Target waves a red flag for retail
Consumer confidence isn’t the only headwind facing the retailer.
Transcript:
Kelsey Barberio: Target has now thrown up yet another red flag when it comes to the state of the U.S. consumer. Just days after the latest PCE report showed consumer spending slowed by a half percent in January, Target saw its own customer’s confidence decline.
The retailer saw sales drop in February, and it only expects sales to grow about 1% for the entirety of 2025. Target said slumping consumer confidence impacted sales of discretionary items - like clothing and home goods. Discretionary sales make up a majority of Target’s merchandise.
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But weary consumers are only one of the headwinds facing Target — tariffs present another issue. CEO Brian Cornell told CNBC that President Trump’s tariffs on Mexico could force his company, as well as others, to raise prices on fruits and vegetables. He told the outlet “Those are categories where we’ll try to protect pricing, but the consumer will likely see price increases over the next couple of days.”
Target’s shift away from its DEI practices have also caused some customers to shop elsewhere. Not only have customers been unhappy with the decision, some have actually called for a boycott of the chain.
But it has not been all doom and gloom for the retailer. Target reported its fourth-quarter earnings and revenue both beat Wall Street exceptions.
That’ll do it for your daily briefing. From New York City, I’m Kelsey Barberio with TheStreet.
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