Target takes lesson from dollar stores with new Dealworthy brand

By STve Gelsi

Retail giant unveils discount product line starting at less than $1

Target Corp. unveiled its Dealworthy brand on Thursday, which will feature products starting under $1 as consumers push back against higher prices.

Target (TGT) said it will offer "incredible value" on about 400 everyday products, ranging from toothbrushes to men's boxer briefs.

The Minneapolis retailer said most items will be priced at $10 or less, with the Dealworthy products backed by a return policy for up to one year with a receipt.

"We know that value is top of mind for consumers, and Dealworthy backed by our owned brand promise, will not only appeal to our current guests but position us to attract even more new shoppers to Target," said Rick Gomez, executive vice president, in a statement.

Target-branded merchandise totals about $30 billion a year for the company.

The move comes as independent dollar stores - as well as chains such as Dollar General Corp. (DG) and Dollar Tree Inc. (DLTR) - have been seeing an increase in market share, especially from wealthier Americans.

From November 2023: Dollar Tree is attracting more high-income shoppers

With the price of a Big Mac meal in Darien, Conn., now at $18, even fast-food giants such as McDonald's (MCD) have been generating gripes on social media.

The jump in food prices and other basics two years ago left shoppers with less to spend on discretionary goods, like clothing or furniture.

As a result, retailers are finding themselves unable to sell those less-essential purchases without cutting prices, and have remained worried about getting caught again with too much product that nobody wants.

Target's stock was up fractionally in premarket trades on Thursday. The stock price has risen by 1.8% so far in 204, compared to a 4.8% rise by the S&P 500 SPX.

Bill Peters contributed to this story.

-STve Gelsi

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02-15-24 0658ET

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