Everyday Discounts?

Ron Johnson, the recently named chief executive officer of J.C. Penney, has announced a marketing strategy that is being proclaimed as a stroke of genius in some quarters and an idiotic scheme by others.

The plan? Johnson says there will be no more sales gimmicks at Penneys. Nothing will be “on sale” in weekly advertisements; instead, everything will be a lower price all the time — as much as 40 percent below the cost before.

An everyday-low-prices strategy long ago made Walmart king of the general merchandisers. Whether J.C. Penney can make a go of it with a more limited range of inventory remains to be seen.

The biggest challenge facing Penneys is consumers who have grown accustomed to buying everything “on sale.” Analysts say 40 percent of what Americans bought in stores in the fourth quarter of 2011 had been discounted. Kohl’s, a prime competitor for Penney’s customers, had a huge fourth quarter yet didn’t show a profit. I shop at Kohl’s a lot because of multiple in-store discounts as well as mailed coupon savings.

But I wouldn’t pay the $45 originally marked on a shirt or the $25 price tag attached to a picture frame.

Which is exactly Johnson’s point. He says shoppers are tired of the phony sale tags that have been jacked up in the beginning to try to convince them they are getting a real bargain when it goes on sale.

Part of the campaign involves a new logo, repeated “fair and square” terminology, revamped stores that will have a town square and main street feel, and hiring Ellen DeGeneres as a spokeswoman. Obviously in a tough economy where competitive techno-savvy shoppers know where the best price is, Johnson’s strategy is a make-or-break proposition.