What’s behind Woolworths, Aldi and Kmart distancing themselves from Australia Day?

A 2021 survey found 21% of Australians supported changing the date. Shutterstock/Dave Hewison Photography^[9]

A key reason to make a business case for corporate activism lies with shareholders^[10]. They typically oppose companies taking a stand on social justice issues believing businesses should “stay in their lane”.

Indeed, when Woolworths supported the Indigenous Voice to Parliament referendum, it resulted in a backlash^[11].

Academic research^[12] indicates a brand’s activist position can harm shareholder returns. Investors view this as a misallocation of resources that threatens profit maximisation. Perceived risk of corporate activism^[13] is heightened for businesses with large market share, like Woolworths. They have more customers to lose and fewer to gain.

In this instance, Woolworths took a business-first, activism-second approach. This likely appeases shareholders because making merchandising decisions is well within Woolworths’ remit. Also, by the retailer cloaking its activism as profit maximisation, shareholders are less likely to be concerned.

As for customers, they increasingly understand the duality of a brand’s motives^[14]. If there are perceptions of sufficient social impact, self-serving motives are also deemed acceptable. Woolworths illuminated the profit-making motive while subtly bringing to light the problematic history of Australia Day.

Activism without activism?

While Woolworths led with business reasons rather than support of First Nations peoples, it was interpreted by the public as a political act^[15], eliciting debate and grandstanding.

A company of this stature with significant marketing intelligence could have correctly predicted this reaction and made a calculated decision to take a stand on an issue at the front of the public’s mind. Yet this looks like activism without activism. Woolworths brought a sociopolitical issue to the fore but operated behind the curtain of dollars and cents.

Read more: 'Change the date' debates about January 26 distract from the truth telling Australia needs to do^[16]

Consumers are discerning about corporate activism, requiring companies to move beyond marketing rhetoric and demonstrate meaningful actions. Usually activism attracts criticism when brands are perceived to be woke washing^[17] - that is, misleading consumers about prosocial corporate practices. Brand activism is therefore sometimes viewed as a “fake marketing trick^[18]” because brands are not backing up their stance on social justice issues.

Woolworths by contrast has taken concrete action - not capitalising on the “Australia Day” term and imagery in its marketing and merchandise on January 26. This move falls short of authentic brand activism^[19].

A deflection tactic?

Australia’s fraught socioeconomic climate has put retailers in the spotlight. Currently, brands like Woolworths are facing media and political scrutiny for price gouging. In Queensland, there is a parliamentary inquiry^[20] into the discrepancy between prices paid to suppliers and those paid at the checkout. The Australian Competition and Consumer Commission and Senate are also holding inquiries.

Is the stance against Australia Day a move to distract from the pricing inquiries? Rob1037/Shutterstock

Aside from making room for more profitable merchandise or advancing the reconciliation agenda, is Woolworths deflecting attention from its role in these problems? Changing the conversation to something time-bound (that is, likely to die down January 27th) may be beneficial.

Research speaks to such a values-based strategy^[21]. Brands call on social initiatives to deflect from negative issues and improve future discourse about their business. In this case, directing discussion to their social responsiveness, even if secondary, enables Woolworths to divert attention away^[22] from potentially exploitative practices.

Corporate activism: an expanding and evolving strategy

Woolworths’ approach to activism warrants examination. While the company took action that ostensibly opposes the celebration of Australia Day on January 26, they communicated a profit motive fitting for the largest grocery chain in Australia by market share. They skirted full-blown corporate sociopolitical activism, an approach that was possibly more digestible for shareholders and customers (politicians less so).

However, this approach is also less authentic. Woolworths states its commitment to reconciliation^[23] through the support of the Indigenous Voice to Parliament and the Uluru Statement from the Heart. So where in this most recent decision was the marketing rhetoric that embraces and respects Indigenous Australians? This represents a lost opportunity to elevate the brand and promote the Change the Date ^[24]movement.

Read more: Welcome to May 9 – the true Australia Day^[25]

Read more https://theconversation.com/whats-behind-woolworths-aldi-and-kmart-distancing-themselves-from-australia-day-221743