S.S. Kresge's Five-and-Dime: The Store That Became Kmart

The smell hit you first — roasted peanuts tumbling in a warm glass case near the front door, the faint sweetness of popcorn drifting from a red-and-chrome machine, and underneath it all, the particular scent of wooden floors and dry goods that no department store has ever quite replicated. That was Kresge's. Before Walmart, before Target, before the big-box era swallowed Main Street whole, the S.S. Kresge five-and-dime was where America went to buy everything it needed for a dime or less.

At its peak in the mid-twentieth century, the S.S. Kresge Company operated more than 900 stores across the United States and Canada. You could find a Kresge's on nearly every downtown shopping street in America — its red-and-black storefront as familiar as the post office, its counters piled high with notions, housewares, candy, school supplies, canaries, goldfish, and 45 RPM records. For millions of Americans who grew up in the 1940s, 1950s, and 1960s, a Saturday trip to Kresge's was as much a ritual as church on Sunday.

The Man Behind the Dime

Sebastian Spering Kresge was born in 1867 on a Pennsylvania Dutch farm near Allentown, Pennsylvania. He was a frugal, driven man who worked as a traveling hardware salesman before catching the retail bug in 1897, when he went to work for James G. McCrory at a five-and-ten-cent store in Memphis, Tennessee. Two years later, Kresge struck out on his own, investing $8,000 to open two stores — one in downtown Detroit, Michigan, and one in Memphis.

The concept was simple and powerful: sell everyday goods at prices anyone could afford. In those early years, nothing in the store cost more than a dime. By 1912, Kresge had incorporated the S.S. Kresge Company with 85 stores and annual sales topping $10 million. The company went public on the New York Stock Exchange in 1918, and by 1924, Sebastian Kresge was worth an estimated $375 million — roughly $3.8 billion in today's dollars.

What made Kresge's different from an ordinary dry-goods store was the sheer democratic abundance of it. You didn't need to dress up or speak to a salesperson behind a glass case. Everything was right there on open counters, priced clearly, within reach of any working family. The store sold parakeets and canaries in a live pet section. It sold sheet music and 45 RPM records. It sold Christmas ornaments that generations of families still find in attic boxes, still bearing the tiny "S.S. Kresge Co." sticker on the bottom.

The Lunch Counter

If the merchandise floor was the heart of Kresge's, the lunch counter was its soul. Long before fast food arrived, the Kresge's lunch counter was where shoppers rested their feet and refueled. The flagship Detroit store famously operated a 99-stool lunch and soda fountain counter that ran the entire length of the south wall — one of the longest in the country. You could get a grilled cheese sandwich, a bowl of chili, a banana split, or a Richardson's Root Beer served in a cone-shaped paper cup with a metal base.

Some stores ran a playful promotion: customers would pick a piece of paper from a pumpkin or a jar, and whatever amount was written on it — sometimes as low as a penny — was what they paid for a slice of pie or a banana split. It was the kind of small-town generosity that built fierce loyalty. Families came back week after week, not just for the prices, but for the feeling of being welcomed.

The lunch counter also had a more serious chapter in American history. In 1960, four Black college students sat down at a Woolworth's lunch counter in Greensboro, North Carolina, and refused to leave when denied service — sparking the sit-in movement that helped reshape civil rights in America. Kresge's and other five-and-dime chains faced the same reckoning, and the lunch counter became a symbol of both the warmth and the contradictions of mid-century American life.

Watch: The History of S.S. Kresge and the Birth of Kmart

The Blue Light Revolution

By the late 1950s, the retail landscape was changing. Suburban shopping centers were pulling customers away from downtown Main Streets. Harry B. Cunningham, who became Kresge president in 1959, had spent years quietly studying the emerging discount store model. What he saw convinced him that the future of retail was not the five-and-dime — it was something bigger, cheaper, and built for the car-owning suburbs.

On March 1, 1962, the first Kmart discount department store opened in Garden City, Michigan. Seventeen more Kmart stores opened that same year, generating corporate sales of more than $483 million. The Blue Light Special — a roving blue police light that would flash somewhere in the store, announcing a sudden deep discount — became one of the most recognizable retail promotions in American history. Shoppers would drop everything and race toward the light.

The growth was staggering. By 1966, just four years after the first Kmart opened, sales in 162 Kmart stores and 753 remaining Kresge stores together topped $1 billion. In 1976, the company made retail history by opening 271 Kmart stores in a single year — the first retailer ever to launch 17 million square feet of sales space in twelve months. By 1977, Kmart stores were generating 95 percent of the company's revenue, and the S.S. Kresge Corporation officially changed its name to the Kmart Corporation. The last Kresge stores were sold off in 1987.

What We Lost

The five-and-dime is gone now, replaced by dollar stores and Amazon and the endless scroll of online retail. Kmart itself filed for bankruptcy in 2002 and has dwindled to a handful of stores. But the thing that Kresge's represented — a store where a child with a quarter could spend a whole Saturday afternoon and come home with something real — has never quite been replaced.

Sebastian Kresge himself lived to see the birth of Kmart, dying in 1966 at the age of 99. He had given more than $60 million to the Kresge Foundation, a philanthropic organization whose endowment had grown to over $4 billion by 2022. His name lives on in university auditoriums and library wings across the country. But for those who remember the roasted peanuts by the door and the soda jerk behind the counter, the real legacy is simpler: he built a place where everyone was welcome, and everything cost a dime.

Explore more vanished American institutions in our Lost Treasures collection, or revisit the golden age of the Soda Fountain.

Photo Credits: Hero image — S.S. Kresge Co. storefront, circa 1920s, Wikimedia Commons (public domain). In-body image — S.S. Kresge Store, 6th Street, Washington, D.C., Library of Congress, Prints & Photographs Division (public domain, no known restrictions on publication).