Friday, April 3, 2015

What is unusual about Ireland’s non-specialised retail sales sector?

In light of this week’s industrial dispute in Dunnes Stores [why don’t they use an apostrophe?] here is a comparison of the non-specialised retail sales sectors in the EU15 (except for Greece as the data is not available).  All the data are annual averages for the five-year period from 2008 to 2012 (except Belgium which only covers 2011 and 2012 and Luxembourg which covers the period 2009-2012).  Click to enlarge.

Non-Specialised Retail Sales

Although indicative sums are noted in the top panel of the table the individual columns are not strictly additive.  Also note:

  1. Personnel costs/valued added, %
  2. Gross value added/personnel costs, %
  3. Personnel costs/number of persons employed, €
  4. Gross operating surplus/turnover, %
  5. Gross investment in tangible goods/gross operating surplus, %

There isn’t a huge amount that stands out for Ireland.  The labour share of value added here (0.72) is the same as the mean for the sample of 14 countries.  A simple productivity measure also shows Ireland to be at the EU15 mean.  The operating surplus rate here is slightly higher than the EU15 mean (4.7 per cent versus 4.2 per cent).  The investment rate (of gross operating surplus) in Ireland is above the EU mean (86 per cent versus 66 per cent) though this could be related to new entrants and expansion during the time period (2008 to 2012).

The most notable feature of the Irish data is the number of person employed in the sector (with the likelihood that the majority are employees).  Over the five years in question, an average 87,700 were employed in non-specialised retail stores (NACE Rev 2 G471).  This is around 3 per cent of the working age population (15-64 years) which compares to an EU15 mean of around 2 per cent.  Only the UK has a higher proportion of the working-age population employed in this sector than Ireland.

Of persons employed in the business economy across the EU15 (NACE sectors B to N, excluding K, and S95) around 4.7 per cent are employed in non-specialised retail stores.  In Ireland the proportion is 7.7 per cent with again only the UK having a higher rate.

As aggregate labour productivity is similar this suggests that Ireland (and the UK) have greater proportions of part-time and lower-hours staff than other EU15 countries.  If Ireland was to move to EU norms in this sector it would roughly correspond to a reduction of around one-third (c.30,000) in the number of people employed in the sector – though the hours worked by the 60,000 who remained would grow by a commensurate amount.

This would see the average personnel costs per person employed rise from €21,500 to somewhere around €30,000.  Good for those who get it but…

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