Wider challenges, exacerbated by pandemic and economic headwinds forced JCPenney to file for Chapter 11 bankruptcy protections and accelerated the retailer’s years-long rightsizing campaign. Under new ownership, JCPenney is continuing to consolidate its store fleet and is finding ways to revitalize the brand. We dove into the visitation metrics for JCPenney and some of its venues in order to take a closer look at the chain’s rightsizing strategy so far and what lies ahead as the brand continues to rebound.
Packing a Punch
JCPenney has been shrinking its retail footprint for quite some time, and location intelligence suggests that this strategy has had some success. Since April 2023, JCPenney’s monthly year-over-four-year (Yo4Y) visits per venue have outperformed Yo4Y visits – which means that as JCPenney consolidates its fleet, the brand drives more traffic to the remaining locations.
Despite the rightsizing, the chain still commands a relatively large share of the total visits to the mid-tier department store category. In August 2023, JCPenney was the third-largest mid-tier department store by visits share (17.6%).
This month, JCPenney launched celebrity stylist redesigns of two of its private label brands. As new styles are added to the collections, the retailer’s first-ever stylist collaboration has the potential to boost foot traffic and share of visits in the coming months. The company is also making significant investments in customer experience and operations, and the company plans to spend over $1 billion by the end of 2025 to remodel its remaining stores – 100 of which have already been updated. The rollout of JCPenney Beauty could also help the retailer capitalize on the growing demand for beauty and self-care products by introducing fresh faces and foot traffic to the department store chain.
Making The Cut
And while JCPenney’s store closures have slowed down, the chain’s persistent visit gaps could be a sign that the retailer may undergo additional rightsizing in the future. If so, analysis of store trade areas and their overlap – the areas from which multiple venues drive visits – is one of the metrics that JCPenney might factor into the decision-making process. A large trade area overlap indicates that nearby stores may be cannibalizing each other’s visits since they have the potential to serve many of the same consumers.
Trade Area Analysis of JCPenney’s venues between January and August 2023 revealed that, in some markets, multiple stores within close proximity to each other create a high level of trade area overlap and serve many of the same shoppers. In Southern California, for example, 74.4% of the Chula Vista location’s trade area overlapped with the trade area of the National City store. And in the St. Louis, MO. region, 80.5% of the St. Louis store’s trade area overlapped with the trade areas of the Des Peres and Fenton stores.
These relatively large trade area overlaps suggest that JCPenney may have room for further store fleet optimization – even after the already significant rightsizing the chain has undergone. Alternatively, as the company carries out its large-scale store remodeling strategy, JCPenney leadership may take advantage of these nearby locations to give each venue a unique flair with a specific focus that can allow each store to cater to a differentiated audience.
A Penney for Your Thoughts
Rightsizing is just one of the ways that JCPenney is adapting to match current market conditions. As the retailer invests in a large-scale remodeling strategy and new beauty and fashion lines, an understanding of trade areas could reveal opportunities for different locations to curate a shopping experience for unique audiences.
For updates and more data-driven foot traffic insights, visit Placer.ai.