Flying SWA is like taking the short bus, lol.
Then a few million people taking the short bus while those offering limo service are starting to tank or be bought out (NWA, COA/UAL, AAL)...
The short bus must be doing something right, because those limo services are crashing and burning (pun intended).
Yeah, WalMart works the same way, and now everyone hates them, lol.
Get what you pay for.
And yet for the service they offer, people keep coming back for more, while those who were more luxurious (to use your analogy, KMart), fell hard to the point of being bought out, their hubs shut down, etc. Cases in point: USA leaving KPIT, and SWA moving in. AWE and COA leaving KCMH, and SWA and TRS moving in. NWA getting bought out, and SWA moving into KMSP. FFT declaring bankruptcy, and being bought by RPA, while SWA moved back into KDEN.
In short, they have to be giving some measure of great service for people to keep coming back to them, and for them to record profits through the most difficult times of aviation history, while the other airlines either declared bankruptcy, were bailed out by the government, or shut down completely.
In fact, the only airline that is beating them at this point is DAL, and that is in the aspect of buying their own oil refinery to cut down the cost of purchasing fuel and paying the markup for that. To be honest, that is also part of the Walmart Effect. You should probably read Sam Walton's book; you'll learn some really good ideas behind the business practices that Walmart uses, outside of what you see as a consumer.