HedgeyeRetail Chart of The Day

We wonder if Ron Johnson is doing this math on where his revenue dollars are going. The recipient will fight tooth and nail to hang on to the $$$.

 

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Let everyone fret over a percent here or a percent there. Let’s think about absolute numbers for a minute.

 

Though JC Penney no longer reports monthy comps, let’s assume that sales for the month followed the 1Q trajectory, and were down ~20% for the month of May. That suggests ~$240mm in lower sales versus last May. Kohl’s should be loving that, right? One would think. But despite 55% store overlap (5-mile radius), KSS could not capture a single dollar. In fact, it gave up ~$35mm of them.

 

Ron Johnson’s biggest problem, however, rests not in the fact that Macy’s captured ~$80mm, or that Gap/Old Navy nabbed $25mm. But rather that TJX and Ross Stores garnered a combined ~$110mm. With JCP’s EDLP strategy under such scrutiny, not only will Johnson need to pull the needle out of the consumer’s arm after 30-years of conditioning to wait for a sale, but now he has to worry about wrangling traffic away from the off-pricers.

This is going to take A LOT LONGER than a year.

 


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