Pocketbook issues front of mind as Target, Best Buy launch holiday retail season

Target plans again to hire 100,000 seasonal workers and will have its first holiday sales event next month.

Richfield-based Best Buy and other retailers also are stretching the ever-important holiday retail season as long as possible.

Both Target and Best Buy have acknowledged they must work hard to entice consumers who are shopping more selectively. Spending during the holidays is projected to increase by the smallest increment in the past few years.

“Consumers are getting ready for one of the most exciting times of the year, which is why we’re leaning into the magic of Tarzhay like never before — with an assortment, value, and experience only Target can deliver,” said Rick Gomez, the Minneapolis-based company’s chief commercial officer, in a statement released Monday.

Target is emphasizing its low prices with another one of its Target Circle Weeks of deals set for October. The retailer hosted a similar event in July, which generated the highest digital traffic the store has seen so far this year. According to Target, its holiday assortment is its biggest ever with 50% more items than last year and thousands of items for $5 and $10.

As shoppers are more price-sensitive, Target has been more intentional to market reduced prices, including those it lowered for 5,000 items this summer.

“Given the significant headwinds they’ve faced with inflation over the last few years, consumers continue to focus on value as they work hard to manage their household budgets,” Target CEO Brian Cornell said last month during a call with analysts. “And while they continue to turn out and shop around holidays and other seasonal moments, many are delaying purchases until the moment of need.”

Target has faced increased pressure from Walmart as shopper loyalty has wavered to wherever consumers think they can get the best deal. Last year, Target saw sales drop more than 4% during the fourth quarter compared with the year before.

For Best Buy, the holidays are a critical time when consumers might be more willing to make big purchases like televisions, appliances and new phones.

The electronics retailer will start sales for its paying members late this month and other sales events in October, such as a sale on games and game consoles.

“We know better than anyone how big of a role tech plays during the holidays,” said Jason Bonfig, senior executive vice president of customer offerings and fulfillment for Best Buy, in a statement. “Not only is it often the most wanted gift on a wish list, but it’s also huge in helping people host and celebrate throughout the season.”

Holiday retail sales are expected to increase between 2.3% and 3.3% this year, according to Deloitte’s annual holiday retail forecast, which was released last week. That would be a smaller bump than the last few years.

“Although the pace of increase in holiday sales will be slower than last year, we expect that healthy growth in disposable personal income (DPI), combined with a steady labor market, will support a solid holiday sales season,” said Akrur Barua, an economist for Deloitte Insights, in a statement.