Target Cuts Prices on Thousands of Essentials as Inflation Pinches Budgets

• To address inflation's impact on household budgets, Target plans to lower prices on thousands of consumer staples this summer, including milk and diapers, with 1,500 items already discounted and a total of 5,000 to be included.
• Target introduced a new line called Dealworthy in January, offering around 400 everyday items, mostly under $10, to attract budget-conscious shoppers moving towards private label products due to rising grocery costs.
• In response to declining sales and consumer frustration with price hikes, other retailers like McDonald's and Walmart are also introducing new deals, with McDonald's launching a $5 lunch deal and Walmart reporting strong sales from bargain-seeking shoppers.

As inflation bites into household budgets and more Americans become more frugal with their purchasing, Target intends to lower prices on thousands of consumer staples this summer, ranging from milk to diapers.

Eventually, 5,000 food, drink, and basic home products will be included in the price reductions, which have already been applied to 1,500 items. Even if inflation has started to slow down, Target and other stores are increasingly trying to help consumers struggling with rising grocery expenses. Many have moved to Target and other large stores' private label goods, usually less expensive than well-known names.

One such line, named Dealworthy, was introduced by Target in January. It consists of around 400 everyday things, from electronics to clothes, most of which are under $10 and can be purchased for less than $1.

In an effort to combat declining sales and consumer annoyance over price increases, McDonald's said last week that it will be launching a $5 lunch deal in the United States the next month. Last week, Walmart reported robust quarterly sales thanks to an inflow of shoppers seeking deals, particularly those earning over $100,000.

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Target Reports First Sales Decline in Seven Years Amid Rising Inflation Concerns

Target, which is well aware of consumers' reduced spending, announced a drop in sales for the first time in seven years in March.

After declining consistently in the second half of 2023, inflation has unexpectedly increased in the first three months of this year. Early in 2024, high readings had cast doubt on the possibility that the largest inflation wave in four decades was abating and sparked fears that prices might rise once again.

At least last month, those costs have started to decline once more, according to the most recent inflation report that was made public last week.

Target Corp. announced on Monday that the summer would see the implementation of the reduced prices for both its own house brands and national brands.

Target's quarterly financial report, which it will issue on Wednesday, is expected to provide further information on the company's views on customer behavior and how it handles any changes.

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