Retail Industry Profile

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(information provide in cooperation with BizStats.com)

Overview
Retail is the second-largest industry in the United States both in number of establishments and number of employees. The U.S. retail industry generates $3.8 trillion in retail sales annually, approximately $11,690 per capita. The retail sector is also one of the largest worldwide. As many of us know Wal-Mart is the world's largest retailer and the world's largest company with more than $256 billion (USD) in sales annually. Wal-Mart employs more than 1 million associates in the United States and more than 300,000 internationally.

Retail trade accounts for about 12.9 percent of all business establishments in the United States. Of that number single-store businesses account for over 95 percent, but they generate less than 50 percent of all retail sales.

Gross margins in the industry are generally between 31 and 33 percent of gross revenue but this varies widely by segment. It is important therefore to look into the specifics of each sector before you decide where to invest.

For more detailed Retail Industry News and Features visit: www.retailnet.com

Retail Employment
The retail industry accounts for just under 12 percent of all U.S. employment or approximately 15 million people. Of this 15 million many work part time or short hours. On average retail workers in non management positions work 31 hours per week with average hourly earnings of approximately $12.

Owning A Retail Business
For many people owning a retail business is their dream and it can make an ideal investment, but for others the nature of the business does not suit either their life style or their personality. Only you and your close advisors can determine if Retail is right for you but here are a few thought starters.

• Hours of Operation – Retail stores often attract customers at times when other businesses are closed: evening and weekends especially. So if you treasure your personal time at the weekends or have other commitments that make it hard to envision working those hours think hard before investing in this sector.
  
  
• Customer Interface – Retailing is the classic “in your face” interface with your customers. Especially in specialist retail situations or in “community” locations your customers will want to know who the owner is and be able to converse with him/her. There is little escape. This can tie you to the store and, if this form of close contact with customers is not your ideal then again think carefully before you invest. If on the other hand your business is more generic in nature (e.g. a C Store, or Ice Cream Parlor) then the key to your success is often more related to how you manage and select your staff.
  
  
• Staff Management – In a retail environment your staff can make or break the business, and while theft and dishonesty can be a problem the bigger issue is the way they interface with your customers. You must be able to set an example for them to follow and you must have a very disciplined approach to dealing with issues with your staff. If your management style or character makes it difficult for you to handle the rigors of staff management this might not be the industry for you.
  
  
• Location, Competition and Survivability – Each of these issues needs to be examined against the specifics of the retail business you are interested in acquiring. Is the location suitable to the type of business, is there sufficient parking, is there good road access, do you have signage rights. How close is the nearest competition, does your store have advantages over theirs. Will the sector your business is in survive new challenges from the big box stores, the internet or other new entrants. Again carefully consider these aspects and more when making your decision.
  
  
• Franchises – The retail industry has many Franchise businesses that can provide the perfect entry point in to the industry. It is important if you are thinking of entering the Retail space to consider if a franchise, either new or existing would be a better investment than a stand alone business. A franchise comes with support, systems, marketing and brand recognition, on the other hand there are set up costs, license fees and possibly royalties to the paid which can reduce your margins considerably. But don’t dismiss franchises before you take a good look at them, in many ways they are the future of retailing.
  

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