Market Overview

J.C. Penney Introduces 52-Week Sale

J.C. Penney (NYSE: JCP) is claiming to be taking the bold step of doing away with the concept of a sale and introducing a permanent price reduction of 40 percent on all of its merchandise.

It is a very brave move to ignore the marketing benefits of the sale in favor of offering shoppers the opportunity to get those discounts all year round. It is mildly reminiscent of the English stores that sell goods at full price for just one day out of the year so that they can then claim that they are on sale for the rest of the year.

According to USA Today, JCP is starting a new pricing structure that will offer every day low pricing daily, but will also incorporate “Monthly Value” discounts on select merchandise, and clearance deals called “Best Price” on the first and third Friday of each month.

Wait a minute, isn't that just another name for a sale? You can call it what you want, but lowering prices for a select amount of time is a sale.

Anyway, JCP is modeling the plan after Wal-Mart's (NYSE: WMT) everyday low pricing strategy, but it is aiming to make life easier for shoppers by taking the guesswork out of when sales will occur. Surely though, those “Monthly Value” discount days will encourage as much consumer guesswork was any other sale.

Again, we think this is a bold move, but we are not completely sure how honest or open JCP is being over the issue of wiping out sales. It sounds like a gimmick, a way to make consumers feel like they are getting a good deal. It will be interesting to see how JCP's prices genuinely compare from 2011 to 2012, and there will surely be plenty of consum,er report writers desperate to do the research.

"The big question on investors' minds will be how customers react to a single price point versus a perceived discount under the old strategy," Citi Investment Research analyst Deborah L. Weinswig said to USA Today.

In addition, JCP are incorporating simpler pricing. In other words, rather than seeing jeans priced at $19.99, they will be priced at $20.

Now if they can only introduce the idea of including sales tax on price tags so we do not have to do math in the stores, life would be a lot easier.

Posted-In: News Retail Sales Best of Benzinga

 

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