Annual Revision of Monthly Retail and Food Services 

Explantion of Benchmarking Revisions, Summary of Changes, and 

Definitions 

INTRODUCTION 

The U.S. Census Bureau produces the Annual Revision of Monthly Retail and Food Services to 

provide revised national estimates by kind of business of annual and monthly sales for establishments 

classified in the retail trade and food services industries. Estimates of end-of-month inventories and 

inventory-to-sales ratios are also provided, but only for retail trade. 

 

We develop the estimates in this report using data from the Advance Monthly Retail Trade and Food 

Services Survey (MARTS), Monthly Retail Trade Survey (MRTS), Annual Retail Trade Survey

(ARTS), and administrative records. For each survey, questionnaires are mailed to a probability 

sample of firms located in the United States and having paid employees. The samples are updated 

regularly and periodically reselected. Firms without paid employees (nonemployers) are included in 

the ARTS estimates through administrative data provided by other Federal agencies and through 

imputation. 

Additional information on MARTS, MRTS, and ARTS can be found on the Census Bureau Web site 

at <http://www.census.gov/econ/www/retmenu.html>. 

 

COVERAGE 

The estimates in this publication are summarized by industry classification based on the 2002 North 

American Industry Classification System (NAICS). NAICS groups establishments into industries 

based on the activities in which they are primarily engaged. This system, developed jointly by the 

statistical agencies of Canada, Mexico, and the United States, allows for comparisons of business 

activity across North America. 

 

Retail trade, as defined by NAICS sectors 44-45, includes establishments engaged in selling 

merchandise in small quantities to the general public, without transformation, and rendering services 
incidental to the sale of merchandise. Two principal types of establishments classified in retail trade 

are distinguished: 

 

1. Store retailers operate fixed point-of-sale locations, located and designed to attract a high volume 

of walk-in customers. They have extensive displays of merchandise, use mass-media advertising to 

attract customers and typically sell merchandise to the general public for personal or household use. 

Some store retailers also provide after-sales services, such as repair and installation; for example, new 

automobile dealers. 

 

2. Nonstore retailers also serve the general public, but their retailing methods differ. Such methods 

include paper and electronic catalogs, door-to-door solicitation, in-home demonstration, ‘‘infomercials,’’ 

selling from portable stalls or through vending machines. 

 

Food services, as defined by NAICS subsector 722, include establishments that prepare meals, 

snacks, and beverages to customer order for immediate on-premises and off-premises consumption. 

 

A summary of changes from the prior report and the procedures for producing the revised estimates 

are described below. 

REVISIONS TO PREVIOUSLY PUBLISHED ESTIMATES 

Not adjusted estimates of monthly sales are revised for January 2005 through February or March 

20091 (if an advance sales estimate is computed), as well as end-of-month inventory estimates for 

January 1999 through February 2009. We revised the not adjusted estimates to: 

• Reflect corrections to data for the current MRTS and ARTS samples. 

• Introduce results from the 2007 ARTS. 

• Link the previously published estimates from the prior sample to estimates from the current 

sample. 

• Incorporate updates to the seasonal adjustment models and parameters to reflect the revised 

estimates. 

Annual sales estimates for 2006 are also revised due to the availability of nonemployer sales data 

from administrative records provided by other Federal agencies. 

 

New seasonal, trading-day, and holiday factors are computed and used to adjust sales estimates for 

January 2002 through February or March 20091

 (if an advance sales estimate is computed). For 

inventories, new seasonal factors are computed and used to adjust inventories estimates for January 

1996 through February 2009. Adjusted estimates start 3 years before the revised, not adjusted 

estimates because the revised, not adjusted estimates can affect the computation of seasonal factors 

as far back as 3 years ago. For both sales and inventories, the revised not adjusted estimates are input 

to the seasonal adjustment program. 
Annual Estimates 

Totals estimated from the current sample survey are computed as the sum of weighted data for all 

selected sampling units that meet the tabulation criteria given in the Sample Maintenance section. 

The weight for a given sampling unit is the reciprocal of its probability of selection into the sample. 

The sample-based estimated totals from the current sample are then linked to the estimates from the 

prior sample using the procedure described on the Census Bureau Web site at 

<http://www.census.gov/svsd/www/summary.html>. 

 

Estimates of Monthly Sales 

For select detailed NAICS codes, corrections are applied to the monthly retail and food service sales 

estimates for August 2006 through February 2009. Then, for each detailed NAICS code, the monthly 

retail and food service sales estimates for January 1992 (the beginning of the series) through August 

2006 from the prior sample are linked to the estimates derived from the current sample. The linkage 

is performed for each detailed NAICS level by multiplying the sample-based estimates, or 

unmodified estimates, from the prior sample by a geometric mean. The geometric mean is computed 

as the square root of the product of two ratios. The numerators of the ratios are the unmodified sales 

estimates for August and September 2006 from the current sample. The denominators of the ratios 

are the unmodified estimates for August and September 2006 from the prior sample. 

After performing the above linkage, the resulting sales estimates for December 2004 through 

February 2009 are input to the benchmarking program. The estimates for a given detailed NAICS 

code are revised in a manner that— 

• For 2005, 2006 and 2007, constrains the sum of the 12 monthly sales estimates to equal the 

corresponding annual sales estimate from ARTS. 

• Minimizes the sum of the squared differences between the month-to-month changes of the input 

and revised estimates for December 2004 through February 2009. 

• Uses the previously published December 2004 sales estimate as a constraint, linking the revised 

estimates to the previously published sales estimates and resulting in no revision to the December 

2004 estimate. 

If an advance sales estimate is computed for an industry, the March 2009 estimate is revised using 

the previously estimated month-to-month ratio (from the originally published MARTS release on 

April 14, 2009). This ratio is applied to the revised February 2009 sales estimate output from the 

benchmarking to obtain a new March sales level. For more information on how advance estimates 

are computed, see the Census Bureau Web site at <http://www.census.gov/marts/www/re0300.html>. 

A mathematical result of the benchmarking methodology is that all revised estimates following the 

end of the last benchmark year (2007) are derived by multiplying the corresponding input estimates 

by the ratio of the benchmarked-to-input estimate for the last month of the last benchmark year. 

Therefore, for a given NAICS code, a ratio of the benchmarked-to-input estimate for December 2007 
is computed. Monthly sales estimates after December 2007 are multiplied by this constant ratio, 

which is called a carry-forward factor, to derive published sales estimates. The carry-forward factor 

remains the same until the next benchmarking operation. 

Revised estimates for aggregate industry levels are computed by summing the revised estimates for 

the appropriate detailed industries comprising the aggregate. 

 

Estimates of End-of-Month Inventories 

For select detailed NAICS codes, corrections are applied to the retail end-of-month inventory 

estimates for August 2006 through February 2009. Then, for each detailed NAICS code, the end-ofmonth inventory estimates for January 1992 (the beginning of the series) through August 2006 from 

the prior sample are linked to the estimates derived from the current sample. The linkage is 

performed using a procedure similar to the one used for sales, except the geometric mean is based on 

end-of-month inventory. 

After performing the above linkage, the resulting end-of-month inventory estimates for December 

1998 through February 2009 are input to the benchmarking program. The estimates for a given 

detailed NAICS code are revised in a manner that— 

• For 1998 through 2007, constrains the December end-of-month inventory estimates from MRTS to 

equal the end-of-year inventory estimates derived from ARTS. 

• Minimizes the sum of squared differences between the month-to-month changes of the input and 

revised estimates for December 1998 through February 2009. 

• Uses the previously published December 1998 estimate as a constraint, linking the revised 

estimates to the previously published estimates and resulting in no revision to the December 1998 

estimate. 

 

For a given detailed NAICS code, end-of-month inventory estimates subsequent to December 2007 

are derived by multiplying the input estimates by the ratio of the benchmarked-to-input estimate for 

December 2007. This ratio is the carry-forward factor for inventory, and it remains the same until the 

next benchmarking operation. 

Revised estimates for aggregate industry levels are computed by summing the revised estimates for 

the appropriate detailed industries comprising the aggregate. 

 

 REVISIONS OF SALES AND INVENTORIES 

The following table shows a comparison of the revised sales and inventories to the previously 

published estimates for 2008: 

2008 Retail and Food Services Sales and Retail Inventories Comparison of the Revised 

Estimates to the Previously Published Estimates
Reasons for Revisions 

There are several reasons for revisions. The main contributors to the revision from the previously 

published estimates are: 

 

• Timing. The respondents have more time to prepare their annual and census reports than they do for 

their monthly reports. The annual and census responses are requested at a time when many firms 

have already compiled audited book figures for their own use. The timing of the annual survey is 

such that we are also able to obtain independent verification of the reported data from such sources 

as a company’s annual report. On the other hand, respondents to the monthly survey have just a few 

weeks to provide reports of their sales and end-of-month inventories. Sometimes these reports are 

based on incomplete or unaudited records and may include estimates made by respondents to 

represent their understanding of their business. 

• Sampling. As described in more detail in the Technical Documentation section of this report, the 

estimates derived from the annual survey are based on a sample that is much larger than the samples 

used to produce the monthly sales or inventory estimates. 

• Response. The annual estimates are based on more reported data than are the monthly estimates. The 

response to the ARTS is required by law. This requirement results in a dollar volume response rate of 

94 percent for sales and 93 percent for inventories. The response to our monthly survey is not 

mandatory. The dollar volume response rates for the monthly surveys are usually around 77 percent 

for sales and 71 percent for inventories. The sales and inventories for the nonresponding retailers are 

accounted for by an imputation process. This process on the monthly surveys assumes that 

nonresponding firms have trends similar to the responding firms in their respective kinds of business. 

DEFINITION OF TERMS 

Dollar Values 

All dollar values presented are expressed in current dollars; that is, the estimates are not adjusted to a 

constant dollar series. Consequently, when comparing estimates to prior years, users also should 

consider price level changes. 

Confidentiality 

Title 13 of the United States Code authorizes the Census Bureau to conduct censuses and surveys. 

Section 9 of the same Title requires that any information collected from the public under the 

authority of Title 13 be maintained as confidential. Section 214 of Title 13 and Sections 3559 and 

3571 of Title 18 of the United States Code provide for the imposition of penalties of up to 5 years in 

prison and/or up to $250,000 in fines for wrongful disclosure of confidential census information. In 

accordance with Title 13, no estimates are published that would disclose the operations of an 

individual firm. 

 

The Census Bureau's Internal Disclosure Review board sets the confidentiality rules for all data 

releases. A checklist approach is used to ensure that all potential risks to the confidentiality of the 

data are considered and addressed. 
Disclosure Limitation 

A disclosure of data occurs when an individual can use published statistical information to identify 

either an individual or firm that has provided information under a pledge of confidentiality. 

Disclosure limitation is the process used to protect the confidentiality of the survey data provided by 

an individual or firm. Using disclosure limitation procedures, the Census Bureau modifies or 

removes the characteristics that put confidential information at risk for disclosure. Although it may 

appear that a table shows information about a specific individual or business, the Census Bureau has 

taken steps to disguise or suppress the original data, while making sure the results are still useful. 

The techniques used by the Census Bureau to protect confidentiality in tabulations vary, depending 

on the type of data. 

Unpublished Estimates 

Additional statistics, such as dollar volume estimates for some kinds of business not separately 

shown in this report, are produced as a by-product of the regularly published statistics. These 

additional estimates have not been included in this publication because of high sampling variability, 

poor response, or other factors that may make them potentially misleading. Upon written request, for 

a nominal fee, the Census Bureau will release these estimates for individual use, though not for 

publication. It should be noted that some unpublished estimates can be derived directly from this 

report by subtracting published estimates from their respective totals. However, the estimates 

obtained by such subtraction would be subject to the poor response rates or high sampling variability 

described previously for unpublished kinds of business. 

 

Individuals who use estimates in this report to create new estimates should cite the Census Bureau as 

the source of only the original estimates. 

Adjustment Factors 

The X-12 ARIMA program was used to derive the factors for adjusting estimates for seasonal 

variations and, in the case of sales, for trading-day and holiday differences. Not adjusted sales and 

inventory estimates for January 1992 through February or March 20091 (if an advance sales estimate 

was computed) were input to this program. 

 

Seasonal adjustment of estimates is an approximation based on current and past experiences. 

Therefore, the adjustment could become less precise because of changes in economic conditions and 

other elements that introduce significant changes in seasonal, trading-day, or holiday patterns. 

Sales 

Sales include merchandise sold (for cash or credit at retail or wholesale) by establishments primarily 

engaged in retail trade. Services that are incidental to the sale of merchandise, and excise taxes that 

are paid by the manufacturer or wholesaler and passed along to the retailer are also included. Sales 

are net, after deductions, for refunds and allowances for merchandise returned by customers. Sales 

exclude sales taxes collected directly from customers and paid directly to a local, state, or federal tax 

agency. 

 

The estimates of sales measure the operations receipts rendered by stores that primarily sell at retail. 

The sales estimates represent total sales and receipts of all establishments primarily engaged in retail 

trade. They do not include sales at retail by manufacturers, wholesalers, service establishments, and 
others whose primary activity is other than retail trade. Because the retail establishment is the basic 

unit of measure, the published estimates of sales by type of retail store are not intended to measure 

the total sales for a given commodity or merchandise line. 

Inventories 

Merchandise inventories are the value of stocks of goods held for sale. The inventories estimates 

represent the value, at cost, of the merchandise available for sale as of the last day of the report 

period. Methods of valuation may vary according to the accounting practices of each firm. The 

estimates provided in this report are valued on a non-LIFO (last in, first out) basis. Note—LIFO is a 

method of valuing inventory where the latest items of merchandise added to the inventory are the 

first ones taken out. Non-LIFO would mean that another method, such as FIFO (first in, first out), 

was used to establish the value of the inventory available for sale. Merchandise inventories are 

shown for stores and warehouses servicing retail establishments. Included are only those warehouses 

that maintained supplies of merchandise primarily intended for distribution within the organization. 

Inventories/ Sales Ratios 

The inventories/ sales ratios show the relationship of the end-of-month values of inventory to the 

monthly sales. These ratios can be looked at as indications of the number of months of inventory that 

are on hand in relation to the sales for a month. For example, a ratio of 2.5 would indicate that the 

retail stores have enough merchandise on hand to cover two and a half months of sales. 

Leased Department 

Leased departments are broadly defined as operations of one company conducted within the 

establishment of another company. Typical examples may include jewelry counters or optical centers 

within department stores. 

GAFO 

GAFO represents sales at stores that sell merchandise normally sold in department stores. GAFO 

includes the following kinds of retail businesses: 

 

• General merchandise stores (NAICS 452). 

• Clothing and clothing accessories stores (NAICS 448). 

• Furniture and home furnishings stores (NAICS 442). 

• Electronics and appliance stores (NAICS 443). 

• Sporting goods, hobby, book, and music stores (NAICS 451). 

• Office supplies, stationery, and gift stores (NAICS 4532). 
 

ADDITIONAL INFORMATION 

E-Commerce Data 

Data for e-commerce sales and electronic data interchange (EDI) can be found on the Census Bureau 

Web site at<http://www.census.gov/estats>. 

Survey Questionnaires 

The ARTS questionnaires can be found on the Census Bureau Web site at 

<http://bhs.econ.census.gov/BHS/ARTS/index.html>. The MRTS questionnaires can be found on the 

Census Bureau's Web site at <http://bhs.econ.census.gov/BHS/MRTS/index.html>. 

 

1 Advance sales estimates are computed for selected kinds of business and are based on a small subsample selected from the larger 

MRTS sample.

 

Source: Retail Indicators Branch, U.S. Census Bureau 

Last Revised: April 30, 2009