Retailers are business firms engaged in offering goods and services directly to consumers. In most—but not all—cases, retail outlets are primarily concerned with selling merchandise. Typically, such businesses sell individual units or small groupings of products to large numbers of customers. A minority of retailers, however, also garner income through rentals rather than outright sales of goods (as in the case of enterprises that offer furniture or gardening tools for rent) or through a combination of products and services (as in the case of a clothing store that might offer free alterations with the purchase of a suit).

The retail industry is a massive part of the overall U.S. economy. In 2005, for example, retail establishments accounted for 18 percent of all nonfarm private-sector jobs and had sales of $3.2 trillion. Moreover, many retail niches are characterized by a healthy population of smaller enterprises; indeed, the vast majority of retail employees in the United States work at establishments with fewer than 20 employees.

Retail trade is widely known as a very competitive area of commercial endeavor, and observers note that many fledgling retail establishments do not survive for more than a few years. Indeed, competition for sales has become so great that consumers have seen a marked blurring of product lines among retailers. Increasingly, retailers have taken to stocking a much greater variety of goods than their basic industry classification would indicate (bookstores, for example, increasingly stock music products, while food, liquor, office supplies, automotive supplies, and other wares can all be found in contemporary drug stores). This development further complicates efforts to establish and maintain a healthy presence in the marketplace. But for the small business owner who launches a retail store on an adequate foundation of capital, business acumen, and attractive merchandise, involvement in the trade can be rewarding on both financial and personal fulfillment levels.


Retail enterprises can be either independently owned and operated or part of a "chain," a group of two or more stores whose activities are determined and coordinated by a single management group. Stores that are part of a chain may all be owned by a single company, but in other cases, the individual stores may be franchises that are independently owned by a small businessperson.

Many different types of retail establishments exist, and, as noted above, the overall industry has seen a significant blurring of the boundaries that had long separated the wide range of companies operating under the retail umbrella. Nonetheless, retailing establishments still generally fall into one of the following general categories:

  • Specialty Stores—These establishments typically concentrate their efforts on selling a single type or very limited range of merchandise. Clothing stores, musical instrument stores, sewing shops, and party supply stores all fall within this category
  • Department Stores—These establishments are comprised of a series of departments, each of which specializes in selling a particular grouping of products. Under this compartmentalized arrangement, consumers go to one area of the store to purchase tableware and another area to acquire bedding, for example.
  • Supermarkets—These retail establishments, which are primarily involved in providing food to consumers but have increasingly ventured into other product areas in recent years, account for the vast majority of total food-store sales in America.
  • Discount Stores—These retail outlets offer consumers a trade-off: lower prices (typically on a broad range of products) in exchange for lower levels of service. Indeed, many discount stores operate under a basic "self-service" philosophy
  • Mail-Order Businesses and other Nonstore Retailing Establishments—Mail-order sales have become an increasingly ubiquitous part of the American retail landscape; indeed, some retail establishments subsist entirely on mail order, forsaking traditional stores entirely, while other companies maintain operations on both levels. In addition, this category includes sales made to end consumers through telemarketing, vending machines, the Internet, and other nonstore avenues.

Electronic retail has been growing at a significantly higher rate than retail trade as a whole. The subject is covered in some detail in this volume under Dot-Coms.


Alexander, Tierney. The Retail Life: A Store Manager's Companion. iUniverse, 2002.

Barnes, Nora Ganim. "The Restructuring of the Retail Business in the US: The fall of the shopping mall." Business Forum. Winter 2005.

Burstiner, Irving. "How to Start and Run Your Own Retail Business." Citadel Press. 2001.

Heard, Geoffrey, and Gordon Woolf. Success in Store: How to Start Or Buy a Retail Business, Enjoy Running It and Make Money. The Worsley Press, 2003.

Koch, Lambert T. and Kati Schmengler. "Entrepreneurial Success and Low-Budget Internet Exposure: The case of online-retailing." International Journal of Technology Management. 13 March 2006.

U.S. Census Bureau. "Estimated Annual Retail and Food Service Sales by Kinds of Business: 1992 Through 2005." Available from Retrieved on 16 May 2006.