Last week, Target’s Chief Executive Officer Brian Cornell announced he will step down in January. The news comes as the chain retailer faces slumping sales after fierce customer backlash against its ‘woke’ product lines and campaigns.
It’s a startling fall from grace.
Just six years ago Cornell was named CNN’s ‘CEO of the Year,’ and credited for the company’s roaring comeback after a data breach more than a decade ago shook customer confidence.
Now, for the third consecutive quarter, Target has reported a decline, with a $227 million drop in sales. Meanwhile the company’s stock has been plummeting since January.
So, how did this happen?
They made one simple mistake. They took their eye off the ball.
In retail, the customer is all that matters. You don’t have employees or investors without them.
If you make those customers angry, they stop shopping with you and, worse, they go online and develop a campaign to boycott you.
Target made one simple mistake – they took their eye off the ball
In retail, the customer is all that matters. You don’t have employees or investors without them
As a CEO your only priority should be offering great products at a great price and ensuring that they are available for the customer.
I sit on several boards of directors and I ask CEOs this all the time: What is your mandate?
In other words, I want them to explain their role, why they have it and their plan of action for the next day, month and year.
If they say anything other than the customer, I know they won’t last – they’re a dead man walking.
Because when companies start to explore things that don’t matter to their customers, it ends very badly very quickly, and that was Target’s fatal mistake.
While the company had too much unsold merchandise on its hands after its pandemic sales boom, it also faced backlash for its 2023 Pride collection, which offered ‘tuck-friendly’ swimsuits for transgender individuals.
At the time, Cornell insisted that the merchandise would be good for business.
Instead, it triggered a widespread boycott among customers and sent the company’s stock – and sales – tumbling.
Most of the Pride merchandise was pulled from the shelves over concerns about staff safety last year and earlier this year Target rolled back some of its Diversity, Equity and Inclusion (DEI) policies.
Still, sales continued to slip.
You know it’s bad when you inspire a Saturday Night Live bit. In April the show joked that Target’s new slogan was ‘Expect More, Offend Everyone.’
Now, Cornell is out at the end of January 2026, though he will stay on the board as executive chairman.
Cornell said he would step down from his position at the start of 2026 – he will stay on board as the executive chairman
Most of the Pride merchandise (pictured) was pulled from the shelves over concerns about staff safety last year
This is a valuable lesson for all S&P 500 CEOs and, indeed, CEOs of any company: don’t go where your customer doesn’t want to go.
Target customers don’t want to be educated about gender. At the end of the day, you’re a retailer, your job is to sell stuff.
Customers have already made up their minds how they feel about social issues, and they just want to shop for the best products at the best price.
They have an allegiance to the brand as long as it continues to deliver the promise that’s put forward, they aren’t shopping for a lesson in identity politics.
Just look at what happened to Bud Light.
In 2023, the beer brand partnered with transgender influencer Dylan Mulvaney, eliciting outcry from once-devout Anheuser-Busch consumers and prompting a boycott that hurt sales.
Anheuser-Busch’s US marketing chief stepped down the same year.
In all honesty Cornell may not have been keyed in on the day-to-day operations of the company he ran – the products and promotions on the store floor.
It’s a lesson I teach my Harvard students: CEOs must have their ear to the track.
Executives have to know what’s happening within their company at every level.
That’s how they catch landmines before it kills the business, because it is incredibly difficult to right the ship when it’s sinking.
Once they step into the proverbial cow dung, they’ll be wasting their time trying to clean it off their boots.
In the case of Bud Light, a former executive said the company still hadn’t recovered in February this year, despite the brand’s attempts to court customers by partnering with celebrities like Peyton Manning and Post Malone.
Now, Target will need a remarkable volte-face.
The company’s Chief Operating Officer Michael Fiddelke will step into the CEO role come February next year and will likely only have 18 to 24 months to course correct.
If he doesn’t, he’ll be gone, too.
