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The holiday sales bump didn’t last long for Target and Walmart. Both retailers saw foot traffic fall over 5% in February and decline again in March, according to a report by Placer.ai.
The declines coincide with a stark drop in consumer confidence in February. But for Target, which saw bigger drops, it also falls after it pulled back on diversity goals in late January and there were calls for boycotts both from local activists and Black church leaders nationally. Retail consultant Liza Amlani said retailers and consumers both are experiencing a “perfect storm” of contributing factors, making it difficult to determine one cause for the decline.
“You can’t pinpoint just one thing,” Amlani said. “It’s almost like everything could come crashing down, depending on how you look at it.” Target lost 9% of its foot traffic year over year in February and 6.
5% in March, according to Placer.ai research. It even lost traffic during Target Circle Week.
That’s more than Walmart, which lost 5.7% of traffic February and another 3.8% in March.
In contrast, Costco gained 2.2% in traffic in February and 7.5% in March.
A Target spokesperson said the company does not comment on third party data. but executives acknowledged in early March that February was a tricky month. While foot traffic doesn’t translate one-on-one to sales, it is an indicator of what revenue trends could be.
And cost pressure will only be greater if President Donald Trump’s tariffs take hold on Wednesday. Costco received national attention for pushing back against activist shareholder proposals to claw back diversity goals. But Anthony Chukumba, managing director of Loop Capital Markets, said Costco’s performance is more a continuation of the wholesaler’s success than a byproduct of possible consumer boycotts against Target.
“Costco’s comparable sales generally outperform Target and Walmart. Costco is just a really well-run retailer,” Chukumba said. Foot traffic data isn’t always indicative of a single problem, Chukumba added.
For example, Best Buy’s foot traffic was up 1.4% compared with last March. The electronics retailer ran a weeklong “Tech Fest” promotion the week of March 17.
Boycotts might play a minor role in Target and Walmart’s recent performance, Chukumba added, but the decline in foot traffic is more likely a result of the general economic uncertainty since Trump took office. “The feeling was that worst-case scenario there are going to be 25% tariffs on Mexico and Canada and an additional 10% on China,” Chukumba said. “What we saw last Wednesday was far beyond anyone’s expectations.
There are tariffs on almost every country we import from and even some we don’t.” The latest survey of consumers by University of Michigan, a widely followed economic indicator, showed consumer confidence down 11.9% from February and 28.
2% from the same time a year ago. Survey director Joanne Hsu said the decrease spread across party lines and income levels, with many worried about ongoing economic policy developments, namely tariffs. Downward consumer sentiment is likely tied to anticipation around higher costs, potentially causing inflation to rise after several months of stabilization, Chukumba said.
Retailers for the past few years have been dealing with sticky inflation and then higher interest rates. Sheletta Brundridge, a local podcaster and media producer who helped lead initial boycott efforts in Minneapolis, said her pocketbook has taken a hit, but her higher costs have not swayed her stance. “There’s going to be some inconvenience for everybody,” said Brundidge, who also writes occasionally for the Star Tribune opinion section.
“But I appreciate the people who are sticking to it to create positive change.” She said her outspokenness also affected her business, which she said took a $44,000 hit in the first quarter as some partners did not renew contracts. The national boycott effort was tied to Lent, which ends with Easter on April 20.
Both Walmart and Target have upped the volume on promotions surrounding the holiday. Target this week said it is offering its Easter bundle for the same price as last year. Target’s promotion features a mix of store brand and national brand items, coming in at just under $25.
The nine-item bundle includes a 6-pound ham and ingredients for green bean casserole and stuffing, as well as mashed potatoes. Walmart’s 10-item promotion includes a 4.8-pound glazed ham, 2 boxes of Kraft mac and cheese, a variety of vegetables, and a creme cake, among other Easter staples.
The total for the above meal bundle is estimated at $42.55 and is meant to feed a family of eight. The deals come as 10% tariffs on produce from Mexico and varying levies on other food items will be in force.
Yet Costco CEO Ron Vachris said on a second quarter earnings call last month that prices will remain low despite tariffs. The company plans to leverage its global buying power and supplier relationships to limit price increases, acknowledging the unpredictability of tariffs. According to the National Retail Federation, consumers are expected to spend 5% more for Easter.
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