Methodology

How Was This Database Built?

ESRI uses the North American Industry Classification System [PDF-36.7 KB, 5 pages] (NAICS) to classify businesses by their primary type of economic activity.

Retail establishments are classified into 27 industry groups within Retail Trade sector, and four industry groups within the Food Services & Drinking Establishments subsector.

To estimate sales, the Retail MarketPlace database combines a number of data sources, including

• Census Bureau's 2002 Census of Retail Trade (CRT)
• Census Bureau's Nonemployer Statistics (NES)
• ESRI's demographic data
• infoUSA's business database
• Bureau of Labor Statistics

All estimates of market supply reflect current dollars derived from receipts of businesses primarily engaged in selling merchandise.

In addition, ESRI also estimates consumer demand or retail potential. Retail potential is estimated by using ESRI's consumer spending data which provides estimated expenditures for more than 700 products and services that are consumed by U.S. households.

To accurately measure retail activity, ESRI includes a leakage/surplus factor that measures the balance between volumes of supply (retail sales) generated by the retail industry and demand (spending by households, signifying retail potential) within the same industry.

Leakage within a specified trade area represents a condition where supply is less than demand. Retailers outside of the trade area are fulfilling demand for retail products. Surplus within a specified trade area represents a condition where supply exceeds the area's demand. Thus retailers are attracting customers that reside outside the trade area.

See also Methodology Statement: 2008 Retail MarketPlace [PDF].