Target is having little success in convincing shoppers of its stance on DEI.
CEO Brian Cornell said Wednesday that public response to changes to its DEI programs — now known as “Belonging” — adversely impacted first-quarter sales, although an exact amount was not quantifiable.
“We faced several additional headwinds this quarter, including five consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs, and the reaction to the updates we shared on Belonging in January,” he said.
The financial results follow weeks of declining foot traffic and sales, punctuated by seasonal holiday bumps during the period. But shifting positions on DEI issues don’t appear to doing Target any favors, Global Data retail analyst Neil Saunders said in a note.
“The extent of this should not be overstated as many other factors are driving down Target’s sales numbers, but the move has certainly not been helpful,” he said.
A Target spokesperson said in a statement to Business Insider that the company is “absolutely dedicated to fostering inclusivity for everyone — our team members, our guests and our supply partners.”
“To do that, we’re focusing on what we do best: providing the best retail experience for the more than 2,000 communities we’re proud to serve,” the spokesperson said.
While some supporters of DEI have claimed partial victory in their pressure campaign, leaders including pastor Jamal-Harrison Bryant say they’re not yet satisfied with the company’s response.
Bryant said his church would hold a protest in front of an Atlanta-area Target on Sunday, May 25, to mark the fifth anniversary of the murder of George Floyd in Target’s hometown of Minneapolis.
“We’re gonna do it for nine minutes and 40 seconds as the same amount of time they applied pressure to George Floyd that led to his death,” Bryant said in a video inviting other churches to join.
Target expanded several diversity initiatives in the immediate aftermath of Floyd’s murder, and CEO Brian Cornell said the incident highlighted that more work was needed.
“It happened only blocks from our headquarters,” Cornell told the Economic Club of Chicago a year after Floyd’s death. “My first reaction watching on TV was that could have been one of my Target team members.”
At the time, Target committed to spending more than $2 billion on Black-owned businesses by 2025 by purchasing goods from more than 500 Black-owned businesses and contracting with Black-owned services from marketing to construction.
“As CEOs we have to be the company’s head of diversity and inclusion,” Cornell told the Economic Club of Chicago. “We’ve got to make sure that we represent our company principles, our values, our company purpose on the issues that are important to our teams.”
Four years later, Target’s message on DEI is less clear.
In January, the company said it was rolling back several diversity initiatives, renaming others, and not renewing the spending and sourcing goals it set in 2021.
(Target’s spokesperson told BI the announcement did not affect existing brand or supplier relationships, and that the company still recruits from a range of schools, including HBCUs.)
Target also for the first time donated $1 million to President Donald Trump’s inauguration fund, filings showed, even as Trump was gearing up executive orders to strip DEI programs from federal agencies and contractors. Tech giants Google, Meta, and Uber also each donated the same amount.
In addition, the company has drastically shrunk its annual LGBTQ Pride collection in recent years, and now offers a small fraction of what it showcased a two years ago.
In a note to employees earlier this month, Cornell acknowledged that “silence from us has created uncertainty,” and the executive has reportedly met with Bryant and Reverend Al Sharpton to discuss a path forward.
Beyond the protests, Saunders said Target continues to face a myriad of other challenges, including still-high tariffs on imports, growing competitive pressures from rivals, and a host of other operational difficulties.
“This year will be another soft one and Target enters it in a relatively weak position,” he said.
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