It’s a War: Target Lowers Prices to Attract Shoppers From Walmart

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Target’s plan to cut prices of around 5000 products, from milk to diapers, was seen as a way to attract Walmart customers. The two companies are seen as big rivals, so many dubbed this move an act of war against Walmart. Here is what we know about Target’s intentions and how the two shopping giants compare.

Americans are more conscious about their spending


Target’s plan to slash prices of essential products comes at a time when most Americans are more conscious of their spending habits. The announcement from Target said customers feel pressured to make the most of their budgets, adding that deductions are in addition to their everyday low prices. 

Rewards for members

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In addition to slashing prices, which already began during the Memorial Day weekend, though not on all planned items, Target intends to reward its Circle Card Rewards Members. The members will be offered the best deals, and lower prices might be included for products that aren’t discounted.

Target wants to remain in the competition 


Target’s lower prices will affect national brands and its house brands. Target Circle Card members will get an additional 5 percent and special deals. The card is free and without fees, and it works for online and in-store shopping. It is another way to support cash-strapped Americans in the post-pandemic world. 

Red tags 


Around 1500 products across Targets have red tags, which means their prices were reduced. The company’s statement shared that they planned to save millions from their customers during the summer months. The news came soon after Walmart released its strong first-quarter earnings.

Walmart is typically cheaper

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Walmart has 4,623 locations, compared to Target’s 1,956 stores. Walmart was traditionally seen as a cheaper version, though the two companies share a similar business model. However, the lines between shoppers are getting blurrier, with Walmart welcoming more upscale customers and Target turning to those who typically shop at Walmart. 

Walmart’s premium line

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Walmart launched its premium, private-label food brand Bettergoods in April 2024. Many people commented that this was the company’s response to the $4 billion Good & Gather grocery brand. Walmart has outperformed Target in the past few years, so it isn’t surprising that it is fighting back. 

The financial situations 


Like the rest of the world, Americans struggle with the new reality: inflation, rising housing prices, and bills. One study even suggested that around 64 percent have trouble paying their bills this year. That’s why many companies are finding ways to stay in the business. 

Walgreens also cut prices

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Walgreens announced price cuts on 1,300 items, citing the financial strain that the customers are experiencing. Among the items reduced are vitamins, cosmetics, and groceries. The news broke soon after Target announced slashing prices of necessities, including baby food, pet food, fruit, dairy, coffee, peanut butter, and more. 

People are changing their shopping habits


C. John Zhang, a professor of marketing at the Wharton School, explained to the Cut that price reductions result from changes in shopping habits. Zhang emphasized that it’s easier to discount prices by overestimating inflation than to compensate for lost profits afterward.

Guilty of gouging


The professor said that some companies were involved in price gouging, though they believed most businesses were too scared of inflation. That’s why they did everything to protect profitability and often overreacted. But the pre-pandemic price will likely never return. 

The price of groceries


Grocery prices have increased around 25 percent in the past four years, outpacing the inflation of 19 percent during the same period, according to the Washington Post report in February. With inflation still high but not as high as it was, the prices of groceries should drop. 

Will others follow?

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Many fast food chains announced limited-value meals. McDonald’s is offering a $5 value menu this month. Wendy’s is rolling out a $3 breakfast. Burger King is adding value deals that will be provided for several months. Taco Bell is also preparing a new menu, but Chipotle and Sweetgreen said higher-income consumers are driving their sales. 

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Kate Smith, a self-proclaimed word nerd who relishes the power of language to inform, entertain, and inspire. Kate's passion for sharing knowledge and sparking meaningful conversations fuels her every word.