Kohl’s has struggled to attract customers to its stores over the past few years, despite recent turnaround efforts to boost sluggish sales. In response to these ongoing challenges, the retailer is rolling out bold new sections across all locations to win back key customer segments.
According to its latest financial report, in the third quarter of 2025, Kohl’s department store’s net sales fell nearly 3% year-on-year. The quarter also generated operating income of $73 million, which was approximately 25% lower than the same period in 2024.
In addition, recent data from Placer.ai showed that traffic at Kohl’s stores fell 2.4% year-over-year during the quarter.
“Unfortunately, Kohl’s has been one of the worst performers in retail, with sales and market share plummeting since 2019,” GlobalData analyst Neil Saunders said in a November research note obtained by CBS News. “This chronic underperformance is directly related to operational sloppiness and the lack of a clear strategy.”
Kohl’s has made several bold changes to its stores to address weak sales that have led to lower consumer demand.
Last year, for example, the company reintroduced smaller sizes into stores and increased investment in its jewelry business after receiving customer complaints. Kohl’s has also increased the number of coupons it offers to customers after excluding many brands from coupon options.
During an earnings call in November, Kohl’s CEO Michael Bender said the company was still seeing customers remain cautious about their discretionary spending.
“We continue to operate in an environment where customers have more and more choices as their discretionary income remains under pressure,” Bender said. “This is particularly noteworthy among our lower- and middle-income consumers as well as our younger customers. These customers are becoming increasingly savvy and are looking for more value.”
It’s not surprising that Kohl’s is seeing this shift in shopper behavior, as consumer sentiment has been low in recent months amid worries about the economy.
A McKinsey & Company survey in December found that 37% of consumers planned to cut spending on clothing in the next three months to combat inflation and rising costs of living, while 35% planned to spend less on footwear.
Amid this trend, Kohl’s announced it will be adding a new area to its stores called “Deal Bars,” targeting price-conscious shoppers, according to a recent press release.
Located at the front of each store, this area offers items such as “gifts, seasonal items and everyday essentials” priced at $10 or less.
Some of the items customers can find in this section include dedicated storage options, home addition items, fitness apparel, DIY craft kits for kids, party supplies, Easter basket fillers, and more.
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“Conveniently located at the front of every store, the Deal Bar offers fun, useful and timely merchandise updated year-round, ensuring our customers always have something new to discover,” Kohl’s said in a news release.
Customers can also shop at the Deal Bar on Kohl’s website, which has a special section selling items priced at $5 or less.
The move by Kohl’s follows in the footsteps of several of its top competitors, which have also recently expanded their affordable assortments for customers.
In 2024, Amazon launched an Amazon Haul section on its website, selling items for $20 or less.
More retail:
Most recently, Target launched more than 2,000 new beauty products in its stores last month, with more than 90 percent priced under $20.
A recent Smarty survey suggests that the strategy of rolling out lower-priced product lines could be particularly beneficial to retailers this year, as more consumers across the country plan to stick more tightly to their budgets due to growing concerns about their finances.
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About 60% of U.S. consumers Fear Prices rise daily while 41% The biggest concern is that inflation isn’t receding fast enough.
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only 19% of consumers say they feel very optimistic Regarding the financial outlook for 2026, also 51% describe their financial future as uncertain.
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2026, 45% expect Cost about the same Just like they did in 2025, while only 16% Anticipate Spend less.
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However, 35% Plan to spend your money more carefully, and twenty three% Focus primarily on the essentials.
Source: Smarty
“What we are seeing is not a panic or a pullback,” Smarty CEO Vipin Porwal said in a statement. “Consumers are preparing by budgeting more carefully while paying closer attention to prices and making conscious choices to protect their financial stability in an environment where inflation persists.”
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This article was originally published by TheStreet on February 18, 2026, and first appeared in the Retail section. Click here to add TheStreet as your preferred source.
