Walmart has now officially joined the National Retail Federation (NRF) as a member. For those new to retail, this may seem to be no big deal, but the background is that Walmart (NYSE:WMT) and the NRF have been in what amounts to a blood feud for decades.
Why have the world's largest retailer and the world's largest retail organization been doing this Hatfields-and-McCoys thing? This all started back in 1969, when the NRF was known as the National Retail Merchants Association and Walmart's annual revenue was about $30 million (about $190 million in 2013 dollars). According to several people involved, the bad feelings started when Walmart founder Sam Walton came to New York City—where the association was based at the time—and lobbied to join the group. They did something that one doesn't do to Sam Walton: They rejected him, saying that they didn't want Walmart as a member. Given that there is nothing that has been more a part of Walmart's culture than holding a grudge, that rejection kept Walmart out of the association for 44 years.
"Back when Sam Walton was running Walmart, the board of directors of (what would later become) NRF decided Walmart was not an appropriate member because it was a discounter," said Cathy Hotka, who runs a retail peer networking group. "That left a very bad taste in their mouth because of the earlier rejection."
When a different longtime retail observer was asked whether a 44-year-old rejection could really be the reason that a world-class retailer would make this kind of decision, she said it certainly can, depending on the players: "Think of Sam Walton. You really think a grudge can't be a part of corporate culture?"
That rejection led to the creation of the Mass Retailing Institute, which in 2004 would become the Retail Industry Leaders Association (RILA). It was formed back in 1969 to give an association home for regional discounts. It's initial members—beyond Walmart—included Kmart, Target, Jamesway, Caldor, Bradlees and Ames, according to Brian Dodge, a senior VP with RILA.
But why would Walmart end the feud and finally join NRF now in 2013? The reason most have given for Walmart's refusal to join in recent years has been a lack of need. as the world's largest retailer, Walmart has its own massive lobbying organization and, therefore, it has much less need for a lobbying association. And when it did need one, RILA delivered the few things it needed.
According to one person familiar with the players involved, what changed is the nature of some of the legislation that Walmart is now pushing, such as interchange and tax considerations for E-Commerce. RILA today is mostly an organization of very major chains. (Here's a hint. You know you're getting old when surveys position you as "more than XX years." The RILA member dues have their lowest revenue range as "under $1 billion." Y'know, the paupers. It then lists $1 billion-$5 billion, $5 billion-$10 billion, $10 billion-$20 billion and Over $20 billion.)
If Walmart goes to Capital Hill represented by one of its house lobbyists—or a RILA lobbyist—its argument is seen as what the big players want. But NRF today has tons of tiny retailers—true mom-and-pops—as members. When an NRF lobbyist meets with a member of Congress, they come with a list of the members who are dry cleaners and bicycle repair shops in that politician's home district. As one NRFer said, "If you want to have success on the Hill, align with the small guys."
- See The Hill story
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