All you shoppers out there: J.C. Penney (JCP) is admitting that its five-month-old radical pricing strategy -- which ditched most sale events and all coupons in favor of 40% lower prices every day, "month-long" discounts on select items and "best" price bargains twice a month -- has confused you. And it simply hasn't worked.

The chain's decision Thursday to revive clearance sales, which it had previously reviled, and drop its new "month-long value" discounts, a term that meant nothing to shoppers, resulted from consumer buying patterns, a spokeswoman tells DailyFinance.

"As we looked at our results this spring, we found that nearly 70% of our sales came from our everyday prices, while only 15% came from our month-long values," Kate Coultas tells DailyFinance.

"Moving forward, we will commit to offering one everyday low price and will no longer offer month-long value prices," she says. "Customers are voting with their wallets that they want the first price to be the right price."

For the first quarter, which ended April 28, Penney's store traffic sank 10%, in part because shoppers didn't get the retailer's new pricing strategy.

The Makeover of a Troubled Makeover

Ron Johnson dropped a bomb on the retail industry in February when he set plans to eliminate 590 of the retailer's annual sale events and stop issuing coupons, in favor of an everyday low-price strategy.

At the time, Johnson stressed that Penney's needed to wean shoppers off their addiction to sales and coupons.

He then spoke aloud retail's dirty little open secret: A number of those big sales are not really sales at all, he said, because many stores have been putting increasingly inflated "full" retail prices on their goods in recent years.

So Johnson's radical makeover of the chain not only pulled the plug on Penney's sales, but also dropped the word "sale" from its stores and marketing messages, as well as "clearance," ditching language that has been shorthand for American shoppers for nearly as long as there have been stores.

But Johnson's push to sell shoppers on its idea that the chain is a destination for everyday deals with a new lexicon, such as "month long value" and "best price," which were intended to communicate bargains, has so far flopped.

And Penney's has been backpedaling ever since.

Last month, J.C. Penney reintroduced the word "sale" into its vocabulary.

"We're moving away from the word 'month-long value' because no one really understood that, to calling it what we intended to do, a sale," he told Reuters then.

And now, clearance events will return too.

But to further drive home the message that it's serious about offering shoppers deals, Penney will start promoting its price-match guarantee program, Coultas says.

"We want customers to have the assurance that they are getting low prices everyday at J.C. Penney," she says. "So if a customer finds a lower price on an identical item at a competitor, we'll gladly match that price."

Nancy Pietschnig, a Penney's shopper from Lodi, N.J., whom DailyFinance has been following for her take on the makeover, is pleased to hear that the department store is moving away from its changes.

Penney's alienated the hospital patient care technician, who is a big fan of clearance sales.

"People think of J.C. Penney as one of the stores to find nicely priced bargains," she says. But with the new pricing strategy, "people just didn't get that."

"If I know that they've gone back to sales, I'd definitely them give another try," Pietschnig says.

It remains to be seen how many other shoppers will be as forgiving.


Increase your money and finance knowledge from home

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum

21 Comments

Filter by:
rosyrice2

Do not bring on the mini shops - people like and need to interact w/store employees. -- Also - get rid of Martha Stewart - AND Ellen Degeneres -- they are a total turn-off for me and I will not support anything they are associated with.-- If Martha and Ellen left the scene I would consider coming back to Penny\'s despite the mini shop fiasco.

September 22 2012 at 11:47 PM Report abuse rate up rate down Reply
rosyrice2

Do not bring on the mini shops - people like and need to interact w/store employees. -- Also - get rid of Martha Stewart - she is a total turn-off for me and I will not support anything she is associated with.-- If Martha left the scene I would consider coming back to Penny\'s despite the mini shop fiasco.

September 22 2012 at 11:44 PM Report abuse rate up rate down Reply
rosyrice2

Do not bring on the mini shops - people like and need to interact w/store employees. -- Also - get rid of Martha Stewart - she is a total turn-off for me and I will not support anything she is associated with.-- If Martha left the scene I would consider coming back to Penny\'s despite the mini shop fiasco.

September 22 2012 at 11:44 PM Report abuse rate up rate down Reply
DAVEARB

THE JC PENNEY STORE IN OECASIDE, CA IS JUST PLAIN AWFUL....

August 11 2012 at 7:37 PM Report abuse rate up rate down Reply
poco424

I agree with TC below. Of all the people I polled lately (this subject came up during a casual conversation at a business meeting I attended) and the consensus was that Ellen did more harm than good with most saying they have not shopped JC Penneys since she became their spokesman. Seems there is a general undercurrent of dissatisfaction with corporations taking an anti-family stance growing in this country.

August 04 2012 at 11:26 PM Report abuse rate up rate down Reply
TC

I love how they WILL NOT mention the fact that their financial situation started declining rapidly after they declared their support for the gay agenda in February by getting Ellen as their spokesperson. Coinsidence? I think not. After seeing the support Chic-fil-A got today, JCP might want to realize that boycotts from anti-gay citizens = big money loss and boycotts from pro-gay citizens = not much of a money loss at all. I am not a marketing major but I think I would just stay out of politics so I don't tick off the money spenders!

August 02 2012 at 1:20 AM Report abuse rate up rate down Reply
sljlwaldrp

I like the "no coupon" approach. Why shouldn't I get the best price available on an item even if I didn't remember to cut out a stupid piece of paper and bring it with me. Please, JCP and Ron Johnson, DON'T BRING BACK THE COUPONS!

August 01 2012 at 9:51 AM Report abuse rate up rate down Reply
jhrochesterny

My company. along with many others, sends out a weekly flyer with items featured, that customers think is a sale, when they ask me is this on sale I say, YES....but then so is everything in the store for sale! If theres something featured with a before and now price, that would be what most think of as a sale, as well as clearance items. Otherwise, just featuring everyday items in the weekly flyer doesnt mean its discounted, its just made to appear that way. The items that have been discounted will usually have something to announce the fact, otherwise its business as usual, at the everyday price.

July 31 2012 at 10:38 PM Report abuse rate up rate down Reply
papadb24

Turn on Long Time Loyal Employee's and Customers, and away you go!

July 31 2012 at 1:30 PM Report abuse +1 rate up rate down Reply
louboutinstores

ye
Sad to see what former "Apple Genius" Ron Johnson is doing to venerable retailer, JCP.

July 31 2012 at 5:19 AM Report abuse +2 rate up rate down Reply