• Retail establishments are primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise
• They are organized to sell merchandise in small quantities to the general public
• Store retailers operate fixed point-of-sale locations, located and designed to attract a high volume of walk-in customers using
  
  • extensive displays of merchandise, and
  • mass-media advertising to attract customers.
• Non-store retailers focus on catalogue and in-home sales as well as sales of speciality products such as home heating fuels.

One way of thinking about the role of retail is to consider the economic importance of consumer expenditure. Essentially, the retail sector facilitates the purchase by consumers of 27% of Domestic Final Demand, the goods and services sold to final purchasers. Technically, retail does not produce the goods. Rather, the actual production of the retail sector is the service of retailing the goods to consumers. The value of this service is represented by the margin between the cost of the goods sold and the final price paid by the purchaser. In technical terms, this difference is referred to as the Gross Margin.

The relative importance of this margin can be seen by the amount of output or domestic product produced by the retail sector. In real (adjusted for inflation or price change) terms, Retail produced $60 billion ($97) out of a total of slightly more than $1 trillion ($97) or 5.7% of Gross Domestic Product (GDP) in 2004. Labour is proportionately a much more important input to the retail sector than most other large sectors such as manufacturing. Retail provided jobs for roughly 12 per cent of the persons employed in 2004.

The bulk of this activity occurred in stores but some occurred in other venues. In 2003, store-based retailers had $356.2 billion of operating revenue compared to $12.1 billion for non-store formats. The latter includes $5.2 billion for fuel dealers.³

Retail generally has proportionately somewhat more small businesses than other sectors. In June 2004, Statistics Canada was able to identify slightly more than 227,000 retail establishments or 9.6% of the total for the economy as a whole.

Figure 1 Retail Establishment Counts

The establishment is the smallest statistical unit for which identifiable financial records, particularly payroll, are available. The establishments are classified according to the size of their payroll if possible. The preceding chart (Figure 1) shows their allocation by employment size category.

Retail focuses on stores. For store-based retailing, in 2003, Statistics Canada identifies 199,952 store locations in 2003 of which 41,498 were chain stores (4 or more locations under one owner).

The existence of retail locations usually defines a town or neighbourhood. There are probably some economies of agglomeration so that denser urban areas require fewer stores than more sparsely settled regions. This is apparent in the next chart (Figure 2) which shows the relationship between stores and population at the provincial level.

Figure 2 Store Counts Per 1000 Persons

Broadly speaking, there were roughly 6 store locations for every 1000 persons in Canada. The relatively low level of stores in the northern territories suggests a greater dependence on non-store catalogue formats as well as a simple lack of towns or other settlements. The chart with data for 1999 and 2003 indicates a modest increase in a number of regions.