Of all his strategic moves, JCPenney CEO Ron Johnson has been particularly staunch in defending his pricing strategy. He wants to turn JCPenney into a retailer that offers every day prices — not constant discounts and sales. The strategy has its share of detractors, who point to discounting as a traffic driver that JCPenney needs.
Johnson addressed those folks in an interview at Fortune’s Brainstorm Tech conference in Aspen this week. He brought up Walmart as a prominent example of how everyday pricing can be vastly successful for a retailer (emphasis ours):
“The largest retailer in the world is Walmart. They serve moderate income America, and they have an everyday pricing strategy.
“About half of what we buy is bought every day. When you go to Starbucks and get a cup of coffee, it’s an everyday price. When you buy an Apple product, it’s an everyday price. When you go get gasoline, it’s every day.
“That’s a business model choice, and we’re going to honour that as part of everything we do. It takes time. When Walmart changed its pricing back in the 80’s, and went back to everyday low, after about seven months, David Glass and Sam looked at each other and said ‘Can we do this? It’s really hard.’ Their sales go back.”
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