Target Sales Drop Following Pride Merchandise Backlash

Facts

• Target's quarterly sales have fallen for the first time in six years, reportedly due to a decrease in consumers' discretionary spending and a right-wing backlash to Target's Pride Month collection released in June.¹
• According to the company's second-quarter earnings report published Wednesday, retail giant Target's sales fell by 5.4% between April and June compared to last year.²
• Though its shares rose 3% following the announcement, Target reduced its profit goal for the entire year, stating its sales could decline again in the current quarter.³
• The sharp drop in sales comes after Target experienced impressive profits during COVID, with the company reporting $30B in growth since 2019.²
• In a quarterly update to investors, Target's CEO Brian Cornell said the company would approach partnerships cautiously and modify how it sells Pride merchandise while celebrating "heritage moments."⁴
• However, CFO Michael Fiddelke declined to attribute the drop in sales solely to the backlash, pointing instead to economic factors including weaker sales of discretionary items across the retail sector because of inflation.⁵

Sources: ¹CNN, ²Guardian, ³Wall Street Journal, ⁴BBC News, and ⁵CNBC.

Narratives

• Narrative A, as provided by CNN. Target may be experiencing a drop in sales, but shoppers aren't enacting a political boycott. Americans are spending less on non-essential items at all stores and Target's inventory comprises a majority of non-essential merchandise like clothing, home decor, and toys.
• Narrative B, as provided by CNBC. This drop in sales results from Target trying too hard to be political. The store needs to do a better job of vetting the vendor merchandise it carries and should be more conscious of the settings, timings, and presentations of any future displays it may have of so-called "heritage celebrations."

Predictions