Waiting on the ‘pay less’ payoff

A 4.8% decline in October same-store sales is certainly not good, but the number could have been a lot worse were it not for the fact that Target’s brand promise of “expect more, pay less,” affords it the flexibility to adjust to the consumer spending environment.

In the current climate, that means Target has spent the better part of this year emphasizing ‘pay less’ and calling out values more aggressively in store, online and in all forms of consumer communications. Even so, monthly sales have deteriorated steadily since June, when the company reported a slight increase in monthly results. A 1.2% decline in July was followed by a 2.1% decline in August, a 3% drop in September and now a 4.8% decline in October. The company doesn’t sound optimistic about November results or the holiday season.

“We expect the recent challenging sales environment to continue into the holiday season and beyond as a result of the economic factors currently affecting consumer spending,” Target president and ceo Gregg Steinhafel said.