Scope of Distributive Trade Statistics
Workshop for African countries on the Implementation of International
Recommendations for Distributive Trade Statistics
27-30 May 2008, Addis Ababa, Ethiopia
UNITED NATIONS STATISTICS DIVISION
Trade Statistics Branch
Distributive Trade Statistics Section
Scope of DTS (1)
Distributive trade statistics (DTS)
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IRDTS 2008 defines the scope of DTS as statistics
reflecting characteristics and activities of the units
belonging to distributive trade sector of an economy
Distributive trade sector
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The scope of distributive trade sector is defined in terms
of ISIC, Rev.4
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All resident entities recognised as statistical units and
classifiable in section G “Wholesale and retail trade; repair of
motor vehicles and motorcycles”
All units irrespective of their size, form of economic and legal
organization and ownership
Distributive trade activities carried out by entities not
classified in Section G of ISIC, Rev.4 are not covered by
distributive trade statistics
Scope of DTS (2)
Data items within the scope of DTS
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Characteristics of entities belonging to the distributive
trade sector
Receipts and other revenues and purchases of those
entities which are recorded in their profit and loss
statements and used for calculation of trade output
Intermediate consumption and value added
Investments of entities in non-financial assets and
changes in inventories
Employment information which is closely related to the
most of previous groups of items
Data items outside the scope of DTS
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Data items on financial position of the entities – they are
compiled as part of financial or other relevant statistics
Distributive trade as an economic
activity
Distributive trade as an economic activity
consists of:
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Provision of a service to various types of customers
(retailers and other commercial users or general
public) by storing and displaying a selection of goods
and making them available for buying
Provision of other services incidental to the sale of
those goods or subordinated to the selling such as the
delivery, after-sale repair and installation services
What makes distributive trade different from
other economic activities?
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Specificity of the production process referred to as
“Resale”
Resale
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Resale is a number of actions which might be
undertaken to make goods available for
buying
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Negotiating transactions between buyers and
sellers
Buying goods from the manufacturer on own
account
Transporting, storing, sorting, assembling,
grading, packing
Displaying a selection of goods in convenient
locations
By convention, resale of goods represents
sale without transformation
Boundary of distributive trade (1)
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The following activities are not considered to be
transformation of goods and are included in
distributive trade
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Sorting, grading and physical assembling of goods
Mixing (blending) of goods (for example sand)
Bottling (with or without preceding bottle cleaning)
Packing, breaking bulk and repacking for distribution in
smaller lots
Storage (whether or not frozen or chilled) and refrigerating
Delivering and after-sale installation
Cleaning and drying of agricultural products
Cutting out of wood fibreboards or metal sheets as
secondary activities
Engaging in sales promotion for their customers including
the label designing
Washing, polishing of vehicles
Boundary of distributive trade (2)
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The following are activities considered as either
transformation of goods or as not being part of
relevant distributive trade divisions and classes and
are excluded
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Renting of motor vehicles or motorcycles
Renting and leasing of goods
Packing of solid goods and bottling of liquid or gaseous
goods, including blending and filtering, for third parties
Sale of farmers' products by farmers
Manufacture and sale of goods, which is generally classified
as manufacturing
Sale of food and drinks for consumption on the premises
and sale of take-a-way food
Renting of personal and household goods to the general
public
Structure of distributive trade in ISIC,
Rev.4
Three divisions
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45 “Wholesale and retail trade and repair of motor
vehicles and motorcycles” (4 groups and 4 classes)
46 “Wholesale trade, except of motor vehicles and
motorcycles” (7 groups and 14 classes)
47 “Retail trade, except of motor vehicles and
motorcycles” (9 groups and 25 classes)
Distinction between division 46 (wholesale) and
division 47 (retail sale) - based on the predominant
type of customer
Two additional levels of distinction within divisions
46 and 47 based on the type of operation of units
and kind of products sold
Wholesale trade
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Defined as the resale (sale without
transformation) of new and used goods to:
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Retailers
Business-to-business trade (industrial, commercial,
institutional or professional users)
Other wholesalers
Acting as an agent or broker in buying
merchandise for, or selling merchandise to, such
persons or companies
Types of wholesale trade businesses
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Wholesalers who take title to the goods sold
Merchandise and commodity brokers
Commission merchants and agents
Retail trade
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Defined as the resale (sale without transformation) of
new and used goods mainly to the general public for
personal or household consumption or utilization, by:
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Shops
Department stores
Stalls
E-commerce retailers and mail-order houses
Hawkers and peddlers
Consumer cooperatives
Types of retail trade businesses
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Retailers who take title to the goods sold
Commission agents
Retail auctioning houses
Distributive trade and other
classifications (1)
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CPC, Ver.2
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Basic statistical tool for establishing DTS by product
Distributive trade services are classified in divisions 61 and
62 of CPC, Ver.2 on the basis of two criteria
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Type of provided service
Type of traded goods
Correspondence table between CPC, Ver.2 and ISIC, Rev.4 –
to be included in the Distributive Trade Statistics: Compilers
Manual
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COICOP
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Relates to the purpose (or function) of the use of the
commodities sold
Retail trade data at detailed COICOP level facilitate the
compilation of private household consumption expenditure in
NA
Distributive trade and other
classifications (2)
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Groupings of distributive trade data by
product
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Food, beverages and tobacco
Clothing and footwear
Household appliances, articles and equipment
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Machinery, equipment and supplies
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Of which: Furniture
Of which: Information processing equipment
Of which: Motor vehicles and associated goods
Personal and other goods
Construction materials
Other
Recommendations for the scope of
Distributive trade
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The scope of distributive trade is to be defined in terms of ISIC,
Rev.4
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Countries are encouraged to draw up their own lists for the
reporting of DTS by type of product based on:
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Countries which do not use ISIC, Rev.4 are encouraged to develop
their national activity classifications to be compatible with ISIC, and
implement them in all national compilations for the purposes of
international comparability
Countries should at the minimum develop clear and precise
concordances between distributive trade classes in their national
classification and in ISIC, Rev.4
Product classifications used in their trade surveys
Need to comply with the international standards
The lists for retail trade are desirable to be more detailed than
those for wholesale trade since they are useful in describing the
flow of goods to households for national accounts purposes
Boundary issues (1)
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Boundary between wholesaling and manufacturing
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Outsourcing of production - when the principal unit (i.e.
principal) contracts another productive unit (i.e. the
contractor) to carry out specific aspects of the
production activity of the principal, in whole or in part in
the production of a good or a service
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Activity classification of the contractor – straightforward,
does not change with the outsourcing
Activity classification of the principal - affected by the
nature and extent of the outsourcing, requires
conventions for a consistent treatment
Boundary issues (2)
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1.
Types of outsourcing
Outsourcing of support functions - the principal (wholesaler or
retailer) carries out the resale of goods and services, but
outsources certain support functions, such as accounting or
computer services, to the contractor
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2.
Principal remains classified to the respective ISIC class of section G
that represents the core production process
Contractor is classified to the specific support activity it is carrying
out, e.g. ISIC class 6920 or 6202
Outsourcing parts of the production process - the principal
(manufacturer) outsources a part of the production process, but
not the whole process, to the contractor as the principal owns the
material inputs to be transformed by the contractor and thereby
has ownership over the final outputs
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Principal is classified in the appropriate manufacturing class of ISIC
as if it were carrying out the complete production process
Contractor is classified according to the portion of the production
process he is undertaking
Boundary issues (3)
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Types of outsourcing (cont.)
3. Outsourcing of complete production process
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Outsourcing of service producing activities, including
construction
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Both the principal and the contractor are classified as if they were
carrying out the complete service activity support functions
Outsourcing of manufacturing activities to contractor, when the
principal does not physically transform the goods at the location
of its unit
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Principal owns the material inputs and thereby has economic
ownership of the outputs, but has the production done by others he is classified to section C (manufacturing) of ISIC, Rev.4
Principal has the production done by others, but does not own the
material inputs - should be classified to section G (distributive
trade) of ISIC, Rev.4
Contractor is classified always to section C (manufacturing) of ISIC,
Rev.4
Boundary issues (4)
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Boundary between retail trade and financial
services
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Units offering purchases on credits (consumer credit
lines) to customers
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Two separate units should be identified when the originator
and holder of a consumer credit is a retail trade unit that
has a separate establishment dealing with consumer credits
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Unit providing consumer credits should be statistically
observable (i.e., separate accounts of its activity are available)
Both units will be classified in their own rights – non-financial
(trade unit) and financial (consumer credit unit)
One unit should be defined if the unit providing consumer
credits is not statistically observable separately
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Unit providing consumer credits should be treated as an
ancillary activity and will not affect classification of that unit in
distributive trade
Thank You