Target’s woes worsen as consumers continue to tighten budgets

Target’s disappointing spring results sent up a warning flare that American consumers are struggling.

The Minneapolis-based retailer’s comparable sales for February, March and April declined nearly 4%, the company said Wednesday.

Like Walmart CEO Doug McMillon said last week, Target Chief Executive Brian Cornell conceded tariffs have led to some higher prices.

“We make adjustments literally each and every week, so we’re constantly adjusting pricing,” Cornell said in a call with reporters. “Some are going up, some will be reduced, but that’s an ongoing effort.”

Consumer sentiment is at the second-lowest point ever recorded, according to a closely watched University of Michigan index.

Target officials also estimated the company’s revenue would be down for the year, indicating their belief that budgets will be tight year-round.

Walmart officials have said for the past year they’ve seen the income of its grocery customers rise.

Rick Gomez, Target’s chief commercial officer, echoed this sentiment, highlighting “financial pressure” forcing consumers to make trade-offs that prioritize essentials.

Consumers are still leaning into special events and holidays, he said, pointing to higher sales around Easter.

For that reason, Gomez and other executives said, Target will lean into the Nintendo Switch 2 release and back-to-school as key focal points for the summer months.

Target also is trying to incentivize loyal customers to spend more with them. On Monday, it added free same-day delivery for Target Circle 360 members from retail partners of its delivery unit Shipt.

“Even in a quarter where we know we’ve got some work to do, we see some data points that’ll matter in the long run,” said Michael Fiddelke, chief operating officer for Target. “The strength of our same-day delivery business and Circle 360 growth, we think bodes really well for the stickiness and relevancy that will drive with those consumers over time.”

Walmart too said it will continue to watch prices.

“We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” Chief Financial Officer John David Rainey told the Associated Press on Thursday.

Trump lashed out at Walmart over the weekend after McMillon talked about some higher price tags because of tariffs. A meeting with Treasury Secretary Scott Bessent followed.

Chief executives at both Target and Walmart, as well as Home Depot, met with President Donald Trump in April to discuss the impact of tariffs on retailers. Since then, tariffs on Chinese goods have gone down to about 30% from 145%.

The fear of higher prices from tariffs are not the only thing spooking consumers, economists say. Higher interest rates and housing costs also are affecting consumer sentiment.