Target's Self-Checkout Flip-Flop Isn't Helping After A 66% Value Crash: Are Retail ETFs Ringing Up The Real Risk?

Target Corp. TGT stock has slumped 29% so far this year, extending declines after falling in each of the last three years. The seventh biggest US retailer has seen a whopping two-thirds of its market value eroded since peaking just above $129 billion in mid-2021. Fast forward to 2025, and its market capitalization is just about $44 billion.

Target’s steep and extended declines in the stock market potentially serves as a warning for ETF investors who still think highly of big-box retail.

What Does This Mean For ETFs?

Retail ETFs: Risk In The Aisles

For funds invested in Target such as the VanEck Retail ETF RTH, the retailer’s poor market performance has been a drag. A once-safe bet on middle-class spending, Target now embodies the agony of inflation-weary shoppers and the boundaries of retail automatization.

With peers such as Macy’s M also hinting at strain, these ETFs are as much at the mercy of changing U.S. consumer risks as ever.

Dividend ETFs: Is The Yield Worth The Risk?

Target continues to boast a 4.66% dividend yield, underpinned by a history of annual dividend increases. That’s left it securely in the portfolio of VictoryShares Dividend Accelerator ETF VSDA.

But be warned: Target’s dividend record may be strong, but without earnings growth or investor confidence, that won’t redeem the stock’s weakness.

What’s Happening With TGT?

In early 2025, when Target announced a rollback of its Diversity, Equity, and Inclusion (DEI) initiatives, it sparked criticism and a 40-day boycott by consumers. That pushed Target’s stock down further till it lost about $12.4 billion in market value by February.

Then came the class-action lawsuit following the backlash, which accused Target of misleading investors about the risks of changing its DEI policies.

It didn’t end there. That was followed by uncertainty over Target’s policy on self-checkout lanes. Media reports this week hinted that Target is limiting self-checkout to thwart shoplifting. But the company says it’s merely enforcing a 10-items-or-fewer rule—a policy it rolled out quietly in March 2024, not last weekend. But the confusion adds to the image of a company grappling to fill gaps while navigating turbulent macro seas.

Now, with customer worries about theft, “shrink,” and subpar customer experience, the sheen of tech-savvy retail is fading. A reminder that automation, poorly executed, can shrink more than products—it can lose consumer trust.

And now, amid fears that U.S. tariffs on international trade will lead to empty shop shelves, Target appears to be restocking investor anxiety more than customer baskets.

Adding more intrigue, Senator Shelley Moore Capito recently sold TGT shares on May 7, as reported under the STOCK Act. The range of value sold was $2,002 to $30,000. Although one congressional trade isn’t gospel, investors may consider this a subtle red flag.

Final Receipt

Target’s valuation crash isn’t merely a corporate fall from favor—it might just be a flashing yellow warning light for ETF investors. If you’re in it for the dividends, sector exposure, or thematic play on retail disruption, it’s time to rethink what TGT does for your portfolio. As of today, this Target may be more of a moving one.

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