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South Dakota e-Labor Bulletin

February 2017

Browsing through South Dakota’s Retail Trade Sector

Abundant opportunities to shop exist throughout South Dakota. A person could be buying groceries, putting gas in a car, looking at the new clothing styles at a boutique or department store, or making a purchase online. These are just a few examples of the different types of retail trade South Dakota offers.

The Retail Trade sector is part of the Trade (including wholesale and retail trade), Transportation and Utilities supersector. Over the last 15 years, consumers consistently have been able to shop at more than 4,000 establishments in South Dakota. In 2015, Retail Trade was the largest industry sector in terms of establishments in South Dakota. This sector had more than 52,000 workers in 2015, which is the second largest industry sector in terms of workers, trailing the Health Care and Social Assistance sector.

The Retail Trade sector has been stable over the last 15 years as shown in the table below. The establishment numbers and employment levels have fluctuated over time; however, the average wages have steadily increased.

The retailing process is the last step in the distribution of merchandise. Wholesaler establishments take the products from the manufacturers and distribute them to retail stores for sale to the public. The Retail Trade sector comprises establishments engaged in retailing merchandise and is made up of two types of retailers: store and nonstore retailers.

• Store Retailers operate fixed point-of-sale locations, located and designed to attract a high volume of walk-in customers. Merchandise is typically sold to the general public, but retailers also service business and institutional clients. This includes establishments such as office supply stores, computer and software stores, building materials dealers, and electrical supply stores. In addition to retailing merchandise, some types of store retailers are also engaged in the provision of after-sales services, such as repair and installation. For example, new automobile dealers, electronics and appliance stores often provide repair services. As a general rule, establishments engaged in retailing merchandise and providing after sales services are classified in this sector.
• Nonstore Retailers are also organized to serve the general public; however, their methods differ from store retailers. The establishments of this subsector reach customers and market merchandise with methods such as infomercials, direct-response advertising, paper and electronic catalogs, door-to-door solicitations, in-home demonstrations, sales from portable stalls (street vendors, except food), and vending machines.

Retail trade is made up of 12 subsectors. Eleven of the subsectors in Retail Trade are store retailers, and one is a nonstore retailer. The table above shows a breakdown of the establishment numbers and worker levels in Retail Trade for 2015. A little more than 15 percent of the establishments (621 establishments) made up the Gasoline Stations subsector in 2015. Included in this group are gasoline service stations, truck stops and gasoline stations with convenience stores. Establishments in this subsector may also provide automotive repair services.

General Merchandise Stores make up more than 18 percent of the employees in Retail Trade. Department stores, warehouse clubs and supercenters, and other general merchandise stores such as dollar stores and auto supply stores are included in this subsector. Establishments in this subsector are unique in that they have the equipment and staff capable of retailing a large variety of goods from a single location. General merchandise stores also account for a high number of part-time employees.

Food and Beverage Stores trail the general merchandise stores with a little more than 17 percent of workers, accounting for more than 9,200 people. Industries in this subsector include retail food and beverage merchandise from a fixed point-of-sale location. Grocery stores, specialty food stores including meat markets, and beer, wine and liquor stores are included in this group.

Motor Vehicle and Parts Dealers and Building Material and Garden Supply Stores also make up a large portion of the workforce in South Dakota. Motor Vehicle and Parts Dealers account for more than 550 establishments and have the third largest percentage of workers in Retail Trade. This includes automobile dealers, recreational vehicle dealers, motorcycle and boat dealers, and auto parts, accessories and tire stores. Building Material and Garden Supply Stores account for a little more than 10 percent of the workers in retail trade with more than 5,500 workers. Home centers, hardware stores, outdoor power equipment stores, nurseries, and garden and farm supply stores are included in this subsector. Workers in this subsector are knowledgeable in the use of the specific products being sold in the construction, repair and maintenance of homes and yards.

The remaining subsectors employ approximately 14,100 workers in the retail industry, which is a little over 26 percent. Furniture stores, pharmacies, clothing stores, florists, used merchandise stores, art dealers and nonstore retailers are some of the examples included in this grouping.

Nonstore Retailers have had the largest percentage of growth in establishments over the last 15 years in the Retail Trade sector. They have gone from 144 establishments in 2001 to 201 establishments in 2015, which equals a 39 percent increase. Advances in technology have opened up many methods for making purchases. Now consumers are able to make some purchases without leaving the comfort of their home using computers, tablets or cell phones. Electronic shopping, mail-order houses, vending machine operators, fuel dealers and other direct selling establishments are included in the Nonstore Retail subsector.

Opportunities will continue to emerge in the Retail Trade sector as technology advances. How we shop may change over time; however, everyone will continue to shop as we simply need things. Retail Trade is projected to continue growing according to the 2014-2024 industry projections (long-term) in South Dakota. Everyone will continue to shop out of necessity. Some may shop to pass the time. Some like to shop as hobby. Shopping is here to stay.