What happened to Target?

Their long time CEO Brian Cornell has "stepped down" as sales continue to slump

Let’s look at what is really going on at Target, shall we? Right now, some of the mainstream media coverage suggests that the boycott by black Americans against Target for its rollback of DEI is what is driving the declines and the ouster of long-time CEO Brian Cornell.

It has contributed. But it isn’t the whole story. I think it’s a dramatic over simplification and a bit of wishful thinking by leftie journalists hoping to make the point that people really really want DEI and if businesses walk away from any part of it those businesses will suffer the consequences.

The left wants to believe in their power to influence with a DEI-rollback driven boycott. And they certainly have some influence.

The right also wants to believe in their power to influence with their “go woke go broke” mantra — and their pushback on Target’s 2023 Pride merch. And they certainly have some influence.

In my opinion all of these things had an impact but reality is usually more complicated than boycotts based on politics. (Though not with Bud Light — that decline was really a go woke go broke scenario! That is the one where it is really obvious that’s what it was and the brand has still not recovered despite its subsequent normie efforts to restore the brand’s place in the hearts of frat boys and former frat boys and blue collar guys and basically anyone who likes their beer to be closer to water than beer so that they can drink a lot of it.)

So where are things with Target?

Sales have been basically stagnant for the last 4 years.

Sales in the first quarter of this year fell almost 4% and sales in the second quarter fell .9%.

In 2023, second quarter sales declined 5.4% in the second quarter. It was the first time in 6 years the retailer saw quarterly sales declines. It’s extreme Pride merch caused a backlash that year and then CEO Cornell acknowledged this was a key driver of the downward trajectory. (By “extreme” I mean it included things like a “tuck friendly” bathing suit for minors. Meaning a bathing suit for boys who think they are girls and want to hide their penises.)

The recent second quarter decline is in the zone of 3% as mentioned above — so the DEI pullback boycott drove or partly drove less of a decline by about 2 points than the Pride backlash.

But both are bad. And rather than cancel each other out, they were both likely additive. One on top of the other.

And now we have dueling right vs left boycotts.

Maybe, just maybe, the gigantic $100+ billion retailer where American moms love (loved?) to shop should have kept out of politics in the first place?

Maybe, just maybe, Target should have STAY FOCUSED ON THE KEY BUSINESS DRIVERS.

For Target, those business drivers are: a unique product assortment at value pricing; solid customer service; ease of shopping.

They have also deployed a distinctive location strategy. Suburban vs rural (Walmart); City stores; College campus adjacent stores. The household income (HHI) of their shopper has been higher than Walmart’s.

(Keep in mind that Walmart’s annual revenue is almost 7x that of Target, but Target did make a dent and peel off some Walmart shoppers, for a time.)

Straying from those core tenets arguably led them down a path of politics rather than staying focused on pleasing the customer — or “guests” as they like to call them at corporate HQ.

But as much as activists on both sides would like to reduce Target’s performance to their protests (main character syndrome?), it’s not really the complete story. Though it does reflect a lack of focus on the brand’s priorities.

What else happened?