Wholesale Turnover Statistics in Canada

23rd Voorburg Group Meeting

Mary Beth Garneau

Aguascalientes, MexicoSeptember 22nd to 26th, 2008

September 23, 2008Statistics Canada • Statistique Canada2

Logistics

Marketing and support services

Packaging and labeling

Inventory management

Shipping

Handling of warranty claims

Wholesalers and their services

Product training

Banner wholesalers Drop shippersRack jobbers

Wholesale merchants and distributorsDealers of machinery & equipment

Import-export merchants and agentsManufacturing reps and agentsWholesale commission agents

Dealer-owned cooperatives Wholesale brokers

Buying groups

In-store or co-op promotionsDistribution

Buy and sell

September 23, 2008Statistics Canada • Statistique Canada3

Definition of the service (1)

North American Industry Classification (NAICS) 2002Classification 41 Wholesale Trade • Establishments primarily engaged in wholesaling merchandise and

providing related logistics, marketing and support services. generally an intermediate step; many wholesalers are organized to sell

merchandise in large quantities to retailers, and business and institutional clients.

some wholesalers sell merchandise in single units to final users (particularly those that supply non-consumer capital goods)

Note: Unlike ISIC, the 2-digit NAICS boundary includes wholesale motor vehicles, parts and accessories

September 23, 2008Statistics Canada • Statistique Canada4

Definition of the service (2)

Wholesale Merchants Buy and sell merchandise on their own account, take title

to the goods they sell.

Wholesale Agents and Brokers Buy and sell merchandise owned by others on a fee or

commission basis, do not take title to the goods they buy or sell.

September 23, 2008Statistics Canada • Statistique Canada5

Wholesale statistics in Canada

Distributive Trades Division Responsible for surveys of revenue and expenses

(turnover)

Prices Division Responsible for developing/producing SPPI

System of National Accounts Responsible for estimates of real and nominal GDP

September 23, 2008Statistics Canada • Statistique Canada6

Survey program overview

Sub-Annual Monthly Wholesale Trade Survey Coverage: Merchants (except Grain & Petroleum Wholesalers)

Excludes Agents and Brokers

Annual Annual Wholesale Trade Survey Coverage: All Merchants, Agents and Brokers

Irregular Wholesale Origin and Destination of Goods Survey Module on Annual Survey

September 23, 2008Statistics Canada • Statistique Canada7

Wholesale population and sample

# Establishments Monthly Monthly SurveySurvey

Annual Annual SurveySurvey

Population on Business Population on Business RegisterRegister 104,000104,000 120,000120,000

SampleSample 12,00012,000 14,00014,000

Mail-out (includes clusters of Mail-out (includes clusters of establishments)establishments) 5,0005,000 5,9005,900

September 23, 2008Statistics Canada • Statistique Canada8

Monthly Wholesale Trade Survey

• A key indicator of the economic conditions of wholesale industries in Canada

• 5% of GDP on a value added basis• Provides values and growth rates for sales and

inventories by industry group and province/territory • An analytical overview disseminated each month

describing current trends within the context of Canadian economic environment

September 23, 2008Statistics Canada • Statistique Canada9

Annual Wholesale Trade Survey

A comprehensive program measuring the structural composition of wholesale industries in Canada

Designed to meet the needs of the SNA Collects detailed revenue and expense data such as

operating income, cost of goods sold, inventories and expenses

Characteristics data such as Class of customers, outsourcing and types of merchants or agents and brokers

September 23, 2008Statistics Canada • Statistique Canada10

Wholesale Origin & Destination of Goods

Data required for the National and Provincial Input-Output Table and constant dollar deflation

Prior to RY 2008, collected on an occasional basis Most recent iteration was conducted for reference year

2001 with less than acceptable results stemming from poor response rates

Pilot survey to collect data as a module within the Annual Wholesale Survey with fewer commodities

New module will be launched to full sample for Reference Year 2008

September 23, 2008Statistics Canada • Statistique Canada11

Market conditions (1)

In Canada, wholesaling is a multi-billion-dollar industry, with sales totalling $660 billion in 2006.

Canada’s wholesale industry accounts for about

5% of Canada’s GDP

September 23, 2008Statistics Canada • Statistique Canada12

Market conditions (2)

Import a large share of the goods they distribute (typically from the United States)

Quick to adopt new information and communications technologies, have recorded above-average growth in capital investments

Globalisation, offshore outsourcing, and the arrival of American-style retailing (big box stores and club warehouses)

September 23, 2008Statistics Canada • Statistique Canada13

2006 Sales by Wholesalers (billions $CDN)

Farm products 18.1  

Petroleum products 121.2  

Food products 82.4  

Alcohol and tobacco 7.7  

Apparel 9.6  

Home and personal products 32.4  

Pharmaceuticals 33.2  

Motor vehicles 75.6  

Motor vehicle parts and accessories 19.3  

Building supplies 50.7  

Metal products 18.7  

Lumber and millwork 13.9  

Machinery and equipment 51.0  

Computers and other electronic equipment 31.5  

Office and professional equipment 23.4  

Other products 64.9  

Agents and brokers 6.3  

All wholesale trade groups 660.0  

September 23, 2008Statistics Canada • Statistique Canada14

GDP estimates

Value-added is the sum of the following Input-output wholesale table input commodities:• Wages and salaries• Supplementary labour income• Mixed income• Other operating surplus• Indirect taxes and subsidies

September 23, 2008Statistics Canada • Statistique Canada15

Deflation

Constant price estimates of monthly industry output• monthly indicator• Monthly GDP by industry

Annual deflation of commodity output Inputs:

• Commodity detail of industry • Margins• Combination of Industrial Product Price Indexes and Import

Price Indexes

September 23, 2008Statistics Canada • Statistique Canada16

Challenges ahead

Deflation• Updated accurate commodity data• Wholesale price indexes

Globalization-induced changes to the structure of multinational firms with operations in Canada

Accurately and consistently define, delineate and measure the wholesale industry. • Wholesale activities can take place in a variety of areas of the economy (manufacturing

sales branches, head-office, logistics, warehousing,, etc.)• Consistent industrial classification of production units can be a challenge. For example, the

same activities of different firms may be classified in different industries based on each firm’s most-recently profiled book-keeping practices.

• Avoid volatility in the wholesale statistical series resulting from changes in classification that may not reflect actual changes in economic activity.

September 23, 2008Statistics Canada • Statistique Canada17

Discussion