The pandemic vastly changed the way Americans spend money and now as they return to pre-pandemic behavior, they’re tripping up retailers again.
That dynamic has only intensified in recent months as inflation jumps sharply, and the latest financial report from Target underscores the challenges. Target reported on Wednesday that its profit tumbled 52% compared with the same period last year in an environment of rising costs for things like fuel, and also a lightning-quick return by consumers to more normalized spending.
Purchases of big TVs and appliances that Americans loaded up on during the pandemic have faded, leaving big retailers with bloated inventory that must be marked down to sell.
As CNN reported, Target’s earnings announcement comes a day after Walmart’s stock had its worst day in 35 years. Walmart revealed poor earnings along with a weak outlook blaming increases in shipping and labor costs.