Target
- Target is launching a new budget brand for clothes, electronics, beauty products, and home items.
- The range includes undergarments, toothbrushes, and dish soap. Most of the items will be under $10.
- Target execs said in November that shoppers were having to make trade-offs and cut back on discretionary spending.
Target has launched a new budget brand that will offer shoppers low-cost clothes, electronics, beauty products, and home items.
Target said on Thursday that the brand, Dealworthy, will feature nearly 400 "everyday basics," with most items under $10 and some costing less than $1.
The range will include items such as undergarments, socks, toothbrushes, laundry detergent, and dish soap.
Target will also sell Dealworthy electronics, including phone cases and power cords, as well as kitchen and home items like paper plates, paper towels, and food containers.
Beauty products and toiletries on offer will include shampoo, dental floss, and cotton balls and swabs.
Target
The retailer said that the first products would be available in stores and on its website on Sunday, February 18, with more being rolled out throughout 2024 and in early 2025.
The new brand could see Target competing more closely with dollar stores, many of which have scrapped the $1 price point in recent years amid soaring inflation. Dollar Tree, the last of the big three dollar store chains to stick to price tags of $1 and under, put its price up to $1.25 in late 2021.
Inflation has been cooling in recent months. But prices soared in the wake of the pandemic, forcing some shoppers to trade down by turning to cheaper brands, including retailers' own-branded products. Aldi, whose range is mostly made up of private-label brands, said that US sales soared in 2022.
"Consumers are still spending, but pressures like higher interest rates, the resumption of student loan repayments, increased credit card debt, and reduced savings rates, have left them with less discretionary income, forcing them to make trade-offs in their family budgets," Target CEO Brian Cornell told investors at the company's most recent earnings call in November.
Executives said that food and beverage prices were up by 25% on average compared to pre-pandemic and that customers had been "delaying their spending until the last moment" to stretch their budgets until the next paycheck, like waiting for the weather to turn cold before getting winter clothing.
Target makes $30 billion a year from own-brand products
Target told Business Insider that it would be selling a 200-pack of jumbo cotton balls for $1.99, a two-pack of toothbrushes for $0.99, and tablet stands and phone cases for $5.99 each.
"In each category they will be the lowest-priced item at the shelf," Rick Gomez, Target's chief food, essentials, and beauty officer, told Axios. The phone cases will cost half the price of the cheapest cases it sells by other brands, Target said in its press release.
Target
"With Dealworthy, Target is offering more options at lower prices, starting at less than $1, while strengthening its portfolio of owned brands," the retailer said in a press release.
Target said that it makes more than $30 billion in annual sales from its owned brands. Target brought in revenues of $109 billion in 2022.