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Retail

Target (TGT) Promotes $3 Appliances

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By Douglas A. McIntyre Updated Published
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DVDs and e-books that sell for under $10 is one thing. Appliances that sell for $3 is another. Target (NYSE:TGT) is offering toasters, coffee makers, and slow roasters at $3 each, according to data from GotADeal.com.  It is a sign that discounting to pull in retail customers is getting out of hand.

A number of retail industry analysts have questioned whether Wal-Mart (NYSE:WMT), Amazon (NASDAQ:AMZN), and Target (NYSE:TGT) can make money on their DVD promotions. It is just as likely that they choose to lose money on these items to draw people into stores or to their online sites.. They hope that those customers will buy more expensive products that have reasonable profit margins. It is a risk, but given the revenues of the three companies, not a big one.

Target cannot be making money on $3 appliances. It has to be losing money on each one sold. Smart consumers will come to Target stores and buy one of these products and then leave. They may as well shop of low-priced products at another store in the same mall.

Target is also offering discounts of up to 50% on a number of other items. That increases the risks that the Thanksgiving weekend may be a huge revenue-producing period, and a large lose-producing one as well.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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