KMART PLANNING FURTHER PANTRY SECTIONS

EILEEN COURTER

DETROIT (FNS) -- Kmart Corp. is satisfied with the progress of its new pantry sections in conventional Kmarts and plans to roll out the concept to more stores, said Floyd Hall, chairman, president and chief executive officer, at the company's annual meeting here last week.

Sales at pantry sections "continue to be impressive in terms of sales generation and gross margin income," Hall said. The pantry sections, introduced last June, emphasize expanded consumables and double the space devoted to food.

"We think it's still very viable," Hall said of the concept. "We intend to roll it out in our stores on a relatively slow basis for 1996 -- about 150 stores or so. We will continue to evaluate it and make sure it's everything we want it to be." The 150 store rollout is less than first anticipated. Last November, Kmart, Troy, Mich., said the format could find its way into some 400 stores in 1996. Hall added that Kmart is taking a look at its food operations and will have some news "in 60 to 90 days." Asked for more details at an ensuing press conference, he said, "We've been looking at how we can make our food operation more efficient. We have to make it more customer-friendly."

The review will cover Super Kmart Centers as well as traditional discount stores, Hall said. However, because the Super Kmarts are new, the study is expected to have much less impact on them, he noted. Kmart plans to close 35 to 40 stores this year and open nine Super Kmarts and 20 traditional stores, according to Hall.

This year's annual meeting was much less raucous than those in the past few years, despite Kmart's announcement of a $99 million net loss for the first quarter. The company reported a loss from continuing operations of $38 million, compared with $109 million in the prior period. Sales rose 1.8% to $7.58 billion from $7.44 billion.

Hall said recovery will be "back-end loaded," with results improving during each coming quarter.