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Retail and wholesale trade

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Slumping auto sales, followed by the global economic downturn, weakened both retail and wholesale sales in the fourth quarter of 2008.

Consumer spending on goods—particularly durable goods such as motor vehicles and household items—and services grew 3.0% in 2008, a drop from 4.5% in 2007.

Retailers’ sales totalled $426.0 billion in 2008, up 3.4% from 2007, the weakest growth since 1996. Measured by volume, total retail sales rose 2.6%, the lowest growth rate since 2003.

Wholesalers’ sales rose 3.0% in 2008 to $532.5 billion. The growth in volume of wholesale sales slowed from 7.0% in 2007 to 0.4% in 2008.

Slumping auto sales were the key factor dragging down both wholesale and retail trade. On the retail side, new car dealers’ sales dropped 4.5% in 2008, their largest annual decline since 1991. Unit sales of new vehicles fell 1.0% to 1.7 million vehicles, while their retail prices dropped 6.9%, the sharpest price decline in more than half a century.

Higher gas and food prices

About half the retail sales growth in current dollars in 2008 came from a 14.6% sales increase at gasoline stations, mostly reflecting higher gas prices in the first nine months of the year.

Home electronics and appliance stores posted the second highest growth; their sales rose 8.3%. Consumers bought higher volumes of commodities such as televisions, computers and telephones in 2008, as prices for these goods declined. By contrast, higher food prices were the main reason for the 4.2% gain in sales at supermarkets; food prices increased 3.9% in 2008.

Employment in the retail industry totalled 1.9 million in 2008, up 3.2% from 2007. The retail industry accounted for 13.0% of total employment in 2008. There was significant job growth in just two retail trade groups: food and beverage stores and electronics and appliance stores.

The total gross margin—the difference between total operating revenues and the cost of goods—for all store retailers was up 8.1% in 2007. Operating profit—total operating revenues minus total operating expenses and the cost of goods sold— reached $22.8 billion in 2007, up 12.5% from 2006.


The wholesale industry consists of 120,000 firms whose main activity is wholesaling merchandise and providing related logistical, marketing and support services. Wholesalers employed 758,352 people in 2008.

Wholesaling largest sector—machinery and electronic equipment, which accounts for 22% of wholesale sales—posted its fifth consecutive sales gain in 2008, up 7.1% to $117.1 billion.

Wholesalers’ gross margins increased 4.0% in 2007, compared with 13.0% in 2006. This reflected the higher cost of goods sold rather than lower revenues.