Target’s latest answer to inflation angst: A new brand with prices starting at $1

Target’s latest pitch to inflation-weary consumers is a new low-cost brand with prices starting at $1.

This month, the Minneapolis-based retailer is launching a new private label brand — Dealworthy — that will have some of the lowest-priced items customers can find on Target’s shelves and its website. Most items will be under $10.

The line will span 400 basic everyday items from socks and underwear to laundry detergent, power cords and cellphone cases. It will offer the lowest prices in each category, in some cases as much as half the price of similar items at Target.

“Consumers are stretching their budget,” said Rick Gomez, chief food, essentials and beauty officer at Target. “They’re trying to make ends meet. They’re dealing with inflation. They’re dealing with the return of student loan repayments. And so they’re looking for affordable options.”

The new brand rollout comes after Target’s sales declined for two consecutive quarters, its first sales dips in six years, as shoppers cut back on everything from apparel to groceries. Meanwhile, Walmart, one of Target’s chief competitors, has seen its sales continue to rise as it gained customers looking for the lowest prices.

Dealworthy has been under development for more than a year, Gomez said in an interview. Target hopes it will appeal to its current customer base and attract new ones.

Gomez said he thinks it will be a draw for younger shoppers and, more broadly, for those on a budget seeking bargains.

“They’re not looking for an over-engineered product,” he said. “They’re looking for a basic item at an affordable price.”

An example of some products: A package of two toothbrushes for 99 cents, a bag of 200 jumbo cotton balls for $1.99 and a tablet stand for $5.99.

Dealworthy will replace Smartly, a smaller private-label, low-cost brand Target started in 2018 that was focused more on toiletries.

In addition, Target is revamping one of its larger and more popular owned brands, Up&Up, which has been around for 15 years and generates nearly $3 billion in sales a year. Most items in the household essentials line are under $15, with the average price being $7.

“It is a fan favorite,” Gomez said. “It had been doing very well. It’s just a chance for us to continue to evolve and keep it fresh.”

Target reformulated many existing products such as adding new scents in household cleaning supplies, thickening the walls of its food-storage containers and changing the shape and feel of its manual and replaceable-head toothbrushes.

“We did a lot of research, listening to guests and reading reviews,” he said. “And we’ve identified the opportunity to improve over 40% of the line.”

Target also is adding hundreds of new Up&Up products in areas such as moving supplies and dog grooming. The packaging is getting a face-lift, too.

While there is some overlap between the two brands, Dealworthy will have lower prices and also be in other categories such as apparel and accessories, electronics, and home.

Both Dealworthy and the updated Up&Up products will start hitting Target’s shelves Sunday, with items being added throughout the year and into 2025.

With more than 45 brands and $30 billion in annual sales, Target’s private-label products make up about a third of its overall business and are a key differentiator for the retailer. Last year, it launched or expanded about 10 of its owned brands, including Figmint, a new line of kitchenware.