Expecting the unexpected

Retailers and consumer goods companies are spending more time than ever in the nation's capital and the trade associations that represent their interests have never been busier. The heightened interest and flurry of activity began on Nov. 9, 2016, when the nation awoke to the reality that Donald Trump was elected president of the United States. His election surprised many, as did the haste with which he has sought to make good on campaign promises around health care and tax reform, reprioritize federal spending and pursuit of an America first agenda. In so doing, all manner of new and pressing challenges have joined the litany of familiar challenges facing retail and consumer goods companies.

To explore these challenges, Retail Leader hosted a first-of-its-kind roundtable luncheon around the time of President Trump's first 100 days in office. The event was made possible with support from Chicago-based Market Track, a leading provider of market intelligence, and was designed to facilitate a dialogue on topics of mutual interest to trade association executives who represent retailers, consumer goods companies and the American consumer. CEOs, presidents and other top executives from eight leading organizations shared their perspective during a two-hour invitation-only luncheon conversation moderated by Retail Leader Editor-in-Chief Mike Troy.

Participating organizations included the Grocery Manufacturers Association (GMA), the Food Marketing Institute (FMI), the National Grocers Association (NGA), the International Council of Shopping Centers (ICSC), the National Association of Chain Drug Stores (NACDS),the Retail Industry Leaders Association (RILA), the International Housewares Association (IHA) and American Humane, an organization involved in food certification standards.

The Source restaurant at the Newseum served as an appropriate venue for the D.C. Difference Makers luncheon.

The conversation was wide-ranging, but among the key topics discuss were:

  • Collaboration and regulatory reform with a focus on the challenge of representing industry and consumer interests during a period of escalating partisanship.
  • The twin forces of transparency and trust that are driving consumer behavior and influencing priorities for retailers, suppliers and trade associations.
  • Tax policy and the outlook for passage of a border adjustment tax, the marketplace fairness tax and comprehensive tax reform.
  • The consumer and how shifting behaviors are impacting purchasing patterns, retail development and innovation efforts.
  • Economic issues such as minimum wage, wage growth, health care reform and the role of retail and retail pharmacies in reducing costs.

Many of the participants were veterans of the Washington, D.C., world of politics with a deep understanding of how things get done or don't get done at the federal level. Several acknowledged seeing a lot of things during their careers, but nothing like what has gone on since Nov. 9. As one participant noted, if Hillary Clinton had won the election the status quo would have remained intact and life would have been simpler. Conversely, with Trump in the White House organizations have had to do a 180-degree turn in key areas and fight battles they did not foresee.

The most obvious of these is the Border Adjustment Tax (BAT) that is widely reviled in the retail industry and has galvanized opposition among trade organizations. The concept is so deeply flawed and detrimental to consumers and businesses it isn't expected to become law, but nonetheless ensuring its defeat is requiring resources when that time and energy could be better expended elsewhere.

The BAT issues underscores one of the top challenges facing all trade associations in the current climate, which is figuring out how to serve the interests of members during a period of profound change. Not only is there profound change, or the talk of it anyway, but there is tremendous noise and vitriol emanating from Washington, D.C. Partisanship didn't begin with the arrival of the Trump administration, but it has certainly become heightened. Fearmongering and the 24-hour news cycle have contributed.

As one attendee noted, the media landscape has changed with Americans' ability to choose sources of information and "news" that support views they already hold and that feeds a reinforcement loop. Media consumption behaviors have reinforced a sense of tribalism, according to another attendee. The discussion of media and the impact on political agendas was highly appropriate considering the venue for the luncheon: The Source restaurant adjacent to the Newseum, located at 555 Pennsylvania Avenue NW, less than a mile either direction from the White House and the United States Capitol.

Another attendee decried the loss of civility in Washington and attributed it to a reality that doesn't get much attention. Most members of Congress no longer relocate to D.C. with their families and their children don't attend local schools, factors which in the past helped curtail nastiness.

Partisanship, a recurring theme at the luncheon, is not a new phenomenon, it existed in the 1970s and 1980s, one attendee noted, but things still got done. Conversely, recent years have seen the situation devolve to the point where Congress only acts when it must.

Despite this situation, the notion of "getting things done" can also mean preventing bad legislation from becoming law. The fight over BAT is the obvious example, but last year a coalition of trade groups were successful when, guided by the beacon of ensuring a consistent national regulatory framework, they blocked an onerous Vermont law relating to GMO labeling in favor a national standard.

Participating in the inaugural D.C. Difference Makers luncheon were, from left to right, event sponsors Trevor Martin, Vice President of Client Development and Tracie Gregorski, Senior Vice President of Marketing with Market Track, Jennifer Platt, Vice President, Federal Operations, International Council of Shopping Centers, Brian Dodge, Executive Vice President, Retail Industry Leaders Association, Steve Anderson, President and CEO, National Association of Chain Drug Stores, Janet Helms, Director, National Farm Program, American Humane, Pam Bailey, President and CEO, Grocery Manufacturers Association, Peter Larkin, President and CEO, National Grocers Association, Leslie Sarasin, President and CEO, Food Marketing Institute, Mike Troy, Editor-in-Chief, Retail Leader and Pamela Sederholm, President and CEO, Sederholm Public Affairs/International Housewares Association.

While logic is often at the root of such victories, common sense doesn't always prevail in Washington, D.C. That helps explain why level playing field type legislation such as the Marketplace Fairness Act, which requires online only retailers to collect sales taxes, still hasn't become law after roughly a decade of effort.

A level playing field, fewer regulations and a more consistent national regulatory framework have long guided trade associations' efforts on the legislative front and that is unlikely to change. In fact, there is a sense that important victories are at hand as the new administration decries regulations. Several executives indicated they are bullish about the outlook for the economy with that view supported by the absence of eight years of anti-business rhetoric. The jury is still out on the future direction and global geopolitical issues are always a wild card, which caused luncheon participants to express an outlook that blended anxiety and optimism. The rhetoric will need to turn to action soon and as is always the case, questions need to be answered about how the priorities of the new administration are funded.

Given the wide-ranging conversation around the long list of retail and consumer goods industry challenges and opportunities, one of the self-evident truths to emerge from the gathering was this: in an increasingly fractious political landscape and competing viewpoints the role of trade associations continues to gain importance when it comes to representing the interests of the retail industry and American consumers.