February 1, 2019
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Farewell, Big K

The demise of my local retailer has me pondering: What went wrong?

By David Maloney

My local Kmart closed this month. It had served my community of North Versailles, Pa., for more than 50 years and was a store where my family shopped weekly.

Kmart and its sister retailer, Sears, were once retail giants. Now, it remains to be seen if a deal struck in early January can save the approximately 425 remaining stores of Sears Holdings.

My store will not be among them. On Nov. 8, Sears Holdings announced that my Kmart would be one of 11 Kmart and 29 Sears stores slated to close by the end of this month. That's on top of the 142 stores shuttered last fall.

In a way, we had been waiting for the shoe to drop for a long time. It was not hard to see the brand's decline, even though this Kmart store had endured much since it opened in 1964. It survived numerous recessions, changing demographics, and the 1980s decline of steel and manufacturing in Pittsburgh. In fact, during that period of local job losses, it actually expanded its footprint to become a "Big" Kmart.

We also wondered how this Kmart would survive when, in 1998, one of the largest Walmart stores in the nation was built just two miles down the road. Yet it hung on for two more decades.

What caused its final demise? I believe more than anything, it was a lack of a good corporate supply chain.

Sears (and by extension, Kmart) believed that its size and service were enough to keep customers coming back. It had solid brands, like Craftsman tools, DieHard batteries, and Kenmore appliances. Sears was a retail behemoth built on a successful catalog operation, the forerunner of today's e-commerce model. If anyone should have been able to successfully transition to online retailing, it was Sears.

But while Sears and Kmart relied on their reputations, their chief competitors—Walmart and Target—built more resilient supply chains. Walmart, in particular, boosted its distribution capabilities, refined its transport fleet, embraced new technologies, and relentlessly pursued efficiencies that would allow it to slash prices to attract customers. Walmart understood that low prices could only be achieved if the company could save elsewhere. A superior supply chain was key to lower costs.

And because they had efficient supply chains, Walmart and Target were better equipped than Sears was to withstand the assault by Amazon and other e-tailers. Walmart has actually become the poster child for the successful meshing of brick-and-mortar and online operations.

So, after 55 years, farewell to my Kmart. It's a death that might have been prevented by a better supply chain.

About the Author

David Maloney
Editorial Director
David Maloney has been a journalist for more than 35 years and is currently the editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.

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