Target, McDonald's and others are offering value as they lose ground with bargain hunters

Target’s weak quarterly earnings underscored why it cut prices on thousands of household staples: it’s struggling to win over bargain hunters. The discounter is not alone. Target’s first-quarter results on Wednesday not only show American consumers are more selective about spending after sustained inflation squeezed their budgets for nearly three years.

Walmart Target’s results on Wednesday revealed at least part of the reason why it is joining the race to cut prices. Sales of discretionary merchandise, such as clothing, dropped year over year. But so did sales of higher frequency items like groceries and paper towels. Some customers may be making those purchases at Walmart instead. Transactions on Walmart’s website and stores rose 3.8% in the most recent quarter, and its e-commerce purchases shot up by 22% in the U.S.

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