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Office of Survey Methods Research
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Published Year: 2024
Survey/Program(s): Office of Productivity and Technology
Catalog: Economic Working Paper
WP Number: WP-579
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Sales versus Margins: Alternative Measures of Output and Productivity for Retail Trade
Abstract
The retail trade sector has experienced dramatic changes in the types of establishments and goods and in the ways these goods are distributed and sold. We introduce new margin-based measures of output that complement existing sales-based output measures and identify what affects the differences between these measures of output, including prices, the product mixes, and industry dynamics. From 2007 to 2022, sales productivity outpaced margin productivity in most instances. We look closely at three representative industries with different trends and the role prices may play. In electronics and appliance stores, sales productivity showed robust growth while margin productivity grew more slowly. In beer, wine, and liquor stores, the two measures had similar trends. For pharmacies and drug stores, margin productivity growth was three times the rate of sales productivity. Comparing these measures gives a better understanding of the distinct effects of quantity of goods sold and changes to retail services on output and productivity.