Target (TGT) is relying on a new tactic it picked up during the summer to entice shoppers into its stores during the holiday season.
After facing a slump in sales during the first quarter of this year, following price hikes and a boycott from consumers over its controversial pride collection, Target began to cushion the blow of inflation for shoppers by slashing its prices on over 5,000 items in May.
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The tactic yielded positive results for Target, which revealed months later that its comparable sales during the second quarter of 2024 increased by 2% year-over-year, while foot traffic in its stores rose by 3%, according to its latest earnings report.
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Now, Target is once again depending on price cuts to attract customers into its stores during the most critical time of year for retailers. The company is decreasing prices on over 2,000 items, including “food and beverages, everyday essentials, holiday gifts, and items to prep the home for the holidays,” according to a new press release.
Some examples of items that Target has reduced in price include Crisco Vegetable Oil, which now sells for $4.79, compared to $5.29. Also, a Magic Bullet Personal Blender Set was previously selling in stores for $49.99; now, most customers can expect to pay $10 less.
The move from Target comes as consumers are battling higher prices across the country amid inflation. According to the U.S. Bureau of Statistics, the consumer price index, which measures the average prices consumers pay for goods and services, increased by 0.2% in September month over month or by 2.4% year over year.
A customer shops for holiday gifts in a Target store on December 21, 2023 in Austin, Texas. People continue last-hour shopping and preparations as the holiday season draws nearer.
Consumers are expected to break holiday spending records
Despite the higher prices, holiday spending is expected to reach record levels this year. According to a recent survey from the National Retail Federation, consumers are expected to spend about $902 per person on “gifts, food, decorations and other seasonal items.”
This is $25 more than what each person was predicted to spend in last year’s survey, and $16 higher than the previous planned spending record of $886 per person in 2019.
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This year, consumers are expected to spend most of their money (about $641) on gifts for family, friends and co-workers, while $261 is expected to be spent on holiday items such as candy, decor, etc.
“The winter holidays are a treasured time for Americans, and they are prioritizing spending on family this holiday season,” said NRF Vice President of Industry and Consumer Insights Katherine Cullen in the survey. “Despite the shorter window of time between Thanksgiving and Christmas, retailers are prepared to meet the needs of consumers by providing holiday shoppers with earlier deals and sales and by ensuring inventory is available for the most in-demand items this year.”
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