10. Retail Trade Sector
LOWER MAINLAND / SOUTHWEST BC INDUSTRIAL PROFILES 2000 VERSION 2
SECTION 10 RETAIL TRADE SECTOR
This project was funded by Human Resources Development Canada and Kwantlen University College and was undertaken as part of the Community Employment Research Initiative (CERI)
10. Retail Trade Sector
ACKNOWLEDGEMENTS Kwantlen University College would like to acknowledge the contributions of those groups and individuals who gave feedback and support to this project. The original edition of these industrial profiles was prepared by R.A. Malatest and Associates Ltd. on behalf of Human Resources Development Canada (HRDC), Kwantlen University College, and the Community Employment Research Initiative (CERI). In 2002, Kwantlen University College prepared major revisions to the original industrial profiles through additional funding from HRDC. These revisions included changing the formatting and page layout of the original profiles, adding a table of contents and an index to each profile, and creating a series of booklets for each major industry sector. The CERI partners included HRDC, the BC Ministry of Social Development and Economic Security, Kwantlen University College, the City of Surrey, the City of White Rock, Delta Chamber of Commerce, Surrey Chamber of Commerce, and White Rock and South Surrey Chamber of Commerce. While each profile contains statistically reliable information, HRDC, Kwantlen University College and CERI are not responsible for the accuracy, reliability or currency of the information that has been provided by external sources. This profile should be used as a general guide to trends and not necessarily as a reflection of current developments.
i
Lower Mainland Industrial Profiles
PREFACE This document presents a labour market profile of the Retail Trade Sector for the Lower Mainland / Southwest region of BC. This sector profile provides information regarding the local labour market, occupations, businesses, workforce composition, current and future industry trends, and major employers. This booklet is part of a comprehensive set of 19 industrial sector profiles. These industrial profiles are available in both print and online formats (i.e., on the Internet) via sources at Kwantlen University College in Surrey, BC. The Internet address for the Lower Mainland Industrial Profiles Web site is: http://www.kwantlen.ca/industrial-profiles In addition, more information related to local labour market conditions, job searches, and career development in the Surrey, BC area can be found via the HRDC Surrey Office Web site at: http://www.bc.hrdc-drhc.gc.ca/5616/index_e.shtml Readers should use caution when interpreting the statistics contained in this document. These statistics are adapted from various government sources, which at times may use different data compilation methods. Moreover, some of the information presented in this document is based on Statistics Canada 1996 census data and may appear somewhat dated. However, this information is still useful because the latest census data will not be available until late 2002 or 2003. In general, it is likely more meaningful to examine overall general trends within industries, rather than relying heavily on absolute figures.
ii
Issued: July 22, 2002
10. Retail Trade Sector
TABLE OF CONTENTS Acknowledgements .................................................................................. i Preface...................................................................................................... ii List of Abbreviations and Acronyms .................................................... iv 10.
Retail Trade Sector ....................................................................... 2
10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11
Description .......................................................................................... 2 Employment Trends / Outlook ............................................................. 3 Composition and Distribution of the Lower Mainland Retail Trade Sector .................................................................................................. 6 Historical Growth – Census Trends..................................................... 8 Major Occupations in the Retail Trade Sector..................................... 8 Future Trends ...................................................................................... 9 Employment Potential........................................................................ 11 Major Employers in the Retail Trade Sector...................................... 11 Major Employers by HRCC Service Area.......................................... 12 Related Associations and Other Information Sources....................... 14 Other Sources ................................................................................... 15
Occupation and Industry Index ............................................................ 16
iii
Lower Mainland Industrial Profiles
LIST OF ABBREVIATIONS AND ACRONYMS AIMS
Association of Internet Marketing and Sales
BC
British Columbia
CERI
Community Employment Research Initiative
CMA
Census Metropolitan Area
COPS
Canadian Occupational Projection System
HRCC
Human Resource Centres Canada
HRDC
Human Resources Development Canada
SIC
Standard Industrial Classification
SOC
Standard Occupational Classification
US
United States
Dec.
December
e.g.
For Example
i.e.
That Is
Inc.
Incorporated
Ltd.
Limited
iv
Issued: July 22, 2002
10. Retail Trade Sector
10. Retail Trade Sector
1
Lower Mainland Industrial Profiles
10.
RETAIL TRADE SECTOR
10.1
Description
Establishments included in retail trade are those primarily engaged in retail dealing, (i.e., buying commodities for resale to the general public for personal or household consumption) and in providing related services such as installation and repair. In general, retail establishments are classified by kind of business according to the principal lines of commodities sold and services provided. Processing which is incidental or subordinate to the selling activity is sometimes carried on in retail stores, (e.g., tea blending or spice grinding in food stores). Ancillary activities are associated with some kinds of retail establishments (e.g., warehouses or garages operated by department or chain stores). Establishments such as farm machinery dealers and dealers in farm supplies which sell to the farmer as a farm operator are considered to be in wholesale trade, but those which sell to farmers as household consumers, (e.g., food or apparel stores) are included in the retail trade sector. On the other hand, lumber and building materials dealers, fuel dealers and sellers of office furniture, machines and equipment, of industrial machinery, of commercial and professional furniture and of machinery and equipment are classified in wholesale whether they sell mainly to other businesses or to household consumers. In this division, the concept of "primarily engaged in" must be interpreted differently from its treatment in other divisions of the classification. A considerable range in the type and size of retail trade businesses characterizes the Lower Mainland retail trade sector. Relative to the provincial average, the Lower Mainland has just a slightly greater proportion of large retail trade establishments (i.e., stores or businesses that employ more than 20 workers). For example, in 1998, 6.6% of retail trade establishments in the Lower Mainland employed more than 20 workers, which was only slightly different than the provincial average of 6.3 percent. It should be noted, however, that more than
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Issued: July 22, 2002
10. Retail Trade Sector
80% of retail trade establishments in the Lower Mainland have fewer than ten employees.
10.2
Employment Trends / Outlook
The retail trade sector is a large and growing component of the Lower Mainland economy. In 1998, it is estimated that there were 16,353 businesses in the Lower Mainland engaged primarily in activities related to retail trade. Given that many retail trade establishments tend to be relatively small, the sector has a large number of operators. In fact, only the business service sector (22,291 establishments) and the construction sector (21,066 establishments) had more establishments than that of retail trade in 1998. Six groups make up the retail trade sector: •
Food, beverage and drugs
•
Shoe, apparel and fabric and yarn
•
Household furniture, appliances and furnishings
•
Auto vehicles, parts, sales and service
•
General retail merchandising
•
Non-store retail
The retail trade sector cannot be construed to be homogenous as the sector encompasses large department stores as well as small single person establishments. This sector also includes "non-store" operations such as vending machine operators and "direct sellers" – which include many home-based businesses such as cosmetics (Mary Kay) or home product sales (Amway). While most retail trade establishments are small (approximately 83% of retail businesses employ fewer than ten workers), the Lower Mainland has numerous large retail trade businesses that each employ more than 200 workers. In 1998, there were more than 65 retail trade establishments in the Lower Mainland that employed 200 or more workers. Although specific information is not available as to retail sales by firm type for the Lower Mainland, data at the provincial level suggests that a significant proportion of retail trade activity is concentrated in the
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Lower Mainland Industrial Profiles
automotive, food and general retail merchandising sectors. For example, based on provincial data, in 1998, approximately 36% of total retail trade revenues were in automotive-related businesses, 24.8% were in food-related establishments, and 11.4% of total BC expenditures were in general merchandise stores (see Figure 1). Figure 1:
Distribution of Retail Trade Expenditures (1998 Provincial Data)
Source: BC Stats General merchandise 11%
Other 28%
Food-related 25%
Automotive & related 36%
The retail trade sector is also an important employer. Based on Census information, in 1996, the Lower Mainland retail trade sector had 132,535 workers or 11.7% of the region’s total workforce. During the period from 1991 to 1996, this sector grew by 6.9%, which was below that of the all-industry average growth of 11.0% for the comparable period. Many of the reasons for the limited employment growth in the retail trade sector can be partially attributed to the impact of greater competition, particularly in the form of several "big box" retailers that entered the region in the 1990’s. The emergence of these large operations can be discerned through the analysis of the growth in large retail trade establishments in terms of both employment and size. For example, during the period from 1993 to 1998, the number of retail trade establishments in the Lower Mainland employing more than 50 people grew by 26.0%, which was substantially higher than the sector average of 7.8% during the same period. The change in composition of the retail trade sector in the Lower Mainland is also highlighted in construction statistics estimated from BC Assessment Authority data. For example, between 1996 and 1998, 4
Issued: July 22, 2002
10. Retail Trade Sector
the share of total floor area for retail trade establishments that were 50,000 square feet or larger increased from 33.8% of the total floor area in the Lower Mainland to an estimated 38.9% of total floor area in 1998. Furthermore, during the past five years, almost 50.0% of the new floor area for retail trade establishments have been for stores/centres of 50,000 square feet or larger. In addition to the impact of greater competition, the retail trade sector in the Lower Mainland has also been faced with only limited growth in total consumer expenditures. For example (as highlighted in Figure 2), in contrast to the buoyant growth in retail expenditures witnessed in 1994 and 1995 (at which time retail sales in the Vancouver CMA increased by an average annual rate of 11.3%), Lower Mainland retail trade expenditures during the past four years have actually declined, with total expenditures falling by 0.4% per year during the period from 1996 to 1999. Figure 2:
Growth in Total Retail Trade Expenditures in Vancouver CMA (1994 – 1999(e))
14
Yr/Yr% Change
12 10 8 6 4 2 0 -2
1994
1995
1996
1997
1998
1999 (ytd)
Source: BC Stats
There are several factors that could possibly account for the stagnant growth in Lower Mainland retail sales including: •
adverse impact of the economic crisis in the Asia-Pacific region;
•
slow population growth;
•
detrimental impacts of the "leaky condo" issue which has limited new home construction and purchases of home furniture and
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Lower Mainland Industrial Profiles
furnishings; •
•
price reductions for gasoline and oil products which would also result in lower total expenditures on fuel/heating oil; and, significant price competition due to the establishment of large multi-national retail chains in the Lower Mainland.
10.3
Composition and Distribution of the Lower Mainland Retail Trade Sector
In 1998, the retail trade sector in the Lower Mainland was comprised primarily of establishments involved in the sale of food, beverages and drugs (28.7% of the total Lower Mainland labour force was in this subgroup), followed by automotive parts, service and accessories (21.2%), and other retail trade stores (18.9%). As highlighted in Table 1, there were few differences in the distribution of employment by firm type across the three Lower Mainland areas. Table 1:
Distribution of Experienced Workforce by Firm Type By Region – Retail Trade Sector
Firm Type
Greater Vancouver
Fraser Valley
Howe Sound1
Lower Mainland
115,810
13,355
3,370
132,535
87.4%
10.1%
2.5%
100.0%
Food, beverage, drugs
28.7%
26.4%
37.0%
28.7%
Automotive vehicles, parts, sales and service
20.5%
28.7%
17.8%
21.2%
Other retail stores
19.0%
16.8%
22.6%
18.9%
General retail merchandising
9.7%
10.0%
5.3%
9.6%
Shoe, apparel, fabric and yarn
9.5%
6.0%
8.0%
9.1%
Household furniture, appliances and furnishings
7.8%
5.7%
4.4%
7.5%
Non-store retail trade
4.9%
6.5%
4.1%
5.0%
100.0%
100.0%
100.0%
100.0%
Total workforce % distribution Sector Breakdown by Region:
Total
1
6
Includes Squamish – Lillooet and Sunshine Coast Regional Districts Issued: July 22, 2002
10. Retail Trade Sector Source: Statistics Canada, 1996 Census. May not sum to 100.0% due to unclassified workers and rounding
Most retail trade establishments are located within the Greater Vancouver regional district. In 1999, of the 10,860 retail trade establishments in the Lower Mainland, 9,485, or 87.3% were encompassed within the Greater Vancouver Regional District. Of the remaining 1,375 retail trade establishments, 982 were in the Fraser Valley and 393 were in the Coastal area (Squamish-Lillooet and Sunshine Coast Regional Districts). Table 2: Firm Size
Retail Firms by Number of Employees in the Lower Mainland / Southwest BC Region (June 1999) 1-9
10-19
Fewer than 20
20-49
50-99
100 Plus
All Sizes
Retail
8,249
1,527
9,776
735
177
172
10,860
% share
76.0%
14.1%
90.0%
6.8%
1.6%
1.6%
100.0%
Total, all industries
66,476
10,586
77,062
7,331
2,138
1,447
87,978
% share, all industries
75.6%
12.0%
87.6%
8.3%
2.4%
1.6%
100.0%
Source: Statistics Canada
Percentage of retail firms with fewer than 20 employees:
90.0%
Percentage of total regional firms in the retail sector:
12.3%
Percent change of retail firms with employees from Dec. 1995 to 1999:
-2.1%
Average change in number of firms (all industries) from Dec. 1995 to 1999:
7.2%
As highlighted above, retail firms represent 12.3% of all businesses in the Lower Mainland, a significant segment of this regions’ economy. There has also been a reduction in the number of retail firms since 1995, due to such factors as increased competition, reduced consumer demand, and more "big box" retail establishments.
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Lower Mainland Industrial Profiles
10.4
Historical Growth – Census Trends
Table 3 depicts the historical growth in the labour force for Lower Mainland’s retail trade sector based on the 1991 and 1996 Census. This represents lower growth in retail than the all-industry average of 14.0% during the same time period. Table 3:
Labour Force for Lower Mainland - Retail Trade Sector
Period
1991
1996
% Change
# of Employees
123,986
132,535
6.9%
Source: 1991 and 1996 Census
10.5
Major Occupations in the Retail Trade Sector
The top ten occupations in the Lower Mainland retail trade sector are listed in Table 4 and are based on 1998 Labour Force Survey data. Specific employment information was available only for those occupations with 1,500 or more employees. Table 4:
Main Occupations – 1998 Annual Average
SOC Description Code
Number
% of Total Employment
G21
Retail salespersons and sales clerks
36,100
25.4%
A21
Managers in retail trade
29,600
20.9%
G31
Cashiers
15,000
10.6%
G97
Other sales and related occupations
9,800
6.9%
H42
Motor vehicle mechanics
7,400
5.2%
B51
Clerical occupations, general office skills
3,700
2.6%
B01
Auditors, accountants and investment professionals
2,300
1.6%
G01
Sales and service supervisors
2,300
1.6%
H81
Longshore workers and material handlers
2,200
1.6%
G94
Butchers and bakers
2,100
1.5%
141,900
100.0%
Total All Occupations
Source: Statistics Canada, Labour Force Survey, 1998
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Issued: July 22, 2002
10. Retail Trade Sector
10.6
Future Trends
It is clear that the retail trade industry has, and will likely continue, to experience significant changes in composition and structure. As identified previously, the retail trade industry in the Lower Mainland is increasingly characterized by larger sized establishments, many of which are large multi-national operations. In addition to the increased competition from large scale retailers, the Lower Mainland retail trade sector has been further affected by flat or declining total expenditures on retail goods or services. For example, information available from the Canadian Occupational Projection System (COPS) suggests that employment growth in the retail sales sector has been only threequarters that of total employment growth in the Lower Mainland during the past five years. Based on COPS projections, it is expected that employment growth in this sector will continue to be at below average rates, although growth will recover to close to the regional average by the year 2002. It is expected that the retail trade sector will face several challenges in the coming years. In addition to the probable continued growth in large "big box" retail trade establishments, it is likely that the retail trade industry will continue to be affected by local, national and international developments. These trends include:
Growth in Internet or On-line Shopping Numerous organizations have identified the significant growth and growth potential of e-commerce and on-line shopping. Industry Canada published several studies highlighting the potential explosive growth in Internet commerce, for example: •
•
•
total Canadian Internet commerce is expected to grow from $5.5 billion ($US) in 1998 to $70 billion by the year 2003; in 1996, only 23% of Canadians accessed the Internet, by 1999, 40.4% of Canadians were accessing the Internet. BC has the second highest Internet access (44.1% of BC households had accessed the Internet), second only to that of Ontario (45.4%); the proportion of Canadian Internet users that have made a purchase using the Internet has increased from 11% in 1996 to 17% in 1998; and, 9
Lower Mainland Industrial Profiles
•
almost three-quarters (70.1%) of small businesses identified a need for e-commerce in their respective business plans.
Although there is little data for the Lower Mainland detailing the growth and impact of e-commerce, it is likely that the Lower Mainland has had a similar increase in Internet usage, particularly regarding online purchases. Although the e-commerce sector is rapidly changing, Industry Canada has identified several markets that have a high, medium or low potential for Internet commerce: High
Medium
Low
Insurance/Financial Services
Automobiles
Toys & Games
Computer Hardware/Software
Sporting Goods
Tools/Home Improvement Products
Travel Services
Food & Beverages
Home Furnishings
Continued Fragmentation and Market Specialization The Retail Council of Canada notes that Department Store sales, as a proportion of total retail sales, have steadily declined during the past five years. While information for the Lower Mainland was unavailable, at the provincial level, department store retail sales as a proportion of retail sales have declined modestly during the last five years. This decrease suggests that there has been some increase in specialty store sales at the expense of traditional department stores (i.e. the demise of Eaton’s).
Other Trends and Developments Not unlike other industrial sectors, Lower Mainland retail trade establishments will also be subject to several on-going economic developments and changes that will influence growth in the industry. Among these include a recovery in Asia-Pacific economies that should result in a recovery in overseas tourist visits to BC; continued low Canada-US exchange rates which will not only encourage US visitors to purchase goods in BC, but will also continue to discourage crossborder shopping by BC consumers; and the prospect of lower federal and provincial tax rates which could stimulate consumer spending.
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Issued: July 22, 2002
10. Retail Trade Sector
10.7
Employment Potential
Although the retail trade sector will be subject to numerous changes and re-structuring, much of this restructuring will likely lead to changing employment opportunities. As Internet and on-line shopping result in the need for fewer sales staff, there will be a need for information technology workers. Overall, however, the employment potential for occupations in the retail trade sector in the next decade is expected to be the same as, or slightly above, the average growth for all BC industries according to the Canadian Occupational Projection System (COPS). Employment in the retail sector is expected to grow by an average of 1.7% per year between 1998 and 2008. This is slightly higher than the average annual growth expected for all industries of 1.6%.
10.8
Major Employers in the Retail Trade Sector
Twenty of the major employers consisting of 200 or more employees in the retail trade sector are listed as follows. The list of major employers was based on information provided by Dun and Bradstreet and InfoCanada. •
•
•
•
•
•
Overwaitea Food Group, Great Pacific Industries Inc. Future Shop Ltd. Earl's, Earl's Restaurants Ltd. White Spot Limited The Spectra Group of Great Restaurants Inc. Cactus Restaurants Ltd.
•
•
•
•
•
•
7-Eleven Canada Inc. Revy Home & Garden, Revy Home Centres Inc. London Drugs Limited The Keg, Keg Restaurants Ltd. Value Village, Value Village Stores Inc. Servomation Inc.
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Lower Mainland Industrial Profiles
•
•
•
•
10.9
Super Save Gas, Actton Super-Save Gas Stations Ltd. A. & B. Sound Ltd. Red Robin Restaurants of Canada Ltd. T & T Supermarket Inc.
•
•
•
•
Canadian Tire, Pacific Associate Stores Limited Denny's Restaurant, Dencan Restaurants Inc. Mountain Equipment Cooperative Cheers Pub, Host International of Canada Ltd.
Major Employers by HRCC Service Area
Highlighted as follows are the major employers for each HRCC service area. For some establishments, it might not be possible to allocate to one specific service area due to multiple branches across the Lower Mainland and only limited data as to employment for each branch. HRCC Vancouver/Richmond •
•
•
7-Eleven Canada Inc.
•
•
White Spot Limited
•
•
•
•
•
12
Overwaitea Food Group, Great Pacific Industries Inc.
The Spectra Group of Great Restaurants Inc. Servomation Inc. Denny's Restaurant, Dencan Restaurants Inc. T & T Supermarket Inc.
Earl's, Earl's Restaurants Ltd. London Drugs Limited The Keg, Keg Restaurants Ltd.
•
Cactus Restaurants Ltd.
•
A & B Sound Ltd.
•
•
Mountain Equipment Cooperative Cheers Pub, Host International of Canada Ltd.
Issued: July 22, 2002
10. Retail Trade Sector
•
•
•
Denny's Restaurant, Denny's Of Canada Ltd. Superstar Athletic Footwear Ltd. Hy's of Canada Ltd.
•
•
•
Sterling Shoes Inc. Petcetera, Canadian Petcetera Limited Mariposa, Berg, Charles F. Inc.
HRCC Surrey •
Revy Home & Garden, Revy Home Centres Inc.
•
•
Buy-Low Foods Ltd.
•
•
London Optical Ltd.
•
Super Save Gas, Actton Super-Save Gas Stations Ltd. Wendy's Restaurants of Canada, Interwest Restaurants Inc. Burger King, C G F Restaurant Management Ltd.
HRCC Fraser Valley Firms in this region are listed for over 100 employees, since there were no retail firms with 200 or more employees in the Fraser Valley. •
•
Jenny's, Auld Phillips Ltd. McDonald's Restaurant, Charleton Investments Ltd.
•
•
Otter Farm & Home Cooperative Mennonite Central Committee BC
HRCC Tri-Cities/Ridge Meadows •
•
Value Village Stores Inc.
•
Wosk, United Furniture Warehouse Ltd.
MacDonalds (Unit 4095), Rose, Paul Ltd.
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Lower Mainland Industrial Profiles
HRCC North Shore •
•
Earl's Restaurants Ltd.
•
Red Robin Restaurants of Canada Ltd.
A & W Food Services of Canada Inc.
HRCC Burnaby/New Westminster •
Future Shop Ltd.
•
•
White Spot Limited
•
•
•
Superstar Athletic Footwear Ltd.
•
7-Eleven Canada Inc. Petcetera #106, Canadian Petcetera Limited Partnership Sears Health Food & Fitness Shop, Claydan Enterprises Inc.
Dueck on Marine, Dueck Chevrolet Oldsmobile Cadillac Ltd.
10.10
Related Associations and Other Information Sources
Canadian Retail Institute http://www.canadianretail.org Canadian Professional Sales Association http://www.cpsa.com Canadian Federation of Independent Grocers http://www.cfig.ca/ National Retail Federation http://www.nrf.com/Default.asp?bhcp=1 Retail Council of Canada http://www.retailcouncil.org Retail Merchants’ Association of BC http://www.rmabc.org/ or (604) 736-0368
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Issued: July 22, 2002
10. Retail Trade Sector
10.11
Other Sources
Automotive Retailers Association (604) 432-7987 Industry Canada http://strategis.ic.gc.ca Canadian Federation of Independent Business http://www.cfib.ca/ Canadian Retail Hardware Association http://www.crha.com Lower Mainland Grocers Co-op Association (604) 255-0370 Lower Mainland Independent Grocers (604) 251-4418 Retail Systems Alert Group http://www.retailsystems.com Retail Works http://www.retailworks.com Electronic Commerce Information There is a considerable volume of information available with respect to electronic commerce. Example sites include: Association of Internet Marketing and Sales (AIMS) http://www.aimscanada.com/ Electronic Commerce Canada http://www.ecc.ca/ Electronic Commerce Council of Canada http://www.eccc.org/ On-line Retailers Association http://www.shop.org
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Lower Mainland Industrial Profiles
OCCUPATION AND INDUSTRY INDEX auditors, accountants and investment professionals, 8 auto vehicles, parts, sales and service, 3
large scale retailers, 9 longshore workers and material handlers, 8
automotive, 3, 6
lumber and building materials dealers, 2
big box, 4
managers in retail trade, 8
business, 2, 3, 10
motor vehicle mechanics, 8
butchers and bakers, 8
non-store retail, 3, 6
cashiers, 8
on-line shopping, 9, 11
clerical occupations, general office skills, 8
other sales and related occupations, 8
e-commerce, 9, 10
retail salespersons and sales clerks, 8
farm machinery dealers, 2 farmer, 2 food and general retail merchandising, 3 Food, beverage and drugs, 3 fuel dealers, 2
retail trade, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 sales and service supervisors, 8 sellers of office furniture, machines and equipment, 2
general retail merchandising, 3, 6
shoe, apparel and fabric and yarn, 3
household furniture, appliances and furnishings, 3, 6
vending machine operators, 3
installation and repair, 2
16
wholesale trade, 2
Issued: July 22, 2002
SECTION 10 RETAIL TRADE SECTOR
This project was funded by Human Resources Development Canada and Kwantlen University College and was undertaken as part of the Community Employment Research Initiative (CERI)
10. Retail Trade Sector
ACKNOWLEDGEMENTS Kwantlen University College would like to acknowledge the contributions of those groups and individuals who gave feedback and support to this project. The original edition of these industrial profiles was prepared by R.A. Malatest and Associates Ltd. on behalf of Human Resources Development Canada (HRDC), Kwantlen University College, and the Community Employment Research Initiative (CERI). In 2002, Kwantlen University College prepared major revisions to the original industrial profiles through additional funding from HRDC. These revisions included changing the formatting and page layout of the original profiles, adding a table of contents and an index to each profile, and creating a series of booklets for each major industry sector. The CERI partners included HRDC, the BC Ministry of Social Development and Economic Security, Kwantlen University College, the City of Surrey, the City of White Rock, Delta Chamber of Commerce, Surrey Chamber of Commerce, and White Rock and South Surrey Chamber of Commerce. While each profile contains statistically reliable information, HRDC, Kwantlen University College and CERI are not responsible for the accuracy, reliability or currency of the information that has been provided by external sources. This profile should be used as a general guide to trends and not necessarily as a reflection of current developments.
i
Lower Mainland Industrial Profiles
PREFACE This document presents a labour market profile of the Retail Trade Sector for the Lower Mainland / Southwest region of BC. This sector profile provides information regarding the local labour market, occupations, businesses, workforce composition, current and future industry trends, and major employers. This booklet is part of a comprehensive set of 19 industrial sector profiles. These industrial profiles are available in both print and online formats (i.e., on the Internet) via sources at Kwantlen University College in Surrey, BC. The Internet address for the Lower Mainland Industrial Profiles Web site is: http://www.kwantlen.ca/industrial-profiles In addition, more information related to local labour market conditions, job searches, and career development in the Surrey, BC area can be found via the HRDC Surrey Office Web site at: http://www.bc.hrdc-drhc.gc.ca/5616/index_e.shtml Readers should use caution when interpreting the statistics contained in this document. These statistics are adapted from various government sources, which at times may use different data compilation methods. Moreover, some of the information presented in this document is based on Statistics Canada 1996 census data and may appear somewhat dated. However, this information is still useful because the latest census data will not be available until late 2002 or 2003. In general, it is likely more meaningful to examine overall general trends within industries, rather than relying heavily on absolute figures.
ii
Issued: July 22, 2002
10. Retail Trade Sector
TABLE OF CONTENTS Acknowledgements .................................................................................. i Preface...................................................................................................... ii List of Abbreviations and Acronyms .................................................... iv 10.
Retail Trade Sector ....................................................................... 2
10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11
Description .......................................................................................... 2 Employment Trends / Outlook ............................................................. 3 Composition and Distribution of the Lower Mainland Retail Trade Sector .................................................................................................. 6 Historical Growth – Census Trends..................................................... 8 Major Occupations in the Retail Trade Sector..................................... 8 Future Trends ...................................................................................... 9 Employment Potential........................................................................ 11 Major Employers in the Retail Trade Sector...................................... 11 Major Employers by HRCC Service Area.......................................... 12 Related Associations and Other Information Sources....................... 14 Other Sources ................................................................................... 15
Occupation and Industry Index ............................................................ 16
iii
Lower Mainland Industrial Profiles
LIST OF ABBREVIATIONS AND ACRONYMS AIMS
Association of Internet Marketing and Sales
BC
British Columbia
CERI
Community Employment Research Initiative
CMA
Census Metropolitan Area
COPS
Canadian Occupational Projection System
HRCC
Human Resource Centres Canada
HRDC
Human Resources Development Canada
SIC
Standard Industrial Classification
SOC
Standard Occupational Classification
US
United States
Dec.
December
e.g.
For Example
i.e.
That Is
Inc.
Incorporated
Ltd.
Limited
iv
Issued: July 22, 2002
10. Retail Trade Sector
10. Retail Trade Sector
1
Lower Mainland Industrial Profiles
10.
RETAIL TRADE SECTOR
10.1
Description
Establishments included in retail trade are those primarily engaged in retail dealing, (i.e., buying commodities for resale to the general public for personal or household consumption) and in providing related services such as installation and repair. In general, retail establishments are classified by kind of business according to the principal lines of commodities sold and services provided. Processing which is incidental or subordinate to the selling activity is sometimes carried on in retail stores, (e.g., tea blending or spice grinding in food stores). Ancillary activities are associated with some kinds of retail establishments (e.g., warehouses or garages operated by department or chain stores). Establishments such as farm machinery dealers and dealers in farm supplies which sell to the farmer as a farm operator are considered to be in wholesale trade, but those which sell to farmers as household consumers, (e.g., food or apparel stores) are included in the retail trade sector. On the other hand, lumber and building materials dealers, fuel dealers and sellers of office furniture, machines and equipment, of industrial machinery, of commercial and professional furniture and of machinery and equipment are classified in wholesale whether they sell mainly to other businesses or to household consumers. In this division, the concept of "primarily engaged in" must be interpreted differently from its treatment in other divisions of the classification. A considerable range in the type and size of retail trade businesses characterizes the Lower Mainland retail trade sector. Relative to the provincial average, the Lower Mainland has just a slightly greater proportion of large retail trade establishments (i.e., stores or businesses that employ more than 20 workers). For example, in 1998, 6.6% of retail trade establishments in the Lower Mainland employed more than 20 workers, which was only slightly different than the provincial average of 6.3 percent. It should be noted, however, that more than
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Issued: July 22, 2002
10. Retail Trade Sector
80% of retail trade establishments in the Lower Mainland have fewer than ten employees.
10.2
Employment Trends / Outlook
The retail trade sector is a large and growing component of the Lower Mainland economy. In 1998, it is estimated that there were 16,353 businesses in the Lower Mainland engaged primarily in activities related to retail trade. Given that many retail trade establishments tend to be relatively small, the sector has a large number of operators. In fact, only the business service sector (22,291 establishments) and the construction sector (21,066 establishments) had more establishments than that of retail trade in 1998. Six groups make up the retail trade sector: •
Food, beverage and drugs
•
Shoe, apparel and fabric and yarn
•
Household furniture, appliances and furnishings
•
Auto vehicles, parts, sales and service
•
General retail merchandising
•
Non-store retail
The retail trade sector cannot be construed to be homogenous as the sector encompasses large department stores as well as small single person establishments. This sector also includes "non-store" operations such as vending machine operators and "direct sellers" – which include many home-based businesses such as cosmetics (Mary Kay) or home product sales (Amway). While most retail trade establishments are small (approximately 83% of retail businesses employ fewer than ten workers), the Lower Mainland has numerous large retail trade businesses that each employ more than 200 workers. In 1998, there were more than 65 retail trade establishments in the Lower Mainland that employed 200 or more workers. Although specific information is not available as to retail sales by firm type for the Lower Mainland, data at the provincial level suggests that a significant proportion of retail trade activity is concentrated in the
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Lower Mainland Industrial Profiles
automotive, food and general retail merchandising sectors. For example, based on provincial data, in 1998, approximately 36% of total retail trade revenues were in automotive-related businesses, 24.8% were in food-related establishments, and 11.4% of total BC expenditures were in general merchandise stores (see Figure 1). Figure 1:
Distribution of Retail Trade Expenditures (1998 Provincial Data)
Source: BC Stats General merchandise 11%
Other 28%
Food-related 25%
Automotive & related 36%
The retail trade sector is also an important employer. Based on Census information, in 1996, the Lower Mainland retail trade sector had 132,535 workers or 11.7% of the region’s total workforce. During the period from 1991 to 1996, this sector grew by 6.9%, which was below that of the all-industry average growth of 11.0% for the comparable period. Many of the reasons for the limited employment growth in the retail trade sector can be partially attributed to the impact of greater competition, particularly in the form of several "big box" retailers that entered the region in the 1990’s. The emergence of these large operations can be discerned through the analysis of the growth in large retail trade establishments in terms of both employment and size. For example, during the period from 1993 to 1998, the number of retail trade establishments in the Lower Mainland employing more than 50 people grew by 26.0%, which was substantially higher than the sector average of 7.8% during the same period. The change in composition of the retail trade sector in the Lower Mainland is also highlighted in construction statistics estimated from BC Assessment Authority data. For example, between 1996 and 1998, 4
Issued: July 22, 2002
10. Retail Trade Sector
the share of total floor area for retail trade establishments that were 50,000 square feet or larger increased from 33.8% of the total floor area in the Lower Mainland to an estimated 38.9% of total floor area in 1998. Furthermore, during the past five years, almost 50.0% of the new floor area for retail trade establishments have been for stores/centres of 50,000 square feet or larger. In addition to the impact of greater competition, the retail trade sector in the Lower Mainland has also been faced with only limited growth in total consumer expenditures. For example (as highlighted in Figure 2), in contrast to the buoyant growth in retail expenditures witnessed in 1994 and 1995 (at which time retail sales in the Vancouver CMA increased by an average annual rate of 11.3%), Lower Mainland retail trade expenditures during the past four years have actually declined, with total expenditures falling by 0.4% per year during the period from 1996 to 1999. Figure 2:
Growth in Total Retail Trade Expenditures in Vancouver CMA (1994 – 1999(e))
14
Yr/Yr% Change
12 10 8 6 4 2 0 -2
1994
1995
1996
1997
1998
1999 (ytd)
Source: BC Stats
There are several factors that could possibly account for the stagnant growth in Lower Mainland retail sales including: •
adverse impact of the economic crisis in the Asia-Pacific region;
•
slow population growth;
•
detrimental impacts of the "leaky condo" issue which has limited new home construction and purchases of home furniture and
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Lower Mainland Industrial Profiles
furnishings; •
•
price reductions for gasoline and oil products which would also result in lower total expenditures on fuel/heating oil; and, significant price competition due to the establishment of large multi-national retail chains in the Lower Mainland.
10.3
Composition and Distribution of the Lower Mainland Retail Trade Sector
In 1998, the retail trade sector in the Lower Mainland was comprised primarily of establishments involved in the sale of food, beverages and drugs (28.7% of the total Lower Mainland labour force was in this subgroup), followed by automotive parts, service and accessories (21.2%), and other retail trade stores (18.9%). As highlighted in Table 1, there were few differences in the distribution of employment by firm type across the three Lower Mainland areas. Table 1:
Distribution of Experienced Workforce by Firm Type By Region – Retail Trade Sector
Firm Type
Greater Vancouver
Fraser Valley
Howe Sound1
Lower Mainland
115,810
13,355
3,370
132,535
87.4%
10.1%
2.5%
100.0%
Food, beverage, drugs
28.7%
26.4%
37.0%
28.7%
Automotive vehicles, parts, sales and service
20.5%
28.7%
17.8%
21.2%
Other retail stores
19.0%
16.8%
22.6%
18.9%
General retail merchandising
9.7%
10.0%
5.3%
9.6%
Shoe, apparel, fabric and yarn
9.5%
6.0%
8.0%
9.1%
Household furniture, appliances and furnishings
7.8%
5.7%
4.4%
7.5%
Non-store retail trade
4.9%
6.5%
4.1%
5.0%
100.0%
100.0%
100.0%
100.0%
Total workforce % distribution Sector Breakdown by Region:
Total
1
6
Includes Squamish – Lillooet and Sunshine Coast Regional Districts Issued: July 22, 2002
10. Retail Trade Sector Source: Statistics Canada, 1996 Census. May not sum to 100.0% due to unclassified workers and rounding
Most retail trade establishments are located within the Greater Vancouver regional district. In 1999, of the 10,860 retail trade establishments in the Lower Mainland, 9,485, or 87.3% were encompassed within the Greater Vancouver Regional District. Of the remaining 1,375 retail trade establishments, 982 were in the Fraser Valley and 393 were in the Coastal area (Squamish-Lillooet and Sunshine Coast Regional Districts). Table 2: Firm Size
Retail Firms by Number of Employees in the Lower Mainland / Southwest BC Region (June 1999) 1-9
10-19
Fewer than 20
20-49
50-99
100 Plus
All Sizes
Retail
8,249
1,527
9,776
735
177
172
10,860
% share
76.0%
14.1%
90.0%
6.8%
1.6%
1.6%
100.0%
Total, all industries
66,476
10,586
77,062
7,331
2,138
1,447
87,978
% share, all industries
75.6%
12.0%
87.6%
8.3%
2.4%
1.6%
100.0%
Source: Statistics Canada
Percentage of retail firms with fewer than 20 employees:
90.0%
Percentage of total regional firms in the retail sector:
12.3%
Percent change of retail firms with employees from Dec. 1995 to 1999:
-2.1%
Average change in number of firms (all industries) from Dec. 1995 to 1999:
7.2%
As highlighted above, retail firms represent 12.3% of all businesses in the Lower Mainland, a significant segment of this regions’ economy. There has also been a reduction in the number of retail firms since 1995, due to such factors as increased competition, reduced consumer demand, and more "big box" retail establishments.
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Lower Mainland Industrial Profiles
10.4
Historical Growth – Census Trends
Table 3 depicts the historical growth in the labour force for Lower Mainland’s retail trade sector based on the 1991 and 1996 Census. This represents lower growth in retail than the all-industry average of 14.0% during the same time period. Table 3:
Labour Force for Lower Mainland - Retail Trade Sector
Period
1991
1996
% Change
# of Employees
123,986
132,535
6.9%
Source: 1991 and 1996 Census
10.5
Major Occupations in the Retail Trade Sector
The top ten occupations in the Lower Mainland retail trade sector are listed in Table 4 and are based on 1998 Labour Force Survey data. Specific employment information was available only for those occupations with 1,500 or more employees. Table 4:
Main Occupations – 1998 Annual Average
SOC Description Code
Number
% of Total Employment
G21
Retail salespersons and sales clerks
36,100
25.4%
A21
Managers in retail trade
29,600
20.9%
G31
Cashiers
15,000
10.6%
G97
Other sales and related occupations
9,800
6.9%
H42
Motor vehicle mechanics
7,400
5.2%
B51
Clerical occupations, general office skills
3,700
2.6%
B01
Auditors, accountants and investment professionals
2,300
1.6%
G01
Sales and service supervisors
2,300
1.6%
H81
Longshore workers and material handlers
2,200
1.6%
G94
Butchers and bakers
2,100
1.5%
141,900
100.0%
Total All Occupations
Source: Statistics Canada, Labour Force Survey, 1998
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Issued: July 22, 2002
10. Retail Trade Sector
10.6
Future Trends
It is clear that the retail trade industry has, and will likely continue, to experience significant changes in composition and structure. As identified previously, the retail trade industry in the Lower Mainland is increasingly characterized by larger sized establishments, many of which are large multi-national operations. In addition to the increased competition from large scale retailers, the Lower Mainland retail trade sector has been further affected by flat or declining total expenditures on retail goods or services. For example, information available from the Canadian Occupational Projection System (COPS) suggests that employment growth in the retail sales sector has been only threequarters that of total employment growth in the Lower Mainland during the past five years. Based on COPS projections, it is expected that employment growth in this sector will continue to be at below average rates, although growth will recover to close to the regional average by the year 2002. It is expected that the retail trade sector will face several challenges in the coming years. In addition to the probable continued growth in large "big box" retail trade establishments, it is likely that the retail trade industry will continue to be affected by local, national and international developments. These trends include:
Growth in Internet or On-line Shopping Numerous organizations have identified the significant growth and growth potential of e-commerce and on-line shopping. Industry Canada published several studies highlighting the potential explosive growth in Internet commerce, for example: •
•
•
total Canadian Internet commerce is expected to grow from $5.5 billion ($US) in 1998 to $70 billion by the year 2003; in 1996, only 23% of Canadians accessed the Internet, by 1999, 40.4% of Canadians were accessing the Internet. BC has the second highest Internet access (44.1% of BC households had accessed the Internet), second only to that of Ontario (45.4%); the proportion of Canadian Internet users that have made a purchase using the Internet has increased from 11% in 1996 to 17% in 1998; and, 9
Lower Mainland Industrial Profiles
•
almost three-quarters (70.1%) of small businesses identified a need for e-commerce in their respective business plans.
Although there is little data for the Lower Mainland detailing the growth and impact of e-commerce, it is likely that the Lower Mainland has had a similar increase in Internet usage, particularly regarding online purchases. Although the e-commerce sector is rapidly changing, Industry Canada has identified several markets that have a high, medium or low potential for Internet commerce: High
Medium
Low
Insurance/Financial Services
Automobiles
Toys & Games
Computer Hardware/Software
Sporting Goods
Tools/Home Improvement Products
Travel Services
Food & Beverages
Home Furnishings
Continued Fragmentation and Market Specialization The Retail Council of Canada notes that Department Store sales, as a proportion of total retail sales, have steadily declined during the past five years. While information for the Lower Mainland was unavailable, at the provincial level, department store retail sales as a proportion of retail sales have declined modestly during the last five years. This decrease suggests that there has been some increase in specialty store sales at the expense of traditional department stores (i.e. the demise of Eaton’s).
Other Trends and Developments Not unlike other industrial sectors, Lower Mainland retail trade establishments will also be subject to several on-going economic developments and changes that will influence growth in the industry. Among these include a recovery in Asia-Pacific economies that should result in a recovery in overseas tourist visits to BC; continued low Canada-US exchange rates which will not only encourage US visitors to purchase goods in BC, but will also continue to discourage crossborder shopping by BC consumers; and the prospect of lower federal and provincial tax rates which could stimulate consumer spending.
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Issued: July 22, 2002
10. Retail Trade Sector
10.7
Employment Potential
Although the retail trade sector will be subject to numerous changes and re-structuring, much of this restructuring will likely lead to changing employment opportunities. As Internet and on-line shopping result in the need for fewer sales staff, there will be a need for information technology workers. Overall, however, the employment potential for occupations in the retail trade sector in the next decade is expected to be the same as, or slightly above, the average growth for all BC industries according to the Canadian Occupational Projection System (COPS). Employment in the retail sector is expected to grow by an average of 1.7% per year between 1998 and 2008. This is slightly higher than the average annual growth expected for all industries of 1.6%.
10.8
Major Employers in the Retail Trade Sector
Twenty of the major employers consisting of 200 or more employees in the retail trade sector are listed as follows. The list of major employers was based on information provided by Dun and Bradstreet and InfoCanada. •
•
•
•
•
•
Overwaitea Food Group, Great Pacific Industries Inc. Future Shop Ltd. Earl's, Earl's Restaurants Ltd. White Spot Limited The Spectra Group of Great Restaurants Inc. Cactus Restaurants Ltd.
•
•
•
•
•
•
7-Eleven Canada Inc. Revy Home & Garden, Revy Home Centres Inc. London Drugs Limited The Keg, Keg Restaurants Ltd. Value Village, Value Village Stores Inc. Servomation Inc.
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Lower Mainland Industrial Profiles
•
•
•
•
10.9
Super Save Gas, Actton Super-Save Gas Stations Ltd. A. & B. Sound Ltd. Red Robin Restaurants of Canada Ltd. T & T Supermarket Inc.
•
•
•
•
Canadian Tire, Pacific Associate Stores Limited Denny's Restaurant, Dencan Restaurants Inc. Mountain Equipment Cooperative Cheers Pub, Host International of Canada Ltd.
Major Employers by HRCC Service Area
Highlighted as follows are the major employers for each HRCC service area. For some establishments, it might not be possible to allocate to one specific service area due to multiple branches across the Lower Mainland and only limited data as to employment for each branch. HRCC Vancouver/Richmond •
•
•
7-Eleven Canada Inc.
•
•
White Spot Limited
•
•
•
•
•
12
Overwaitea Food Group, Great Pacific Industries Inc.
The Spectra Group of Great Restaurants Inc. Servomation Inc. Denny's Restaurant, Dencan Restaurants Inc. T & T Supermarket Inc.
Earl's, Earl's Restaurants Ltd. London Drugs Limited The Keg, Keg Restaurants Ltd.
•
Cactus Restaurants Ltd.
•
A & B Sound Ltd.
•
•
Mountain Equipment Cooperative Cheers Pub, Host International of Canada Ltd.
Issued: July 22, 2002
10. Retail Trade Sector
•
•
•
Denny's Restaurant, Denny's Of Canada Ltd. Superstar Athletic Footwear Ltd. Hy's of Canada Ltd.
•
•
•
Sterling Shoes Inc. Petcetera, Canadian Petcetera Limited Mariposa, Berg, Charles F. Inc.
HRCC Surrey •
Revy Home & Garden, Revy Home Centres Inc.
•
•
Buy-Low Foods Ltd.
•
•
London Optical Ltd.
•
Super Save Gas, Actton Super-Save Gas Stations Ltd. Wendy's Restaurants of Canada, Interwest Restaurants Inc. Burger King, C G F Restaurant Management Ltd.
HRCC Fraser Valley Firms in this region are listed for over 100 employees, since there were no retail firms with 200 or more employees in the Fraser Valley. •
•
Jenny's, Auld Phillips Ltd. McDonald's Restaurant, Charleton Investments Ltd.
•
•
Otter Farm & Home Cooperative Mennonite Central Committee BC
HRCC Tri-Cities/Ridge Meadows •
•
Value Village Stores Inc.
•
Wosk, United Furniture Warehouse Ltd.
MacDonalds (Unit 4095), Rose, Paul Ltd.
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Lower Mainland Industrial Profiles
HRCC North Shore •
•
Earl's Restaurants Ltd.
•
Red Robin Restaurants of Canada Ltd.
A & W Food Services of Canada Inc.
HRCC Burnaby/New Westminster •
Future Shop Ltd.
•
•
White Spot Limited
•
•
•
Superstar Athletic Footwear Ltd.
•
7-Eleven Canada Inc. Petcetera #106, Canadian Petcetera Limited Partnership Sears Health Food & Fitness Shop, Claydan Enterprises Inc.
Dueck on Marine, Dueck Chevrolet Oldsmobile Cadillac Ltd.
10.10
Related Associations and Other Information Sources
Canadian Retail Institute http://www.canadianretail.org Canadian Professional Sales Association http://www.cpsa.com Canadian Federation of Independent Grocers http://www.cfig.ca/ National Retail Federation http://www.nrf.com/Default.asp?bhcp=1 Retail Council of Canada http://www.retailcouncil.org Retail Merchants’ Association of BC http://www.rmabc.org/ or (604) 736-0368
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Issued: July 22, 2002
10. Retail Trade Sector
10.11
Other Sources
Automotive Retailers Association (604) 432-7987 Industry Canada http://strategis.ic.gc.ca Canadian Federation of Independent Business http://www.cfib.ca/ Canadian Retail Hardware Association http://www.crha.com Lower Mainland Grocers Co-op Association (604) 255-0370 Lower Mainland Independent Grocers (604) 251-4418 Retail Systems Alert Group http://www.retailsystems.com Retail Works http://www.retailworks.com Electronic Commerce Information There is a considerable volume of information available with respect to electronic commerce. Example sites include: Association of Internet Marketing and Sales (AIMS) http://www.aimscanada.com/ Electronic Commerce Canada http://www.ecc.ca/ Electronic Commerce Council of Canada http://www.eccc.org/ On-line Retailers Association http://www.shop.org
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Lower Mainland Industrial Profiles
OCCUPATION AND INDUSTRY INDEX auditors, accountants and investment professionals, 8 auto vehicles, parts, sales and service, 3
large scale retailers, 9 longshore workers and material handlers, 8
automotive, 3, 6
lumber and building materials dealers, 2
big box, 4
managers in retail trade, 8
business, 2, 3, 10
motor vehicle mechanics, 8
butchers and bakers, 8
non-store retail, 3, 6
cashiers, 8
on-line shopping, 9, 11
clerical occupations, general office skills, 8
other sales and related occupations, 8
e-commerce, 9, 10
retail salespersons and sales clerks, 8
farm machinery dealers, 2 farmer, 2 food and general retail merchandising, 3 Food, beverage and drugs, 3 fuel dealers, 2
retail trade, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 sales and service supervisors, 8 sellers of office furniture, machines and equipment, 2
general retail merchandising, 3, 6
shoe, apparel and fabric and yarn, 3
household furniture, appliances and furnishings, 3, 6
vending machine operators, 3
installation and repair, 2
16
wholesale trade, 2
Issued: July 22, 2002
