Across corporate America, Diversity, Equity, and Inclusion (DEI) initiatives are under fire. Major players like Amazon, Meta, McDonald’s, and Walmart have rolled back DEI programs in response to political pressure, lawsuits, and shifting cultural winds.
But as the case of Target shows, the decision to retreat from DEI may carry far greater costs than anticipated.
Target’s DEI Retreat: A Case Study in Backlash
Target was once considered a leader in inclusive business practices, with a $2 billion REACH initiative and strong supplier diversity programs. But in 2025, the retailer ended many of these efforts, rebranded others, and stepped away from public DEI rankings.
The reaction was swift.
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Civil rights leaders and even the daughters of Target’s founders condemned the move as a betrayal of company values.
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A nationwide boycott campaign, the “Target Fast”, drew over 250,000 pledges to avoid the brand.
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Foot traffic dropped, sales weakened, and stock value plummeted.
By Q2 2025, the damage was clear: a 21% drop in net income, a 1.9% decline in comparable sales, and a year-to-date stock decline of over 30%. Ultimately, Target’s CEO resigned, underscoring how destabilizing the rollback had become.
The Consumer Contract: Why Values Matter
The Target case isn’t just about one company—it’s a warning for all big brands. As Business Insider notes, Target’s rollback exacerbated existing problems, such as messy stores and higher prices. But the bigger issue is how it fractured consumer trust.
Research shows that while only 39% of consumers report actively boycotting a brand in the past year, nearly 68% say they want companies to take a stance on social issues. More than half admit they’ve switched away from brands that don’t align with their values.
In other words, companies aren’t just selling products—they’re selling belief systems. When brands break that contract, consumers respond with their wallets.
Winners and Losers in the DEI Debate
The contrast is striking when you compare Target with companies that stayed the course.
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Costco, for example, maintained its DEI commitments—and saw a 5.1% increase in foot traffic year-over-year.
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Apple, which has consistently integrated DEI into its brand identity, continues to be rewarded with strong customer loyalty and market performance.
These examples suggest that standing firm on DEI may be less risky than retreating from it.
Lessons for CEOs and Business Leaders
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Don’t Underestimate the Backlash – Consumers notice when companies walk back values, and the financial hit can be immediate.
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Align DEI With Strategy, Not Politics – Treat DEI as a driver of innovation, customer trust, and competitive advantage—not as a trend to be abandoned under pressure.
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Consistency Builds Trust – Abrupt reversals look inauthentic. Long-term commitment builds resilience, even in polarized times.
Final Thought
Are DEI rollbacks the beginning of the end for big brands? Not necessarily. But Target’s struggles show that retreating from inclusivity carries significant risks—not just reputational, but financial.
The lesson for business leaders is clear: when values and profits collide, betting against inclusion may be the costliest gamble of all.
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