Black-and-blue-light special: Kmart, Sears hit hard

Wal-Mart, by contrast, "is right on with the marketplace," Drenik says. "They've got enough younger people in there who are busy buying things."

Drenik questions whether older customers will allow Sears and Kmart stores to increase sales. "If not, they need to figure out what segments they need to go after long term."

Disgruntled investors might not be willing to wait that long. "You have a disinterested customer base and a highly engaged investment group," Nisch says.

Meanwhile, Sears said Monday that it remains interested in acquiring home goods retailer Restoration Hardware, which has accepted a bid from private-equity firm Catterton Partners. But Sears said it would do so only at a lower price than its earlier offer. Sears already owns 13.7% of Restoration.

Another challenge: While most retailers' traditional customers say they're cutting spending in some areas, Drenik notes that Kmart shoppers say they plan to reduce spending in every area over the next couple of months.

It's only slightly better at Sears: Shoppers who describe themselves as Sears shoppers say they plan to cut spending in every category but home improvement.

Loyal customers leaving?

Kmart may have lost shopper Kathy Glaser of St. Louis. She says she's given up on the store near her in the past year, in part because it seldom has what's advertised, but also because the selections of beauty products and plus-size clothing have diminished. "I don't go there any longer, and I suspect no one else does, either, as the store is always empty, and there are very few employees around to help," she says.

"Kmart is no real competition to Wal-Mart on stock, store or prices," says Lynn Keates of California, Md. There's "no good reason to go there with Wal-Mart Supercenter the next block down."

Kmart still has its fans. Namrata Sun of East Brunswick, N.J., says she likes Kmart's pricing, which is as good as it gets except at Wal-Mart. So why does it compare favorably to Wal-Mart?

"It isn't so crowded," Sun says.

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