How the Trump presidency upended retailers’ DEI policy playbooks

In light of legal threats, conservative activism and the entrance of the Trump administration, retailers that once championed diversity, equity and inclusion policies are quickly recalibrating their efforts to safeguard their business interests.
Following the death of George Floyd in 2020 and subsequent Black Lives Matter protests, brands and retailers quickly committed to diversity, equity and inclusion measures; some launched diversity-focused programs or agreed to participate in the Fifteen Percent Pledge, where at least 15% of their shelf space would go to black-owned businesses.
However, in recent months, retailers such as Walmart, Lowe’s, Tractor Supply and, most recently, Target have announced that they would step back from DEI-related goals, programs and initiatives. Several have decided not to participate in diversity-focused surveys or festivals and parades. Walmart also said it would not renew a five-year commitment for a racial equity center and would not prioritize suppliers based on race or gender.
“They’re afraid of lawsuits. They’re afraid of boycotts. They’re legitimately concerned about the negative impact on their business,” said Rob Smith, board director at shoe company Steve Madden and a former executive at Macy’s and Victoria’s Secret.
Now, a new playbook is forming when it comes to DEI initiatives where once-vocal companies will either hedge their public stances or tone down messaging, according to Smith. He said companies are more likely to tout keywords like “belonging” and “employee excellence” rather than diversity and inclusion moving forward and that some are integrating these initiatives into broader company operations, such as human resources, without giving them a standalone focus.
While many retailers and brands have remained silent, others are sticking with their values. In a recent shareholder vote, Costco opted to continue its diversity efforts, saying it believes its DEI policies “enhance our capacity to attract and retain employees who will help our business succeed.” Apple’s board of directors recommended its shareholders do the same. Sephora, which has published reports on its hiring practices and advancement programs, just launched a new film celebrating its DEI values. The beauty brand was one of the first major retailers to take the Fifteen Percent Pledge and reported that it would triple the number of Black-owned brands on its shelves by 2024.
Retail consultants and former executives warn the rollback of DEI programs comes with potential long-term consequences that could affect many different aspects of a business, from people to marketing, merchandising and sales.
Many companies are pivoting rather than entirely abandoning DEI, according to Smith. He described how businesses are adjusting their language and strategies. Retailers and brands still have a commitment to diversity, but it “just looks and sounds different” than it did a few years ago. Companies are shifting toward a “softer approach,” he said, to avoid public controversies while still maintaining diverse hiring and leadership practices behind the scenes. Target, for example, said it would commit to “belonging” and rename its “supplier diversity” team to “supplier engagement.”
Why companies are pulling back
Only a few years ago, diversity was a major talking point for retail executives. As recently as 2023, Target CEO Brian Cornell celebrated the company’s DEI efforts. “It’s adding value,” Cornell said on a Fortune podcast at the time. “It’s helping us drive sales, it’s building greater engagement with both our teams and our guests, and those are just the right things for our business today.”
Recent changes, however, have come after some retailers faced backlash from conservative groups over their DEI-friendly stances.
Anheuser-Busch, the owner of Bud Light, faced boycotts in 2023 after the brand worked with transgender influencer Dylan Mulvaney for a marketing promotion. Sales plunged, and Mexican lager Modelo Especial dethroned Bud Light as America’s best-selling beer. That same year, Target took a sales hit when consumers protested against its Pride Month products, prompting the retailer to pull some of its LGBTQIA-themed merchandise. A year later, in 2024, to mitigate against further backlash, Target said it would scale back its Pride Month offerings in stores and would no longer sell such merchandise for children.
Since then, conservative activists like Robby Starbuck have targeted the DEI policies of companies across corporate America, including retailers like Lowe’s and Tractor Supply, which has only escalated the furor over corporate DEI even further. He has taken credit for policy changes at these companies, though some companies, including Walmart and Lowe’s, told media outlets that some of these changes had already been planned.
At the law firm Gibson Dunn, attorney Jason Schwartz, who heads the firm’s DEI task force, has witnessed the rising tensions surrounding corporate DEI programs firsthand. Inquiries from executives seeking legal advice have spiked, especially in the last week following President Donald Trump’s executive order directing federal agencies to scrutinize DEI practices at publicly traded companies. Now, executives are scrambling to gauge their exposure to legal risks tied to corporate diversity policies.
“The phone is literally ringing off the hook,” he shared with Modern Retail. “We have 75 companies that we’ve worked with over the last two years. In the course of the last week, a huge number of those companies and new ones have called us to say, ‘We want to take a fresh look at this in light of the President’s orders.’”
Leadership and employee retention
The pushback against DEI could lead to a lack of diversity in corporate leadership, particularly in the C-suite. Data show that company boardrooms continue to be dominated by white male executives. For instance, women currently make up 29% of C-suite positions at U.S. companies, up from 17% in 2025, according to a report published in September by Lean In and McKinsey & Company.
Smith said companies that have walked back their DEI policies may see employees leave in favor of companies with more robust DEI commitments. He added that such companies may also struggle to recruit and retain top talent. A survey from the Human Rights Campaign found that nearly 20% of LGBTQ+ employees said they would quit or look to leave if their company were to walk back its commitments to inclusion, and a third said their productivity would suffer.
“My major concern is we’re going back to a situation where you have a diverse team on the front lines, but the C-suite and the board do not reflect who’s working in the stores,” said Rebekah Kondrat, a retail consultant and founder of Rekon Retail.
Barry Thomas, a consultant with Kantar and former Coca-Cola executive, said he expects retailers to adopt more “merit-based” hiring initiatives to avoid the divisiveness of the term DEI. “Most of the retailers that we work with and I’m involved with are focused on the fundamentals of driving the business and shareholders,” Thomas said. “While they certainly want the right people moves, they’re more interested, generally, in investment returns.”
‘That breeds a lot of distrust’
Businesses may fear being labeled as “woke” and alienating significant portions of their customer base. But now, retail and marketing experts say these brands are risking their relationships with other shoppers who may now see their previous efforts as inauthentic.
“Consumers are more loyal to a brand when they become aware of that brand’s advocacy for an issue or a cause, and this goes beyond DEI,” said Kassi Socha, director analyst for Gartner. “Consumers do expect companies to take action on causes, not just pledge.”
For example, 80% of LGBTQ+ people surveyed by the HRC said they would boycott companies rolling back inclusion initiatives.
“You, I think, have a better reputation with consumers when you stand on your values and when you aren’t sort of going wherever the wind blows,” said Lola Bakare, a CMO advisor, inclusive marketing strategist and founder of the consultancy be/co. “That breeds a lot of distrust, and that trust is hard to build back.” Bakare added that many brands are staying silent on the issue, and in her opinion, that is the stronger move than following suit with the retailers in the headlines.
Bakare expects brands to eventually turn back to standing for diversity, equity and inclusion to grow their market share as well as attract new audiences and shoppers to their store. She mentioned Sephora and Ulta, which have been vocal about DEI programs, as examples of how brands can find business opportunities in catering to underserved groups.
“Anybody who may not be of the historical mainstream standard of beauty, essentially non-white women who are looking for beauty offerings, they know that if they go to Sephora or Ulta, they’re going to find things for them,” Bakare said. “It’s just simple as saying, ‘Our business operates based on what is most successful, and we will continue to make choices on what we invest in and what we divest in based on what programs and policies are successful and aren’t.'”