News
Target Cuts Prices on Essential Products as Consumer Caution Continues
Target is reducing the prices of essential goods, such as milk and agricultural products, in a context of continued consumer caution.
The retailer plans to reduce prices by around 5,000 “frequently purchased items,” including milk, meat, bread, produce, peanut butter, coffee, diapers, paper towels and pet food, according to a Monday (May 20) press release.
“We know consumers are feeling pressure to make the most of their budget and Target is here to help them save more,” Rick Gomez, Target’s executive vice president and chief food, essentials and beauty officer said in the release. “Our teams work hard to deliver great value every day, and these new lower prices on thousands of items will result in big additional savings for the millions of consumers who shop Target every week to meet their everyday needs.”
These reductions come just days after the news that consumer prices have risen, while retail sales are stable, trends that indicate buyers are buying less or perhaps trading down.
“These changes would fit with PYMNTS Intelligence data, which showed that in the first few months of 2024, consumers were opting for own marksand more than two-thirds of paycheck-to-paycheck consumers who [said they were] already challenged to pay their bills, they found themselves making compromises between ‘essential‘ and those they considered ‘nice to have,’” PYMNTS reported.
The data showed the impact inflation had on many of the most essential categories. For example, housing is nearly 24% more expensive than it was just before COVID-19 hit, while groceries cost 27% more than before the pandemic.
“That means there isn’t much left over to buy items like sports equipment, apparel or entertainment, and each of these spending categories has been marked by double-digit price increases over the same period,” PYMNTS wrote.
With consumers increasingly embracing private label items, Target and rival Wal-Mart have expanded their offerings on this front.
For example, Cristina HenningtonTarget’s chief growth officer said earlier this month that he is expanding sales of its Cat & Jack children’s brand in the Hudson’s Bay Co. department store chain in Canada.
This followed a February announcement that the retailer was reformulating 40% of products under its Up&Up brand, which represents about 10% of Target’s private label stable.
In April, Walmart launched best goodsa “chef-inspired” food line that the company says is the biggest private label food launch in 20 years.
For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.