Local retail sales data is
an important part of assessing the viability of a retail business. It lets
you understand the value of your local market and the potential market share
held by your competitors.
There are a number of sources for this type
of information. Each has its own advantages and disadvantages.
The first is FP Markets – Canadian Demographics.
This publication is the starting point of all Canadian consumer
market research. If you do not own a copy of this publication or at
least know where your closest local copy can be found, you need to find this
out right away! You can order the latest issue (2005) online at
http://www.fpinfomart.ca/prod/prod_list.php
The cost is $199. If you are not planning on referring to it a number of
times over the year, you are best to find a public source such as a major
library or business resource centre to access it.
FP markets includes detailed demographic and
psychographic profiles of communities across Canada. More importantly
to the subject at hand, it provides local sales by store type:
Motor & Recreational Vehicles
Gas Service Stations,
Auto Parts Accessories & Services
Household Furniture & Appliances,
Household Furnishings.
Supermarkets & Grocery Stores,
Other Food,
Drugs & Patent Medicine.
Women's Clothing,
Men's Clothing,
Other Clothing, Shoes,
Other Durable Goods
Other Semi-Durable Goods
General Merchandise,
While the store types covered are limited,
the estimates are very current and the geographical detail covers all
municipal regions (Census Divisions) and metropolitan areas across Canada.
After FP Markets there is Statistics
Canada. Stats Can has a number of sources
for national and provincial retail sales information. At a local level
though their data is extremely limited. Oftentimes this is due to concerns
of data quality or confidentiality.
Their most current local data is from the
Quarterly Retail Trade survey. It covers
a slightly different selection of store types as compared to the FP Markets
data described above. The data is based on the North American Industry
Classification System (NAICS). It is current (3rd Q 2004)
however at a local level it only covers three metropolitan areas in Canada
(Toronto, Montreal and Vancouver) And even then some data is suppressed
(e.g. computer and software sales for Vancouver)
The following is the store types covered.
New car dealers
Used and recreational motor vehicle and
parts dealers
Gasoline stations
Furniture stores
Home furnishings stores
Computer and software stores
Home electronics and appliance stores
Home centres and hardware stores
Specialized building materials and garden
stores
Supermarkets
Convenience and specialty food stores
Beer, wine and liquor stores
Pharmacies and personal care stores
Clothing stores
Shoe, clothing accessories and jewellery
stores
Department stores
Other general merchandise stores
Sporting goods, hobby, music and book stores
Miscellaneous store retailers
To access this data use the CANSIM
database (http://cansim2.statcan.ca/) and enter table number 080-0015 in
the search box.
Statistics Canada also has the
Small Area Retail Trade Estimates database
which provides retail sales data by 5 digit NAICS (e.g. 45391 Pet and Pet
Supplies Stores) and by FSA (Forward Sortation Area: first three characters
of a postal code). While the concept of this database is fantastic the
resulting figures are very disappointing. The most current data only covers
2001 (updates to 2002 are expected for March of 2005) and for many of the
FSAs detailed 5-digit NAICS data is suppressed to protect confidentiality.
Generally this means that there are not enough stores of a particular type
in the FSA
to allow the data to be released.
When data by a detailed industry is suppressed
it is “rolled-up” to the next available NAICS level. For example if there
are not enough pet stores (NAICS
45391) in the FSA you are interested
in, Stats Can will only
provide you with data at the NAICS level where there are enough stores to
protect confidentiality. Sometimes this will be at a 4-digit level
(e.g. 4539 Other Miscellaneous Store
Retailers which include pet stores, art dealers,
mobile home retailers and beer & wine-making supply stores.) In
many cases however Stats Can only releases data at a 3 or even 2-digit level.
As an example of what this means, the industry heading 453 Miscellaneous Store
Retailers includes florists, office supplies, stationery and gift stores,
used merchandise stores as well as all the other Miscellaneous stores
included in 4539. The 2-digit grouping 45 adds sporting
goods, hobby, book and music stores as well as general merchandise stores in
the mix. As you can see this severely dilutes the information for pet stores.
It is possible given the extremely detailed
geographies available (FSAs) that even this broad and dated data could be
potentially helpful. Keep in mind that the FP Market and Quarterly Retail
Trade data described above is basically at a 3 or 4 digit industry level.
However when you add in the minimum $125 charge from Statistics Canada this option for local retail sales is the least
appealing.
Up to this point we have discussed sources
of local retail sales based on store sales. There is another way of assess
local retail sales potential. In this case instead of examining store
revenues we examine household expenditures. One thing to keep in mind is
that store sales indicate the sales volume generated at a local level
regardless of where the store’s customers come from (e.g. out of town
tourists). Estimates based on household expenditures indicate how much a
certain geographical area spends on specific goods and services. These
purchases however could be made at any store (either local or outside the
customer's home city.)
The primary source for household expenditure
data is the Statistics Canada Survey of Household Spending. Based on a
sample size of 24,000 households, data is provided on more than 300
different products and services. The data covers average annual expenditure
per household and the percentage of households reporting a purchase. The
data is further segmented by major metropolitan area, income group and
household type (e.g. couple with children, single).
The latest figures for 2003 were just
release by Statistics Canada in December 2004 and are now included in our
Canada Market Estimates. The cost for one summary profile is only
$16.00.
New for 2005 we now have Provincial Market
Estimates which provide expenditure data and market estimates for individual
provinces. They also cover major
metropolitan areas. (For more information see:
http://www.gdsourcing.ca/SBDC.htm#CME )
Statistics Canada also produces a
publication based on the Survey of Household Spending called: Spending Patterns in Canada. The
publication is release 6 months after the initial data release. Therefore the most current
issue (released in June 2004) only covers 2002 data. This publication is
available in most major libraries. You can also purchase the publication
from Statistics Canada for $45.00 or from GDSourcing at a 20% discount
($36.00) For more information and ordering details see:
http://www.gdsourcing.ca/CENSUS2/StatsCanPubs.htm
To use household spending data to estimate
local retail sales, you need to perform a simple calculation: multiply the
average expenditure per household by the number of households in your
market. Ideally you would want to use the most appropriate geographical,
income or household type data for your particular market.
For example if you are located in Nova
Scotia and your local market is particularly affluent, you will want to use
figures pertaining to the wealthiest households in Nova Scotia. If there
are 5000 households in your local market and you find that the average
expenditure of households in Nova Scotia with income over $80,000 on New
Computer Hardware is $1016 then your estimated market potential is $5,080,000
($1016 x 5000 households). As mentioned above this does not mean that $5
million was spent within your local market but rather that households in your
market collectively spent $5 million on new computer hardware at local and other stores.
This data is more helpful for assessing local market potential as opposed
to current local retail sales performance. It provides
insight into the possibility of your local neighborhood supporting another
business in your industry.
Finding the
number of households in your local market
is quite easy. There are two free online options:
1. 2001 Census - GeoSearch
http://geodepot.statcan.ca/Diss/GeoSearch/index.cfm?lang=E
2. Canada Post Householder Counter
http://www.canadapost.ca/cpc2/addrm/hh/default-e.asp
If you want to know the nature of
households in your market you can use FP Markets – Canadian Demographics
(described above) for city and town data. The 2001 Census results
provide information by Census
Tract (urban neighborhood of 3000 people). Hard copy versions of local Census data are now available in most
major libraries. You can also contact us for more information on electronic
Census resources (contact@gdsourcing.com)
One final option for local retail sales
estimates is to use our Canadian Business Directory. In addition to
company name and address, the directory also includes estimated sales volume
for each business listed. You can use this information to arrive at a
total sale figure from all related
businesses in your market to arrive at an estimate of local performance.
The advantage of this source is that you can immediately determine market
share. Simply divide the sales estimate of an individual business by the
industry total for your market.
Businesses are organized in the Canadian
Business Directory by
American SIC. For information on this classification system and for
definitions see:
http://www.osha.gov/pls/imis/sic_manual.html
The tricky part of this resource is making sure you
identify all the players in your market. Some of your competitors may generate the majority of their
revenue from another line of business and compete with you in a secondary
capacity. While the database identifies secondary lines of business, it is
up to you to identify which are appropriate to your particular venture.
You can search, compile and purchase a list
of your local competitors online (http://www.gdsourcing.ca/CdnDir.htm).
If you prefer you can let us do the work for you. Provide us with the
details and we will quote you a cost to compile an appropriate list.
(contact@gdsourcing.com)
All of the sources of
local retail sales listed above have their limitations. None will provide you
with “gift wrapped” data (i.e. exactly what you need). Also, since all have
been collected or compiled using different surveys or methodologies they can
not be directly compared or combined. Nevertheless they can provide
you with invaluable insight into your local market performance and
potential. Examine all the sources carefully and
use only those that best meet your particular needs.
