Target is planning to cut prices on thousands of consumer basics this summer, in response to inflation squeezing household budgets. The price cuts will apply to 5,000 food, drink, and essential household items, with 1,500 items already reduced. Retailers like Target are focusing on customers facing higher grocery prices, with many switching to lower-cost private label brands. Target’s Dealworthy collection, launched in January, offers basic items for under $10, with most costing less than $1. McDonald’s also announced plans to introduce a $5 meal deal to combat slowing sales and higher prices, following Walmart’s strong sales driven by bargain-seeking customers.
Target reported its first annual sales decline in seven years in March, as shoppers pulled back on spending. Inflation has been unexpectedly high in the first few months of 2024, raising concerns of another price spike after a temporary drop in the second half of 2023. However, the latest inflation data shows prices beginning to retreat, prompting Target to roll out lower prices on national and house brands over the summer. The company stated that these reductions are in addition to their everyday low prices, which are regularly adjusted to stay competitive in the market. Target is expected to provide more insight into customer behavior and its strategies in its upcoming quarterly financial report.
AP retail writer Anne D’Innocenzio in New York contributed to the report.
