Kmart May Be Cheap, but That Doesn't Mean You Should Buy It

Arne Alsin may be right: When it comes to discount retailers, Kmart(KM Quote) might be a cheap alternative to Target(TGT Quote).

Walk into any Kmart store and you'll see a cheap attempt at Target imitation. Problem is, as my mother always said, there is a big difference between cheap and inexpensive.

I won't argue with Arne's metrics. He has been "Mr. Money" all year long. And, I won't claim to have the intuitive skills of Peter Lynch in picking winners simply by wandering around. But I do use personal observations to help temper convictions created by statistics.

And those observations say avoid Kmart. If I walk into a Target, I want to shop. If I trip into a Kmart, I want to leave.

It's all about merchandising. At Target you find what you want, where you want it. With Kmart, you find an unpleasant safari, never knowing what lurks around the next corner. Target stores are bright, clean and cheerful, qualities that suggest "buy." Kmarts are poorly lit, dingy and uninspiring, characteristics that scream "cheap."

The "feel good" experience prompts consumer purchases. Target gets it; Kmart does not.

What about Martha Stewart? A solid branding strategy, but can they leverage it? As reader Joshua Weiss chimed in, "While we have been to Kmart for Martha Stewart merchandise -- my wife is a big fan -- the merchandise was thrown together haphazardly and the experience very unsatisfactory. Martha is a draw for Kmart, but I think Target could do a much better job with that line."

Exactly. Didn't Kmart once hold out great promise for a Jaclyn Smith clothing line?

Arne may be right: Kmart, which was trading at $11.31 recently, might be cheap. Then again, Target, trading at $36.27 about midday, may be expensive. But, there is almost always a good reason merchandise (stocks included) ends up being sold under the Blue Light.

The Peter Lynch in me suspects that's where Kmart is destined to remain.