These days, you seem to see "sale" signs everywhere. "Closing out sale," "50 per cent off," "everything must go," "red tag specials" and more. There are a few exceptions, but just about every store puts stock on sale at some time or other.
And when they do, the customers roll in.
And there lies the problem, according to J.C. Penney's recently appointed CEO, Ron Johnson. It seems that no one wants to pay full price any more, the department store's boss says.
Mr. Johnson, who joined the store from Apple last year, may have a point. When I walk through the shopping centre and see the number of "sale" signs, I wonder if the public has become conditioned not to pay the regular price (whatever that is!). I suspect many potential customers now put off buying because they know that if they wait, they can often get a substantial discount.
There are some figures to support this theory. More than 40 per cent of all items bought in North America last year were on sale. That's up from just 10 per cent in 1990, according to a U.S. management consulting firm, A.T. Kearney.
And when it comes to sales, it is well known in the retail business that J.C. Penney has long been one of the most notorious discounters.
Last year, the store had 590 different sales, discounts, promotions and other gimmicks. Three-quarters of its revenue came from goods sold at 50 per cent or more off list price.
But that's finished, the new CEO told Time Magazine recently. The public has had enough of sales, he said. Instead, the company plans to reduce prices throughout the store by 40 to 50 per cent to what it calls "everyday low price."
That's a strategy that is not without its risks.
Sure, it has worked well for Apple, Mr. Johnson's former company, over the years - you rarely see Apple products on sale, and their retail prices are tightly controlled - but clothing and makeup are not iPods or computers.
And the "everyday low price" market is already well served, if not actually controlled, by Walmart and Target.
There are pros and cons to the whole concept of putting goods on sale. Most retail managers feel they are essential. A discount gives shoppers the incentive to make a purchase today - a sense of urgency. And we all feel good when we get a bargain.
Sales are also useful for clearing out old, slowmoving or seasonal stock and improving the daily cash flow. A low-priced loss leader can impress regular customers and often will bring new ones into a store. Hopefully they will like what they see and come back.
But on the other hand, bombarded by ads and "sale" signs, each one shouting louder than the next, could it be that the customer is increasingly turning a deaf ear and now expects every price to be a bargain? Is low price alone the new key to success?
Time will tell if J.C. Penney's makeover works, and I wish Mr. Johnson and his company every success.
But in his place, I would have a niggling little doubt about what might happen when the novelty of "everyday low prices" wears off and they don't seem so special any more?
After all, even Walmart and Target have sales.
Doug MacDougall is the general manager of Metropolis at Metrotown.
