It makes some business sense for the following reasons:
-Kmart offers layaway chain wide. Walmart allows individual store managers to decide whether they want the hassle (which most of them do not). So there is some competitive advantage.
-Good way to sell to people short on money in a tough economy (it boomed back in the 70’s).
-Kmart captures their cash in the layaway payments. So they get to invest that money for a time even if the customer ultimately cancels. Plus that’s less they can spend at the competition.
-As many here have pointed out, Kmart has become decidedly downscale, and layaway is a proven winner with this crowd.
K-Mart made a huge mistake back in the early 80’s when they still were competitive with Wal-Mart. They backed off of a pure grocery section, and they went a cheap stuff-a-store plan.
Grocery was burdened by a union, so I forgive them that, but they should have re-entered after ditching the union.
Wal-Mart became a destination store and K-Mart became an afterthought.
At this point, the best thing they could do would be to rebrand all their boxes as Sears Retail, bring back food, and turn the K-Mart name into a competitor in small towns to Family Dollar.