Marketing Essay Sample Paper on Retail sales

Retail sales

Retail sales provide useful data and information that is analyzed to reflect consumer spending in a given economy. In determination of GDP using expenditure approach, consumption is a major component in that particular economy. The rise of retail sales in a given country, for instance America will increase the total consumption which includes durables like gasoline, building materials, and automobiles and non-durables. Therefore, an increase in the retail sales increases the GDP of an economy and vice versa.

A rise in retail sales means that, room will be created in stores and warehouses giving producers and manufacturers an opportunity to increase their production. This will increase gross value of output and definitely gross value added which will have a general rise in the GDP.

Growth in the sales of durable goods like automobiles tend to indicate economic growth but an unexpected increase is usually an indicator of inflation. Therefore the article uses non-durable goods to determine the increase of sales because it tends to be stable and can give reliable data and estimates. Economists in some occasions exclude some categories of commodities because they are volatile and may change prices for reasons which have minimal effects on the economy.

 The Producer Price Index (PPI) is used to measure the average change over a period of time in the prices that are received by the domestic producers for their output. The PPI is somehow similar to Consumer Price Index (CPI) although it considers rising prices from the producer side rather than the consumer. Therefore, it can be used to predict inflation in a certain economy.

Increased consumer spending in a given economy is therefore considered as an indicator of economic stability and growth. These retail sales reports are so significant and reliable for making crucial decisions in regard to the economy.