Feb 15, 2024 - Business

Target launching "dealworthy" brand with focus on basics

Assortment of products in new Target "dealworthy" brand, including plates and paper towels.

Target's new brand includes includes nearly 400 products, starting at less than $1 and with most items under $10. Photo: Courtesy of Target

Target is focusing on the basics and low prices for its new store-owned brand "dealworthy," a line of everyday essentials arriving in stores this month.

Why it matters: More Americans have been turning to store brands to save money as they continue to deal with sticker shock over high prices.

What's happening: Target is introducing the first products in the new value brand and will add additional products through early 2025.

  • The line will have nearly 400 items spanning four categories: apparel and accessories, essentials and beauty, electronics and home. Products include toilet paper, phone cases, shirts and other basics.
  • Prices start at less than $1 and most items will be under $10, Rick Gomez, the company's chief food, essentials and beauty officer, told Axios.
  • "In each category they will be the lowest-priced item at the shelf," Gomez said.

The big picture: Store brands are big business for Target and generate $30 billion in sales annually, said Gomez, an executive vice president with the Minneapolis-based retailer.

  • "Our owned brand business is really critical to driving differentiation for Target, but also driving traffic and ultimately growth for the business," Gomez told Axios.
  • Sales of store-owned brand products globally grew 4.7% in 2023 to $236.3 billion while national brands grew 3.4% year-over-year, according to the Private Label Manufacturers Association.

What they're saying: Consumers have been telling Target they need affordable options, Gomez said.

  • They're looking to stretch their budget, they're looking to manage through inflation, and they're looking for value," Gomez said.

Meanwhile, Target also announced this week that it is expanding its 15-year-old up&up brand to reformulate products and add additional items.

Of note: Target's store-owned brands come with a one-year return policy or money-back guarantee compared to the 90-day return period for most items.

  • GlobalData managing director Neil Saunders told Axios that Target's guarantee is "very generous and designed to create confidence in their products."
  • "It is also a point of differentiation for their own brands over national brands," Saunders said.

Our thought bubble: It's extremely rare for a retailer to offer a separate return policy for store-branded products and a year-long return period is beyond the normal 30 to 90 days most stores offer.

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