|JC Penneys Feb 2012 Catalog|
The increased discounting has been a vicious cycle that only feeds into shoppers' insatiable appetite for bigger and better discounts. In fact, whereas it took 38 percent off to get shoppers to buy 10 years ago, it now takes discounts of 60 percent, Johnson says.
At Penney, the regular price on an item that costs $10 to make rose 43 percent, from $28 in 2002 to $40 in 2011. But because of all of its sales and other promotions, what it actually ended up selling for rose only 15 cents, from $15.80 to $15.95 during that same period.
This is a very interesting article, and I think that Ron Johnson, Penney's new CEO and former Apple / Target alum is onto something. If you get a chance you should read it all. It covers the new pricing strategy in detail.
Article: JC Penney Gets Rid of Sales