Target recently decided to roll back its DEI (diversity, equity, and inclusion) initiatives, which has proved costly for the retailer. In addition to experiencing decreased sales, the retail giant is now facing calls for a boycott from a very powerful lobbying group. Here’s what we know so far.
Black Church Leaders Call Upon Parishioners To Boycott Target
USA Today reports that to protest businesses that have abandoned diversity measures, Black religious groups urged pastors to encourage their congregations on Sunday to participate in a 40-day boycott of Target.
“We’ve got to tell corporate America that there’s a consequence for turning their back on diversity,” said Bishop Reginald T. Jackson. “So let us send the message that if corporate America can’t stand with us, we’re not going to stand with corporate America.”
The religious leaders started the boycott effort at the historic Black church in Washington, D.C., Metropolitan African Methodist Episcopal Church. On March 3, Ash Wednesday, which marks the beginning of Lent and the 40 days of prayer and penance leading up to Easter, the boycott will commence.
“If our diversity is not good, our money isn’t good,” Jackson, bishop of the AME Church’s Second District, told his parishioners.
Following Donald Trump’s executive order to rescind diversity, equity, and inclusion programs across the federal government, civil rights organizations, religious leaders, and others have launched several campaigns targeting businesses they claim have backed off from diversity initiatives.
Trump has supported similar initiatives, arguing that hiring and other procedures should be determined only by merit. Diversity proponents claim that these initiatives give everyone an equal chance at success by eliminating discrimination in hiring and promotions.
Following Trump’s signing of the order, Target was among several businesses that reversed its DEI programs, though some had already started to reduce their efforts beforehand.
Class Action Lawsuit
Black churchgoers, however, aren’t the only ones mad at Target for its DEI efforts. Earlier this month, the City of Riviera Beach Police Pension Fund filed a class-action lawsuit against the retailer, claiming that the business misled investors about the dangers associated with its ESG and DEI initiatives.
According to the plaintiffs, Target’s stock price soared between Aug. 26, 2022, and Nov. 19, 2024 (the Class Period) due to the company’s false representation of the risks. As a result, investors purchased Target shares at higher prices during the Class Period before declining in the ensuing months.
The store allegedly misled shareholders by inadvertently encouraging them to back management’s “misuse of investor funds to serve political and social goals.” CEO Brian Cornell and other officials are accused in the lawsuit of not sufficiently outlining the risks of consumer boycotts due to the company’s DEI policy.
The lawsuit cited the May 2023 Pride Month campaign as one example. The lawsuit claims that Target failed to disclose the full extent of the response during the campaign. Employees started to worry about their safety when the business was forced to stop selling certain LGBTQ-themed items in its stores due to intense criticism at the time.
Target also revealed poor Q3 FY24 results on Nov. 20, 2024, including lower-than-expected earnings and expectations for December holiday sales. The company’s market value dropped by $15.7 billion, and its stock price dropped by 22% in a single day.
In a memo to its staff on Jan. 24, the Minneapolis-based retailer said it would terminate its three-year DEI targets, cease reporting to external diversity-focused organizations like the Human Rights Campaign’s Corporate Equality Index, and end a program to carry more products from Black or minority-owned companies.
“Many years of data, insights, listening and learning have been shaping this next chapter in our strategy,” said Kiera Fernandez, chief community impact and equity officer for Target, in the memo. “And as a retailer that serves millions of consumers every day, we understand the importance of staying in step with the evolving external landscape, now and in the future — all in service of driving Target’s growth and winning together.”
