Target is expecting a subdued holiday shopping season, which is shaking some retail investors.

The company predicted on Wednesday that sales in the final quarter of the year will be flat, and executives cut their profit forecast from last quarter.

Target also reported a sales increase of just 0.3 percent in its most recent quarter, despite repeated cuts in recent months to appeal to inflationary consumers.

The news sent Target shares tumbling as much as 20 percent in premarket trading Wednesday. This put the company on track for its biggest daily decline in more than two years.

CEO Brian Cornell recently told reporters during a call that “lingering softness in discretionary categories” and costs incurred by rushing shipments to prepare for the short-lived dock workers strike in October both contributed to a weak quarterly result.

Throughout the summer, most economic metrics showed Americans still increasing their spending despite high interest rates and stubborn inflation.

But as the country approaches the holidays, it appears many Americans may be strapped for cash at a crucial time for retail.

Gerald Storch, former vice chairman of Target, predicted in October that the retail industry faces a tough couple of months ahead.

Target expects this holiday season to be weak in terms of sales. It also lowered the profit forecast for the next quarter

“It’s very clear that consumers are running out of money,” Storch said Fox Business.

“They are increasingly stressed by inflation and the depletion of their savings from the pandemic… they are spending less than the growth of inflation,” he added.

Target, much more than its main competitor Walmart, relies on selling discretionary goods such as home furnishings, electronics and clothing to make a profit.

More than half of Target’s merchandise is discretionary, CNN are reported, and those are the exact items that consumers are forgoing in favor of groceries and groceries.

Meanwhile, Walmart, which gets about half of its sales from groceries, is booming.

The retail giant beat out Target in the most recent quarter, posting a 5.5 percent increase in revenue, along with a 27 percent increase in global e-commerce sales.

Walmart also raised its financial outlook, possibly signaling that it expects a strong holiday season.

Walmart said it gained market share last quarter largely thanks to “higher-income households.”

Households earning more than $100,000 a year accounted for 75 percent of the company’s profits.

Former Target CEO Gerald Storch issued a dire warning about the shopping season before his former company released its dismal earnings results

Target executives explained that customers are increasingly looking for deals, and if there aren’t any, they’ll keep their wallets closed until there is

Target also cited budget-conscious shoppers as an explanation for its sluggish performance.

“Consumers have become increasingly resourceful and strategic in how they shop,” said Chief Commercial Officer Rick Gomez.

“They know there are deals out there. They’re willing to search for them, and they wait for the exact right moment to walk into our stores or log into our app.’

Gomez added that in the week before Target’s Circle Week, a promotional event last month, sales were slow. But when the incident happened, it immediately took off.

October’s Circle Week was the most successful in company history, with 3 million new members signing up for Target’s loyalty program.

Target began its mission to appeal to cash-strapped shoppers in May, when it slashed prices on at least 5,000 frequently purchased products, from milk to diapers.

The company increased that in October, making 2,000 more items cheaper, including cold medicine, toys and ice cream.

Target said it will have reduced prices on more than 10,000 items by the end of this year.