National Retail Federation Losing Members

Posted July 25, 2012 at 6:08pm

The National Retail Federation, once retail’s primary voice in Washington, D.C., has lost several prominent members, including CVS Caremark Corp., Best Buy Co. Inc. and Dollar General Corp., Roll Call has learned.

Spokesmen for the three companies confirmed this week that they have dropped out of the trade group because of budgetary concerns. The news comes as the industry inches closer to securing its top legislative priority: a long-sought federal mandate for online retailers to collect sales tax, just like their brick-and-mortar counterparts.

The companies, which departed the NRF during the past 20 months, have maintained memberships in a competing trade association, the Retail Industry Leaders Association. An NRF spokeswoman declined to comment, citing the organization’s policy against discussing membership issues publicly.

The group, which took a leading role protecting the industry’s interests in last year’s debate over debit card swipe fee rules, seems to be taking a back seat to other organizations, such as RILA, in the push for legislation that would allow states to require out-of-state online retailers to remit sales tax.

For nearly a decade, such legislation has been one of the top policy goals of retailers, pushed almost exclusively by the NRF. Now, with a cadre of GOP governors including Bob McDonnell of Virginia and Chris Christie of New Jersey, lending their names to the cause, Republican lawmakers in Washington are cottoning to the idea.

A House bill introduced by Reps. Steve Womack (R-Ark.) and Jackie Speier (D-Calif.) has nearly 50 co-sponsors, equally split between both parties. And the Senate Commerce Committee announced Tuesday  that it would hold a hearing on companion legislation next week.

“[Sens. Mike] Enzi and [Dick] Durbin are working to get to 60 votes. They’re not there yet,” Senate Majority Leader Harry Reid (D-Nev.) told Roll Call on Tuesday, referring to the bill’s co-sponsors. “I have told them the minute we get 60 votes I will be happy to do everything I can to get that matter on the floor. … I’m for helping as much as I can these businesses in these strip malls and shopping centers we have around the country where people have invested millions of dollars building a store, and it’s — they can’t be competitive when somebody can sell a pair of pajamas online and not pay any taxes on it.”

The NRF maintains that it’s been pushing hard for the legislation but that the online tax is just one among many issues it is actively lobbying.

The group, which represents a huge roster of retailers from Macy’s Inc. to mom and pop stores, has steadily increased its lobbying expenditures over the past decade, especially since Matt Shay joined the organization in 2010 as its president and CEO. In 2010 and 2011, the group spent about $3.2 million on federal lobbying, up from $2.6 million in 2009. In the second quarter of this year, the group spent more than $1 million on lobbying for the first time ever in a single quarter.

At the same time, the NRF has increased revenue from about $33 million in 2009 to about $40 million this fiscal year, a spokeswoman said.

Still, it’s been noticeably absent from the ad pages in Beltway publications, and the group’s top lobbyist was not present at a Tuesday House Judiciary Committee hearing on the online tax issue.

RILA, which represents megastores and big brands such as Walmart Stores Inc., Target Corp. and Bed Bath & Beyond Inc., had three lobbyists and two staffers on hand. The International Council of Shopping Centers had five lobbyists in the room.

The shopping center group has advertised aggressively in Beltway media since October, even with no clear legislative vehicle.

“We put our resources into different areas of the fight,” said David French, the NRF’s chief lobbyist. “We spend our money doing what I would characterize as conservative voter education.”

 “While we may not have been making as loud of noise or spending as much money, we are, and have been, consistently beating the drum,” added Katie Wilson, spokeswoman for the NRF.

All three groups may have the same goal, but their strategies are vastly different and sometimes at odds. The NRF has focused primarily on rallying local retailers and connecting constituents with lawmakers, while RILA was instrumental in wooing the support of Republican governors.

The legislation’s prospects hinge on the outcome of the November elections not so much because retailers run the risk of losing key supporters in Congress, but because Republican victories could halt all legislative momentum until January, the lobbyists said.

“It all depends if they decide they are going to make sausage,” said Jason Brewer, a spokesman for RILA, who sat sandwiched between lobbyists for J. C. Penney & Co. and Target at Tuesday’s hearing.

Niels Lesniewski contributed to this report.