Costco is defying Donald Trump and conservative activists by sticking to its DEI policies
The president-elect and his incoming administration have railed against diversity, equity and inclusion (DEI) initiatives, claiming they are unfair and distracting.
‘I think there is a definite anti-white feeling in this country and that can’t be allowed,’ Last summer, Trump said last summer in an interview with Time.
Meanwhile, vocal figures on social media, like Robby Starbuck, have also pushed for boycotts of so-called ‘woke’ companies. It has forced the likes of John Deere, Walmart and Ford to scale back or ditch their commitments.
Costco, however, is standing its ground. The company’s board has urged investors to reject an anti-DEI proposal from a conservative activist group at its upcoming annual meeting.
Retail expert Neil saunders told DailyMail.com that Costco takes the view that its various programs have helped it to build a strong business.
‘Given the positive results over recent years it is impossible to argue that Costco management doesn’t know what it’s doing,’ Saunders, of Global Data, said.
‘There is an element of them saying leave us to get on with the job. While some customers might dislike the policy, I doubt many will defect as it is not something that is visible or that directly impacts shoppers.’
Costco CEO Ron Vachris defended the company’s policies to a complaining customer
The proposal to be voted on at Costco’s shareholder meeting is from the National Center for Public Policy Research.
The conservative activist group is pressuring Costo to produce a report outlining the potential risks of its DEI initiatives – as it says they backfire and hit the stock price.
In its shareholder proposal, the group stated, ‘DEI clearly poses litigation, reputational, and financial risks to the company.’
All businesses have a duty to avoid practices that harm their share price – since it harms investors.
But – in a letter to the board, seen by the Wall Street Journal – Costco’s directors argue that DEI policies are an asset, not a liability.
Executives emphasized that a diverse workforce and supplier base help attract top talent, foster innovation, and enhance the ‘treasure hunt’ shopping experience that customers value.
‘Our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary,’ they said.
Costco also argued that the conservative group bringing the motion have ulterior motives other than DEI risks to share price.
Costco is banking on its status as a much-loved store with loyal customers
The company argued in its note to investors that Costco customers enjoy seeing diversity reflected in its workforce.
‘The proponent’s broader agenda is not reducing risk for the Company but abolition of diversity initiatives,’ the company wrote.
Earlier this month, Costco CEO Ron Vachris wrote a rigorous defence of the company’s policies to a customer who had raised concerns that employees were hired based on ‘skin color’ or ‘gender identification.’
Vachris, in the letter seen by the Journal, told the customer that Costco did not use hiring quotas but focused on giving all workers the same opportunities.
‘If these are the policies you see as offensive, I must tell you I am not prepared to change,’ he reportedly wrote.
Costco is banking on its status as a much-loved store with loyal customers that have helped it stay out of political frays in the past.
‘They are not the worst of the worst, so they weren’t my focus,’ Starbuck, who successfully pressured Walmart to reverse some of its DEI policies, has said of Costco.
‘You better have your ducks in a row before you go after a beloved company,’ he said of any future boycott initiatives against Costco.
Robby Starbuck successfully pressured Walmart to reverse some of its DEI policies
Retail expert Neil saunders told DailyMail.com that Costco takes the view that its various programs have helped it to build a strong business.
‘Given the positive results over recent years it is impossible to argue that Costco management doesn’t know what it’s doing,’ Saunders, of Global Data, said.
‘There is an element of them saying leave us to get on with the job. While some customers might dislike the policy, I doubt many will defect as it is not something that is visible or that directly impacts shoppers.’
It comes after major companies such as Walmart, Ford, John Deere, and Tractor Supply bowed to pressure and rowed back on their DEI commitments.
In July, John Deere made a huge U-turn on its DEI practices in the face of opposition and a damaging boycott from farmers and conservatives.
The company said in a statement it would drop ‘socially motivated messaging’ and ‘diversity quotas and pronoun identification’ and distance itself from ‘cultural awareness parades.’
The $61 billion-a-year firm had come under fire over sponsoring a Pride event for children as young as three and other DEI efforts, even as it shuttered plants and sacked American workers.
