Target is in the position of needing to offer discounts- perhaps painful ones- to clear out inventory that isn't selling, while they have to pay more to bring in what is.
Time will tell, but I'm not optimistic on this account.
Presumably, this was asb opposed to shortages; Target being overstocked is not normal, and is in fact a sign that things are not normal- rather, a sign that supply lines still aren't lining up with demand, but with different causes now than last year.
Odds are we won't see 2020 prices again on many goods, so inflation slowing is the best we can hope for (and better than rising inflation, of course). It is going to take awhile for a new normal to stabilize, though.
8% inflation may not sound great to you if you got a 1% raise last year, but it's pretty fantastic if you got a 15% raise.
I guess I don't quite understand what is happening in this conversation :)
From my perspective, OP explained why the outlook is negative for target and you asked "why wouldn't i [whimsicalism] be optimistic about [lower inflation]?". To which the answer is, "well, you aren't target... you can be optimistic about that, that's prefectly ok, but it's also sort of immaterial to OP's post which was about Target's current situation."
OP wasn't analyzing whimsicalism's financial situation; they were analyze Target's financial situation. It's possible that you should be optimistic and target should be pessimistic.
I'm either wildly misinterpreting the flow of ideas here or your responses just don't make any sense at all. I'm not sure which.
But companies lowering prices because they are not having as much trouble acquiring goods would seem to be a return to normal to me.
That isn't what is happening. Target is offering discounts because people aren't buying what they have in stock, not because their supply costs are going down. If anything, it'll force prices to stay high on other goods as they need to make up the losses elsewhere.
To whit [1]:
"Target set off alarms three weeks ago — its shares tumbled more than 25 percent — after reporting a 52 percent drop in first-quarter net profit. The Minneapolis-based company cited supply-chain pressures and rising expenses, factors that also hurt Walmart and helped spark a broader market sell-off that erased more than 1,100 points from the Dow Jones industrial average.
Target now expects to sell fewer products in its home categories. It continues to see strong sales in high-frequency goods like groceries, household essentials and beauty products, largely reflecting consumer trends away from the U.S. shopping boom at the height of the pandemic. It also revised its second-quarter profit expectations from 5.3 percent to 2 percent, according to a Tuesday news release."
[1]: https://www.washingtonpost.com/business/2022/06/07/target-pr...
Other articles elsewhere have also pointed out the discounts are an effort to purge stale inventory, which lines up with them also cancelling orders from their suppliers.
If they were cutting costs because supply issues were smoothing out, that would be great. Like I said in a sibling comment, it's going to take some time yet before things stabilize to a "new normal".
Inflation is measured across a wide range of goods- a one-time discount on select items isn't going to budge the needle, or a sign of improvement.
What in god's green earth are you talking about?
There were three economic impact payments that went out to almost everyone:
https://home.treasury.gov/policy-issues/coronavirus/assistan...
For people under the income caps, the total disbursed to each adult was 3200, plus additional to parents / guardians for each child.
So, 2 years on to announce that "Free COVID money is over" is extraordinarily disingenuous.