By early fall 2011, Mr. Johnson was tackling Penney’s pricing, which he thought used too many discounts. He ignored a study Penney had just completed on customer preferences, and gave merchants a one-sheet grid explaining what prices they could use.
I think that in JC Penney's case, excessive discounting may not have been a merchandising strategy but rather a symptom of allocation mismatches in their supply chain, leaving them with excess inventory (and associated costs). Their mistake was hiring a merchandising guy who didn't get this and tried to eliminate the discounts without fixing the underlying allocation problems.
I think that in JC Penney's case, excessive discounting may not have been a merchandising strategy but rather a symptom of allocation mismatches in their supply chain, leaving them with excess inventory (and associated costs). Their mistake was hiring a merchandising guy who didn't get this and tried to eliminate the discounts without fixing the underlying allocation problems.