Target sees shift in consumer behavior

Core Insights - Target is adapting to a significant shift in consumer behavior, focusing on lowering prices to meet changing spending habits [7][10] - The company reported a decline in net sales and merchandise sales, indicating weaker demand for physical goods [9][10] Consumer Behavior - Consumers are cutting back on discretionary spending due to financial strain, with 25% expressing pessimism about the economy in November 2025, up from 21% in August 2025 [4][5] - A significant 44% of consumers reported that high prices are negatively impacting their finances, leading to a reevaluation of spending habits [5] Retail Strategy - In response to economic conditions, Target announced plans to lower prices on 3,000 essential items for the holiday season, with expectations that these reductions may continue into 2026 [8][10] - The company’s proactive approach to keeping prices low on essentials is seen as a necessary step to align with consumer sentiment [10] Financial Performance - Target's net sales for Q3 2025 were reported at $25.3 billion, a 1.5% decrease from the same period in 2024, reflecting a broader trend of declining demand [9] - Merchandise sales fell by 1.9% year-over-year, indicating a shift away from physical goods purchases, particularly discretionary items [10]