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NEW YORK – The retail industry's largest trade group is rallying its members against the world's largest retailer, Wal-Mart Stores Inc., for supporting a federal mandate for employer-funded health insurance.
The Washington-based National Retail Federation sent a letter Monday to 2,500 members, which range from mom and pop stores to big chains, to fight Wal-Mart's stance, publicized in a letter sent to President Barack Obama late last month.
Wal-Mart, long a poster child for bad corporate behavior, has been improving the health benefits it offers works and pushing for a voice in the health care debate. But its support for mandated coverage surprised the industry since the proposal is in lockstep with unions.
"The retail sector isn't ready to fit into a box that Wal-Mart has made," said Neil Trautwein, vice president at NRF.
The nation's current health care plan needs to be fixed, he said, but NRF has adamantly opposed an employer mandate.
"Although the move may provide a short-term public relations boost to Wal-Mart, it could have long-lasting,devastating consequences to retailers through the country," Tracy Mullin, NRF's president and CEO, said in the letter. "We could stand idly by and allow Wal-Mart to tip the scales on the health care debate, cower and release an innocuous statement that would neither support nor condemn their decision or stand up for all retailers and come out swinging."
NRF says an employer mandate would burden retailers with more costs during the most challenging time the industry has faced in decades and lead many stores to cut their payrolls or close. Another possibility would be that stores would have to raise prices to offset costs, but Trautwein believes that will not happen given the consumer spending funk.
NRF is the primary voice for the retail industry, which includes about 1.6 million businesses.
Wal-Mart — which is not a member of NRF — has been one of the industry's few bright spots, benefiting from financially squeezed shoppers switching to cheaper shopping options in the recession.
Greg Rossiter, a Wal-Mart spokesman, called the retailer's stance "a pro-business position" and "the right thing to do for the company."
"The present (health care) system is not sustainable, and the status quo is not an option," he said, adding that the company is committed to working with the Obama administration on health care reform that is a "win-win" for employers and individuals and that maintains U.S competitiveness.
Wal-Mart is also pushing for a mechanism to ensure health care cost reductions.
