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JCPenney reports second quarter of big losses

Eve Troeh Aug 10, 2012
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JCPenney reports second quarter of big losses

Eve Troeh Aug 10, 2012
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Jeremy Hobson: JCPenney is reporting big losses today. Sales were down almost 22 percent last quarter. That’s the second straight quarter of steep declines.

Analysts say consumers just don’t get the company’s new pricing stategy, as Marketplace’s Eve Troeh reports.


Eve Troeh: Six months ago Penney’s switched its strategy to “everyday low price” — where the price you see on the tag, is the price. Major sales or coupons won’t knock it down.

Morningstar retail analyst Paul Swinand says the idea was to give customers lower, more fair prices from the get-go.

Paul Swinand: I’ve even seen ads where Penney’s is saying: “Hey do the math.” Well, they don’t want to do the math. They want to come in and see the sign that says 60 percent or 80 percent off.

And when they didn’t see those signs, they didn’t buy anything. That forced Penney’s to put lots of stuff on clearance — which looks an awful lot like a sale — which further confuses the message of “everyday low price.”

But, he says, the strategy can still work in the long run, getting customers buy on the spot instead of waiting for a sale.

Swinand: This is a pair of shoes for $25. That’s a decent price I’m gonna buy it.

Seems like JCPenney will stick with that approach, maybe just explain it better.

I’m Eve Troeh for Marketplace.

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