At Target Corp., the second-largest U.S. discount chain, stubbornly high jobless rates and the onset of the extra payroll levy have caused concern.
“The U.S. economy is growing at a painfully slow rate and unemployment remains persistently high,” Gregg W. Steinhafel Target’s chief executive officer, said during a Feb. 27 fourth-quarter earnings call. “While there are some encouraging signs in the housing market, volatility and consumer confidence, a payroll tax increase and rise in the price of gas all present incremental headwinds.”
Though a newly enhanced program to match competitors’ prices, which now includes online retailers such as Amazon.com Inc., and a focus on value will help the company succeed in the uncertain environment, Steinhafel said, the conditions could be an economic drag.
“Given these new challenges facing an already sluggish economy, we have a tempered view of the near-term sales environment,” he said.