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Productivity
Bureau of Labor Statistics > Productivity > Publications > Productivity Highlights

Wholesale and Retail Trade Industries Labor Productivity

On July 29, 2021, the Bureau of Labor Statistics (BLS) updated measures for 46 detailed industries in Productivity and Costs by Industry: Wholesale Trade and Retail Trade Industries - 2020. Chart 1 from the news release illustrates the industries with the largest increases and decreases in labor productivity in 2020. All six NAICS 4–digit trade industries with the highest productivity growth ranked in the bottom third by employment size. Five of the six NAICS 4–digit industries with the largest declines in productivity ranked in the top third by employment size.

Chart 1. Largest changes in productivity in NAICS 4-digit wholesale and retail trade industries, 2020

Bubble chart of largest labor productivity changes in retail and wholesale industries
Chart 1 data. Largest changes in productivity in NAICS 4-digit wholesale and retail trade industries, 2020

In 2020, the wholesale trade sector (NAICS 42) comprised 4.0 percent of nonfarm business sector employment (5.64 million workers) and 5.8 percent of U.S. GDP. The retail trade sector (NAICS 44,45) employed approximately 14.85 million workers, or 10.4 percent of all total nonfarm employees in 2020, while contributing 5.7 percent to GDP.

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2020, assessing the essential

The BLS productivity program publishes productivity data for detailed industries on an annual basis using source data and estimation methods as described in the BLS Handbook of Methods. Here we compare the impact on a couple of those industries deemed essential for the reference year 2020. Employers and workers in various industries differed in how they were able to respond to the year's unique and unexpected challenges.

Gasoline stations

While some essential businesses saw pumped up traffic in 2020, the gas station industry was not as fortunate. Output and productivity fell at the highest rates for as far back as BLS has data. Hours worked also declined but at a much slower rate than output. (See chart 2.) Furthermore, in 2020, gasoline stations had the largest decline in productivity among all the trade industries.

Chart 2. Gasoline stations (NAICS 4471) output, hours, and productivity annual rates, 1988-2020 

Combination chart comparing output, hours, and productivity of gasoline stations

 

Chart 2 data. Gasoline stations (NAICS 4471) output, hours, and productivity annual rates, 1988-2020


As the coronavirus pandemic began in early 2020, travel came to a screeching halt. As seen in chart 3, the U.S. Energy Information Administration (EIA) data shows a sharp drop in demand for gasoline as travel for both business and pleasure declined. The weak demand also impacted the oil and gas extraction industry and the petroleum and coal products manufacturing industry. People who did venture out were met with lower prices at the pump.

Chart 3. U.S. gasoline demand in million barrels per day, 2019 and 2020 

Line chart of average gasoline demand

 

Chart 3 data. U.S. gasoline demand in million barrels per day, 2019 and 2020


Hours worked by gasoline station employees declined at a much slower rate than output, largely due to being deemed essential and remaining open throughout the shutdowns. The gasoline stations industry group (NAICS 4471) is comprised of two detailed industries: gasoline stations with convenience stores (NAICS 447110) and other gasoline stations (NAICS 447190). Ninety percent of the total hours worked at gasoline stations in 2020 were at those with convenience stores. Gasoline stations with convenience stores saw a slight uptick in hours worked in 2020 but stand-alone gasoline stations saw a large reduction in hours worked causing the slight decline in gasoline stations overall. Gasoline stations with convenience stores were able to shift their focus to the convenience store side to attract customers. They were able to utilize online ordering, curbside pickup, and delivery of their products which included grocery items, made to order food, coffee, and alcohol. As such, gasoline stations with convenience stores avoided cutting hours for their employees despite much lower fuel sales.

Grocery: wholesale and retail

If you are shopping for industries that had explosive productivity growth in 2020, you might just find the best bang for your buck in grocery stores. Labor productivity in Grocery Stores (NAICS 4451) accelerated 7.6 percent, achieving the largest one-year increase in labor productivity ever recorded in this industry. In a similar industry, Grocery and Related Products Merchant Wholesalers (NAICS 4244), productivity jumped 5.8 percent, the largest one-year rise since 2003.

Chart 4. Grocery wholesale and retail industry output, hours, and productivity rates, 2020 
 

Bar chart of grocery wholesale and retail industry output, hours, and productivity rates for 2020

 

Chart 4 data. Grocery wholesale and retail industry output, hours, and productivity rates, 2020


Although both retail stores and grocery wholesalers saw exceptional productivity growth, they realized this growth in very different ways. Output vaulted and hours worked inched up in retail grocery stores but both output and hours fell in grocery wholesalers. (See chart 4.) The decline in hours for grocery wholesalers was the largest one-year decline in hours on record for this industry.

So why did both output and hours increase in retail stores but decline for wholesalers?

To answer this question, we need to understand what distinguishes retail grocery stores in NAICS 4451 from grocery wholesalers in NAICS 4244. Their customers are the key. Retail grocery stores sell groceries straight to consumers, but grocery wholesalers sell groceries in bulk to retail grocery stores, restaurants, and other retail vendors that then sell to consumers.

American consumers spent approximately $1.56 trillion on food in 2020, representing a a 5.3 percent fall from 2019, only the second decline in the last 25 years. (See chart 5.) This decline was led by an 18.3 percent plunge in spending at restaurants, cafeterias, and other food-away-from-home venues. This fall far outweighed the 8.5 percent increase in spending on food-at-home.[1]

Chart 5. U.S. monthly food sales, 2019-2020 

Chart of U.S. monthly food sales

 

Chart 5 data. U.S. monthly food sales, 2019-2020


By going out less for food at full-service restaurants, American consumers boosted sales at retail grocery stores and hurt sales for grocery wholesalers that supply full-service restaurants. Although some of the increase in spending on food-at-home passed through to grocery wholesalers, this did little to offset the loss in sales from restaurants and other food-away-from-home venues.

 

Related resources

Industries at a Glance: Wholesale Trade

Industries at a Glance: Retail Trade

Overview of BLS Productivity Statistics

 

Notes