Target’s Quarterly Sales Decline for the First Time in Six Years as Economic Issues Take a Toll

Target, a Minneapolis-based retailer, has lowered its profit and sales expectations for the year due to economic issues such as higher interest rates, higher prices on food, and the resumption of student loan payments this fall. On a conference call to discuss the results, CEO Brian Cornell and other executives primarily blamed wider economic issues for the drop.

Target’s second quarter sales were hit by inflation and a negative reaction by some customers, widely publicized on social media, to its Pride merchandise. Sales at stores open at the same time a year ago declined 5.4% in the second quarter, the company said on Wednesday. This marks the first time in six years that Target’s quarterly sales have declined.

In lowering its forecast, Target also cited the end of the student loan moratorium, which had provided one-time college students a little more financial breathing room. Profit came in above expectations, however, as the Minneapolis chain brought inventories closer in line with cautionary spending on discretionary items by customers.

Target is not the only retailer feeling the pinch of the current economic climate. Many other retailers are also feeling the strain of higher prices, higher interest rates, and the end of the student loan moratorium. It remains to be seen how these issues will affect the retail industry in the long run.