Fragmentation Of The Retail Industry

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Recommended: Importance of the retail industry to the world economy

The retail sector is very crucial to the health of any countries economy. In the United States the retail sector is huge and is the biggest contributor to the country’s economy. As per 2013 census bureau report, the sales revenue from retail business in US is accounted for more than 4 trillion. The retail industry is a sector of the economy that is contained of individuals and businesses engaged in the selling of finished products to end user buyers. They purchase commodities from manufacturers for resale it to consumers for profit. The domestic retail industry is well established and extremely competitive. The retail industry has several categories which includes discount store, warehouse store, Boutique, mall, Specialty store, department store etc. Fragmentation of the retail industry depends on the type of business, for example pharmacies are greatly concentrated, while convenience stores are greatly fragmented (Jeffrey & Mark, 2007). In US, retail industry is the top contributor to countries gross domestic product and it is estimated that two thirds of the countries gross domestic product comes from retail industry (Source: U.S. Census Bureau). Hence, any new business openings and closings is the one of the indicator of the performance of the country’s economy is. The retail business has been around for centuries in the United States. It started with a small general shop where people of the community would shop for items of requirement (John, 1990). During that period, due to the limited population and connectivity issue specialty stores were not needed. But as the societies progressed with population increase, new advanced technologies gave rise to interconnectivity, as well easy communication between distanced cities and soc... ... middle of paper ... ... During recession lots of people lost their job and job creation was at minimum. This made retail job market very competitive at all levels. In 2013, retail represented 27% of nominal US GDP, This is an increase of 0.2% up from 26.8% in 2012 (U.S. Department of Commerce). Real GDP raised by 1.9 percent in 2013, compared with an increase of 2.8 percent in 2012. Please refer Appendix C for 2012 Real Gross domestic product from retail business. Retail industries help to improve standard of living. It helps families to make ends meet by providing a wide range of budget friendly goods, like electronics, clothes, shoes etc. It will also provide the continuous supply of items such as fresh fruits and vegetables. Providing people with all the necessary goods under one roof, from grocery, medicine, banks, salons etc are one of the special characteristics of retail industry.

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