Heading to Target is a form of self-care for many people. Shoppers love to wander the aisles in search of superfluous home decor, cozy new lounge outfits, their next book, or the latest skincare trend. However, according to new financial data, Target customers are weaning their buying habits across all major store categories, including home essentials, apparel, and groceries.
Back in March, Target revealed a 1.7 percent decrease in sales in 2023 as a whole. Additionally, for the first time in seven years, Target’s annual revenue was down by 1.6 percent, dropping to $107.4 billion. And with the first fiscal quarter of 2024 behind us, it appears shoppers are still abandoning Target.
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During the first quarter of 2024, Target’s total revenue dropped to $24.5 billion— a 3.1 percent decrease year over year—according to a May 22 earnings release. On top of that, Target said its first-quarter operating income fell 2.4 percent from 2023.
To that point, Target customers aren’t only being sticklers with their hard-earned cash but also their time. The big-box chain noticed a 1.9 percent decrease in foot traffic, both in-store and online.
Speaking with reporters, Target CEO Brian Cornell said the staggering results show “continued soft trends in discretionary categories,” per CNBC. Despite a positive spike in beauty sales, essentials like groceries and throwaway paper products and “discretionary” items like clothing weren’t flying off the shelves during the first three months of 2024.
Given the current state of the U.S. economy, Target is at a huge deficit, considering its inventory largely consists of non-essentials, according to CNN. Right now, groceries are a hot spending category, but this doesn’t bode well for Target, which isn’t perceived as a leading grocer in comparison to Walmart.
To regain customers' trust, Target is promoting its relaunched free loyalty program. Since April, over one million new members have joined Target Circle, the company reports.
Earlier this week, Target also announced it will be slashing prices on 5,000 frequently bought items. This includes household goods such as paper towels and diapers as well as groceries like milk, meat, bread, and fresh produce.
"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, Target’s executive vice president and chief food, essentials and beauty officer. "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."
The price markdown is one of the ways Target hopes to attract new customers and drive sales forward in the latter half of 2024.
