Target to Launch New Private Labels, Expand Others
Target announced earlier this week that it would be stocking its shelves with more products priced under $10 as it tries to appeal to more cost-conscious consumers dealing with once-in-a-generation inflation. The retailer has shifted its focus to selling more food and lower-priced items under its higher-margin private-label brands including Favorite Day, Good & Gather, and Mondo Llama. Target said it plans to launch or expand more than 10 owned brands, adding thousands of new products. The majority of these items will be sold for $3, $5, $10 and $15, according to the retailer.
Total Retail's Take: Target has seen the success of dollar stores and other value-based retail chains (e.g., Five Below) as consumers grapple with economic pressures and is trying to emulate them with a greater emphasis on low-priced private-label merchandise. Furthermore, by appealing to price-conscious consumers, Target is seeking to increase store traffic. Private-label goods offer Target a higher-profit item, diversification against its competitors, and an opportunity to create brand loyalty.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.