Poor Ron Johnson. He became J.C. Penney’s CEO a little over a year ago and promised to get rid of the admittedly “fake prices” that the company slapped on goods to make their many sales seem more deeply discounted than they really were. The public didn’t take well to his elimination of sales and coupons, and the company lost millions.
In April 2013, Ron Johnson was ousted, and the company is now apologizing to customers in a commercial acknowledging that they made mistakes. They are asking customers to “come back to J.C. Penney… we heard you.”
How are they going to get customers back in the door? They are probably going to reintroduce deep discounting. To start running 50% off sales again, however, they will first have to raise their regular prices to an artificially high level. To see if this was happening, Mouse Print* undertook a little spotcheck of their prices. Here are five examples of the regular everyday prices the company charged during Ron Johnson’s tenure, and how they have now been jacked up as a possible prelude to being offered “on sale” again.
*MOUSE PRINT: Example 1
*MOUSE PRINT: Example 2
*MOUSE PRINT: Example 3
*MOUSE PRINT: Example 4
*MOUSE PRINT: Example 5
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In some of the cases above, the new “sale” price is already in effect showing seemingly significant savings, but it is virtually the same as the previous everyday regular price. In other cases, the item has not yet gone “on sale,” but the higher regular price has been established which could facilitate the company offering a seemingly deep discount from it.
Shoppers will likely flock back to their stores because, unfortunately, everyone loves a bargain even if it is a phony one. Lucky for J.C. Penney too, state Attorneys General will probably let them get away with it because of lax enforcement of local laws that prohibit fictitious discounts under certain circumstances.
Note: It is not known how many of JCP’s items have had their regular prices marked up.
With the changes last year to “real pricing” I started to shop at JCPenney on a more frequent basis. Now that they’re back to the same old crap I’ll be shopping there less and only when there are “sales”.
Phony prices and discounts is what people want so they are getting what they asked for. I’m not blaming JP on this one.
I agree with you Peter. Consumer psychology voted Ron Johnson out, and P.T.Barnum back in – “You can fool most of the people…”, etcetera.
What a sad day for the informed consumer. When JCP changed its pricing scheme it became the only clothing department store I would visit. Lucky for me I do not shop at department stores that often and I don’t have to deal with the fake prices.
Examples 3 and 4 are perfect depictions of the kind of nonsense people fall for. Before JCP decided to change its pricing scheme I would never buy anything that wasn’t on sale because I knew that sales often rotated between items and that the “sale” price was more representative of the actual value. If something wasn’t on sale one week it was most likely to be on sale in the next couple of weeks.
I guess it’s back to square one.
I love the cookware set with the “original” price $50 higher than the real original price. Classic!
I wrote on a facebook post from my local news station about how I’ll miss the no nonsense pricing. Some lady responded with “but they’re bringing back the sales.” Some people just don’t get it. After working at a major department store I realized how ridiculous the markups are and how the “sale” price is the actual price. I would put discount stickers on tags as soon as brand new items arrived in the stockroom. It surprises me how people are so willing to fall for pricing mind games.
I, too, liked the new no-nonsense pricing, but along with that they also seemed to gear their stock even more toward the young and slim. As I am neither, I found very little in the clothing to even contemplate. Maybe the lack of coupons and sales wasn’t the only factor driving customers away.
I do not care about sales if the prices are higher. JC Penny had a great idea, but so badly executed it.
People just like to “think” (be fooled) that they are getting a deal when they see what their “savings” are off of regular price. These are the same shoppers that see a coupon or special at the grocery store, and then buy more stuff they don’t want or need to get the deal, i.e. Buy $30 of food (at Thanksgiving) and get free stuffing mix, Buy $50 of food and get free stuffing plus free cranberry sauce. So they have $25 worth of stuff and they spend over $5 more for the free stuffing-which would have only cost them $1.59 if they bought it outright. But since it’s “free”, it’s a much better deal.
I don’t get your point. If Ron Johnson said he was going to have low prices all the time, it seems that is what he did. To go back to the previous sale tactic, there needs to be a “regular” price and then a sale price when it is on sale. But isn’t what retail is all about? Prices are set to make a profit – and when they don’t sell after a while, they go on sale.
Edgar replies: The problem with the way that JCP previously ran sales was that it seemed that the goods were rarely if ever offered at full price. A retailer which advertises a savings from a regular price really has to offer those goods at that full, regular price for a substantial period of time. If the goods are always “on sale”, then the price comparison to that regular price is false and deceptive, because there really are no savings.
The way they did it was yank the band aid off. They would have been better off slowly doing it and not making a big deal out of it how it is ‘new and better’. Just set the prices and eventually people would get it anyway… Instead they made it look like they were ripping us off and making it look like a good deal. Good luck getting those people back. Once a person feels ripped off they rarely come back…
Let me tell you the cold hard facts! Don’t mess with he women of America. It’s irrelevant what is correct or what is not correct…whether there are fake sales or not? The fact of the matter is that the majority of JCP’s shoppers want and like the coupons! These women are not stupid, as this article implies. They want the old system because they can manage the old system. They know if an item has been marked up for sale. They know all of that! However, the key is that they selectively buy and they compare all that to Marshalls, TJ Maxx and Ross. When Johnson came in with his grand Apple ideas, he had several strikes against him from the start. [1] Tech company exec’s have no business trying to run anything but tech companies…because tech companies run by themselves, despite management. [2] he changed the brands and made different brand cubbyholes, thus confusing the old consumers as to the real prices and quality. [3] those new brands were better quality when most JCP consumers didn’t want that quality… i.e they tried to be Macy’s. How do I know all of this…my checkbook tells me to look into this! My wife was one of those that went into orbit over the loss of coupons and the old way. I had to listen to it. I liked it myself because my checkbook was a little fatter…she was buying less! I thought this was only her talking, so I went one day (something I’d rather beat my hands with a hammer than do) and she went to Ross, TJ MAxx etc. Everywhere we went, she would say…see that gal over there, she’s another JCP protestor and so it went until I had seen at minimum 50 women. To repeat, whether it makes sense or not is not the discussable subject. The discussable subject is “don’t mess with America’s women…they know what they want and business better listen. Johnson didn’t listen because he didn’t have to at a tech company but when he got to the REAL business world he got an awakening. The success in the real world doesn’t translate to text book talking ponts, especially fashion, it translates into LISTENING and PRODUCING. If they want witjets then give them witjets etc. I’ve had several successful businesses in my life and I would be on welfare right now, if I gave the public what I wanted! It doesn’t make sense but it is what it is!
Went to JCP today. Noticed that a 40 dollar tag was over another. I peeled it back and there was a 32 dollar tag under it. Walked right out of there. No way to keep a customer.
If you receive new merchandise, or if the value of said article has increased, then you can state that the “value” of the article is $30. Then you advertise that it’s on sale. Marketing 101. Seriously, that’s what we learned in college.
Dad would come home with a radio and tell me, “Look at this! Got it for a bargain. I saved $50 dollars!” I would just look at him and reply, “Dad, you didn’t save 50 bucks. You just spent 200 on something you didn’t need.” And Dad was an executive at digital corporation. Some people’s brains just turn to jelly when they see a sale.
Luckily, I have a smartphone. So, I can check the price on Amazon or google a similar item if the item is an in house brand.
Being behind closed doors I can tell you the big dept stores hate the govt., because they try to help the consumer with the pricing and when they can use the word Regular. The way they get around this is by using such wording as MSRP, after sale,Original,etc. etc.. The only true way is for the consumer to know the stores cost. Cost and initial mark-up would be all the information the consumer would need to decide whether the item has been outrageously marked up from cost and that will never happen. If the Govt stepped in and required them to show there cost and initial mark-up on the tag all hell would be exposed with there lobbyists fighting it every step of the way. Right now like I heard along time time ago “the consumers are like sheep and its our job to shear them”. Honor thy bottom line.
Here’s a little chart to see what the items would be with a 25% discount (and how much more you pay now):
Item Original Updated 25% discount higher price
Pants $17.00 $24.00 $18.00 $1.00
Towels $30.00 $55.00 $41.25 $11.25
Swimsuit $25.00 $38.00 $28.50 $3.50
Cookware $200.00 $250.00 $187.50 $(12.50)
Sofa $900.00 $1,695.00 $1,271.25 $371.25
(I hope the formatting works)
I think it’s a shame that people are giving JCP so much crap for “fake prices” when nearly every other store does exactly the same. Macy’s, Kohl’s… even McDonalds… all have “fake prices”.
I used to buy some of my jackets there. The last time I went there which was about 6 months ago. The Men’s Dept was in another area, all the way in the back. They used to have 2 people to help you with the Men’s Dept. They were not there. They used to have great sales on Men’s jacket’s, and I liked what I bought.
The Jackets were in the front of the store, and organized by color and size when I was there about a year, and a half ago. Now everything is mixed up, and now they have garbage. I won’t go into the store again!
On a related note, I noticed that all of the major grocery stores have major markups on their products here in CA (that’s Von’s, Albertson’s and Ralph’s). How do I know this? Because I have a few local grocery stores nearby and when I shop there almost all of the standard prices are the big guy’s sales prices. And when the local place has sales, they’re quite a bargain, like 10lb oranges for $1 versus the big guys’ sales of 2lb oranges for $1.
I’ve also noticed that Costco produce prices are way up there too compared to my local place, like peaches at $3/lb versus the local guy at 99-cents/lb; the main difference is that Costco has reliably high quality produce and the local guy doesn’t…but since I can buy at the little guy and throw away 2/3 and get the same price as Costco, I go little and find that most of what I buy is great stuff.
I liked the “real” prices rather than the alleged “sale” prices. However, the stock had changed dramatically. It was great if you were 20 and could dress casually wherever you went. I would not buy nor wear Blaze Orange and other very bright colors that were not suitable for some work environments. This fiasco is about more than how the items were priced. If you are going to have a wide range of customers, you need a larger range of colors and styles.
Lets all STOP going to JCP so they can comfortably go out of business. Who needs them anyway??????