May 7, 2018
Legislative leaders discuss the final week of session at the Public Affairs Breakfast this past Friday. Seated left to right: Sen. Susan Kent, Sen. Eric Pratt, Rep. Paul Marquart, Rep. Tony Albright.
Minnesota Retail Champions Nominations Open Through June 1
When innovative retailers and their partners gather, learn and celebrate at Retail Rally in October, we'll roll out the red carpet to recognize 10 Minnesota organizations and individuals for being champions of the industry.

Show your support for Minnesota's retail industry by nominating an employee, employer, business or vendor partner for one or more of these prestigious awards:

  •  Lifetime Achievement/Outstanding Achievement
  •  Vendor Partner of the Year
  •  Retailer of the Year
  •  Retail Community of the Year
  •  Retail Employee of the Year
  •  Social Responsibility
  •  Best Place To Work
  •  Retail Innovation
  •  Customer Experience
  •  Advocate of the Year

Nominations are open through June 1 and can be done at www.retailrally.com/nominate.

Take a moment to nominate a Minnesota Retail Champion today!
Pace Quickens At The Capitol; All The Federal Tax Conformity Approaches Are Out For Consideration
Perhaps the biggest news at the State Capitol last week was the release and passage of the final proposal on federal tax conformity. With the passage of the Senate version of the omnibus tax bill, work begins between the House and Senate to come up with an agreement, hopefully one that the Governor can ultimately support.

At a breakfast Friday morning hosted by MnRA and the Dakota County Regional Chamber of Commerce, Rep. Paul Marquart--the DFL lead on the House Tax Committee--commented that the approaches between the Governor, House and Senate are "not that far off", but he said a successful outcome will require that each be willing to compromise to get the job done before the end of the legislative session.

In a poll conducted at the event, attendees overwhelmingly agreed that federal tax conformity is so important in the immediate, that failure to get a law passed and signed by the Governor warrants a special session. The Governor has been firm in his insistence that there be no special session this year.

Also last week, Minnesota's Budget Commissioner Myron Frans sent a nine page letter to House Ways and Means Committee Chair Rep. Jim Knoblach outlining his concerns with budget and spending bills approved by the House. In response, Rep. Knoblach fired his own letter back to Frans. The exchange either clears the air for negotiations on bills, or more likely sets up a bumpy end of session road.

This week, the Legislature will be heavy in to conference committee work and floor sessions as it steams toward the May 21 constitutional adjournment deadline.
Exiting NAFTA Could Cost Retailers $5.3 Billion A Year
From the Retail Dive, Corinne Ruff, May 7, 2018

Exiting the North American Free Trade Agreement could cost retailers $5.3 billion annually, or $15.8 billion over the next three years, in added tariffs and reduced margins, according to a study released Monday by global strategy and management consulting firm, A.T. Kearney. According to the report, the effects could also lead to the loss of 128,000 retail and retail-supported jobs in that timeframe.

The three macro issues researched in the report included: tariff increases, reduced consumer spending and employment. Retailers in different sectors, even from product to product, may be affected in different ways, Johan Gott, A.T. Kearney Principal and co-author of the study, wrote.

This week, cabinet-level negotiators from the U.S., Mexico and Canada are meeting in Washington to attempt striking up a deal in May, but it won't be easy, Bloomberg reported Monday. The countries have been in talks to renegotiate the deal for more than eight months, and discussions will continue on Monday as U.S. Trade Representative Robert Lighthizer will host Mexico's Economy Minister Ildefonso Guajardo and Canada's Foreign Affairs Minister Chrystia Freeland. The clock is ticking if Congress is to look at the issue this year.
NAFTA Withdrawal Would Mean Higher Consumer Prices and Fewer Retail Jobs, New Study Finds
From the National Retail Federation, May 7, 2018

Withdrawing from the North American Free Trade Agreement would cost retailers and consumers up to $16 billion a year and lead to the loss of 128,000 retail-related jobs over the next three years, according to an AT Kearney study released today that was prepared for the National Retail Federation, the Retail Industry Leaders Association and the Food Marketing Institute.

“There’s a lot at stake for American retailers, workers and consumers as the administration resumes NAFTA negotiations,” NRF President and CEO Matthew Shay said. “It’s clear NAFTA must be modernized, but we can’t lose sight of the fact that this agreement helps ensure that American families have access to products they need at prices they can afford. As this report shows, withdrawing from NAFTA would jeopardize countless U.S. jobs and force consumers to pay more everyday products like groceries and blue jeans.”  

“This report confirms that leaving NAFTA puts American jobs, family budgets and the entire North American economy at risk,” RILA President Sandra Kennedy said. “We encourage the administration to modernize and preserve NAFTA to support the millions of American jobs along the supply chain that rely upon free and fair trade.”

“This report helps illustrate how – thanks in part to our expanded trade with Mexico and Canada – U.S. grocery shoppers can wander the produce section in January and take home groceries to allow them to eat like it’s a June day,” FMI President and CEO Leslie G. Sarasin said. “Customers are accustomed to this type of access to fresh products and increasingly demand it in their efforts to make healthy choices. The quality, consistency and affordability that stems from the interconnectedness of our three economies helps guarantee that Americans have the most abundant, safest, healthiest and most cost-effective food choices in the world.”

In 2017, retailers imported $128 billion worth of merchandise from Mexico and $54 billion from Canada, according to the study. NAFTA has made most of those goods tariff-free since it took effect in 1994.

The study finds that withdrawing from NAFTA would subject retail imports to $5.3 billion in annual tariffs that would that would most likely be passed along to consumers in the form of higher prices. Food and beverages sold at grocery stores would see the biggest hit at $2.7 billion, followed by apparel and footwear at $501 million, electronics and appliances at $390 million, household goods at $498 million and auto parts at $240 million. The remainder would come from the “flow-through” costs of tariffs imposed on other industries that would drive up retailers’ costs for services such as transportation.

Even with the tariffs passed on, retailers would see a $10.5 billion hit to their bottom lines, the report said. Retailers would likely leave 68,000 jobs unfilled over the next three years, and another 60,000 jobs supported by the retail industry would be lost.
Online Spending Passes $100 Billion For The First Time
From the Retail Dive, Dan O'Shea, May 3, 2018

Online spending by U.S. consumers surpassed $100 billion for the first time during the first quarter of this year, representing a 14.1% increase over the same period last year, according to Adobe's new Digital Dollar report.

 The amount of money consumers spend while shopping via mobile devices is now about one-third the amount spent via desktop online shopping, and the former eventually will overtake the latter, according to the report. Mobile shopping spending was about one-fifth the desktop figure in 2014.

The report also pointed to evidence that consumers timed their spending around first quarter holidays, such as Presidents Day, and the store sales promotions related to those holidays. That in turn suggests, according to Adobe, the upcoming Memorial Day holiday weekend represents an "especially huge opportunity for retailers to grab consumers' attention."