Can Department Stores End Their Addiction To Discounting
Have sales promotions become a “cancer” for department stores? Allen Questrom, the former CEO of J.C. Penney, thinks they have and said so in an interview on the CNBC show “Squawk Box” in November. Mr. Questrom, who was credited with turning J.C. Penney around in the early 2000s, said department stores have fallen back on sales promotions whenever business begins to slow. “Sale[s] cannot be the only driver, it has to be a part of it. But product, presentation, excitement in the stores, the salespeople in terms of servicing the customer” all need to be part of the value proposition for department stores to succeed, he said. The desire for department stores to move away from sales is not new. Former J.C. Penney CEO Ron Johnson’s failed initiative is often held up as a cautionary tale for other retailers looking to abandon discounting. After joining the department store chain from Apple, Mr. Johnson made the decision to abandon sales promotions and emphasize everyday low price. The move nearly destroyed J.C. Penney and led to Mr. Johnson’s ouster after just 17 months as the company’s chief executive. Read more at Forbes.
