Mastodawn

Target CEO says shoppers are pulling back, even on groceries

https://lemmy.world/post/7716000

Target CEO says shoppers are pulling back, even on groceries - Lemmy.World

Target CEO Brian Cornell says shoppers are pulling back, even on groceries, as they feel stressed about their budgets. In an interview with CNBC’s Becky Quick that aired Thursday morning, he emphasized that the retailer has posted seven consecutive quarters of declining sales of discretionary items, such as apparel and toys, in terms of both dollars and units. “But even in food and beverage categories, over the last few quarters, the units, the number of items they’re buying, has been declining,” he said in the interview.

CarbonatedPastaSauce Nov 3, 2023

They are finding the stone is running out of blood.

zeppo Nov 3, 2023

No shit. Groceries have gone up 40% in the past 1-2 years for no real reason while wages have not and things like housing are going up too. Amazing that people would be buying less ‘units’.

ohlaph Nov 3, 2023

No doubt. I’m starting to eat healthier because a bag of Doritos is like $5 now when I used to but 8t for $2.50-3.00. That’s just one example, but across my snacking ‘units’, everything is outrageous.

I’m eating less and healthier ‘units’.

maaj Nov 3, 2023

20oz bottle of coke is $2.29. Used to be $1.29

Bonehead Nov 3, 2023

Where I am, cooking oil is now $14.99 for a 3 liter jug and never goes on sale anymore. It used to be $5.99, and and would frequently go on sale for $2.99. I haven't deep-fried anything in months. This isn't the way I expected to start eating healthier...

Daft_ish Nov 4, 2023

The American dream is dead. When good people can’t even even afford carnival food like fried butter we know lady liberty is sheding tears of regret.

clearleaf Nov 3, 2023

It’s $3.11 canadian dollars from department and grocery stores where I live. Pepsi hasn’t gone up as much, which includes Rockstar energy drinks, which are now cheaper than Coke somehow. On the Walmart website, they show 52 cents per 100ml of rockstar vs 53 cents for Coke.

meseek #2982 Nov 3, 2023

Even $1.29 is robbery for fucking carbonated sugar water. Come to Canada. They are $3.49 now 🫠

Catoblepas Nov 3, 2023

A lot of stuff I used to consider splurge items at Trader Joe’s are now the same price or cheaper than regular brands, it’s ridiculous.

metaStatic Nov 3, 2023

no real reason

because if wages fell 40% there would be fucking riots. your masters are robbing you with the most basic slight of hand and it's working.

zeppo Nov 3, 2023

Sure, I noticed that part. Inflation is always a scam, built into the monetary system, and while manufacturers/distributors are paying more for their materials and energy also, the rest is price gouging. It’s ‘working’ because people have no choice but to you know, eat food.

BraveSirZaphod Nov 3, 2023

Inflation is a natural phenomenon that will occur with or without any amount of central monetary planning. It's impossible to introduce new currency without it affecting the value of that currency. You either don't introduce currency, which causes the existing currency to become more and more valuable as economic developments create new value, or you print some new money which will cause some amount of inflation.

If your economy has $1000 dollars in it, and suddenly a new invention allows you to create 50% more widgets for the same cost, then the same amount of money is now more valuable since it can fund the creation of more stuff. You can instead add another $500 to the economy to represent this new wealth, but that will have an inflationary effect. You can try to balance it to keep it relatively low, which is what the Fed does with its 2% inflation target, but there's no real way to completely get rid of it. Additionally, some amount of inflation encourages people to put money into more productive assets like investments rather than simply hording all their money, allowing the existence of things like credit, which are pretty helpful for anyone looking to start a business or buy a house. But, credit requires you to either have a lot of money sitting around in order to make that loan, or you need to be able to print money. The latter offers a lot more flexibility, but again, thus inflation.

EatATaco Nov 3, 2023

Inflation steals from everyone. sure the rich can weather it more easily, and a few will profit during it, but it doesn’t make anyone more rich.

𝕱𝖎𝖗𝖊𝖜𝖎𝖙𝖈𝖍 Nov 3, 2023

Gone up 40% in cost and down 20% in quantity

butterflyattack Nov 3, 2023

And in quality. Seems like a lot of food items are using cheaper ingredients.

theneverfox Nov 3, 2023

I’ve noticed a lot of things taste worse. Maybe worse ingredients, but also like things were burnt on the assembly line or left out to dry for too long

It has helped me cut down on eating processed food… It’s expensive and not even good half the time

Historical_General Nov 4, 2023

I noticed more defects in chocolates at least.

Deconceptualist Nov 3, 2023

and things like housing are going up too

You’ve noticed the trees but missed the forest. Housing is so astronomically worse. Sure, it sucks to buy bread, but have you looked at mortgage rates??

zeppo Nov 3, 2023

I’m aware of the conditions of the housing market including interest rates, yes.

Sir_Kevin Nov 3, 2023

Not for many years. Buying a home is a fantasy I let go of. Maybe if I leave the US someday…

Blapoo Nov 3, 2023

People can afford mortgages?

sugar_in_your_tea Nov 3, 2023

Mortgage rates aren’t the real issue IMO, but it is an indicator. The real issue is a mix of rent and food prices, which have both gone up drastically. Add to that financing costs for cars and you have basically increased the most common expenses most households have.

Mortgage interest isn’t something the bottom 50% need to interact with, rent, food, and cars are.

meseek #2982 Nov 3, 2023

Where do you live that your groceries only went up 40%??? Here it was more like 100-150%. A dozen eggs from a company I like went from $2.89 back in 2021 to $5.69. They said it was avian flu, temporary, covid, etc. Prices today are still $5.69.

This went across the board. A bushel of green onions went from $.99 to $1.99. Some places went higher.

The worst part of all this is that both rent/mortgage and food doubled in a matter of 3 years. And you have to pay these. There’s no avoiding food and shelter.

It’s as if the entire world just threw you down and started rifling through your pockets. The nice ones let you keep a shilling…

zeppo Nov 3, 2023

I’ve found the prices very much depend on where you shop. A dozen good eggs at my local Albertson’s is $2.50-7.00 depending on how organiccy they are, but I can get 18 at natural Grocers for $5.50 or 24 at Costco for $7.50. Green onions are 2 bundles for $.99 at this Chinese grocery store near me, 89 cents at the local Kroger, or $2.50 at the food coop. A whole chicken at Natural Grocers went from $9.99 to $12.99, but at other stores they’re $15-25 (one is charging $4.99 a lb, which is definitely double what it was a few years ago).

Our rent hasn’t gone up much because it was already ridiculous when my girlfriend signed 3 years ago. Our neighbors who moved in 7 years ago are paying less than 50%.

And yeah, what’s happened with the prices of neccessities is absurd. It’s also absurd that official sources say ‘inflation of 6%! 10%!’. Complete bullshit when we can see prices that went up way more than that.

insomniac Nov 5, 2023

Jesus, where I live eggs are back down to $1.99 a dozen which is more than they used to be but not that extreme. I think pre-pandemic, we were paying $1.79. There was a period where the store brand was $5.99 and Egg Lands Best was $3.99 which made no sense to me.

ohlaph Nov 3, 2023

Hmmm. We raised the prices on EVERYTHING and shoppers aren’t buying as much.

No shit.

RvTV95XBeo Nov 3, 2023

If shoppers are buying less they should just try increasing the price. More revenue per sale you don’t even need those lousy shoppers who left! What could go wrong?

ohlaph Nov 3, 2023

I mean, what does a banana even cost, $10?

Teon Nov 3, 2023

$10. you lucky. I had to trade my car for 1 banana.

Nepenthe Nov 3, 2023

Fair deal. Not everyone has the gas money to bother with a car. Measuring things is free.

RvTV95XBeo Nov 3, 2023

“We tried raising prices to meet our margin targets, and now we’re all out of ideas”

-every MBA at Target

Romanmir Nov 3, 2023

-every MBA everywhere.

Fixed that for you.

danielton Nov 3, 2023

“We’ll also use union actors to tell our team members why unions are bad.”

snekerpimp Nov 3, 2023

So they had their CEO come on and complain that the reason “line go down” is “people no buy” so investors won’t think it’s management’s fault?

catboss Nov 3, 2023

Yes. Either that or everyone involved from shareholders to board is dumb as a rock. Knowing rich people are not special, but just got lucky, I am not ruling out either option.

kubica Nov 3, 2023

Something something no one wants to eat anymore.

BraveSirZaphod Nov 3, 2023

I mean, do you think there are obvious actions that management has done that have caused it? Target's margins are about 3%, so they're not exactly extorting consumers for their own profit. It's a grocery store. It's not a particularly complicated business. Consumer grocery spending probably is more related to the general consumer economic environment than anything that Target does or doesn't do.

snekerpimp Nov 3, 2023

I mean, I think anyone making decisions at a multi billion dollar corporation that they themselves are pocketing millions of that money instead of letting it be reinvested in the business and workers, should be fully to blame for their companies tanking profits.

BraveSirZaphod Nov 3, 2023

Executive salaries are a pretty small portion of business expenses. As per Target's 2022 data, their selling, general, and admin expenses were about 19.76 billion dollars. Of that, the CEO's pay was $17.7 million, or 0.09%, and actually decreased from the year before. Sure, it's a lot of money, but it's pretty average for Fortune 500 CEOs, and nullifying his pay would make essentially no difference. If you were to slash his pay to 0, you could give everyone else an annual raise of $40, representing an hourly raise of about two cents.

snekerpimp Nov 3, 2023

They are still in charge of the company. If I am in charge of the fruit stand and all the fruit goes rotten, I’m responsible. I don’t say “people just aren’t hungry”, I mismanaged something, and should suffer the consequences. They were steering the ship, it’s their fault the business is tanking. Earn the golden parachute you have and take the damn blame.

BraveSirZaphod Nov 3, 2023

Okay, but we're talking about lower consumer spending, not fruit rotting on shelves.

And again, his pay has actually decreased in recent years, even more so when you account for inflation, so you might even say that he's suffering some consequences. I'm not saying that Target is perfect or anything, but sometimes the business environment simply changes despite what leadership does. No amount of good management would have made it be a good time to be a candlemaker or horse carriage operator in the 1930s. Consumer disposable income obviously isn't exactly the same thing as technological obsolescence, but regardless, Target isn't Walmart and isn't trying to be Walmart, nor is it capable of being a better cheap grocer than Walmart is. They're fundamentally aiming at a slightly different target market, and sometimes the economic wind simply isn't blowing your way.

snekerpimp Nov 3, 2023

And you are missing the point of my comments, idgaf about money, they are skirting RESPONSIBILITY. They were driving, they are responsible for the decisions that are making it hard for target to weather the current economic times. Poor management, and this interview was done to deflect that responsibility.

zeppo Nov 3, 2023

Target is not at all primarily a grocery store. They chiefly sell home goods and clothing, which they were known for long before they added the somewhat limited grocery section.

BraveSirZaphod Nov 3, 2023

Sure, I'll admit that's bad wording on my part. I don't think it really changes my point though. If anything, since a lot of the things Target sells aren't strictly necessities like groceries, you'd expect a greater decline in those kinds of non-essential purchases when consumers are in tighter financial environment.

zeppo Nov 3, 2023

I’m not sure of the changes in their sales categories. You’re right about their overall margins being 3-4%, according to their 2022 financial statement. Here’s how their sales break down by category… about 20% food. I suppose ‘beauty and household essentials’ would be things a grocery store also sells such as cleaning supplies.

BabyWah Nov 3, 2023

I live in a country where wages are linked to a central index.

The index measures how expensive life is becoming. If the prices of products and services rise, the index rises accordingly. If the figure exceeds the so-called central index, benefits and wages will automatically increase.

So, this happened in October again and next month I’ll have an increase of 2% in wages.

It’s more complicated than that, but most countries should use this to protect at the very least handicapped, sick or unemployed people who live on benefits.

It’s not much, but it helps in a way.

Match!!Nov 3, 2023

is this a country I, an American, would consider good

BabyWah Nov 3, 2023

Yes, Belgium in Europe. Come on over!

Sir_Kevin Nov 3, 2023

I swear, every time I hear a little bit about how other countries operate I realize more and more what a fucking shithole the US has become.

LemmysMum Nov 3, 2023

Imagine how it feels for us who live in these countries and are bombarded with the hate and ignorance of social wellfare spewing out of the US cultural machine for decades.

TheIllustrativeMan Nov 3, 2023

Interesting, Belgium has never really landed on my list of places to look at. Then again, Germany didn’t either until I studied there for a while…

Any chance you guys have an Architect shortage? 😅

BabyWah Nov 4, 2023

There’s always a need for architects. For such a small country, people here are always building and renovating. Maybe try it out first with an architect firm here? You can always send your CV to a few firms and explain you’d like the experience.

But really do your homework on where exactly you want to live. Flemish/Wallon/urban Brussels, the coast or Limburg? If you’ve already experienced Germany, it’s a bit the same here.

Got_Bent Nov 3, 2023

I dunno man. You’ve got that whole slathering your French fries in mayonnaise thing.

I think I’ll continue living in my shit hole, no healthcare, hopeless wage slave, daily mass shooting, christofascist dictatorship because I need that sweet, sweet sugary ketchup.

BabyWah Nov 4, 2023

Oh, we have sooo many more sauces. And our fries are really the best. Right across the border, in the Netherlands, they even have peanut sauce for fries. I tried it and it was shit.

BlanketsWithSmallpox Nov 4, 2023

Yeah, but Flemish…

Ik sprek neet hoot naderlands.

BabyWah Nov 4, 2023

Trust me, I moved to a rural region and understand half of what these people say and I was born here :) it’s a tough language to learn, but you’ll get there. Also Belgians are exposed to other nationalities since the 60’s and know how to communicate non-verbally if they have to. Most of them have learned Dutch, French, German and know English.

Refurbished Refurbisher Nov 3, 2023

TF does “good” even mean to you?

jordanlund Nov 3, 2023

No, we just aren’t shopping at Target. :)

Th4tGuyII Nov 3, 2023

Damn who could've predicted that the price of even basic groceries skyrocketing up while wages stay stagnant (again) would discourage people from buying more things. It's almost like they don't have the money ...

El Barto Nov 3, 2023

Or they have the money but they’re shopping elsewhere.