Target cuts prices on 3,000 items as stubborn inflation keeps U.S. consumers on edge

The logo for Target is displayed above a trading post on the floor of the New York Stock Exchange (AP Photo/Richard Drew)

Target said on Wednesday it is lowering prices on more than 3,000 products spanning apparel, home goods and daily essentials, a key early move by new CEO Michael Fiddelke as the retailer seeks to woo shoppers and revive demand after three years of declining sales.

The latest price cuts come a week after Fiddelke pledged to revive sales growth this year by reinvesting billions in store remodels, newer products and sharper pricing to shore up demand amid stiff competition from other retailers heading into the spring shopping season.

The big-box retailer is undergoing a turnaround while navigating the macroeconomic uncertainty arising from labor market weakness and tariff-led inflation that’s plaguing several consumer-facing companies.

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U.S. headline inflation remains stubbornly above two per cent and Americans stay cautious, prioritizing essentials and value nearly a year after U.S. President Donald Trump imposed global tariffs on imports.

A spike in energy prices, triggered by the escalating Middle East conflict, has exacerbated inflationary concerns, further dampening consumer demand.

“The latest price reductions reinforce a broader, ongoing value strategy that builds on prior investments and aligns with management’s FY27 framework,” said Jefferies analyst Corey Tarlowe in a note.

Target CEO Fiddelke told investors earlier this month that the company would spend more than US$2 billion across the business this year, including $1 billion on new stores and remodels and another $1 billion on improving the overall guest experience.

The company has lagged other retailers, including Walmart WMT.O, pressured by weaker consumer spending on its higher-priced items.

Walmart and U.S. grocer Kroger already cut prices on essentials, including groceries, to lure in increasingly value-conscious shoppers. Companies such as Procter & Gamble, Coca-Cola and PepsiCo have also lowered entry price points to safeguard their market share.

“Consumers are feeling squeezed by rising costs, especially at the pump, and that puts pressure on retailers to lean into value. Target’s price cuts are a step in the right direction, but they may not be enough to recapture shoppers who’ve drifted to its competitors,” said Zak Stambor, analyst with eMarketer.

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Shares of Target were down as much as 1.9 per cent in afternoon trading. The stock has risen nearly 24 per cent this year after falling more than 28 per cent in 2025.

Target’s forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 14.88, starkly below Walmart’s 42.06 and Costco Wholesale’s 46.07, but slightly above Kroger’s 13.60.

Target has begun rolling out price changes both online and in stores. It has priced down Listerine Alcohol-Free Extra Mild Mouthwash at $4.99 from $5.99, and Toddler Fleece at $10 from $12.

The company said price reductions across categories, including baby essentials, beverages and select food items, will continue through spring.

The retailer lowered prices on thousands of items last year, ahead of the all-important holiday season, to tempt value-hunting shoppers.

Target forecast annual sales and profit largely above estimates after beating holiday-quarter profit targets.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shinjini Ganguli and Arpan Varghese)