Target Blames Economy, Politics, and Culture for Falling Sales
Retail Giant Under Fire: How Tariffs, DEI Backlash, and Consumer Fatigue Are Undermining Target’s Turnaround Strategy
Editorial Team (ET)May 22, 2025
Target is navigating a storm. Once the darling of American retail, affectionately nicknamed “Tarzhay” for its affordable luxury and trend-savvy branding, the company is now on the defensive. Its latest earnings report paints a sobering picture: revenue missed expectations, sales dropped nearly 3%, and customer transactions are slipping. The retailer’s once-loyal base is retreating—and Target’s leadership knows exactly why.
In a candid call with reporters, CEO Brian Cornell laid it bare. A trifecta of troubles is pressing down on Target’s performance: faltering consumer sentiment, looming tariff hikes, and the contentious fallout from pulling back its Diversity, Equity, and Inclusion (DEI) initiatives. The combination is volatile, and the data tells the story. Comparable store sales are down 5.7%, digital sales only mustered a modest 4.7% uptick, and overall revenue fell from $24.53 billion last year to $23.85 billion. Worse yet, Target slashed its full-year sales outlook, now projecting a low-single-digit decline instead of the modest growth it had previously expected.
The challenges come as part of a broader identity crisis. Target is grappling not just with economic headwinds but with how it’s perceived by its core demographic. In recent years, the company leaned into social values, investing heavily in DEI programs and inclusive campaigns. But a rollback in those efforts has sparked public backlash, with critics ranging from everyday shoppers to civil rights leaders like Reverend Al Sharpton. That public discontent isn’t staying on social media—it’s impacting sales, store traffic, and share price. In fact, Target stock has dropped over 37% in the past year.
