Target is cutting prices on 2,000 items ahead of the holiday shopping season
By Jordan Valinsky, CNN
New York (CNN) — Target is slashing prices on more than 2,000 items, marking the second time this year that the retailer cut customer costs as it attempts to attract inflation-weary shoppers ahead of the holiday shopping season.
Some prices have dropped effective immediately on a number of items, including home goods, beauty products, food, beverages and toys. In a press release, Target said it “routinely adjusts its prices to remain competitive in markets across the country” and the discounting will continue through December.
Target’s price cuts have boosted customer spending after a string of dreadful quarters for the company. Discounts helped turn around Target’s fortunes: Sales at stores open at least one year increased 2% last quarter, and its profit boomed 36%, according to its most recent earnings report.
In May, Target announced it was going to slash prices on 5,000 items but ended up surpassing that number, cutting prices on 8,000 products. In total this year, the retailer will have discounted more than 10,000 items.
The new round of cuts affects name brands like Lego and Coffee Mate, as well as its house brands. Although prices vary depending on city, Target highlighted some examples with a Magic Bullet blender reduced to $39.99 from $49.99 and a Bluey fire truck toy dropping to $19.99 from $24.99.
Other major retailers, like Walmart, Ikea and Aldi, also have been reducing prices in recent months in an attempt to entice customers to spend money, since many have become more selective in their spending because of inflation.
However, there’s some good news for stores: Spending at US retailers climbed 0.4% in September from the prior month, according to government data released last week. That was much stronger than August’s 0.1% gain.
Consumer spending makes up about 70% of the US economy, with retail sales comprising a sizable chunk of that. Last week’s report shows that Americans are still opening their wallets despite years of elevated inflation and interest rates that have only recently begun to come down from a bruising two-decade high.
Still, Target signaled a cautious outlook for the rest of the year, a sign it expects consumers continue to spend carefully. The company expects sales to rise by up to 2% this year but said it likely could come in lower than that.
The next earnings report for Target (TGT) will be released on November 20.
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