Americans cutting back spending on nonessential items at major retailers – By Justin Boggs (Business Insider) / May 23, 2024
A Target executive said the election, high interest rates and rising credit card debt are possible reasons consumers are spending less on discretionary items.
Target said sales dipped in the first quarter of 2024 as customers cut back on discretionary items.
The company said comparable sales were down 3.7% in the quarter, primarily driven by soft home and hardline sales. Target’s updated financial disclosure comes just days after the company said it is lowering prices on thousands of items, including many grocery products and household essentials.
Target Executive Vice President Christina Hennington cited numerous reasons consumers are cutting their discretionary spending at Target.
“Consumers remain surprisingly resilient despite a challenging backdrop of significantly elevated prices compared to just a few years ago,” she said. “And even as inflation moderates and we see sequential improvement in discretionary category trends, higher interest rates, uncertainty around the future of the economy, continued social and political divisiveness, and the upcoming election cycles have consumers concerned about what lies ahead. In fact, consumer confidence took a meaningful dip in April despite a strong job market and normalizing inflation.”
