• by Sarah Mahoney , October 22, 2024

With most forecasts pointing to moderate increases in holiday spending, Target is taking the gloves off early, announcing price reductions on more than 2,000 items.

The Minneapolis-based retailer says that with these cuts, it is now selling more than 10,000 items at prices below last year, encompassing holiday prep items, toys and games, home décor and many groceries. The company has begun systematically adjusting prices lower throughout the year, starting with 5,000 items back in May, after it reported a 3.7% decline in sales.

Since then, sales have improved, and the company has become more determined to steal share from rivals perceived as more affordable.

While Target’s strength has blossomed in recent years, with sales up 40% in the last three years, consumer perception about price is a critical factor.

“Despite its iconic and trendy brand, we view Target’s position in the hyper-competitive retail environment as rather ambiguous, which dilutes our confidence in the durability of its brand to drive consistent store traffic,” writes Noah Rohr, an analyst who follows the company for Morningstar. “Furthermore, we don’t see sufficient evidence to award Target a cost advantage. Although it is the nation’s seventh-largest retailer, we do not believe the firm exhibits irreplicable scale across its individual product categories.”

Target is also looking beyond price to build consumer connections, offering its exclusive “Taylor Swift:  The Eras Tour Book” on Black Friday and exclusive merchandise linked to the upcoming release of the movie “Wicked.”

New research from the National Retail Federation finds that 45% of U.S. consumers will likely shop at discount stores like Target and Walmart this holiday season. However, online options reign as the most likely shopping channel, at 57%, followed by department stores (46%), grocery stores and supermarkets (46%).

Younger shoppers also say they intend to buy from thrift stores and resale shops.

The Washington D.C.-based trade association expects spending on the winter holidays to reach a record $902 per person, including gifts, décor and food. That’s $25 per person more than last year’s figure and $16 higher than the previous record set in 2019.

The most significant increase is in presents for family, expected to reach $641 this year, up from $620.

The survey, conducted by Prosper Insights & Analytics, is based on a sample of 8,100 adults.