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.
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.