Coles inks deal with data intelligence tech firm Palantir

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Supermarket giant Coles has signed a major deal with an American data intelligence firm that provides high-level analytical technology to the CIA and the Pentagon.

Experts warn the arrangement with Palantir could lead to job losses and vast cost-cutting, as the company seeks to save $1 billion in operating expenses over the next four years.

More than 10 billion rows of data, including in-depth insights into Coles’ 840 supermarkets, 120,000 employees, 9000 suppliers and $41 billion in revenue, will be ingested into a system called Foundry.

Then, by intricately examining “each store, team member, shift and allocation across all intervals in a day, every day”, Coles can begin to “redefine” how it thinks about its vast workforce, a press release issued in the US last week reveals.

Luke Munn, a research fellow in the field of digital cultures and societies at The University of Queensland, warned the deal should be cause for concern.

Mr Munn believes Palantir’s technology will eventually be “ticking along silently in the background” and “imperceptibly but powerfully shape the lives and livelihoods of Australian supermarket employees and shoppers”.

“By placing Palantir at the heart of its operations, Coles quietly smuggles in several key assumptions – that food is a commodity to be optimised, paying for labour is a risk rather than a responsibility, and data can capture everything of importance,” Mr Munn wrote in analysis for The Conversation.

“At a time of increased food insecurity, Australians should strongly question whether this is the direction one of our major grocery providers should take.”

Professor Uri Gal from The University of Sydney’s Business School said the framing of the partnership raises question about how Coles views its workforce.

“There are various implications, like whether they view their workers as fully fledged humans with their own needs and interests, or primarily as numbered resources to extract the most possible value from.”

A controversial partner

While it might not be a household name in Australia, Palantir is no stranger to controversial headlines in the US and Europe thanks to its dealings with militaries and spy agencies.

“This company has had a checkered past, one could say,” Professor Gal said. “Their technology has been put to use in various ways, some more ethically questionable than others.

“Of all the data companies Coles could partner with, Palantir has possibly the worst reputation.”

The company was founded in 2003 in Silicon Valley with the financial support of the Central Intelligence Agency, it has been reported, and grew to become a major provider of data analysis.

Among its private clients are iconic brands like BP, Airbus and Amazon but Palantir works with a number of government organisations, from the Department of Homeland Security to the Israeli Defence Forces.

One of its major contracts is with the Pentagon, working on Project Maven, developing the AI technology behind unmanned weaponised drones.

Amnesty International accused the company of enabling “serious human rights abuses” by enabling US immigration authorities to track and deport several hundred illegal aliens – a process that saw minors separated from their parents.

It has also been accused of facilitating the spying efforts of multiple governments, including on their own citizens.

A £330 million (AU$639 million) contract with Britain’s National Health Service (NHS) sparked furore last year, with politicians across the ideological spectrum alarmed by the company’s “ethics” and the British Medical Association warning the scope of data use was “deeply worrying”.

Concerns weren’t alleviated by Palantir founder Peter Thiel’s scathing comments about the NHS, which he said had loyal Britons in a state of “Stockholm syndrome” and should be privatised.

Over the past decade, the company has won tens of millions of dollars’ worth of contracts from the Australian Government, including with the Department of Defence and Criminal Intelligence Commission.

Major implications of Coles deal

Professor Gal said there are several unanswered questions about how Coles plans to use the technology and its exact scope.

“Are they going to use it on customer data as well? What data exactly are they collecting and where it being kept? How long are they going to keep it for? Are they sharing it with third parties?

“These are critical questions to which we don’t have answers.”

But based on what’s been said to date, he said it’s safe to assume “this is all about trimming costs” and, on the issue of job cuts, it’s “reasonable that’s where this is going”.

In a way, by signing a deal of this magnitude, Mr Munn said Coles is shifting the focus of its business from groceries to data.

“Groceries and grocery store labour become more data, just like the hedge funds, healthcare, or immigrants that other Palantir clients co-ordinate.

“Supermarkets have been under fire over the past year for increasing profit margins through a pandemic and cost-of-living crisis, and accused of underpaying workers.

“The Palantir deal continues this extractive trajectory.”

What the tech company essentially provides is “a way of seeing”, with its various data dashboards promising a “God’s eye view” that stretches across an entire organisation while also allowing clients to “zoom in to granular detail to locate a ‘needle in the haystack’ insight”.

“The claim is that this data-driven view is a shortcut to total knowledge, a way to map every operation, reveal every important element, and identify every inefficiency,” he said.

“Yet the data inevitably excludes significant social, financial and environmental information. The sweat of workers struggling to pack at pace, the belt-tightening of consumers struggling to make ends meet, and the struggle of farmers to survive unexpected climate impacts will go untracked.

“Such details never appear on the platform – and if they’re not data, they don’t matter. Will Palantir’s data-driven myopia translate to how Coles views its workers and customers?”

Locally, Coles has been fairly quiet about the deal, leaving it up to Palantir to issue a media release in the United States about its partnership with “one of Australia’s leading retailers” to help “address workforce-related spend”.

In it, Matt Swindells, chief operating and sustainability officer at Coles, was quoted as saying the systems would allow the retailer to “redefine how we think about our workforce”.

“Our development work with Palantir has demonstrated how we can enhance our ability to ensure all departments are optimally resourced – to provide not only the best return on workforce spend, but to drive better customer outcomes in-store,” Mr Swindells said.

Coles declined a request for an interview about the Palantir deal, saying: “We don’t have anyone available.”