What is Retail Industry Analysis?

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  • Written By: B. Turner
  • Edited By: W. Everett
  • Last Modified Date: 29 April 2020
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Retail industry analysis is a process used to assess the financial impact of the retail industry. This field includes brick-and-mortar stores, as well as Internet retailers, who buy and resell items rather than manufacture them. By gathering information about this industry and analyzing how it compares to certain benchmarks, those in the retail field can make important decisions regarding prices, staffing, investment, and other factors. Retail industry analysis also provides key information about the state of the economy as a whole, and how consumers feel about spending and saving.

This type of retail industry analysis may be carried out by large financial or investment firms, who are paid to provide these analyses. They may also be performed by the stores themselves, or by economists in other fields. These parties start by issuing market surveys to gather information about the retail industry. They also include publicly available sales figures, such as those found in an annual report issued by a business. By combining all of this information, these parties are able to issue a retail industry analysis report, which includes key facts and statistics about this field.

A retail industry report may include a wide variety of information, and may focus on a single segment of retail or the industry as a whole. The report includes annual sales figures, as well as profit and inventory data. It may include information on changes in same store sales, or the number of stores that have opened or closed each year. Many retail industry analysis reports also include data on how many employees or jobs were added, as well as what types of goods were the best sellers for the year.

Store owners or company financial consultants rely on this information to make critical decisions about the business. These reports allow the business to determine how it is performing compared to the competition, or to the market as a whole. It also helps the business spot key opportunities, such as an increased demand for a specific product. Based on these reports, a business may plan to hire or fire staff, or open new stores. They may also introduce new products, or sell off unpopular product lines.

Retail industry analysis also provides important information about the state of the global economy. Retail sales have historically been closely linked to consumer confidence and disposable income levels. When sales are increasing, consumers generally feel confident about money and the economy. When sales are shrinking, consumers are holding on to money, or have less disposable income, which may point to a recessionary period.

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