The other day, we shared a post from the Young Conservatives on our Facebook page reporting that Target had finally responded to pressure regarding the transgender bathroom debacle.Back in April, the store chain publicly announced it would cater to transgender customers and employees in restrooms and changing areas, allowing them to use whichever room corresponded with their gender identity. The American Family Association launched a boycott in response, and over 1.4 million people signed a petition to boycott the store.
Among the AFA’s concerns were that according to Target’s policy, “This means a man can simply say he “feels like a woman today” and enter the women’s restroom…even if young girls or women are already in there. Target’s policy is exactly how sexual predators get access to their victims. And with Target publicly boasting that men can enter women’s bathrooms, where do you think predators are going to go?” They urged Target to abandon the current policy and instead implement unisex bathrooms.Four months and one arrest of a transgender woman in one of their dressing rooms later, Target finally caved and adopted that policy. The chain of stores is now spending $20 million installing single-stall unisex restrooms, which is a drop in the bucket compared to their 2015 revenues of $74 billion. So what’s the real reason Target made the change? Long story short: the boycott worked.
When Target Stores reported results for its second-quarter, which ended on July 31, on August 17, the Associated Press’s Anne D’Innocenzio told readers that “Sales at stores open at least a year fell 1.1 percent, reversing seven straight quarters of gains,” and that “Customer traffic fell for the first time in a year and a half.”What could have caused such a stark reversal, especially in light of the fact that the next day, larger arch rival Wal-Mart reported, as seen in the Wall Street Journal, that “sales at established stores up for the eighth consecutive quarter and more shoppers visiting for the seventh period (i.e., quarter) in a row”? The AP’s D’Innocenzio dutifully relayed a statement from Target’s chief financial officer in Paragraph 17 of her 19-paragraph report that “the impact of the bathroom issue has ‘really not been material.'” Balderdash.
While denying that the problem was significant, Target essentially answered that question to the contrary by announcing that it would spend $20 million to ensure that single-stall bathrooms are available in all stores. Alatheia Nielsen and Katie Yoder at NewsBusters commented on this development on August 19, noting that Target was implementing a solution “that conservatives came up with … four months ago.”
Let’s generously assume that only half of that 1.1 percent same-store sales drop occurred because customers incensed with the company’s recalcitrance started shopping elsewhere. That’s a generous assumption, as the first decline didn’t occur until the first full quarter after the bathroom controversy ensued, following seven quarters of sales gains. 0.55 percent of Target’s topline full-year revenue of $73.8 billion would be $406 million.That’s painful, but the damage is arguably quite a bit higher. If all of the decline is bathroom controversy-related, the lost sales amount to $812 million. That’s not all. One has to address the fact that the company is missing out on sales increases its competitors have seen.
Those figures aren’t outrageous by any stretch of the imagination. Assuming half of the decline was attributable to the petition, that means of the 1.4 million who signed the petition, Target lost revenues of about $300 per petitioner since April (or $600 if we attribute all of the decline to the petition). No matter how you look at the data, it’s clear it would’ve been cheaper for them to just have accommodated transgender customers the way the AFA requested they do all along, instead of trying to “virtue signal” to progressives.
[Note: This post was written by The Analytical Economist]