Revisions to retail trade data


MESI Feature Article

The Australian Bureau of Statistics ( ABS ) has announced revisions to the Retail Business Survey (RBS), which provides the information for its regular Retail Trade publication. This feature discusses the changes and the implications for the Monthly statistical bulletin.

What is changing?

The RBS is used to estimate the value of the turnover of retail businesses in Australia. The ABS reports that three changes will be made to the RBS. These changes include removing some sectors from the survey, reducing the survey sample size and changing the sampling method.

The RBS will no longer include the hotels and licensed clubs sector and the selected services industries sector. These exclusions reduce the size of the ‘completely enumerated’ sector from 730 to 640 businesses, and sampled businesses from 3214 to 2775—a reduction of 13 per cent in businesses surveyed. (The enumerated sector includes major retailers such as department stores, and the sampled sector includes all other retail businesses).

The survey size will also be reduced for the businesses that remain in the survey.  The completed enumerated sector size will fall from 640 to 500 businesses, due to a reclassification of businesses through size.  For the sampled sector the survey sample will be reduced from 2775 to 2702 businesses.  The combined reduction in survey sample size will be around six per cent.

The monthly activity is also affected by the change in sampling methodology, not just the sample reduction. Typically, the RBS would survey businesses on a monthly basis. That is, before the change, 3944 businesses would have been surveyed each month.  After the change, the survey will be run monthly; however, the survey will include only 1401 businesses. This figure includes the completely enumerated sector’s 500 businesses, each month, and only 901 sample sector businesses. For the latter sector, the monthly target is derived from sampling 901 businesses per month, over a three month period, so that 2702 businesses are sampled per quarter.

Why does it matter?

A survey measures responses to questions from a sample of participants within a population. The intention is to estimate statistics from the sample, such as average monthly turnover, which can be used to estimate, or infer, the approximate values of a population as a whole.

Surveys contain sampling errors which occur because they do not cover an entire population, as in a census. While understanding the cause of, and reasons for, the errors is not critical it is important to understand that as the sample size decreases, the errors from the sampling exercise increase.  Therefore, reducing the scope and sample of the RBS mean the retail trade data are less accurate.

The ABS provides details of the RBS sampling error by publishing the relative standard errors ( RSE ) for the retail trade data.  According to ABS’ estimates, the reduced sample size will cause an increase in the monthly RSEs of between 30 per cent and 100 per cent, depending on the sector or State being considered. 

What will be available?

As a consequence of the discussed changes the retail trade information will be split into two components.  The first component will be a monthly report ‘Retail Trade Trends’. This report will provide trend estimates of broad industry groups and State totals, but limited industry level details. Additional information will be provided, such as seasonally adjusted data, but is considered too volatile due to the smaller sample size and associated higher RSEs.

The second component will be a quarterly publication ‘Retail Trade Quarterly Indicators’. This publication will be more reliable than the monthly report. It will include original, seasonally adjusted and trend details for industry and sub-industry data, at the Australian and State levels. The publication will also include chain volume estimates to provide inflation adjusted turnover.

What is the expected impact on the data?

The immediate impact of the changes will be to lower the value of sales activity reported, compared to the previous series. The impact of the sample size and methodological change will be to reduce the reliability of retail trade data.

The ABS has estimated that the revisions would have seen a 0.3 per cent smaller measure of retail trade for June 2008 data. To see how the series compare over time, the graph below shows the pre and post change seasonally adjusted series from April 1982 (based on ABS backcasts) to June 2008. It is clear that total retail trade is now lower.

Monthly trade data under different methods

Monthly trade data under different methods

Monthly statistical bulletin Table 4.1

Monthly statistical bulletin Table 4.1 reports seasonally adjusted monthly retail sales data. As a consequence of the changes, the monthly data will be replaced by quarterly seasonally adjusted retail sales data, once the quarterly series begins being published in November 2008.  When the quarterly ABS report is published, this bulletin will incorporate all backcast data for consistency, and any further changes will be advised.

Adrian Makeham-Kirchner

 

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