Target CEO Brian Cornell says shoppers are pulling back, even on groceries, as they feel stressed about their budgets.
In an interview with CNBC’s Becky Quick that aired Thursday morning, he emphasized that the retailer has posted seven consecutive quarters of declining sales of discretionary items, such as apparel and toys, in terms of both dollars and units.
“But even in food and beverage categories, over the last few quarters, the units, the number of items they’re buying, has been declining,” he said in the interview.
No shit. Groceries have gone up 40% in the past 1-2 years for no real reason while wages have not and things like housing are going up too. Amazing that people would be buying less ‘units’.
No doubt. I’m starting to eat healthier because a bag of Doritos is like $5 now when I used to buy it for $2.50-3.00. That’s just one example, but across my snacking ‘units’, everything is outrageous.
I’m eating less and healthier ‘units’.
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Where I am, cooking oil is now $14.99 for a 3 liter jug and never goes on sale anymore. It used to be $5.99, and would frequently go on sale for $2.99. I haven’t deep-fried anything in months. This isn’t the way I expected to start eating healthier…
The American dream is dead. When good people can’t even afford their first cardiac arrest from eating carnival food like fried butter we know lady liberty is sheding tears of regret.
Even $1.29 is robbery for fucking carbonated sugar water. Come to Canada. They are $3.49 now 🫠
It’s $3.11 canadian dollars from department and grocery stores where I live. Pepsi hasn’t gone up as much, which includes Rockstar energy drinks, which are now cheaper than Coke somehow. On the Walmart website, they show 52 cents per 100ml of rockstar vs 53 cents for Coke.
A lot of stuff I used to consider splurge items at Trader Joe’s are now the same price or cheaper than regular brands, it’s ridiculous.
Gone up 40% in cost and down 20% in quantity
And in quality. Seems like a lot of food items are using cheaper ingredients.
no real reason
because if wages fell 40% there would be fucking riots. your masters are robbing you with the most basic slight of hand and it’s working.
Sure, I noticed that part. Inflation is always a scam, built into the monetary system, and while manufacturers/distributors are paying more for their materials and energy also, the rest is price gouging. It’s ‘working’ because people have no choice but to you know, eat food.
Inflation is a natural phenomenon that will occur with or without any amount of central monetary planning. It’s impossible to introduce new currency without it affecting the value of that currency. You either don’t introduce currency, which causes the existing currency to become more and more valuable as economic developments create new value, or you print some new money which will cause some amount of inflation.
If your economy has $1000 dollars in it, and suddenly a new invention allows you to create 50% more widgets for the same cost, then the same amount of money is now more valuable since it can fund the creation of more stuff. You can instead add another $500 to the economy to represent this new wealth, but that will have an inflationary effect. You can try to balance it to keep it relatively low, which is what the Fed does with its 2% inflation target, but there’s no real way to completely get rid of it. Additionally, some amount of inflation encourages people to put money into more productive assets like investments rather than simply hording all their money, allowing the existence of things like credit, which are pretty helpful for anyone looking to start a business or buy a house. But, credit requires you to either have a lot of money sitting around in order to make that loan, or you need to be able to print money. The latter offers a lot more flexibility, but again, thus inflation.
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and things like housing are going up too
You’ve noticed the trees but missed the forest. Housing is so astronomically worse. Sure, it sucks to buy bread, but have you looked at mortgage rates??
I’m aware of the conditions of the housing market including interest rates, yes.
Not for many years. Buying a home is a fantasy I let go of. Maybe if I leave the US someday…
People can afford mortgages?
Mortgage rates aren’t the real issue IMO, but it is an indicator. The real issue is a mix of rent and food prices, which have both gone up drastically. Add to that financing costs for cars and you have basically increased the most common expenses most households have.
Mortgage interest isn’t something the bottom 50% need to interact with, rent, food, and cars are.
Where do you live that your groceries only went up 40%??? Here it was more like 100-150%. A dozen eggs from a company I like went from $2.89 back in 2021 to $5.69. They said it was avian flu, temporary, covid, etc. Prices today are still $5.69.
This went across the board. A bushel of green onions went from $.99 to $1.99. Some places went higher.
The worst part of all this is that both rent/mortgage and food doubled in a matter of 3 years. And you have to pay these. There’s no avoiding food and shelter.
It’s as if the entire world just threw you down and started rifling through your pockets. The nice ones let you keep a shilling…
I’ve found the prices very much depend on where you shop. A dozen good eggs at my local Albertson’s is $2.50-7.00 depending on how organiccy they are, but I can get 18 at natural Grocers for $5.50 or 24 at Costco for $7.50. Green onions are 2 bundles for $.99 at this Chinese grocery store near me, 89 cents at the local Kroger, or $2.50 at the food coop. A whole chicken at Natural Grocers went from $9.99 to $12.99, but at other stores they’re $15-25 (one is charging $4.99 a lb, which is definitely double what it was a few years ago).
Our rent hasn’t gone up much because it was already ridiculous when my girlfriend signed 3 years ago. Our neighbors who moved in 7 years ago are paying less than 50%.
And yeah, what’s happened with the prices of neccessities is absurd. It’s also absurd that official sources say ‘inflation of 6%! 10%!’. Complete bullshit when we can see prices that went up way more than that.
Jesus, where I live eggs are back down to $1.99 a dozen which is more than they used to be but not that extreme. I think pre-pandemic, we were paying $1.79. There was a period where the store brand was $5.99 and Egg Lands Best was $3.99 which made no sense to me.
Hmmm. We raised the prices on EVERYTHING and shoppers aren’t buying as much.
No shit.
If shoppers are buying less they should just try increasing the price. More revenue per sale you don’t even need those lousy shoppers who left! What could go wrong?
I mean, what does a banana even cost, $10?
$10. you lucky. I had to trade my car for 1 banana.
Fair deal. Not everyone has the gas money to bother with a car. Measuring things is free.
“We tried raising prices to meet our margin targets, and now we’re all out of ideas”
-every MBA at Target
-every MBA everywhere.
Fixed that for you.
“We’ll also use union actors to tell our team members why unions are bad.”
They are finding the stone is running out of blood.
Shoppers are quiet quitting. Nobody wants to shop anymore
Watching shoe company gouge CHILDREN by marketing and selling them running shoes for 500 dollars kinda turned me off from ever wanting to give those companies money ever again.
Barefoot running is it then.
Kidding aside, kids do need good shoes, but they’ll also need new shoes every 6 months or more, so $500 is definitely out of the question for most parents.
It must be a signal product or something. Quite frankly I don’t mind those, because it only steals money from dumb rich people. If I were to start a business that’d be my segment too. It’s easier to find 10 customers willing to pay a $1000 for a bag of shit than it is to find 1000 customers willing to pay $10 for the same bag of shit.
Quite frankly I don’t mind those, because it only steals money from dumb rich people
Oh no I think you’ll find that most of the people that are targeted by this type of predatory marketing are not rich, some are, but most are just taking money away from other essentials to try and get that thing that the multi-million dollar marketing campaign told them they must have
You’re right. Most customers for those kinds of products are only pretending to be rich. The suburban BMW/Audi segment. Actual rich people don’t buy those things.
I grocery shop with the app now. It costs $100/yr including delivery. I don’t have to step foot in the store and I can track my spending to the dollar so I’ve saved more than the app costs just by avoiding impulse purchases.
If I don’t like the produce they send, I reject it at the door and they replace it.
It’s pretty sweet for us and is saving a bunch of time and money.
It’s “set foot” goddammit, not “step foot.” I fucking hate that. Never do it again.
Go fuck yourself dude
I set my foot by stepping, so it is literally ‘step foot’ any way you look at it and I will absolutely continue to use the phrase appropriately.
Thanks for inspiring my increased usage of the term.
Damn who could’ve predicted that the price of even basic groceries skyrocketing up while wages stay stagnant (again) would discourage people from buying more things. It’s almost like they don’t have the money …
Or they have the money but they’re shopping elsewhere.
Except wage growth is now out pacing inflation, so it’s a bit more complicated than that
For people in the lower income bands that buy at Target it’s Food inflation that counts, not the general inflation figure that’s calculated using a basket of goods and services with many things which are beyond the purchasing power of such people.
The personal inflation for such people is almost certainly higher than their wage growth.
But food inflation is at around the same level as overall inflation, so I imagine it’s close if not the same. Do you have the numbers to back this claim up or is it just gut?
You are correct that Food Inflation is at the same level as the broad Inflation right now.
However last year when inflation peaked, Food inflation was 10.4% Y-on-Y (source, see 3rd chart) whilst broad inflation was 6.5% (source).
Meanwhile wage growth was at around the 6% mark (source) so below even broad inflation.
Looking at the graphs in all 3 sources, the higher than inflation average wage increase at the moment (even if it was evenly distributed across all income ranges, which in the present day US it is almost never the case) isn’t enough to compensate the already baked-in higher food prices due to the food inflation last year and the first quartile of this year.
Given that when people get overextended they will first draw down on any savings they have and cut down on non-essentials, and the problems that Target now pointed out didn’t just start today, it makes some sense that what they’re seeing is the reflection of an accumulation the effects from above wage growth inflation from April 2021 to early this year which was worse for Food during most of that period, significantly so at its peak.
Yes but we are just seeing people cut back now, when wage growth is now outpacing inflation. The top level comment made the claim that wages are stagnant. I corrected that by pointing out the facts and that it’s more complicated…and then you went on yo explain how it’s significantly more complicated.
And why put in all of this effort to cite your other sources, and then just claim that the poor are being screwed by wage growth, when low wage workers saw the largest wage increases coming out the pandemic? I can’t find the stats for right now which groups are seeing most robust growth.
Why do you keep saying the same thing even though the other guy keeps proving you incorrect?
He proved me correct by showing that wage growth is now beating out inflation, and that it’s more complicated than the top level comment alluded to with their false claims that wages are stagnant. I’m not sure what you think about my point is wrong.
On average, and that isn’t true for everybody everywhere (even within the US)
And the price of some food items have fallen over the past year. What’s your point?
My point being those who haven’t seen an inflation matching salary increases, which applies to a lot of people, are going to be hit hard by the large average increases in grocery prices regardless of if some happen to go down.
Sure, but this is always true.
And that invalidates my argument how exactly?
We’re talking about what is happening now. Pointing out something that always happens in an argument thats trying to explain current issues doesn’t make much sense.
Is it really ‘pulling back’ when consumers are priced out of those things?
Who is buying anything at this point, I mean seriously? The only thing my wife and I buy now is food, and we hunt, literally hunt for the lowest possible prices on any item before we buy anything. These people who spend 1000 dollars on a concert or 500 dollars for running shoes actually blow my mind.
I thought you literally hunt meant you and your wife are out there with rifles taking down a deer. Or somebody else’s chicken
It’s sort of not a bad idea but it’s also not a good idea. At least I got a neighbor who has chickens and she gives me eggs
Prices are just getting that bad.
mm, yappy dog hot dog
The people who spend a thousand on concert tickets or five hundred on shoes will be complaining about their credit card debt on Facebook next month.
It took me a while to get it through my head why people who I knew were making less than I do had significantly nicer stuff. The difference is that I own what I have. They don’t.
I’m fortunate that after many years of struggle and single parenthood that I’m finally in a place with a comfortable income and free of debt except a small mortgage. Nonetheless, give or take a couple of cheap flights to go see friends a couple times a year, I still live like I’m struggling. That shit will burn into your mind if you suffer through it long enough.
Caveat: In spite of what I just wrote, I still have to work until I collapse and die at my desk. It’s a pretty great future for me presently in my fifties. Only another thirty or forty years to go before I can afford to stop working entirely. Save your money when you’re young if at all possible, kids.
Middle class sucks. Doing well now but I know it will take so little for it all to go to hell. Glad things are getting slightly better for you.
My wife and I are extremely fortunate in that we have a family friend rent situation that is way below market rent and both have decent income & no kids (yet). We enjoy a bit of light travel and go to 5-6 concerts a year and maybe one music festival. Outside of that we are fairly frugal. Don’t eat out often, do most of our shopping at Aldi etc. That being said, we don’t feel particularly well-off. And if we had a mortgage (minimum in our area with a 20 percent down payment) would be around $2k a month and a car payment, things would be pretty tight. I don’t know how people are getting by at this point… especially new families buying their first home and starting to have kids…
That’s the neat part. They don’t! (start families or buy houses)
The people who spend a thousand on concert tickets or five hundred on shoes will be complaining about their credit card debt on Facebook next month.
Or not. Because they could just be well off.
I’m still buying things, but only because I plan for it (with the exception of taking advantage of a very short term deal with smile direct club to straighten my teeth for $1000 this week, which I had savings that could cover it). Just a few years ago I was quite comfortable and able to buy luxury items on a fairly regular basis. Today I’m working a second job to make ends meet.
People who have recession-proof employment that is who is buying stuff.
It’s almost like people don’t have enough money to buy things when wages are stagnating and prices are going up. Weird.
People are still buying cars and luxury goods though. This reads almost as a story of how our society is fracturing.
People cannot afford groceries or basics, but the new iPhone seems to sell pretty well.
It has titanium! How could not want to buy that! How innovative! It’s a completely different experience in your hand, you’ve tried metal, plastic, even glass, but not… Titanium… So cool…
I worked in China for a couple years on a banking app for lending money. The middle class in large cities over there was interested only in social status. They would happily borrow insane amounts for the newest phones and biggest cars, when they couldn’t afford a dinner for their kids. I know that what we did was predatory and exploitative, and on a scale unimaginable on European markets. Our marketing predicted a collapse of the target social class in 5-7 years… That was 4 years ago.
I’m certain other (western) markets experience similar progression - and exploits.
That’s terrifying.
Tbf, without good public transport, many places in the US iirc, require good quality cars.
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Does replying to deleted comments work?
* it does.
Does replying to the reply of a deleted comment work?
It does.
This was true May 2021 - Jan 2023 but has flipped since luckily.
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
Unfortunately though there’s been long periods like the 2000’s where wgae growth vs inflation barely budged, though they did start going up in the 2010’s again. Real wages are still catching up to where they were in the like 1970s though. 1980s were not kind to real wages (wage vs inflation).
It’s funny how much people here hate hearing this. Any time you point out this fact, it’s down voted.
Because it’s misleading at best. If you and I were racing and I moved at twice your speed for four hours it would be misleading to say you were outpacing me when you start moving faster than me for four minutes. Just because you are now faster than me you are still very far behind and therefore it makes no material difference how fast you are currently moving. American workers are still in a hole caused by stagnant wages and corporate price gouging that’s lasted for decades.
I don’t think it was misleading, I think people didn’t read the whole comment. I said the trend reversed but we haven’t even caught back up to where we were in the 1970s. It’s going to take more than just one year of real wage growth to make up for stagnation and loss over decades. Wage growth is outpacing inflation for the moment, but this was just a recent change.
And likely temporary. I talked to my boss about our expected merit increase (stupid name, it’s just the inflation increase) and he said to not expect as much as last year, which was also below inflation. We source our numbers from the rest of the market and target something like 65-75 percentile (higher than average, but not top of market).
Last year we got ~5.5%, and this year will probably be a little lower (like 4-5% maybe).
You can’t catch up if you never out pace them, so of course it’s important and not misleading. You don’t think they talk about teams coming back from being down early on?
But more importantly, the claim that wages are stagnant is not just misleading, but outright wrong, and it was corrected. Why aren’t you calling out the actual false statement rather than claiming reality is misleading?
That’s not true anymore. Looks like salaries are keeping up with inflation:
https://www.bankrate.com/banking/federal-reserve/wage-to-inflation-index/
Did you even read the article? The gap between inflation and wage increase is closing, but inflation is still higher.
And that’s irrelevant because we have 25 years of decreasing wages to make up for.
From the article:
“Pay is beginning to catch up in the race, and since May, has been rising faster than inflation after losing ground for more than two years.”
Basically what they are saying is that it’s behind overall, because it lagged so much due to COVID, but that salary growth is actually faster than inflation right now.
Looks like you didn’t read the article:
Pay is beginning to catch up in the race, and since May, has been rising faster than inflation
You and the person who also claimed the comment youre replying to was wrong cannot read. Whether wages are rising faster than inflation is irrelevant when we are years and years behind. All that means is that we are on an uphill trajectory.
If you have 20 apples to start, and you have to pay me 1/3 apple per month. You make 2 apples per month. Over a year I raise that tax to 1+1/3 apples.
If over the next year, I raise your apple income by 2/3 of an apple and your apple tax by 1/3, your earnings increase outpaces the increase of my apple tax, but you’re still completely fucked.
It’s not the same as saying everything is hunky dory, but of course wages growth now beating inflation is relevant in a discussion about the relationship between wages and inflation, and especially when someone makes the incorrect claim that it’s the other way around.
You can never not be behind if wages never outpacing inflation, so the fact that it’s catching up is important.
Yes. You’re still not getting it though.
The rate in which pay is increasing is higher than the rate at which inflation is increasing. That is correct. But if you look at the numbers, total inflation in 2023 is still higher then total pay increase in 2023.
You are conflating a rate increase with a total increase. That is not accurate.
In a society that deletes the middle class, prioritizes the oligopoly in which three fucking people own more than the bottom 50% (in 2017, before the great covid wealth transfer), and every goddamn product (necessity or no) is overpriced to fuck because a handful of companies owns the majority of the “competitors”…
it’s almost like people CAN’T AFFORD to not “pull back” on even groceries. Fuck capitalism, fuck the oligopoly, fuck this fucked planet. Humanity is a cancer
I live in a country where wages are linked to a central index.
The index measures how expensive life is becoming. If the prices of products and services rise, the index rises accordingly. If the figure exceeds the so-called central index, benefits and wages will automatically increase.
So, this happened in October again and next month I’ll have an increase of 2% in wages.
It’s more complicated than that, but most countries should use this to protect at the very least handicapped, sick or unemployed people who live on benefits.
It’s not much, but it helps in a way.
Maybe the rich people could BUY MORE UNITS. Since the rest of us normal people don’t have that kind of money.
But they’re counting on us buying UNITS so they can make money. Just hasn’t occurred to them that they have to pay the working class money in order for them to spend it.
They’ll bring back scrip and company towns before they pay us equitably.
“The middle class is tanking the ______ industry”
It’s all that damn avocado toast smh my head.
Welcome to the elephant curve
So they had their CEO come on and complain that the reason “line go down” is “people no buy” so investors won’t think it’s management’s fault?
Something something no one wants to eat anymore.
Yes. Either that or everyone involved from shareholders to board is dumb as a rock. Knowing rich people are not special, but just got lucky, I am not ruling out either option.
I mean, do you think there are obvious actions that management has done that have caused it? Target’s margins are about 3%, so they’re not exactly extorting consumers for their own profit. It’s a grocery store. It’s not a particularly complicated business. Consumer grocery spending probably is more related to the general consumer economic environment than anything that Target does or doesn’t do.
I mean, I think anyone making decisions at a multi billion dollar corporation that they themselves are pocketing millions of that money instead of letting it be reinvested in the business and workers, should be fully to blame for their companies tanking profits.
Executive salaries are a pretty small portion of business expenses. As per Target’s 2022 data, their selling, general, and admin expenses were about 19.76 billion dollars. Of that, the CEO’s pay was $17.7 million, or 0.09%, and actually decreased from the year before. Sure, it’s a lot of money, but it’s pretty average for Fortune 500 CEOs, and nullifying his pay would make essentially no difference. If you were to slash his pay to 0, you could give everyone else an annual raise of $40, representing an hourly raise of about two cents.
They are still in charge of the company. If I am in charge of the fruit stand and all the fruit goes rotten, I’m responsible. I don’t say “people just aren’t hungry”, I mismanaged something, and should suffer the consequences. They were steering the ship, it’s their fault the business is tanking. Earn the golden parachute you have and take the damn blame.
Okay, but we’re talking about lower consumer spending, not fruit rotting on shelves.
And again, his pay has actually decreased in recent years, even more so when you account for inflation, so you might even say that he’s suffering some consequences. I’m not saying that Target is perfect or anything, but sometimes the business environment simply changes despite what leadership does. No amount of good management would have made it be a good time to be a candlemaker or horse carriage operator in the 1930s. Consumer disposable income obviously isn’t exactly the same thing as technological obsolescence, but regardless, Target isn’t Walmart and isn’t trying to be Walmart, nor is it capable of being a better cheap grocer than Walmart is. They’re fundamentally aiming at a slightly different target market, and sometimes the economic wind simply isn’t blowing your way.
And you are missing the point of my comments, idgaf about money, they are skirting RESPONSIBILITY. They were driving, they are responsible for the decisions that are making it hard for target to weather the current economic times. Poor management, and this interview was done to deflect that responsibility.
Target is not at all primarily a grocery store. They chiefly sell home goods and clothing, which they were known for long before they added the somewhat limited grocery section.
Sure, I’ll admit that’s bad wording on my part. I don’t think it really changes my point though. If anything, since a lot of the things Target sells aren’t strictly necessities like groceries, you’d expect a greater decline in those kinds of non-essential purchases when consumers are in tighter financial environment.
I’m not sure of the changes in their sales categories. You’re right about their overall margins being 3-4%, according to their 2022 financial statement. Here’s how their sales break down by category… about 20% food. I suppose ‘beauty and household essentials’ would be things a grocery store also sells such as cleaning supplies.
“People with only $100 to spend are still only spending $100 on things! And we raised prices and everything!”
These rubes figured out what compound interest is! We’ll be ruined if people only but what they can afford!!
underrated comment.
When you wring the middle class for every spare cent they have, eventually money is going to stop falling out no matter how hard you twist them.
People just aren’t buying from Target
Among my peers (early/mid 20s to early 30s) everyone explicitly avoids grocery shopping at target because it’s so much more expensive than other big box retailers. Target is for the occasional home decor items or household items, but very rarely food in my experience.
The only thing I have noticed is that every piece of men’s clothing I have bought from them has worked out for me. It didn’t die quickly or have some weird defect. I tend to shop there for clothing for that reason.
The last time I went to target it sort of skeeved me out. I bought two bookshelves, and once I paid there were two employees that seemed to want to get really close and follow my wife and I out the door. So I paid for something and probably ended up in their database as a shoplifter.
Are you sure they weren’t just waiting to see if you needed help lifting the bookshelves into your car?
If they were doing that, they could use their word-noises like adult human beings.
And they didn’t help, so your comment doesn’t make sense.
Not always, friend. Being a human/communication is hard. It’s also entirely likely that they had walkies in and their manager was telling them to keep an eye out for you in case you did need an employee nearby to ask for help. I think your original comment assuming conspiratorial malice instead of just much-more-common awkwardness is the comment that doesn’t make sense.
Yes, I have the same experience there. It’s ridiculous. I rarely go there anymore because of that, and everything being expensive.
Edit: sorry, this comment was meant for someone else! Lemmy tacked it under yours for some reason.
Yep it’s getting skeevy. I think Target is the next Kmart.
I go there to window shop and never ever buy anything. I visit around this time of year because I know less people will be there and I can have peace - just never buy there. Now they get traffic and not a purchase, whoopsie.
