A US analyst has backed a recommendation that federal agencies should create a “satellite account” to better assess the performance of the retail industry, saying traditional statistical measurements do not accurately reflect the industry’s contribution to the economy amid the increase in online shopping and other changes.
“In recent years, critics have claimed the retail industry is facing an existential crisis, that retail is not growing and that we are entering – if not already in – a retail apocalypse,” Jack Kleinhenz, chief economist at the National Retail Federation (NRF) said. “This is not an accurate picture, and the analysis driving this conclusion is incomplete. But why has this become the conventional wisdom? The lack of government data that accurately reflects the retail industry is at least partially to blame.”
Kleinhenz said government standards that only consider employees who work in stores as “retail” fail to capture the hundreds of thousands of warehouse and distribution centre jobs retailers have created in recent years to support the increase in e-commerce. Similarly, monthly reports on retail sales do not break out e-commerce sales, making it difficult to count a retailer’s online sales of clothing, for example, as part of total clothing sales through all retail channels.
Kleinhenz’s remarks came in the June issue of NRF’s Monthly Economic Review, which focused on a request made by the federal Bureau of Labor Statistics (BLS) last year to the National Academies of Science, Engineering and Medicine. BLS asked that the non-profit’s Committee on National Statistics assess retail employment and productivity measurements and examine the creation of a satellite account that would better capture the retail industry’s transformation.
Last month, the committee recommended the creation of a labor productivity satellite account that would be developed by an interagency team from BLS, the Bureau of Economic Analysis and the Census Bureau, each of which currently track or analyse different retail statistics.
Satellite accounts pull together data in one place in order to provide a better picture of economic sectors that cross traditional statistical lines. They have been used to measure e-commerce and digital services, health care, outdoor recreation, and small business, among other sectors, and the committee said those accounts could be useful examples in developing a retail satellite account.
“NRF has been a strong advocate for better retail data from government agencies and has emphasised the need to capture aspects of the industry’s transformation that are not reflected in current statistics,” Kleinhenz said. “We are hopeful that work on creation of a retail satellite account will begin immediately, and we are prepared to bring industry perspective to assist in the launching of this essential and timely initiative.”