Over the past few years, Kohl’s has struggled to attract customers to its stores, despite recent turnaround efforts to boost sluggish sales. In response to these ongoing challenges, the retailer is launching a bold new section across all locations to win back a key customer group.
In the third quarter of 2025, Kohl’s net sales fell nearly 3% year-over-year, according to its most recent earnings report. It also generated operating income of $73 million during the quarter, about 25% less than it earned in the same time 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 one of the worst performers in retail — with sales and market share declining since 2019,” GlobalData analyst Neil Saunders said in a November research note obtained by CBS News. “This chronic underperformance is directly related to operational negligence and the absence of a clear strategy.”
The drop in consumer demand comes after Kohl’s made some bold changes to its stores to address weak sales.
For example, last year it reintroduced petite sizes in stores following customer complaints and increased investment in its jewelry business. Kohl’s has also increased the number of coupons it offers customers after eliminating 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 choosy as their discretionary income remains under pressure,” Bender said. “This is particularly notable among our low- and middle-income consumers, as well as our younger customers. These customers are becoming more savvy and looking for more value.”
It’s no surprise that Kohl’s is seeing this change in shopper behavior, as consumer sentiment has remained subdued in recent months due to concerns about the economy.
A McKinsey & Company survey last December found that 37 percent of consumers planned to cut spending on clothing over the next three months as they battle inflation and the rising cost of living, while 35 percent planned to spend less on footwear.
Amid this trend, Kohl’s announced that it is adding a new section in its stores called the “Deal Bar” aimed at price-conscious shoppers, according to a recent press release.
The section, which is located in 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 the section include purposeful storage options, home accessories, fitness apparel, DIY kits for kids, party supplies, Easter basket fillers, and more.
Related: Kohl’s Takes Drastic Action to Fix Customer Behavior
“Conveniently located at the front of each store, the Deal Bar offers fun, practical and timely items refreshed throughout the year, ensuring there’s always something new for our customers to discover,” Kohl’s said in the press release.
Customers can also shop the Deal Bar on the Kohl’s website, where there is a section for items that cost $5 or less.
The move by Kohl’s follows in the footsteps of several of its top competitors, which have 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 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 rolling out low-priced product assortments may be especially beneficial for retailers this year, as more consumers nationwide plan to be tighter with their budgets amid growing concerns about their finances, according to a recent survey from Smarty.
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Approximate 60% of American consumers fear daily price increase while 41% you mostly worry that inflation isn’t coming down fast enough.
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Only 19% of consumers said they feel very optimistic about their financial outlook for 2026, while 51% describe their financial future as insecure.
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For 2026, 45% expect to I spend about the same as they did in 2025, while only 16% anticipate spending less.
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However, 35% plan to spend more cautiously and 23% it mainly focuses on the essentials.
Source: Smarty
“What we are seeing is not panic or withdrawal,” Smarty CEO Vipin Porwal said in a statement. “Consumers are preparing by budgeting more carefully, while watching prices more closely and making intentional choices to protect their financial stability in an environment where inflation is permanent.”
Related: Home Depot and Lowe’s are quietly gaining 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 favorite source by clicking here.