Americans are shifting their consumption patterns, and Target and Walmart are experiencing high demand.

After years of facing soaring prices and rising interest rates, American consumers are changing their shopping habits. They have shifted towards discount chains like Target and Walmart, while reducing spending at Macy's and Lowe's.

Inflation is changing consumer habits in the US. (Source: Bloomberg)

In the second quarter of 2024, sales at Target stores that had been open for a year or more increased by 2%, and company profits surged 36%, thanks to a discounting strategy.

The company lowered prices on more than 5,000 items commonly purchased in stores to attract customers. This strategy proved effective, with Target stores seeing a 3% increase in foot traffic in the second quarter of 2024, and customers spending more on non-essential items like clothing.

Analyst Joseph Feldman at investment advisory firm Telsey Advisory Group noted that consumers are focusing on necessities while selectively spending only on non-essential items.

High inflation and interest rates have put significant pressure on consumers, forcing them to spend more selectively than they did at the beginning of the pandemic and focus on discount stores.

Besides Target, consumers are also spending more at Walmart. Walmart's sales at US stores that have been open for a year or more increased 4.2% in the last quarter.

Target's revenue increase in the past quarter ended a previous four-quarter streak of declines. Target's revenue and profits surged during the peak of the COVID-19 pandemic in 2020 and continued to grow into 2023.

However, Target has faced many difficulties over the past year, due to its product mix and higher prices compared to competitors like Walmart.

More than half of Target's merchandise consists of non-essential items. Although Target has added food and essential goods to its stores in recent years, it still lags behind Walmart, where about half of its sales come from food.

TJX, the parent company of the discount clothing chains TJ Maxx and Marshalls, also reported positive business results in the past quarter. Sales at stores open for one year or more increased by 4%. TJX has raised its sales forecast for the entire year.

Source: https://baoquocte.vn/nguoi-my-chuyen-huong-tieu-dung-target-va-walmart-dat-khach-283486.html