5260.0.55.001 - Information paper: Experimental Estimates of Industry Multifactor Productivity, 2007  
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Contents >> Retail trade >> Output

OUTPUT

Figure 9.2 shows growth in output in Retail trade. The chart shows that there has been a steady increase in Retail output since 1985-86. Growth picked up in the latter half of the 1990s, when consumer confidence was relatively high. Associated with this rising consumer confidence were rising incomes, low inflation and low interest rates. This might indicate that consumer demand is driving changes in Retail output and that this demand is driven by relatively buoyant conditions in the Australian economy.

9.2 Retail outputs and inputs, (2004-05 = 100)
Graph: 9.2 Retail outputs and inputs, (2004-05 = 100)

Retail output is not solely demand driven as there were a number of supply side factors that also affected the industry. For instance, there was an increase in competition in the industry, due to in part the deregulation of trading hours but also due to the introduction of 'category killers' in certain segments of the Retail market. Category killers are large retail stores that specialise in particular products, such as hardware (Bunnings), toys (Toys-R-Us) or sporting goods (Rebel Sport).


Another aspect that affects Retail is the deregulation of shopping hours. While deregulation may have led to an increase in competition, there might not have been any significant increases in output, as measured by volume of goods traded. However, this raises the issue of how improved convenience for shoppers should be factored into a quality adjustment for Retail output.


Value added has been steadily increasing, at approximately 3.1% per year over the last two decades. The main component of Retail output is gross margins. The margins in current price terms are the difference between sales and cost of goods sold. The change in the volume of Retail industry output is based on the quantity of goods sold.


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