One important consensus emerged during the pandemic: Businesses have a duty to think beyond profit maximization. The leading supermarkets in the US need to face up to this responsibility to do better; they have the power to transform how people work, what consumers buy, and how the supply chain operates.
The COVID-19 pandemic may (hopefully) be a once-in-a-lifetime event (as UN Secretary General António Guterres noted); but it’s also possible that history will remember it as a turning point for the world. We can use this moment of disruption to do better for people all over the world.
However, it’s been a mixed bag so far. Since the onset of the pandemic in March 2020, several key trends have emerged: widening wealth and gender inequalities, awakening US worker power, supply chain disruptions, technology adoption, investors’ demand for action on corporate responsibility, and legislative advances towards mandatory human rights due diligence (HRDD).
Amidst these great expectations, US supermarkets continued to lag behind UK and European counterparts on key policy areas; these include wages and well-being of people in the US and in global supply chains.
Oxfam reviewed relevant policies of five major US supermarkets--Albertsons Companies, Costco, Kroger, Walmart, and Whole Foods/Amazon—and just published the results in Turning Point: A three-year update on US Supermarkets' progress and pitfalls. We focused our analysis on the top three issues that need urgent action: HRDD commitments, workers’ rights, and gender justice.
The bottom line? While US supermarkets made some progress, huge gaps remain. The analysis sends an urgent message: the current business model no longer serves the purpose of income generation and poverty reduction. In fact, it is having an opposite effect.
Globally, trends suggest that a tsunami of crises is coming (forced migration, climate disasters, ongoing war); US supermarkets need to help solve these problems--rather than contributing to them (or, worse, actually exploiting the moment for the benefit of shareholders only).
Slow steps toward progress
Let’s start by acknowledging early signs of progress on the US front. A few retailers are starting to shift corporate practices to better respect people’s lives in supply chains.
- In 2019, Amazon (parent company of Whole Foods) released its first Human Rights Principles and Supplier Map. The company conducted its first Human Rights Impact Assessment (HRIA) in 2020, following an Oxfam shareholder resolution on HRDD.
In March 2022, Amazon made a new human rights commitment on freedom of association and collective bargaining. We expect Whole Foods, as Amazon’s biggest subsidiary, to uphold a similar commitment. Recently, Amazon announced that it was signing on to the UN Women’s Empowerment Principles (WEPs).
- In mid-2021, Kroger published a new Statement on Human Rights that included sweeping HRDD commitments, such as publishing a Human Rights Gap Analysis, conducting and publishing HRIAs, and devising an action plan in response to those findings.
In February 2022, the company published a Human Rights Progress Report that announced the development of an HRDD framework, integration of the UNGPs into the company’s Vendor Code of Conduct, and new commitment to improve gender equity in its business model.
Much more remains to be done
However, we remain deeply concerned about notable gaps in policies.
Human Rights Due Diligence Commitment
- Most retailers continued to rely heavily on audits, and have not presented meaningful rights holders engagement strategy or commitment.
- Most retailers have failed to adopt meaningful HRDD frameworks, including the conduct of HRIAs, development of action plans, and genuine grievance mechanisms.
- Where companies have committed to such policies and practices, they often neglect to explain their process or publish the full findings of the assessment.
- All retailers could do more to prioritize and ensure their suppliers are respecting workers’ rights, particularly with respect to freedom of association/collective bargaining, and rights of migrant and precarious workers.
- None has committed to paying living wages for workers in the supply chain.
- Most retailers have had very limited collaboration with local workers’ rights/women’s rights organizations to address issues in supply chains.
- All assessed retailers lack a sufficient focus on gender inequalities across their supply chains, especially with respect to the gender pay gap and gender disaggregated data (and even extending to unpaid care responsibilities).
- None has published gender equality policies related to supply chains.
- Most retailers have not signed on to the UN WEPs.
Now is not the time for “business as usual”
Unfortunately, values distribution in the food supply chain has worsened over the years; farmers’ and workers’ share of the retail value of food products has steadily decreased by 44% over the past two decades.
US food retailers must now shift from acknowledging the risks to actually addressing them. The new report offers several recommendations:
- Adopt and implement the HRDD, gender justice and workers’ rights policies that Oxfam has been calling for through Behind the Barcodes.
- “Walk the talk” and fundamentally change procurement practices. Incorporate human/labor rights standards into buying agreements, and stop placing pricing pressure on suppliers (which often leads to exploitative practices).
- Tie key performance indicators and executive compensation to the company’s performance on ESG to implement change at the operational level.
- Prioritize gender justice in all human rights and social sustainability policies, procedures and practices. Commit to implementing the UN WEPs.
- Embrace (rather than obstruct) the role of workers’ unions; protect the right to organize, and include worker advocates in representing the needs and voice of workers.
- Increase supply chain transparency by disclosing the entire food supply chain, starting with first tier suppliers.
US supermarkets have always been at the bottom of Oxfam’s assessment on human rights. They must now rise to the occasion.
The pandemic revealed the many problems and abuses in our food supply chain; it’s way past time to make constructive changes. Albertsons Companies, Costco, Kroger, Walmart, and Whole Foods/Amazon have the power to make a difference: to transform how people work, what consumers buy, and how supply chains operate.
We cannot afford another missed opportunity for US supermarkets to make fundamental changes. Corporate executives must no longer just engage in feel-good talk about corporate responsibility—they must make hard choices to put principles into practice, and lead others to do the same.
 ESG stands for Environmental, social, and governance (ESG) criteria.