CHICAGO -- Kmart Corp., Troy, Mich., unveiled a new logo at a discount store here last week and said it will resume new store construction with 35 new discount stores and 15 to 18 new Super Kmart combination stores next year.
ecome "Big Ks" by year-end, said Floyd Hall, chairman, president and chief executive officer.
The logo features the word "big" in blue block letters, plus the red Kmart logo, with an orange swoosh, similar to the logo used on the Super Kmart supermarket-discount combination stores.
Over the next three years all but 180 of the conventional Kmarts will be converted to the new Big K name and format; only those with selling areas under 65,000 square feet will retain the Kmart banner.
The bulk of Kmart's capital budget this year will go into remodels and conversions to the new format, Hall said. The chain has budgeted $750 million for the change. The stores that have been converted to the high-frequency format are showing sales increases of 10% to 15% above the increases in the traditional stores, said Hall.
Those stores have a 7,000-square-foot grocery section, the Pantry, with about 1,200 more grocery stockkeeping units than conventional Kmarts, including 32 feet of refrigerated cases.
At the Chicago opening, Andy Giancamilli, senior vice president and general merchandise manager in charge of the Pantry, said Big K stores aim to price "lower than the most competitive grocery store in a given market."
Milk, he said, will be priced 20 to 30 cents below the market leader price. All Frito-Lay snack items are discounted 10% every day.
The Big K stores are also applying for beer and wine licenses in their markets.
In the Big K conversion, Kmart will change stores by newspaper advertising zones in a given market, so that all the advertising for Kmart in a zone will be either Big K or Kmart during the transition period.