| Behind The Store Front
Prepared for the Retail Council of Canada in partnership with Industry Canada By Jacobson Consulting Inc.
The Retail Sector |
The largest sectors are food and automotive, occupying roughly half of the retail landscape in terms of sales. The next chart (Figure 3) shows the basic market shares of the major categories of retail commodities.4
Originally, retail businesses reflected a specialization on particular markets or products. For example some years ago, it was generally accepted that food stores didn't compete with auto parts stores or general merchandise stores. However, now, some grocery stores sell simple auto parts and the latter sell home cleaning supplies. The next figure (Figure 4) shows the retail commodities with the market share of the most significant sub-sector.
Only the automotive and food sectors are able to occupy more than 80% of the market for their major commodity specializations. A table (Table 4) showing both the major and second tier sectors in the statistical appendix shows that general merchandising is the major second sector in many commodity categories. At one point, department stores, a component of General Merchandise Stores, were the expected source for most purchases of housewares. In 2004, the General Merchandise sector, which includes department stores and warehouse club chains, distributed only 42% of housewares. Even the Pharmacy and Personal Care sector is able to capture only 66% of the market for its dominant products.
Although the retail sector has many businesses with many locations, large chain retails dominate many segments. Every month, Statistics Canada surveys a panel of 80 large retailer businesses that account for about 35% of non-automotive retail sales. The next figure (Figure 5) summarizes the market presence of these retailers in the sales of specific commodity groupings.
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| Source: CANSIM, Special Tabulations |
This panel of large retailers has been defined by their relative dominance in market segments. In many of the commodity segments, these retail businesses occupy over 50% of the total market. In other words, most of the other retail businesses are smaller players with probably a more narrow market defined either spatially or in very specific commodity terms or both. This definition of large retailers, essentially large chains, does not include significant banner or franchise groups such as some automotive parts and grocery brands.
4 Not sales by trade group or industrial sector