KMART STEAMING AHEAD WITH PANTRY CONCEPT

MARK TOSH

TROY, Mich. (FNS) -- Moving ahead on its plan to operate "pantry" departments in 180 stores by the end of this month, Kmart Corp. here rolled the new concept out to 10 of its New Jersey units late last month.

About 150 of Kmart's 2,150 discount stores now have pantry sections, and this month 30 more units will be remodeled to include the department, said Robert Burton, director of investor relations. Each of the remodels costs between $400,000 and $500,000, according to Kmart.

After this month's remodels, Kmart will halt rollout of the pantry concept through December so it won't interfere with the holiday shopping season. Starting in January, Kmart said, it plans to add 450 additional pantry departments over the year.

The 7,000-square-foot pantry section, located in the center of Kmart's discount stores, offers 2,500 grocery stockkeeping units, including a small refrigerated section with milk, eggs and cheese. The strategy behind the concept -- which Kmart also refers to as its "high-frequency" format -- is to draw more store traffic by pricing groceries competitively with nearby supermarkets.

The first stores to feature the pantry format were in Fort Wayne, Ind.; Charlotte, N.C.; Miami, and Washington. "We're very satisfied with the performance," said Burton, who noted that remodeling plans for next year will focus heavily on the Northeast.