K-Mart has had a rough year. After a much less than average Christmas 2011, the individual company filed for bankruptcy in February 2012. Sears Holding, the company that owns K-Mart, saw massive declines in stock prices. The discount retail market, traditionally dominated by the so-called “Big Three” (Target, Walmart, K-Mart) has been ravaged by the exponential growth of Amazon.com.
Companies in the discount retail market are in a constant struggle for lowest prices. K-Mart has not been able to compete with the low prices because of supply chain issues, and not enough advertisement. While Walmart and Target have aggressive marketing campaigns, K-Mart has sat idly in the background and can no longer compete in such a quick-moving market. Although all three companies are taking losses as Amazon increases its market share, K-Mart has taken the most losses. They have become irrelevant as a company.
In a market where the only point of difference between companies is price, companies must cut costs wherever they can. Amazon is now offering free shipping to anywhere in North America, which other companies simply can’t compete with. I think K-Mart will take a long time to go away, but the company’s days are numbered. Sears Holding is in a pattern of liquidation, as they are seeing larger and larger losses on every quarterly report.