PPI introduces industries to complete coverage of the retail trade sector

PPI Detailed Report, Jan, 2004

With the release of indexes for January 2004, the Producer ice Index (PPI) introduced data for 19 additional retail trade industries classified using the North American Industry Classification System (NAICS). Publication of these industries completes the expansion of PPI coverage of the retail trade sector. The introduction of these industry indexes reflects the ongoing BLS effort to expand PPI coverage of the U.S. economy into areas other than the mining and manufacturing sectors. These indexes, published according to NAICS industry definitions, appear in table 5 of the monthly PPI Detailed Report and are available online via the BLS homepage (http://www.bls.gov). These NAICS industries include:

442110--Furniture stores
442210--Floor covering stores
443111--Household appliance stores
443112--Radio, television, and other electronics stores
443120--Computer and software stores
444110--Home centers
444120--Paint and wallpaper stores
444130--Hardware stores
444190--Other building material dealers
444220--Nursery, garden center, and farm supply stores
448110--Men's clothing stores
448120--Women's clothing stores
448140--Family clothing stores
448210--Shoe stores
451220--Prerecorded tape, compact disc, and record stores
452111--Department stores (except discount department
        stores)
452112--Discount department stores
452900--Other general merchandise stores
453930--Manufactured (mobile) home dealers

The NAICS identifies establishments in the retail trade sector as primarily engaged in purchasing goods for resale to the general public for personal or household consumption, but some establishments also serve business and institutional clients. Given that little, if any, transformation of these goods takes place, the PPI views a retailer as a supplier of services (rather than goods). This implies that the output of a retail trade establishment can be estimated by the difference between the retail selling price of a good and the acquisition price for that same item. (Any discounts from the vendor to the retailer and any discounts offered by the retailer to the consumer are captured.) The resulting gross-margin prices reflect the value added by the establishment for services, such as marketing, storing, displaying goods in convenient locations, and making the goods easily available for customers to purchase.

Margin weights provided to the PPI by the U.S. Census Bureau are used to weight retail trade at the industry level. Item weights in the PPI retail trade cells reflect margin weights for margin-priced items (items bought and resold) and retail weights for retail-priced items (items typically made by the retailer), in those rare cases when retail-priced items are measured.

The PPI usually classifies establishments based on their major revenue-generating activity. However, the PPI groups retail trade establishments according to their usual trade designation. For example, many drug stores also carry other products---cosmetics, toiletries, tobacco, and novelty merchandise. A store that sells prescription drugs is treated as a drug store if the owner states that its usual trade designation is "drug store," even if the establishment generates a plurality of its revenue through sales of novelty merchandise.

NAICS 442, Furniture and Home Furnishings Stores

Furniture and Home Furnishings Stores retail new furniture and home furnishings from fixed point-of-sale locations. Establishments in this subsector usually operate from showrooms and have substantial areas for the presentation of their products. The two largest industries from this subsector were introduced into the PPI in January 2004, with historical data back to June 2003.

NAICS 442110, Furniture Stores, includes establishments that retail new furniture, such as household furniture, outdoor furniture, office furniture (except that sold in combination with office supplies and equipment), or furniture sold in combination with major appliances, home electronics, home furnishings, or floor coverings.

NAICS 442210, Floor Covering Stores, comprises establishments that retail new floor coverings, such as rugs and carpets, vinyl floor coverings, and floor tile (except ceramic or wood only). This industry also includes establishments that retail new floor coverings in combination with installation and repair services. For further information relating to NAICS 442, contact Jay Snyder at snyder.jay@bls.gov or (202) 691-7698.

NAICS 443, Electronics and Appliance Stores

Electronics and Appliance Stores retail new electronics and appliances from point-of-sale locations. Establishments in this subsector often maintain floor displays that require special electrical capacity to accommodate the proper demonstration of their products. The classification of an establishment within this subsector is made principally by product type and knowledge required to operate each type of store. As a service primary to NAICS 443, businesses often provide installation, repair, and support work relating to the products that they retail. The PPI introduced three industries from this subsector in January 2004, with historical data back to June 2003. NAICS 443111, Household Appliance Stores, are establishments that retail an array of new household appliances, such as refrigerators, dishwashers, ovens, irons, coffeemakers, room air conditioners, microwave ovens, sewing machines, and vacuum cleaners. For further information in connection with NAICS 443111, contact Jay Snyder at snyderjay@bls.gov or (202) 691-7698.