Name: Target’s Transgender Bathroom Controversy Has Been Costly
Uploaded: 2016-08-18
Duration: 3 min 43 s
Description: It reported a second-quarter sales slump.

What is going on with Walmart? Very, very good earnings, right, Phil? Yeah, so basically what's happening is they're reaping the rewards of spending billions on giving workers wages that's improving customer service in stores. But also the takeaway and stay tuned, I've got a story in the works is their e- commerce performance, growth accelerated again, and basically they introduced Walmart pagering the quarter They've expanded a grocery pick up, and also a in store pick up. So basically now, they've done what most retailers want to do is see online sales increase but also more traffic to stores. And that really is what retailers need to do. Is that strange, you said e- commerce was up, but Walmart has been known for maybe not as strong engine as it could in e- commerce relative to something like Amazon. And that was one of the reasons that it bought Jet not long ago, right. Yeah. Is that weird that it's seeing growth there? No, not at all. I mean, they were slower and they let Amazon take a lot of the market share that they should have taken if they'd been more alert ten years ago. But they're making it easier for people to use tech to shop while they're in the stores. And basically now you have people, retailers, customers, everybody No longer looks at the two as separate entities. They're together or you get nothing. Right, all right, so let's talk about Target, actually, which is the complete opposite of that. I mean, you're talking about a company that, as it's watching its main rival succeed, it's down. What's going on? Yeah, so it was definitely the tale of two retailers this quarter. So you've got Target seeing traffic up Walmart traffic up, Target traffic down. And I think there were two things that really stood out to me for Target. One was electronics. They actually called out the fact that people were not buying Apple products during the call. The other- They're going to the Apple store. They're going to the Apple store. The other was food. Warmer cells they're at the biggest grocery in the US > Target was it's really investing trying to make in roads and clearly that's not working. Yeah. I mean they projected what I had these as here, the challenging end of the year too. It's not looking good either. Right .>> Yeah. So Sales have climbed through the end of the year. To be fair to Target, though, this period had three particular factors that are one- offs. Well, first, you talked about it, the Apple. Apple's sales themselves were down by that much. That's true. So they need a new product. But also the transition from CVS. They sold, there was a lot more disruption, now CVS runs the pharmacies that Target used to in their stores, there's a lot of confusion And also they they're downplaying it a bit but you know the whole controversy with the transgender bathrooms. Right. Which led to a boycott. Now the company is saying it hasn't had a material effect but at the same time They're spending $ 20 million to install more single store lockable bathroom so that settles the issue. That's a chunk of change too .>> Yeah .>> But you mentioned something interesting about grocery. How important a lot of people don't think about these companies as grocers but they certainly are. Is that important part of their business Contributing to, for Target, the soft numbers. Yeah, I think, I mean grocery's huge. We don't really think about that, but it brings people in to these retailers. It's kinda the bread and butter, sorry. [ LAUGH ] But it's true, it's really is a staple part of the business for them. And if you can't get people in the stores for that reason It's gonna hurt. In fact, I would say that was the number one reason why Walmart pummeled Target this. Walmart gets 55 % of sales from food, and they've been much quicker and they've been working on it longer to refresh their fresh food section. Target, it's a work in progress. Target only gets 20 % of revenue from food, but they admitted that they're having a lot of trouble getting people to come in and buy their fresh food.

It reported a second-quarter sales slump.