In a bid to alleviate the financial strain on American households grappling with inflation and stagnant minimum wages, Target Corp. has announced plans to slash prices on approximately 5,000 basic goods this summer. The move comes as more consumers are tightening their belts and seeking out deals to stretch their dollars.
The retail giant is lowering prices on a wide array of consumer staples, ranging from food and beverages to essential household items. The price reductions, already applied to 1,500 items, are part of a broader strategy to cater to customers who are feeling the pinch of higher grocery prices.
"Target is cognizant of the pullback by shoppers due to inflation and because of the increased cost of using credit cards," the company said in a statement. The retailer has seen its first annual decline in sales — 1.7% — in seven years, a trend it attributes to the financial pressures facing its customers.
The price cuts will extend to both national brands and Target's own house brands. Customers can expect to see reduced prices on everyday items like milk, bread, fruits, vegetables, diapers, and pet food. The company's statement emphasized that these reductions are in addition to their "everyday low prices," which are routinely adjusted to remain competitive in the market.
This move by Target comes at a time when the federal minimum wage has remained stagnant at $7.25 an hour for nearly 15 years. The purchasing power of this wage has dropped 17% between 2009 and 2019, reflecting an annual loss of over $3,000 in earnings for full-time workers.
A 2021 survey by the Pew Research Center found that more than three out of five adults in the U.S. favor raising the federal wage floor to $15 an hour. Even among those who oppose the $15 raise, a majority still favor a slight increase.
Despite this public sentiment, the minimum wage has not kept pace with inflation and productivity. The National Low Income Housing Coalition points out that the average minimum wage earner would have to work 97-hour weeks to afford rent in a two-bedroom apartment at fair market value.
Target's price reduction strategy also includes the launch of a collection called Dealworthy, which offers nearly 400 basic items, from clothing to electronics, at prices below $10, with many items costing less than $1.
The company is expected to offer more insight into its pricing strategy and how it's addressing changes in customer behavior when it releases its quarterly financial report on Wednesday.
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