By Craig Webb
Tractor Supply's sudden cancellation of its Diversity, Equity, and Inclusion job roles and goals--efforts that it has celebrated in the past--as well as its global warming initiative deserves close watching from LBM dealers along several themes:
Will public companies such as The Home Depot, Lowe's, and Beacon follow Tractor Supply Corp. (TSC) and remove DEI and sustainability commitments from their official corporate responsibility policies?
How will Wall Street react? Debates over whether companies should commit to DEI and ESG--shorthand for Environmental, Social and Governance concerns--have been raging for years. TSC shares did drop during a recent boycott campaign and recovered a bit after the announcement.
How will employees respond? Tractor Supply Corp. could face challenges in future recruiting for its workforce, which now numbers over 50,000. Multiple surveys indicate Gen-Z individuals want to work at companies that recognize their individuality and that engage in social causes.
Perhaps most important, how will customers respond? When Tractor Supply declares its goal is to serve "Life Out Here," the implication is that it's primarily a rural institution, with customers that are more conservative than their urban counterparts. But as the map below shows, Tractor Supply's 2,000+ locations includes lots of stores in states that are more blue than red.
"My wife and I have shopped at Tractor Supply for about 15 years now, and I would guess we're in your top 20% of spenders," wrote one couple who shop at the Tractor Supply in Harrisburg, NC, just outside Charlotte. "We're appalled by TS's chickenshit betrayal to its previous commitment to corporate decency and good citizenship. We quit. We'll be going to Southern States for all our farm supply needs from now on."
Tractor Supply's decision to change owes much to Robby Starbuck, a social media personality with more than 475,000 followers on X. On June 6, Starbuck launched a campaign to boycott the company and call TSC's headquarters to protest its policies. Starbuck in particular disliked sexually diversity training for employees, funding of pride events, DEI hiring practices, and the presence of a DEI council.
Starbuck said Tractor Supply CEO Hal Lawton "needs to understand that we don't want our hard-earned money spent on these woke priorities. ... The kind of sex you like is not an appropriate topic for work. Events built around the kind of sex people like to have should not have kids at them and should not be funded with the money we spend at Tractor Supply."
Given Starbuck's complaints, Tractor Supply's decision could nudge LBM operations toward policies of supporting only anodyne community projects--as TSC does with veteran's programs, rodeos, and animal shelters--while steering away from anything with a political tinge or that appears to support a particular community.
The impact on sales from Starbuck's boycott call probably won't be known until the next quarterly report comes out. As for Wall Street's response, Tractor Supply shares stood at $269.76 on June 6, rose to $289.98 on June 15 then dropped to as low as $264.56 on June 25 and was at $267.75 when Tractor Supply issued its statement on June 27.
"We have heard from customers that we have disappointed them," Lawton wrote then. "We have taken this feedback to heart."
Starbuck posted on X that Tractor Supply's change was "the single biggest boycott win of our lifetime." He also said he would announce soon a new boycott target.
It's notable that Tractor Supply withdrew its carbon emissions goals even though Starbuck's complaint didn't attack TSC's sustainability efforts. The move brings an interesting contrast to what's going on at The Home Depot and Lowe's. The Home Depot's ESG Report declares it has committed "to science-based targets to reduce Scope 3 'Use of Sold Products' emissions 25% by 203 from the 202 base year." Lowe's aims to reach net-zero greenhouse gas emissions by 2025. Lowe's also has begun meeting with suppliers to explain what's in Scope 3. (See my story regarding Scope 3.)
Both The Home Depot and Lowe's are members of a task force of big home center companies worldwide that's devoted to setting up a process to measure greenhouse gas emissions from the manufacture, sale, and use of construction products.
As for DEI, Beacon's Corporate Social Responsibility Report includes a page devoted to the issue. "Our commitment to DEI starts with our leaders, who champion initiatives aimed at creating an environment where every individual feels valued and empowered to contribute their unique perspective sand talents and reach their full potential," Beacon declares.
Lowe's 2022 Corporate Responsibility Report highlights a Culture, Diversity & Inclusion strategy. "We strive to foster an inclusive culture that provides associate support, where associate engagement and belonging are measures through a broad-spectrum listening strategy," the report states. The company has eight Business Resource Groups that"allow associates to learn about diversity and inclusion topics from peers while also acting as a support resource." In 2023, it planned to relaunch a self-identification program in which associates can "share their diverse backgrounds and highlight the impact of self-identification on their experience at Lowe's."
The Home Depot used the word "diversity" 86 times in its ESG report for fiscal year 2022, including as part of DEI initiatives for its associates. The big box noted that it partners with the Women's Business Enterprise National Council to promote gender diversity among its suppliers. In Canada, The Home Depot's Orange Pride effort "has a mission to celebrate lesbian, gay, bisexual and transgender associates and allies by creating an inclusive environment."
Another public company, the drywall distributor Gypsum Management & Supply, includes a Inclusion & Diversity page in its 2023 Corporate Responsibility report. It states: "We have a responsibility to foster a workplace that values contributions and perspectives from a variety of backgrounds, skills, and experiences regardless of race, color, age, sex, national origin, religion, marital status, sexual orientation, gender identity, gender expression, disability, or veteran status."