Kmart Rivals Appear to Benefit from BlueLight

Retail giants Kmart Corp., Wal-Mart Stores Inc. and Target Corp. are engaging in a price war prompted by the return of Kmart's famous BlueLight discount campaign. However, Wal-Mart and Target seem to be gaining market share on Kmart due to their retaliatory price cuts.

Retail consultant Burt Flickinger says, "I've never seen anything like this. As deep as Kmart is going, Wal-Mart is going deeper."

Kmart has cut prices on 50,000 items in an attempt to match prices with Wal-Mart, saying its prices used to be 9% higher than the rival, but hopes to be within a 1% to 2% price range. In the fiscal second quarter same-store sales at Wal-Mart rose 5.7%, Target's grew 3.4%, while Kmart only posted a 1% rise in sales.
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