In a highly competitive holiday season, Target and Walmart increased advertising on platforms like TikTok and streaming services. However, Target struggles to reverse its ongoing market share loss. Despite a small early-December sales boost, Target’s stock has dropped 7% this year, contrasting sharply with Walmart’s 72% gain.
Target’s reliance on non-essential merchandise has hurt its performance, with investors doubting a quick turnaround. Charles Sizemore of Sizemore Capital Management noted that late-season advertising might prompt gift card use but isn’t a guaranteed fix.
Retailers, including Target, have been cautious with spending as consumers prioritize essentials. Analysts predict Target’s advertising spend will grow only 0.11% in 2024. Target, which forecasts a weaker holiday quarter, ramped up digital ads post-Cyber Weekend, emphasizing last-minute deals like 50% off toys and 40% off kitchen appliances.
While Target saw a 5.5% year-over-year spending increase from Black Friday to Dec. 11, this growth lags behind inflation. Visits to its stores fell 6.8% in the week after Cyber Monday, according to Placer.ai. Investors believe Target needs a long-term strategy shift to regain its core customer base of price-sensitive families.
Lowering prices to compete with Walmart and Costco is critical, Bernstein analysts stated. Bill Smead of Smead Capital emphasized Target must “win back the moms” to stabilize its position. Without significant changes, Target faces continued challenges in retaining shoppers and reversing declining sales trends.
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