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KMART CORPORATION REPORTS 2.8% COMPARABLE STORE SALES INCREASE FOR AUGUST

TROY, Mich., August 31, 2000 -- Kmart Corporation (NYSE: KM) today reported that August consolidated sales increased 2.8% on a comparable store basis. Total consolidated sales increased 4.6% to $2.644 billion for the four-week period ended August 23, 2000 compared with $2.527 billion for the same period last year. Excluding the impact of store closings and inventory liquidation sales, comparable sales were flat for the period.

Sales from consolidated operations for the 30 weeks ended August 23, 2000 were $19.837 billion, up 2.3% from $19.386 billion for the first 30 weeks of fiscal 1999. On a comparable store basis, consolidated sales rose 0.7% for the same period.

"Sales were below plan for the month of August,” said Chuck Conaway, Chairman and CEO of Kmart. "Merchandise categories showing particular strength included outdoor living, lawn and garden, prescription drugs, and home-related categories such as housewares, home electronics and soft home. Obviously, regular sales have been offset due to the impact of closing stores and expedited inventory liquidation."

Kmart Corporation serves America with 2,164 Kmart retail outlets. Kmart Corporation common stock is listed on the New York, Pacific and Chicago Stock Exchanges.