Target’s Latest Rollout Puts Cost-Conscious Consumers First

Target’s new private label aims to draw budget-conscious consumers back into the store. 

This week, the company announced the launch of its new private label, Dealworthy. Products in the line–which include beauty, personal care, electronics, apparel, and home SKUs–will roll out in stores on February 18. Items will be priced as much as 50 percent less than competitor brands, with prices between $1 and $10. 

The Minneapolis-based company’s bid to draw in budget shoppers makes sense. Retail businesses nationwide are struggling to bring in consumers pressed by inflation, and Target has particularly suffered from shoppers reducing their discretionary spend at its stores. The company reported in October 2023 that sales declined over 3 percent year-over-year resulting in over $2 billion lost revenue. 

“We know that value is top of mind for consumers, and Dealworthy, backed by our owned brand promise, will not only appeal to our current guests but position us to attract even more new shoppers to Target,” Rick Gomez, Target’s EVP and chief food, essentials, and beauty officer said in a statement.

Target also announced this week the expansion of its 15-year-old private label Up&up, which drives $30 billion in sales annually for the company. In February, the company will launch more than 2,000 new and reformulated items, most priced at less than $15. 

Business owners struggling to drive sales may take Target as an example to find new ways to appeal to cost-conscious shoppers. Budget-friendly stores tend to thrive during recessions, Jorge A. Guzman, associate professor of business management at Columbia Business School told Inc. in 2022. And considering consumers tipped credit card debt over $1.13 trillion after the holidays and are expected to finally reel in their spending habits, more businesses might be slashing prices instead.

Or, they might consider the opposite, by taking note from other retailers who leverage premium products to boost sales during economic strife. There are always outlying consumers who prefer quality over quantity, or may not be impacted as much by inflation and are able to splurge on discretionary goods.