Target issued a warning Tuesday about declining consumer confidence and the impact of tariffs, signaling further strain on the U.S. economy. The company reported a sales decline in February and projected only a 1% growth for the year. Jim Lee, Target’s CFO, attributed the slowdown to soft sales driven by cold weather and falling consumer confidence, which particularly affected discretionary spending on items like clothing and home goods.
Tariff uncertainty also weighed on Target’s profit outlook for the quarter. Despite a slight rise in premarket stock trading, the company remains cautious about 2025. This follows Walmart’s recent warning of slower sales amid inflation and tariff concerns. Consumer confidence saw its sharpest monthly drop since 2021 as inflation fears resurfaced.
President Donald Trump’s new tariffs, including a 25% duty on Mexico and Canada and a 20% tariff on Chinese imports, have heightened economic anxieties. These tariffs, aimed at curbing fentanyl imports, could raise prices on a wide range of goods. Target CEO Brian Cornell warned that Mexican produce imports, crucial during winter, may lead to price hikes on fruits and vegetables as early as this week.
Target is also facing backlash for scaling back its diversity, equity, and inclusion (DEI) initiatives. Progressive consumers, particularly Black shoppers, have called for boycotts. Rev. Jamal Bryant has urged a 40-day boycott starting Wednesday. Foot traffic data shows Target experiencing a sharper decline compared to Walmart and Costco, though weather and other factors may also play a role.
— news from CNN