Tractor Supply Co, Walmart, Amazon. What do all these retailers have in common? They are part of a major wave of corporations that have been minimising or entirely shutting down their diversity, equity and inclusion (DEI) teams or programs in recent months. Target is the most recent big-box retailer to jump on the bandwagon after the company announced on January 24 that it would be backing away from several DEI initiatives it had previously launched. In an internal memo, Target’s chief communi
f community impact and equity officer Kiera Fernandez revealed that the retailer was concluding its three-year DEI goals “as planned”, including its participation in third-party diversity surveys, such as the Human Rights Campaign’s Corporate Equality Index.
The equity officer also announced that Target’s “supplier diversity” team had been renamed “supplier engagement” to better reflect the retailer’s “inclusive global procurement process across a broad range of suppliers, including increasing our focus on small businesses.”
The big-box retailer did not say it was fully stepping away from its DEI commitments but that it would move forward in a way that reflected the state of the social climate.
“As a retailer that serves millions of consumers every day, we understand the importance of staying in step with the evolving external landscape, now and in the future,” Fernandez said.
It does not seem to be a coincidence that Target and other major retailers have been shutting down DEI programs in the wake of the most recent presidential election cycle.
During his first week in office, President Trump signed an executive order ending DEI programs in federal agencies.
However, as Alison Taylor, a clinical associate professor at the NYU Stern School of Business and author of Higher Ground: How Business Can Do the Right Thing in a Turbulent World, pointed out, “While attacks on DEI have certainly been ramping up since the inauguration, the direction of travel has been clear for some time.”
When did retailers flip the script on DEI?
In the wake of George Floyd’s death in June 2020, corporations came under pressure for their efforts – or lack thereof – to address racial injustice. Many retailers signed up for the 15 Percent Pledge, a commitment to keep 15 per cent of shelves stocked with Black-owned brands, while others announced newly formed DEI teams.
However, these actions also gave rise to an “anti-woke” movement, and enabled anti-DEI activists like Robby Starbuck to tap into a “rich seam of internal discount, which is helping them gather damaging allegations about current [DEI] programs from existing employees,” Taylor said.
Retailers are now walking a fine line when it comes to their DEI initiatives, according to Global Data managing director and retail analyst Neil Saunders.
“While there is no doubt that most still want an inclusive environment where employees from all backgrounds can thrive, they are shying away from interventionist measures which favour one group of people over another,” Saunders said.
“The mood music on DEI has changed and it has become much more contentious.”
What does DEI in retail look like moving forward?
The short-term impact of this wave of DEI program closures “is that a lot of retailers are scrambling to change policies and adjust how they do business, especially in terms of employment,” Saunders commented. “The longer-term impact is harder to plot, but so long as retailers continue to focus on the needs of their customers, and they listen to all voices within their organisations there should not be a detrimental impact on performance.”
However, Nikki Porcher, the founder of Buy From A Black Woman, a non-profit that provides resources and support to Black women business owners, believes that corporations will ultimately pay a price for pulling back from their DEI commitments.
“Consumers pay attention and make decisions based on the values companies reflect,” Porcher stated.
The non-profit founder referenced a 2024 Edelman Trust Barometer Special Report that found 84 per cent of consumers said they must share values with a brand before supporting it.
“When companies back away from DEI initiatives, it sends a message about their priorities,” Porcher said.
“Over the next few years, the retail industry will look very different. Brands that stay
committed to equity and inclusion will build trust and loyalty. At the same time, those who treat these efforts as optional or temporary will lose their place in an increasingly value-driven market.”
Taylor told Inside Retail that retailers “have many minority employees who are feeling scared, and generally will not get anywhere by abandoning commitments to inclusion and belonging”.
“What is needed now is an approach to inclusion that is more defensible, more rigorous and measurable, and less divisive. It is productive to focus on the ability to work across values divides, to welcome different perspectives, and to focus on building true psychological safety,” she said.
“More importantly, no programs should be rolled out without proper measurement, ideally with academic partners who can design studies and use the results to advance thinking and approaches that actually work.
“In this sense, activists may have done organisations a favor by pivoting away from approaches that are mainly based on either legalistic notions of protected classes, or aimed at PR upside, and towards efforts that actually help build more ethical, effective and resilient cultures.”