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Target slashes prices on 5,000 items: Here's why

In an era of increased inflationary pressures, consumers are seeking out bargains and value-driven offerings. This trend has prompted retail giant Target (TGT) to adopt a new pricing strategy, slashing prices on a range of consumer staple items across their stores. Ahead of the highly anticipated summer season, Target has announced price reductions on approximately 5,000 items, with 1,500 of these items getting immediate markdowns.

Yahoo Finance's Madison Mills breaks down the details of this strategic move ahead of their earnings report.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Video transcript

In an effort to turn around sluggish sales numbers target to charge will be cutting prices on 5000 items this summer with 1500 items getting their prices slashed effective immediately with the company reporting its latest earnings.

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This Wednesday, our own Madison Mills joins us to explain why target is making this move right now.

Ok. What's the impetus behind this?

Well, they're noticing that consumers are starting to buckle under the weight of inflation and they need to do something about it.

We're seeing the likes of Wal Mart having a very successful earnings print, bringing in consumers across the income level, which could be an indication that consumers are looking for better deals.

Target wants to get in on that and they're doing that by cutting prices on a lot of what we call the consumer staples.

The things that you can't really go without your Clorox wipes your Thomas bagels.

If you're a fan of a non New York City bagel here, you know, with their lotions, Huggies, cutting down prices on those items and this will go up to 5000 items, they've already cut is on 1500 the company says they're gonna be cutting back even more as we head into the rest of the summer and said again, shoppers can expect more bargains for July 4th and the back to school and back to college seasons as well.

Now, it's interesting to note is that these price cuts come again as we are seeing additional kickbacks from target to consumers.

Those who are in the target Circle card program can get an additional 5% discount on top of the discounted prices that were already seen across these 5000 items.

So it's an indication to me that target, I I mean, I think there's a chance that consumers could get a little bit irritated by this because obviously it's good to have the price cuts.

But at the same time, could they have lowered these costs months ago, right?

Uh Also I, I have never tried thomas' bagels, I've only tried the e the, the, the muffin, the English muffin, but I mean, it's coming at a time too where they're using this opportunity to promote ahead of Memorial Day weekend summer sales saying, hey, some of these everyday low items, whether it's red cups for those of you who are probably tossing some ping pong balls into it or those of you who just need, you know, an extra grill at home.

Um Those everyday low prices that they're trying to talk about are also trying to promote the du jour of seasonality too.

Well, and it's also interesting.

I forgot to note this, that Walmart is America's biggest grocer.

So a lot of these price cuts coming in for food, that could be a potential move to compete with Walmart as well.