Target said Monday it will lower prices on approximately 5,000 frequently bought items as it seeks to stay competitive amid signs consumers are experiencing price fatigue.
The company said in a statement that the price cuts are concentrated in grocery staples like milk, meat, bread, fruit and vegetables, as well as paper towels and diapers, with many cuts affecting its company-owned Good & Gather and Everspring brands.
It had already cut prices on some 1,500 other items.
“We know consumers are feeling pressured to make the most of their budget, and Target is here to help them save more,” said Rick Gomez, executive vice president and chief food, essentials and beauty officer at Target. “Our teams work hard to deliver great value every day, and these new lower prices across thousands of items will add up to additional big savings for the millions of consumers that shop Target each week for their everyday needs.”
As the rate of annual inflation remains stuck above 3% and the Fed’s key interest rate remains unchanged, many consumers are starting to pull back on spending and becoming more selective about what they purchase.
“Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending,” McDonald’s CEO Chris Kempczinski said on the company’s conference call in late April.
One of Target’s chief competitors, Walmart, recently signaled that even higher-income consumers were turning toward its offerings as “wallets are still stretched.”
“We’ve got customers that are coming to us more frequently than they have before and newer customers that we haven’t traditionally had, and they’re coming into a Walmart whether it’s a virtual store online, or whether it’s one of our physical stores,” said Walmart CFO John David Rainey in an interview with CNBC.