Over the past few years, Kohl’s has struggled to attract customers to its stores despite recent efforts to boost sluggish sales. In response to these ongoing challenges, the retailer is rolling out a bold new segment across all locations to win over key customer groups.
In the third quarter of 2025, Kohl’s saw its total sales decline by about 3% year over year, according to its most recent earnings report. It also generated operating income of $73 million during the quarter, which is about 25% less than what it earned during the same period in 2024.
Additionally, 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 the worst performer in the retail sector as sales and market share have declined since 2019,” GlobalData analyst Neil Saunders said in a November research note obtained by CBS News. “This chronic underperformance is directly linked to operational slowness and lack of a clear strategy.”
The drop in consumer demand comes after Kohl’s made several bold changes to its stores to fix weak sales.
For example, last year it put back smaller sizes in stores after customer complaints and increased investment in its jewelry business. Kohl’s also multiplied the number of coupons it offered to customers by dropping several brands from its coupon selection.
During an earnings call in November, Kohl’s CEO Michael Bender said the company continues to encourage customers to be vigilant about their discretionary spending.
“We continue to operate in an environment where our clients are becoming increasingly selective as their discretionary income remains under pressure,” Bender said. “This is particularly noticeable among our lower-middle income consumers and our younger customers. These customers are increasingly savvy and looking for more value.”
It’s no surprise that Kohl’s is seeing this change in shopping behavior, as consumer sentiment has been low in recent months due to concerns about the economy.
A McKinsey & Company survey in December last year found that 37% of consumers plan to cut their spending on clothing in the next three months as they battle inflation and the rising cost of living, while 35% plan to spend less on shoes.
Amid this trend, Kohl’s has announced that it is adding a new section to its stores called the “Deal Bar,” which targets price-conscious shoppers, according to a recent press release.
A section located at the front of each store offers items such as “gifts, seasonal finds, and everyday essentials” priced at $10 or less.
Some of the items customers can find in this 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 measures to correct customer behavior
“Conveniently located at the front of every store, the Deal Bar keeps fun, practical and timely items fresh year-round, ensuring our customers always have something new to discover,” Kohl’s press release said.
Customers can also shop the Deal Bar on the Kohl’s website, which has a section for items costing $5 or less.
Kohl’s move follows in the footsteps of many of its top competitors, which have also recently expanded their assortment of affordable items for customers.
In 2024, Amazon launched an Amazon Haul section on its website, where it sells 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% priced under $20.
This strategy of launching lower-priced product assortments could be particularly beneficial for retailers this year, as more consumers plan to tighten their budgets amid growing concerns about their finances, according to a recent survey by Smarty.
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approx 60% of American consumers fear Daily price increase, while 41% Most worry about inflation not coming down fast enough.
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only 19% Consumers felt it Very optimistic Regarding your financial outlook for 2026, while 51% Describe your financial future Uncertain.
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For 2026, 45% expect Spend the same As they did in 2025, while only 16% guess less expense.
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but, 35% More careful spending planning, and 23% Mainly focused on essentials.
Source: Smart
“What we are seeing is not a panic or a pullback,” Smarti CEO Vipin Porwal said in a statement. “Consumers are bracing for more careful budgeting, while watching prices more closely and making deliberate choices to protect their financial stability in an environment where inflation feels permanent.”
Related: Home Depot and Lowe’s quietly acquire new rivals
This story was originally published by TheStreet on February 18, 2026, where it first appeared in the Retail section. Add TheStreet as a preferred source by clicking here.
