JCPenney recently announced a couple of tweaks to its “Fair & Square” pricing policy. First, JCP plans to reticket merchandise throughout the store with EDLP comparisons to manufacturers’ suggested retails. Second, Penney plan to add more targeted sale events in 2013. This triggered an outpouring of comments (mostly negative) on RetailWire; here’s my opinion:
Ron Johnson: “Our sales have gone backward a little more than we expected”? Understatement of the year. Yes, it’s possible that JCP will start to demonstrate a positive comp sales trend in 2013, but part of the reason is the hugely depressed base from last year.
It will take more than the “targeted promotions” (such as 20% off Fine Jewelry for Valentine’s Day) or the new ticketed price comparisons to “suggested retail” to return JCP to relevance. And it’s a double-edged sword: Penney is trying to regain the core customer that through sales promotions, but she is not likely to appreciate the transformation of the store into a collection of trend shops like Betseyville and Cosmopolitan, staffed by associates with handheld checkout devices.