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Target Tackles Holiday Season Head-On with Price Cuts and Strategic Shifts
Minneapolis, MN – As the holiday shopping season rapidly approaches, retail giant Target is pulling out all the stops to entice shoppers and reverse a recent sales slump. Under the guidance of its new chief executive, the company is implementing a multi-pronged strategy, with a significant focus on making holiday budgets stretch further for families.
Target announced it will be slashing prices on thousands of essential food and household items, a move designed to deliver immediate value to consumers. Rick Gomez, Target’s commercial officer, confirmed that approximately 3,000 items across these categories will see price reductions.
“That move to reduce prices is really just one part of a much broader plan to ensure that we’re delivering great value to the consumer, given how important that is to them right now,” Gomez stated.
Beyond everyday savings, Target is significantly expanding its holiday offerings. This year, the retailer has more than doubled its holiday assortment, introducing an impressive 20,000 new gift options. Shoppers will find thousands of toys priced under $20, alongside a wide array of affordable holiday home décor, including ornaments starting at just $1, candles at $5, and throws at $10.
These initiatives come as retailers nationwide navigate a challenging economic landscape. High inflation and rising interest rates have prompted debt-laden households to tighten their belts, leading to a reduction in discretionary spending. Target, which traditionally relies more heavily on discretionary products, has been particularly affected, experiencing consecutive quarters of subdued traffic, weak growth, and declining sales.
The company’s latest quarterly results underscored these challenges, with sales declining 2.7% and total revenue slipping 1.5%. Adjusted earnings per share also saw a 4% drop compared to the previous year.
Michael Fiddelke, who is set to take the helm as CEO in February, acknowledged the current climate. Fiddelke, who aims to steer the embattled retailer towards a more profitable future, indicated a prudent and cautious approach for the remainder of the year. The company has narrowed its full-year profit forecast, now expecting earnings of $7 to $8 per share, down from its earlier estimate of $7 to $9, alongside a projected single-digit decline in store sales.
“We saw some choppiness by month in the quarter, and we learned over time that in times of volatility, it’s best for us to be positioned cautiously,” Fiddelke told reporters.
In an effort to revitalize store traffic and alleviate profit pressures, partly attributed to tariffs, Target has also undertaken internal restructuring. This included cutting approximately 1,000 corporate positions and eliminating 800 open roles, a move intended to streamline decision-making and foster growth.
The company is also strategically expanding its brand partnerships. Collaborations with Chip and Joanna Gaines’ home and lifestyle brand Magnolia, as well as a Target-exclusive holiday drink with Starbucks, are designed to attract more shoppers. Starbucks, under its CEO Brian Niccol, is also pursuing its own turnaround strategy.
Looking ahead, Target is committing significant resources to future growth. The company announced a $5 billion investment for 2026, marking a 25% increase from 2025. These funds will be directed towards remodeling existing stores, constructing new large-format stores, and upgrading supply chain and technology infrastructure to further enhance the overall shopping experience for its customers.