With New Brand, Target Takes Aim At Dollar Stores

Target is introducing Dealworthy, a line of private-label household products. While Target shoppers have long been sold on the retailer’s store brands that focus on style and quality, from Good & Gather in the food aisles to Cat & Jack in kids’ apparel, Dealworthy is aimed squarely at bargain hunters, including those who typically shop at Walmart and dollar stores.

The new line is already hitting the shelves and will include over 400 everyday basics, such as power cords, undergarments, socks, laundry detergent and dish soap. And like the many other brands in Target’s owned-brands portfolio, each item is backed with a one-year satisfaction guarantee.

In some categories, such as phone cases sold in the electronics section, prices are up to 50% lower than other brands stocked by Target.



"We know that value is top of mind for consumers, and Dealworthy, backed by our owned brand promise, will not only appeal to our current guests but position us to attract even more new shoppers to Target," said Rick Gomez, executive vice president and chief food, essentials and beauty officer, in the company’s announcement.

The news comes just days after Target revealed a refresh of its Up & Up collection, which was launched 15 years ago and generated about $3 billion in annual sales. Product revamps will extend to 2,000 items, most under $15.

Target says the changes are based on thousands of customer reviews, leading to new formulations, products and packaging. The retailer is altering the shape and feel of manual and replaceable-head toothbrushes, for example. The Minneapolis-based company is also strengthening food storage containers and adding new scents to baby, household cleaning, bath and body products.

Target has also brightened the Up & Up packaging with more colors, differentiating that brand from the stripped-down style of the new Dealworthy line.

Retailers have been intensifying store-brand efforts for years because they are more profitable. And many offer tiered pricing, differentiating between “better” and “value” brands.

Consumers have responded. More than 95% of people are buying private-label products at least some of the time, per the Food Industry Association, and 46% say they do so most or all of the time. And 61% of shoppers have increased store brand purchases in the last year, while just 26% have bought more name-brand products.

Target has established itself as one of the most skillful marketers of store brands, with owned brands contributing to more than $30 billion in annual sales.

Sales of private-label products have been growing for years, making especially significant gains as inflation chewed its way through family budgets.

In the first half of 2023, dollar sales of store brands across all U.S. retail had climbed 8.2%, compared to a gain of 5.1% for national brands. Unit sales for the period declined 0.5%, while national brands fell 3.4%, according to the Private Label Manufacturer Association.

Since then, private label sales have slowed a bit, with Food Processing, a trade publication, reporting a 0.8% fall in dollar sales in October, following 31 consecutive months of dollar sales growth, often in the double digits.

The publication says the PLMA projects total U.S. store brand dollar sales for 2023 to have reached $233 billion, topping the previous year by $4 billion.

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