CEO Ron Johnson switches J.C. Penney to two-tier pricing with price-match guarantee

“J.C. Penney Co. (JCP) is switching to a two-tiered pricing system and promoting price matching for the first time as Chief Executive Officer Ron Johnson alters a strategy that flopped with customers and caused sales to plunge,” Sapna Maheshwari reports for Bloomberg. “The change to a system of everyday low prices and clearance items will take effect Aug. 1, as will the price-match guarantee, Kate Coultas, a spokeswoman for the Plano, Texas- based company, said today in an e-mailed statement.”

“Johnson, the former head of Apple Inc. (AAPL)’s retail operations, in January introduced a three-tiered pricing system of regular prices, monthlong sales on seasonal items and two ‘best prices’ promotions each month,” Maheshwari reports. “The strategy didn’t catch on: First-quarter sales fell 20 percent, the biggest quarterly drop since the period ended in October 2004.”

Maheshwari reports, “Johnson said last week that the retailer was working on simplifying its pricing strategy. ‘Our pricing has been kind of confusing, our marketing overreached, so we’re going to bring that back,’ Johnson said on July 18 at the Fortune Brainstorm Tech conference in Aspen, Colorado. ‘We’ll really honor the everyday price in a different way.'”

Read more in the full article here.

Related articles:
Why is Ron Johnson’s retail strategy for J.C. Penney failing? – June 26, 2012
J.C Penney’s stock tumbles after key exec’s abrupt exit – June 19, 2012
J.C. Penney reports loss and plummeting sales in 1Q – May 15, 2012
Why Ron Johnson left Apple to head JC Penney – April 30, 2012
J.C. Penney lures another executive from Apple – April 26, 2012
Steve Jobs’ ex-lieutenant Ron Johnson adds $1.5 billion to J.C. Penney in two days – January 30, 2012
J.C. Penney CEO Ron Johnson: What I learned building the Apple Store – November 21, 2011
New J.C. Penney CEO Johnson hiring former Apple co-workers – November 9, 2011
Why Apple’s retail genius Ron Johnson is paying for the privilege of running J.C. Penney – June 15, 2011
Apple’s retail store chief Johnson off to J.C. Penney; expected to become CEO within months – June 14, 2011


  1. His strategy was brilliant. The lame ads they ran to introduce the concept to the public were annoying and an insult to their customers intelligence. I didn’t understand what they were up to until I followed a link to his presentation to investors. I was blown away and everything made sense. He should have told everyone in the same, no BS way and sales would have taken off. (They do need to bring back cotton percale sheets. Sateen is too clingy and fragile)

    I see a jcp ad campaign: White backdrop, two speakers, one stodgy and dated, one hip and fresh, let’s call them old Penney’s and new jcp… you can see where this is going. I wonder if John Hodgman and Justin Long are busy right now.

  2. Ron Jonson’s mistake was in thinking that the stratospheric success of Apple Retail was somehow his doing. I bet he wakes up every morning wishing he had stayed.

  3. JCP’s advertising and support is focused on a small minority that at the same time is alienating their largest customer base, the traditional family. There are many companies that aren’t actively attacking marriage and the family. Those companies that are neutral get our support.

      1. The right to marry someone of the opposite gender is “equality.” It’s the right that everyone has.

        The right to marry someone of the same gender is not equality; it’s “special rights,” and pandering to what is – despite the politically-motivated modification of the manual – a mental aberration.

        When theft is decriminalized because it would discriminate against kleptomaniacs, and someone with multiple personalities can let each of those personalities cast a vote in an election, THEN talk to me about same-sex “marriage.”

        1. Wrong. Laws that ban marriage equality are flat-out gender discrimination. Under them, an unmarried man is allowed to marry a unmarried woman, while an unmarried woman cannot marry an unmarried woman.
          Notice that the ONLY difference is that the person forbidden is female. As such, it is a legal distinction based only on the person’s gender, and is thus sex discrimination. Laws that distinguish between otherwise similarly-situated individuals only by gender face what is called strict scrutiny. Under that standard, the government must show that the laws serves a compelling governmental interest, is narrowly tailored to achieve that interest, and is the least restrictive means for achieving that interest.
          Thinking that non-hetero sex is icky is not a “compelling governmental interest.”
          Therefore, if the courts actually followed their own jurisprudence, anti-same-sex laws would fail every time. That is demanded by our Constitution, which was designed to deny the majority to violate the rights of minorities of whom they disapprove.
          Too bad we have so many Americans who seek to impose their personal moralities on everyone else and are happy to shred the Constitution in the process.

    1. How are they attacking the traditional family? Ellen is their spokesperson, but I haven’t heard them say anything to support her lifestyle or diss traditional families. If they have been doing that, I missed it. Instead, I found their advertising and pricing confusing.

    2. 2000 years ago, traditional marriage was a 30-year-old guy, a 12-year-old girl, and as many kids as she could pop out before her uterus broke. And it was a legal arrangement between families to consolidate wealth or resources.

      Times change. So should your narrow views.

    1. The only relevance is that Johnson is trying out Apple strategies in a completely different market than high tech. He knew it would take time to retrain JCP’s traditional customers, but the board of directors became impatient; as a result, Johnson is wasting no time making “course corrections”. The jury is still out on this one.

  4. I give him credit for taking on the JCP challenge. He tried something and was unhappy with the results and rather than digging in his heels he is flexible enough to try something else. I think he will turn JCP around and make it profitable. They have a decent selection of merchandise and an easy return policy. He will find the right mix and make it work.

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