Target Is Ramping Up Discounts. Here's Why
(CNN) -- Target is stuck with too much home decor and too many TVs. To clear out the glut, it will ramp up discounts.
The retail giant said Tuesday that it would mark down prices on some bigger-ticket items that consumers have pulled back on purchasing and cancel pending orders from suppliers.
Target and other big-box retailers stocked up on a wide array of merchandise such as electronics and furniture throughout the pandemic to respond to red-hot consumer demand.
But many shoppers in recent months have altered their purchasing choices in response to the fastest jump in inflation in decades and the end of federal government pandemic stimulus payments.
Consumers are making fewer high-end purchases and buying more necessities like food, household staples and self-care items.
Target was caught off guard by the speed of these shifting trends and last month told investors it would begin marking down some overstocked items.
On Tuesday, the company said it needed to respond more aggressively.
The steps will dent the retailer's profit estimates for the year, the company said.
Heading into Tuesday, Target's stock was down 31% for the year, and shares dropped 2% in early trading following the unexpected announcement.
Other retailers, including Walmart, Gap and Urban Outfitters, have also said they are holding too much inventory of some product lines and also plan to mark down prices and step up sales to clear the glut.
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