They were ordering for a level of demand that was very reasonable,” said Bobby Griffin, retail analyst at Raymond James. “All last year the supply chain was very, very tight. Several say the sudden shift in consumer buying habits was not the fault of miscalculation by management. Many analysts agree that Target did the right thing taking the hit. “The vast majority of the financial impact of these inventory actions is now behind us.” He predicts a meaningful improvement in operating margin rates in the fall season. While that might have reduced the near-term financial impact, it would have held back our business over time,” said CEO Brian Cornell to investors. “Consider the alternative: we could have held on to excess inventory and attempted to deal with it slowly, over multiple quarters or even years. But company executives insist it was the right choice. The hit to earnings from such deep discounting was unavoidable. Target’s profit plunge came from the deep discounts it had to offer on much of its general merchandise, such as clothing, electronics and home goods. Friday it announced it had to cut 5% of the staff due to expanding too fast during the good times. (WMT), which posted only a narrow drop in profits for the quarter.īut many analysts believe Target is still in good position going forward, that it’s not at risk of joining some of the other pandemic winners who are now struggling, like online retailer Wayfair It was a stark contrast to larger rival Walmart Inflation-weary shoppers shifted to buying essentials such as food and gas rather than “nonessential” general merchandise that is central to Target’s sales and profits. Profits plunged 90% compared to a year earlier. Target was widely seen as one of the winners of the pandemic, gaining new customers as shoppers not wanting to go into brick-and-mortar stores were drawn to its growing curbside pickup and home delivery.īut after a disappointing fiscal first quarter when profits fell 40%, Target just had an even worse second quarter. But the big box retailer is promising things will change in the other direction just as fast. “Target is adjusting its marketing strategy to diversify its offerings to a budget challenged premium shopper.Target just demonstrated how quickly things can change in the world of retail, posting a terrible quarter after nearly two years of soaring profits and record revenue growth. “Target knows non-traditional Target shoppers are likely to start trialling their store as the cost of living increases and the discount departmental store brand wants to give them something that appeals and will entice them to spend,” Mrs Spooner told. Retail and marketing expert Lyndall Spooner explained that Target is counting on consumers “breaking up” with “premium brands” because of the rising cost of living and suddenly seeing Target as an option. Often its more expensive blazer and dresses will make the rounds on social media for being popular and fashionable. Yes, the women’s Target fashion is more expensive but it is also going more viral.
Meanwhile, if you stepped into Kmart, you could pick up a coat for under $50. Target’s slogan, “expect more, pay less,” doesn’t seem to be the motto when it comes to pricing women’s clothing, with most items selling at the same prices a women’s fashion chains that were traditionally pricier. To put Target’s prices into perspective, you could pick up a coat at Sportsgirl for $120-$140, or Cotton On sells coats from $60 to $100.
It is imperative to focus on essential expenses first,” Mr Jagger advised.Ĭan regular Aussies still afford Target? Picture TikTok “People need to be conscious about where their money goes more than ever before. So is that a good thing? Well, it is if you can shop without breaking your budget. This is down compared to 12 months ago, when Australians were reported to spend on average five hours online shopping per week, forking out a similar $232.įinder’s shopping expert Chris Jagger said: “The demand for non-essential spending is high despite the cost of living skyrocketing.” Finder’s Consumer Sentiment Tracker reveals on average, Australians spend four hours online shopping per week, excluding groceries, splurging roughly $227 per week. Inflation in Australia has bubbled over to 7 per cent, meaning plenty of Aussies are looking for more affordable clothing options.įinancial pressure has increased, but Aussies are still spending on fashion. Target’s now selling dresses for $70 and coats for $120 yes, even Target has become expensive and the timing isn’t great.
0 kommentar(er)
