Discount birthday: Walmart, Kmart, Target hit 50
— -- Discounting wasn't invented in 1962, but it might as well have been.
That was when Walmart, Target and Kmart were born, each with their distinctive style of low-price retailing. As the three celebrate their 50th anniversaries this year, they can take credit for much of the way bargain-obsessed America now shops. Retailers of every stripe have followed their lead, making shopping the equivalent of "Blue Light Specials" all the time.
There were plenty of stand-alone or regional "five-and-ten" or "dime stores" back then, including Woolworth's, Ben Franklin and W.T. Grant. Kmart, Walmart and Target built on the concept and brought self-service, low-price shopping to the masses.
"For the first time ... there were long aisles of merchandise, merchandise was well assorted, and the customers helped themselves," says Walter Loeb, a retail consultant and former analyst who spent 20 years as an executive for May Co. and Macy's. "People looked for bargains, and that feeling of bargains never left retail."
PHOTOS: Take a look back 50 years ago at the creation of Kmart, Target, Walmart
It only expanded, with bricks-and-mortar wholesale stores, including Costco and Sam's Club, followed by online discounters such as Amazon.
In 1967, discount stores accounted for 42% of all retail sales. In 2010, that number rose to 87%, Loeb says, citing data from Consumer Reports.
"Discounting today is a way of life," Loeb says.
Oddly enough, companies founded by Sam Walton, George Dayton and Sebastian Kresge all gave the concept of a high-volume store with lower-price merchandise a try in the same year. Odder still, it was S.S. Kresge's Kmart -- the now-beleaguered of the trio -- that set the standards for discount retailing that the others built upon.
Kmart expanded the fastest of the three, growing to hundreds of stores by the mid-'70s, vs. a few dozen Targets and Walmarts. Kmart's rapid growth and hugely popular Blue Light Specials made it an early leader.
"Kmart brought the carnival aspect of shopping -- the idea of deal and excitement around price," says Ken Nisch, chairman of retail branding and design firm JGA.
Nisch recalls his delight as a child when the arrival of Kmart into the Toledo, Ohio, suburbs meant the end of long trips downtown with his mother and brother to visit the rundown Tiedtke's department store.
With Kmart's big parking lot, wide aisles, shopping carts and bright fluorescent lights, "it was sort of like Oz had opened up," he says. Kmart, he says, had "all the things the middle class wanted," such as brand names including Jockey and Levi's.
Looking back, retail experts say it was no accident that each of the three chains started far away from the East and West Coasts.
The chains' leaders were responding to the post-World War II growth in Middle America.
"The most important thing was that American suburban living was exploding," Loeb says. "Because of that, the need for stores in the neighborhoods was immediate."
Walmart founder Sam Walton went even further out to rural areas, opening his first store in Rogers, Ark., where the nearest city was Tulsa, two hours away, says Alan Dranow, senior director for heritage and marketing at Walmart.
"He saw the opportunity to serve the underserved," Dranow says. "If you look at how the company grew, it really grew in the heartland."
Related Stories
ABC News Live