The retail industry comprises retail businesses that sell goods and services directly to end consumers. It is a fundamental pillar of modern commerce, influencing consumption patterns, urban infrastructure, and labor markets. In major classification systems, retail is treated as a distinct set of activities. Over millennia, retail has evolved from ancient barter marketplaces to modern omnichannel systems integrating physical stores and digital platforms. Today, retail is a large source of jobs and economic activity in many countries. In the United States, retail is described as the largest employer in the private sector. This sector employed about 16.2 million people (approximately 12.6% of nonfarm business employment) in 2022, supporting millions more in related logistics and services. The retail market is also described as very large globally, with projected worldwide retail sales of about $31.3 trillion in 2025, and U.S. retail sales of about $7.26 trillion in 2024. U.S. retail and food services together contribute over $5.3 trillion annually to the national gross domestic product and support more than one in four jobs in the country. The industry is commonly segmented by merchandise category (such as grocery, apparel, and electronics) and is organized differently across classification systems. Over recent decades, consolidation through mergers and acquisitions has been described as a major structural trend, alongside the rise of large multinational retailers and major e-commerce platforms. Retail formats and infrastructure have changed substantially over time, including the spread of self-service stores, shopping centers, barcode scanning and point-of-sale systems, as well as the expansion of e-commerce. Retail profit margins tend to be slim and vary widely by sector and geography, but many leading retailers generate substantial profits due to scale, control of supply chains, and operational efficiency. Publicly listed retailers often achieve profit margins with percentages in the low single-digit to mid-single-digit range. The retail industry has had many innovations, from the invention of permanent shopfronts and marketplaces to department stores, malls, and now digital commerce. In the 2010s and early 2020s, retailers increasingly adopted omnichannel models, and some stores experimented with automation and cashierless checkout. During the COVID-19 pandemic, online sales growth accelerated sharply in some markets, including a reported surge in U.S. e-commerce sales in 2020.
Definition According to the United Nations Statistics Division, retail is the Division: 63 - Retail trade services; repair services of personal and household goods. In the International Standard Industrial Classification (ISIC Rev.4), the retail industry is part of Section G: “Wholesale and retail trade; repair of motor vehicles and motorcycles.” Within this section, retail trade is primarily represented by Division 47: “Retail trade, except of motor vehicles and motorcycles.” (Retail sale of motor vehicles and motorcycles is covered in Division 45, alongside vehicle repair.) ISIC distinguishes retail from wholesale based on the buyer: retail involves selling chiefly to the general public (household consumers), whereas wholesale is selling to business or institutional clients. Thus, Divisions 46 and 47 cover all non-vehicle sales activities, with Division 47 specifically covering retail sales to consumers. In the NAICS, the retail industry is designated as Sector 44–45, “Retail Trade.” According to the official NAICS 2022 definition, “The Retail Trade sector comprises establishments primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise.” The retailing process is described as the final step in the distribution of merchandise: retailers are organized to sell goods in small quantities directly to the general public (household consumers). In essence, NAICS defines retail trade as businesses that do not produce goods themselves, but instead purchase and sell goods (with minimal processing) to end-use consumers, often providing related customer services.
Commercial significance and statistics
… excerpt ends here. Continue reading the full article.
