KMART TO INTRODUCE NEW SUPER FORMAT

EILEEN COURTER

DEARBORN, Mich. (FNS) -- Kmart, Troy, Mich., will unveil a new Super Kmart format next March geared to improving merchandising presentations in areas ranging from fresh foods to private labels.

During a store tour press briefing last week prior to Kmart's annual meeting here, Dennis Carter, vice president of food for Super Kmart, said the retailer will begin rolling out what it calls "Series 8 Super K" at stores scheduled to open in Norfolk and Virginia Beach, Va. Among the features slated for the Super 8 approach:

Produce and perishables up front instead of at the side and rear of the stores. "Our market studies indicate food drives the store, and perishables drive the food," Carter said. Produce tables in the front of the store will be on rollers so the number and arrangement can be easily changed.

Fewer kiosks for items such as baked goods, to reduce staffing, with two kiosks replacing three. The partition between the seafood and butcher shop areas will also be eliminated so one employee can serve both.

About a 1% reduction in dry grocery presentation.

More and consistent private labels. Carter pointed out Kmart has just hired Bill Adams, a "private-label guru," who will be responsible for putting together a private-label program. Adams was senior vice president of Statler Tissue, Boston.

"We need to have a private label in food. It's absolutely mandatory," Carter stated. Carter predicts it will be six months to a year before the private label is rolled out and begins to capture sales.

Signs to provide continuity between the food and general merchandise sections.

Carter, who joined Kmart this year, admits there are some things he'd do differently if he'd been in on the start of Kmart's superstore ventures.

However, "It's like your kid -- once you have it, there's no turning it in. You have to make the best of what you have," he said.

He made these comments during a media tour of the Dearborn, Mich., Super Kmart. The annual meeting, which followed, included praise of the supercenter venture. Discussing the Dearborn store, Carter pointed out, "This store is not quite a year old, and it's already outdated.

"It's basic blocking and tackling -- we're just going to do it better," Carter said.

During the last quarter, Kmart saw increased traffic in its stores, but profit was off, he said. Consumers picked up a few bargains, then checked out. So Kmart wants to cross-merchandise more profitable areas, he added. At Kmart's supercenters, that means drawing customers into the general merchandise area, where margins tend to be higher than in foods.

"Our goal is to get $2 or $3 more in each basket," said David Marsico, vice president of Super Kmart Centers. The Dearborn store, open 24 hours a day, draws more than 30,000 customers a week.

On the general merchandise side of the Super Kmart, baby food areas are stocked with items such as children's furniture, baby powder and other items. Greeting cards, on the other hand, are slated to move into foods, where Marsico has found sales "go way up."

At the annual meeting, Kmart Chairman Donald Perkins praised Super Kmart Centers. He said they "attract more customers and draw more sales per square foot."

About 22 Super Kmarts are expected to open in 1995.

During the annual meeting and at a press briefing, Perkins fielded questions about the corporation's search for a new chief executive officer to succeed Joseph Antonini, who resigned two months ago.

"We will have a new CEO as soon as possible, and there will be more changes to come," he told shareholders.

Perkins hinted the new CEO will likely come from outside the corporation. The ideal candidate, he indicated, will have both turnaround and retail experience. It would also be nice if he "could walk on water," Perkins quipped. He indicated Kmart has talked to "a lot of people" who said they were not interested.

The search committee "has not completed its work," Perkins stressed. He refused to say if a decision is days, weeks or months away.

Perkins denied reports Richard Cline, former Jewel Cos. chairman, is on a short list of CEO candidates. As for rumors Kmart will move its headquarters to Dallas, "I never heard of the idea until I read it in the press. There are no plans under way that I know of," he said.