Americans who spend Memorial Day scouting sales online and in stores may find more reasons to celebrate the return of warmer weather
Americans who spend Memorial Day scouting sales online and in stores may find more reasons to celebrate the return of warmer weather. Major retailers are stepping up discounts heading into the summer months, hoping to entice inflation-weary shoppers into opening their wallets.
Target, Walmart and other chains have rolled out price cuts — some permanent, others temporary — with the stated aim of giving their customers some relief. The reductions, which mostly involve groceries, are getting introduced as inflation showed its first sign of easing this year but not enough for consumers who are struggling to pay for basic necessities as well as rent and car insurance.
The latest quarterly earnings reported by Walmart, Macy’s and Ralph Lauren underscored that consumers have not stopped spending. But multiple CE0s, including the heads of McDonald’s, Starbucks and home improvement retailer Home Depot, have observed that people are becoming more price-conscious and choosy. They’re delaying purchases, focusing on store brands compared to typically more expensive national brands, and looking for deals.
“Retailers recognize that unless they pull out some stops on pricing, they are going to have difficulty holding on to the customers they got,“ Neil Saunders, managing director of consulting and data analysis firm GlobalData, said. “The consumer really has had enough of inflation, and they’re starting to take action in terms of where they shop, how they shop, the amount they buy.”
While discounts are an everyday tool in retail, Saunders said these aggressive price cuts that cover thousands of items announced by a number of retailers represent a “major shift” in recent strategy. He noted most companies talked about price increases in the past two or three years, and the cut mark the first big “price war” since before inflation started taking hold.
Higher-income shoppers looking to save money have helped Walmart maintain strong sales in recent quarters. But earlier this month, the nation’s largest retailer expanded its price rollbacks — temporary discounts that can last a few months — to nearly 7,000 grocery items, a 45% increase. Items include a 28-ounce can of Bush’s baked beans marked down to $2.22, from $2.48, and a 24-pack of 12-ounce Diet Coke priced at $12.78 from $14.28.
Company executives said the Bentonville, Arkansas-based retailer is seeing more people eating at home versus eating out.
