As the holiday shopping season begins, big retailers are experiencing diverging fortunes. Target missed sales expectations, citing a focus on necessities and a soft market for nonessentials, while Walmart exceeded expectations with better-than-expected earnings. Analysts attribute this difference to the value-conscious American consumer who is shifting their dollars to Walmart. The focus on discounts is expected to drive holiday sales, with Walmart and other value-focused brands seeing success.
Despite concerns about inflation and affordability, U.S. retail sales rose in October, indicating a healthy economy. The National Retail Federation predicts steady sales growth this season. However, worries about affording basics persist for many consumers. Target’s struggles may not be reflective of the retail industry overall, as some shoppers have complained about the company’s positioning and limited hours for self-checkout. Price competition among major retailers is intensifying, with discounts becoming more widespread.
The shift towards e-commerce continues this holiday season, with Target and Walmart experiencing strong growth in online sales. Retailers are focusing on ways to attract online shoppers, especially younger consumers who are adopting Buy Now, Pay Later services. Overall, the retail industry is adapting to the changing consumer preferences and economic conditions, with a focus on value and online shopping expected to drive holiday sales.
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