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July 2, 2024
Should Tractor Supply Be Ditching DEI and Climate Goals?
Tractor Supply announced it will eliminate its diversity and climate target goals in a push to distance itself from “nonbusiness activities” after weeks of conservative backlash.
In a statement, the chain, which caters to mainly rural customers with home improvement equipment, livestock, and agricultural supplies, said it has “invested millions of dollars” in veteran causes, emergency response, animal shelters, state fairs, rodeos, and farmers markets; is the largest supporter of FFA; and has longstanding relationships with 4-H and other educational organizations. However, it’s no longer supporting activities and causes that don’t align with the values of its core consumer.
“We work hard to live up to our mission and values every day and represent the values of the communities and customers we serve,” Tractor Supply said in a statement. “We have heard from customers that we have disappointed them. We have taken this feedback to heart. Going forward, we will ensure our activities and giving tie directly to our business.”
Among the changes, Tractor Supply will:
- No longer submit data to the Human Rights Campaign, an LGBTQ advocacy group
- Refocus its Team Member Engagement Groups on mentoring, networking, and supporting the business
- Further focus on “rural America priorities” such as agriculture education, animal welfare, veteran causes, and “being a good neighbor and stop sponsoring nonbusiness activities like pride festivals and voting campaigns”
- Eliminate DEI (diversity, equity, and inclusion) roles and retire its current DEI goals “while still ensuring a respectful environment”
- Withdraw its carbon emission goals and focus on land and water conservation efforts
The changes come as conservative activist and former Hollywood director Robby Starbuck in a campaign on X (formerly Twitter) called for a boycott of the retailer over its “woke” initiatives, including DEI hiring and employee training practices, in-office Pride Month decorations, climate change activism, and funding sex-change procedures, among other complaints.
Facing political and legal threats, many companies have been retreating from their diversity policies after putting a major focus on them following the 2020 murder of George Floyd. In April, the Wall Street Journal reported that dozens of companies, including Kohl’s and GameStop, were quietly removing language from or tweaking their DEI programs. A growing wave of anti-DEI sentiment followed a U.S. Supreme Court decision in 2023 to strike down affirmative action in colleges.
Bud Light and Target came under right-wing fire for their promotions with the LBGTQ+ community last year, resulting in sales declines for both.
Meanwhile, a Politico article from April said legislators across North America “who have embraced aggressive climate policies are facing a political backlash as the programs drive up the cost of electricity, home heating and even ordinary goods.”
Tractor Supply’s pullback from DEI initiatives received the most attention, with statements criticizing the move coming from the Human Rights Campaign, GLAAD, and the National Black Farmers Association, as well as several Democrat legislators.
Shaun Harper, a professor of business at the University of Southern California, told NPR that because Tractor Supply stores are primarily located in rural communities, “the case-making for DEI should’ve been differently framed and better customized for those cultural contexts.”
A Wall Street Journal article pointed out that while fewer companies aren’t broadcasting their diversity goals, a 2023 survey from Bridge Partners, an executive recruitment firm, still showed that 70% of companies with over $25 million in revenue plan to expand their DEI programs.
David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging, told the WSJ that companies “aren’t answering to conservatives on X, they are answering to liberal consumers and recruits at liberal colleges.” He added that Tractor Supply’s decision “is kind of an illustration of the two Americas.”
Discussion Questions
Is Tractor Supply aligning with its customers’ values, bending to political pressures, or a bit of both?
Is this the right move?
Has it become riskier or less beneficial to publicize DEI or climate change initiatives?
Poll
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The primary duty of a retailer is to serve its two main audiences: customers and investors. Within the law, the interests of these constituents must come first. Oftentimes, there will be an intersection between wider social issues and these interests. However, sometimes the interests deviate and where they do, it is right to take corrective action. It is also right to cut back if DEI becomes too burdensome and is sapping productivity and profitability.
For all the heat and noise, I actually don’t think Tractor Supply is doing anything that radical. It will still put a lot of effort into things like animal welfare and conservation, which are important to the communities it serves. And it still, quite rightly, has to abide by laws on non-discrimination in hiring and such like. It’s just elected to go in its own direction, which is the company’s right.
Tractor Supply is responding to a customer base at 2,200+ stores in rural America, which wanted the company focused back toward its missional roots in community. Meanwhile, the stock price has dipped in 2024 and same store sales Q1 2024 was reported at 1.1% from a decline in the previous quarter 2023, and after healthy growth in 2022. Combine all of these together for the CEO and board, and they will be wanting to shore up easier paths back to growth. National news media doesn’t appear to like the move, but Tractor Supply is serving its customers and investors by reducing an added cost and a visible controversy.
According to most studies, more than half of U.S. consumers prefer that brands keep their views to themselves when it comes to taking “woke” (political or sociological) stances or profiles.
We have seen what happened to Bud Light and, to a lesser extent, Target, and now, many other slow learners. Do not engage in politics, whether intentionally or unintentionally, and do not assume anything about the likely political views of your consumers. Specific to this discussion, please note that anything having to do with race, sexual orientations, religion, or other divisive topics, be that direct or implied, are poison ivy for your brand. Keep in mind too that you (and your brand) don’t get to decide which topics should, or should not be, divisive.
No one will not buy your brand simply because you do not take a political or sociological position, but more than half may refrain from purchasing your brand if you do. There is a great deal of polarization in our country, and we are pretty much split down the middle. You should keep a safe distance from topics not directly related to your brand’s quality, value, or points of differentiation, unless you wish for your brand to be purchased by only those who agree with you.
Tractor Supply has decided to align its values with those of rural consumers, and that makes sense, provided that 90% or more of its customers share these values. However, their circumstances and situation are easier to align than those of most brands. – Db
I’d say your 90% figure for rural customers is off by about 40%. TSCO has also moved aggressively into exurban and near-suburban areas & depends on those markets for growth. Pride festivals are just as American these days as 4th of July parades, even in small towns. Lots of alternatives in the marketplace.
Cost cutting moves by a retailer who never should have implemented these programs in the first place.
I’m surprised they even announced the cuts.
I won’t comment on whether/not they’ll “eventually (come to) regret this” in favor of restating the obvious: it’s a folly to take political positions in the first place.(Some may say these aren’t political positions…I’ll be happy to show them to the “Pig drone” section in the store.) And it has little to do with the merits of the positions themselves. but rather trying to turn a moral issue into a competitive advantage.
It seems like the whole country is headed in the wrong direction. I’m afraid that TSC will regret this.
“Diversity, equity and inclusion” aren’t dirty words, and companies should make efforts to respect differences in their workforces and consumer bases even if they choose not to publicize their efforts. A recent study (University of Kentucky) shows that over 60% of agricultural workers are Hispanic, and 30% of farm managers, inspectors and supervisors are also Hispanic. Those managers are probably Tractor Supply customers.
As to climate change…I hope that customers in the agriculture business accept some of the science behind their flooded or overbaked property, even if it’s politically unpopular. This feels closer to the self-interest of Tractor Supply’s market than the company is willing to admit.
They won’t regret it.
My suspicion is they waited to see how Target was impacted by basically killing its Pride program this season. They had items in a limited number of stores almost hidden in a back corner. Wal Mart had a larger assortment of Pride merchandise than Target displayed closer to front of store in front seasonal on a back facing endcap… but it seems Target’s downplaying of Pride this season was quietly accepted. No boycotts or anything.
If TSC regrets this they can reverse course but they won’t regret it at least not in the immediate future. Because customers don’t spend more there because of these programs.
The pendulum is swinging back closer to where most people probably would have anticipated it to be for TSC. While some of the changes, ( i.e. climate changes) are hard to align with their core demographic the majority of them seem aligned with their core customer demographics. The changes are a warning message to other retailers that they have to be prepared to face criticism from the right, left or possibly both when they express corporate values.
TSC (and many other businesses) can effectively continue to practice all the principles from which it just publicly retreated without making a public big deal out of them, which has obviously flown in the face of its conservative customer base. TSC must listen to its customers but can continue to be mindful of other socioenvironmental issues. Just do it!
One would hope so.
As a retailer, like any public company, wandering into policy changes based on popular public sentiment is a slippery slope. Yes, TSC is a rural retailer with a very different consumer demographic than most other retailers. And most if not all reporters writing about this story have likely never set foot in one of their stores.
Regardless of their moves with farmers, 4H, and other rural initiatives, TSC should still care about the environment, as it directly impacts farmers and related businesses. They need to pay attention to some elements of DEI at least within legal compliance, but they don’t need to broadcast what they aren’t doing. Run your business profitably, serve your shareholders, don’t harm the environment, comply with labor laws, etc. There’s a difference between aligning your policies with your consumers values, and being vocal about what policies you’re abandoning or not striving towards.
DEI, ESG, Climate Change, pay attention to all “stakeholders” (this is straight from Davos that bastion of integrity) not just your shareholders and your customers….all of these initiatives, while (mostly) well intended, lead to no where.
Tractor Supply is better off after this move, and would have been even better off if they had never made the move.
These initiatives led to big money paid to consultants and then the activists who protested your annual meetings and investor calls, and kept complaining you weren’t doing enough… combined with rednecks who think any program related to this is bad and go hassle your cashiers in the store over it.
Without commenting on the merits of the initiatives they brought out the worst in all involved. Dropping the ourward publicity surrounding these initiatives is the right move.
As with so many things in retail, the details are in the execution. This is a case of the execution and the PR intensity generated by it – took over the narrative from what the actual initiatives are meant to accomplish. Was there anything inherently wrong with any of the programs TSC was implementing? No. Should they have made so much PR noise about how they were doing it? In hindsight, it appears that was the mistake, potentially upsetting their customer base.
However, it’s always difficult to measure negative impact like this. Brand boycotts rarely have any meaningful impact – although most consumers say they will support brands that agree with their values, many times consumers buy what they feel best serves their need in the moment regardless of those corporate values. This is especially true when brands are attacked by far0right wing personalities. Their power is not in their persuasiveness but more so in their ability to attract media attention. TSC like other brands made a knee-jerk reaction to this media noise and pulled back efforts they believe were becoming a distraction to their core business. Whether or not any of these initiatives were actually distracting from their business is a matter of execution. Many businesses successfully do this without any negative impact and in fact enjoy positive gains overall. Perhaps in this case, TSC put too much effort into the execution versus defining the value of the initiatives.
TSC is a strong retailer so let’s hope they don’t regret this decision in the long run. While their core customer base may be pleased with this announcement (more likely they won’t even notice the difference), TSC will need to hope that any pursuit of new customers aren’t met with a backlash from these actions.
One would hope that Tractor Supply would continue to follow these goals while not publishing them. After all, both initiatives are good for the company’s operation.
I fear that pressure goes beyond not publishing, but the pressure is to reverse TS’s progress on both fronts.
I share the opinion with others here that TCS is making a mistake here and will come to regret this. They have been bullied by a small but vocal group of online trollers who represent a point of view that I believe isn’t shared by most of America, much less most of its customers. So many companies and organizations that seemingly appeal to the same demographics — the NFL, Walmart, Major League Baseball — have managed to embrace these kinds of ESG initiatives without alienating their customers, why can’t TCS? These are not radical points of view, they are simply the right things for the country…and for Tractor Supply. Very sad.
You bring up the “small but vocal group of online trollers” who you credit for getting the company to reverse these initiatives but what about the small but vocal group of activists who pressured the company into these initiatives in the first place? We know they protest, disrupt operations, disrupt financial presentations, soak up corporate resources that could be used on increasing sales… they are not innocent either.
Tractor Supply is aligning its business practices with its values and the values of its customers and stakeholders. The company clearly feels it is the right move at this time for its best interests, while refocusing on its foundational mission and resources on the local communities it serves.
One of the great things about America is our freedom. Freedom of choice as to consciously choosing where we spend our consumer dollars and freedom of choice as a company or organization to operate in a manner that aligns with the values of its leadership, stakeholders, employees and customers.
In today’s polarized world, where every action and decision is scrutinized, remembering and exercising our free will is more crucial than ever.
While I agree that they are continuing to put their efforts around very important causes, why does it have to come at the cost of having a DE&I strategy? Creating inclusive and diverse work environments, etc should be core to any business. I’m curious if they are really ending sponsorships of ALL non-business activities. And I echo their misstep, retreating from climate causes – addressing them are/should be of the utmost important to their base. If the personalities and execution were part of this, then address that…no need to throw out the baby with the bathwater.
Given their public announcement on this (which they didn’t have to do), it seems they prioritized politics over policies and did so primarily to respond to the loudest voices in the room (which is becoming a rampant issue in our society on both sides). The values of a company should be core to their mission, not about appeasing SOME of their base which actually is diverse.
https://apnews.com/article/tractor-supply-dei-black-farmers-bdd23385a21242cfcfcd4c3e0118c853
Of course retailers should align their corporate values with their customer’s values. It’s absurd to think otherwise.
And, my guess is the entire concept of a meritocracy will make a comeback too. A pesky fiduciary responsibility to stockholders will demand it.