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FOR IMMEDIATE RELEASE

KMART CORPORATION REPORTS JUNE SAME STORE SALES INCREASE 1.1%

Troy, Michigan, July 12, 2001 -- Kmart Corporation (NYSE: KM) today reported that for the five-week period ended July 4, 2001 net sales increased 1.1% on a same-store basis. Total net sales were $3.531 billion, a decline of 0.1% from $3.536 billion for the same period last year.

Net sales for the twenty-two-week period ended July 4, 2001 increased 1.0% on a same-store basis. Total net sales were $14.715 billion, down slightly from $14.787 billion for the same period last year.

"We are pleased with our sales for the month of June particularly in light of our ongoing transformation. The extensive disruption in our stores continued during the month as we completed the conversion of our entire store base to the Fleming distribution system, reset another 726 stores and reduced our advertising by over 30% from last year," said Chuck Conaway, Chairman and CEO of Kmart Corporation. "We've achieved an increase in customer traffic and the average number of items in a market basket driven by our BlueLight Always program and improved store execution. This has resulted in significant increases in our high frequency categories compared to last year. We are providing our customers with excellent savings by lowering prices on thousands of items as part of our long-term strategy to build loyalty with our customer and drive repeat traffic."

On June 30, 2001, the entire Kmart store base is now receiving all consumable and perishable products from Fleming, as committed. This significant undertaking, which began with the signing of a new contract on February 7, was completed in just 143 days. This alliance provides Kmart with a lower cost to acquire products and a lower cost to serve the customers. It also eliminates the distribution barrier for supercenter growth for Kmart. Kmart anticipates annualized savings of $225 million in the third year as a result of this initiative.

					Change
($ Millions)	07-04-01		07-05-00		All Stores	Same-Store
Total Kmart	$3,531		$3,536		(0.1%)	1.1%

					Change
($ Millions)	07-04-01		07-05-00		All Stores	Same-Store
Total Kmart	$14,715		$14,787		(0.5%)	1.0%
# of Store Locations	2,113		2,165		(2.5%)

Cautionary Statement Regarding Forward-looking Information

Statements, other than those based on historical facts, which address activities, events, or developments that the Company expects or anticipates may occur in the future are forward-looking statements which are based upon a number of assumptions concerning further conditions that may ultimately prove to be inaccurate. Actual events and results may materially differ from anticipated results described in any forward-looking statements. The Company's ability to achieve such results is subject to certain risks and uncertainties, including, but not limited to, economic and weather conditions which affect buying patterns of the Company's customers, changes in consumer spending and the Company's ability to anticipate buying patterns and implement appropriate inventory strategies, continued availability of capital and financing, competitive factors, and other factors affecting business beyond the Company's control. Consequently, all of the forward-looking statements are qualified by these cautionary statements and there can be no assurance that the results or developments anticipated by the Company will be realized or that they will have the expected effects on the Company or its business or operations.

Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart supercenter retail outlets. Kmart donates $35 million each year to support its hometowns and local non-profit organizations. Kmart associates also provide their most valuable resource - time - everyday in their local communities. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart sales is available by calling (248) 614-0480 and general information is available on the World Wide Web at www.bluelight.com under the "About Kmart" section.