Retail liquor stores experience flat trend in productivity, (EXCERPT), Monthly Labor Review Online, February 1987

Retail liquor stores experience
flat trend in productivity

James D. York

Output per hour of all persons¹ in the retail liquor store industry² increased at an average annual rate of 0.2 percent from 1972 to 1985, compared with an average annual rate of 0.7 percent for the total nonfarm business sector of the economy during the same period. This overall productivity gain reflects no change in output on an average annual basis coupled with a corresponding decrease in all person hours of 0.3 percent. (See table 1.)

In 1972-78, productivity in the retail liquor industry declined at a rate of 0.8 percent. The rate of growth in output was only 0.7 percent and was outpaced by a growth in hours of 1.5 percent per year. Productivity declined every year of this subperiod except in 1976, when it increased by 4.7 percent. This increase occurred as output rose 1.6 percent and hours declined 3.0 percent. Recessionary conditions in 1974 and 1975 may have contributed to the weak demand exhibited during this period. Sales declined in 1975, the year the recession reached its trough, but rebounded in 1976 and 1977—both years of economic recovery.

From 1978 to 1982, productivity experienced a sharp turnaround, rising at a 3.3-percent annual rate. However, it still reflected a decrease in hours. Output increased an average of 0.4 percent annually, while hours declined at a rate of 2.9 percent. Output increased in only 2 years of this subperiod, 1979 and 1980.

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Footnotes

1 All average rates of change are based on the linear least squares trends of the logarithms of the index numbers.

2 The retail liquor store industry is designated as Standard Industrial Classification (SIC) 592. It consists of establishments primarily engaged in the retail sale of packaged alcoholic beverages, such as ale, beer, wine, and whiskey, for consumption off the premises. All retail liquor establishments, whether operated by government or private ownership, are included in the industry. For a discussion of productivity trends in liquor stores operated by State or local government, see Donald M. Fisk, Measuring Productivity in State and Local Government, Bulletin 2166 (Bureau of Labor Statistics, December 1983), pp. 34-42.

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