The Target Strategy – Slashed Prices and the Desperate Fight for Retail Foot Traffic

On Tuesday afternoons, a certain kind of silence descends upon a Target store that didn’t exist five years prior. The red bullseye still shines above the sliding doors, and the carts are still arranged neatly outside the entrances, but the rhythm has altered. There are fewer customers lingering in the home goods section. There are fewer impulsive purchases filling baskets close to the registers. It’s difficult to ignore, and the business seems to have noticed as well.

This week, Michael Fiddelke, who became CEO last month, made his first significant move by cutting prices on over 3,000 products. Cuts in clothing, household goods, and everyday necessities range from 5% to 20%. It seems like a daring opening salvo on paper. In reality, it appears more like a borrowed tactic. His predecessor, Brian Cornell, used a similar strategy multiple times between 2017 and 2024, but the outcomes were, at most, temporary. In 2024, Target temporarily increased same-store sales after slashing prices on 5,000 items. The company’s obstinate over-reliance on discretionary spending at a time when American consumers were only purchasing necessities caused the gains to vanish.

The story’s uncomfortable part is that. Pricing isn’t really Target’s issue. It has to do with positioning. The concept that you could come in for laundry detergent and leave with a $40 throw pillow you didn’t realize you needed was the foundation of the chain’s identity for twenty years. When paychecks were comfortable, that magic worked. Now, when the same customer goes the extra mile to Walmart for groceries that are significantly less expensive, it is less effective. Earlier this year, Target’s foot traffic decreased for the eighth consecutive month. CFRA analyst Arun Sundaram put it plainly: cutting prices by itself isn’t a winning strategy.

Additionally, there was a more subdued shift that received less media attention. A recent report claims that Target has started to distance itself from direct competition with Walmart and Kroger in some grocery and necessities categories, focusing instead on improving what it can control, such as manager workload, store cleanliness, and the fundamental aspects of a shopping experience that had been subtly deteriorating. You’re more likely to see a neat endcap than a creative one if you walk into a Target today. It remains to be seen if that trade-off is worthwhile.

Investors appear hesitant to give Fiddelke space. Thanks to his $6 billion capital plan and an AI-focused presentation at the company’s investor day on March 3, the stock has increased by roughly 20% since January. However, there seems to be a limit to Wall Street’s patience, particularly after three years in a row of declining sales. Some of the optimism feels more like hope dressed up in a suit than it does like belief.

As you watch this play out, you can’t help but think of other stores that attempted to use discounts to get out of identity issues; JCPenney comes to mind, and that didn’t end well. There is no target. Not even near. However, the difference between a beloved brand and a merely functional one is smaller than executives would like to acknowledge, and one of the most difficult things in retail is to get customers to expect delight once they have stopped.

The price reductions will be beneficial. Most likely. Maybe two quarters. The more fundamental question—whether Target still knows what it wants to be—remains obstinately unresolved.