NRF's Matt Shay on Trade Policies and Retail's Future at NRF Europe

Bonjour, and hello, everyone.

This is omnitalk Retail.

I'm Chris Walton.

And I'm Anne Mazinga.

And we are coming to you live from the Fusion Group's podcast studio at the NRF big show in Paris.

And we are pleased to kick off our coverage today with none other than Matt Shea, the president and CEO of nrf.

Matt, welcome back to omnitalk.

Happy to be here.

Thanks for the invitation.

Well, Matt, let's start off.

It's day one.

You just got off the stage.

How's the show starting for you?

And tell us.

Tell us how, like, NRF Europe came about, because this is a pretty big deal for us and for everybody attending.

Yeah.

So I think this, the show coming about is really the culmination of lots of conversations that took place almost over the last decade.

Okay.

But this all started before the pandemic, and we began talking to our partner here, a company called comicsposium, about doing events globally.

Okay.

And we eventually launched.

Two years ago, we launched NRF Asia Pacific Singapore.

And we thought, well, where.

Where else is there a market where we could add something?

And Paris retail week had been around for many years, but com exposium thought with the partnership with nrf, we could really improve it and elevate it.

And I think based on what we've already seen this week, today, I think we've achieved a lot of that success.

I think there's still room to grow, but we've got 25,000 square meters of exhibit space, which is the largest they've ever had.

We've got 12,000 attendees.

We've got 500 exhibitors, 200 speakers.

So really, for year one, we're really, really pleased.

We're off to a great start.

Yeah.

You just came off stage.

Right.

You just opened the show.

You know, what was the energy like?

The energy was great.

Room was full, standing room only, people all across the back.

The.

The French fire marshal was having coffee and just watching.

Didn't really care, but just casual.

No big deal.

Yeah, no big deal.

We need some more people in here.

Yeah, Right, Right.

Yeah, right.

Awesome.

All right, so let' Great crowd, great crowd.

Be here all day.

Beer all day.

Right?

Yeah.

Thanks so much.

All right, so let's get serious now.

So last year, you know, retail, the holiday season was fairly strong.

We did pretty well as an industry.

What's your outlook for this year?

How are you thinking about this year?

How's things going to shape up?

Well, our stated outlook is that we'll continue to see.

We're seeing Growth, we will see growth.

Our forecast was for growth of between 2.7 and 3.7%, better than last year.

We're actually running ahead of that at the moment.

And I think the thing that has really been the real wild card, of course, has been the whole situation with our trade conversations and tariffs.

And one of the reasons we're running ahead is because many of the tariffs were announced and then delayed.

Right.

And so retailers brought in inventory before the impact of tariffs.

Consumers went out and pre bought goods and stocked up ahead of time.

And so really we pulled a lot of sales forward, we think, from future markets, future quarters.

Right.

And pulled it into current year quarters.

And that's part of the explanation for why the numbers have been higher than we expected.

But the real, the real wild card has been the issue of trade and tariffs.

The tax bill was, was extended and renewed the 2017 tax bill that created.

Right.

Among other things, the 21% corporate tax rate.

That was a huge deal for retailers.

So we were pleased to see that happen.

But overall, consumers are holding up pretty well.

I think the real trick, as you both know, have to have great product and merchandise.

But really, consumers are shopping and behaving based on the job market.

And as long as they're employed and their wages exceed inflation and they feel somewhat confident about the economy, we're going to see consumer engagement.

And that's what's really started to slip.

We've seen consumer confidence numbers down.

We've seen big concerns about the jobs market.

We've seen less mobility in the jobs market, fewer people moving, changing jobs moving because they're worried about job security.

We've seen companies not refilling positions.

We saw the Restatement of of jobs last week.

Right.

A million jobs lost in the last year, lower than we thought we had created.

So I think that suggests some potential challenges in the labor market and that contributes to consumer behavior and then in turn, that will impact retail sales in the future.

So Matt, if you were to kind of distill that down to maybe two or three things that you feel like retailers are really focused on right now or the variables that they're watching, what would those top two be or top three?

Well, I think number one, two and three is, is really tariffs.

And I think it's all about execution everywhere.

The tariffs are what they are.

Right.

And, and no amount of shouting into the wind as effectively as we have shouted is changing the current environment in and of itself.

The administration is committed to tariffs as a policy tool.

We certainly agree that tariffs are important tools for any president to have.

We think the broad application has not been the most thoughtful and strategic use of tariffs and has had negative consequences for the economy.

Maybe they haven't all shown up yet, but they will.

So I think retailers understand that environment.

Yeah, there aren't any questions about will or won't.

Tariffs are here and in some form are probably going to be here for some time.

And so I think retailers are focused on execution and agility and taking the things they learned from the pandemic forward and Even the last 10 years in the age of transforming digital commerce.

And they're applying all of it to find solutions to preserve margins, but also to serve customers and provide lower prices and real value.

And I think that is number one, two and three for every retail CEO and every C suite and every management team right now.

Very pointed.

That's great.

All right, so let's step up a level now, because we've had you.

I think we've interviewed you now probably five or six half dozen times, you know, and one question that we've always.

Wanted seems like 10 or 15.

Right?

Right.

It feels like a lot more, doesn't it?

Yeah.

For you guys, it's only seems like 20 times.

I guess it's been three.

I lost count.

Honestly.

Can't wait till we do that.

All right, so one question we've always wanted to ask you is, you know, if you look at the macroeconomics aside of the current climate, like, if you're evaluating a policy proposal that impacts retail, what is your rubric for deciding whether or not that's the right policy to go after for the industry?

The rubrics cube.

You know what I think in the last.

So the team came in 15 years ago.

So the NRF has gone through a lot of change, just as the industry has in the last 15 years.

And while the composition of our membership has evolved and while the volunteer leaders sitting around the table has changed and while the industry itself has transformed and disrupted and transformed again.

I think the thing that we have heard consistently from our members throughout, from the leaders, from the chairs, from the officers, from the board members, from all of the members, is how much they value the diversity of thought and viewpoint inside the nrf.

Because the NRF represents every segment of retail, from the very largest to the very smallest.

And across categories, department store, discount store, luxury store, specialty grocery, chain, restaurant, online, digital, first home goods, home improvement, furnishings, you name it.

From the very largest companies in the world with global footprints down to retailers that have, you know, the proverbial one store on Main Street.

And, and that level of diversity of thought and perspective contributes to the way in which decisions get okay and I think ensures that there's a very representative set of perspectives that get shared as the volunteer committees and as the volunteer leaders on the board and the executive committee make decisions about policy priorities.

And sometimes it's very easy, right?

In the current environment, it's easy to say we need to be involved on trade and tariffs.

Right.

It's self evident, right.

And the same is true on an issue like taxes or an issue like organized retail crime, or even an issue like regulatory reform broadly.

So in terms of the decision making process, I guess I would say that we have this very representative group of members.

We have dozens and dozens of standing committees of members, volunteer leaders, whether it's for chief operating officers or general counsels or digital officers or marketing officers, or supply chain or loss prevention.

And they meet regularly, they have conversations about issues, and those issues end up being discussed by the board and by the officers, and it sort of percolates into here are the things that our members care about, and are there some ways in which we could bring the perspective of our members to life through our advocacy or our communication on a particular topic?

And that's really how it works.

And the board is discussing this all the time.

We do, of course, lots of regular updates to the board and have very, very thorough, thoughtful discussions.

And you know, when the board and the volunteer leaders say either we should be somewhere we aren't or we should stop doing something we don't need to anymore, then we quickly adjust and make those changes.

That's the inside baseball look.

Okay, I love it.

Well, Matt, let's close things out with this.

Hopefully we'll be talking to you in New York at NRF here in a few months.

But between now and then, and even as we head into 2026, what would you say your own priorities are?

As we start to think about, you know, what's ahead for the retail, the National Retail Federation and then for the retail organizations that are members of that.

Well, you know, as we were discussing downstairs the opening session a minute ago, I mean, our three priorities are advocacy, communication and education.

And we're doing those constantly, all the time, in a variety of, variety of initiatives and programs.

And so the advocacy will continue.

And I think in the near term, you know, as the economy potentially continues to face uncertainty, which I think is the one thing we all agree is likely to happen in the future, things change so quickly and it's a very, in many ways a very challenging environment.

I think communicating to public audiences, to policymakers, to the media and others, the work that goes into the retail industry trying to deliver value for consumers at a time when consumers may be feeling the challenges.

You know, the statistic that I read recently that struck me that our research team gave me was that 10 years ago, the top 10% of Americans accounted for about 37% of all consumption.

And today, the top 10% of Americans by household wealth account for more than half, more than 50% of all consumption.

Which shows you that there's increasing pressure on those other households.

And I think that, you know, unless we see some real panacea, some real relief, that's going to continue.

And so I think telling the story of how retailers are serving those consumers, those individuals, those households, those communities that are really feeling pressure, I think is an important story to tell at a time like this.

And then I think the other thing that we talk about, and I don't think people appreciate fully unless they've been to an event like this or the New York show, is the level of innovation that retailers deploy to serve customers, to deliver that value, to give them what they need and want at a time and place and a price at which they want it.

And people still have an antiquated, outdated, inaccurate kind of perception of retail when they think of all they see is the front of the store.

They don't appreciate the 90% that's below the waterline on that iceberg.

And there's an enormous amount of technology and innovation, as you know, that as we see here standing on the show floor with 500 exhibitors here in Europe for our first NRF Europe show ever.

So I think that's also a story that we can't ever tell too often because it helps explain how retailers are able to accomplish that other objective, which is serving customers and delivering value.

Yeah, that's a great point.

Like we always say, and retail is detail, and there's a heck of a lot of detail that goes on behind the scenes.

Yeah.

Well, Matt, thank you for joining us today.

My pleasure.

Thank you.

Our first interview to kick off the show.

We appreciate you spending the time with us.

And you heard it here, folks.

Very focused on the trade policies that are happening in the U.S. particularly.

So, Ann, until next time, thanks.

Big thank you to Fusion Group, and be careful out there.