The FORMER CEO of Toys R Us has clarified Target’s decision to slash prices, claiming the company made a huge mistake years earlier.
Former CEO Jerry Storch said the error on Target’s part put it in “very bad shape” when compared to Walmart.
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Target’s first-quarter earnings report fell short as inflation continues to cause problems.
Storch spoke with Yahoo Finance on Wednesday, clarifying the company’s past decisions and how he views Target compared to another major retailer.
On Monday, the retail giant also announced that there would be a major price drop on 5,000 of its everyday items.
The former CEO of Toys R Us stated that this was the company’s attempt to recover due to rising inflation.
“They’re clearly trying to project value. The problem is they’re not really prepared to do that,” he said. Yahoo Finance.
Storch then detailed a “massive error” that has affected the company for about 20 years.
“About 20 years ago, Target made a strategic mistake by essentially exiting the full-service grocery business,” Storch revealed.
“What you have at Target now is really a big convenience grocery store, whereas Walmart is the biggest real grocery store in the country, with all the departments and fresh produce you want.
“This positions Target very poorly. They can’t fix this overnight,” says Storch.
He added: “They can’t all of a sudden snap their fingers at all these stores and have a real supermarket inside them.”
Storch goes on to say that Target does shopping “backwards.”
“You buy general merchandise once a month, and while you’re there, you buy some low-margin groceries,” he says, compared to Walmart, where shoppers go there weekly to buy groceries as well as everyday items.
The former CEO said this was “a fundamental strategic mistake that Target made about 20 years ago and it put them in a very bad situation compared to Walmart.”
PRICE DROP
Target has informed customers about new, lower prices coming to the retail giant, some available now and others coming later this summer.
Lower prices coming to Target
Target announced it will reduce prices on 5,000 everyday items. According to a press release, stores across the county can expect lower prices now or this summer, including:
- Good & Gather Unsalted Butter (1 pound) now $3.79, was $3.99
- Good & Gather Organic Baby Spinach (5 oz) now $2.99, was $3.29
- Prime Hydration Sports Drinks (16.9 fl oz) now $1.99, was $2.19
- Jack’s Frozen Pepperoni Pizza (14.3 oz) now $3.99, was $4.19
- Thomas’ Plain Bagels (20 oz.) now $3.79, up from $4.19
- Pepperidge Farm Goldfish Cheddar Flavor Blasted Crackers (6.6 oz) now $2.79, down from $2.99
- Good & Gather Sea Salt Roasted Nuts (9.5 oz) now $5.29, was $6.89
- Clorox Scented Wipes (75 ct) now $4.99, was $5.79
- Huggies Baby Wipes (16 ct) now $0.99, was $1.19
- Aveeno Sunscreen SPF 50 (3 fl oz) now $13.19, was $13.89
- Persil Liquid Laundry Detergent (100 fl oz) now $12.99, was $13.69
- Purina One Chicken & Gravy Cat Food (13 oz.) now $1.99, was $2.39
There has already been a large reduction of 1,500 items.
Customers will save money on food including milk, meat, bread, soda, fresh fruits and vegetables, snacks, yogurt, peanut butter, coffee and items such as diapers, paper towels, pet food and more, according to with a report. Press release.
Many of the price reductions will be for Target’s own brands, Good & Gather and Everspring.
The new prices will be displayed in the store on red labels, as well as on the website and app.
Target’s announcement comes after Walmart announced a price drop on 7,000 of its products.
Aldi also announced that it would reduce the price of more than 250 foods through Labor Day.
US Sun has reached out to Target for comment.
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