NRF Annual Report 2010

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2010 National Retail Federation Annual Report




    100 YEARS OF

    325 7th Street NW, Suite 1100, Washington, DC 20004(202) 783-7971 Fax (202) 737-2849


  • COVER PHOTOS (clockwise from upper left corner):

    Tory A. Burch, Founder and Creative Director, Tory Burch

    Allen Questrom, former CEO, JCPenney and Federated Department Stores

    Roger Farah, President and CEO, Polo Ralph Lauren

    House Speaker, John Boehner (R-OH)

    Kip Tindell, Chairman and CEO, Container Store and Tony Hsieh, CEO, Zappos

    U.S. Senator Mitch McConnell (R-KY), Senate Republican Leader

    Stephen Sadove, Chairman and CEO, Saks Inc.

    Bert Jacobs, Founder, Life is Good

    Mindy Grossman, CEO, HSN

    U.S. Representative James Clyburn (D-SC), Assistant Democratic Leader

    U.S. Senator Dick Durbin (D-IL), Democratic Whip

    Terry Lundgren, Chairman, President and CEO, Macys, Inc. and Chairman, National Retail Federation and Matthew Shay, President and CEO, National Retail Federation

  • NRFs mission is to advance the interests of the retail industry through advocacy, communications and education.

    As the worlds largest retail trade association and the voice of retail worldwide, the National Retail Federations global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the U.S. and more than 45 countries abroad. In the U.S., NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion.

    Mission Statement Chairmans Message

    Presidents Letter

    Introduction 2010

    Officers and Board of Directors

    Government Relations

    National Council of Chain Restaurants

    Media Relations

    Washington Retail Insight Newsletter

    STORES Media

    99th Annual Convention and EXPO

    Shop.orgs Annual Summit

    Loss Prevention Conference and EXPO

    Innovate 10




    Loss Prevention

    Information Technology


    Supply Chain



































    NatioNal Retail FedeRatioN 2010 aNNual RepoRt2

    Chairmans Messageollowing one of the most challenging periods in the retail industry since perhaps the 1930s, 2010 was a year of

    gradual recovery.

    Sales havent completely returned to levels seen before the great recession of 2008 and 2009, however, there is no

    question that the industry is in much better shape. Retailers saw increases in key discretionary spending categories, and

    while improvement in economic indicators such as employment, consumer confidence and GDP are needed to sustain any

    long-term growth, the momentum appears positive as we head into 2011. Consumers are still cautious, but optimism is rising

    and purse-strings are loosening.

    The recent economy has forced retailers to think differently and do business differently. Weve had to better manage our

    inventories, create better value at every price point, and make every aspect of our operations more efficient. Looking back, many

    NRF members viewed the recession as a call-to-action to make aggressive changes to make their business model more efficient

    and more responsive to consumer demand.

    It was exciting for me to become chairman of the National Retail Federation during such a pivotal time, and to have the

    opportunity to work with some of the best and brightest from other companies to seek solutions to help restore the vitality not

    just of our industry but of our nations economy. With its diversity of membership and wide variety of conferences, networking

    opportunities, committees and other resources, NRF provides a forum for advocacy, communications and education where

    retailers working together can achieve far more than any of us could on our own.

    Unity of the retail industry was particularly important in Washington in 2010, with almost every critical issue tied to the

    economy and jobs. Retailers saw a major victory on debit and credit card swipe fees, pushed back proposals for a Value Added

    Tax that would have thrown away hundreds of thousands of jobs, and were able to defeat key provisions of the job-taxing new

    health care reform law that would have made the measure even more draconian. We also made progress on issues such as

    organized crime against retail and gift cards, just to name a couple.

    Amid all of these developments, the past year was a time of change at NRF. We

    introduced a new President and CEO as Matthew Shay succeeded Tracy Mullin, who

    served NRF with distinction for 34 years. With roots in retail and a strong track record

    of association management and advocacy success, Matthew has shown tremendous

    leadership, energy and enthusiasm that will guide our organization confidently into

    the future.

    Im looking forward to working with Matthew, his team and our membership so that

    NRF continues to make progress and represent our membership effectively in 2011

    and beyond.

    Terry J. Lundgren Chairman, President and CEOMacys, Inc.


  • 100 YeaRs oF leadeRship 3

    o matter your size, category or channel, the great recession of recent years left no retailer untouched. Inventories were

    slashed, jobs were lost and companies faced tough times as they were forced to make even tougher decisions.

    As 2010 began, however, hints of optimism emerged and retailers started to show they were finally ready to turn the page on a

    dismal period.

    The industrys response to this time of crisis was an inspirational show of innovation.

    Proving that every economic downturn is ripe with opportunity, retailers found new ways to embrace their customers through

    social media. Industry leaders streamlined operating costs with a very fluid supply chain. When many were competing on price,

    smart retailers stood out by offering private label brands and investing in localization efforts.

    When the road ahead becomes uncertain, retailers do what they do best - adapt, transform and thrive. NRF has followed our

    members fine example.

    2010 was a year of transformation for NRF. With uncertainty in the economy and Capitol Hill becoming the new normal, it was

    important for NRF to look inward to make sure our resources were aligned with our mission. We developed a new strategic plan based

    on a perception audit of our members and policymakers, designed to gauge their opinions of NRF and the role we play within the

    industry. This plan will sharpen our focus as we invest in new resources to support advocacy, education and communications.

    Investments are already paying off. NRF secured a major legislative win with passage of credit/debit card swipe fee reform,

    successfully fought back the first round of proposals to create a Value Added Tax, and negotiated with Congress and the

    Administration to make the new health care reform law as workable as possible. Victories like these are excellent examples of

    what the industry can accomplish when it comes together on key issues.

    And while we have achieved some major wins, the real work is just beginning. Looking ahead, NRF will capitalize on all

    opportunities to work with Congress to influence and support policies that will help the business community thrive and create jobs.

    Many members are poised for substantial productivity gains in 2011, but a great deal of

    work still needs to be done to foster more stability for the economy. The retail industry

    will play a key role in this economic recovery and we plan to make sure that our industry

    has a seat at the table for all major economic policy discussions.

    As we raise the curtain on 2011, NRF looks forward to commemorating 100 years of

    representing an industry with a rich history and proud tradition of excellence. Working

    together we will ensure our industrys continued success as we embark on the next

    100 years.

    Thank you for your continued support and we look forward to serving your needs

    in the coming year.

    Presidents Letter

    Matthew Shay President & CEO

    National Retail Federation


  • NatioNal Retail FedeRatioN 2010 aNNual RepoRt4


    The Road to Economic Recovery Runs Through RetailNo other industry has the ability to impact our economy quite like retail. And with that, our industry has been on the forefront of the economic recovery. With retailers creating jobs for one in five American workers and consumer spending accounting for two-thirds of U.S. gross domestic product, it is no wonder why all eyes have been fixed on the performance of the retail industry.

    No other industry has a larger economic footprint and no other industry is closer to the consumer. With an overwhelmingly influential impact on the most predominant issues facing our country and governments across the globe, its paramount for our membership to have a voice in policy decisions. And every voice should be heard.

    NRF MembershipNRF is proud to represent the full breadth and depth of retailing, from independent retailers to grocers, multi-national companies and online retailers. In 2010, our members sought NRF information, guidance and perspective through the Federations original research and consumer trend information, participation in NRF committees and councils, and NRFs representation before Congress. NRF responded by providing its members with cost-effective ways to instantly access industry data, resources, and networking opportunitiesall the while delivering world-class advocacy on issues that matter most.

    Appealing to All Sizes and SectorsWith the economic downturn in our rearview mirror, membership has come roaring back in 2010. Many well-known brands returned as NRF members, including: Benetton USA Crabtree & Evelyn, Ltd. ESCADA of the Americas iParty Corporation Party City Corporation Pier 1 Imports, Inc. Stuart Weitzman Ulta Salon, Cosmetics & Fragrance, Inc. Urban Brands, Inc.

    Retailers who had never been members made the decision to invest in their future by joining NRF this past year, including: Academy Sports + Outdoors Davids Bridal Godfathers Pizza, Inc. Grupo Coban S.A. (Guatemala) OfficeMax Otto Group (Germany) Sony Corporation of America Tuesday Morning, Inc. Under Armour, Inc. Williams-Sonoma, Inc.

    In total, more than 200 companies joined NRF as direct members in 2010. As NRF enters 2011, the future looks bright for new member acquisition as well as member retention. In fact, in a survey of NRF members, 90 percent of respondents stated that they would renew their membership while 80 percent said they would recommend NRF membership to others.

    Thinking Globally Acting LocallyNRFs membership includes affiliate relationships with such groups as the Travel Goods Association.

    In 2010, NRF launched a new affiliate program called the State Leadership Group. The program is designed to increase cooperation between NRF and state retail associations on advocacy efforts. The SLG now comprises 19 state associations and resulted in NRFs membership rolls swelling to more than 6,000 direct or affiliated company members in 2010.

    Influencing Retailing Around the WorldNearly 20 percent of NRF members are based outside of the United States. As globalization continues to provide growth opportunities for U.S.-based retailers as well as international retailers seeking to move into emerging markets, it becomes increasingly important for NRF to expand its global footprint. In 2010, NRF or its divisions sponsored or presented at a number of global events, including: POPAI Italia China Department Store Summit


    The Voice of Retail Worldwide

  • RAC Lite (South Africa) Retail Days (Turkey) European Retail Technology Summit (Netherlands) World Retail Congress (Germany) International Retail Design Conference (Canada)

    In addition to speaking events, NRF continues to serve as Secretariat for the Forum for International Retail Association Executives. Today, 24 of NRFs counterparts around the world contribute to FIRAE and its website,

    Leveraging Expertise to Create New Tools for MembersCapitalizing on its cumulative experience, the NRF Associate Member Advisory Council (AMAC) created two new member benefits in 2010: Buddy Program: AMAC members call new associate members within 60 days of joining to ensure that members are aware of resources available to them through their NRF membership and to offer peer-to-peer assistance as needed throughout the year.

    Roadmap to Retails BIG Show: A compilation of how-tos and what-not-to-dos at NRFs Annual Convention & EXPO, written by AMAC members who have experience exhibiting and/or attending.

    Disseminating Information on Retail Best PracticesAMACs mission is to provide feedback to NRF regarding the needs of their own customers the retail industry and how NRF can better meet those needs. AMAC also serves to ensure the needs of NRFs associate member base are met.

    Information is disseminated to the full associate membership via blog postings and at the annual Town Hall meeting held in conjunction with the NRF Annual Convention.

    Advancing the interests of our membershipWith NRF working to advance the interests of the retail industry at both the state and national levels the range of issues to be addressed is enormous. NRF is the only retail trade association with the depth and breadth of membership to truly speak for the entire industry at once. that ability is crucial in Washington, where decisions impacting retailers on issues as varied as tax policy, job creation, health care, labor relations and international trade are made every year. as the leader of the retail industrys advocacy efforts, NRF is well known as the Voice of Retail on Capitol hill. No matter what the forum or venue, retailers can rest assured that NRF will see that their voices are heard.

    NRF and the NRF Foundation participate in a panel discussion about customer service standards for China

    retail, which took place at the Beijing technology & Business university. pictured are (from right): Kimberly

    Grabel (saks Fifth avenue); Katherine Mance (NRF Foundation); denise Brass (NRF); Rick philips (Castle Worldwide); Xiuqi Chu, Chairman, China Commerce

    association for General Merchandise.

    2010 Global Retail Membership by Annual Sales

    Up to $1 million26% $1 to $10 million


    $500 million to$1 billion


    $50 to$100 million


    $100 to$500 million


    $10 to$50 million


    $1 to$5 billion14%

    Over $5 billion8%



    Middle East& Africa15%


    Caribbean& Latin America


    2010 International Retail Member Distribution

    100 YeaRs oF leadeRship 55

    2010 Membership Composition

    0 1000 2000 3000 4000 5000 6000 7000







    Membership Composition

    US Retailers

    International Retailers

    Non-Retail Members

    Aliated Members

  • Marty P. AlbertsonChairmanGuitar Center, Inc.

    Thomas G. Bata Jr.ChairmanBataCorp SA

    H. James Baum CEOBGH Heres Hallmark Shops



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