There are some new signs emerging about just how badly retail is suffering through the economic downturn.

First, Moody's Investors Service downgraded the debt of Macy's and J.C. Penney to junk-grade status. That means there are questions about whether their bonds will ever be paid off. It's a sure sign of financial instability in these veteran retailers.

Macy's and J.C. Penney have price points that are expensive and mid-priced, respectively. But at the other extreme, a discount merchant called Filene's Basement is eyeing bankruptcy.

Need more signs? The usually expensive Toys R Us is now introducing a discount store within its stores called $1-$2-$3 Fun! shops. The emphasis is on affordable $1, $2 and $3 choices of toys.

The $1-$2-$3 Fun! shops aren't being hidden in a corner, either. They're being placed right up front to create a sense of value from the moment you walk in.

The question of value is really perplexing businesses these days. Most respond to it by discounting their prices.

Panera Bread, however, has a different philosophy.

"We continue doing what we do, which is to concentrate on the quality of the experience," founder/CEO Ron Shaich told The Financial Times of London. "Everyone is degrading their competitive message. They are sacrificing it in the interest of gaining sales tomorrow, simply based on price. And when you compete on price, you simply tell people what you are worth, which is less than what you were selling it for the week before."

It's important to note that Panera's stock is doing better than any restaurant chain in America and their sales are up.

The problem for businesses who want to lower prices in a recession is that, over time, you destroy the perceived value of what you make and sell.

And that's coming from a man like Clark who is always willing to accept lower quality for a lower price!

So there is something to be said for knowing what you're about; doing it better than anyone else; and continuing to charge a fair price for goods or services that people perceive as a value.

Think about it in your own business.