In 2005, according to IBGE’s Annual Survey of Trade (PAC), there were 1,438 million commercial companies all over the country, with net operating revenue of R$ 940,2 billion and employing 7,074 million persons. Wholesale companies had the highest revenue (R$ 418,9 billion), but retail comprised 84.2% of the companies and held 75.2% of the workers employed in the commercial sector. Only 8.6% of the companies traded cars, pieces and motorcycles, the third category surveyed by PAC. Companies with less than 20 employed persons accounted for 97.8% of the total of commercial companies in the country. The sales of fuels and lubricants were responsible for most of (34.2%) the net resale revenue of wholesale trade. Hypermarkets and supermarkets comprised only 0.9% of the retail companies, but they accounted for 24% of the net resale revenue of this sector. Between 2000 and 2005, the participation of the wholesale sector in the value added of commercial activities in the country increased by 5.6 percentage points (from 29.9% to 35.5%). Its productivity almost doubled: from R$ 23,344 to R$ 45,415 per worker.

 

In 2005, the estimated net operating revenue of the sector was, according to the Annual Survey of Trade, R$ 940,2 billion. A total R$ 52,9 billion were paid as salaries, withdrawals and other remuneration and there were 7,074 persons employed. There were 1,502 million establishments and 1,438 million commercial companies.  

 

 

The fixed stratum¹, which is formed by about 36 thousand companies with over 20 employees each, had a total net operating revenue of R$ 674,4 billion (71.7% of the total). These companies held 2.5% of the total and employed 2,542 million persons and paid R$ 28,8 billion in salaries, accounting, respectively, for 35.9% and 54.5% of the overall trade figures as a whole.

 

Survey investigates three categories

 

PAC presents the activities of Brazilian trade grouped into three categories: trade of automotive vehicles, pieces and motorcycles; wholesale trade; retail trade.  

 

Wholesale companies function as distributors; they have better infrastructure and higher volume of sales. The trade of vehicles and pieces has wholesale, retail or even services features, since it sells durable goods of high average cost.

 

Wholesale has the highest revenue, but retail is the leader in terms of wages, employed persons and number of companies

 

The structure of the Brazilian commercial sector remained practically unchanged in relation to 2004. Wholesale trade was responsible for the biggest part of the net operating revenue of trade (about 45.0%). Retail trade featured as the major participation in terms of wages, withdrawals and other remuneration, employed persons, number of establishments and number of companies. This occurs due to the specific characteristics of both activities.

 

In 2005, retail trade generated net operating revenue of R$ 393,5 billion, which accounted for 41.9% of the overall commercial activity in 2005. The payment of wages, withdrawals and other remuneration totaled R$ 33,9 billion, representing 64.00% of the wages paid by commercial companies. 

 

In 2005, the 1,211 million retail companies, which made up 84.2% of the trade segment, employed about 5,320 million persons, that is, 75.2% of the total number of employed persons in the commercial sector.

 

Wholesale companies generated R$ 418,9 billion in net operating revenue, which represented 44.5% of the commercial sector. In relation to the number of establishments and companies, the contributions of this segment were 7.7% and 7.2%, respectively; it was responsible for 15.0% of the total number of employed persons.

 

The trade of vehicles, parts and motorcycles accounted for 8.6% of the overall number of companies and establishments, generating R$ 127,8 billion as net operational revenue.

 

 

Retail trade had the highest trade margin²: R$ 97,4 billion, or 53.1% of the total, versus 36.5% in wholesale trade and 10.4% in vehicles, pieces and motorcycles.

 

Companies with less than 20 employees are still the majority in retail trade

 

The structure of commercial sector by group of employed persons did not change from 2004 to 2005. The companies which employed up to 19 persons were responsible for most of the remuneration, the number of companies, establishments and employed persons. This result is due to the high number of small companies in retail trade.

 

The companies which had up to 19 employees accounted for 29.4% (R$ 276,6 billion) of net operating revenue, and for 97.8% (1,406 million) of the total of commercial companies. Bigger corporations, with 500 or more employed persons, represented only 0.03% of the total of active commercial companies, being responsible for the generation of net operating income of R$ 278,1 billion (29.6% of the total).   

 

In retail trade, most of the companies employed up to 19 persons (91.7% of the total), being responsible for 39.9% of the total number of employed persons in the activity and by only 16.4% of the net operating revenue. Companies which had over 500 employed persons had the highest net operating revenue, according to the Table of Results # 2. These wholesale companies accounted for 0.1% of the total of companies, 15.1% of the employed persons and 36.7% of the net operating revenue.

 

In retail trade, the companies with up to 19 employed persons also had significant participation in the number of companies (98.4%). However, it was different from wholesale trade, since it concentrates most employed persons (69.1%) and most of the net operating income (45.2%). It is important to highlight that the participation of bigger companies, with 500 or more employed persons, has similar participation to companies of the same kind which are on the market, accounting for 0.03% of the number of companies, 14.0% of the number of employed persons and 30.0% of the net operating revenue.

 

The small companies of vehicles, pieces and motorcycles, which employed up to 19 persons, accounted for 97.0% of the companies, 64.6% of the employed persons and 23.3% of the net operating revenue. This activity is different from the others since it includes a considerable part of net operating revenue in the groups from 50 – 99 and 100 – 249 employed persons.              

 

Vehicle sales accounted for 70.5% of the trade revenue of vehicles, pieces and motorcycles

 

Sales of automotive vehicles comprised 19.9% of the companies, and it generated net resale revenue of R$ 87,0 billion (70.5% of the total). The activity vehicle pieces made up 23.5% of the total net resale revenue and 72.1% of the number of companies.

 

Vehicles and pieces trade employed, on average, 6 persons per company and paid an average of 2.3 minimum wages (Table 1). The trade of automotive vehicles employed, on average, 8 persons by company, with an average salary of 3.3 minimum wages. This subsector was the only one with productivity3  above average: each person employed in this activity aggregate, on average, R$ 42 140 to value added³ of vehicles and pieces trade.          

Fuels and lubricants had the highest net resale revenue in wholesale trade

In wholesale trade, the highlight is resale of fuels and lubricants, because the rise of petroleum derivative prices contributed to the generation of a net resale revenue of R$ 138,6 billion (34.2% of the total). This activity accounted for 1.4% ( 1 459) of the overall number of companies and 3.8% (40 102) of the persons employed in wholesale trade in 2005. Table 2 shows other details:  

The wholesale subsector of fuels and lubricants generated R$ 138,6 billion of net resale revenue and the cost of resale of these goods was R$ 128,2 billion, which resulted in trade margin of R$10,4 billion. This way, the trade margin (8.1%) of these companies was the lowest among those estimated for the wholesale activities (Table 2). The highest trade margin rate was that of wholesale sales of pharmaceutical articles: 43.8%, and above the overall average (19.8%) in 2005.   

 

In retail trade, hypermarkets and supermarkets comprise 0.9% of the companies and 24% of the net resale revenue

 

In retail trade, big chains have gone through several changes in the last few years, worsening the competition with the participation of big international companies in the country, the restructuring of patrimony of big economical groups, and the fast assimilation of organizational innovations and automation technologies.     

 

It is important to point out the importance of the subsector hypermarkets and supermarkets in retail trade. It held 0.9% of the total of companies and generated net resale revenue of R$ 93,6 billion, that is, 24% of the entire retail subsector. This activity was the one which presented the highest revenue by establishment of retail trade. Companies paid R$ 5,7 billion in wages, withdrawals and other remuneration, and its contribution made up 16.9% of the R$ 33,9 billion of retail trade.

 

Another important segment of retail trade, fuels and lubricants, reached the highest productivity (R$ 34 685) among the activities analyzed, whose average was R$ 13 341 million (Table 3). Wages, withdrawals and other remuneration of this activity totaled R$ 2,3 billion, and had, together with Hypermarkets and supermarkets, the highest average wage of retail trade (2.2 minimum wages). This segment also had a reduced number of companies and employed persons (2.3% and 5.1% in retail trade, respectively), and a significant part of net resale revenue (24.3% or R$ 94.5 billion) in 2005.

Hypermarkets and supermarkets employed a significant part of the workers in retail trade, reaching 12.8% of the total, that is, 681 229 persons in December 2005. These were distributed among 10 632 companies; there was, on average, 64 employed persons by company.

 

In 2005, the subsector textiles, apparel and footwear paid R$ 5,7 billion in salaries, withdrawals and other remuneration (16.7% of the total), employing the biggest number of people (19.0% of the total) and comprising 22.6% of the retail trade. This segment and the trade of food products, beverages and tobacco had the highest trade margin rates: 69.0% and 70.6%, respectively.

 

Between 2000 and 2005, the participation of wholesale in the trade segment increased 5.6 percentage points

 

The economic changes which have recently occurred in the country have brought more trade competition and the restructuring of many companies. These changes occurred after the implementation of management methods, logistics systems, trade automation and new information and communication technologies.

The participation of the segments vehicles, pieces and motorcycles and wholesale in value added of trade increased (Table 4). The former changed from 11.5% in 2000, to 12.4% in 2005; the latter, which had contributed 29.9% in 2000, had increase of participation to 35.5%. The relative participation of retail trade decreased by 6.4 percentage points in 5 years.

 

In order to evaluate the structural transformation or the change in the composition of trade by segment between 200 and 2005, it was necessary to apply the Index of Structural Change (IME) for value added and employed persons. The IME for value added shows there were no significant structural changes in the period. The IME for employed persons (2.0%) is even lower, indicating that, according to this criterion, Trade did not go through any structural changes (Table 4).

 

From 2000 to 2005, the participation of retail trade in Trade fell from 77.2% to 75.2%, whereas the participation of wholesale trade increased from 14.2% to 15.0 %, and vehicles, pieces and motorcycles, from 8.6% to 9.8%.

 

PAC also analyzed the 12^th Order Concentration Ratio (R12) of Trade and its three subsectors. There was slight reduction in the participation of the twelve biggest companies of each subsector; the market concentration of Trade was 14.2% in 200 and changed to 13.9% in 2005. The most concentrated subsector is wholesale (28.1% in 2000 and 26.3% in 2005); the least concentrated one is vehicles and pieces (6.6% in 2000 and 4.8% in 2005).

 

Wholesale leads most analyses and almost doubles its productivity

 

Between 2000 and 2005, wholesale had major relevance to all the indicators, except the trade margin rate, for which retail trade had the highest figures (Table 5).Wholesale trade had the highest average number of employed persons by segment (10) in 2000 and 2005. It was also the subsector with the highest average wages (in minimum salaries): 4.2 in 2000, and 3.3 in 2005. These were always above the average of Trade (Table 5).

 

In 2005, wholesale productivity (R$ 45 415) was over twice as the figure of overall productivity in the segment (R$ 19,243) and almost twice as its own figure in 2000 (R$ 23 344). The trade margin rate (19.8%), the second highest one among the segments surveyed, was lower than in retail trade (31.1% in 2000 and 33.4% in 2005).

 

In 2005, the average revenue of wholesale trade was the highest among the segments: R$ 3,9 million, that is, more than three times the average revenue of the segment of vehicles, pieces and motorcycles (R$ 997,7 thousand) and five times higher the average of the overall revenue of Trade (R$ 638,6 thousand).

 

Participation of the Southeast Region in Trade decreases from 2000 to 2005

 

The Southeast Region, in spite of its big relevance, faced reduction of participation considering all the variables investigated from 2000 to 2005. In 2000, it accounted for 55.8% of the overall gross resale revenue of goods in Brazil; this figure fell to 54.1% in 2005. The South Region contributed 20.5% to revenue, and remained so in 2005. The Northeast Region had slight increase in participation, from 13.2% to 13.5% (Graph 5). The Central West Region, in relation to the gross resale revenue, between 2000 and 2005, had the highest gain in participation: from 7.7% to 8.7%.

 

The Southeast Region, the most relevant one in terms of wages, withdrawals and other remuneration, had its participation reduced from 60.0% to 57.5%. The other areas increased their participation, except the Northeast, which had slight decrease, from 12.0% to 11.8%.

 

 

The Southeast Region held most of the persons employed in this activity, 53.5% in 2000 and 52.3% in 2005. The South Region remained in second place (20.7% in 2000 and 20.8% in 2005) and the Northeast had slight increase (from 15.7% to 15.9%). 

 

In the analysis of distribution of the number of commercial establishments with gross resale revenue, it can be seen that the Southeast Region had fall (from 51.4% in 200 to 48.1% in 2005). The South and Central West Regions increased their contribution from 22.1% to 24.1% and  from 6.9% to 8.4%, respectively.

 

Trade in the North Region has the highest average of employed persons by establishment

 

The average number of employed persons by establishment, in the group of Brazilian areas, has not had change from 2000 to 2005 (Table 6). The highlight, in this case, is the wholesale segment, which remained as the biggest employer by establishment, with an average result above that of Trade in each Region.

The North Region had the highest average number of employed persons by establishment (7), followed by the Southeast and Central West (5). In all the activities of trade, the North Region had bigger establishments, in terms of average number of employed persons.

The highest wages were paid in the Southeast and South Regions; in all the areas the average retail wages were below the national and the regional average, whereas the averages of wholesale trade and trade of vehicles, pieces and motorcycles were above both.

 

In terms of employed persons, the regional IME (3.2) shows there was not structural change in the period, that is, there were not significant changes in the participation of Federative Units, between 2000 and 2005 (Table 7).

 

The states in the Southeast and South regions had the highest levels of participation in the overall number of persons employed in Trade activities. São Paulo (30.0%) had the highest percentage, being followed by Minas Gerais and Rio de Janeiro (Table 7).

 

The participation of the Southeast Region in the group of employed persons reached 52.4% in 2005. In the South alone, the highlights were Rio Grande do Sul (8.3%) and Paraná (7.8%), whereas in the overall region there was participation of 20.8% in the number of employed persons. Both regions together had about 73.2% of the number of employed persons of national trade. 

In terms of the Northeast region results it is important to highlight Bahia and Pernambuco (4.6% and 2.5%, respectively). Together, the North and Northeast regions contributed 18.5% to the group of persons employed in the commercial sector.

 [1] The information in PAC are tables and analyzed for all the companies surveyed, and also for companies with 20 or more employed persons, which form the fixed stratum, with more detailed information.

 

[2] Trade margin refers to the difference between net resale revenue and the cost of resold goods. It is the result obtained by the sales efforts of goods deducted from its acquisition costs by companies.

[3] Value added corresponds to the difference between the gross value of production and its intermediate consumption. It expresses the value that the economic activity adds to the goods and services consumed during its production.