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Productivity measures for retail trade: data and issues
Marilyn E. Manser
The retail trade industry is a major component of the
U.S. economy, with
employment exceeding that in manufacturing. Yet only recently has the strong
productivity performance of the retail sector been widely noted. Analysis of
productivity growth in retail trade is especially challenging because it
involves defining what output is for the industry, and different concepts can be
used.
This article discusses conceptual and other issues in measuring productivity for retail trade industries, and presents current information on productivity in these industries in the United States. First it discusses the classification of retail trade activities. Second, it focuses on issues in defining the output concept for retail trade and in obtaining operational measures. Third, it presents data and comparisons for various measures and fourth, it addresses issues in comparing changes in retail trade productivity across countries.
Classification of retail trade
Recently, U.S. data have been converted to the new North American Industry Classification System (NAICS). NAICS retail trade (industries 44�) includes stores and nonstore retailers and excludes food services and drinking places (NAICS 722). Both NAICS and the earlier Standard Industrial Classification (SIC) system classify retail stores according to the types of goods that are being moved to the consumer. Eating and drinking places were classified as part of the retail trade division under the SIC (industries 52�).
Two other major differences between NAICS and SIC also affect the classification of retail trade. Under NAICS, unlike SIC, auxiliary units involved in management or support activities such as transportation, warehousing, accounting and related services, and repair and maintenance are classified into specialized industries rather than including them in the industries they support, including retail trade. In addition, NAICS considers the method of selling when classifying establishments into wholesale versus retail trade, whereas the SIC system focused on the class of customer. This latter change caused a noticeable increase in the size of the retail trade sector, with a corresponding decrease in wholesale trade.
This excerpt is from an article published in the July 2005 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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