Even Though Target Sales are Surging, Profits Might Tell a Different Tale
Target Corp. has been overwhelmed with consumers purchasing food and household items, but profits might not show it, according to The Wall Street Journal.
The novel coronavirus COVID-19 that has evolved into a pandemic has been great for grocery stores. Consumers scared of quarantine and starvation rushed the stores, clearing shelves in the process and driving up sales for companies like Target.
Sale of household items, food and beverages increased over 50 percent from this time last year. It has become so overwhelming that stores have actually struggled to keep shelves stocked. Walmart and Amazon are trying to hire 250,000 temporary workers as they attempt to meet demand.
However, increased sales of food, beverage, and household items might not mean increased profits for companies, especially Target. The decrease in demand for high-margin goods like accessories combined with the increased cost of cleaning stores and paying staff is eating into profits.
Target Corp. has been overwhelmed with consumers purchasing food and household items, but profits might not show it.