Are Consumers Still Shopping at Target? A Recent Poll Hints at the Answer

Target’s data breach has led to a lot of negative press for the retailer. However, do consumers feel the same way as the media?

Mar 1, 2014 at 12:00PM


Source: Wikimedia Commons

As you might already know, Target (NYSE:TGT) lowered its fourth-quarter comps (same-store sales) expectation from flat to negative 2.5% year over year. This primarily stems from the massive data breach it suffered. Up until the point of the data breach, comps had been up 1% and were outperforming expectations. Given this change, what does the future hold? Perhaps consumers hold the answer. 

Retailer failure 
Target's stock price has declined 9.8% over the past month. Over the same time frame, Wal-Mart Stores (NYSE:WMT) and Costco Wholesale (NASDAQ:COST) have suffered stock depreciations of 6.5% and 3%, respectively. Wal-Mart just released fourth-quarter numbers that didn't impress (more on this soon), and the Costco sell-off is somewhat of a mystery. 

Whatever the case may be, all three retailers are not living up to expectations (at least from a stock performance standpoint.) It's difficult to tell if Target is really suffering, or if it's underperformance is more about retailer weakness and data breach perception. A recent poll conducted by the Star Tribune in Minnesota might provide an important clue.

Consumer reaction
This poll consisted of 800 Minnesota adults being asked a few questions about Target. While this is a small sampling, it's one of the few consumer polls relating to the Target data breach. 


Percentage of Consumers

Won't Change Target Shopping Habits


Will Shop Less Often at Target


Will Never Shop at Target Again


If you look at these numbers at a glance, then they seem to be OK. On the other hand, if you take away 5% of any retailer's customers, it's going to have a significant impact on both the top and bottom lines. Poor top-line performance has a tendency to lead to increased costs, which then further impacts the bottom line. It's a vicious cycle, and it's one that Target might currently find itself in.

Target attempted to please customers by offering an apology, a 10% discount (as a limited-time offer that has since ended), and free credit monitoring and identity theft protection for one year. How do you think consumers took to these offerings?


Percentage of Consumers

Very Satisfied



50% (approximately)

Not Satisfied


Any missing percentages in any of these polls likely means "no response." As far as the results go, they're average (clearly.)

Target waited four days to release the news of the data breach to the public. This aggravated many customers. While a sampling of 800 people isn't huge, it's better than asking just yourself, family, and friends (unless you're extremely popular.) The chart below indicates how consumers felt about the delayed Target response following the data breach:


Percentage of Consumers

Acceptable Wait Time


Too Slow




Those numbers aren't good enough. They indicate that consumers felt Target didn't inform them of the data breach soon enough, which is likely going to lead to continued distrust in the retailer for a significant amount of time.

Target adjusts
Target recently reduced its headcount by 475 while also announcing that it will leave 700 positions unfilled. The hardest hit areas were Technology Services and Human Resources. Between the Target data breach, a rough start in Canada, and potential health insurance cost increases, Target had to make a move somewhere.  

Clearly, it will take Target a long time to improve its reputation and win back the trust of its customers. Therefore, now isn't likely to be the best time to invest in Target. Fortunately, the retailer's strategy of targeting middle-income and high-income consumers looking for bargains in a spacious and comfortable atmosphere has been a success. A recovery down the road is likely, but that could be a while from now. 

You might immediately look at Wal-Mart as an alternative investment option. Wal-Mart recently reported a domestic comps decline of 0.4%, primarily because low-income consumers are struggling. However, Walmart Neighborhood Market comps increased 5%. Wal-Mart is going to put more capital toward this growth brand, as well as Walmart Express. This should alter Wal-Mart over the long haul, with its supercenters acting as supply chains to smaller format stores (which will keep costs low for the smaller stores.) The point: Wal-Mart should be capable of continuing to return capital to shareholders in the future.

If you're looking for more of a growth play, then you might want to consider Costco. In January, Costco saw comps jumped 4%, with domestic comps climbing 5% and international comps improving 1%. If you look at the bigger picture, as in the 22 weeks ending Feb. 2, comps grew at a 3% clip with domestic and international comps increasing 4% and 1%.

The Foolish takeaway
Based on Target's lowered projections, a recent consumer poll, and likely future increased costs to help fix the problems created by the data breach, Target's woes are far from over. As an investor, you never want to fight against a current trend by attempting to pick a bottom. Please do your own research prior to making any investment decisions. 

Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This FREE guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.


Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information