Wholesale and Retail Trade Industries Labor Productivity

On May 30, 2024, the Bureau of Labor Statistics (BLS) updated measures for 46 detailed industries in the release of Productivity and Costs by Industry: Wholesale Trade and Retail Trade Industries - 2023. Chart 1 illustrates the ten largest four–digit NAICS industries in the wholesale and retail trade sector along with their 2023 change in labor productivity as well as their employment.

In 2023, the wholesale trade sector^[1] comprised 6.2 million workers with revenue that made up 5.9 percent of U.S. Gross Domestic Product (GDP).^[2] The retail trade sector^[3] employed approximately 16.4 million people in 2023 and generated revenue accounting for 6.4 percent of GDP.

This webpage takes a closer look at two trade industries that have experienced recent sustained productivity growth: Health and Personal Care Stores (NAICS 4461) and Drug and Druggists' Sundries Merchant Wholesalers (NAICS 4242).

Health and Personal Care Stores

2023 marked another year of strength for Health and Personal Care Stores (NAICS 4461). Productivity was up 4.7 percent, output up 3.9 percent, and hours worked down 0.8 percent. This continues a streak of productivity and output growth that began in 2018 after a productivity slump from 2011 to 2017. In spite of (or perhaps due to) pandemic conditions, the Health and Personal Care Stores industry has enjoyed record productivity and output gains over the past few years. Productivity in this industry has increased each year since 2017.

Health and Personal Care Stores is one of only two retail industries to record positive output change in every year since 2019. From 2007-2019, output in this industry grew at a slower pace than the overall retail sector. After 2019, output has grown 4.2 percent annually in Health and Personal Care Stores, compared to 3.1 percent in the retail sector.

The Health and Personal Care Stores industry is composed of four smaller industries: Pharmacies and Drug Stores; Cosmetics, Beauty Supplies, and Perfume Stores; Optical Goods Stores; and Other Health and Personal Care Stores. Among these, Cosmetics, Beauty Supplies, and Perfume Stores (NAICS 44612) has continued to distinguish itself as a leader in productivity growth. Post pandemic staffing cuts and continued strong output of cosmetic products have kept productivity on a steady path upwards. Part of these gains could be attributed to growing self-care retail purchases of health and beauty goods, particularly affected by social media influencers and trends.^[4]

Back in 2020, service-based self-health output suffered considerably more than retail. On the retail side, Health and Personal Care Stores grew slightly; but on the service side, Personal Care Services (NAICS 8121) output fell by 18.8 percent. This created a gap between these two industries that had been tracking closely with each other since 2013. Personal Care Services output rebounded in 2021 and 2022, but so did output in Health and Personal Care Stores. In 2022, Health and Personal Care Stores output remains 19.5 percent higher than Personal Care Services, suggesting that consumers have hung on to retail health and personal care practices while also returning to service-based health and beauty.^[5] 2023 data on Personal Care Services is due for release in the latter half of 2024.

Drug and Druggists' Sundries Merchant Wholesalers

The Drug and Druggists’ Sundries Merchant Wholesalers (NAICS 4242) industry can be thought of, in part, as the wholesale analog of Health and Personal Care Stores. Component businesses of this industry supply inventories for retail health and personal care stores. Given the recent performance of Health and Personal Care Stores, it follows that the wholesale suppliers of these stores have seen similar gains. Productivity, output, and hours for Drug and Druggists’ Sundries Merchant Wholesalers in 2023 looked very similar to values from 2022. Productivity grew by 6.5 percent, output by 8.8 percent, and hours worked by 2.2 percent.

Notably, this current strength runs counter to the overall Wholesale Trade (NAICS 42) sector. In Wholesale Trade, productivity declined by 1.6 percent in 2023, furthering a 1.2 percent decline from 2022. Despite decreasing productivity and flat output growth in the broader sector, members in Drug and Druggist’s Sundries Merchant Wholesalers have been able to find recent productivity gains. Building on 2022, 2023 has seen continued productivity growth for both the retail and wholesale sides of health and personal care.

Related resources

Industries at a Glance: Wholesale Trade

Industries at a Glance: Retail Trade

Notes

Last Modified Date: June 11, 2024