J.C. Penney executives believe their customers have become addicted to coupons and the company is working hard to help them kick the habit, but so far those efforts are proving to be costly.
The company recently revealed that sales plummeted in the first quarter, resulting in net losses of $55 million and a decision to scrap dividend payments.
J.C. Penney executives are blaming the poor results on the elimination of coupons, which is part of the company's new strategy of every day low pricing. But it appears that many customers simply aren't catching on because the association between bargains and coupons seems especially hard to disconnect.
Coupons were a drug, J.C. Penney CEO Ron Johnson told analysts, the Huffington Post reported.
“We did not realize how deep some of the customers were into this. We've got to wean them off this and educate our consumers,” the Huffington Post quoted Michael Kramer, chief operating officer as saying.
Part of that education is coming in the form of a new advertising campaign called “do the math.”
© 2021 Newsmax Finance. All rights reserved.