Target Boycott Gains Momentum as Retailers Face Growing Risks from DEI Policies

Image credits: Joe Raedle/Getty Images

The backlash against diversity, equity, and inclusion (DEI) policies has escalated, with retailers like Target and Starbucks facing lawsuits and boycotts. The pastor behind a boycott of Target, Dr. Jamal Bryant, has a long history of associating with Nation of Islam leader Louis Farrakhan and recently called Black Trump supporters "coons" in a fiery speech. Bryant has also publicly been critical of the gay community, telling a congregation that "homosexuality is not the only sin, but it is a sin." Despite his past comments, Bryant has been embraced by liberal organizations, many of which have flocked to support the Target boycott.

The legal battle against corporate DEI policies has grown, with the state of Florida filing a security fraud lawsuit against Target and Missouri suing Starbucks for violating federal and state civil rights laws. The lawsuits claim that the companies' DEI policies constitute illegal discrimination or preferences. Adding to the pressure, the Justice Department is preparing a report to identify steps to "deter the use of DEI programs or principles that constitute illegal discrimination or preferences" in the private sector. DEI has become a political and social minefield, with public opinion divided but mostly positive, according to a Pew survey.

Many retailers have dialed back their DEI programs, including Amazon, Walmart, Lowe's, McDonald's, Tractor Supply, and Target, to avoid backlash and potential lawsuits. However, others, like Costco, Kroger, Giant, and Trader Joe's, remain committed to their DEI policies, believing they do not violate federal or state laws. The University of Michigan's Marcus Collins notes that brands that aren't committed to DEI but don't want to face backlash may wait until they are forced to make a decision. But with the costs associated with litigation and potentially damaging publicity, companies may not want to wait, especially if internal communications suggest that hiring or promotion decisions were made on the basis of race or gender.

Foot traffic data from Placer.ai shows that Target's announcement to backtrack on its DEI efforts has led to a drop in foot traffic, with a 4% year-over-year decline in the week following the announcement. Walmart, which also rolled back its DEI efforts, saw a smaller decline in foot traffic. In contrast, Costco, which has resisted pressure to dump its DEI program, has seen traffic rise year-over-year. The data suggests that consumers are responding to the companies' DEI policies, with some switching to Costco instead of Target.

The growing risks from DEI policies have led to a re-evaluation of the role of diversity and inclusion in corporate America. As the lawsuits and boycotts continue, retailers will need to navigate the complex landscape of DEI policies, balancing the need to promote diversity and inclusion with the risk of backlash and potential lawsuits. With the Justice Department and state attorneys general taking a closer look at DEI policies, companies will need to be careful to ensure that their policies comply with federal and state laws, or face the consequences.