Miscellaneous Retail Stores, NEC

SIC 5999

Industry report:

This category includes establishments primarily engaged in the retail trade of specialized lines of merchandise that are not included elsewhere, including art and architecture supplies; autographs, sets of coins, and related supplies; finished monuments and gravestones; cake decorating supplies; baby carriages; cosmetics; awnings and banners; candles; fireworks; rough gemstones and rock and stone specimens; home swimming pools (not installed); hearing aids; and trophy shops. It also includes ice dealers; hot tub and whirlpool bath dealers; orthopedic and artificial limbs stores; pet shops; rubber stamps stores; art dealers; auction rooms; typewriter stores; religious goods (other than books); telephone stores; and tent shops.

The industry also includes establishments primarily engaged in selling a general line of their own or consigned merchandise at retail on an auction basis. Establishments primarily engaged in auctioning tangible personal property of others on a contract or fee basis are classified in SIC 7389: Business Services, Not Elsewhere Classified.
As part of the more than $4.7 trillion retailing business in the United States, these businesses are wide-ranging in size of operation and revenue generated. While many of the enterprises in this category can be classified as small business, their impact on the U.S. economy is substantial, accounting for as much as 30 percent of the gross domestic product. These businesses sell everything from light bulbs to sunscreen to mailing supplies to cat toys. The products are not always glamorous, but for many, they are necessities. In 2007, for retailers in the miscellaneous store retailing industry, of which many of the businesses in this industry are a part, sales totaled nearly $84 billion.

According to industry statistics, 180,449 establishments operated within this industry sector in 2010 valued at nearly $59 billion, a reflection of the stagnant economy with industry-wide employment of 738,666 workers. Miscellaneous retail stores, not elsewhere classified numbered 44,644, or 24.7 percent of industry share with sales of nearly $4.1 billion. While this industry classification is highly fragmented, the majority of establishments were located in California, Florida, and Texas.

Depending on the segment of retailing being examined, the profit margin for these businesses hovers around 2 percent nationwide. In the early 2000s, some enterprises in this classification, such as typewriter stores and ice dealers, no longer enjoyed the same prominence or level of enterprise that they did 30 or more years ago. However, enterprises like religious goods stores and pet stores have enjoyed healthy activity, even during difficult times. In 2003, specialty retailers of all types were responsible for three-fourths of all retail sales nationwide.

The growth of discount stores and price clubs that carry a wide variety of durable and nondurable goods, such as Wal-Mart and its sibling operation Sam's Club, have seen an increase in popularity. Wal-Mart is by far the best known of these stores and has 1.9 million employees in 6,775 stores with 2007 sales of $348.6 billion. The company's revenues reached $408.2 billion in 2010 with a reported 2.1 million employees. Wal-Mart's stores climbed to 8,400.

It is difficult to predict future trends for this segment of the economy, given the variables involved and the mix of merchandise among the businesses. Although various individual businesses posted double-digit sales increases in the late 1990s, retailing as a whole showed less impressive numbers. Indeed, economic predictions are hard to make, but in the mid- to late 1990s, thousands of retail companies sought protection from creditors in bankruptcy courts. Reports of bankruptcies, voluntary consolidations, and hostile takeovers still occupy a regular place in business news columns. By the mid-2000s, the economy along with the retail sector was growing as consumers became more confident and began to spend more.

One effect of retailing failures was the growth of liquidator-type stores. A liquidator will either purchase a store's inventory or run a going-out-of-business sale when a merchandiser cuts back its operation or closes down. In the late 1990s, liquidators moved inventory worth billions of dollars, and it was still a booming sector in the 2000s. Boston-based Gordon Brothers Group LLC alone estimates that it moves $2 billion of merchandise annually. The Schottenstein Bernstein Capital Group is another big name in the liquidation business. These companies have worked with Jamesway, Woodward & Lothrop, along with selected individual Kmart, Edison Brothers, and Petrie Stores locations.

Home-based shopping in the form of catalog offerings like Spiegel and Fingerhut and broadcast-based presentations like QVC and the Home Shopping Network (HSN) are also part of this diverse retailing segment. By the late 2000s, these companies also offer online shopping experiences in addition to their traditional channels. Net sales of QVC were more than $7 billion in 2006, a nearly 30 percent increase over 2003 sales. And, HSN, reported 2006 annual sales of nearly $3.3 billion. Subsidiary of Barry Diller's InterActiveCorp., HSN was spun off in 2008. The company reported revenues of $2.7 billion in 2009.

E-commerce sales continue to grow and accounted for 3.4 percent of total retail sales in 2007. It is difficult to find businesses that have no presence on the Internet as moving companies, restaurants, and bakeries all seem to have their own Web sites. Sites that began with one specific product now sell a variety of items. The best known example is Amazon.com, which started as a book dealer and now sells a variety of retail goods over the Internet. In 2007, Amazon's sales increased 38 percent to $14.8 billion, and its 2007 annual net income grew by 150% to $476 million.

Compared to retail sales that increased 6.3 percent during the first-quarter of 2010, e-commerce sales grew 14.3 percent. E-commerce sales comprised 4 percent of total retail sales, according to the Census Bureau of the Department of Commerce. Amazon's sales grew to $24.5 billion in 2009, however, with expectations that sales will reach $46 billion in 2011 and even higher in 2012, the company was in the process of adding an additional seven million square feet of distribution space by 2011 to compliment its 17.5 million square feet of distribution space in 2010, and accommodate anticipated growth.

While just a few years ago consumers were leery about online shopping and submitting their credit card information while online, online shopping growth has continued to explode. Consumer confidence in online shopping continues to grow as increased security protocols are introduced. In 2007, total e-commerce sales were estimated at about $136 billion, setting a record, and nearly tripling growth from 2003.

In the late 2000s, pet and pet supplies stores continued to thrive proving "recession-proof" once again. As companies were struggling throughout 2008 and 2009, pet stores were turning profits. During 2008, Americans spent $43 billion on their pets and an estimated $45.4 billion in 2009, a 5.1 percent increase. PetSmart, the largest U.S. pet store retailer's net profit totaled $46.3 million for the quarter that ended May 3, 2009.

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