We're nearly a year into Ron Johnson's tenure as CEO of J.C. Penney (JCP), and the results aren't encouraging. Its share price has fallen more than 10% under the former Apple (AAPL) and Target (TGT) executive, and now, a new report suggests that female shoppers are fleeing the retailer in droves.
BIGinsight, a consumer research firm, recently released the latest iteration of its Consumer Equity Index, which identifies how different retailers are viewed by various market segments. In this case, they polled more than 9,000 women for their opinions about which stores they prefer when it comes to clothes shopping.
Of the top 10 apparel retailers, nine either held steady or gained in market share among women between September 2011 and September 2012. Only J.C. Penney lost ground during that period -- which more or less coincides with Johnson's first year in charge. During that 12-month span, the number of women identifying J.C. Penney as their favorite clothing store dropped more than 13%.
Pam Goodfellow, consumer insights director for BIGinsight, says that this translates to about 1.3 million women ditching J.C. Penney as their favorite shopping destination. While Penney's still ranks third in the category behind Walmart (WMT) and Kohl's (KSS), she says there's little doubt that it will soon be passed by Macy's (M) for the bronze medal in the category.
"I think what's hurt J.C. Penney is that they've taken away these deals and coupons," says Goodfellow, referring to Johnson's new -- and widely pilloried -- "fair and square" pricing strategy. "Shoppers are still very much gravitating toward promos and deals ... When you're receiving Macy's coupons in the mail, you have more incentive to head over there."
Johnson has shown signs of backtracking recently: Penney's offered a $10 coupon late last week. The company was quick to insist that it wasn't a coupon but a gift, and thus didn't constitute a reversal in policy, but Goodfellow joins other industry observers in opining that J.C. Penney should indeed reverse its pricing and sales strategy before it's too late.
"Shoppers have been educated to expect those gimmicks and give them a reason to head out to the mall," she says. "Given the type of retailer [J.C. Penney is], these promos are what motivate shoppers."
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
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