May 15, 2012
Ronald Friedman, Co-Leader, Retail/Consumer Products Industry Group, Quoted in Associated Press Article "Penney has 1Q Loss as New Pricing Repels Shoppers"
By Anne D'Innocenzio, AP Retail Writer
Turns out, J.C. Penney shoppers don't prefer predictable pricing over blockbuster bargains — at least not yet.
The department-store chain on Tuesday reported a larger-than-expected first-quarter loss largely because customers were turned off by the retailer's new plan to get rid of big sales throughout the year in favor of everyday low pricing.
The idea of the strategy, which was rolled out on Feb. 1, is to discourage shoppers from waiting for the nearly 600 sales Penney used to offer each year. But the move has backfired: It seems many faithful Penney customers have stopped shopping altogether.
"I am rooting for Ron Johnson to hit a home run," said Ronald Friedman, the head of the retail group at Marcum LLP, an accounting firm that works with clothing companies. "But it won't happen overnight. This is a process. It will take between 12 to 18 months."