“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.
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