Target (TGT) is spending millions to add private single-stall locking bathrooms at many of its stores as it looks to reverse a drop in shopper traffic, some of which may have been caused by the retailer’s transgender-friendly bathroom policy.
In April, the discounter said on a blog that transgender workers and customers could use the restroom aligned with the gender they identify with, wading into a national controversy and raising the ire of part of its clientele. The move led to a purported boycott of Target by at least one million customers, many of whom argued that Target’s policy would increase sexual assaults.
While many retailers have the same policy, including Macy’s (M) and Barnes & Noble (BKS), Target planted its flag on the issue in a blog post in which it explained the policy by saying “inclusivity is a core belief at Target.”
Though company executives downplayed the impact of the backlash in May when discussing first-quarter results, and again on Wednesday to go over its second-quarter numbers, which included its first drop in shopper traffic since early 2014, Target is making concessions to customers displeased with the bathroom policy. So Target is spending $20 million to add private bathrooms that can be locked.
“It’s clear that some of our guests like and some dislike our inclusive bathroom policy,” Target chief financial officer Cathy Smith told reporters on a media briefing. The vast majority of Target stores already have the single-stall bathrooms but the retailer will add them to more locations by November, and then again after the holiday season, which it doesn’t want to disrupt with repairs, and be done by March.
Though Smith did not say whether the backlash had cost it some business, the announcement of the bathroom policy came at a time pressure on Target was already building from a number of directions. For one thing, Target lost quite a bit of shopper traffic in the second quarter because of the disruption from the transition of the pharmacy business it sold last year to CVS Health (CVS). (CVS has undertaken an aggressive marketing campaign to lure customers to its pharmacies within Target stores.) Target also got dinged by a 20% drop in Apple (AAPL) products and customers not taking to its fresh grocery offering.
So the last thing Target needed was to alienate any of customer base, given that it is a $75 billion-a-year retailer that caters to a wide swathe of America, including socially conservative shoppers.
“We are not satisfied with our second quarter traffic and sales performance,” Smith said. Stepping back a bit on a controversial move is one way Target is trying to fix that.