Retail industry
The retail industry comprises retail businesses that sell goods and services directly to end consumers. It is a fundamental pillar of modern commerce, influencing consumption patterns, urban infrastructure, and labor markets. In major classification systems, retail is treated as a distinct set of activities. Over millennia, retail has evolved from ancient barter marketplaces to modern omnichannel systems integrating physical stores and digital platforms. Retail is a large source of jobs and economic activity in many countries. In the United States, retail is described as the largest private-sector employer. This sector employed about 16.2 million people in 2022, supporting millions more in related logistics and services. The retail market is also described as very large globally, with projected worldwide retail sales of about $31.3 trillion in 2025, and U.S. retail sales of about $7.26 trillion in 2024. U.S. retail and food services together contribute over $5.3 trillion annually to the national GDP and support more than one in four jobs in the country.
The industry is commonly segmented by merchandise category and is organized differently across classification systems. Over recent decades, consolidation through mergers and acquisitions has been described as a major structural trend, alongside the rise of large multinational retailers and major e-commerce platforms. Retail formats and infrastructure have changed substantially over time, including the spread of self-service stores, shopping malls, barcode scanning and point-of-sale systems, and the expansion of e-commerce. Retail profit margins tend to be slim and vary widely by sector and geography, but many leading retailers generate substantial profits due to scale, control of supply chains, and operational efficiency.Publicly listed retailers often achieve profit margins in the low single-digit to mid-single-digit range.
Retail industry has had many innovations; from the invention of permanent shopfronts and marketplaces to department stores, malls, and now digital commerce. In the 2010s and early 2020s, retailers increasingly adopted omnichannel models, and some stores experimented with automation and cashierless checkout. During the COVID-19 pandemic, online sales growth accelerated sharply in some markets, including a reported surge in U.S. e-commerce sales in 2020.
Definition
According to the United Nations Statistics Division, retail is the Division: 63 - Retail trade services; repair services of personal and household goods. In the International Standard Industrial Classification ', the retail industry is part of Section G: “Wholesale and retail trade; repair of motor vehicles and motorcycles.”' Within this section, retail trade is primarily represented by Division 47: “Retail trade, except of motor vehicles and motorcycles.” ISIC distinguishes retail from wholesale based on the buyer: retail involves selling chiefly to the general public, whereas wholesale is selling to business or institutional clients. Thus, Divisions 46 and 47 cover all non-vehicle sales activities, with Division 47 specifically covering retail sales to consumers. In the NAICS, the retail industry is designated as Sector 44-45, “Retail Trade.” According to the official NAICS 2022 definition, “The Retail Trade sector comprises establishments primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise.” The retailing process is described as the final step in the distribution of merchandise: retailers are organized to sell goods in small quantities directly to the general public. In essence, NAICS defines retail trade as businesses that do not produce goods themselves, but instead purchase and sell goods to end-use consumers,'' often providing related customer services.Commercial Significance and Statistics
World
National accounts show a combined total of retail and wholesale trade, with hotels and restaurants. in 2012 the sector provides over a fifth of GDP in tourist-oriented island commerce, as well as in other major countries such as Brazil, Pakistan, Russia, and Spain. In all four of the latter countries, this fraction is an increase over 1970, but there are other countries where the sector has declined since 1970, sometimes in absolute terms, as other sectors have replaced its role in the commerce. In the United States the sector has declined from 19% of GDP to 14%, though it has risen in absolute terms from $4,500 to $7,400 per capita per year. In China the sector has grown from 7.3% to 11.5%, and in India even more, from 8.4% to 18.7%. Emarketer predicts China will have the largest retail market in the world in 2016.In 2016, China became the largest retail market in the world. In the Republic of Armenia, retail trade has been increasing recently. In October 2022, it increased by 23.1% year by year, which was the most considerable rise since April 2021, faster than the 20.7 per cent increase recorded a month earlier. Retail dropped by 1.9% after accumulating 2.1%in the earlier month. For the first 10 months of 2022, retail sales increased by 15.5% by measuring the exact time of 2021. Among its bordering countries, on retail trade percentage of GDP, Armenia ranks more increased than Turkey, but it is still lower than Georgia.
As of the early 2020s, retail is a major employer and revenue generator. In the United States alone, the retail trade sector employed about 16.2 million people in 2022, supporting millions more in related logistics and services. U.S. retail and food services together contribute over $5.3 trillion annually to the national GDP and support more than one in four jobs in the country. Globally, the retail market is immense: total worldwide retail sales are projected at around USD 31.3 trillion in 2025, with U.S. retail sales alone reaching approximately USD 7.26 trillion in 2024. Because patronage at a retail outlet varies, flexibility in scheduling is desirable. Employee scheduling software is sold, which, using known patterns of customer patronage, more or less reliably predicts the need for staffing for various functions at times of the year, day of the month or week, and time of day. Usually needs vary widely. Conforming staff utilization to staffing needs requires a flexible workforce which is available when needed but does not have to be paid when they are not, part-time workers; as of 2012 70% of retail workers in the United States were part-time. This may result in financial problems for the workers, who while they are required to be available at all times if their work hours are to be maximized, may not have sufficient income to meet their family and other obligations.
Many leading brands actively target tourists who travel specifically to shop or allocate a significant portion of their spending to retail while on vacation. According to the Global Retail Tourism Market Report 2019–2023, the global shopping tourism market was valued at approximately $1.2 trillion in 2018. The report projected steady growth, with a compound annual growth rate of 6.7% between 2019 and 2023. Building on this trend, Kogan Page published the book Leading Travel and Tourism Retail in 2023, offering an in-depth analysis of the travel retail sector and its evolution in the post-COVID era. Retail profit margins tend to be slim and vary widely by sector and geography, but many leading retailers generate substantial profits due to scale, control of supply chains, and operational efficiency. For example, European discount retailer Schwarz Group reported revenue of €175.4 billion in fiscal year 2024, with nearly 595,000 employees worldwide. Meanwhile, publicly listed retailers often achieve profit margins in the low single-digit to mid-single-digit range.
United States
The National Retail Federation and Kantar annually rank the nation's top retailers according to sales. The National Retail Federation also separately ranks the 100 fastest-growing U.S. retailers based on increases in domestic sales.Since 1951, the U.S. Census Bureau has published the Retail Sales report every month. It is a measure of consumer spending, an important indicator of the US GDP. Retail firms provide data on the dollar value of their retail sales and inventories. A sample of 12,000 firms is included in the final survey and 5,000 in the advanced one. The advanced estimated data is based on a subsample from the US CB complete retail and food services sample.
Retail is the largest private-sector employer in the United States, supporting 52 million working Americans. As of the early 2020s, retail is a major employer and revenue generator. In the United States alone, the retail trade sector employed about 16.2 million people in 2022, supporting millions more in related logistics and services. U.S. retail and food services together contribute over $5.3 trillion annually to the national GDP and support more than one in four jobs in the country. Globally, the retail market is immense: total worldwide retail sales are projected at around USD 31.3 trillion in 2025, with U.S. retail sales alone reaching approximately USD 7.26 trillion in 2024.