Target to lower prices on thousands of basic items due to inflation
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Target plans to cut prices on thousands of consumer basics this summer, from diapers to milk, as inflation cuts into household budgets and more Americans pay closer attention to their spending.
The price cuts, already applied to 1,500 items, will eventually include 5,000 food, drink and essential household goods. Target and other retailers are increasingly catering to customers who are struggling with higher prices for groceries, though inflation has begun to cool. Many of them have switched to private label brands sold by Target and others big retailers, which are typically less expensive than well-known brands.
Target launched one such collection in January called Dealworthy which includes nearly 400 basic items, ranging from clothing to electronics, that can cost less than $1, with most items under $10.
Last week, McDonald’s said that it was planning to introduce a $5 meal deal in the U.S. next month to counter slowing sales and customer frustration with higher prices. Walmart posted strong quarterly sales last week driven by a influx of customers, including households with incomes of more than $100,000, looking for bargains.
Target is very cognizant of the spending pullback by shoppers and in March reported its first annual decline in sales in seven years.
Inflation has been unexpectedly high in the first three months of this year after having steadily dropped in the second half of 2023. The elevated readings in early 2024 had dimmed hopes that the worst bout of inflation in four decades was being tamed and raised concerns that prices could spike again.
The latest inflation reading released last week showed that those prices, at least last month, had begun to retreat again.
Target Corp. said Monday that the lower prices will roll out over the summer on national brands and its own house brands.
“These reductions are in addition to our everyday low prices, which we routinely adjust to be competitive in the market and make sure you enjoy great value every day,” the company said in a prepared statement.
Target is likely to offer more insight into what it thinks about customer behavior and how it’s addressing any changes when it releases its quarterly financial report Wednesday.