I know of a school with 2-grade rooms that often retains kids (like, 2% of kids?) for an extra year in K-1, either at the end of K or the end of 1. If retained at the end of K they have the chance to catch up again and move on to 2nd with their original cohort.
This is usually done at the request of parents and teachers together after a truly useless year, when some other issue kept the kid from fully participating and learning. That is, there is reason to expect that this is not an ongoing issue that would affect every year. It's also not done for isolated academic reasons like the OP describes. Sometimes it also comes with a teacher change (the kids normally stay in the same room both years). Sad that useless years happen often enough that I would know about it, but good that they have a matter-of-fact way to deal when it does happen.
