Kmart Launches New Associate Rewards Program

Kmart Corporation (NYSE: KM) today announced a new Super Service Rewards Program that recognizes and rewards Kmart store associates for providing world-class customer service. Nearly all Kmart associates now participate in incentive plans tied to customer service.

The new program is designed to support Kmart's business strategy and create daily intensity around improvements in customer service. Store associates will receive quarterly cash bonuses for increasing the Super Service Index (SSI) score within their store. SSI measures the percentage of shoppers who rate their overall shopping experience as "excellent."

In addition to the team rewards, every quarter, the highest SSI store in each of the company's five divisions will be recognized in a store celebration that is personally hosted by Chuck Conaway, Kmart Chairman and Chief Executive Officer. Likewise, each quarter, the associate in each division who best demonstrates superior customer service will be named a "Star Performer," receive 500 shares of Kmart common stock, and be recognized by Conaway during an annual awards ceremony.

"The Super Service Rewards Program is the first of its kind among retailers, and will energize all associates to work together to deliver world- class service to our shoppers," said David Rots, Kmart Chief Administrative Officer. "In our industry, there is no single dynamic that sets apart competitors other than their ability to please the customer. This important change in our rewards system will create the competitive advantage we need to distinguish ourselves as the place people go out of their way to shop."

The Super Service Rewards Program is one more element of Kmart's customer service initiative. In September, Kmart launched a new 24-hour Customer Call Center (1-800-Kmart4U) to expedite the resolution of customer concerns. On Oct. 1, 2000, the company implemented a Super Service Sweepstakes program that awards one customer $10,000 each month for giving feedback about their most recent Kmart shopping experience.

Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart super center retail outlets. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart is available on the World Wide Web at http://www.bluelight.com/ under the "About Kmart" section.

SOURCE: Kmart Corporation

Contact: Mary Lorencz, Director, Corporate Media Relations of Kmart
Corporation, 248-463-1021

Website: http://www.bluelight.com/