JC Penney Battles Price Wars By Getting Rid Of Sales

The department store introduces an “everyday” value system that will have more consistent deals, and less highs and lows.

J.C. Penney is simplifying its pricing and promotions by introducing a three-tiered system of “everyday,” “month-long value” and “best price” items. This new retail communication strategy aims to confront intensifying price competition driven by recent consumer price-checking capabilities.

This new approach will start rolling out on February 1st and is the first major move by former Apple executive Ron Johnson since he became CEO in November. The department store will permanently mark down its products so shoppers no longer have to wait for sales. These “everyday” prices will be 40% lower than last year’s prices. The number of annual promotions will be reduced from 590 to one per month. “Month-long value” products will be discounted items that customers need at the time (like Valentine’s Day gift offers in February), and J.C. Penney will spend $80 million per month to promote them. The third pricing tier, “best prices,” will be used to clear merchandise on the first and third Fridays of each month.

There will be new tags to reflect this pricing system, with red tags for “everyday” prices, white for “month-long value” and blue for “best price”, and whole figures will be used to make pricing simpler ($10 instead of $9.99). Marketing for the new program claims “No more pricing games.  Just great prices from the start.”

J.C. Penney

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