The American retail sector is undergoing a long-term structural shift away from small “mom-and-pop” stores and toward national chains. Retail establishments have gotten larger and more concentrated; the mass-market merchandisers of the later twentieth century continued a trend toward consolidation of the retail sector into national chains operating large stores that started before their widespread emergence. In the late twentieth century, Wal-Mart emerged as the world’s most important (and controversial) retailer. The evidence on Wal-Mart’s effects on retail employment suggests either mild positive or mild negative effects, but Wal-Mart’s effect on prices suggests increases in real income.

Key findings

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Retail changed in the twentieth century as small, independent retailers gave way to national chains of massive general merchandise stores.

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Retail has surpassed manufacturing as the leading sector in American economic growth, and the transition to a service economy has occurred in spite of the view that the service sector consists largely of low-productivity, low-wage, dead-end “McJobs”.

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The retail sector has been transformed: it delivers goods to consumers with a combination of quantity, price, and promptness that would have been unthinkable in the earlier twentieth century.

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