Target, one of the largest retail chains in the United States, is launching a new brand called “Dealworthy” to cater to budget-conscious customers. This move comes as Target aims to compete with dollar stores and online giant Amazon, while also addressing the impact of inflation on its sales. Dealworthy will offer a range of everyday basics at prices starting from less than $1, making it an attractive option for cost-conscious shoppers.
With 400 items available both in-store and online, Dealworthy covers a wide range of products, including phone chargers, disposable plates, and even underwear. Target claims that these products will have some of the lowest prices among its offerings, with electronics priced at half the cost of other brands available at the store. Most items will be priced under $10, and some will even be available for less than $1.
One of the key selling points of Dealworthy is that it is a Target-owned brand, providing customers with the credibility and assurance of purchasing from a trusted source. Rick Gomez, a Target vice president, emphasized this point in a press release, stating that Dealworthy offers customers a cheaper alternative without compromising on quality.
The launch of Dealworthy is seen as a strategic move by Target to better compete with rivals such as Walmart and dollar stores. Neil Saunders, a retail analyst and managing director at GlobalData Retail, believes that low prices have become increasingly important to Target shoppers. He explains that many customers have been switching to other retailers with stronger opening price points, and Target aims to retain this spend by offering Dealworthy as an affordable option.
This new brand also brings about changes to Target’s existing budget-focused brands. Smartly, which focused on household essentials like soap and trash bags, will be discontinued and replaced by Dealworthy items. Saunders notes that Smartly failed to capture shoppers’ attention due to its weak assortment and odd positioning. On the other hand, Up&Up, another affordably priced Target brand, will undergo a redesign and will be priced slightly higher than Dealworthy. Up&Up products, which include a range of items from toothbrushes to dog grooming supplies, have been upgraded to meet higher quality standards while still remaining under $15.
Target’s private labels, including Dealworthy, are highly popular among customers and generate over $30 billion in annual sales. These private labels serve as a key differentiator for Target against its competitors. However, the company has experienced a decline in overall sales for two consecutive quarters, primarily due to customers cutting back on discretionary purchases such as furniture, electronics, and certain clothing items. Additionally, Target faced backlash from right-wing groups regarding its Pride Month collection, which further impacted its brand image.
Target’s next earnings report is expected in March, which will provide further insights into the performance of the company and the impact of the launch of Dealworthy. As Target continues to adapt to changing consumer preferences and intensifying competition, the introduction of this new brand demonstrates its commitment to providing affordable options to its customers while maintaining its position as a leading retail chain in the United States.