Target suffers as Walmart soars this holiday season INDIANAPOLIS (WISH) — Target is struggling while Walmart had a good third quarter as people grapple with costs remaining high as inflation levels out. Kyle Anderson, an economist at the Indiana University Kelley School of Business, said Monday that what it boils down to is prices and marketing. Target remains known as a store that is “higher-end” than Walmart, so cost-conscious consumers are likely to lean toward those stores known for bargains when they are tightening their budgets. Anderson says as prices for essentials remain high people are going to deal hunt into the holidays. “People are getting really price-sensitive. So, the American consumer is really continuing to spend, but they are really looking for bargains right now, and we’re seeing that play out in the numbers.” This has been an ongoing problem for Target. Target stock was down 21% last Wednesday but started rebounding by the end of the week. In comparison, Walmart stock rose nearly 3% on Wednesday and has been on a steady increase all year despite seeing a small dip on Monday. “They’re just looking for bargains and deals wherever they can get them, and I don’t think that is Target’s reputation,” Anderson said. “So what we’re really seeing now is a flight to value, and Target focuses more on that midtier experience.” Anderson says this is affecting middle-of-the-pack businesses. The luxury end is not feeling the spending squeeze. “There’s another decent size group that is doing pretty well economically, and they’re seeking out luxury brands,” Anderson said. “They have the money to spend, and they’re not particularly price-sensitive so they’re going to a little more higher scale, so it’s that in-between group that is really getting pinched right now.” Anderson says this shift in spending could help the economy for the consumer. “I think this is actually advantageous to consumers overall. I mean when stores are actively seeking to create the best deals that’s when we get lower prices and value, and so I think some of this will actually help curb inflation a little bit as the market becomes more competitive for those retail holiday sales.” Holiday spending has already begun but the official start to the season is at the end of this week on Black Friday. Only time will tell if consumers ramp up spending at Target and other stores. Anderson says it is difficult for brands to change their perception in a short period of time so Target may have a lackluster holiday season.