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What you need to know
- Target says that shoppers who are concerned about inflation will be watching sales and stocking up when they see them.
- People haven't had such a strong reaction to promotions in a while, the retailer said.
- People are still searching for small, inexpensive splurges.
All Target shoppers are in for the best deals.
Target (TGT), in reporting its latest financial result, noted that its customers had said they were still on a tight budget after years of having to absorb price increases. Target executives reported that people are comparing prices at different retailers, keeping track of sales, and stocking essentials during discounts.
Americans, Target CEO Brian Cornell said on an earnings call Wednesday, are reacting to sales in a way the retailer hasn’t seen in “some time."
“They're becoming increasingly resourceful in their shopping behaviors: waiting to buy until the last moment of need, focusing on deals and then stocking up when they find them,” Cornell said, according to a transcript from AlphaSense. “We're seeing a stronger response to promotions than we've seen in some time.”
Target has cut prices on 5,000 items and plans to discount another 2,000 heading into the holiday season, the Minneapolis-based retailer said.
Sales dipped in the weeks before and after Target’s Circle week, which provides discounts to members of the company’s loyalty program, according to Executive Vice President Richard Gomez. People stocked up on essential items during other promotions, he said.
Target said it had 2.4% more transactions in the third-quarter compared to the same period in 2023, but purchases tended to be for smaller amounts.
Despite the difficult environment, Target said all the bargain-hunting has helped people make small splurges. Sales of more expensive discretionary items, like TVs fell, but people are picking up little luxuries like candles, frames and vases, Gomez said.
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