This is the reason why Target’s sales are down: It’s not only because of Trump’s tariffs

Target has announced that sales fell in the last quarter, tumbling by 3.8% across stores that have been open for at least a year. The reasons for the drop, however, are less clear.

The retail giant has been forced to downgrade its financial outlook as a result of the latest figures. CNN reports that sales are likely to remain down for the rest of the year.

Explaining the findings, Target CEO Brian Cornell said: “We faced several additional headwinds this quarter, including five consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs, and the reaction to the updates we shared on (DEI) in January.”

Cornell outlined two key contributing factors to the downturn. Firstly, the decision to remove its previous Diversity, Equality, Inclusion (DEI) policies. The move came less than one week after President Donald Trump had returned to the White House and Target was criticized for pandering to the new administration.

Target had previously been a prominent supporter of similar initiatives and Anne and Lucy Dayton, the daughters of one of Target’s co-founders, described the reversal ads “a betrayal.”

However that DEI misstep was not the sole reason for the downturn. The uncertainty caused by Trump’s proposed tariffs also rocked the retail industry across the board. More than half of Target’s stock is considered discretionary - far more than rivals Costco and Walmart - meaning that they are particularly affected by drops in consumer confidence.

Target also imports around 25% of products from China, leaving the store in a “challenging position,” according to Steven Shemesh, an analyst at RBC Capital Markets. Walmart, too, has felt the effects of the tariffs and pointed the blame at the White House for the disruption. In response, Trump was not impressed.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump wrote on social media. “Between Walmart and China they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”

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