Employment Security Department
Labor Market & Economic Analysis Branch
General Merchandise Stores
Overview of Demand and Supply Conditions
General merchandise stores are defined as retail stores that sell a number of lines, such as dry goods,
apparel and accessories, furniture and home furnishings, small wares, hardware, and food. General
merchandise stores are subdivided into three major groupings: department stores, variety stores, and
miscellaneous general merchandise stores. Each of these three groupings has different characteristics.
Department stores, by far the largest of the three, accounts for over 89 percent of total employment and
almost 80 percent of total sales within the general merchandise industry. A department store carries
men’s, women’s and children’s apparel, household appliances or other home furnishings, and various
other lines. These stores are generally arranged in departments with individualized accounting.
Department stores usually provide their own charge accounts, deliver merchandise, and maintain open
stocks. After a disappointing performance in the second half of the eighties, department stores have
increased their market share during the nineties. In 1990, department stores accounted for 9.0 percent of
total retail sales and 14.1 percent of nondurable goods sales. Since then, restructuring within the
department store industry has led to continued gains in market share. In 1998, department stores
accounted for 10.1 percent of total sales and 17.2 percent of nondurable sales. The rise of discount
department stores (or “superstores”) such as Wal-Mart, Target and K-Mart, have contributed to the overall
growth of the industry by posting better than industry sales increases every year in the 1990s. Consumer
spending at department stores is likely to remain healthy in the near future. Technology advances and
continuing change will keep costs, and therefore prices, down, which should lead to strong sales in the
future.
One of the major reasons for stronger department store performance has been the consolidation in the
industry. Many of the big names in department stores not only downsized their operations in an effort to
become more efficient and profitable, but also merged with other giants in the industry. Even so,
department stores face stiff competition from various other forms of retail businesses. Entities such as
the Home Shopping Network, mail order catalogs, and Internet retailing have the ability to capture sales
due to their convenience and ease. Nonstore retailers have greatly increased their sales revenues in
recent years due in large to the explosion in “e-retailing.” Department stores continue to face competition
from specialty stores—those that offer goods in a certain category line; and from the latest trend in
retailing—the “category killer” or “superstores.” These superstores, like Home Depot, and Borders
seriously threaten department store sales because they offer practically every product within a particular
retail category usually at much lower prices.
Variety stores, the smallest component of general merchandise, are defined as retailers who do not carry
a complete line of merchandise, are not departmentalized, do not carry their own charge service, and do
not deliver merchandise. As such, variety stores have been performing quite poorly in recent years.
Since the mid-1980s, annual variety store sales have grown at a meager rate of 1.0 percent. Variety
stores’ share of all general merchandise sales has fallen from 7.2 percent in 1980 to 3.3 percent in 1998.
The growth of specialty stores and superstores is the major reason behind the demise of variety stores.
Although the major attraction of variety stores is lower prices, not carrying complete product lines have
made these stores especially vulnerable to superstores, which carry every product in a category at
relatively low prices.
Miscellaneous general merchandise stores, the final category, are similar in structure to department
stores, except they generally have fewer employees. Miscellaneous general merchandise stores
normally have fewer than 50 employees. Sales at these stores have struggled in the mid-1990s. Sales
growth (in real terms—i.e., without inflation) averaged 6.8 percent from 1986 to 1993, but have slowed
significantly to a mere 1.3 percent average since then. The market share within general merchandise
stores held by miscellaneous stores has remained somewhat strong, due largely to the strength of past
sales and the demise of variety stores. Miscellaneous merchandise stores market share grew from 11.5
percent in 1980 to 20.7 percent in 1993, but has since fallen back to 18.0 percent in 1998.
Figure 1
Annual Retail Sales of General Merchandise Stores, 1986-1998 (Billions of 1998 dollars)
Source: U.S. Bureau of Census
$400.0
Annual retail sales (Billions of 98$)
$350.0
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$0.0
1986
1987
1988
1989
1990
Department stores
1991
1992
V ariety stores
1993
1994
1995
1996
1997
1998
M isc. general merchandise
Current Conditions in Washington
Of the eight retail trade major categories (SIC 2-digit), general merchandise stores employed
approximately 10 percent of the 1998 total of 460,670 retail trade workers in Washington State. In 1998,
575 general merchandise establishments employed 47,270 workers statewide. From the latest economic
census (1997), general merchandise stores account for about 14 percent of total Washington State retail
sales.
The largest sub-category is department stores, representing about one-half of all establishments and over
90 percent of all employment. In general, the number of establishments in general merchandise is
somewhat stable.
Figure 2
Composition of Retail Sales in Washington State, 1997
Source: U.S. Bureau of Census, 1997 Economic Census, Retail Trade, Washington State
Electronics & appliances
3%
Furniture & furnishings
3%
Building materials &
supplies
10%
Food & beverages
18%
Motor vehicles & parts
24%
Health & personal care
4%
Nonstore retail
5%
Clothing
5%
Miscellaneous retail
4%
Gasoline stations
7%
Sporting goods, book &
music
3%
General merchandise
14%
Notes: Based on the new North American Industry Classification System (NAICS); among the changes,
eating and drinking places were re-classified to the accommodation & foodservices sector.
Total 1997 retail sales in Washington was $52.473 billion.
Figure 3
Number of Establishments in Washington General Merchandise Stores, 1981-1998
Source: Washington Employment Security Department
700
Number of establishments
600
500
400
300
200
100
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Department stores
Variety stores
Misc. general merchandise
Employment in general merchandise stores has steadily grown in recent years. Over the 1981-1998
period, general merchandise store employment increased by 45 percent. Nine of every ten net new
workers in general merchandise were found in department stores. As elsewhere, variety stores lost
employment during the 1981-1998 period. Much of the growth in general merchandise stores can be
attributed to the entry into Washington of mass discount merchandise stores, particularly Wal-Mart.
Figure 4
Washington General Merchandise Store Workers, 1981-1998
Source: Employment Security Department
50,000
45,000
Number of employees
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Department stores
Variety stores
Misc. general merchandise
General merchandise stores in Washington are largely composed of large nationwide companies that sell
various general merchandise goods. Over four-fifths of all general merchandise store workers are found
in establishments with 100 or more employees, compared with 51 percent of all retail trade workers and
60 percent of all state nonfarm workers.
Figure 5
Size of Establishments of Washington General Merchandise Store Workers, 1998
Source: Washington Employment Security Department
100%
Share of total employment
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1-19
20-49
50-99
100-249
250-500
500+
Number of employees per establishment
State
Retail trade
General merchandise
In 1998, average covered wages for general merchandise store workers was $20,388, compared with
$17,908 for all retail trade workers and $33,922 for all nonfarm workers in Washington. General
merchandise store workers rank fourth in wages and salaries among all retail trade workers (behind auto
dealers and gasoline service stations; building materials and supply stores; and home furniture and
furnishings). Like most statewide nonfarm workers, general merchandise store workers gained ground in
real wage growth (i.e., without inflation) over the 1981-1998 period. Real wages in general merchandise
grew faster than overall retail trade, but slower than state nonfarm workers.
Table 1
Real Average Wages for Washington Covered General Merchandise Store Workers, 1981-1998 (1998
dollars)
Sources: Washington Employment Security Department, U.S. Bureau of Economic Analysis
Sector
1981 1983 1985 1987 1989 1991 1993 1995 1997 1998
Department stores
Variety stores
Misc. general merchandise
Total general merchandise
Total retail trade
Total nonfarm state
$18,970
$13,985
$14,549
$18,641
$16,764
$28,783
$19,198
$13,573
$14,406
$18,852
$16,274
$27,789
$19,308
$18,670
$14,441
$19,121
$15,600
$27,313
$18,635
$19,688
$13,130
$18,524
$15,233
$27,304
$17,629
$22,320
$14,526
$17,753
$15,264
$27,167
$17,894
$23,430
$14,319
$18,245
$15,672
$27,928
$17,339
$23,674
$15,546
$18,135
$15,886
$28,575
$18,639
$13,633
$15,551
$18,311
$16,163
$29,046
$19,246
$11,440
$15,507
$18,833
$16,915
$31,504
$20,846
$11,398
$16,262
$20,388
$17,908
$33,922
The distribution of hourly wages for general merchandise store workers is dissimilar to the state, with a
pronounced disposition toward lower hourly wages. Two-thirds of all workers in general merchandise
stores earn $12 or less per hour, compared with 41 percent of all nonfarm workers in the state.
Figure 6
Hourly Wages for Washington Building Material & Supply Store Workers, 1997
Source: Washington Employment Security Department
30%
Share of total employment
25%
20%
15%
10%
5%
0%
<$6
$6-$8
$8-$10
$10-$12 $12-$14
$14-$16
$16-$18
$18-$20 $20-$22
$22-$24
$24-$26
>$26
Hourly wage
State
Retail trade
General merchandise
The labor force in general merchandise stores are dominated by sales workers, clerical workers, and
laborers. Sales clerks and cashiers are the most common occupations within general merchandise
stores.
Table 2
Occupational Profile of General Merchandise Store Workers in Washington, 1998 and 2008
Source: Washington Employment Security Department
Estimated 1998
Projected 2008
General merchandise, SIC 53
Percent of
Percent of
Estimated
Total
Projected
Total
Employment Employment Employment Employment
Managerial & Administrative
1,590
3.4%
1,719
3.3%
Professional, Paraprofessional & Technical
2,083
4.5%
2,259
4.3%
Sales & Related Occupations
27,980
60.2%
33,181
63.0%
Clerical & Administrative Support
7,077
15.2%
7,116
13.5%
Service Occupations
2,909
6.3%
3,122
5.9%
Production, Operating & Maintenance
1,107
2.4%
1,208
2.3%
Operators, Helpers & Laborers
452
1.0%
475
0.9%
Undefined Occupations
3,290
7.1%
3,582
6.8%
TOTAL
46,488
100.0%
52,662
100.0%
Outlook
The massive restructuring of general merchandising stores undertaken largely by department stores
during the 1990s will continue into over the next five-ten years. Since acquiring new stores is a way to
gain market share within a mature industry, mergers and acquisitions will dominate department stores.
Variety stores, by and large, are in trouble, but their small market share will generally limit their overall
impact on general merchandise stores. Miscellaneous merchandise stores are expected to rebound from
their recent decline in sales over the past few years.
The health of general merchandise falls directly upon department stores. In Washington, forecasters
expect continued health within general merchandise stores as measured by employment. Department
stores will continue to dominate the employment picture. General merchandise stores are expected to
experience modest growth during the 2000-2020 forecast period.
Figure 7
Washington General Merchandise Store Wage & Salary Employment Forecast, 2000-2020
Sources: Washington Office of Financial Management, Washington Employment Security Department
60,000
Total employment
50,000
40,000
30,000
20,000
10,000
0
1995
2000
Department Stores
2005
Variety Stores
2010
2015
Misc. General Merchandise Stores
2020