Kmart Cafe, a new foodservice design that focuses on hot dogs, hamburgers, french fries, nachos and egg and sausage breakfast biscuits, and one that signals the chain's intention to keep and fix its foodservice operation;

* A Martha Stewart paint section, one of the first stores to carry the line, which officially begins rolling out next month;

* A 4,500-sq.-ft. Martha Stewart Bed & Bath Shop;

* A convenience corner at the end of the checkouts that combines One Hour Photo, key making and cigarette sales;

* Greeting card re-merchandising--with the Hallmark Expressions cards at a 10% discount, replacing previous vendors such as American Greetings and Sangamon;

* Racetrack aisles as wide as 15 ft., and 10-ft. spacing between midway display tables to enhance the open feeling;

* A 5,000-sq.-ft. lawn & garden department on the end of the store (based on the Jackson, Miss., prototype) that is heated and air-conditioned for other seasonal uses such as trim-a-tree;

* A Pantry department, offering seven 64-ft. aisles of groceries, including a 32-ft. dairy case for milk, eggs and fresh juices and an endcap freezer for Tombstone pizza, the only frozen food carried.

The store, one of only six new discount stores Kmart will open this year, is also significant for what it doesn't have: a Penske Auto Service Center. Penske bought about 800 auto service centers in older Kmarts last year. but Kmart is no longer openings are planned for '97, including the one that opened last month in San Jose, Calif.

Last year, Kmart converted 180 stores to its high frequency concept, which was introduced last August. It will convert 450 more by the end of 1997. Altogether, Kmart will invest $1 billion over three years to convert all of its 2,134 stores, except for small units such as the old Parsippany store.

Kmart chairman Floyd Hall took particular interest in the new Parsippany store, since it operates within a 15-minute drive from his home in Montclair, N.J. During the soft opening, prior to the grand opening March 16, Hall visited the store three days in a row, manager Kevin White said.

The new store, located next to an existing Bradlees, places most of its stock on the 96,000-sq.-ft. selling floor, with only 12,000 sq. ft. of backroom storage, said district manager David Viotto, who oversaw the grand opening.

The Kmart Cafe represents an abrupt turnaround following Kmart's attempt last year to sell its foodservice operation to Daka, a restaurant chain operator. The deal subsequently fell through. Kmart will roll out the Cafe concept which seats 39, to all stores renovated to the high frequency concept, Viotto said.

The convenience corner makes it easier to control cigarette sales from locked cases and to check the I.D. of customers under the age of 27 which a new federal law requires. To promote its One Hour photo service, often a destination shopping trip, Kmart was offering a coupon worth $2 off the everyday price of $7.99 to develop and print a roll of 24 exposures.

Kmart was also making a full-court press to promote its private label credit card, and at least a dozen employees spotted along the front of the store were importuning customers to sign an application.

The set for the lawn & garden department centered on displays of lawn fertilizer, both Kmart's private label KGro and Scott's. The L&G department also includes a sunscreen to protect plants from sunscald and a computer-controlled watering system to provide better care and reduce plant loss.

The adjacencies in the high frequency concept store are the most important aspect of its layout, Viotto said. Kid's World is to the right front of the entrance, just after the Cafe. Floor space for boys', girls' and infants' clothing was increased 15%, and sales per square foot gained at least 35%, he said.

Space for men's apparel was reduced 15%, but the department is now located next to sporting goods. "Sales per square foot in men's apparel are exploding." Viotto said.

The new Martha Stewart Bed and Bath shops are leading to 40% to 50% gains in bed and bath sales, he said, and the department has been moved next to the Pantry.

In high-frequency stores, sales in soft home and children's apparel gain as much as 50%, Viotto said.

Kmart already carried 60% to 70% of the skus in the Pantry, Viotto said, and SuperValu is supplying the rest. Other food wholesalers supply Kmart in other regions, such as Fleming in Florida.

Kmart is expanding its American Fare line of 150 private label food skus in areas such as cereals, Viotto said. Showing the importance of the Pantry, each district now employs a Pantry manager with supermarket experience.

Each store is allowed to micromarket foods, and the Parsippany store plans to expand Asian foods to reflect customer demographics.

The high frequency concept makes consumer electronics an open department, rather than a closed corral, and expands music and video.