Wow, a lot of memories in this thread! Nostalgia is running wild. The thing that is most interesting to me though, is that I remember my family avoiding a lot of these stores due to constantly having issues with certain locations. Perhaps stunts like that is why some of them didn't stick around.
Service Merchandiser, for example, provided my family anything and everything less than service. My folks never had a lot of money when I was growing up, so if they saw something in a Service Merchandiser flier, perhaps they would go to get it...but there would always be problems, and we would waste hours trying to get things sorted out. One day my dad had enough and we never went back. Same with a lot of the other places mentioned.
So good memories, but seeing a lot of the names, no surprise.
Also, am I the only one here who, while having fun browsing through Kay Bee as a child, always thought they were crazy overpriced compared to the competition? It would seem their stuff would be $5 - $10 more than elsewhere, on action figured and the like, always. Then they would have a big sale and reduce the stuff to clear it out, and those would be the times I would buy from them. Not a really good business model I guess.