Target finds itself caught in the Crossfire of the Culture War

Target (NYSE: TGT) discovered the hard way that the culture wars are far from over. The retailer is facing a boycott because it issued a press release saying that transgender customers were free to use the bathroom of their choice.

A petition; labeled “I pledge to boycott Target stores,” is being circulated by a conservative group called the American Family Association, or AFA. Around 1,322,968 people had signed the petition as of May 31, 2016, according to the Association’s website.

The boycott comes at a bad time for Target; because its revenue fell by $920 million during the first quarter of 2016. That number indicates the discounter was suffering from falling sales before the controversy.

There is no Way to know if the Boycott is working

Not surprisingly, the boycotters are trying to take credit for Target’s woes. Such claims are premature because we do not know how the AFA’s efforts are affecting Target.

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Target’s latest earning report only covers financial information up to March 31, 2016. The American Family Association launched its boycott on April 20, a full 21 days into the second quarter.

We will not know how the boycott and related controversy is affecting Target’s operations until September; because Target’s second quarter does not end until July 31. This means that any claims the boycott is hurting Target’s sales are based upon purely anecdotal evidence.

Even if revenues and sales are down in Target’s second quarter financials; and I think they will be, it will be hard to tell if the boycott was responsible. Target’s revenue and sales have been falling for some time because of other reasons; such as intense competition from Amazon (NASDAQ: AMZN), high prices and the declining quality of some of its merchandise.

Should Corporate America be worried about a Battle with Christian America?

Retailers and investors should pay attention to the situation at Target because it shines a spotlighting on a growing cultural rift between conservative Christians and corporate America.

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For some time there has been growing discontent with big business’s increasing acceptance of gay and transgender rights among some social conservatives. The American Conservative’s Rod Dreher believes large companies’ opposition to “religious freedom laws” that shield businesses from discrimination complaints by gays constitutes hostility to Christianity and traditional values on the part of big business.

Dreher thinks organized corporate opposition to Indiana’s religious freedom law should convince Christians to break politically with big business. Effectively; Dreher is demanding the dissolution of the Reagan-era political coalition between big business and social conservatives that served as the basis of the modern Republican Party.

Is the Reagan Coalition Dead?

There are indications that other Christians and conservatives seem to feel that coalition is already dead. Polls indicate that majority of self-proclaimed evangelicals voted for Donald Trump and his radical anti-business agenda in the Republican presidential primary.

More tellingly the Republicans’ main rival on the American right; the more secular Libertarian Party, has taken an interesting change in direction. Historically the Libertarians have been a fringe party; rooted in the counterculture and the antigovernment philosophies of thinkers like Ayn Rand, but they have also been staunchly pro-business and small government. More importantly, the Libertarians have no social conservative baggage; such as a history of homophobia, unlike the Republicans.

The Libertarians just nominated a decidedly mainstream ticket of two former Republican governors; Gary Johnson and William Weld, for President and Vice President. Politico reported that the reason for this move is that the Libertarians hope Johnson and Weld can attract lots of campaign donations; presumably from big business.

Perhaps more tellingly, professional political operatives; including famed Republican strategist Mary Matalin, have started sniffing around the Libertarian Party. It is too early to tell, but it is obvious that some people feel an alternative the Republicans is necessary.

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A reason for this could be the growing rift between Christians and big business. Some business leaders might want a choice besides party associated with the Religious Right; and a Democratic Party being dragged to the left by the likes of Bernie Sanders.

Dreher has proposed that Christians separate themselves from society with his Benedict Option; and steer clear of mainstream business and politics. Such a move portends a Christian separatist movement that rejects mainstream American culture and create an alternative.

Organized Civil Disobedience against Corporate America from Conservative Christians?

The AFA is going further and organizing civil disobedience against large corporations. Civil disobedience against corporations is not without precedent in American history. During the 1960s, civil rights activists targeted segregated companies like Woolworth’s with sit-ins and other protests. Generations of labor activists have organized boycotts of select companies.

Like the AFA’s efforts the earlier civil disobedience; was prompted by government and business’s refusal to go along with groups demands. One has to wonder what will follow the boycott efforts, perhaps sit-ins or pickets at Target stores. Would Target be willing to put up with that for the sake of principle?

A major problem Target faces is that it could face protests or boycott efforts from gay or transgender groups; if it were to accede to the AFA’s demands. Target executives find themselves in the uncomfortable position of deciding which group of customers to appease.

The Christians probably have an advantage in sheer numbers; but the gay and transgender groups have the media, and public opinion on their side. This gives the gays an advantage, because a market-driven company like Target needs positive; or neutral media coverage.

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Despite that, the AFA might have chosen wisely when taking on Target. It is a declining retailer that needs all the sales it can get; so the boycott could be more painful there.

Yet the AFA is taking a risk here because if the boycott fails; its power will diminish. Retailers and other large corporations will have little incentive to pay attention to such groups in the future.

Even if it fails; this Target boycott represents a paradigm shift in the relationship between Christians and corporate America. One has to wonder if this shift will lead to violent conflict of the kind seen during the labor movement of the early 20th Century, or new political coalitions. Either way it represents a profound change in our culture; that goes far beyond the bathrooms at a discount store.