Target is slashing prices on 2,000 items this holiday season to gain an edge over competitors during this critical shopping period. This marks its second round of price cuts, following a successful summer effort that boosted sales despite cautious consumer spending.
On Tuesday, the Minneapolis-based retailer said it will cut prices on its in-house and national brands, including food and beverages, everyday essentials, holiday gifts and items to prep the home for the holidays.
The lower prices have already started to take effect in stores across the country. The price cuts can also be found online at Target.com and on the Target app, the company said.
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The price cuts that can be found online and through the Target app in addition to in stores come ahead of the holiday shopping season. National Retail Federation (NRF) chief economist Jack Kleinhenz projected that while household finances are stable, and there is optimism about economic activity, consumers "will spend more cautiously."
While Target is promoting these cuts as a way to help shoppers save on holiday preparations and gifts, it is aiming to mimic the success it experienced over the summer when households proceeded "with measured spending," according to Kleinhenz.
Target CEO Brian Cornell said in August during an earnings call that the company reduced prices on thousands of items in various markets over the summer, resulting in an "acceleration" in unit and dollar sales trends during the three-month period ending June 30.
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"We feel really good about the way the consumers reacted to the price investments we've made on those 5,000 frequently purchased items," Cornell said during the call.
The company's essentials and food and beverage categories saw growth in traffic in the quarter, reflecting how "consumers are responding to our offerings in an environment where they are focused on value," Cornell said.
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Target rival Walmart also issued more than 7,200 rollbacks across categories in previous months, including a 35% increase in the number of rollbacks in food, which has particularly been a pain point for households.
In the prior quarter, Walmart surpassed Wall Street expectations as it enticed shoppers with more discounts.
Economists say the midsummer boost in retail sales figures was helped in part by the deals offered by such retailers.
