Retail Industry In United States - Porter's Five Forces Strategy Analysis

Retail is the second-largest industry in the United States both in number of establishments and number of employees. The U.S. retail industry generates $3.8 trillion in retail sales annually ($4.2 trillion if food service sales are included), approximately $11,993 per capita. The retail sector is also one of the largest worldwide.

Retail trade accounts for about 12.4% of all business establishments in the United States. Single-store businesses account for over 95% of all U.S. retailers, but generate less than 50% of all retail store sales. Gross margin typically runs between 31 and 33% of sales for the industry but varies widely by segment.

Aruvian Research analyzes The Retail Industry in United States in Michael Porter's Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.