Atlanta/ Retail & Industry
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Published on May 29, 2024
Target and Walmart Cut Grocery Prices to Attract Shoppers Amid Inflation ConcernsSource: Unsplash/ Tara Clark

As summer heats up, so do the deals. Big-name retailers are slashing prices to draw back shoppers who have grown tired of high inflation rates. According to a report by WABE, giants like Target and Walmart are rolling out significant discounts, especially on groceries, to provide some reprieve for customers facing the pinch of rising living costs.

The move is seen as a sharp turn from the persistent price hikes of the past years, signalling a major shift in retail strategy. Neil Saunders, managing director of GlobalData, explained these discounts are a necessary measure for retailers determined to hold onto their customers. "Retailers recognize that unless they pull out some stops on pricing, they are going to have difficulty holding on to the customers they got," Saunders told WABE. As part of these efforts, Walmart expanded its price rollbacks to nearly 7,000 grocery items, while Target slashed prices on 1,500 items and plans to continue cut costs on another 3,500 throughout the summer.

Discounts aren't only restricted to groceries. McDonald’s is introducing a $5 meal deal to address slowing sales, and convenience store operator, Arko Corp., has launched what CEO Arie Kotler described as their "most aggressive" deals in roughly two decades. Kotler observed that due to higher gas prices and inflation, "consumers cutting back, consumers coming less often, and consumers reducing their purchases," he recounted in an interview with WABE.

But do these price cuts mean we're back to pre-pandemic numbers? Not exactly. Michaels crafts stores announced reductions ranging from 15% to 40%, bringing some prices back to their 2019 marks. However, Target suggested comparing current prices to a fixed time frame is complex due to varying inflation rates across different items. The broader effort to trim prices aims to recapture customer loyalty and boost in-store traffic, which for Target has seen a hit with its fourth consecutive quarterly decline in comparable sales, as reported by WABE.

While the question remains on how these companies are funding the cuts, GlobalData’s Saunders speculated that some are likely leveraging a combination of reduced expenses, vendor support, or potentially taking a hit on profits instead of risking customer backlash by raising prices elsewhere. Amidst these changes, consumers have indeed something to smile about as they fire up their grills and plan their summer outings, with plenty of deals now on the table.