Sales fall as customers puzzle over new pricing policy
of ConsumerAffairs
The financial media is focusing new attention on the changes at retailer J.C. Penney, pointing out that consumers appear to be resisting them.
Business Week reports J.C. Penney has taken a big hit in revenue, a result it says of the company's new pricing policy.
In an article headlined “Most Customers Don't Have A Clue About J.C. Penney's New Pricing Plan,” Forbes cites a survey showing 67 percent of shoppers said they did not know about changes to Penney's pricing policies.
Many of the consumers who do know about it don't seem all that impressed. Jeannette, of Enfield, N.C., doesn't mince words.
Hates it
“I hate the new pricing that J.C. Penney recently implemented,” Jeannette wrote in a post at ConsumerAffairs. “All of my coworkers, family and friends feel the same way. I hope the CEO or whoever that made these changes will change things back to the way they were or at least improve the pricing! I predict that many stores especially in my small community area will be closing if something does not change. Listen to your customers!”
New J.C. Penney CEO Rob Johnson instituted the changes in February, doing away with sales and coupons and going to what he called a three-tiered pricing system. Wanda, of Panama City, Fla., said she used to be a regular Penney's shopper until the changes went into effect in February. But over the over the weekend, she says she and her husband decided to see what had changed at their local store.
Prices are higher
“This was the first time my husband had been in the store since the change,” Wanda wrote. “He has always liked to shop for his clothes here and he also was in shock. We purchased three polos for him which costs us $60 plus. In the old days those same shirts would have cost us at least $20 less with our 'coupon' savings and 'rewards' we would received by doing the survey on the back of our receipt. St Johns Bay polos use to be around $10-$15 when on sale....now a SJB polos regular everyday price is $20. How is that fair and square?”
Candy, of Morgantown, WVa., says she also hates the new pricing, and is additionally upset that Penney's has discontinued its catalog.
“I believe the changes have made it clear that J.C. Penney no longer wants any money from senior citizens,” Candy wrote. “Senior citizens needed the catalogs and were good customers. Senior citizens needed the coupon sales to save due to fixed incomes.”
The arrival of Johnson at Penney's from his former position at Apple was cause for widespread optimism about Penney's on Wall Street. But now it appears that some of that optimism is fading. Forbes cites a report from a Citi analyst predicting J.C. Penney's sales will fall by $1.2 billion in 2012. Bloomberg reports Johnson, meanwhile, earned $53 million in compensation from Penney's last year.
While consumers like Jeannette, Wanda and Candy don't feel they are benefiting from Penney's make-over, Forbes sees some possible winners – Walmart, Target and Khol's.