Target’s sales fell for the first time in nearly 8 years, so it’s launching a subscription

Far from the bull’s-eye… Fewer folks are “doing a quick Target run.” Target’s holiday-quarter sales suffered as shoppers trimmed spending on discretionary goodies like blenders and fuzzy slippers. The red retailer’s annual sales dipped for the first time since 2016, and same-store revenue fell for the third straight quarter. It also gave an uninspiring sales forecast for this year. Still, Target’s stock popped 12% yesterday after it reported higher profit, courtesy of fewer discounts and lower costs. Its weak sales reflected a broader trend:

• Discretionary splurges: ⬇️. Spending on electronics and household goods boomed during the pandemic as people stocked up for the forever-at-home life. That trend’s reversing. Walmart’s profit fell 12% last quarter as folks pulled back on big-ticket buys like air fryers and laptops.

• Essential spending: ⬆️. Budgets are tight (thanks, inflation), yet people still need to eat. Walmart’s sales grew last quarter as shoppers flocked to America’s largest grocer. Unlike Walmart’s, Target’s sales are mostly from nonedible items.

A subscription not called “plus”... finally. To combat slowing sales, Target’s joining the sub club. Yesterday the retailer announced a paid membership called Target Circle 360 (doesn’t roll off the tongue, but at least it’s not Target+). The program, meant to rival Walmart+ and Amazon Prime, will offer perks like free same-day delivery for orders $35+ and two-day free shipping. It’ll roll out in April with a promo price of $49/year, and then cost $99/year starting May 18 (roughly the same price as Walmart+).