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KMART CORPORATION REPORTS SAME-STORE SALES INCREASE FOR DECEMBER 2000

Troy, Michigan, January 4, 2001 -- Kmart Corporation (NYSE: KM) reports for the five-week period ended December 27, 2000 net sales increase of 0.7% on a same-store basis.

Leading the industry in responding to the later shopping season, Kmart opened its doors for 86 hours straight just prior to Christmas creating additional consumer excitement into the final hours of the holiday shopping season. The added shopping convenience yielded positive sales results in spite of the current economic environment, severe weather conditions and liquidation of excess inventory that cannibalized regular seasonal sales.

''I am pleased with our continued progress reporting December’s nearly 1% same-store sales gain following our solid 3.3% same-store sales gain in November," said Chuck Conaway, Chairman and CEO of Kmart. "We are on track to deliver most, if not all, of our commitments while closing the performance gap to our discount competitors in sales growth, in-stock position, working capital productivity and customer service levels."

Evidence of Kmart’s progress on its three strategic imperatives, world-class execution, customer-centric culture, and sales & marketing opportunities, is starting to be visible throughout the business. For the first time in over a decade, Kmart has virtually no merchandise trailers that in the past drove unproductive working capital. This is compared to 14,962 trailers behind Kmart stores earlier this year.

"While we have made significant progress in customer service, we are still tracking below our long-term goal. We are reinforcing the need for urgency to expedite our plan to fix the cultural and structural inefficiencies that have historically plagued Kmart to further the momentum in developing customer traffic," said Conaway.

Net sales for the 48 weeks ended December 27, 2000 were $34.378 billion, up 1.6% from $33.827 billion the same period last year. On a same-store basis, net sales rose 0.9%.

Kmart Corporation serves America with 2,106 Kmart, Big Kmart and Super Kmart retail outlets. In addition to serving all 50 states, Kmart operations extend to Puerto Rico, Guam, and the US Virgin Islands. More information about Kmart is available on the World Wide Web www.bluelight.com under the "About Kmart" section.