New York (CNN) — US consumers, strained by years of higher prices and elevated interest rates, are changing their shopping patterns. Americans are buying more at discount chains like Target and Walmart while dialing back spending at Macy’s and Lowe’s.
Target’s sales at stores open at least one year increased 2% last quarter, and its profit boomed 36%. The company’s stock (TGT) surged 13% in premarket trading.
Target was boosted by price cuts. The company slashed prices on 5,000 frequently bought items at stores to draw customers. That strategy worked. Foot traffic to Target’s stores increased 3% during the quarter, and shoppers spent on discretionary products like clothing.
“Consumers are showing resiliency as they continue to search for value and focus on essentials, while selectively spending on discretionary items,” Joseph Feldman, an analyst at Telsey Advisory Group, said in a recent note to clients.
Still, Target signaled a cautious outlook for the rest of …