Target reportedly lost market share in several of its key product categories in the first quarter.
The retailer’s share shrank in food and household goods, clothing, electronics, homewares and furniture — categories that collectively account for 60% of its revenue, Reuters reported Friday (June 14), citing data from market research firm GlobalData.
In addition, Target’s purchase rates and average spending per shopper have dropped, the report said, pointing to data from online shopping tracker PriceSpider.
A Target spokesperson told Reuters that CEO Brian Cornell said in May that the retailer expects to see sales growth in the current quarter, according to the report.
During the first quarter, Target’s comparable sales dropped for the fourth consecutive quarter at a time when its rivals reported rising sales and growing market share, the report said.
Target has attributed its drop to delayed purchases, increased spending on activities outside the home and other macroeconomic factors, without addressing its loss of market share, per the report.
“Business trends continue to reflect a normalization in spending patterns that first emerged more than two years ago, a pattern where consumers are remixing their spending back into services and entertainment outside of their homes after curtailing those activities during the pandemic,” Cornell said in May during the company’s quarterly earnings call.
The retailer’s stock has also underperformed compared to that of its rivals. Over the year, Target’s stock is up 1.6%, while Amazon’s is up 21%, Walmart’s is up 27% and Costco’s is up 28%, according to Friday’s Reuters report.
To reverse these trends, Target launched its private-label brand Dealworthy in January, and has plans to cut prices on 5,000 grocery items this summer. The retailer also aims to add 125 more food items to its Good & Gather and Favorite Day brands, the report said.
“Our summer assortment is about bringing together everything people love about Target and making it even easier to shop, even more joyful and even more affordable,” Jill Sando, the retailer’s executive vice president and chief merchandising officer of apparel and accessories, home and hardlines, said in a May press release announced new, low-price summer items.
One analyst interviewed by Reuters said these moves are a good start but may not be enough to reverse its loss of market share, while another said that the retailer’s expansion of its private-label offerings and price cuts are the right things to do in the current environment.
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