Target plans to reduce prices on about 5,000 “frequently shopped items” heading into the summer, the big-box retailer announced Monday, as it looks to attract inflation-wary shoppers who are more conscious of their spending and boost demand for essential products in a push to turnaround last year’s sales slowdown.
NEW YORK CITY - SEPTEMBER 28: People walk by a Target store in the Harlem neighborhood in Manhattan ... [+]
The retailer has so far slashed prices on roughly 1,500 items, and hopes to introduce thousands more price cuts to sum up to 5,000 over the course of the summer.
The products include everyday items such as milk, meat, bread, soda, fresh fruit and vegetables, snacks, yogurt, peanut butter, coffee, diapers, paper towels and pet food.
The Minneapolis-based retailer said shoppers will find cheaper items needed to run their households and maximize their budgets, especially as they stock up for Memorial Day, Fourth of July and back-to-school and back-to-college season.
The new price cuts on food, beverages and household essentials come amid the high cost of some popular items, causing Americans to rework their spending by seeking deals or cheaper alternatives—a trend that has created increased competition in the retail business, with Walmart reporting a strong revenue growth last quarter due to higher demand.
Meanwhile, Target said that it routinely adjusts prices to ensure it remains competitive in the retail business.
Target is set to release its first-quarter earnings report on Wednesday before the market opens, with consensus analyst forecasts expecting earnings per share to remain unchanged at $2.05 compared to the same period last year, according to Zacks Investment Research.
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$1 billion. That’s how much money Target lost in Monday’s early trading session, as the company’s shares were down 1.3% to $157.93 following the announcement.
Target’s sales were down 1.6% to $107.4 billion in 2023, marking the first revenue decline in seven years. The weaker revenue was partly attributed to lower visitor numbers during the year, thanks to inflation and stiff competition from rival retail chains, including Walmart. Headline inflation fell from 9.1% in June 2022 to 3.4% in December 2023, according to data from the US Bureau of Labor Statistics. Despite the moderation, inflation remained higher than pre-pandemic levels, causing Americans to continue feeling the impact of the high consumer prices when they shop.
How the price cuts will impact on Target sales this year.
In March, Target launched a new loyalty program called Target Circle 360. The paid membership allows subscribed customers to enjoy unlimited free same-day delivery for orders over $35 through the company’s delivery service Shipt, from which they can access deliveries from more than 100 retailers nationwide.