Target is canceling orders from its suppliers, particularly in home and clothing, while slashing prices of goods in a bold move to clear out mounds of unwanted inventory ahead of the critical fall and holiday shopping seasons.
The Minneapolis-based discounter announced the move Tuesday. It comes as shoppers shifted their spending in the past few months faster than Target and other merchants expected.
During the depths of the pandemic, shoppers sought casual clothes and home goods like furniture, but they are now returning to pre-pandemic routines and seeking dressier clothes and services. It marks a reversal from the past two years when retailers were scrambling to bring in goods that were clogged in the supply networks. That resulted in skimpy discounts.
“Target’s business continues to generate healthy increases in traffic and sales, despite sustained volatility in the macro-environment, including shifting consumer buying patterns and rapidly changing operating conditions," said Brian Cornell, chairman and chief executive officer of Target Corporation. "Since we reported our first-quarter results, we have continued to monitor external conditions and have determined the necessary actions to remain nimble in the current environment."
Target said it is factoring in the rapid increase in fuel costs for its decision.