Kmart, a unit of Sears Holdings Corp (>> Sears Holdings Corp), started allowing customers to sign up to buy items in installments with no down payment last week, an option it will offer every day through the end of November, a company executive told Reuters.

That represents an expansion on its layaway scheme last holiday season, when it limited the no-money-down option to certain weeks, said Jai Holtz, president of financial services at Sears.

Kmart is also allowing customers to tap its rent-to-own program without a down payment - a first since the scheme for big ticket items like refrigerators and TVs was launched in 2013. That option will also run through the end of November.

The moves by Kmart come as rivals also take steps to capture holiday demand. Wal-Mart Stores Inc (>> Wal-Mart Stores, Inc.) started its layaway scheme in late August, two weeks earlier than in 2014. The largest supermarket chain in Texas, H-E-B, has also launched a layaway program and related promotions.

"There is absolutely a trend to an earlier holiday. And so we are trying to meet that demand," Holtz said.

Holtz said toys, electronics and apparel were among the top categories in layaway. While many customers used the program to budget their spending, others saw it as a way to store toys that might be discovered by kids if kept in the house, Holtz said.

The leasing program meanwhile has a minimum purchase of $69 and the path to ownership can come at a cost. Using a calculator on Kmart's website a customer seeking to buy an item worth $500 would end up paying $692 to buy out the lease after financing it over five months of biweekly payments.

Holtz noted the company had devised early purchase options at 30, 60 and 90 days that would limit the premium paid over the initial sticker price.

Similar to Wal-Mart, Kmart's customer base tends to skew towards the lower end of the income scale.

Holtz said the layaway and leasing program were designed to tap into demand at various income levels.

"We see a great layaway business in our Beverly Hills Kmart store. This is a program that goes across all demographics," he said.

(Editing by Miral Fahmy)

By Nathan Layne

Stocks treated in this article : Wal-Mart Stores, Inc., Sears Holdings Corp