JCPenney Took Some Giant Steps Back; Now Customers Are Confused

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shoppers confused by JCPenneyBy Ashley Lutz

When Ron Johnson took over as CEO of JCPenney (JCP) in January, his mantra was "no more coupons." Johnson said that the retailer was switching to a model of everyday low prices without constant promotions.

But since then, comparable-store sales have fallen 20 percent, and JCPenney has taken some giant steps back on this policy.

It started with free haircuts for kids in the weeks leading up to back-to-school. Then the store offered a $10 coupon. Now, the retailer is promoting free family photos, to begin later this week.

In perhaps the biggest backtrack, JCPenney offered an additional 30 percent off clearance items.

Now, customers are confused, hurting the chances they'll come shop at JCPenney, Charles Grum, an analyst at Deutsche Bank, said in a report.

"On the heels of a $10 in-store coupon provided earlier, free haircuts for kids and free family photos to begin later this week, we believe JCP is backtracking on its no-promotion strategy, confusing customers, and we, therefore, remain skeptical of near-term improvement in business trends," Grom said.

JCPenney told Women's Wear Daily that it wasn't reneging on the pricing strategy.

"We are not changing our pricing strategy. [JCPenney] still has two kinds of pricing: everyday low prices and clearance," a spokeswoman told WWD's Evan Clark. "We utilized a temporary percentage-off clearance, as is common in the industry, to help reduce inventory levels at the end of the season."


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