Protesters have been rallying outside Target Corp. or its stores almost daily since the retailer angered gay rights supporters and progressives by giving money to help a conservative Republican gubernatorial candidate in Minnesota. Liberal groups are pushing to make an example of the company, hoping its woes will deter other businesses from putting their corporate funds into elections.
A national gay rights group is negotiating with Target officials, demanding that the firm balance the scale by making comparable donations to benefit candidates it favors. Meanwhile, the controversy is threatening to complicate Target's business plans in other urban markets. Several city officials in San Francisco, one of the cities where Target hopes to expand, have begun criticizing the company.
"Target is receiving criticism and frustration from their customers because they are doing something wrong, and that should serve absolutely as an example for other companies," said Ilyse Hogue, director of political advocacy for the liberal group MoveOn.org, which is pressing Target to formally renounce involvement in election campaigns.
But conservative organizations are likely to react harshly if Target makes significant concessions to the left-leaning groups.
The flap has revealed new implications of a recent Supreme Court ruling that appeared to benefit corporations by clearing the way for them to spend company funds directly in elections. Companies taking sides in political campaigns risk alienating customers who back other candidates.
Target's $150,000 donation to a business-oriented group supporting Republican Tom Emmer, an outspoken opponent of gay marriage, was one of the first big corporate contributions to become known after the U.S. Supreme Court threw out prohibitions on corporate spending in elections earlier this year.
The Minneapolis-based chain has gone from defending the donation as a business decision to apologizing and saying it would carefully review its future giving. But the protests have continued.
Demonstrators marched near Target's Minneapolis headquarters on Thursday, and two Facebook groups focused on gay rights are organizing protests at Target stores nationwide this weekend. Immigrant rights supporters have joined the protests, citing Emmer's tough stance on illegal immigration.
The company is in talks with the Human Rights Campaign, a national gay rights organization that wants Target and electronics retailer Best Buy Co., which gave $100,000 to the same group backing Emmer, to match their donations with equal amounts to help gay-friendly candidates.
Fred Sainz, the group's vice president for communications, said he is optimistic both companies will respond to the demand. Target has long cultivated a good relationship with the gay community in Minneapolis, and its gay employees have protested the donation.
"The repair has to be consistent with the harm that was done," Sainz said.
MoveOn, which had feared a heavy flow of corporate donations to groups that help conservative candidates after the Supreme Court decision, protested outside Target headquarters last week.
On the other side, conservatives have begun to rally to support Target, but in smaller numbers. A Facebook page urging "Boycott Target Until They Cease Funding Anti-Gay Politics" has more than 54,000 fans. A page declaring "I will NOT Boycott Target for supporting a Conservative candidate" has a little more than 400 fans.
A Target spokeswoman said the company had nothing to add to chief executive Gregg Steinhafel's statement of apology last week. At Richfield Minn.-based Best Buy, a spokeswoman said the company is reviewing its process for political donations and intended the Minnesota contribution to focus "solely on jobs and an improved economy."
Emmer has said he views the Target giving as an exercise in free speech and wants to keep his campaign focused on economic issues.
Target and rival Wal-Mart Stores Inc. have been trying to expand into urban markets after years of saturating the suburbs. Just last month, Target opened its first store in Manhattan, in East Harlem.
The company has 1,700 stores in the U.S. but only 150 stores in cities, and 50 more in cities with more than 100,000 people nearby.
In San Francisco, Target got a warm reception when it originally outlined plans to open two stores. That's shifted since the Minnesota controversy erupted.
"It just illustrates their disconnect, I think, from a city that they would want to establish a successful business in," said Supervisor Ross Mirkarimi. Target stores would be serving "the epicenter of the LGBT rights movement."
Target and BestBuy's donations went to MN Forward, a business-focused group that has run ads supporting Emmer and his lower-taxes message. The group is staffed by former insiders from Republican Gov. Tim Pawlenty's administration and has also backed a few Democratic legislators.
MN Forward has continued to collect corporate money after the backlash against Target, bringing in $110,000 through Tuesday from businesses including Holiday Cos. gas stations and Graco Inc., a maker of pumps and fluid handling equipment.