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Kmart Corporation (NYSE: KM) today announced that for the first time ever, it will award a total of $18 million to associates in 1,290 stores for dramatically improving customer service in their stores through the Super Service Index (SSI) program.

Paid quarterly, the cash bonuses are part of a new Super Service Rewards program established in February 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. The quarterly cash bonus is a percentage of the associate's earnings, determined by how much the store has increased their SSI score, or maintained their current high score. Only those stores who increased their store's SSI score or maintained their high score qualified for the bonus.

The SSI program is a customer feedback program that assigns each store a percentage, or score, based on "highly satisfied" customers who have responded to a 1-800 call-in number printed on store receipts. The percentage is determined by the number of customers who rate their shopping experience as "excellent."

"The Super Service Index system is revolutionary in retail," said David Rots, Kmart Chief Administrative Officer. "It allows stores to hear feedback from the people that matter most to them -- their customers. By rewarding our associates to strive to beat our customers' expectations through the SSI program, we are differentiating ourselves from the competition in our ability to please the customer."

This is the first time bonuses will be issued through the SSI program, and the bonuses reflect the daily intensity Kmart associates are placing on customer service.

"Significant progress was made at the store level in a short period of time," added Rots. "We expect each store to continue to maintain high SSI scores, but we are also challenging the stores to exceed our expectations. By continuing to raise the bar, the bonus program will function to reward those stores that continue to provide superior customer service."

The Super Service Rewards Program is just one element of Kmart's customer service initiative. In September, Kmart launched a new 24-hour Customer Call Center (1-866-Kmart4U) to expedite the resolution of customer concerns. In October, 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 Supercenter retail outlets. Kmart donates $35 million each year to support its hometowns and local nonprofit organizations. Kmart associates also provide their most valuable resource -- time -- every day 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 is available on the World Wide Web at under the "About Kmart" section.

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SOURCE: Kmart Corporation

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

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