Walmart and Target Just Sounded the Alarm About This Problem for Shoppers — Best Life (2024)

As two of the largest retailers in the U.S., Target and Walmart stores are daily destinations for countless shoppers, so when they make any changes, it can be unsettling. You've likely already noticed markups on the price of your eggs or milk, a result of inflation spurred by disruptions in the global supply chain. All roads lead back to—you guessed it—the COVID-19 pandemic. Now, recent reports from Target and Walmart indicate that rising prices and inflation are unlikely to disappear, and there may be even more challenges down the road. Read on to find out what problem shoppers need to be prepared for.

READ THIS NEXT: These Are All the Walmart Locations Closing Forever by the End of May.

The pandemic has affected every sector of the economy.

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Healthcare and frontline workers faced an enormous challenge during the pandemic, working to care for patients while trying to contain an ever-evolving virus. But all economic sectors felt the ramifications of COVID, particularly small businesses and restaurants that were forced to close their doors during lockdown. Now, many stores are still feeling the pressure thanks to lingering supply chain issues brought on by the pandemic. And with higher expenses and rising inflation, consumers may start to feel even more noticeable effects.

Recent reports from Walmart and Target could be signs of a larger problem.

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Both Walmart and Target have experienced significant decreases in profit for their first quarters, which could signal an oncoming recession—or a recession that we're already in, experts say. Higher costs don't appear to be letting up, as indicated by both businesses' earnings, which could later "test the strength of the consumer," according to Edward Moya, senior market analyst at OANDA, The Hill reported.

"Growth was challenged by unusually high costs, resulting in profitability well below what we expected to be and where we expect to operate overtime,"Brian Cornell, CEO of Target, said on a May 18 earnings call (via Fox Business). After reporting earnings far below Wall Street analysts' expectations, Target shares decreased by 25 percent the same day, which is the most staggering drop since 1987. Walmart, on the other hand, saw shares decrease by 11 percent on May 17. This was also the retailer's worst day in 35 years, Fox Business said, and shares fell yet again on May 18, down another 7 percent.

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Financial experts warn consumers to be prepared.

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Inflation is problematic for businesses and consumers alike, and currently, there doesn't seem to be an end in sight. April marked the highest rate of consumer inflation in 40 years, hitting 8.3 percent, Fox Business reported. You may have noticed food prices creeping up, but gas has certainly been the most concerning, as the price of unleaded fuel is currently up 44.2 percent from last year's prices.

Many of us are feeling the strains of rising costs and have hit the pause button on nonessential purchases. According to CNN Business, this was reflected in Target's inventory reports, which show that consumers are still spending money on essential food and beauty items, but are skipping out on splurges like televisions. Jeff Sica of Circle Squared Alternative Investments told Fox Business that with prices up and purchases down, we could be headed into a recession.

"What we saw out of these two major retail earnings reports is that the consumer is about to break and that the consumer cutting back on spending with less confidence in the future indicates where we're headed," he said. "I believe we're already in the recession, but it indicates that we're headed into a deeper recession."

Target and Walmart aren't the only two stores feeling the pressure.

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According to CNN Business, other retailers like TJX (owner of T.J. Maxx and Marshalls) had sales that were below estimates on May 18. Retail stores have had to raise hourly wages in order to attract employees to join or rejoin the workforce, with Target citing that as a contributing factor to lower earnings. The lack of stimulus checks, which encouraged "discretionary spending," has also been noted as a key difference between the previous fiscal year.

However, there are stores that actually saw strong sales this week, CNN Business reported. These big retailers include Home Depot and Lowe's, both of which are profiting from the booming housing market.

READ THIS NEXT: Walmart and Dollar General Are Under Fire for Doing This to Customers.

Walmart and Target Just Sounded the Alarm About This Problem for Shoppers — Best Life (2024)

FAQs

What do you call stores like Walmart and Target? ›

Examples of big box stores include Walmart, Target, Home Depot, and Lowe's. Each of these retailers has large physical locations and offers a wide selection of products and services for purchase.

What type of store is Walmart? ›

Walmart Inc.

( /ˈwɔːlmɑːrt/; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States and 23 other countries. It is headquartered in Bentonville, Arkansas.

What type of store is Target considered? ›

Target Corporation is an American retail corporation that operates a chain of discount department stores and hypermarkets, headquartered in Minneapolis, Minnesota. It is the seventh-largest retailer in the United States, and a component of the S&P 500 Index.

Why is Target so much nicer than Walmart? ›

From the availability of staff, cleanliness of the store, and plentiful checkouts, Target is top-notch in my book. Moving through Target was also easier compared to Walmart, with less dodging of shopping carts and little to no bottle-necking from store staff restocking shelves.

Is Target classier than Walmart? ›

Which is better Walmart or Target? Overall, Target offers a more pleasant and upscale shopping experience with better quality products compared to Walmart. However, Walmart consistently has lower prices on staple items, so it's better for budget-conscious shoppers.

Why is Walmart changing their name? ›

While Wal-Mart Stores as a corporate legal name is rarely used in public-facing materials or in stores themselves, CEO Doug McMillon said in a statement that he felt the name change was needed to be “consistent with the idea that you can shop us however you like as a customer.” He added: “Our customers know us as ...

What was Walmart's original name? ›

The history of Walmart, an American discount department store chain, began in 1950 when businessman Sam Walton purchased a store from Luther E. Harrison in Oklahoma City, Oklahoma, and opened Walton's 5 & 10.

Does Walmart own Sam's Club? ›

A division of Walmart Inc., we are the membership warehouse club solution for everyday living. Our President and CEO is Chris Nicholas and our headquarters is in Bentonville, AR. For the fiscal year ending January 31, 2023, Sam's Club's total revenue was $84.3 billion.

What type of person shops at Target? ›

The data shows that the typical Target shopper is a suburban mother between 35 and 44 years of age. The typical Target customer also has some college education and a household income of $80,000. The latter helps explain all of those $200 Target runs. For lower-income households, those splurges may not be possible.

Is Target or Walmart better for groceries? ›

In many categories, Target's prices were only slightly higher, but higher-priced salmon and no store-brand milk or cornflakes proved costly. Target's basket was $17.51 more than Aldi's with those three items, but just $5.86 more without them. It was $15.99 more than Walmart's with them and only $2.21 more without them.

Do people buy groceries from Target? ›

That said, some people shop at Target for the groceries alone. And given that Target's prices tend to be competitive, that's not necessarily a bad idea. But while buying groceries at Target could save you money, it could also cost you big time.

What is the term for Walmart and Target? ›

Big box stores are also sometimes referred to as superstores or supercenters. ... Many big box stores are part of a retail chain.

What do you call a store business? ›

Retail stores are for-profit businesses that sell goods and services to customers in person, on the phone, through online platforms or on social media.

What type of retailer is Target considered being? ›

Examples of mass-market retailers include big-box stores such as Target, Sam's Club, and Best Buy, as well as brands like Levi Strauss and Gap, and e-retailers like Amazon. Supermarket, drugstore, mass merchandise, and warehouse chains are all considered mass-market retailers.

What are some stores similar to Walmart? ›

Here are a few stores like Walmart for the best budget-friendly furniture finds.
  • Amazon. Similar to Walmart, Amazon has thousands of home furnishing offerings, including decor and furniture. ...
  • Wayfair. ...
  • Target. ...
  • IKEA. ...
  • Costco. ...
  • Lowe's. ...
  • Best Buy. ...
  • The Home Depot.
Dec 31, 2023

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