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Matt Shay Remakes National Retail Federation

The National Retail Federation in the past two years has upped its spending on K Street and worked, under the management of Matt Shay, to cut a bigger profile inside the Beltway.

“We are playing with a new level of aggressiveness and a new level of influence,” said Shay, who has been on the job as president and CEO just shy of two years.

This month, Shay retained Purple Strategies, the communications and government-affairs shop co-founded by strategist Alex Castellanos, to help the association with lobbying and global public relations.

“We have a good story to tell,” Shay added.

Part of that story is the federation’s multimillion-dollar Retail Means Jobs campaign, which aims to tell Members of Congress that retailers employ a lot of people in their districts. “All of this is really designed to increase the effectiveness of the advocacy work we do,” Shay said.

That advocacy work right now is focused on trying to sell Congress on a measure that would require all retailers, whether online or bricks-and-mortar, to collect state sales tax from customers. The NRF also is lobbying for a lower corporate tax rate, hoping to reduce the rate from about 35 percent to about 25 percent. Finally, the group advocates for more global trade and for the elimination of visa delays to make it easier for foreign tourists to travel — and shop — here.

In 2010, when Shay joined from the helm of the International Franchise Association, the retail federation had
$35 million in annual revenue. This year, it is close to $40 million, he said.

The NRF has put more money into its Hill outreach. Last year, it reported $3.3 million on federal lobbying, up from $2.6 million in 2010 and $2 million in 2009.

“I see Matt creating an atmosphere where he’s expanded the retail industry footprint to better reflect its size,” said Mary Schell, a lobbyist for NRF member company Wendy’s. “Retail has grown to be a big part of the economy.”

Shay replaced the group’s former top lobbyist — Steve Pfister, who had been with the NRF for 24 years, including a dozen years as chief lobbyist — with David French, who, like his boss, joined from the International Franchise Association. French, a veteran lobbyist, spent almost a decade on Capitol Hill, including stints with then-Sen. Rick Santorum (R-Pa.) and former Rep. Matthew Rinaldo (R-N.J.).

Shay took over the NRF from Tracy Mullin, who retired after having been the group’s CEO for 17 years. Since then, he said he has overseen a “significant reorganization” of the group in his first few months. That led to several departures in the group’s executive roster, including Pfister. Shay also added 10 positions in the association’s in-house lobbying and communications shops.

“These are all indicators of a new level of engagement,” Shay said. “Our rapid organizational change reflects changes in the industry.”

Susan Neely, president and CEO of the American Beverage Association, said Shay helped rally his forces “in a very effective way” during the debit card interchange fee debate last year. “He showed his membership what an investment in stronger advocacy capabilities can do,” she said.

But when it comes to the retail industry, Shay’s is not the only game in town. The retail federation represents a huge roster of retailers (Macy’s, Dillards, mom and pops), but the megastores and big brands — Walmart, Target, Bed Bath & Beyond — have their own Retail Industry Leaders of America. RILA, just before Shay came aboard the federation, initiated a merger between the two organizations, then backed out in mid-2009.

Shay said the two retail trade groups generally have broad agreement on the objectives but “occasional disagreements on the tactics.”

Still, they do work together. For example, Shay co-hosted a fundraiser last week for Sen. Dick Lugar (R-Ind.) along with Sandy Kennedy, RILA’s president.

“We work very well with them, whether it was work on the Employee Free Choice Act, trade policy or the e-fairness debate,” said RILA top lobbyist Katherine Lugar, a former NRF lobbyist who is the Senator’s daughter-in-law. “We have different memberships at this point. I think they appreciate the large, well-known brands we bring to the table.”

Not all of RILA’s members see the NRF as a key to the retail industry’s success in Washington. One RILA member, speaking on background, said RILA is a bigger force behind the stepped-up presence of retailers, not the federation. “If RILA is the ballet dancers, NRF is the line dancers,” this RILA member said.

But NRF members say Shay has helped build consensus in the highly competitive industry.

“Retailers are all, generally speaking, very competitive,” said Dean Elliott, director of governmental affairs for Dillards. “Matt has actually come in and really pulled the leaders within the different retailers together to create a common goal.”

And Shay’s profile is not limited to the retail federation.

He serves as chairman of the American Society of Association Executives’ key industry associations committee — a role that recently took him to the White House to argue against a proposed administration rule that could effectively bar executive branch employees from attending trade association meetings and widely attended events.

“To discriminate against trade associations because they lobby is not fair,” said John Graham, ASAE’s president and CEO. “Matt was very helpful in helping us make that point.” Shay helped generate more than 500 signatures for an ASAE letter on the matter and was instrumental in getting about 300 associations to write their own comments, Graham added. The administration has not issued a final rule on the matter.

As for Shay’s work at the retail group, Graham said it’s as if he woke a “kind of sleeping giant” when he joined.

“Before he got there, they were not very assertive and active in the public policy arena,” Graham said. “He has gone over there and really ramped up their communications efforts and ramped up their profile and their government relations activity.”

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