1 Based on 1987 Standard Industrial Classification code;see text, Section 13, Labor Force.
2 Excludes supplies and equipment used in store and warehouseoperations that are not for resale.
3 Includes kinds of business not shown separately.

Source: U.S. Census Bureau,Current Business Reports, Annual Benchmark Report for Retail Trade,January 1990 Through December 1999, (BR/99-A) and unpublished data.

http://www.census.gov/econ/www/retmenu.html*ANNUAL RETAIL TRADE SURVEY

PURPOSE

To provide detailed industry measures of retail company activities. TheUnited States Code, Title 13, authorizes this survey and provides formandatory responses.

COVERAGE

Retail companies with one or more establishments that sell merchandise andassociated services to final consumers (SIC Division G). In 1995, consumersspent more than an estimated $2.3 trillion at retail establishments.

CONTENT

Companies provide data on dollar value of retail sales, sales taxescollected, inventories, method-of-inventory valuation, cost of purchases,and account receivables balances.

FREQUENCY

Annually since 1951 (except 1954); reported data are for activity takingplace over the prior calendar year. Data collection begins the first weekafter the close of the year. Samples are re-selected every 5 years andupdated annually, most recently for the 1996 reference year.

METHODS

A mail-out/mail-back survey of a sub-sample of about 22,000 firms selectedfrom the monthly retail trade survey panels. The annual survey consists ofall monthly survey panel firms that had payrolls during the reference year,plus administrative data or imputed values to account for nonemployerretail businesses.

There are currently about 31,000 companies in the monthly sample. Themonthly sample consists of 3 rotating panels of about 6,100 single-unitfirms and 2,200 small multi-unit firms; and a special panel of largemulti-unit firms and other firms with large sales.

The annual survey uses 2 of the 3 rotating monthly panels, and the specialmonthly panel. Since 1977, the monthly retail trade survey has beenbenchmarked to the annual retail trade report. Inventories have beensimilarly benchmarked since 1951. Annual estimates are benchmarked to themost recent census of retail trade. In addition, benchmarking the annualsurvey to the monthly surveys greatly improved the quality of the monthlyestimates and allowed the sample to be reduced.

*DEFINITION OF TERMS

Sales. Sales include the following: merchandise sold for cash or credit atretail and wholesale by establishments primarily engaged in retail trade;amounts received from customers for layaway purchases; receipts from rentalor leasing of vehicles, equipment, instruments, tools, etc; receipts fordelivery, installation, maintenance, repair, alteration, storage, and otherservices; and receipts from gasoline, liquor, tobacco, and other excisetaxes which are paid by the manufacturer or wholesaler and passed along tothe retailer. Sales are net after deduction for refunds and allowances formerchandise returned by customers. Trade-in allowances and manufacturers'rebates are not deducted from total sales, however, rebates offered by theretailer are deducted. Total sales do not include commissions from vendingmachine operators or nonoperating income from such sources as investmentsand rental or sales or real estate.

Sales exclude sales and excise taxes collected directly from customers andpaid directly to a local, State, or Federal tax agency. Also excluded arereceipts from customers for carrying or other credit charges.

The sales data represent total sales and receipts of all establishmentsprimarily engaged in retail trade. They do not include sales at retail bymanufacturers, wholesalers, service establishments, and others whoseprimary activity is other than retail trade.

Inventories. Inventories represent stocks of merchandise, valued at cost,on hand for sale by retail establishments at the end of the month. Methodsof valuation may vary according to the accounting practices of the firms.However, the estimates provided are on a non-LIFO basis. Inventories areshown for retail stores and warehouses combined. Only those warehouseswhich maintain supplies of merchandise primarily intended for distributionto retail stores within the organization are included. Inventories excludethe value of fixtures, furnishings, equipment, and supplies used in storeand warehouse operations and not held for resale.

Inventories-sales ratios. The inventories-sales ratios indicate therelationship of end-of-month inventories to sales during the month. Theratios shown are derived by dividing the inventories estimates by thecorresponding sales estimates. No adjustment is made in these ratios forthe markup in sales which may vary from one kind of business to another.

Kind-of-business classifications. Retail trade, defined as major groups 52through 59 of the SIC Manual, includes establishments engaged in sellingmerchandise for personal or household consumption and rendering servicesincidental to the sale of the goods. Exceptions to this general rule aremade necessary by trade practices. For example, lumber yards and paint,glass, and wallpaper stores are included in retail trade if they sell tothe general public, even if a higher proportion of their sales is made tocontractors. Also, establishments engaged in selling products such astypewriters, stationery or gasoline to the general public are classified inretail trade, even though such products may not be used for personal orhousehold consumption. However, even within these areas of exception to thegeneral rule, establishments that sell exclusively to businessestablishments, institutional and industrial users, or contractors areclassified in wholesale trade.

Additional characteristics of retail trade establishments are that theyusually operate at fixed places of business; they are engaged in activitiesto attract the general public to buy; they buy or receive merchandise aswell as sell; they may process their products, but such processing isincidental or subordinate to selling; and they are considered as retail inthe trade. Not all of these characteristics need to be present, and someare modified by trade practice.

Kind-of-business classifications are not interchangeable with commodityclassifications. Most businesses sell several kinds of commodities. Thekind-of-business code assigned generally reflects the individual commodity,the commodity group which is the primary source of the establishment'sreceipts, or some mixture of commodities which characterizes theestablishment's business. Classification of establishments by kind ofbusiness generally does not make it possible to determine either the numberof establishments handling a particular commodity or the sales of thatcommodity. For example, the food group classification excludes storesselling food if the sale of food is not the primary source of receipts;moreover, even though stores are classified as food stores, some of theirreceipts may be derived from the sales of nonfood products.

Purchases represent the total cost of merchandise that was purchased forresale during the year, whether or not payment for the merchandise wasmade during the year.

Purchases data include cash and credit purchases made at central officesand company warehouses. The purchases, however, exclude deliveries fromcentral offices or warehouses to retail stores owned by other companies.We asked those companies engaged in both manufacturing and retailing to include purchases at the cost value of intercompany transfers from theirplant or warehouses to their retail stores. Also, we asked these companiesto include the cost of outside purchases.

Cost of Goods Available for Sale and Cost of Goods Sold

Cost of goods available for sale is calculated by adding the purchases made during the year to the preceding year's end-of-year inventories.To calculate the cost of goods sold, we deducted the end of the currentyear's value of inventories from the cost of goods available for sale.

Gross margin represents total sales less cost of goods sold.

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