Supply chain, workers and reputation

Following growing public concern and an aim to increase awareness of the issue, Oxfam recently released its second yearly ranking of supermarkets and their approach to human rights within their supply chain.

The "behind the barcodes" campaign titled "Does your supermarket food contain human suffering?" scores the UK big six supermarkets in the areas of transparency and accountability, prosperity of workers and farmers rights and the fair treatment of women.

With the recent surge in awareness of workplace issues following the #MeToo campaign, the increased focus on modern slavery, and several reports into poor working conditions and human rights violations at big retail brands, this campaign has potential to damage supermarkets' reputations.

How poor conditions in the supply chain can damage reputation and profits

Poor supply chain and workforce management can damage the reputation of all retail businesses, of any size and within any sector. In 2018 GAP and H&M came under fire following a number of interviews with their factory garment workers which revealed that in countries such as Cambodia, India and Sri Lanka women workers faced daily physical and verbal abuse. The reports resulted in a huge amount of media coverage and criticism for the companies involved. They responded publicly by announcing an investigation and due diligence process into their supply chains and condemned the abuse.

They aren't the only ones. There have been reports documenting the abuse of women at supplier factories for Walmart and most recently Amazon have come under the spotlight following a Guardian investigation into the conditions at US based warehouses, where workers are reportedly sustaining workplace injuries and returning to work whilst injured.

All of this negative publicity can have not only a damaging effect on the company's reputation but also to revenue growth. Following the extensive media coverage of ethical and workplace-related issues in Apple's supply chain in 2012, their revenue growth was reported to have dropped significantly from 43.6% in 2012 to 9.55% in the following year, although commentators have also cited wider factors.

Unfounded allegations can also have a serious impact on reputation. Primark faced a huge backlash with protestors outside of its Oxford street store in 2008, following the BBC Panorama documentary alleging that some garments were being produced by child labour. Following a complaint escalated to the BBC Trust, the footage was revealed to be "not genuine" and the BBC was forced to issue a public apology to Primark. The company has since released an interactive online map providing details of their supplier factories and information on the number and gender of their workers, in an effort to increase transparency and recover from negative publicity surrounding their supply chain.

What steps can you take?

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