Target, a well-known advocate for diversity and inclusion, revealed on August 16 that its sales for the second quarter plummeted by more than five percent after featuring LGBTQ-themed merchandise such as onesies for newborns and rainbow socks for kids to support Pride Month.
However, the retail giant suffered a dual-pronged backlash from critics who accused Target of pushing a "woke" agenda by featuring LGBTQ merchandise and from LGBTQ and human rights advocates who criticized the company for not supporting the community after removing some items in displays.
Bud Light, which also embraced the LGBTQ community, suffered a similar fate. The beer brand has experienced a sharp decline in sales after conservatives lambasted its collaboration with transgender influencer Dylan Mulvaney. In response to the backlash, Anheuser-Busch took the unusual step of firing executives involved in the partnership.
These setbacks for Target and Bud Light underscore the consequences faced by companies when navigating the increasingly treacherous landscape of culture wars.
For the first time in six years, the market value of Target had taken a toll after the controversy involving its Pride Month collection. The sales of the company reportedly dropped by $9 billion within a week after displaying the collection featuring Pride merchandise.
The slump in sales prompted Target to take a closer look and modify similar campaigns in the future. While Target did not explicitly detail the extent of the impact, the company acknowledged that the fallout had a tangible effect on its bottom line.
The moment is leading executives to wonder about the benefits of supporting social causes during a time of such polarization in the country.
Christina Hennington, the chief growth officer of Target, also admitted the complexity of the situation during a conference call with analysts. She emphasized the need for a nuanced approach that balances celebration, inclusivity and broad-based appeal. (Related: Target loses $9B in week following boycott calls over LGBTQ-friendly kids clothing.)
"We'll have a slightly more focused assortment and will evolve our store and digital presentations," Hennington explained. "We're going to reconsider the mix of our own national brands with our external partners. And so, you'll see us celebrate these heritage moments but with these modifications."
Former Target Vice Chairman Gerald Storch also weighed in on the matter, noting that the Pride collection wasn't the sole contributor to the decline. "It's certainly impacted them. There's no doubt about it. But I would say it's probably 20 percent of the [decline]. Not the main part of it."
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Watch Tim Pool expounds on Target's $9 billion loss following the backlash toward its Pride collection.
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