On the heels of Target’s Thanksgiving value play – a sub-$20 holiday meal for four – today, the retailer announced a strategy to lower prices on 3,000 SKUs across food, beverage, and household essentials.
“It’s important work that will make a difference for families managing tight household budgets during the holidays,” said Lisa Roath, Target EVP and chief merchandising officer of food, essentials, and beauty, in a statement.
The initiative comes as retailers prepare for an uncertain holiday season.
Recent consumer sentiments are nearing a historic low after the key index dropped over 6% in November compared to the previous month, according to a survey from the University of Michigan. Worries over the government shutdown and ongoing economic concern are the likely culprits for this decline.
Despite the bleak outlook, the National Retail Federation is bullish on the holidays ahead.
“The economy has continued to show surprising resilience in a year marked by trade uncertainty and persistent inflation,” said NRF chief economist Mark Mathews in a recent statement.
Target’s Grocery Price Cuts in Play for 2025 Holiday Season
NRF estimates that 2025 holiday sales are expected to increase between 3.7-4.2% from 2024, in both cases surpassing the $1 billion threshold for the first time in history. Of that, food and beverage purchases are slated to take up a sizeable share of the basket.
Target’s recent announcement subverts Americans’ holiday shopping perceptions, coming at a time when 85% anticipate higher prices due to tariffs.
Over the period, the retailer is also offering other deals to drive customer value, including a “deal of the day” savings of up to 50% for Target Circle members, weeklong deals rolling out every Sunday until Dec. 24, and a holiday price match guarantee in effect until Christmas.
Late last month, Target announced an 8% cut to its corporate workforce (totaling 1,800 roles), marking the business’s largest round of layoffs in a decade. This decision, coupled with the -0.9% hit to net sales in Q2, signals the brand is taking a radical approach to saving margins. Target will release its Q3 results on Nov. 19.
Other U.S. Retailers Engaging in Grocery Price Cuts
Those familiar with the retail industry will remember a time when grocers engaged in “value wars” with each other; often, this resulted in a race to the bottom for prices.
While perceptions of value have changed in the post-pandemic inflationary environment, it seems retailers are once again embracing this philosophy to engage consumers who are cash-strapped and looking for value.
Some notable U.S. retailers who have discounted groceries this year include:
- Aldi, which cut prices on more than 400 products for the summer
- Walmart, which offered 7,400 temporary price cuts over the summer
- Stop & Shop, which said thousands of products would be cheaper by September
- Giant Eagle, which lowered prices on more than 300 items through the end of 2025
Additionally, many of these price cuts are now seasonal or tied to a holiday, which Target appears to be doing ahead of Thanksgiving and the winter holiday season.
Grocery Price Cuts Across the Pond
The U.S. isn’t alone when it comes to grocery price cuts – U.K. supermarkets are also slashing prices in hopes of retaining (and even attracting new) customers.
Several grocers instituted price cuts in recent months ahead of the winter holiday season:
- Tesco launched numerous price cuts in April and intensified them in October
- Aldi UK said it lowered prices on 900 products so far in 2025 as of September
- Asda cut prices on 956 products in early October
Grocery discounting was so strong within the U.K. that Worldpanel by Numerator found grocery price inflation in the nation had slowed to 4.7% in October from the 5.2% reported in September.
Food for Thought Leadership
This Episode is Sponsored by: Performance Foodservice
How important is it as a food distributor to build a brand for foodservice – especially since consumers may never see or recognize it? Mike Seidel, vice president of procurement at Performance Foodservice Corporate, shares how the company views the development of its existing foodservice brands, including Roma and Contigo, and how they helped in the creation of its most recent Mediterranean concept Zebec.
