Target is throwing in the towel on its previous losing strategy. Like many businesses, it tried to raise prices only to find its customers going elsewhere, largely to Walmart. Now Target is slashing its prices including on the towel it just threw in. The retail giant simply has no other choice given the sudden change in consumer behavior we’re seeing across the economic landscape. Eurodollar University&#x27;s Money &amp; Macro Analysis Target cuts prices on 3,000 items as stubborn inflation keeps US consumers on edge https://www.reuters.com/business/target-slashes-prices-more-than-3000-products-2026-03-11/ Fewer Americans Plan to Travel After Surging Fuel Costs Hit Budgets https://www.bloomberg.com/news/articles/2026-04-02/fuel-price-rise-on-iran-war-has-americans-putting-vacations-on-hold Numerator Consumers React to Rising Gas Prices https://www.numerator.com/resources/blog/consumers-react-rising-gas-prices/ FRBNY SURVEY OF CONSUMER EXPECTATIONS https://www.newyorkfed.org/microeconomics/sce#/ https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Target Just Revealed a Sudden Shift in Consumer Spending

Eurodollar University

# Full Transcript

**Podcast:** Eurodollar University

## Transcript

[SPEAKER_A] Target is throwing in the towel on its previous losing strategy because, like a lot of other businesses, it had been raising prices only to find its customers going elsewhere, largely to Walmart. Now the retail giant is slashing prices on thousands of items, including probably the towel that it just threw. They simply have no choice. Target has no choice here because of the sudden change in consumer behavior that we're seeing from all across the economic landscape. And behind all of this is the labor market. Its trend is the reason why consumers are altering their habits. The Bureau of Economic Analysis, for example, reported today more ugly data on both incomes and spending, which confirms the difficulties facing shoppers. And it shows exactly why Target is doing all this towel throwing and price slashing, and more importantly, why it's doing it now. Americans have been pulling back before, but now they're poised to really start digging in. According to recent surveys, many of them have already started by postponing or downgrading summer vacations while also canceling their dinner plans. So you can see where grocers, for example, have an opening here to at least offer cheaper food where possible. And this is exactly what consumers themselves have been warning about since early last year at the latest. Pessimism had been rising, which was proven by income and spending and the data that we got on both. And now the shifting business strategies of big companies like Target. But looking farther ahead into the oil shock and beyond, consumers have even more thoughts on what the economy is very likely to look like for the rest of this year. Let me tell you, it isn't inflation. It's more struggles with jobs and incomes. Therefore, why a real increase in the cost of a necessity like gasoline produces the types of really significant changes in behavior that companies like Target are always very afraid of. Afraid of. Now, before we get to Target toweling off its prices, you can see exactly where retailers were coming from in the February updates on income and spending, which, as I just said, were released earlier today. So this is where consumers were right before the oil shock started. Energy costs had already come up a little bit in January and February, but nothing like the month that they had in March. We also know what the job market environment had been. Contrary to mainstream expectations, The dramatic weakness last year that they said was all about tariffs and uncertainty over trade wars. Therefore, everyone thought it would just disappear in the second half of last year, leading to a robust pickup here in 2026. None of that happened, nor should anyone have expected it to happen. We've been following this for years. Flat beverage stuff. As I said just recently, the Japanese carry traders in July and August of 2024, they warned everyone what was really coming, both in t...

Target Just Revealed a Sudden Shift in Consumer Spending

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Target Just Revealed a Sudden Shift in Consumer Spending

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.