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This topic relates to businesses whose main activity is the wholesale and/or retail sale of any type of goods, and the supply of services incidental to the sale of goods. The repair of motor vehicles and motorcycles is also included.

Publications

Annual Business Inquiry
Department: Office for National Statistics
The Annual Business Inquiry (ABI) is conducted in two parts: employment and financial information. This release deals with the financial inquiry which collects information for about two thirds of the UK economy, covering agriculture (part), hunting, forestry and fishing; production; construction; motor trades; wholesale; retail; catering and allied trades; property; service trades. The financial variables covered include turnover, purchases, employment costs, capital expenditure and stocks. Approximate Gross Value Added (GVA) is calculated as an input into the measurement of Gross Domestic product (GDP).
Annual Business Survey
Department: Office for National Statistics
The Annual Business Survey collects financial information for the UK non-financial business economy; variables covered include turnover, purchases and approximate gross value added.
Distributive and Services Trades
Department: Office for National Statistics
Provides information on turnover of various Distribution and Service industries at the three digit level of UK Standard Industrial Classification.
Index of Services (Northern Ireland)
Department: Enterprise, Trade and Investment (Northern Ireland)
General measure of changes in output of service sector industries.
Index of Services (Northern Ireland)
Department: Northern Ireland Statistics and Research Agency
General measure of changes in output of service sector industries.
Northern Ireland Annual Business Inquiry
Department: Northern Ireland Statistics and Research Agency
Provides information on the value of the economic activity that businesses generate and associated expenditure across the main industrial sectors in Northern Ireland.
Northern Ireland Annual Business Inquiry
Department: Enterprise, Trade and Investment (Northern Ireland)
Provides information on the value of the economic activity that businesses generate and associated expenditure across the main industrial sectors in Northern Ireland.
Turnover and Orders in Production and Services Industries
Department: Office for National Statistics
Monthly Turnover, Exports, and Orders data for Production and Services industries.

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Overview

Activities include:

  • wholesale and retail trade and repair of motor vehicles and motorcycles, including parts and accessories

  • wholesale trade, both domestic and international, of goods on own account or on a fee or contract basis

  • retail sale of consumer or retail goods via specialised stores, stalls, markets, mail order, Internet, direct (door-to-door) sales including fuel and vending machines

  • retail sales by commission agents and retail auction houses

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Technical Data

Data are collected from a selection of businesses in the retail and distribution industries via the Annual Business Inquiry (financial), (ABI/2). Monthly retail turnover data are collected from the retail sector by the Retail Sales Inquiry (RSI). Turnover for the wholesale sector and the retail and wholesale trade in motor vehicles is collected by the Monthly Inquiry into the Distribution and Services Sector (MIDSS). All three are sample surveys but the data collected are weighted to provide an estimate covering the total population of the sector.

Data collected by the RSI are used to calculate the Index of Retail Sales, which is an important short-term indicator of economic activity. This index, along with the MIDSS data, feed into the Index of Services (IoS) and are used to calculate Gross Domestic Product (GDP). RSI data, excluding the food components, also feed into parts of the Household and Final Consumption and Expenditure (HFCE) price index.

ABI/2 data totalled to industry level for the main variables feed into the UK National and Regional Accounts. They are also used to derive Gross Value Added (GVA), which measures the contribution of the manufacturing sector to the economy. Other measures such as turnover per head are derived using employment data collected by the Annual Business Inquiry (employment).

Total Turnover

The total turnover of the business is collected by both the annual and monthly surveys. The annual turnover, together with the other variables, is used to derive industry level GVA. Monthly turnover data are used as a proxy for GVA because it is not possible to collect the individual variables on a monthly basis.

Other main variables collected and used in the calculation of GVA are:

  • employment costs

  • purchases of energy goods, materials and services

  • tax, duties and levies paid

  • subsidies receivable

  • value of stocks held

  • capital expenditure

Gross Value Added (GVA)

GVA is used in the estimation of Gross Domestic Product (GDP), which is a key indicator of the state of the whole economy. In the UK, three theoretical approaches are used to estimate GDP: ‘production’, ‘income’ and ‘expenditure’.  All three approaches are balanced annually using the Input-Output Supply and Use Tables accounting framework. The GVA for the manufacturing sector is used in the estimation of the GDP ‘production’ approach.

The link between GVA and GDP can be defined as:
GVA (at industry level current basic prices)
plus taxes on products (available at whole economy level only)
minus subsidies on products (available at whole economy level only)
equals GDP (at current market prices; available at whole economy level only)

The Standard Industrial Classification (SIC) defines the activities covered by the manufacturing industries. The main or principal activity of a business is defined as the activity that contributes most to the business’s total value added. In practice, variables such as employment, salaries and gross output are used instead of value added.

The UK Standard Industrial Classification (SIC), which defines all of the Office for National Statistics’ (ONS’) business surveys, is based on the European Communities (EC) classification of Economic Activities, NACE (from January 2008, a major revision to NACE was introduced, NACE Rev.2). ONS is in the process of converting its surveys to NACE Rev.2, with the ABI/2 survey to be despatched early in 2009, among the first selected on the new classification SIC 2007.

For the retail and distribution sector as a whole, the change in classification has very little effect other than the transfer of the repair of personal and household goods from the retail and distribution sector to the personal services sector.

ONS business surveys will be converted to SIC 2007 over the next few years, with the National Accounts system being the last to be converted in 2011. In order to take full advantage of the change in classification, all survey samples will be re-optimised as each survey converts to SIC 2007.

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Glossary

  • Annual Business Inquiry (ABI)

    An annual business survey covering most sectors of the economy. ABI/1 collects data on employment while ABI/2 collects financial data such as turnover, stocks and capital expenditure.

  • Capital Expenditure (including non-deductible VAT but excluding deductible VAT)

    Capital Expenditure includes the purchase costs and disposal proceeds of fixed assets, together with any other amounts treated as capital items for taxation purposes. Grants and allowances from government sources, statutory bodies and local authorities should be included.

  • Employment costs

    The amount the business pays for its workforce to carry out the activities of the business. It includes wages and salaries paid to all employees (including overtime) and also the National Insurance and pensions contributions paid by the employer. Employment costs for subcontracted work where the employees are not directly employed by the business are excluded.

  • Eurostat

    The Statistical Office of the European Communities, based in Luxembourg.

  • Generally Accepted Accounting Principles (GAAP)

    The standard framework of guidelines for financial accounting. It includes the standards, conventions and rules accountants follow in recording and summarising transactions, and in the preparation of financial statements.

  • Gross Domestic Product (GDP)

    A measure of the value of the goods and services produced in the economy in the year. It is a good indicator of the wealth and economic development of a country. Developed countries typically have high GDPs and developing countries typically have low GDPs. Income earned abroad, such as overseas investments, is not counted in GDP but is counted in a country’s Gross National Product (GNP).

  • Gross Value Added (GVA)

    A measure of the value of the goods and services produced in the economy and is used to monitor the performance of the national economy as a whole. It can also be used by individual businesses to monitor their performance, and therefore, the profitability of the business. GVA is calculated as: the value of sales of goods and services minus the cost of purchases of energy goods, materials and services.

  • Household final consumption expenditure (HFCF)

    HFCF is a price index which represents consumer spending. It consists of expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services, including those sold at prices that are not economically significant. It also includes imputed rent for the provision of owner-occupied housing services, and consumption of own production. The household sector covers not only those living in traditional households, but also those people living in communal establishments, such as retirement homes, boarding houses and prisons.

  • Monthly Inquiry into the Distribution and Services Sector

    A survey collecting monthly information on sales from businesses within the distribution and services sector. It also collects information on new orders within the engineering sector and a limited amount of employment information.

  • Nomenclature of Economic Activities in the European Community (NACE)

    This classification of economic activities has been developed by the Statistical Office of the European Communities (Eurostat) since 1970. It classifies statistical units (for example, companies and establishments) related to economic activity providing the base on which to develop a wide range of statistics such as products, consumption, capital formation and financial transaction (see Standard Industrial Classification).

  • Purchases of energy goods, materials and services

    The amount paid by the business for all energy goods, materials and services used to carry out the activities of that business. This figure is exclusive of VAT but inclusive of other taxes, duties and levies.

  • Standard Industrial Classification (SIC)

    The system used by the Office for National Statistics (ONS) to classify businesses to particular industries or economic activity. The UK classification is based on the Statistical Office of the European Communities (Eurostat) NACE classification of economic activities. This is used widely throughout the European Commission (EC) and enables comparisons to be made between national and EC statistics. Any revisions to NACE are made under EC Regulation. All Member States are obliged to adopt the changes. Along with other Member States, ONS is in the process of converting to the revised version of NACE (NACE Rev.2), which under the UK classification is called SIC 2007.

  • Stocks held

    Stocks, or inventories, include all goods and materials on hand for sale or processing, including work in progress owned by the business in the UK. They should be valued in accordance with UK GAAP (Generally Accepted Accounting Practice) or International GAAP. Balances on long-term contracts included in stocks should exclude any progress payments made.

  • Subsidies on products

    Amounts receivable from UK government bodies or the European Commission (EC) to reduce the price of products (goods or services) sold to customers. Grants received from any source as one-off payments to lessen the burden of purchasing capital expenditure items are excluded.

  • Tax, duties and levies paid

    The total amount payable in taxes (excluding VAT), duties or levies on the energy goods, materials and products purchased by the business in order to carry out the activities of the business. It is paid to government, other statutory bodies and local authorities. Any amounts payable in taxes, duties and levies on the outputs of the business are also included.

  • Turnover (excluding VAT)

    Turnover consists of total takings or invoiced sales and receipts of the business in connection with the sale of goods and services. It should include any indirect taxes, duties and levies (except VAT) invoiced to the customer. Interest and similar income, other operating income and extraordinary income are excluded as are the net proceeds on the sale of capital items.

  • Turnover (including VAT)

    Turnover collected by the Retail Sales Inquiry includes the sale of goods to the general public and households and is generally inclusive of VAT.

  • Weighting

    The process of estimating a total from a sample (the process was previously called ‘grossing’ but the Office for National Statistics’ (ONS’) Methodology Directorate has revised the term to ‘weighting’).

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Contact Details

For statistical enquiries about this topic, please contact:

ONS Customer Services

Email: info@statistics.gov.uk

Telephone: +44 (0) 845 601 3034

Office for National Statistics Room 1.015 Government Buildings Cardiff Road Newport NP10 8XG

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