Target shoppers are now buying fewer groceries, its CEO said. / Photo: Shutterstock
Grocery has been a consistent bright spot for Target, even as inflation-pressed consumers have cut back on discretionary purchases.
But Target CEO Brian Cornell told CNBC on Thursday that shoppers at the Minneapolis-based retailer are starting to pull backâeven on essential items.
âTheyâre buying less stuff, even within food and beverage,â Cornell said in an interview with CNBCâs Becky Quick. âEven in food and beverage categories, over the last few quarters, the units, the number of items theyâre buying, has been declining. So, theyâre even tightening up their spending in those categories.â
Target is slated to report its third-quarter earnings on Nov. 15.
In August, the retailer lowered its sales outlook for the remainder of the year after reporting its first quarterly drop in earnings in six years. Comparable-store sales fell 5.4% during the three months ended July 29, though food and beverage sales were up in the low single digits during the period, with particular strength in snacks, candy and beverages.
Cornell, in the interview, said Target has seen seven consecutive quarters of decreases in discretionary sales, both in dollars and units purchased. Regardless, though, he said shoppers continue to enjoy âseasonal moments.â
âWhether itâs Halloween or the summer moments, going back to Motherâs Day and Fatherâs Day, theyâre still enjoying these moments and they keep looking for newness,â he said.
To that end, Target added more than 70 private-label food and beverage items for Halloween, as it looked to offer a wide range of store and national brands that consumers couldnât find elsewhere, most priced under $5.
And for Thanksgiving, Target just launched a meal for four that costs less than $25, including turkey at under $1 per pound and an assortment of sides and desserts for $5 or less. Most of the items on the menu come from Targetâs Good & Gather store brand.
âWeâve been very committed to delivering value for our guests,â Rick Gomez, Targetâs EVP and chief food and beverage officer, told WGB last month. âAnd what we recognize is right nowâwith inflation, with the economyâour guest is looking for affordability.â
Cornell told CNBC that seasonal sales will continue to be an area of focus for the company.
âWeâre going to lean into those big seasonal moments and play to win,â he said. âWhat we know is the consumer is looking for something thatâs new, looking for affordability, looking for that special item for the holiday season.â
Heather Lalley is the editor in chief of Winsight Grocery Business, overseeing a team of editors and a web producer to write, report and publish breaking news, features, trend stories and industry analysis.
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