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Chipotle CEO says there’s ‘no smoking gun’ for burrito sales dip—but he wants customers to give the chain more ‘credit’ for affordable prices

2026-03-07 10:30:08 By John Smith

Chipotle CEO Scott Boatwright said the burrito chainneeds to work on selling itself as a bargain brand for jittery, budget-strapped consumers. The company reported on Wednesday a 4% same-store quarterly sales decline and cut its guidance for the rest of the year, citing poor consumer sentiment and economic uncertainty.

As more Americans grow anxious about the economy and start pulling back on eating out, CEO Scott Boatwright wants consumers to give Chipotle some more credit for its low prices.

Changing perceptions of value

The CEO was firm in attributing Chipotle’s sales slump to external macroeconomic factors, telling investors, “There’s no smoking gun here that says we’ve had a misstep.” However, he said low-income consumers in particular are looking for value when choosing where to dine.

“Look no further than what’s going on with our competitors with snack occasions or five-dollar meals, and that’s where the consumer is drifting towards…because of low consumer sentiment.”

Indeed, fast-food giants like McDonald’s are continuing to offer meal deals amid softening sales, particularly as these restaurants have seen more traffic from high-income consumers while those on a budget pull away. As Chipotle similarly tries to compete in an environment of cautious consumers, it will need to focus on its public perception and sell itself as an affordable option, according to Raymond James restaurant analyst Brian Vaccaro.

“Over the last two years, the industry has gotten more aggressive on value promotions and messaging,” Vaccaro toldFortune. “There are certain brands that have a strong value proposition in the mind of the average consumer. But they didn’t effectively message that, and it caused them to lose some mind share.”

Olive Garden suffered this fate in 2024, Vaccaro said, when the fast-casual Italian chain’s parent company Darden Restaurants reported a pull back from customers making less than $75,000.

“That could be something that’s happened to Chipotle, where their value almost gets taken for granted a little bit,” Vaccaro said.

In March, Olive Garden announced the return of its “buy one, take one” promotion—essentially a buy one, get one free deal—for the first time in five years. The restaurant group attributed a modest earnings beat in June in part to the return of the offer.

“Everyone knows Olive Garden is a good value,” Vaccaro said. “But if you’re not reminding the guests of that, they could get distracted and wooed away by all of these value promotions that are floating around.”

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Starbucks ends 6-year Gen Z experiment after finding proof that human connection is better

Starbucks CEO Brian Niccol is closing a convenience that was explicitly targeted toward Gen Z’s taste for “frictionless” experiences: their mobile-only “pickup” stores. The move signals a deliberate shift away from the high-speed, tech-driven model that defined much of the chain’s recent expansion. The coffee giant will convert or close approximately 80 to 90 of these mobile order-only locations nationwide by the end of 2026, Niccol said on Tuesday’s earnings call with analysts, marking the end of a six-year experiment that catered to on-the-go customers who seemed to prefer mobile ordering to lingering over a latte.Recommended VideoAnnouncing the closures, Niccol was direct about the rationale on Starbucks’ Tuesday call with analysts. “We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” he said.Built primarily in urban centers, airports, and hospitals, these stores were designed to maximize convenience—no cash registers, limited or zero seating, and an efficient grab-and-go experience orchestrated through the Starbucks app. Starbucks wants to bring back the warm coffeehouse.The move comes amid a period of challenge and transition for Starbucks. Sales at stores that have been open for at least one year have declined for six straight quarters, with North American sales have dropped by 2% most recently. Analysts point to customer fatigue with impersonal, tech-centric transactions and “soulless” atmospheres, especially as competitors offer new forms of hospitality and engagement. It’s also a tricky needle to thread, as Starbucks disclosed in its earnings that 31% of all transactions are mobile, making it a critical part of the business.The company remains committed, according to Niccol, to enhancing digital and mobile experiences through technical upgrades to the Starbucks app and its Rewards program, set for rollout in 2026. But Starbucks’ other actions are suggesting that these experiences shouldn’tfeelmobile.Niccol, who took over as CEO in September 2024, has staked his turnaround strategy on restoring the brand’s emotional resonance, echoing former CEO Howard Schultz’s recognition that consumers needed a “third space” that wasn’t home or work. Niccol argued on the call that customer-value perceptions are near two-year highs, and they’re driven by gains among Gen Z and millennials, who make up over half of Starbucks’ customer base. It shows that younger consumers wanted more warmth than previously thought.Uplift through green apronsStarbucks has a program under way to “uplift” its coffee houses, which involves investing $150,000 per store to upgrade seating, lighting, and atmosphere in more standard locations. The chain’s new prototype stores—already being piloted in New York City—reintroduce cozy chairs, power outlets, and large tables, fostering a more communal and linger-friendly environment. Niccol said some mobile-only stores will get converted to this new setup, where it makes sense.“We plan to complete an evaluation of our North American portfolio by the end of this fiscal year to ensure we have the right coffee houses in the right locations to drive profitability and deliver the Starbucks experience,” Niccol said on the earnings call.Starbucks is also piloting smaller-format stores with limited seating to blend convenience with a sense of place—another sign the brand isn’t abandoning quick service, but is instead recalibrating its approach. As the company prepares to sunset its transactional pickup model, Starbucks is doubling down on its legacy: coffee shops as community anchors, not just efficiency engines. The era of the “app-only” Starbucks is ending, as the company bets that its future lies in connection, not just convenience.These investments are part of Niccol’s $500 million “Green Apron Service” initiative, intended to restore “hospitality” to the center of its business. It involves a revamped barista dress code featuring, yes, the green apron, but also emphasizes personalized service. Starbucks believes this is what Gen Z really wants, not a frictionless mobile order that barely involves interacting with a human. There is other evidence that Gen Z craves more human connection, with 91% telling the Harris Poll they want more of a balance between remote and office work.Starbucks COO Mike Grams spoke withCNBC earlier this week and also offered thoughts on how the company views Gen Z. He argued in favor of an approach the company describes as “hospitality” and, when asked about evolving “social cues,” he described how Starbucks is working to lean into a more subjective experience. “Connection is different things to different people,” he said, arguing that Starbucks baristas are well positioned “to understand what each individual customer wants in that moment in time.” In other words, Starbucks is risking a collision with the “Gen Z stare,” because it’s working to make sure that the human connection is front and center in its business.When reached for comment, Starbucks referredFortuneto the earnings report and Niccol’s comments on the analyst call.For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Cola lovers: PepsiCo has a prebiotic soda in the works for you—and it’s not Poppi

With the buzz around healthy sodas far from fizzling, Pepsi is doubling down on the emerging segment just months after acquiring one of its pioneers, Poppi, by launching a new innovation: Pepsi Prebiotic Cola.Recommended VideoThe product is “one of the largest new innovations in the cola category,” Mark Kirkham, CMO of PepsiCo Beverages US, told Retail Brew. Containing 5 grams of cane sugar, 30 calories, and 3 grams of prebiotic fiber, the new soda is aimed at giving consumers more soda choices, he said, as Pepsi tries to meet demand for more healthy options. It’ll be sold first online in Original Cola and Cherry Vanilla flavors for Black Friday and Cyber Monday, followed by a retail debut in February, priced at a premium to traditional Pepsi, Kirkham said.Poppi, whose acquisition was completed in May, also offers Classic Cola and Cherry Cola flavors with a nearly identical nutritional profile, but Kirkham sees the two as complementary, selling in two separate soda segments that reach different consumer sets.Kirkham broke down the new product, and how it fits into its portfolio alongside Poppi and aligns with Pepsi’s larger beverage innovation strategy.This interview has been lightly edited for length and clarity.Why did Pepsi decide to develop this product?One of the things we wanted to do is address two opportunities. One is the declining cola category. Particularly, we’ve seen occasions drop over time in the core, but especially in diet [soda], and also to look for new ways to deliver more, better-for-you functional ingredients into our core. And obviously this was early days in what has become the modern soda business, and we started working on this well over a year ago.We found…we could get to an amazing-tasting product that is no artificial sweeteners, that’s 5 grams of cane sugar, that’s got the taste of Pepsi…But also it’s got prebiotic fiber…And it’s the kind of ingredient that we’ve seen bringing new consumers into the category. The reality is, no one has that in cola, and obviously super complimentary to Poppi, who do have two cola SKUs, but that’s only 8% of their mix. We feel this is a great opportunity to: one; bring innovation to the traditional cola category; two, compliment this amazing new family member in Poppi—they are the leader in developing the modern soda category; and then three, offer choice. Offering choice to our consumers is the ultimate goal of these innovations…It’s a win-win for the consumer, and it’s a win-win for us.What are your thoughts about how similar those products are?A lot of what makes Poppi so special is it’s been built from the ground up. It always was clean label, natural ingredients. One of the biggest drivers there was always the apple cider vinegar. When you taste their cola, particularly their cherry and their regular cola, it’s a very different flavor profile than, let’s say, traditional cola, like we offer with Pepsi. We felt there are a lot of cola lovers out there that have this certain expectation of a cola flavor, particularly of Pepsi, but they also want alternatives in terms of different sweetener systems, or added benefits, or having lower sugar. Being able to address that part of the market that may not be being addressed through the cola segment within modern soda—that’s where the real opportunity is for us.The prebiotic soda space has been popping off for several years. What instigated the development of this product now?We were just listening to the consumer, and we were seeing the emergence of different segments in the category.This is about Pepsi, and Pepsi delivering a new product to address the consumers of cola, or, in the case of maybe some of the younger consumers who maybe didn’t grow up with cola like I did, right?…We’re bringing them in through the fact that this is only 5 grams of sugar, no artificial sweeteners, that it’s only 30 calories, and the prebiotic fiber gives it a new way to bring in a different audience and a new consumer.We actually think it’s a great opportunity for, let’s say, Gen X female diet cola drinkers. There’s an opportunity to really source from a broader range of consumers. This is not just a pure Gen Z play, which is very much what’s built modern soda. This is a broader play for cola lovers.How are you balancing innovating on the core versus bringing on acquisitions like Poppi?The reality is you have to do both…I like to say “core and more.” The only way you’re really going to drive growth in some of our categories is to really ensure that your core is healthy and that you’re continuing to innovate your core, but at the same time, you cannot miss out on these new and emerging categories, like what we saw in modern soda and Poppi. It’s a balanced approach that you need to take with innovation, but you must make sure that you’re doing both core and more, because we built this amazing brand for over 125 years. We’’ve helped create amazing products through our Diets, through our Zeros, but this next generation of consumer and as the category evolves, there’s opportunities to offer new innovation within the core, and that’s what we’re doing.This report was originally published byRetail Brew.Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Do you want some high-protein cold foam in your coffee? Starbucks backs new products to battle sagging same-store sales

Starbucks said Tuesday it’s confident that improved store operations and new products — including a cold foam protein drink — will soon help turn around the company’s lagging U.S. sales.Recommended VideoIn the meantime, slow U.S. demand continues to be a drag on the company’s results.Starbucks reported that its revenue rose 4% to $9.5 billion in its fiscal third quarter. That was better than the $9.3 billion Wall Street expected, according to analysts polled by FactSet.But same-store sales, or sales at locations open at least a year, fell 2% in the April-June period. That was a bigger decline than Wall Street expected, and it was the sixth straight quarter that the Seattle-based company reported lower same-store sales.Same-store sales were up in China, Starbucks’ second-largest market. Starbucks has been looking for a partner that can help it expand in China, particularly in smaller cities. Chairman and CEO Brian Niccol said Starbucks was evaluating around 20 offers.“We remain committed to our China business and want to retain a meaningful stake,” Niccol told investors during a conference call on Tuesday. “The intense interest in partnering with us is a testament to the great team, strong brand and long-term opportunity for Starbucks in China. It really is a vote of confidence.”But even as its sales picked up in China, Starbucks’ same-store sales in the U.S. fell 2% in in the April-June period. U.S. customers spent more per order, but transactions fell 4%, the company reported.Niccol expressed optimism about a new program setting hospitality standards and staffing levels to better handle peak hours. The “Green Apron Service” model showed so much promise in an eight-week test at 1,500 stores that Starbucks plans to roll it out across the U.S. starting in mid-August, the company said.New software is also helping stores sequence orders, cutting down on wait times. Niccol said 80% of in-store orders are now made in four minutes or less, a target he set last fall.“I think we’ll become famous for Green Apron Service and be the defining customer service company that I think Starbucks should be,” Niccol said.Niccol said improving store operations and paring back Starbucks’ menu was necessary before layering in new products. In addition to protein drinks, Starbucks plans to introduce new baked goods and a new dark roast coffee next year. It will also test beverages made with coconut water, customizable energy drinks, and gluten-free and high-protein foods.Niccol said Starbucks has been working closely with employees to develop new food and drink items that can be prepared quickly and consistently. In the past, he said, the company would often develop new menu items at its headquarters and then hope baristas figured out how to make them.“Those days are over,” Niccol said.Niccol said Starbucks is also trying to encourage customers to linger in its stores. It’s closing or modifying some of its approximately 90 mobile order-only storefronts and it is developing a store prototype with 32 seats and a drive-thru window that costs 30% less than the company’s current store design.Starbucks is spending heavily to turn itself around. One big expense in the third quarter was a two-day meeting in Las Vegas where the company hosted 14,000 store managers and regional leaders.The company said its net income fell 47% to $558 million in the April-June period. Adjusted for one-time items, its earnings fell 46% to 50 cents per share for the quarter. That was lower than the 65 cents analysts had forecast.Starbucks shares rose 3% in after-hours trading.Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

The 99-cent AriZona iced tea could be the next victim of Trump’s tariffs

For more than two decades, AriZona’s iconic 99-cent iced tea has shrugged off pandemics, recessions, and supply shocks. Now, President Donald Trump’s new 50% aluminum tariffs could finally crack its unshakable price tag. AriZona Iced Tea uses about 100 million pounds of aluminum for its signature cans, about 20% of which comes from Canada. Founder and chairman Don Vultaggio told theNew York Timesthat unless Trump strikes a deal to lower the new aluminum levy with Canada, the company may be forced to raise prices. “I hate even the thought of it,” Vultaggio toldThe Times.  “It would be a hell of a shame after 30-plus years.”The founder has made headlines for refusing to hike the price of his tea, even as inflation drives the prices of all other goods up. If Vultaggio adjusted the price of AriZona iced tea to match rising input costs, the tea would cost $1.99 today. Yet, the billionaire didn’t see a point. “We’re successful. We’re debt-free. We own everything. Why?,” Vultaggio said in an interview withTodayin June. “Why have people who are having a hard time paying their rent have to pay more for our drink?” Vultaggio has tried other workarounds to save money on aluminum, including downsizing the can from 23 ounces to 22 ounces. Even that decision weighed on him. Now, the founder worries the price of aluminum, which he said has “dramatically bumped up” because of the tariffs, might be the final blow to the 99-cent cans. A test case for U.S. manufacturingAriZona’s predicament could be a test case for what happens when a domestic manufacturer—one that’s nearly fully vertically integrated, even owning the railroad tracks its trains use to ship sugar daily—gets punished for importing some of its materials. PNC’s Chief Economist Augustine Faucher toldFortunehe thought the aluminum tariffs were unnecessary and inefficient. Canada, which has access to abundant and inexpensive hydroelectric power, is one of the world’s leaders in aluminum production. Given the higher input costs of making aluminum in the U.S., importing it will always be cheaper than producing it domestically, he said.“It’s going to be difficult to completely avoid tariffs, and that’s likely to contribute to higher consumer inflation in the near term as these companies pass along some of their higher input prices,” he said. Faucher said companies like AriZona have few ways to blunt the impact. Unlike industries with slow turnover, which can stock up on inventory before the tariffs hit, beverage makers move product quickly. That means the aluminum tariffs will immediately hit the company’s bottom line.All the price pain comes with very little gain, Faucher noted. Companies like AriZona, which imports some aluminum but produces the rest of the product domestically, might decide to just package the product overseas to avoid the duty. “The idea is to help American manufacturers, but this hurts American manufacturers who use these types of imported inputs,” Faucher said. The economist said he doesn’t see a need for the United States to have a strong domestic aluminum industry at all. “It makes sense over the long-run to specialize in areas where the United States does well,” Faucher said. “But given the energy costs associated with aluminum production and getting bauxite and all that kind of stuff, it just doesn’t make sense for the industry to be located in the United States.” Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Starbucks asks customers in South Korea to stop bringing printers and desktop computers into stores as workers transform cafés into remote offices

Starbucks patrons in South Korea are setting up de facto officesat the coffee chain, bringing along their desktop computers and printers. The company implemented a new policy banning bulky items from store locations. In South Korea, where office space is scant, remote workers are using cafés as a cheap place to work.There’s getting cozy at a Starbucks to sip a latte and catch up on emails, and then there’s lugging your printer and desktop to the coffee chain to clock into work.Recommended VideoStarbucks South Korea is experiencing this exact phenomenon and is now barring patrons from bringing in large pieces of work equipment, treating the cafés like their own amenity-stuffed office space.“Starbucks Korea has updated its policy so all customers can have a pleasant and accessible store experience. While laptops and smaller personal devices are welcome, customers are asked to refrain from bringing desktop computers, printers, or other bulky items that may limit seating and impact the shared space,” a Starbucks spokesperson toldFortunein a statement.The company said it will continue to be a “welcoming third space.” The store policy change was first reported by theKorea Herald.Starbucks has been a fixture in Korea since opening its first store there, in the Edae neighborhood of Seoul, in 1999. South Korea has surpassed Japan in the number of Starbucks stores, boasting 2,050 to Japan’s 2,040 locations, despite having less than half its population.But the coffee chain’s crackdown oncagongjok, a term referring to individuals spending prolonged periods of time working at cafés, may indicate a changing attitude toward customers who may be loyal but taking Starbucks’ burgeoning efforts to become a cozy third space for granted. Starbucks South Korea is majority owned by retail giant E-Mart Inc. as of 2021. Starbucks continues to oversee its licensed business.For years, there have been pockets ofcagongjokas a result of the COVID-induced remote-work boom, as well as the rise of temporary-contract jobs following the 1997 Asian financial crisis, according to Jo Elfving-Hwang, an associate professor of Korean society and culture at Curtin University in Australia.“It’s quite a cheap way to work really,” Elfving-Hwang toldFortune. “You can just go and have a cup of coffee, work there—but people are taking it a little bit to the extreme nowadays.”Rising visibility ofcagongjokKorea has a strong tearoom culture, Young-Key Kim-Renaud, professor emeritus of Korean language and culture and international affairs at George Washington University, toldFortune.“Even when they were dirt-poor, people gathered in the tearooms to discuss things [like] literature, art, politics, or whatever, and felt that they were civilized,” she said.Butcagongjok—a portmanteau of the Korean words for café, study, and a word for a tribe that has taken on a pejorative meaning—has gained public awareness as a result of South Korea’s labor market and remote-work shift. The pandemic caused an influx of employees needing to work remotely, but as many Koreans returned to the office, government redevelopment restrictions limited how much space was available for businesses to set up their employees in office spaces—especially in South Korea’s capital of Seoul, where rent prices are skyrocketing as businesses fight over office spaces. Office vacancies in Seoul remained low last quarter at around 2.6%, according to April data from commercial real estate service CBRE, while rent for the offices increased on average 1.5% from the quarter before. Korean companies failing to find or afford office spaces has led some to let employees work in third-party co-working spaces or remotely, Elfving-Hwang said, leaving many to flock to cafés.“People just started working from home more, and [businesses] discovered that they didn’t necessarily need a space in the same way,” she said. “Part of the reason is that it’s become more of a practice that just a lot of companies discovered that they didn’t necessarily need an office of their own.”However, not all café owners are so sympathetic to changing labor culture, calling cagongjok “electricity thieves” and claiming patrons stay working at their businesses for hours while nursing just a single cup of coffee in that time.While the rise of remote workers in cafés marks the shift of coffee shops from a place of leisure to a place of work, Elfving-Hwang said, she said she believed it was only a matter of time before coffee shops itched to shift the balance back toward reputations of relaxation.“I was surprised it took so long,” she said.Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Campbell’s gets a Gen X makeover — 42-year-old fashion exec joins her family at $9 billion canned-soup-and-snacks giant

The great-granddaughter of the inventor of condensed soup has joined the famat Campbell’s, the company announced this week. The daughter of late billionaire Campbell’s heiress Mary Alice Dorrance Malone will serve on the board following her mother’s death last month. The Campbell’s Company on Friday announced it had elected 42-year-old luxury fashion entrepreneur Mary Alice Dorrance Malone Jr. to its board, continuing a family legacy that has spanned more than a century. Recommended VideoMalone Jr. is filling a board seat at the Fortune 500 company that her mother, with whom she shares the name Mary Alice Dorrance Malone, held for 35 years before passing away in June 2025 at the age of 75. The billionaire was Campbell’s largest shareholder and the longest-tenured member of the board, at one point even fending off an activist attack from Daniel Loeb’s hedge fund. Malone Jr. is also the great-granddaughter of Dr. John T. Dorrance, who invented condensed soup and served as president of the company from 1914 to 1930. Her grandfather, John T. Dorrance Jr., chaired Campbell’s from 1962 to 1984. Other members of Malone Jr.’s family including Bennett Dorrance Jr. and Archbold D. van Beuren also serve on the board. Collectively, the Dorrance family holds more than 23% of the company, andForbescounts the family as among America’s richest, with a net worth valued at $17 billion. However, Malone Jr.’s appointment comes at a pivotal time for Campbell’s. The company’s stock price has dropped more than 25% year to date. It renamed itself from “Campbell Soup Company” to The Campbell’s Company in November 2024 to better reflect its other standout brands which include Cape Cod, Goldfish, Kettle Brand, Pepperidge Farm, Swanson, and V8. In recent years, the company has shifted its portfolio mix with total sales focused more on revenues from snacks and brands such as Rao’s rather than core soup operations.The board executed a CEO transition at the start of the year. Mick Beekhuizen, another Gen Xer at age 48, took the role effective in February. Malone Jr. brings with her nearly 20 years in the fashion business, having founded luxury shoe line Malone Souliers in 2014, where she serves as chief brand director. The line’s iconic “Maurene” leather mule retails for more than $600 and is handcrafted in Italy. The company has also partnered with Netflix seriesEmily in Parisand Bridgerton, according to its website. In a statement, Campbell’s board chair Keith McLoughlin welcomed her to the team.“Mary Alice’s unique blend of creative, analytical and entrepreneurial experience and deep appreciation of Campbell’s history will be an asset to the Board and the company,” said McLouglin. Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Target still facing boycott from pro-DEI activists: ‘Leadership change doesn’t mean anything without a culture change’

Organizers of a Target boycott that began in January are pointing to their tactics as a hopeful sign that actions against corporate retailers can still make a deep impact.Recommended VideoWhen Target announced its current chief executive officer will be stepping down in February 2026 and an insider was taking the helm, those organizers saw it as a move in the right direction and stress more than ever that boycotts will continue as long as previous promises made to the public go unfulfilled.“It’s been now nearly 200 days and what all the statistics and economics are showing that since that boycott was announced on that Monday — every single week since then — Target foot traffic in nearly 2,000 stores has declined sharply and continues to decline,” said organizer Jaylani Hussein, at a news conference of the National Target Boycott movement outside Target’s Minneapolis headquarters late last week.Boycott organizers in Minnesota were among some of the first to galvanize when Target opted in January to follow other companies like Amazon and Walmart and forego diversity, equity and inclusion initiatives. High-profile civil rights activists like the Rev. Al Sharpton and the Rev. Jamal Bryant also made similar calls for what they deemed a betrayal of previous DEI promises.Social justice advocates say this shows boycotting is a key tactic not to be taken for granted.Retail analysts say it’s difficult to gauge the exact impact of the boycott, since Target has faced a slump the last few years and a leadership change was in the cards. Still, groups like Washington-based DC Boycott Target Coalition insist falling foot traffic is “due in no small part” to a boycott that spans coast to coast.“The leadership change doesn’t mean anything without a culture change,” the group said in a statement, vowing to continue pressuring Target until the corporation sees its diversity goals as “more important than bowing to an administration that is filled with racism, failure and hatred.”Opponents began the national boycott in February, during Black History Month. Their strategy left some Black-owned brands with merchandise on Target shelves conflicted or scrambling.By April, Sharpton actually met with Target’s CEO Brian Cornell, who had been at the helm for 11 years. But, nothing concrete came of it.Target CEO change was long plannedCornell’s departure from the role had been in the works for several years.In September 2022, the board extended Cornell’s contract for three more years and eliminated a policy requiring its chief executives to retire at age 65. When Target’s chief operating officer Michael Fiddelke takes over, Cornell will transition to be executive chair of the board.In a call with reporters, Fiddelke attributed the sales malaise to many issues like focusing too much on basics and not enough trendy items, particularly in home goods.Data shows Target sales were already slidingStacey Widlitz, president of investment research firm SW Retail Advisors, said she believes that Target’s sales malaise has more to do with its operational issues — messy stores and poorly stocked shelves — not from its pullback from DEI initiatives.Unraveling them did not affect Target “exponentially compared to somebody else,” she said. “The consumer has a very short memory. If you have great, compelling product at value prices, they’ll forgive you.”The number of Americans who say they regularly shop at Target has gone down 19% since 2021, according to GWI, a behavioral attitudinal data provider. The number of Americans who say they do not shop at Target has risen 17%.The same analysis also looked at trends along party lines. Since last year, the number of regular Target shoppers who identify as Democrat has declined 13%. Inversely, the number of Republican customers has risen 13%. It’s not clear if that is due to Target’s $1 million donation to Trump’s inauguration or some other factors.Organizers are sticking to boycott strategyThe strategy of racial justice boycotts stretches back over 160 years, from Reconstruction era “Buy Black” campaigns stressing the Black American economic influence to the Montgomery Bus Boycott of the Civil Rights Movement. There have been more modern campaigns like the NAACP’s 15-year economic boycott of the state of South Carolina over its display of the confederate battle flag widely regarded as a symbol of hatred and slavery. The civil rights group ended its boycott in 2015 after the state removed the flag from its statehouse grounds, following the massacre of nine Black parishioners at a historic African Methodist Episcopal church in Charleston.Some Black creators on the social media platform TikTok rejoiced on the platform at the CEO leaving and credited the boycotts. Others cautioned that Cornell was essentially promoted but that the boycott is still needed.Black Americans’ buying power has climbed over the last 25 years and is now an estimated $2.1 trillion annually, according to Nielsen research.Part of the reason organizers say they have zeroed in on Target is because the company had heavily touted a commitment to DEI back in 2020 after protests erupted across the nation over the murder of George Floyd. That year, Target announced it would increase representation of Black staff by 20% over three years and invest $10 million in social justice organizations. In 2021, the company pledged to dedicate more than $2 billion toward Black-owned businesses before the end of 2025.In January, however, Target said it would conclude the hiring and advancement goals it had set.For boycott organizers, a reversal of those decisions is the only way to rectify the situation.“We’re expecting that Target is making good on the promises that it made. Otherwise there’s no point of discussion regarding calling off this boycott,” said Nekima Levy Armstrong, a civil rights attorney and past president of the Minneapolis chapter of the NAACP. “We’re asking people to join us, get involved and hold Target accountable for its actions.___AP Retail Writer Anne D’Innocenzio in New York contributed to this report.Fortune Brainstorm AIreturns to San Francisco Dec. 8–9 to convene the smartest people we know—technologists, entrepreneurs, Fortune Global 500 executives, investors, policymakers, and the brilliant minds in between—to explore and interrogate the most pressing questions about AI at another pivotal moment. Register here.

Cracker Barrel’s first rebrand in nearly 50 years backfired. The company’s stock lost nearly $100 million after introducing a more minimalist look

Cracker Barrel’s new logo refresh, has sparked major backlash from critics who view it as a loss of tradition and a “woke” move, even briefly wiping nearly $100 million off the company’s market value. While some argue the change erases the brand’s Americana identity and nostalgia, branding experts say the modest update is part of a broader modernization strategy and reflects the tension between preserving tradition and staying relevant.One Americana brand isn’t getting the barrel-of-monkeys response they were hoping for when launching their new logo this week. Recommended VideoCracker Barrel—one of the most iconic restaurant chains in America, deeply rooted in Southern food and hospitality—this week revealed a new look. A tweak to the logo removes the man sitting on a chair and leaning on a barrel, and the font appears to have slightly changed. Photo courtesy Cracker BarrelAnd some people are absolutely outraged, with many going as far to say its new, simplified logo is a signal of Cracker Barrel going woke. “Cracker Barrel didn’t just lose its logo. It lost its soul,” wrote an X user called @DesireeAmerica4, whose bio section reads: “Unapologetically America First. Igniting debate. Standing tall for the everyday American.”“This isn’t modernization. It’s extermination of Americana, of warmth, of memory,” she continued. “Congratulations, Cracker Barrel. You’re now Woke Barrel. Nobody asked for this.”Cracker Barrel lost nearly $100 million in value in trading on Thursday. The stock slightly rebounded Friday, up about 0.25% in the late afternoon.Cracker Barrel didn’t immediately respond toFortune’s request for comment. The new logo is all part of CEO Julie Felss Masino’s turnaround plan for the restaurant. She said last year the chain wasn’t “as relevant as we once were,” and announced plans to update its menu and eateries. The new logo is “now rooted even more closely to the iconic barrel shape and word mark that started it all,” according to the company. “On the surface, it’s a modest refresh. But when a brand is built on tradition, even a small design change can feel like a cultural shift,” Evan Nierman, founder and CEO at crisis communications firm Red Banyan, toldFortune. “It touched a nerve because it challenged what some customers felt was sacred about Cracker Barrel.”Is the Cracker Barrel rebrand really that big of a deal?Cracker Barrel’s rebrand has really struck a chord with some people, particularly those who subscribe to a MAGA-leaning lifestyle. They argue it rids the brand of its deep Southern heritage and that the brand has become too sterile. One TikTok user satirically said in regards to the new Cracker Barrel logo: “I don’t want this woke crap. What DEI hire made this logo?”Steak N’ Shake even chimed in on the logo change and reshared the X post from @DesireeAmerica4 with a comment in a style mimicking President Donald Trump’s Truth Social posts: “Fire the CEO! Thank you for your attention to this matter!” While Cracker Barrel “took a stab at modernizing and showing cultural relevance,” Mary Delano, chief marketing officer at ad agency Moosylvania, toldFortune, it lost its old-fashioned identity. “This could potentially offend the restaurant’s core fans, who see the chain’s rocking chairs, comfort food and nostalgia as the elements that make Cracker Barrel feel like that home away from home,” said Delano, who’s helped bring iconic brands like Pink Whitney to market.Although the new logo was “more of a tweak than a total overhaul,” said Tenyse Williams, digital marketing adjunct instructor at George Washington University and the University of Central Florida, it feels bigger because of the political climate we’re in.“Cracker Barrel is nostalgia for many, especially customers in the South and Midwest who feel ownership and pride over the brand,” Williams toldFortune. “For a brand that hasn’t changed its logo since 1977, even small changes to a symbol so tied to Americana can feel magnified.”Nierman argued, however, Cracker Barrel’s new logo doesn’t erase its legacy. Rather it softens its image. “Cracker Barrel has long leaned into a version of Americana that felt frozen in time,” he said. “This update suggests the brand is finally acknowledging that the world around it is changing, and it wants to be part of that future.”Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Walmart, once ordered to ‘eat the tariffs,’ is giving employees a year-round 10% discount to help them eat

In its largest employee perk rollout in years, Walmart is extending its 10% grocery discount to cover nearly all food categories for its 1.6 million U.S. workers—marking a significant boost to benefits at the nation’s largest private employer. Announced in a LinkedIn video by Kieran Shanahan, executive vice president and chief operating officer at Walmart U.S., the change is effective immediately and applies both in-store and online, signaling Walmart’s bid to support its workforce amid rising food prices and retention challenges.Recommended VideoIn a separate LinkedIn post, JD Mahaffey, group director and global head of executive total rewards, expanded on the new benefit: Previously, Walmart’s 10% discount for employees was limited to fresh produce and select general merchandise, and most grocery items were excluded except during the November to December holiday season. With the new policy, nearly every food category is covered year-round, including staples such as dairy, frozen foods, dry groceries, meat, and seafood. In total, approximately 95% of regularly priced items in-store are now eligible for the discount.All employees and eligible corporate staff receive a discount card after 90 days of employment. The move was prompted by persistent worker feedback that called for more comprehensive and accessible perks, particularly as food inflation has squeezed household budgets. “We’ve heard your feedback that these savings make a real difference for you and your families,” chief people officer Donna Morris wrote in a staff memo shared withFortune. In fact, she described it as “one of our most requested benefits.”Why is Walmart doing this now?The expansion comes as economic pressures weigh on households nationwide. Recent government data shows food prices for staples such as eggs and meat have jumped sharply year over year. The move also coincides with heightened concerns over new tariffs that threaten to further raise prices across major retailers, Walmart included. More than half of grocery shoppers surveyed in August cited tariffs as their top worry about food costs.By ramping up employee benefits, Walmart is responding to both external market forces and internal demand. It’s a strategic step designed to bolster recruitment and retention at a time when competition for retail talent is fierce. Analysts note the company’s efforts to improve its work culture, including earlier expansions of training programs, wage hikes for hourly staff, and the introduction of bonus programs for frontline workers.COO Shanahan explained in the company video: “We know the impact this discount has for so many associates and their families, and one consistent piece of feedback we hear is to look at how we can make our associate discount program even better.”How does Walmart compare with other retailers?With the new perk, Walmart’s benefits now align more closely with those of leading competitors. Target offers a similar 10% discount on most merchandise plus 20% off select food items, while Kroger gives staff 10% off house-brand products and other categories. Hy-Vee (a Midwest grocer) and Trader Joe’s have even more generous policies, with discounts of up to 20% for employees.The timing of the announcement is crucial, coming just days before Walmart’s quarterly earnings release and as the company grapples with both supply-chain challenges and inflation pressures. As economic uncertainty continues to roil the retail sector, Walmart’s expanded grocery discount stands out as both a smart business maneuver and a measure aimed at fostering goodwill among its massive employee base.In May, Walmart issued a warning along with its earnings report that it may have to raise prices because of the anticipated impact of President Donald Trump’s tariffs. “We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” chief financial officer John David Rainey told the AP at the time.Trump responded by ordering Walmart to “EAT THE TARIFFS.” This move by Walmart appears to confirm that Walmart can’t eat all of them, and it will at least be helping its employees take home something to eat for the pre-tariff prices they used to see.Walmart did not immediately respond to a request for comment.For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

Toy shortages this holiday shopping season are an ‘absolute inevitability’ thanks to tariffs, manufacturing CEO says

This holiday season, toy shortages are an “absolute inevitability,” according to Jay Foreman, CEO of Florida-based toy manufacturer Basic Fun.Recommended VideoA combination of tariff-induced production cuts earlier this year and cautious purchasing behavior from retailers could create a scenario where the most sought-after toys are unavailable, Foreman told Retail Brew.“The consumer is going to see empty shelves,” he said. “People are going to be chasing merchandise, at least the merchandise they want.”That last word is key: want. Unlike toilet paper and baby formula, which experienced shortages during the height of the Covid-19 pandemic, toys are a discretionary purchase subject to the whims of trend-seeking consumers. And when it comes to keeping shelves stocked, ordering the right item is as important as ordering the right amount.“It’s not like there won’t be toys on the shelves, but I think those toys are going to be a much lower selection and assortment,” Greg Ahearn, CEO of The Toy Association and former chief marketing officer at Toys ‘R’ Us, said. “And I think the quantity of toys backing up those products on the shelves are going to be low.”This could mean a holiday season with less variety overall and shortages of the most in-demand products—a lethal combo for toy manufacturers that even in a regular year have to make a bet on what consumers are going to want come Q4.“You don’t really know what the sales velocities are going to be until you get into late September, early October, where you’re getting early reads on things, but if you’re going to chase it, you’ve got to make the decision now, literally in July–August, to get that ramped up last bit of inventory,” Ahearn said. “It’s all future betting.”Ripple effects: But future betting is even more difficult when the global trade environment is changing month to month.Ahearn said the current difficulties go back to April, when President Donald Trump announced a 145% tariff on Chinese imports. While that number has since settled on 30%, pending further trade negotiations, the spike in import costs caused many toy manufacturers to power down their production lines.“The entire industry was on pause for 60 days of prime manufacturing,” he said. “There’s only a certain amount of product that you could force through a supply chain when you’ve missed about 60 days of manufacturing.”Now manufacturers are playing catch-up, but they’re doing so in a highly uncertain economic climate, making it so many small to mid-sized companies are hesitant to experiment with new product lines, according to Ahearn.No extras: Unlike many toymakers though, Basic Fun kept its production lines rolling. “I’d rather go out of business with a warehouse full of merchandise or a factory full of merchandise than go out of business because I have nothing to sell,” Foreman said.The challenge for Basic Fun is instead hesitancy on the part of retailers, who Foreman predicts are not going to “gamble on extra inventory,” in part because “they’re not feeling overly excited about where the consumer is right now.”In Ahearn’s view, “If you’re a mass retailer, you don’t want to have a significant overhang of inventory within the toy category when you get to December 26.”Instead of ordering ahead of time, Foreman added, retailers could wait to see how the season plays out, then put pressure on vendors to replenish their inventory if consumers surprise them on the upside. This usually wouldn’t be a problem, but pricier imports means manufacturers aren’t in a position to keep extra inventory for this just-in-case scenario.“There’s always going to be stuff to buy, even if the shelves are half empty,” he said. “It’s just, is it going to be anything you really want?”Deconstructing the product: This puts manufacturers in a bind for which there are few easy solutions. One option Basic Fun is considering is what Foreman calls “deconstructing the product to reduce costs where possible.” What that means specifically is cutting back on add-ons like extra packaging or free batteries, which lowers costs but then has the downside of reducing the shelf appeal of the product.What about substituting imports for US-made goods? After all, that is the stated goal of Trump’s trade policy.“There’s really no value in moving out of China,” Foreman said. “They have things that we want and need. We have things that they want and need, and this concept of decoupling is pretty much off the table.”The cost of domestic labor is simply too high, he explained. “There’s no way to be able to set up some of these light industrial manufacturing facilities here in the States, because…if you did, you would have to pay [workers], which would double or triple the cost of the product here,” he said.This report was originally published byRetail Brew.Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.