WSJ: Target Stock Plummets Due to Disappointing Earnings Report

Target recently reported its worst earnings in years, causing its stock to drop by 21%. This comes at a tough time, right in the middle of the holiday shopping season. According to the Wall Street Journal, shoppers are starting to lose interest in Target and are turning to competitors like Walmart instead.

It seems like high grocery prices are a big factor in this shift, as many customers are feeling the pinch of inflation and are looking for better deals. In fact, about 75% of Walmart’s recent gains in market share have come from households earning over $100,000 a year, as reported by Yahoo! Finance.

Customers have started complaining about missing items on shelves, long checkout lines, and products being locked up to prevent theft. They also feel like groceries are cheaper elsewhere and that the store lacks exciting items. Some are still upset about Target’s Pride month collection in 2023.

The company has also been struggling to recover from a hit it took last year with its Pride merchandising. The controversy surrounding a collection by designer Erik Carnell didn’t help matters either.

Target’s Chief Executive Brian Cornell and his team blame external factors like economic conditions for the company’s poor performance. Despite an increase in store visits and improved shopper-experience scores, the retailer is still facing challenges.

Many customers, like retired executive Lee Middleton from Miami Beach, feel like Target has lost its charm. With out-of-stock products and long checkout lines, the shopping experience has become less enjoyable for many.

Target relies heavily on groceries for about 20% of its sales, whereas Walmart generates 60% of its revenue from food items. To try and compete, Target has started slashing prices on many items.

Some experts believe that Target is in need of a makeover, with marketing professor Scott Galloway even suggesting that it could be a potential target for a leveraged buyout. Bloomberg reported that the company needs to create new “cheap-chic” hits to stay relevant in a market filled with competitors like Lululemon and Gap.

To attract budget-conscious consumers, Target is pinning its hopes on popular $25 leggings and other high-quality, low-cost products for the upcoming holiday season. The retailer is aiming to reclaim its reputation for being affordable and stylish, hoping to win back customers and revitalize its image as a go-to destination for savvy shoppers.