Target to Cut Prices on 3,000 Grocery and Essential Items

Target announced on Tuesday that it will cut prices on 3,000 food, beverage and household essentials, joining retailers across the nation lowering prices on milk, eggs and butter ahead of the holiday season. The moves come as millions of Americans await November federal Supplemental Nutrition Assistance Program (SNAP) benefits and others remain cautious about higher costs lingering since the pandemic. Target is aiming to hold onto price-conscious shoppers as Walmart and other competitors capture a larger share of higher-income consumers.

Total Retail's Take: By lowering prices on high-frequency product categories such as groceries and household essentials, Target is likely counting on increased visits (web and store) during the holiday season and capturing a larger share of consumers' gift budgets. Furthermore, increased emphasis on grocery and household essentials signals a pivot by Target toward a more value-oriented model. This is a strategic move by Target to "close the value gap" with mass and club retailers, including top competitors such as Walmart, Costco, and Amazon.com. However, the increased visits will have to make up for the hit in margin that Target is likely to be taking by lowering its prices. Striking the right balance between driving top-line demand with bottom-line profitability will be the key for Target this holiday season and beyond.