June 27, 2011

Janney Montgomery Scott analyst David Strasser downgraded shares of Target to neutral from buy on Monday. In doing so he cited some familiar concerns about the challenging competitive environment, rising input costs and anticipated difficulties passing through price increases to cash-strapped shoppers thereby negatively affecting gross margins.

January 28, 2011

This just sounds problematic. To better serve cash constrained customers and compete with dollar stores, the company wants to flow less expensive smaller pack sizes to stores during the middle and the end of the month when customers have less money while larger packs sizes would be on store shelves at those times right after customers have been paid.

Doing so is seen as a way to improve the company’s competitive position relative to dollar stores who in recent years have expanded their assortments of brand name food and consumables and offer smaller pack sizes that create the appearance of savings.