Target CEO Brian Cornell weighed in Thursday on spending behavior that the retailer has observed among its customers, saying they have been "buying less stuff."
"They’re managing that budget really carefully, and it’s certainly pressuring discretionary spending. They’re buying less stuff, even within food and beverage," Cornell, who has led the Minnesota-based retailer since 2014, said during a CNBC interview.
He added that when looking at retail spending, one can "just look at the top line and say a really healthy consumer, and they are spending."
Retail sales unexpectedly rose 0.7% in September, according to the latest data from the U.S. Department of Commerce.
RETAIL SALES UNEXPECTEDLY JUMP IN SEPTEMBER AS CONSUMERS KEEP SPENDING
Nonetheless, shoppers have been "tightening up" how much they’re buying units-wise for food and beverages in recent quarters.
Cornell added that Target has "seen seven consecutive quarters of both dollars and units declining" in discretionary categories, noting people are buying less clothing, home goods and toys.
On top of less spending on discretionary items, consumers are "not buying the goods they were during the pandemic," though Cornell said that "will change over time."
"We’re certainly planning conservatively in those categories," Cornell added.
He also noted a trend that Target has observed: "The American consumer is enjoying those seasonal moments, whether it’s Halloween or summer moments going back to Mother’s Day and Father’s Day."
Target, he said, aims to capitalize on such trends.
Ahead of Halloween, the National Retail Federation (NRF) had projected that Americans would shell out some $12.2 billion in connection with the holiday.
Winter holiday shoppers will average $875 each in spending this year, the trade association more recently estimated. Those funds will go toward presents, decorations and food, according to the NRF.
GIFTS FOR THE HOLIDAYS: HOW TO PLAN AND SHOP WISELY THIS SEASON AMID INFLATION
In mid-August, Target adjusted its expectations for its third quarter. The retailer said it foresaw a "mid-single-digit decline" for comparable sales, while setting a projection of $1.20-$1.60 for adjusted earnings per share. The company is expected to report quarterly results on November 16.
FOX Business' Megan Henney contributed to this report.
