January 3, 2008
Wal-Mart Goes to Washington
By Tom Ryan
Wal-Mart spent more than $4 million on lobbying efforts in Washington in the past 18 months compared to $6.6 million it collectively spent in the prior seven years, according to federal lobbying reports.
In just the first six months of 2007, Wal-Mart spent nearly $1.8 million – a pace that should enable the retail giant to handily break the nearly $2.5 million it spent for all of 2006.
Wal-Mart spokesman David Tovar declined to comment to The Associated Press on the reason for the increase, noting that the company’s spending depends on the congressional agenda.
In 2007, that agenda included immigration reform legislation that failed and a minimum wage-hike bill that passed. Wal-Mart had argued that higher wages would push up the cost of goods for customers.
According to federal lobbying reports, Wal-Mart also pushed for tougher tactics against organized retail crime, legislation promoting electronic health records and other technology to reduce health-care costs. Other issues listed on the disclosure form included legislation tied to unions, international trade matters, currency, taxes and banking.
Wal-Mart, which established a Washington office about 10 years ago, spent just $140,000 in 1999. It spent about a $1 million annually for the next several years, before increasing its lobbying representation and funds in 2005 amid increased criticism of labor practices and benefits.
Overall, the retail sector hasn’t invested much in lobby efforts compared to industries such as defense, energy and pharmaceutical. According to the AP, Wal-Mart’s $1.8 million in the first six months compared with $4.8 million spent by Lockheed Martin Corp. Among other retailers, Target Corp. spent $100,000 in lobbying expenses in the first six months of 2007, and Sears Holding Corp., about $141,000.
Brian Dodge, spokesman for the Retail Industry Leaders Association, said in the last few years his group’s lobbying efforts have increased involvement in various issues, including product safety, the environment, organized retail crime, health insurance and jobs. The retail industry, according to Mr. Dodge, must deal with more complex matters, such as imported products involving increased government oversight by several agencies.
“For a long time, Sam Walton really didn’t think that Wal-Mart should be involved in politics,” added Lee Drutman, a University of California at Berkeley doctoral student who is writing his dissertation on lobbying. “That was part of his actual belief so Wal-Mart was late to the game.”
Discussion Questions: Have retailers been at a disadvantage compared to other industries when it comes to pushing their agendas on Capital Hill and in state houses around the nation? Are retailers in general becoming more focused on lobbying efforts? In what areas do you think lobbying dollars are best put to use?
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Just to weigh in a bit on the last part of the question–wouldn’t it be refreshing to see more (I know there is some) active lobbying to make retailing easier/better/safer rather than the more traditional defensive maneuvers? Just a late idea.
Companies that lobby heavily must feel that one should always play fairly when one has the winning cards…and perhaps they are correct as today’s questions could be indicating.
If lobbying is so “key” to constructive legislation, perhaps we should elect lobbyists rather than politicians and thereby eliminate one complicating and expensive layer of government. But switching to today’s reality, being what it is, suggests that retailing should become more active in hustling elected officials on behalf of their sector of the economy.
More than likely apathy has set in over the previous 12 years. Business tends to be reactionary rather than go on the offense. The previous Congress was far more friendly to business. Now this Congress has proposed some rather anti-business legislation and they feel it’s time to wake up and fight back.
An increase in dollars spent consistently by Wal-Mart should really indicate only one thing. They are getting a return on their investment.
Retailers, from my view, have somewhat of a disadvantage in pursuing common goals on a national level due to their lack of cooperation simply from a competitive point of view. Local and regional retailers can be found to be very active at the local level and state level in pursuing–in a collective way–their agendas.
Since many of the issues are diverse, based on region, this has made sense. As our increasingly nanny government becomes more and more involved in controlling–or at least exhibiting intentions of controlling–our daily matters, a national government influence will have more importance. Considerable increases in reactive regulation could have a great impact on the retailing industry as this type of governing continues. A greater retail industry influence is going to be critical to future profitability.
Local and state associations have been and continue to be very effective in communicating a collective message at their levels. The same types of associations have had lesser results nationally. Whether or not these types of organizations could have a potential voice in common is less possible using older, less effective methods.
Just as the world of news and communications has changed dramatically, so too will the art of lobbying need to change and adapt. If these types of organizations can adapt to new methods, retailers without Wal-Mart’s war chest could have a better voice. However, no one should kid themselves. Wal-Mart is not lobbying on behalf of the industry. They are lobbying on behalf of Wal-Mart. The results of that effort, just as with everything else they do, will have an impact on the competitive environment and the communities where they operate. Whether that is good for retailing in general or the nation in general is a matter of debate.
It used to be said, “What’s good for General Motors is good for the country.” I am not so sure that what’s good for Wal-Mart, now the largest employer–as was General Motors at one time–holds the same implication for America. Although, it could be argued the same held true for General Motors at the time and that we simply didn’t understand it then.
Wal-Mart’s efforts at lobbying can and will be successful on their behalf. Learning from the past and examining their goals could be significant in understanding what things might look like some time from now. As with their business goals, they have no intentions toward failure. Even when they do experience small failures, they move on quickly and try a different way. I have to assume that same mindset would hold true in their lobbying efforts as well. Their activities here shouldn’t be disregarded or taken lightly.
Retailers spend a microscopic amount of money on lobbying compared to other industries. This has hurt the industry in innumerable ways over time. Retailers literally spend a few minutes’ worth of their annual revenue on lobbying each year. The sooner the industry can decide on issues it cares about, and determines to fight for them, the better….
Wal-Mart has been the object of a number of court cases that involve public issues such as discrimination and health care. It may be that as they find themselves in the public eye on issues that are controlled by legislation that they find a need to have lobbyists present. It is important for retailers to be good corporate citizens.
I was not familiar with the difference in lobby dollars between Wal-Mart and Target. Target has spent more money on ads describing their program of donating money to local communities and has a much lower lobbying contribution. These appear to be different ways of being corporate citizens.
Retailers’ efforts have frequently been targeted at state or local levels. More federal endeavors are certainly called for, given the national reach of retailers and their global supply chains/competitors.
With the potential shift in political paradigm over the coming year (if the Democrats regain the White House and maintain control over the Congress), lobbying efforts by retailers’ groups and individual companies are likely to intensify. There are a lot of issues being discussed in 2008–free trade, immigration policy, minimum wages, health care–that will have an impact on retailers’ bottom lines. It’s important for a company like Wal-Mart, with its own history of PR problems, not to end up looking like an obstructionist in the process of protecting its interests.
Lobbying works best if (1) the group agrees upon a worthwhile focus and (2) that message can be portrayed to fit credible political purposes. Drug companies found a great focus: the defense of high drug prices, portrayed as the best way to urgently save lives. Credit card companies found a great focus: make bankruptcy harder, portrayed as a way to stop fraud on the rest of the public.
Retailers can’t agree on a great focus, let alone portray it as a help to the greater society. Hold down minimum wages? Well, Wal-Mart didn’t like that. Allow immigration? Well, restaurants want immigration, but they sure haven’t sold most Americans on how that helps society. Restrictive zoning to stop the endless growth of surplus retail space? Almost no retailer wants that, even though it would reduce competition immediately. Years ago, retailers campaigned for the end of Sunday blue laws, even though that “breakthrough” simply raised their labor costs and stress levels. Perhaps retailer lobbyists should consider the ancient warning, “Beware of getting what you want.”
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Just to weigh in a bit on the last part of the question–wouldn’t it be refreshing to see more (I know there is some) active lobbying to make retailing easier/better/safer rather than the more traditional defensive maneuvers? Just a late idea.
Companies that lobby heavily must feel that one should always play fairly when one has the winning cards…and perhaps they are correct as today’s questions could be indicating.
If lobbying is so “key” to constructive legislation, perhaps we should elect lobbyists rather than politicians and thereby eliminate one complicating and expensive layer of government. But switching to today’s reality, being what it is, suggests that retailing should become more active in hustling elected officials on behalf of their sector of the economy.
More than likely apathy has set in over the previous 12 years. Business tends to be reactionary rather than go on the offense. The previous Congress was far more friendly to business. Now this Congress has proposed some rather anti-business legislation and they feel it’s time to wake up and fight back.
An increase in dollars spent consistently by Wal-Mart should really indicate only one thing. They are getting a return on their investment.
Retailers, from my view, have somewhat of a disadvantage in pursuing common goals on a national level due to their lack of cooperation simply from a competitive point of view. Local and regional retailers can be found to be very active at the local level and state level in pursuing–in a collective way–their agendas.
Since many of the issues are diverse, based on region, this has made sense. As our increasingly nanny government becomes more and more involved in controlling–or at least exhibiting intentions of controlling–our daily matters, a national government influence will have more importance. Considerable increases in reactive regulation could have a great impact on the retailing industry as this type of governing continues. A greater retail industry influence is going to be critical to future profitability.
Local and state associations have been and continue to be very effective in communicating a collective message at their levels. The same types of associations have had lesser results nationally. Whether or not these types of organizations could have a potential voice in common is less possible using older, less effective methods.
Just as the world of news and communications has changed dramatically, so too will the art of lobbying need to change and adapt. If these types of organizations can adapt to new methods, retailers without Wal-Mart’s war chest could have a better voice. However, no one should kid themselves. Wal-Mart is not lobbying on behalf of the industry. They are lobbying on behalf of Wal-Mart. The results of that effort, just as with everything else they do, will have an impact on the competitive environment and the communities where they operate. Whether that is good for retailing in general or the nation in general is a matter of debate.
It used to be said, “What’s good for General Motors is good for the country.” I am not so sure that what’s good for Wal-Mart, now the largest employer–as was General Motors at one time–holds the same implication for America. Although, it could be argued the same held true for General Motors at the time and that we simply didn’t understand it then.
Wal-Mart’s efforts at lobbying can and will be successful on their behalf. Learning from the past and examining their goals could be significant in understanding what things might look like some time from now. As with their business goals, they have no intentions toward failure. Even when they do experience small failures, they move on quickly and try a different way. I have to assume that same mindset would hold true in their lobbying efforts as well. Their activities here shouldn’t be disregarded or taken lightly.
Retailers spend a microscopic amount of money on lobbying compared to other industries. This has hurt the industry in innumerable ways over time. Retailers literally spend a few minutes’ worth of their annual revenue on lobbying each year. The sooner the industry can decide on issues it cares about, and determines to fight for them, the better….
Wal-Mart has been the object of a number of court cases that involve public issues such as discrimination and health care. It may be that as they find themselves in the public eye on issues that are controlled by legislation that they find a need to have lobbyists present. It is important for retailers to be good corporate citizens.
I was not familiar with the difference in lobby dollars between Wal-Mart and Target. Target has spent more money on ads describing their program of donating money to local communities and has a much lower lobbying contribution. These appear to be different ways of being corporate citizens.
Retailers’ efforts have frequently been targeted at state or local levels. More federal endeavors are certainly called for, given the national reach of retailers and their global supply chains/competitors.
With the potential shift in political paradigm over the coming year (if the Democrats regain the White House and maintain control over the Congress), lobbying efforts by retailers’ groups and individual companies are likely to intensify. There are a lot of issues being discussed in 2008–free trade, immigration policy, minimum wages, health care–that will have an impact on retailers’ bottom lines. It’s important for a company like Wal-Mart, with its own history of PR problems, not to end up looking like an obstructionist in the process of protecting its interests.
Lobbying works best if (1) the group agrees upon a worthwhile focus and (2) that message can be portrayed to fit credible political purposes. Drug companies found a great focus: the defense of high drug prices, portrayed as the best way to urgently save lives. Credit card companies found a great focus: make bankruptcy harder, portrayed as a way to stop fraud on the rest of the public.
Retailers can’t agree on a great focus, let alone portray it as a help to the greater society. Hold down minimum wages? Well, Wal-Mart didn’t like that. Allow immigration? Well, restaurants want immigration, but they sure haven’t sold most Americans on how that helps society. Restrictive zoning to stop the endless growth of surplus retail space? Almost no retailer wants that, even though it would reduce competition immediately. Years ago, retailers campaigned for the end of Sunday blue laws, even though that “breakthrough” simply raised their labor costs and stress levels. Perhaps retailer lobbyists should consider the ancient warning, “Beware of getting what you want.”