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8502.0 - Retail Trade Quarterly Indicators, Australia, Dec 2008  
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EXPLANATORY NOTES


INTRODUCTION

1 This publication presents quarterly estimates of the value of turnover of retail businesses classified by industry, and by state and territory. The estimates of turnover are compiled from the Retail Business Survey (RBS).

2 With a sample design introduced in the July 2008 reference month, the aim of the survey is to produce quarterly estimates at the industry group by state level and monthly estimates at a broader level. The survey includes about 3,200 retail and selected service businesses each quarter. About 500 'large' businesses are included in the survey every month. A quarterly sample of about 2700 'smaller' businesses is selected, with about 900 of these smaller businesses allocated to each month of the quarter. From November 2008 reference month, the 2700 sampled businesses are surveyed each month. The 'large' business' contribution of approximately 62% of the total estimate ensures a highly reliable Australian total turnover estimate.

3 Monthly estimates are presented in Retail Trade, Australia (cat. no. 8501.0).


SCOPE AND COVERAGE

4 The scope of the RBS is all employing businesses with at least one retail outlet. Like most Australian Bureau of Statistics (ABS) economic surveys, the frame used for the RBS is taken from the ABS Business Register which includes registrations to the Australian Taxation Office's (ATO) pay-as-you-go withholding (PAYGW) scheme. Each statistical unit (as defined below) included on the ABS Business Register is classified to the Australian and New Zealand Standard Industrial Classification (ANZSIC) industry in which it mainly operates. The frame is supplemented with information about businesses which are classified as non-retail but which have significant retail activity.

5 The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in industry and other general business changes. The estimates include an allowance for the time it takes a newly registered business to get on to the survey frame. Businesses which have ceased employing are identified when the ATO cancels their Australian Business Number (ABN) and/or PAYGW registration. In addition, businesses with less than 50 employees which do not remit under the PAYGW scheme in each of the previous five quarters are removed from the frame.

6 The following industries included in the survey are as defined in ANZSIC:

  • Food retailing
      Supermarkets and grocery stores (5110) and non-petrol sales of convenience stores of selected petrol stations
      Liquor retailing (5123)
      Other food retailing
          Fresh meat, fish and poultry retailing (5121)
          Fruit and vegetable retailing (5122)
          Bread and cake retailing (5124)
          Specialised food retailing n.e.c. (5129)
  • Department stores (5210)
  • Clothing and soft good retailing
      Clothing retailing (5221)
      Footwear, fabric and other soft good retailing
          Footwear retailing (5222)
          Fabric and other soft good retailing (5223)
  • Household good retailing
      Furniture and floor covering retailing
          Furniture retailing (5231)
          Floor covering retailing (5232)
      Domestic hardware and houseware retailing (5233)
      Domestic appliance and recorded music retailing
          Domestic appliance retailing (5234)
          Recorded music retailing (5235)
  • Other retailing
      Newspaper, book and stationery retailing (5243)
      Other recreational goods retailing
          Sport and camping equipment retailing (5241)
          Toy and game retailing (5242)
          Photographic equipment retailing (5244)
      Pharmaceutical, cosmetic and toiletry retailing (5251)
      Other retailing n.e.c.
          Antique and used good retailing (5252)
          Garden supplies retailing (5253)
          Flower retailing (5254)
          Watch and jewellery retailing (5255)
          Retailing n.e.c. (5259)
  • Cafes, restaurants and takeaway food services
      Takeaway food retailing (5125)
      Cafes and restaurants (5730).


STATISTICAL UNITS DEFINED ON THE ABS BUSINESS REGISTER

7 The ABS uses an economic statistics units model on the ABS Business Register to describe the characteristics of businesses, and the structural relationships between related businesses. The units model is also used to break groups of related businesses into relatively homogeneous components that can provide data to the ABS.

8 The units model allocates businesses to one of two sub-populations. The vast majority of businesses are in what is called the ATO Maintained Population, while the remaining businesses are in the ABS Maintained Population. Together, these two sub-populations make up the ABS Business Register population.


ATO Maintained Population

9 Most businesses and organisations in Australia need to obtain an ABN, and are then included on the ATO Australian Business Register. Most of these businesses have simple structures; therefore the unit registered for an ABN will satisfy ABS statistical requirements. The businesses with simple structures constitute the ATO Maintained Population, and the ABN unit is used as the statistical unit for all economic collections.


ABS Maintained Population

10 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with each business. These businesses constitute the ABS Maintained Population. This population consists typically of large, complex and diverse businesses. The statistical units model described below is used for these businesses.
      Enterprise Group: This is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts, and partnerships. Majority ownership is not required for control to be exercised.
      Enterprise: The enterprise is an institutional unit comprising (i) a single legal entity or business entity, or (ii) more than one legal entity or business entity within the same Enterprise Group and in the same institutional subsector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia subsector).
      Type of Activity Unit (TAU): The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar economic activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision.


SURVEY METHODOLOGY

11 The survey is conducted monthly primarily by telephone interview although a small number of questionnaires are mailed to businesses. The businesses included in the survey are selected by random sample from a frame stratified by state, industry and business size. The survey uses annualised turnover as the measure of business size. For the ATO Maintained Population, the annualised turnover is based on the ATO's Business Activity Statement item Total sales and for the ABS Maintained Population a modelled annualised turnover is used. For stratification purposes the annualised turnover allocated to each business is not updated each quarter as to do so would result in increased volatility in the estimates.

12 Generalised regression estimation methodology is used for estimation. For estimation purposes, the annualised turnover allocated to each business is updated each quarter.

13 The July 2008 issue of Retail Trade Trends, Australia (cat. no. 8501.0) saw the introduction of a 'one in two out' strategy for collecting data from sampled units. Businesses in the sample sector were allocated evenly across the three months of a quarter with approximately 900 sample sector businesses included each month. These businesses were required to provide a monthly estimate of turnover for the month of the quarter to which they had been allocated. They were then not required to report data for the next two months i.e. a business allocated to the first month of a quarter was required to report a monthly estimate for the July and October reference months. This strategy ceased in October 2008.

14 Each quarter, some businesses in the sample are replaced, at random, by other businesses so that the reporting load can be spread across smaller retailers.

15 Most businesses can provide turnover on a calendar month basis and this is how the data are presented. When businesses cannot provide turnover on a calendar month basis, the reported data and the period they relate to are used to estimate turnover for the calendar month.

16 The quarterly estimates, in original terms, are the sum of the monthly estimates for each quarter.

17 Most retailers operate in a single state/territory. For this reason, estimates of turnover by state/territory are only collected from the larger retailers which are included in the survey each month. These retailers are asked to provide turnover for sales from each state/territory in which the business operates. Turnover for the smaller businesses is allocated to the state of their head office or main outlet.


DEFINITION OF TURNOVER

18 Turnover includes retail sales; wholesale sales; takings from repairs, meals and hiring of goods (except for rent, leasing and hiring of land and buildings); commissions from agency activity (e.g. commissions received from collecting dry cleaning, selling lottery tickets, etc.). From July 2000, turnover includes the goods and services tax.


SEASONAL ADJUSTMENT AND TREND ESTIMATION

19 Seasonally adjusted estimates are derived by estimating and removing systematic calendar related effects from the original series. In the Retail trade series, these calendar related effects are known as seasonal (e.g. increased spending in the December Quarter as a result of Christmas) and trading day influences (arising from the varying length of each quarter). Each influence is estimated by separate seasonal and trading day factors which, when combined, are referred to as the combined adjustment factors.

20 The seasonally adjusted estimates also have an allowance for an Easter proximity effect, which is caused when Easter falls late in March or early in April. This effect, when present, is combined with the seasonal and trading day factors to form the combined adjustment factors. See the Appendix of the July 2001 issue of publication Retail Trade, Australia (cat. no. 8501.0) for more information.

21 The Retail series uses a concurrent seasonal adjustment methodology to derive the combined adjustment factors. This means that data from the current quarter are used in estimating seasonal and trading day factors for the current and previous quarters. For more information see Information Paper: Introduction of Concurrent Seasonal Adjustment into the Retail Trade Series (cat. no. 8514.0).

22 Autoregressive integrated moving average (ARIMA) modelling can improve the revision properties of the seasonally adjusted and trend estimates. ARIMA modelling relies on the characteristics of the series being analysed to project future period data. The projected values are temporary, intermediate values, that are only used internally to improve the estimation of the seasonal factors. The projected data do not affect the original estimates and are discarded at the end of the seasonal adjustment process. The retail collection uses an individual ARIMA model for 79% of the series in this publication. The ARIMA model is assessed as part of the annual reanalysis. For more information on ARIMA modelling see Feature article: Use of ARIMA modelling to reduce revisions in the October 2004 issue of Australian Economic Indicators (cat. no. 1350.0).

23 A "two-dimensional reconciliation" methodology has been used on the seasonally adjusted time series in this publication to force additivity - that is, to force the sum of fine-level (state and industry) estimates to be equal to the Australian total.

24 In the seasonal adjustment process, the seasonal factors evolve over time to reflect changes in spending and trading patterns. Examples of this evolution include the slow move in spending from the December Quarter to the March Quarter. The seasonally adjusted estimates still reflect the sampling and non-sampling errors to which the original estimates are subject.

25 The quarterly trend estimates are derived by applying a 7-term Henderson moving average to the seasonally adjusted estimates. The Henderson moving average is symmetric, but as the end of a time series is approached, asymmetric forms of the moving average have to be applied. The asymmetric moving averages have been tailored to suit the particular characteristics of individual series and enable trend estimates for recent periods to be produced. Estimates of the trend will be improved at the current end of the time series as additional observations become available. This improvement is due to the combined effect of the concurrent seasonal adjustment methodology and the application of different asymmetric moving averages for the most recent three quarters. As a result of the improvement, most revisions to the trend estimates will be observed for the most recent three quarters.

26 Trend estimates are used to analyse the underlying behaviour of the series over time. As a result of the introduction of The New Tax System, a break in the monthly trend series has been inserted between the June and September Quarters 2000. Care should therefore be taken if comparisons span this period. For more details refer to the Appendix in the December 2000 issue of Retail Trade, Australia (cat. no. 8501.0).

27 For further information on trend estimates, see Information Paper: A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0) or contact the Assistant Director, Time Series Analysis on Canberra (02) 6252 6345 or by email at <time.series.analysis@abs.gov.au>.


CHAIN VOLUME MEASURES

28 The chain volume measures of retail turnover appearing in this publication are annually reweighted chain Laspeyres indexes referenced to current price values in a chosen reference year. The reference year is advanced each September issue and is currently 2006-07. Each year's data in the Retail chain volume series are based on the prices of the previous year, except for the quarters of the latest incomplete year. Data for the 2007-08 financial year will initially be based upon price data for the 2006-07 financial year. Comparability with previous years is achieved by linking (or chaining) the series together to form a continuous time series. While current price estimates reflect both price and volume changes, chain volume estimates measure changes in value after the direct effects of price changes have been eliminated and hence only reflect volume changes. Further information on the nature and concepts of chain volume measures is contained in the ABS publication Information Paper: Introduction of Chain Volume Measures in the Australian National Accounts (cat. no. 5248.0).


RELIABILITY OF ESTIMATES

29 There are two types of error possible in estimates of retail turnover:
      Sampling error which occurs because a sample, rather than the entire population, is surveyed. One measure of the likely difference resulting from not including all establishments in the survey is given by the standard error, see below. Sampling error for each quarter will be influenced by the rotation effect of having some businesses in each quarter being replaced by other businesses so that the reporting load can be spread across retailers.
      Non sampling error which arises from inaccuracies in collecting, recording and processing the data. The most significant of these errors are: misreporting of data items; deficiencies in coverage; non-response; and processing errors. Every effort is made to minimise reporting error by the careful design of questionnaires, intensive training and supervision of interviewers, and efficient data processing procedures.


STANDARD ERRORS

30 Seasonally adjusted and trend estimates and chain volume measures are also subject to sampling variability. For seasonally adjusted estimates, the standard errors are approximately the same as for the original estimates. For trend estimates, the standard errors are likely to be smaller. For quarterly chain volume measures, the standard errors may be up to 10% higher than those for the corresponding current price estimates because of the sampling variability contained in the prices data used to deflate the current price estimates.

31 Estimates, in original terms, that have an estimated relative standard error (RSE) between 10% and 25% are annotated with the symbol '^'. These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with a RSE between 25% and 50% are annotated with the symbol '*', indicating that the estimates should be used with caution as they are subject to sampling variability too high for most practical purposes. Estimates with a RSE greater than 50% are annotated with the symbol '**' indicating that the sampling variability causes the estimates to be considered too unreliable for general use.

32 To further assist users in assessing the reliability of estimates, key data series has been given a grading of A to D. Where:
  • A represents a relative standard error on level of less than 2%. The published estimates are highly reliable for movement analysis.
  • B represents a relative standard error on level between 2% and 5%, meaning the estimates is reliable for movement analysis purposes.
  • C represents a relative standard error on level between 5% and 10%, meaning users are advised to exercise some caution in interpreting movements for such series.
  • D represents a relative standard error on level between 10% and 15% meaning users are advised to exercise caution in interpreting movements for such series.

33 The tables below provide an indicator of reliability for the estimates in original terms.

Food retailing
Department Stores
Clothing and soft good retailing
Household good retailing
Other retailing
Cafes, restaurants and takeaway food services
Total

NSW
A
A
C
B
C
C
A
Vic.
B
A
C
B
C
C
A
Qld
B
A
B
C
C
C
A
SA
B
A
B
C
C
C
A
WA
B
A
C
B
C
C
A
Tas.
B
np
C
C
np
D
B
NT
B
np
B
B
np
D
A
ACT
B
A
D
C
C
D
B
Aust.
A
A
B
A
B
B
A

np not available for publication but included in totals where applicable, unless otherwise indicated



RELIABILITY OF TREND ESTIMATES

34 The trending process dampens the volatility in the original and seasonally adjusted estimates. However, trend estimates are subject to revisions as future observations become available.


ABS DATA AVAILABLE ON REQUEST

35 As well as the statistics included in this and related publication, the ABS may have other relevant data available. Inquires should be made to the Retail Business Survey contact officer on (02) 6252 5990 or any ABS office.


RELATED PUBLICATIONS

36 Current publications and other products released by the ABS are available from the Statistics View. The ABS also issues a daily Release Advice on the web site which details products to be released in the week ahead.


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