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Target Is the Latest Store to Go on a Price-Slashing Spree
By Adam Hardy MONEY RESEARCH COLLECTIVE
In a bid to win back inflation-weary customers, Target is discounting milk, bread, veggies, yogurt, coffee, pet food, paper towels and more.
Target is the latest major retailer to announce broad price reductions as stubborn inflation continues to weigh on the budgets of everyday Americans.
The box-store behemoth said Monday that it has already slashed prices on 1,500 popular products, including many grocery staples, with “thousands more price cuts” planned for the summer. In total, about 5,000 products will be discounted once the plan is in full effect.
“We know consumers are feeling pressured to make the most of their budget,” Rick Gomez, an executive vice president at Target, said in a statement.
The discounted items include many essentials, such as milk, bread, veggies, yogurt, coffee, pet food, paper towels and more. The changes affect some name-brand products from well-known companies like Huggies, Pepperidge Farm and Clorox as well as Target’s own private-label brands, which include Good & Gather and Everspring.
The price cuts are in addition to seasonal promotions slated for Memorial Day and the Fourth of July. Target estimated that the lower prices will add up to millions of dollars of savings, collectively.
The strategy also doubles as a way for the retailer to lure back inflation-weary customers.
Why is Target lowering its prices?
Though the inflation rate for April was slightly lower than expected at 3.5%, it lingers well above the Federal Reserve’s preferred rate of about 2% in the long run. Month after month of price growth — albeit much slower than at the 2022 peak — continues to eat into Americans’ budgets.
According to the National Retail Federation, a retail lobbying group that represents Target and other retailers, persistent inflation is contributing to fatigue from consumers, causing them to be more selective with their spending.
Target is not immune to the trend. The company’s latest earnings report, which was released in March and looks at the final three months of 2023, reveals the retailer has been grappling with sluggish sales — and looking for ways to reverse them.
“While there are some encouraging signs in the economy, there are also stubborn pressures impacting families,” Christina Hennington, Target’s chief growth officer, said on a March earnings call. “Consumers say they still feel stretched, they’re balancing a lot and having to make trade-offs.”
In a similar bid to woo budget-conscious shoppers, Target debuted a new private-label brand called Dealworthy in February. The no-frills brand name includes about 400 items like paper towels, disposable plates, cotton balls, underpants, toothbrushes and other essentials priced mostly under $10.
Other retailers cutting prices
In recent months, several other grocers and retailers have lowered their prices for similar reasons: Inflation pushed some shoppers away. Now, those companies want them back.
For instance, Walmart, Ikea, Whole Foods, Giant Food, Michaels and Aldi have recently announced or implemented broad price reductions in an effort to drum up business from folks who may have previously been turned off by soaring price tags.
“Freight costs are lower, and input costs are also moderating, so retailers can afford to take those lower costs and pass them on to the consumer,” Mickey Chadha, vice president of corporate finance at Moody’s, previously told Money.
Price cuts may have also been spurred by mounting pressure from the White House. For months now, President Joe Biden has blamed lingering inflation on the greed of major corporations and urged retailers to use their record profits to bring their prices back down.
Alas, even though some retailers are starting to do just that, Chadha said it’s unlikely that prices will ever fall back to where they were before the pandemic.
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.