J.C. Penney sees caution among shoppers

By Nicole Maestri

LAS VEGAS (Reuters) - J.C. Penney Co Inc (JCP.N) expects shoppers to be "cautious" and more discriminating in their purchases this year amid growing concerns over the economy, one of the retailer's top consumer electronics buyers said on Monday.

"Everybody knows that macro-economic issues are in play here," said John Kendig, a merchandise director at Penney who chooses the electronics Penney sells on its Web site, catalog and "Red Box" program highlighting hot gifts for the holidays.

"Do I think it's going to be a walk in the park? No," Kendig said, referring to the economic environment. "But I think we're uniquely positioned."

Kendig made the comments in an interview with Reuters at the Consumer Electronics Show in Las Vegas, which is taking place as worries persist that U.S. consumer spending will slow in 2008 amid high energy prices, a slumping housing market and a credit crunch.

He said consumers were expected to be more "cautious" in 2008, and would be more "considerate" about their buying decisions.

Penney's consumer-electronics offerings expand and contract like an accordion with the broader electronics industry, Kendig said. "I would suspect that the accordion is probably going to stay where it is" for the year, he said.

Kendig added that he was at the show looking for products that would set the department-store operator apart from competitors and help it win sales in a difficult environment.

Kendig said some of Penney's most popular sellers for the just completed holiday season were digital photo frames, navigation systems and MP3 music players that play videos.

He said he expected Penney would add new products to its line-up for 2008 and drop others, but he was not yet sure which products would make the cut.

"It's the beginning of the dance," he said of meeting with electronics makers at CES. "We don't know who we're going to take home yet.

(Editing by Richard Chang)