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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 $$$.



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.