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J. C. Penney Company, Inc. Message Board

  • jcpenneyman85 jcpenneyman85 Aug 23, 2013 8:32 AM Flag

    JCPenney: Where It's Possible To Have A Sales Loss With Increased Traffic

    Across JCPenney land support leaders gathered their staff and discussed the whirlwind of activity about to unfold. August was about to begin and it was time to pry open those file cabinets of sign holders and fill the copy machine full of sign paper. The bugler had blown, it was time to get busy doing something that looked productive.

    I watched from a distance as a leader told her crew it was time to change gears. I didn't have the heart to tell her she was shifting to reverse. Walk into any JCPenney today and you'll see a sea of magnetic signs on virtually every rack. What a difference a year makes.

    Increased promotions has increased traffic that much is true. But what good is increased traffic flow if it doesn't add revenue?

    Her crew was busy putting up signs for the doorbusters. She delegated one person to run off copies of the $10 off $25 coupon to put at the each entrance. Team members also taped them to their registers and scanned one for every transaction. The intent of the coupon I suppose is one coupon per customer per shopping visit. That's not what happens. Customers are allowed to routinely separate piles of $25 purchases and use one coupon per stack. So in essence a customer making a $100 purchase is getting the benefit of the normal sale price, typically 50% off, plus a $10 off coupon off each $25 transaction. that's 4 $10 off coupons one customer.

    Now you know how we have increased traffic but yield, a 29% gross profit and negative growth.

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    • maxkissime Aug 25, 2013 3:36 PM Flag

      Brings a whole new meaning to "Loss Leader".

    • What is apparent is your lack of critical thinking skills and logic. Unfortunately you are so jaded in your thinking that you cannot see the forest for the trees. What you fail to realize is the gross profit erosion lies at the feet of RJ. The merchandise under his regime failed. His debacle in home failed. His financial prowess and executive decision making failed. His understanding of the department store consumer failed. The alienation of the customer was the one major accomplishment of his tenure.
      At thus juncture driving store traffic back is critical. The gross profit will right itself in due time. There will be more profit erosion due to the disaster that will come in home. The merchandise and space allocations are wrong. By the way, a coupon will not have caused that but two initials did....RJ!!!

    • Sales must be down from 2011 figures. The sales surely can't be lower than Johnson's 1st BTS period.

    • I wish that I had read your piece yesterday. I went in to pick up some shoes that I had ordered through the store, but on line, I guess. I got a 15% off coupon good towards my next ONLINE purchase. I looked at some St. Andrews Golf Shirts and some IZOD Polo Shirts and ended up buying three total. Very good price-$11.99 ea. I couldn't use the coupon that I got from the shoe purchase. They didn't have any other coupons around, so I ended up paying $11.99 ea. I still think that's a very decent price for quality stuff, though.

    • If $100. retail worth of rags cost JCP $20. and is discounted $40. that leaves a $40. gross profit. Wish I had a look at the BOOKS.

      • 1 Reply to dcfabc
      • they do report their "BOOKS" it scalled earnings
        in your analyst the gross profit is 29 dollars not 40 based on their last earnings
        that is great and all but it doesn't come close to paying the bills
        they have a ton of debt and pensions to support plus all the occupancy and staff expenses for 100k+ employees

    • You won't have to worry about it much longer !

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