In the past few months, two major retailers—Target and Costco—have made distinctly different choices in response to political pressure. Target scaled back its Diversity, Equity, and Inclusion (DEI) commitments. Costco didn’t. One bent the knee. The other stood tall. And now, the results speak for themselves.
Target lost $12.4 billion in market value, saw a steep decline in customer visits—particularly among Black and Hispanic shoppers—and experienced a drop in brand loyalty. Meanwhile, Costco reaffirmed its DEI stance, rejected proposals to weaken it, and gained nearly 8 million additional visits, plus stronger customer trust.
This isn’t just about DEI. It’s about culture. It’s about leadership. And it’s a clear example of what happens when companies try to sidestep hard conversations rather than stand by their values.
After more than 35 years in corporate life, I’ve learned this: culture isn’t just a tagline. It’s what you protect when it would be easier not to. It’s how you show up when the pressure mounts. It’s the commitments you keep when no one would blame you for walking them back.
Target’s retreat from DEI didn’t happen in a vacuum. It came in response to political pressure and organized backlash. But backing down didn’t create peace—it created confusion and disappointment. The move sparked lawsuits and anger from civil rights groups, and most importantly, it broke trust.
Costco, on the other hand, made a clear choice. They faced similar pressures. They stood firm. Their leadership said: this is who we are. And people responded—not just with applause, but with loyalty.
DEI isn’t a trend. It’s a signal of trust. Done well, it tells your people: “You belong here. You matter here.” When that signal is pulled back, the silence speaks volumes. It tells employees and customers that inclusion is conditional. And that message carries real consequences.
So here’s what I tell leaders: don’t confuse comfort with clarity. People aren’t asking for perfection—they’re asking for consistency. If your culture bends every time the climate shifts, people will stop believing in it. You don’t build trust by retreating. You build it by staying rooted.
The bottom line? Target tried to avoid controversy and lost credibility. Costco stood firm and gained ground. And in a time when culture is currency, the companies that commit to their values—especially when it’s hard—will be the ones that endure.
Culture doesn’t bend. You either stand by it—or you lose it.
