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Bureau of Labor Statistics > Office of Survey Methods Research > Publications > Browse Research Papers

National Chains, Online Shopping, and Trends in Retail

Dominic Smith, G. Jacob Blackwood, Michael D. Giandrea, Cheryl Grim, Jay Stewart, and Zoltan Wolf

Abstract

Retail trade was transformed between 1987 and 2017: first, national chains displaced
single-store firms; then, activity began to shift to online sellers. We show how
this transformation reshaped the labor productivity distribution by developing and analyzing
new public-use dispersion statistics from the Census of Retail Trade. Dispersion
in the lower tail rose sharply, consistent with a surviving fringe of small, less productive
retailers. Dispersion in the middle declined once stores were weighted by labor
inputs—consistent with chains expanding by opening large stores that resemble one another.
Moreover, industries with larger increases in the share of large firms experienced
a bigger decrease in productivity differences between the 90th and 50th percentiles, but
not in the tails of the productivity distribution. Our results imply that business models
account for a substantial share of productivity differences. Evaluating these patterns
in a single-input Hsieh–Klenow framework, we find labor allocative efficiency rises and
then falls below its initial level—but the decline is entirely attributable to e-commerce,
an industry whose NAICS definition pools disparate production technologies.