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.