The same retailers that have helped to push consumer prices up by 20% over the past four years are getting desperate as shoppers aggressively tighten their spending to cope with stubborn inflation. Some of the biggest retail chains in America are on a price-cutting spree to gain back their customers now that sales are declining faster than expected and financial results have started to disappoint.
They are finally feeling the consequences of the substantial price hikes they have passed on to consumers since 2020. That’s why some companies are reporting discounts of up to 30% to lure people back into their stores.
Big name-retailers like Target, Walmart, Aldi, Best Buy, Home Depot, and more, are introducing a shift in sales strategy to prevent facing even bigger financial losses over the coming quarters, according to multiple reports. Executives are saying that American consumers have become too “price-conscious” and “choosy” after years of persistent price increases.
At this point, not only those at the bottom of the economic ladder are curbing their spending. Chad Lusk, consumer and retail group managing director for consultancy firm Alvarez & Marshal, noted that upper-income households are also changing their consumption patterns due to lower affordability. “The ‘budget conscious consumer’ is no longer just low- or middle-income earners,” he told CNN. “By far the starkest decrease in intent to spend is coming from the higher-income groups, and those that were previously the most immune to an economic downturn are now tightening their belts.”
The rapid change in consumer behavior is prompting swift action by retailers, who cannot afford to lose any more customers. Last week, Target executive vice president and chief food, essentials, and beauty officer, Rick Gomez revealed that more than 1,500 items faced price cuts in the past month alone, including staples like frozen chicken breast, cheese, butter, and baby supplies, like diapers and cleansing wipes.