US retailers are extending Black Friday deals into weeks-long sales events to stimulate consumer spending, which is showing signs of slowing. Major retailers like Walmart, Amazon, and Target are offering significant discounts, yet general merchandise sales fell 3% year-on-year as consumer confidence remains low amid persistent inflation concerns. Despite forecasts of nearly $1 trillion in holiday sales, growth is expected to be the slowest since 2018, prompting retailers to incentivize purchases across different income levels.
Target's recent earnings miss is attributed to higher freight costs and a decline in discretionary spending, exacerbated by a short-lived U.S. port strike. Despite preemptively increasing inventory, trade data reveals no significant surge in imports compared to last year, indicating deeper issues with consumer demand and strategy. As a result, Target faces elevated inventory levels and increased discounting to clear stock, while Walmart continues to gain market share.
Walmart's stock soared to an all-time high, while Target's plummeted to a 52-week low following disappointing earnings. Target reported its largest earnings miss in two years, attributing it to a decline in discretionary spending and increased costs, while Walmart raised its full-year forecast, benefiting from a stronger sales performance and gaining upper-income shoppers. Analysts express concerns over Target's market share loss to competitors like Walmart and Amazon, highlighting issues with its merchandise mix and execution.
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