Expect Markdowns On Some Target Items, But Rising Prices On Others

Minneapolis MN

08 June, 2022

1:09 PM

Description

MINNEAPOLIS, MN — Target shoppers can expect to see markdowns on some items but rising prices on others, the company announced Tuesday. The retail chain is making adjustments to align with the changing buying habits of its customers, including marking down products, removing excess inventory, canceling orders, and raising prices to align with "unusually high" transportation and fuel costs, the Minneapolis-based company reported. Shoppers continue to purchase groceries and other household staples, as well as beauty products, according to the company, but Target intends to plan more conservatively regarding non-essentials such as home goods and decor, citing rapidly changing trends since early 2022. The company is revising sales forecasts, promotional plans and cost expectations, and will also add five distribution centers over the next two years. Target, which had a 52 percent drop in year-over-year first-quarter profit, isn't the only company scrambling as consumers who are weary of the coronavirus pandemic shift from investing in their homes to spending on travel and dining, according to the Associated Press. Macy's, Kohl's and Walmart all reported rising inventories last month, according to the Associated Press, which noted inflation is another factor limiting what shoppers purchase. "Target's business continues to generate healthy increases in traffic and sales, despite sustained volatility in the macro-environment, including shifting consumer buying patterns and rapidly changing operating conditions," Target Chairman and CEO Brian Cornell said in a news release Tuesday. Despite a second-quarter operating margin rate projection of around 2 percent, Target expects that number will rise to around 6 percent in late 2022, exceeding the company's average pre-pandemic fall season performance.