Christmas in May: Major Retailers Lure Customers with Summer Price Cuts

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While inflation-weary consumers become increasingly tuned in to value and cost savings, many retailers find themselves floundering under lagging sales and shrinking profit margins. The solution? Celebrate the arrival of the warm weather with online sales and price reductions to entice customers back to the fold.

Major retailers like Target, Walmart and others are rolling out cost savings and price cuts as they describe, “to give their customers some relief.”

While inflation showed the first signs of easing up this year, many consumers still struggle to pay for essentials. Recent quarterly earnings by Walmart, Macy’s and Ralph Lauren demonstrate consumers haven’t stopped spending their disposable income altogether, but are far more price conscious and selective. Today’s consumer is willing to delay purchases and look to store brands over more expensive national brands to stretch their dollar.

“Retailers recognize unless they pull out some stops on pricing, they are going to have difficulty holding on to customers,” said Neil Saunders, the managing director of consulting and data analysis firm, GlobalData. “The consumer really has had enough of inflation, and they’re starting to take action in terms of where they shop, how they shop, and the amount they buy.”

Walmart has benefited from the inflationary struggle in seeing an increase of higher-income shoppers coming through their doors to save money. To keep them coming, earlier this month the retail giant expanded price rollbacks on upwards of 7,000 grocery items, with discounts that may last for months.

Rival big box retailer, Target, is also slashing prices to stay in the game. Last week Target reduced prices on 1,500 products in food, beverages, and essential household items. The retailer says they plan to make similar cuts on 3,500 more products this summer.

Discount supermarket, Aldi, will cut prices on 250 items – especially those for barbecues and picnics – in a summer promotion that will last through Labor Day. Michael’s arts and crafts chain announced markdowns in prices of common art supplies ranging from 15 to 40 percent, which the company says will be permanent. 

Fast food merchants are feeling the pain, too, with growing customer dissatisfaction over rising prices. McDonald’s is responding by planning to introduce a limited-time $5 meal deal in the US, to bring back sales and woo frustrated customers. 

Could a possible rollback to pre-pandemic pricing be on the horizon? Will a backdoor benefit of inflation be a flux of ongoing sales and price cuts for consumers? What are retailers doing to fund these discounts? Keep reading here.

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