Target Slashes Prices to Entice Shoppers Tired of High Prices

The retailer will cut prices on up to 5,000 grocery items to keep pace with lower-cost rivals like Walmart.

Photo of Target store
Photo by Farragutful via CC BY-SA 4.0

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Target and Walmart both opened in 1962, and they’ve been going mano a mano ever since. Now they’re joined together in a battle against a nationwide scourge: inflation, which they helped stoke. 

On Monday, big-box retailer Target lowered prices on 1,500 grocery items — with thousands more on the way — in an attempt to both lure back customers put off by inflated costs and keep pace with lower-cost rivals like Walmart. 

Keeping Up with the Waltons

April’s consumer-price index report showed that while inflation is still very much a problem for the American consumer, it’s cooling slightly with the annual rate falling to 3.4%. In response, President Joe Biden urged the country’s grocery stores to lower their prices further — and apparently the message was heard. It just so happens to dovetail nicely with the companies’ own self-interest.

Walmart, the nation’s largest retailer and employer, reported impressive first-quarter earnings last week with revenue up 6%, thanks to more budget-friendly prices. Target, which provides a somewhat more upscale shopping experience, looks to be playing catch-up:

  • Starting this week, Target plans to eventually cut prices on 5,000 grocery items over this summer ranging from essentials like milk, fruit, diapers, and pet food to more name-brand products like Clorox and Prime, the energy drink from YouTuber Logan Paul. Target says it intends to “collectively save consumers millions of dollars.”
  • Target reports its earnings on Wednesday, and the company has surpassed earnings-per-share expectations for five straight quarters. However, in 2023, sales and total revenue decreased 1.7% and 1.6%, respectively, from a year earlier. And it expects comparable sales to fall 3% to 5% in the first quarter.

Self-Control and Retail Therapy: Hit by inflation and high interest rates, consumers are becoming more particular with their spending habits, according to CNBC. Weaker-than-expected earnings reports from McDonald’s, Starbucks, and Home Depot suggested people are cutting back on their Happy Meals, Frappuccinos, and home renovations. Meanwhile, they’re still shelling out for Sweetgreen veggie bowls and international flights on Delta Airlines at an impressive rate. 

Also, working from home changed our retail habits, with many of us overindulging in online shopping in between and sometimes during Zoom calls. The Wall Street Journal reported that research from Stanford University, Northwestern University and the Mastercard Economics Institute estimates that WFH may have resulted in Americans spending $375 billion more than they might otherwise have last year. Just remember to record your next all-hands meeting as you browse for a new summer wardrobe and generic wall art.