Amid record inflation, and consumers responding to it by tightening their spending, an increasing number of retailers are starting to cough up heavy discounts to lure frugal shoppers back into their stores.
Target (TGT) , Walmart (WMT) and Amazon Fresh have all recently slashed the prices on thousands of items to attract back customers, and now Walgreens (WBA) just became the latest company to join the growing trend.
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The pharmacy has revealed in a press release that it has just dropped the prices on over 1,300 items in stores and online. For example, Clean & Clear Foaming Facial Cleanser decreased from $7.99 to $6.99. Nice Mini Pretzels are now $1.99, before it was $2.79.
“Walgreens understands our customers are under financial strain and struggle to purchase everyday essentials,” said Tracey Brown, chief customer officer at Walgreens, in the press release. “We continue to be committed to our customers by lowering prices on over a thousand additional items, something we’ve been doing since October of 2023.”
The move from Walgreens comes after it revealed in its latest earnings report that its retail sales decreased by 4.5%, and its comparable retail sales decreased 4.3%, compared to the same time period last year. Walgreens claims in the report that the decline in retail sales reflects “a challenging retail environment, channel shift, and a weaker respiratory season.”
Inflation is still on the rise and it continues to squeeze the wallets of consumers who are battling the higher cost of living. In April, the U.S. inflation rate was 3.4%, which is a 0.3% increase compared to February, according to a press release from the U.S. Bureau of Labor Statistics. Between January 2020 and April 2024, consumer price inflation increased by 19.32%, according to NerdWallet.
Consumers have altered their spending habits as a result of inflation. According to a recent survey by Advantage Solutions, 55% of shoppers that were polled revealed that they have opted to buy less-expensive options due to higher prices. It also found that 52% have switched to buying lower-priced brands and 54% have cut how much they buy. One-third of shoppers also said that they have changed where they purchase groceries in an effort to save money.
Retailers are starting to feel the consequences of this change of behavior from consumers and have recently embarked on a price-cutting spree to gain back shoppers.
Target slashed its prices last week after it reported in a 3.2% decline in total sales and 3.7% decrease in comparable sales, while store traffic was down by 1.9%.
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“Consumers continue to spend cautiously, particularly in discretionary categories,” said Target Executive Vice President Michael Fiddelke during a recent earrings call.
Target later announced on May 20 that it was cutting prices on roughly 6,500 items which the company claims will save customers millions of dollars during the summer when the change takes effect.
During an earnings call on May 16, Walmart CEO John Furner revealed that the company cut the prices on almost 7,000 items in its stores.
“Well, broadly across the store, we have almost 7,000 rollbacks,” said Furner. “That's really helping that in our food categories. We see an even larger spread between eating at home, preparing meals at home, and eating out, which we think can help Walmart over the remainder of the year.”
AmazonFresh also announced last week that it will cut prices on 4,000 grocery items in-store and online, and shoppers will see discounts of up to 30% everyday.
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