The Death Knell for Sears, K-Mart, and Shop Your Way?

I have been a customer of Sears all of my life, and now that relationship could be ending as Sears fights to stay in business. Please don’t laugh; there are real reasons why Sears has been sentimental for me. First of all, my mother worked there for over 20 years from when I was a kid all the way though my college years. I too worked there the summer between high school and my first year in college in their warehouse. Mom helped me get the job.

Is Sears going out of business? Here's my thoughts on the history and current status of Sears and K-Mart, and why the Shop Your Way program is doomed.

We weren’t a wealthy family, as I have written previously, and many of my clothes were handed down to me from my Dad’s boss’s son when I was growing up. The only other clothes I ever had until I was about 18 came from Sears & Roebuck.

Reliable, Sturdy and Affordable Sears

Sears clothes may not have been the most popular or fashionable clothes in the 1950’s, 60’s and 70’s (as if they have ever been!), but one thing you could say about them is that they lasted forever. My wardrobe of “Roebucks”, the Sears version of Levi’s and Wrangler’s jeans, wore like iron and lasted forever. In fact, I could probably still wear those same ones from back then today if my waist was as small as it was 50 years ago!

Besides the early link I had with my wardrobe, I learned a lot about Sears just from the fact that Mom worked there. I found out about their quality tools, “Craftsmen”, and their “satisfaction guaranteed” promise which they actually kept all though those years. It was what made them great.

A Little Bit of History for Perspective

For a lot of America, Sears was the biggest link to shopping for wanted goods through the Sears catalogue which began back in 1896. And then there was the humongous Sear’s “Christmas Wish” big book each year. Every Christmas toy ever was right in that book. The catalogue stopped its long run in 1993 when Sears was beginning to stumble in the 1980’s from its lofty position as the “king” of retail.

Walmart Replaces Sears in #1 Spot in 1989

What happened in the retail world between 1980 and 2002 is really mindboggling. Sears, once the largest retailer in the country, saw its competition gaining rapidly on them and their place in retail fell dramatically due to a whole lot of bad decisions and a changing scenario in the shopping habits of the country. The name Walmart also has a lot to do with that demise. By 1990, Walmart replaces Sears as the retail “king”.

At the same time K-Mart, a store which sprang from the 5 and dime Kressge’s back in the 1890’s, opened its first store in 1962. By the 1990’s, K-Mart was bigger than Sears, but it was a rough road to gain on the Walmart earthquake and after some real difficulties, K-Mart declared bankruptcy in 2002.

K-Mart Pulls Off a Miracle

The shocking turnaround and recovery of K-Mart in 2004 surprised everyone. By returning to profitability, K-Mart had a very good reason for thinking that an acquisition like Sears would give them extra volume of sales and a dramatic cost saving in operations with consolidation. The distribution of Sears’ biggest assets—Craftsmen, Kenmore, and the like—would be a big added resource. So K-Mart bought Sears for $11 billion. For a while, it seemed to be working. But the recession of 2008 and the surging power of online shopping had changed retailing. Taken along with the fact that Sears and K-Mart are part of the “dinosaur era” stores which just didn’t change rapidly enough for a new generation of consumers and it’s easy to see why they are on life support in 2017.

A New Loyalty Rewards Program

Are you familiar with the Sears and K-Mart Shop Your Way program? Back in 2009, it was conceived as a way that these stores could help stimulate their sales and offer a rewards program for loyal shoppers. Great idea? In theory, yes it is. But it has turned out to be a huge drain on the company’s profits and it has been almost from the beginning.

The idea is that you get 1% credit on any purchases you make at the store or online (a modest amount in today’s world), and you can use it in-store or online the next time you shop. A $100.00 purchase gives you a $1.00 credit. They also offer a “surprise” amount of money as a credit periodically to inspire your purchases. For example, they will send you an email giving you $9.00 of “free” money on your next in-store or online purchase. I love that, and here’s why.

The Ridiculous and Deadly “Shop Your Way”

There are literally no strings on that “surprise” gift of $9.00. As long as you spend at least $9.00, you have fulfilled the obligation and can literally use it to obtain a free item or two. Just in the last week, I have been offered twice a $9.00 surprise. Last week, I ordered online a bathing suit and a long sleeved shirt (on sale too!) which totaled exactly $9.00. After applying the points, my total came to $0.45 cents, the state sales tax. I picked them up for free at the local K-Mart the next day. Not too shabby for me, right?

To my surprise, yesterday, I got a new $9.00 free gift surprise from SYW rewards in my email. Once again, I went online shopping and I ordered two beach towels (to go along with my new bathing trunks!) on sale for $4.99 each. I applied my points and my total came to $0.98 plus tax. So, for $1.05, I got my new towels which I picked up last night. By, the way, the store is very close to where I live so it’s no biggie to pick up and pay no shipping.

In just one week, I had purchased one bathing suit, one shirt, and two beach towels, all for a total of $1.52. I saved over 92% on my purchases (and that was on items that were already on sale)!!!!

This has happened to me over and over again and I am not a regular shopper at either Sears or K-Mart. For the most part, I only go there to use my surprise SYW points. The last major purchase I made at either store was over 3 years ago when I purchased a new mattress set at Sears (and by the way, I got lots of points for doing it!).

I’m not the only one who has caught on to this great for me and not so great for them proposition. I recently read that nearly 75% of all sales at these two entities in 2014 were made through Shop Your Way transactions. And that number is rising each year! I wonder how many of those purchases were purchases like mine at 92% off sale prices?


The bottom line for me is that I have done nothing more than what they have asked me to do. Shop MY Way, using discounts and any freebies they throw at me! It certainly isn’t helping their bottom line nor frankly has it made me a loyal customer other than when they practically bribe me to shop there.  Many other stores seem to be doing similar things these days (like Staples, but that’s another story to tell down the road), but Sears and K-Mart are the world leaders at this and I’m sincerely afraid that the plug will be pulled on their life support system very, very soon.

So, do you belong to the SYW program? Would you feel any guilt in getting something for almost nothing even if it meant that these icons of retail will cease to exist if they keep losing money as they have been for years? Will you miss theses stores when they’re gone? The experts give them almost no chance of survival. Is Sears going out of business? Flat lining is probably the new future for these former kings of retail.

Disease Called Debt

About Gary Weiner @ Super Saving Tips

Over the last 45 years I’ve worked in retail (department stores and supermarkets) and financial planning. In addition, I am a shopper, born and bred, who enjoys the challenges of finding the best items for the best prices. When I’m not busy saving money or writing here at Super Saving Tips, I enjoy baseball, music, and classic movies. I am retired and live in New Jersey with my wife.

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20 Comments

  1. So what you’re saying is that I should use my Kmart gift card? 😉 Virtually every Kmart left the ‘burbs probably 5 years ago. I actually loved the one we had right by my work. I am not a Walmart shopper. Too much chaos among other reasons. It’s sad to hear these stories about all of these retailers. It’s even more depressing to see all the giant empty buildings now that everyone mostly shops online.

    • It is quite sad, Penny, when you think about how many of these stores have gone bye-bye. What amazes me though is that around here they just keep building more and more shopping centers even though there are so many around not being fully rented. I thought I lived in suburbia but it’s starting to look like downtown.

  2. As a kid I recall marveling at the Christmas Wish book. I study that thing for hours. 🙂 My dad always purchased Craftsmen tools because of their guarantee. I was never a fan of K-mart. The stores always felt run down, over stocked, dingy. I can say I was aware of the SYW program. We very rarely shop at either stores these days. I used to frequent Sears hardware, but many have closed.

    If a store if offering a program like SYW, why not take advantage of it. I can’t stay I’ll miss these stores, they just not two I frequent these days.
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  3. I suspect they won’t be here in ten years. There is one kmart near me that is very sketchy. I’m not even sure why you’d want to shop at that store. There is also a Sears. I recently needed the oil changed on my car. I ultimately took my car to sears automotive for the change… Why? Not because of quality. No its because they do so little business there was no line. I still own my Craftsman tool set from 20 years ago but I’ve read they’ve been selling these few unique aspects of their business. I just can’t see the value they bring these days.
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  4. I’ll more closely at my emails. You know Penny’s does this too. I love it ..sometimes I may spend more. That’s what they hope for I guess.

  5. I had a grandparent who worked for Sears and supported their family through my parent’s generation’s childhood. They might not have been”rich”, but they were comfortable. They treated their employees far better than Walmart treats theirs today.
    This is sad, but honestly, I do the same with my rewards. Maybe today they just attract too frugal of a customer base? It is sad, though. Kmart was so cheap–like Penny, we lost most of ours in the region recently. We never had any in the city limits as far as I’m aware. But the ones in the burbs are disappearing.
    I just went to a conference that placed heavy value on the digital mindset. It was phenomenal, and it’s a shame good business like Sears hasn’t been able to get with the program.
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  6. I have wondered how Kmart has stayed in business as long as it has. It seems like since 2009, all the Kmarts I go into are dirty, disorganized and nothing has the correct price one it. Which is a shame because there are good things to find in Kmart! Our town had two Kmarts until recently, but now we’re down to one. Our Sears is now becoming a Whole Foods, which is another store I don’t understand how our town can support.

    I keep getting the Shop Your Way Suprise money emails and ignore them. I am going to take a better look next time!

    • Jax, when you check those out, you may also notice there are many SYW offers that give you either a percentage off price coupon or dollars off on a minimum purchase. Those are different than the straight-up “free money” surprise dollars that I used. Just FYI.

  7. I went into our local KMart last fall to buy totes and school supplies…it was scary how empty the shelves were. They’d even discontinued electronics for the most part. And I don’t remember the last time I went into a Sears, even though I grew up wearing mainly Toughskins. (I remember having both rust orange and avocado green ones. Ahh…childhood in the Seventies.) My understanding is that the quality of Kenmore and Craftsman have both taken nosedives.

    Big box national retailers (that aren’t named Walmart or Target) seem to be disappearing quickly. Since I do most of my non-clothes, non-food shopping on Amazon, I know I’m partly to blame. On the other hand, there’s only so much competing most businesses can do on price, and few national retailers seem to want to invest in personnel enough to compete on service. It’s giving smaller businesses a place to shine, even if it’s a much harder way to do it.
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    • Emily, you’ve summarized the situation very well. The big chains either can’t or won’t compete with the online retailers and local businesses will provide the customer service that the shoppers are looking for. Thanks for your observations.

  8. K-Mart has always been synonymous with pretty poor quality around here, so it’s never been a store I’ve frequented, but I’m sad about the Sears. They’re such a staple. But I also haven’t been in one in years, so I can see how they’re declining. It’s rare I shop in a store anymore unless it’s a really niche type of store.

    • I think you have a lot of company in your shopping habits these days. That’s one of the chief reasons that these traditional stores are struggling so much. Specialty stores in strip malls should continue to do well so long as they provide great customer service and unique merchandise. Everything else you can get online.

  9. I have to admit that I don’t have any brand loyalty to stores. I usually use slickdeals.net and see if anything is on sale. I think this has really distorted retail brand loyalty for me.
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  10. From what I heard, it’s not all Amazon’s fault. Sears’ current hedge fund owner is driving the company to the ground. The hedge fund is squeezing every last penny out of Sears, even if doing so will drive Sears to the ground in the not-so-long-run.

  11. I used to love Sears. Craftsman and Kenmore were classic brands that stood for quality. And I’ll never forget the Brenda and Eddie song by Billy Joel and the line about them “buying a couple of paintings from Sears.” But then in the early 90s, I got ripped off by Sears automotive and I never shopped there again. Sadly its demise is near. And sadly I welcome it. Thanks for a trip down memory lane. It was a great way to start the week.

    • I remember well using Sears auto center to service my car. I always thought to myself the best mechanics are probably in their own business and not working for minimum wages at Sears or places like that. I think Sears had a purpose back in its heyday, but sadly I think that day has long gone. Thanks, Mr. G.

  12. I try to remember to use my JC Penney’s $10 off $10 coupons, but I don’t live close to the mall, so it’s a chore to even get there. I am a traditionalist, so seeing those stores slowly dying makes me sad, too. But I’m guilty of not shopping there much either!

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