by Chloe Campbell
Every other month Minnesota Employment Review will spotlight several North American Industry Classification System (NAICS) sectors for the reader. More detailed information on each NAICS sector can be found at apps.deed.state.mn.us/lmi/qcew/ResultsDisp.aspx . This month the spotlight is on:
44-45 Retail Trade
The Retail Trade sector includes establishments engaged in retailing merchandise, generally without transformation, and providing services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise to the final user. Retailers are, therefore, organized to sell merchandise in small quantities to the general public. This sector covers two main types of retailers – store and non-store retailers. Store retailers operate fixed point-of-sale locations, located and designed to attract walk in customers. Non-store retailers serve the general public as well but lack a fixed point-of-sale location. Non-store retailers reach customers through in-home demonstrations, infomercials, street sales, and catalogs. While farmers are final users of farm machinery, they are businessmen and thus farm machinery is coded to wholesale rather than retail.
A recent article in The Atlantic magazine noted that the decline in brick and mortar shops is from the growth of online shopping (www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/). Online shopping is not new but has become more convenient with online retailers offering easy return policies and free shipping and with the advent of apps and mobile wallet that store credit card information.
Minnesota is not immune to the challenges facing many retail establishments. Between 2015 and 2016 department stores, discount department stores and clothing stores all experienced declines in at least one of the following categories: number of establishments, employment, or annual wages (see Table 1).
||2015 Average Weekly Wage
||2016 Average Weekly Wage
||Department Stores (except Discount Department Stores)
||Discount Department Stores
||Men's Clothing Stores
||Women's Clothing Stores
||Children's and Infants' Clothing Stores
||Family Clothing Stores
||Clothing Accessories Stores
Minnesota experienced positive establishment and employment growth in Pharmacies and Drugstores (NAICS 446110) and Supermarkets and Other Grocery (445110). There were 2,554 more employees and eight more establishments in NAICS code 445110 and 674 more employees and 27 more establishments in NAICS code 446110 in 2016 than in 2015 (apps.deed.state.mn.us/lmi/qcew/ResultsDisp.aspx).
Overall, Retail Trade in Minnesota is facing challenges. While employment in the sector increased by 5,776 between 2015 and 2016, the number of retail establishments decreased to 18,108 in 2016 from 18,298 in 2015. Average weekly wages in this sector increased by $11 in the same time period.