Mass Market Retailers Cut Prices to Win Budget-Conscious Shoppers This Holiday Season

As we approach the holiday season, mass merchants and dollar stores are unveiling a plethora of new deals designed to attract budget-conscious consumers grappling with financial struggles.

This year, many retailers are adapting their strategies to meet the needs of shoppers who are feeling the pinch of rising costs, emphasizing affordability and value in their holiday offerings.

The current economy presents challenges for millions of Americans, with many living paycheck to paycheck. Inflation is palpable, leading consumers to trade down in their purchasing decisions and seek out retailers that offer the best deals. As mass merchants ramp up their holiday promotions, understanding the financial context in which they operate is crucial.

• Kohl’s: Launching a new brand platform, Where Families Come First, Kohl’s focuses on authentic family moments. Its holiday campaign includes relatable ads showcasing everyday family experiences, aiming to emotionally connect with shoppers. To promote this platform, Kohl’s is rolling out the campaign, “When Life Gets Real, Start Here,” featuring ads that showcase candid family interactions, from playful sibling rivalries to midnight baby care. The campaign will use a variety of channels, including TV, social media and digital platforms, to illustrate how Kohl’s products fit into everyday family experiences.
• Target: Target is preparing for the holiday season with its largest assortment ever. The Target Circle Week (Oct. 6-12) features exclusive deals, with over half of holiday toys priced under $20. The retailer plans to hire about 100,000 seasonal workers to enhance customer service. Following Target Circle Week, Target is preparing an assortment of exclusive products and deals. The retailer is introducing over 1,000 new toys and festive items, with more than half of its holiday offerings priced under $20. Additionally, Target is collaborating with Universal Pictures for “Wicked”-themed merchandise and reviving its partnership with Marks & Spencer to feature new food and home items.
• Dollar Tree: Under new CEO Rick Dreiling, Dollar Tree is implementing a multiprice format to expand product offerings and attract a broader customer base. 
• Dollar General: Dollar General is doubling down on in-store experiences. CEO Todd Vasos noted a slight increase in store traffic, but average transaction amounts have declined, reflecting the financial strain on customers.

Inflation and savings depletion are major concerns for consumers across various income levels. According to the PYMNTS Intelligence report, “New Reality Check: The Paycheck-to-Paycheck Report: Why One-Third of High Earners Live Paycheck to Paycheck,” 82% of nearly 4,000 respondents identified inflation as their primary economic concern. This anxiety is reflected broadly: In January, 62% of individuals reported living paycheck to paycheck, including 36% of those earning over $200,000 annually.

Meanwhile, according to PYMNTS Intelligence in “New Reality Check: The Paycheck-to-Paycheck Report” titled “Savings Deep Dive Edition,” consumers are rapidly depleting their savings.

The report reveals that, on average, individuals exhaust 67% of their available savings every four years. For those living paycheck to paycheck, this financial strain is even more pronounced, with savings being depleted every 2.5 years. These trends highlight the financial insecurity faced by many, regardless of their income levels.

As mass merchants prepare for the holiday season, the focus on affordability and value-driven marketing is evident. The struggles of consumers living paycheck to paycheck serve as a backdrop for retailers as they craft their strategies, emphasizing the importance of understanding and responding to the financial realities faced by millions. With new initiatives and promotions, retailers are positioning themselves to capture the hearts and wallets of shoppers navigating this challenging economic landscape.