J.C. Penney unveils three-tiered sales strategy

J.C. Penney said Wednesday that it is getting rid of the hundreds of sales it offers each year in favor of a simpler approach to pricing. On Feb. 1, the retailer is rolling out a three-tiered strategy that offers “Every Day” low pricing daily, “Monthly Value” discounts on select merchandise each month and clearance deals called “Best Price” during the first and the third Friday of each month when many shoppers get paid.

The plan is similar to Wal-Mart Store Inc.’s iconic everyday low pricing strategy except that Penney’s goal isn’t to undercut competitors. Instead, Penney aims to take the guesswork out of shopping in its stores by offering customers fewer sales and more predictable pricing.

Penney’s plan comes at a time when stores are struggling to wean shoppers off the profit-busting bargains that they have come to expect in the weak economy. The move is risky because shoppers who love to bargain-hunt may be turned off by the absence of sales.

“The big question on investors’ minds will be how customers will react to a single price point versus a perceived discount under the old strategy,” says Citi Investment Research analyst Deborah L. Weinswig.

Here’s how Penney’s pricing will be different: