published : 2023-11-04

Target CEO on consumer spending: 'They're buying less stuff'

Consumers are 'managing that budget really carefully,' Target CEO said

A photo of Target CEO Brian Cornell during his CNBC interview, captured with a Nikon D850.

Target CEO Brian Cornell shared his insights on consumer spending, revealing that customers have been purchasing fewer items.

During a CNBC interview, Cornell acknowledged that consumers are managing their budgets carefully, which is putting pressure on discretionary spending.

This trend is evident even within the food and beverage category, as people are buying less.

Despite the decline in spending, Cornell noted that the top line indicates a healthy consumer base still willing to spend.

This reflects the cautious approach consumers are adopting when it comes to buying units-wise for food and beverages.

Target has experienced seven consecutive quarters of declining dollars and units in discretionary categories, including clothing, home goods, and toys.

A close-up shot of a Target shopping cart filled with food and beverage items, taken with a Canon EOS R.

Cornell emphasized that Target is planning conservatively in these categories as a result.

Additionally, there has been a shift in consumer behavior during the pandemic, with people not purchasing goods at the same level as before.

Cornell is confident that this will change over time.

One trend observed by Target is that American consumers are embracing seasonal moments, such as Halloween and summer celebrations.

Target aims to capitalize on these trends.

For Halloween, the National Retail Federation projected Americans to spend approximately $12.2 billion.

An image of a crowded Halloween aisle at Target, showing customers selecting costumes, captured using a Sony A7 III.

Looking ahead to the winter holidays, the NRF estimates that shoppers will spend an average of $875 each on presents, decorations, and food.

In mid-August, Target adjusted its expectations for the third quarter, anticipating a mid-single-digit decline in comparable sales.

The company is scheduled to report quarterly results on November 16.

As an expert in consumer spending, D.R. Barton from Woodshaw Financial Group provided his outlook on Walmart and Apple shares, as well as the decline in Treasury yields.

The article highlights the impact of consumer behavior on major retailers like Target, shedding light on the measures they are adopting to navigate market challenges.