Wholesale Turnover Statistics in Canada 23rd Voorburg Group Meeting Mary Beth Garneau Aguascalientes, Mexico September 22nd to 26th, 2008

Wholesalers and their services In-store or co-op promotions Distribution Banner wholesalers Drop shippers Rack jobbers Wholesale merchants and distributors Dealers of machinery & equipment Import-export merchants and agents Manufacturing reps and agents Wholesale commission agents Dealer-owned cooperatives Wholesale brokers Buying groups Shipping Buy and sell Packaging and labeling Logistics Product training Inventory management Handling of warranty claims Marketing and support services Statistics Canada • Statistique Canada September 23, 2008

Definition of the service (1) North American Industry Classification (NAICS) 2002 Classification 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 Statistics Canada • Statistique Canada September 23, 2008

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. Statistics Canada • Statistique Canada September 23, 2008

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 Statistics Canada • Statistique Canada September 23, 2008

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 Statistics Canada • Statistique Canada September 23, 2008

Wholesale population and sample # Establishments Monthly Survey Annual Survey Population on Business Register 104,000 120,000 Sample 12,000 14,000 Mail-out (includes clusters of establishments) 5,000 5,900 Statistics Canada • Statistique Canada September 23, 2008

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 Statistics Canada • Statistique Canada September 23, 2008

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 Statistics Canada • Statistique Canada September 23, 2008

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 Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada 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 Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada 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) Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada 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 Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada 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 Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada 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 Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada 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. Statistics Canada • Statistique Canada September 23, 2008

Statistics Canada • Statistique Canada Discussion Statistics Canada • Statistique Canada September 23, 2008