Target Under Fire: DEI Rollback and Trump-Era Tariffs Hit Retailer Hard

Target, long recognized for championing progressive causes, is facing a wave of consumer backlash and economic challenges. The Minneapolis-based retailer is grappling with falling sales, a politically charged boycott, and steep tariffs under former President Donald Trump’s trade policies.

A 3.8% drop in same-store sales last quarter has put Target in the spotlight. Much of the decline can be traced back to the company’s decision to reduce its focus on its diversity, equity, and inclusion (DEI) initiatives. The move triggered a 40-day Target boycott during Lent, led by Atlanta pastor, Rev. Jamal Bryant. The campaign was fueled by disappointment among customers who viewed the retailer as a leader in diversity and inclusion.

The company’s rollback included eliminating hiring goals for minority employees and disbanding its executive DEI council. This move, announced just days after Trump signed an executive order targeting corporate DEI programs, surprised many of Target’s progressive supporters. In Minneapolis, where Target is headquartered, the decision stung particularly hard, given the company’s vocal response to the 2020 murder of George Floyd.

Critics, including civil rights activist Nekima Levy Armstrong, accused Target of bowing to political pressure. “They acted cowardly,” she said during protests outside the company’s headquarters. Anne and Lucy Dayton, daughters of one of Target’s co-founders, called the reversal a “betrayal” in an op-ed for the Los Angeles Times.

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The consumer backlash was swift and effective. Data from Placer.ai shows a 9% decline in foot traffic in February, with a further 6.5% drop in March, aligning with the boycott’s peak. Rev. Bryant said more than 200,000 people participated in the effort, which aimed to use the projected $2 trillion buying power of Black Americans as leverage.

While the boycott has impacted sales, the controversy has also put pressure on Black-owned businesses that sell products at Target. Entrepreneurs like Melissa Butler of The Lip Bar warned that decreased foot traffic could hurt minority brands that rely on Target’s national reach. Others, including Tabitha Brown, urged a “buycott,” encouraging shoppers to support Black-owned products while boycotting other items.

Adding to Target’s troubles are Trump tariffs on imports from countries like China and Mexico. With about 50% of its products sourced internationally, the retailer is particularly vulnerable. Tariffs as high as 40% on Chinese goods and 25% on Mexican imports are expected to raise costs substantially. Target CEO Brian Cornell called the potential impact “massive.”

Analysts point out that Target’s heavy focus on discretionary items, such as clothing and home goods, makes it more sensitive to price increases than grocery-focused competitors like Walmart. While Target is exploring ways to reduce its reliance on imports, including diversifying suppliers and adjusting product offerings, these changes will take time.

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In response to these challenges, Target has launched an “Enterprise Acceleration Office” and reshuffled its executive team. The company assures that it remains committed to its core values and is working to stabilize operations. In a message to employees, Cornell acknowledged a “tough few months” and reaffirmed Target’s pledge to honor its $2 billion commitment to Black-owned businesses.

Meanwhile, other retailers are charting different paths. Costco, for example, rejected a shareholder proposal to reduce its DEI efforts, earning praise from diversity advocates. The wholesaler saw a 22% increase in web traffic during the boycott period, in sharp contrast to Target’s declines.

As Target tries to rebuild trust and navigate economic pressures, the backlash over its DEI retreat highlights the growing power of consumer activism. Whether the retailer can recover its progressive image and its customer base remains to be seen.

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Source: mixvale