I remember when K-Mart was basically what Wal-Mart is today - minus the food (although they did have a deli/restaurant in the back).   They carried lower end stuff that low income people could afford,  and they flourished for it... there's no shortage of low income people.  They even offered Lay-Away.    
But then they started trying to compete with Target and other 'new' and upcoming stores,  raised their prices, and brought in all the 'designer' crap with Martha Stewart or Jaclyn Smith's name all over it trying to piss with the big dogs instead of staying what they were good at.     I feel like Wal-Mart is doing the same thing now.
		
		
	 
You're 200% right - Walmart IS doing the exact same thing Kmart did with its store.  Only problem is, Walmart is now the 20-ton gorilla in the middle of the living room.  Back in the late 90s/early 2000s, Walmart went on a construction boom, converting most of it department store-class stores into supercenter-class, with the added supermarket side in each.  Such a massive super-class big box store would and can only run properly with massive staffing to cover all bases for customers.  Trouble with Walmart is that they do their dead-level best to run massive supercenter-class stores on a skeleton crew, and then wonder why service goes downhill, quality goes downhill, and customers get absolutely fed up and go else where.  As someone who works in this business, I honestly can't say I blame customers for how they feel.  Much of the criticism from customers is actually quite justified.
The truth is, especially with Walmart - one of their dirty little secrets is that all employees get what's called "MyShare" - basically a bonus, paid quarterly, if that particular store location does well in 4 criteria - sales, customer experience, merchandise in-stock/item turnover ratio (how quickly or slowly is each individual item selling out, storewide), and profit margin.  One thing that directly affect profit margins is labor/manpower hours costs.  Now, not only do the lower ranks get bonuses, but for store management, their MyShare bonuses come at the end of the year, and some of them, depending on the store location, 
can actually be quite a windfall.  So hiring more people and staffing the salesfloor with more employees to help customers and work in individual departments actually takes away from profit margins, which in turn, 
takes away from the managers' bonuses.  <-- That right there is directly responsible for most of Walmart's problems.
Every warm body on the sales floor or at a cash register running a checkout line literally directly translates to that much money that will not be in the management bonuses at the end of the year!!!  I've said for years that the staff of an average Walmart store is literally a microcosm of the US economy as a whole - you have managers, salaried assistants, and store co-managers (assistant store directors - the store manager's seconds-in-command) making at least $40K/year to upwards of over $100-150k a year, plus bonus money.  And you have the lower ranks who barely make enough to get by on, or to feed their kids.  It's an absolute disgrace.