J.C. Penney has unveiled a new pricing strategy. Image from Wikimedia Commons.
J.C. Penney, the national department store chain, is trying to find ways to boost its bottom line and has come up with a new strategy. The store is cutting all prices by 40 percent but will have fewer sales.
J.C. Penny rollback permanent
Retailers everywhere are looking for ways to entice more customers into buying more stuff, and the easiest way to do that is to cut prices and make it up on volume. J.C. Penney, which recently came under new management, is unveiling a new strategy that is aimed at boosting its flagging revenues, according to Daily Finance.
The store is not performing as well as some competitors, having posted a loss in the third fiscal quarter and revised its fourth quarter projections down after a disappointing holiday season. The store’s sales rose only by 0.9 percent for the first nine months of last year at stores open at least a year, far less than many of its competitors, and profits have been shrinking for the past six quarters.
So, in attempt to get people buying J.C. Penney’s clothes and other wares, the store is cutting all prices by 40 percent, permanently.
Fewer sales
In addition to significantly cutting all prices, the store will offer fewer sales throughout the year. According to Bloomberg, J.C. Penney will offer only one promotional sale per month. There will be some other promotional offers on certain items during particular seasons and some scattered sale offers, but the number of sales will be drastically reduced. The store had 590 sales events, according to Daily Finance, in 2011.
However, the discount of 40 percent or more on all items will mean that the daily price for all items will be drastically lower. Last year, J.C. Penney made 72 percent of its income on items discounted by 50 percent or more.
A series of Martha Stewart mini-stores will be opening in J.C. Penny stores across the country, according to USA Today.
New price tags
J.C. Penney is also rounding up prices to the nearest dollar amount. Any items that would ordinarily, for instance, be $9.99 will be changed to $10.
The store is also changing the price tags; instead of myriad tags, there will be three types of tags. There will be the “Every Day” red price tag, a “Monthly Value” white tag for items subject to a monthly special and a “Best Price” blue tag for seasonal promotional prices.
Sources
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