(Reuters) - Target will be lowering prices on at least 5,000 frequently shopped products across its assortment ranging from milk to diapers, the big-box retailer said on Monday, as it looks to attract budget-stretched customers.

Still-high food prices and borrowing costs have made cash-crunched customers more conscious of their spending on pricey items and look for cheaper products in stores and online, forcing retailers to lower prices to get more consumers to their stores.

Target also faces stiff competition from larger rival Walmart that already offers products at lower prices, and last week signaled a resilient U.S. shopper, betting on easing inflationary concerns.

"We know consumers are feeling pressured to make the most of their budget," Rick Gomez, chief food, essentials and beauty officer at Target, said in a statement.

Target said it also plans to cut prices on items such as meat, bread, soda, fresh fruit and vegetables, snacks and yogurt in markets ranging from Phoenix and Minneapolis to New Orleans and Baltimore.

The company, set to report its first-quarter results on Wednesday, said it had currently cut prices on about 1,500 items including frozen chicken breast and shredded cheese among others, with more planned to take effect over the course of summer.

The retailer also said these price cuts - which will be found across dozens of national brands as well as Target's own private brands - were in addition to the discounts it had planned to offer across its stores as part of Memorial Day celebrations.

Earlier in May, a source familiar with the matter said that McDonald's U.S. franchises also considering launching a $5 meal deal to draw more inflation-hit customers to its restaurants.