Target’s CEO Gregg Steinhafel says the national discount chain is “pushing the envelope” on fashion in apparel and home to give customers a more compelling reason to spend money on discretionary categories during the current economic downturn.
In an interview earlier this week with Minnesota Public Radio, he said Target’s mostly female consumer has been cutting back on apparel and home décor – which he described as “the extras, the special purchases” – because she currently “just has no money to really go out and splurge.” So to woo her out of the commodity aisles, Target is actively “trying to give her a reason to spend money. We’re actually pushing the fashion envelope and trying to create an environment where there is something that gets her excited about coming into apparel or coming into home. We’re pushing the fashion side of it even more aggressively.” But not at any price, he said.
To improve upon its “value perception” and drive business, Target is working “very closely” with its suppliers to avoid price increases “because we want to best serve our guests by keeping prices as low as we possibly can,” Steinhafel said. When asked about Target’s falling share price over the past several months compared to Wal-Mart’s, Steinhafel explained the differences in the two retailers’ business models.
“During tough economic business times, Wal-Mart’s business model plays a little better to individuals more focused to the basic necessities of life,” he said. “When the economic climate is more normal in nature, we can perform, and outperform Wal-Mart.”