Over the past few years, Kohl’s has struggled to attract customers to its stores, despite recent turnaround efforts to boost low sales. In response to these ongoing challenges, the retailer is rolling out a bold new section in all locations to win back a key customer group. 

In the third quarter of 2025, Kohl’s saw net sales decline by almost 3% year over year, according to its most recent earnings report. It also generated operating income of $73 million during the quarter, about 25% lower than what it earned in the same time period in 2024.

In addition, recent Placer.ai data showed that foot traffic at Kohl’s stores during the quarter was down 2.4% year over year.

“Unfortunately. Kohl’s has been one of the worst performers in retail – with sales and market share plummeting since 2019,” said GlobalData analyst Neil Saunders in a November research note obtained by CBS News. “This chronic underperformance is directly linked to operational sloppiness and the absence of a clear strategy.”

The drop in consumer demand comes after Kohl’s made several bold changes in its stores to fix its weak sales.

For example, last year it put petite sizes back into stores following customer complaints and increased investment in its jewelry business. Kohl’s also multiplied the number of coupons it offers customers after excluding many brands from its coupon selection. 

During an earnings call in November, Kohl’s CEO Michael Bender said the company continues to see customers remain cautious about their discretionary spending. 

“We continue to operate in an environment where our customers are becoming increasingly choiceful as their discretionary income remains pressured,” said Bender. “This is especially notable in our low-to-middle-income consumers as well as in our younger customers. These customers are becoming increasingly savvy and are seeking more value.”

It is no surprise that Kohl’s is seeing this shift in shopper behavior, as consumer sentiment has remained low in recent months due to concerns about the economy. 

A survey from McKinsey & Company in December last year found that 37% of consumers planned to cut back their spending on apparel over the next three months as they battle inflation and rising costs of living, while 35% planned to spend less on footwear. 

Kohl’s saw a decline in sales and foot traffic during the third quarter of 2025.

Kohl’s launches new store section as shoppers cut back

Shutterstock Amid this trend, Kohl’s has announced that it is adding a new section in its stores called “the Deal Bar,” which targets price-conscious shoppers, according to a recent press release. 

The section, which is located at the front of every store, offers items such as “gifts, seasonal finds, and everyday essentials” priced at $10 or less. 

Some of the items customers can find in the section include purposeful storage options, home replenishment items, fitness apparel, DIY craft kits for kids, party supplies, Easter basket fillers, etc. 

Related: Kohl’s takes drastic action to fix concerning customer behavior

“Located conveniently at the front of every store, the Deal Bar features fun, practical, and timely items refreshed throughout the year, making sure there’s always something new for our customers to discover,” said Kohl’s in the press release.

Customers can also shop the Deal Bar on Kohl’s website, where there’s a section for items costing $5 or less. 

Kohl’s joins other retailers in adapting to tighter consumer budgets

The move from Kohl’s follows in the footsteps of several of its top competitors, which also recently expanded their assortments of affordable items for customers. 

In 2024, Amazon launched its Amazon Haul section on its website, where it sells items for $20 or less. 

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More Retail: More recently, Target launched more than 2,000 new beauty products in its stores last month, with over 90% priced under $20.

This strategy of launching low-priced product assortments may be especially beneficial for retailers this year, as more consumers nationwide plan to be stricter with their budgets amid growing concerns about their finances, according to a recent survey from Smarty. 

How U.S. consumers plan to spend money in 2026:

  • Approximately 60% of U.S. consumers fear rising everyday prices, while 41% worry most about inflation not subsiding quickly enough.
  • Only 19% of consumers said they feel very optimistic about their financial outlook for 2026, while 51% describe their financial future as uncertain. 
  • For 2026, 45% expect to spend about the same as they did in 2025, while only 16% anticipate spending less.
  • However, 35% plan to spend more cautiously, and 23% are focusing mainly on essentials. Source: Smarty

“What we’re seeing is not panic or pullback,” said Smarty CEO Vipin Porwal in a statement. “Consumers are bracing by budgeting more carefully, while watching prices more closely and making intentional choices to protect their financial stability in an environment where inflation feels permanent.”

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