Target slashes prices to keep pace with competition

By Pouyan Broukhim

Target’s shares have dropped significantly, trading as much as 4.7% lower than they were previous to the announcement that it would be introducing thousands of cuts on everyday items sold in store.

For any company, lowering prices threatens gross margins, something that resulted in the drastic drop in the retailer’s share prices.

The source of the growing competition in the supermarket industry can largely be put down to Amazon, who immediately announced significant price reductions to Whole Foods’ range after buying the company out for $13.7bn in its latest acquisition.

As the ecommerce giant upended the books and electronics industries, food retailers are now battling to avoid a similar threat to their fates.

See also:

"We want our guests to feel a sense of satisfaction every time they shop at Target," Mark Tritton, Target's Chief Merchandising Officer.

"Part of that is removing the guesswork to ensure they feel confident they're getting a great, low price every day.”

"We've spent months looking at our entire assortment, with a focus on offering the right price every day and simplifying our marketing... all while maintaining sales we know are meaningful to guests."

Target is not the first to announce price reductions in an attempt to match Amazon’s advances, with Wal-Mart and Kroger already having done so.

The company has also expanded its online presence to keep pace with competition, demonstrated by its online sales having jumped 32%, whilst also having announced its movement away from Amazon's cloud services in an attempt to stop funding a key rival.

Share

Featured Articles

How Elon Musk pulled off a $44bn hostile takeover of Twitter

As the world’s richest man, Elon Musk, takes over tech giant Twitter, we highlight the timeline that led to this titanic takeover

Amazon, Alphabet, Wells Fargo best workplaces, says LinkedIn

The top 50 workplaces to grow careers prioritise flexible work and tuition-support programs, as top-ranking firms Amazon and Alphabet prove, says LinkedIn

Top 10 women in technology in the US

These 10 women in tech are forging a path into bold areas of innovation and technological ambition, according to sister publication Technology Magazine

8 executive moves to crypto – from mainstream to startup

Technology & AI

Digital Twins tech ‘missing link’ in urban decarbonisation

Technology & AI

The Metaverse Foundry from Infosys is a business playground

Technology & AI