Producer Price Indexes

PPI Introduces Industries to Complete Coverage of the Retail Trade Sector

With the release of indexes for January 2004, the Producer Price Index (PPI) introduced data for additional retail trade industries classified using the North American Industry Classification System (NAICS). Publication of these industries completes the expansion of PPI coverage of the retail trade sector. The introduction of these industry indexes reflects the ongoing BLS effort to expand PPI coverage of the U.S. economy into areas other than the mining and manufacturing sectors. These indexes, published according to NAICS industry definitions, appear in table 5 of the monthly PPI Detailed Report and are available online through the BLS website. These NAICS industries include:

The NAICS identifies establishments in the retail trade sector as primarily engaged in purchasing goods for resale to the general public for personal or household consumption, but some establishments also serve business and institutional clients. Given that little, if any, transformation of these goods takes place, the PPI views a retailer as a supplier of services (rather than goods). This implies that the output of a retail trade establishment can be estimated by the difference between the retail selling price of a good and the acquisition price for that same item. (Any discounts from the vendor to the retailer and any discounts offered by the retailer to the consumer are captured.) The resulting gross margin prices reflect the value added by the establishment for services such as marketing, storing, displaying goods in convenient locations, and making the goods easily available for customers to purchase.

Margin weights provided to the PPI by the Bureau of the Census are used to weight retail trade at the industry level. Item weights in the PPI retail trade cells reflect margin weights for margin priced items (items bought and resold) and retail weights for retail priced items (items typically made by the retailer), in those rare cases when retail priced items are measured.

The PPI usually classifies establishments based on their major revenue-generating activity. However, the PPI groups retail trade establishments according to their usual trade designation. For example, many drug stores also carry other products—cosmetics, toiletries, tobacco, and novelty merchandise. A store that sells prescription drugs is treated as a drug store if the owner states that its usual trade designation is "drug store," even if the establishment generates a plurality of its revenue through sales of novelty merchandise.

NAICS 442, Furniture and Home Furnishings Stores

Furniture and home furnishings stores retail new furniture and home furnishings from fixed point-of-sale locations. Establishments in this subsector usually operate from showrooms and have substantial areas for the presentation of their products. The two largest industries from this subsector were introduced into the PPI in January 2004, with historical data back to June 2003.

NAICS 442110—Furniture stores includes establishments that retail new furniture, such as household furniture, outdoor furniture, office furniture (except those sold in combination with office supplies and equipment), or furniture sold in combination with major appliances, home electronics, home furnishings, or floor coverings.

NAICS 442210—Floor covering stores comprises establishments that retail new floor coverings, such as rugs and carpets, vinyl floor coverings, and floor tile (except ceramic or wood only). This industry also includes establishments that retail new floor coverings in combination with installation and repair services.

NAICS 443, Electronics and Appliance Stores

Electronics and appliance stores retail new electronics and appliances from point-of-sale locations. Establishments in this subsector often maintain floor displays that require special electrical capacity to accommodate the proper demonstration of their products. The classification of an establishment within this subsector is made principally by product type and knowledge required to operate each type of store. The PPI introduced three industries from this subsector in January 2004, with historical data back to June 2003. In January 2012, the PPI introduced a new price index for NAICS 443142—Electronic stores and a recoded price index for NAICS 443141—Household appliance stores to accommodate changes in the 2012 NAICS classification.

NAICS 443141—Household appliance stores are establishments that retail an array of new household appliances, such as refrigerators, dishwashers, ovens, irons, coffeemakers, room air conditioners, microwave ovens, sewing machines, and vacuum cleaners. The index for NAICS 443141 was introduced in January 2012 as continuous with the previously published index for 2007 NAICS 443111.

NAICS 443142—Electronic stores are establishments that retail a general line of new consumer-type electronic products; including radios, televisions, computers, computer peripherals, prepackaged computer software, cameras, photographic equipment, photographic supplies, prerecorded audio and video tapes, compact discs (CDs), digital video discs (DVDs), cellular phones and cellular phone plans.

NAICS 443142 is an aggregate of the following 2007 NAICS industries:

NAICS 444, Building Material and Garden Equipment and Supplies Dealers

NAICS subsector 444 includes retail establishments that sell new building material and supplies and garden equipment and supplies from fixed point-of-sale locations. These products typically are used in the construction, repair, and maintenance of homes and associated grounds. Establishments in this subsector may display their stock either indoors or outdoors under covered areas, and staff is usually knowledgeable in the use of the specific products being retailed. The PPI introduced the following NAICS subsector 444 industries in January 2004:

NAICS 444110—Home centers includes establishments that retail a general line of new home repair and improvement materials and supplies, such as lumber, plumbing goods, electrical goods, tools, housewares, hardware, and lawn and garden supplies, with no one merchandise line predominating. The merchandise lines are normally arranged in separate departments. A NAICS 444 establishment also is considered a home center when usual trade designation is not clear, and no single product line predominates.

NAICS 444120—Paint and wallpaper stores comprises establishments that retail paint, wallpaper, or related supplies to the general public. While these establishments may sell primarily to construction contractors, they are considered retail establishments within the trade. Establishments that do not sell to the general public, or those that are considered wholesalers within the trade, are classified in NAICS 42—Wholesale trade.

NAICS 444130—Hardware stores includes establishments known as hardware stores that retail a general line of new hardware items, such as tools and builders' hardware.

NAICS 444190—Other building material dealers comprises establishments (except those known as home centers, paint and wallpaper stores, and hardware stores) that retail specialized lines of new building materials, such as lumber, fencing, glass, doors, plumbing fixtures and supplies, electrical supplies, prefabricated buildings and kits, kitchen and bath cabinets, and countertops to be installed. All margin-priced products are considered primary, including sales to business customers. Examples of establishments in this industry include: electrical supply stores, fencing dealers, floor covering stores (wood or ceramic tile only), glass stores, kitchen cabinet (except custom) stores, lumber retailing yards, plumbing supply stores, and prefabricated building dealers.

NAICS 444220—Nursery, garden center, and farm supply stores comprises establishments that retail nursery and garden products, such as trees, shrubs, plants, seeds, bulbs, and sod that are predominantly grown elsewhere. Any items that are grown or produced on the premises are tracked using retail selling prices, not margin prices, and are classified as other receipts, rather than primary services.

NAICS 448, Clothing and Clothing Accessories Stores

NAICS subsector 448 includes establishments that retail new clothing and clothing accessories merchandise from fixed point-of-sale locations. Two industries within NAICS 448—Jewelry stores and Luggage stores—have been in publication since June 2000, and four additional NAICS industries entered publication with the release of data for January 2004. NAICS 448110—Men's clothing stores includes establishments that retail a general line of new men's and boys' clothing. NAICS 448120—Women's clothing stores comprises establishments that retail a general line of new women's, misses', and juniors'; clothing, including maternity wear. NAICS 448140—Family clothing stores includes establishments that retail a general line of new clothing for men, women, and children, without specializing in sales for an individual gender or age group. NAICS 448210—Shoe stores comprises establishments that retail all types of new footwear (except hosiery and specialty sports footwear, such as golf shoes, bowling shoes, and spiked shoes). Establishments that retail new tennis shoes or sneakers are included in NAICS 448210. PPI data for the men's clothing stores industry and the shoe stores industry include historical information back to June 2002, while the industries for women's clothing stores and for family clothing stores include data back to June 2003.

Establishments in this subsector have similar display equipment and maintain staff that is generally knowledgeable regarding fashion trends and the proper match of styles, colors, and combinations of clothing and accessories to the characteristics and tastes of the customer.

Seasonal and fashion merchandise make up a substantial part of all merchandise sold in industry subsector 448. Apparel and footwear are very seasonal. Apparel can go through a 3- to 6-month cycle in which different items can come in and out of season at different times. Each season offers a different selection of clothing for the consumer. Like seasonality, fashion can play an important role in these industries, because the majority of the products that are being sold in this industry are clothing. Clothes that are in fashion this month may go out of style in 3 or 4 months, or, it may take several years before certain clothes go out of fashion. Despite seasonal and fashion shifts, the services associated with NAICS 448 generally do not change.

Establishments in this subsector may provide basic alterations, such as hemming, taking in or letting out seams, or lengthening or shortening sleeves. The incidental fees for these services, separable from the sale of the good, are considered primary activity for industries in this subsector.

NAICS 451, Sporting Goods, Hobby, and Book Stores

Industries in the Sporting goods, hobby, and book stores subsector are engaged in retailing and providing expertise on the use of sporting equipment or other products used for specific leisure activities. Four industries within this subsector were previously introduced into the PPI in June 2000:

NAICS 452, General Merchandise Stores

A large part of the retail trade sector is accounted for by General merchandise stores, industry subsector 452. These stores retail new general merchandise from fixed point-of-sale locations. Establishments in subsector 452 are unique in that they maintain a wide variety of display equipment and trained staff capable of retailing a large assortment of goods from a single location. Seasonal and fashion merchandise make up a major part of merchandise sold in the NAICS 452 subsector, but despite seasonal and fashion shifts, the services associated with NAICS 452 generally do not change. This subsector is comprised of the following NAICS industries:

NAICS 452111—Department stores (except discount department stores) includes establishments, known as department stores, which have separate departments for various merchandise lines, such as apparel, jewelry, home furnishings, and linens, each with separate cash registers and sales associates. Department stores in this industry generally do not have central customer checkout and cash register facilities.

Establishments in NAICS 452112—Discount department stores also are referred to commonly as department stores. However, these establishments usually have central customer checkout areas, generally in the front of the store, though they may have additional cash registers located in one or more individual departments. Department stores in this industry sell a wide range of general merchandise (except fresh, perishable foods).

NAICS 452900—Other general merchandise stores includes establishments such as warehouse clubs and supercenters that typically are engaged in retailing a general line of groceries in combination with general lines of new merchandise, such as apparel, furniture, and appliances. This industry also includes variety-type stores that retail a general line of new merchandise in limited amounts, with none of the lines predominating.

NAICS 453, Miscellaneous Store Retailers

Industries in the Miscellaneous store retailers subsector retail merchandise from fixed point-of-sale locations. A number of industries from this subsector were previously introduced into the PPI in June 2000: Florists; Stationery stores; and Gift, novelty, and souvenir stores. One additional industry was introduced into the PPI in January 2004, with historical data back to December 2002:

NAICS 453930—Manufactured (mobile) home dealers are engaged in the retail sale of new and/or used manufactured homes, parts, and equipment, and are typically responsible for transporting and installing the mobile homes they have sold. (Manufactured homes sometimes are referred to as trailer, modular, or mobile homes.)

Last Modified Date: February 16, 2012

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