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Like any retailer, Target has seen some changes in their business due to inflation. The retailer’s stock value is falling and its third-quarter earnings were disappointing.
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Target is considered a store for higher-income shoppers than Walmart, for example, so as a result of inflation, many shoppers switched from Target to Walmart for their needs. “Amid high inflation, shoppers are choosing to shop at lower priced retailers, brands and products. Walmart noted how it has seen shoppers with household incomes over $100,000 spend greater share of their portfolio at Walmart, increasing their bottom line,” Tim Campbell, director of Insights at TradeIQsaid.
But what impact has this had on Target shoppers? GOBankingRates spoke to experts to see how target consumers have been affected and what they can expect in 2023.
Excess inventory leads to big discounts
Excess inventory has been a huge problem for Target this year, however, it has translated into good news for consumers. If you’ve seen amazing deals, especially for the holidays, it’s due to the retailer’s excess inventory. Due to the extra inventory, customers may have seen more of a mess in terms of aisle organization, but Campbell says that’s likely to be cleaned up next year. “The inventory glut at Target caused by an overly optimistic forecast for discretionary goods growth in 2022 will likely be fully resolved in 2023, so shoppers can expect to see tidier stores with better merchandising.”
As for low prices, Campbell says consumers will still benefit from those in 2023, especially from Target’s brands. Look for bargains from Target’s 45 private labels, including A New Day, Market Pantry, Cat & Jack, Room Essentials, Everspring, Good & Gather, up & up, and Universal Thread, to name a few.
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Don’t expect discounts on food
Although consumers may hope to reduce the cost of clothing and electronics, if you shop, you won’t see much of a price reduction. In times of inflation, consumers tend to cut back on discretionary spending, but they still need groceries. Target reported that its food and beverage sales topped all other spend categories in 2022. Needless to say, they don’t have to cut prices for customers to buy, so there likely won’t be any no significant sales.
Paper coupons are no longer always accepted
If you were relying on coupons to shop at Target, you might want to switch to digital coupons only, as it will be a bit more difficult to redeem your paper coupons. Recently, due to an increase in fraudulent coupons, Target now only accepts coupons that can be validated through their barcode master file. Because of this, customers reported that their paper coupons were being rejected more frequently than before.
Your best bet is to use the Target coupons you find in the Target app, as they’re automatically valid and don’t need to be checked against the barcode database.
More in-store displays improve the shopping experience
Despite the rising cost of goods, Target has made it a point to stand out from the competition with attractive in-store displays. “Despite recessionary trends, Target remains committed to renovations that improve the look and feel of their in-store experience,” Campbell said, citing Target’s partnership with Ulta as an example. Customers who want to try before they buy will find plenty of opportunities to do so at Target stores.
The target should continue to attract high-income buyers
As Campbell explained, Target caters to a customer in a certain income bracket. Surprisingly, even after a lackluster year, the retailer has no intention of trying to rebrand those it appeals to. While there will always be plenty of sales, Target will always carry products that other retailers simply won’t carry. For example, the company recently announced a partnership with UK retailer Marks & Spencer to sell a limited-time assortment of gourmet foods and premium chocolates. It’s items like these that will continue to set Target apart, as the retailer hopes to retain its place as a store for high-income shoppers. Technology industry analyst Jeff Kagan says if they can do this, they will survive. “Target wants and needs a strong economy and low inflation to thrive and grow as a whole. However, they are more insulated from tough economic times than some of their competitors who have [lower income] buyers. »
As 2023 approaches, keep an eye out for top sellers using the Target app and expect apparel and electronics prices to stay low for some time.
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