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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 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 ()
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. ()
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.
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