Costco Thriving After Retailers Like Target Roll Back DEI Initiatives

During a four-week period, Costco saw an increase of over 7 million shoppers compared to Target's decrease of nearly 5 million.

Black and Hispanic shoppers spend their dollars at Costco, while retailers like Target have seen declining in-store visits, analytics firm Numerator stated in a March 5 report that the shift may be linked to retailers’ adjustments to DEI initiatives.

“Black and Hispanic households appear to be reducing visits at disproportionately high rates in the weeks following Target’s DEI rollback,” the report states. “Meanwhile, Costco—maintaining a strong DEI stance—has attracted many of these same consumers.” In year-to-year visits, Target saw a decline in nearly 5 million shoppers during a four-week period that ended Feb. 9. For Costco, the big-box store corporation saw an increase of 7.7 million visits.

The decline in Target’s traffic may reflect its decision to switch things up on customers. One-third of survey respondents knew about the Feb. 28 economic blackout.

“That kind of seesawing back and forth and saying one thing and doing another, that’s what gets brands like Target in trouble,” Collage Group’s chief insights officer, David Albert, told Business Insider. “We’ve seen here, especially with Target, is that they’ve eroded that trust.”

Target announced its decision to roll back its DEI initiatives Jan. 24 following President Donald Trump’s order following his inauguration to cease DEI programs.

According to a companywide memo, the retail giant stated the changes would better align with the Target consumer base. During a Jan. 30 news conference, civil rights attorney Nekima Levy Armstrong stood outside the retailer’s Minnesota headquarters and called for a nationwide boycott on Black History Month’s first day. Keeping the momentum, New Birth Missionary Baptist Church Pastor Dr. Jamal Bryant announced a 40-day fast from Target, which commenced March 5. In a press release, the pastor urged 100,000 Black shoppers to “halt all purchases” and “divest any stock holdings” in the company.

Costco, on the other hand, has not changed course. “Our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary,” the wholesaler’s board wrote in a memo, per The Independent. Costco CEO Ron Vachris urged shareholders to support the wholesaler’s commitment to DEI initiatives, which he believes contributes to boosting profits.

Walmart’s performance remained consistent during the four weeks examined. The report suggested that even though Walmart also rolled back DEI initiatives, such strategies were never a central focus.