Target plans to cut prices on thousands of consumer basics this summer, from diapers to milk, as inflation eats into household budgets and more Americans watch their spending.
The price cuts, already applied to 1,500 items, will 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 Americans 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 that 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 US next month to counter slowing sales and customers’ frustration with high prices. Walmart posted strong quarterly sales last week, driven by a influx of customers looking for bargains.
Speaking to CNBC, Walmart’s Chief Financial Officer John David Rainey said one of the reasons for the boost in sales is the gap between the price of cooking at home and eating out.
“We’ve got customers that are coming to us more frequently than they have before and newer customers that we haven’t traditionally had, and they’re coming into a Walmart whether it’s a virtual store online, or whether it’s one of our physical stores,” he said.
Target is cognizant of the pullback by shoppers due to inflation and because of the increased cost of using credit cards. The company in March reported its first annual decline in sales — 1.7 percent — in seven years.
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 said customers will be able to score reduced prices on milk, meat, bread, soda, fresh fruit and vegetables, snacks, yogurt, peanut butter, coffee, diapers, paper towels, pet food and more. The company said that the savings are estimated to add up to millions of dollars over the summer months.
Some of the deals are already in place, the retailer said in a news release. Though the discounts are likely to vary, several of the products had been reduced by 20 cents.
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.
