National Chains, Online Shopping, and Trends in Retail Productivity Dispersion
BLS Working Paper 594, U.S. Bureau of Labor Statistics, 2026
PDF Working Paper CES WP 25-64 BLS WP 570 CES WP 23-60
Abstract
Retail trade was transformed between 1987 and 2017: first, national chains displaced single-store firms; then, activity began to shift to online sellers. We show how this transformation reshaped the labor productivity distribution by developing and analyzing new public-use dispersion statistics from the Census of Retail Trade. Dispersion in the lower tail rose sharply, consistent with a surviving fringe of small, less productive retailers. Dispersion in the middle declined once stores were weighted by labor inputs—consistent with chains expanding by opening large stores that resemble one another. Moreover, industries with larger increases in the share of large firms experienced a bigger decrease in productivity differences between the 90th and 50th percentiles, but not in the tails of the productivity distribution. Our results imply that business models account for a substantial share of productivity differences. Evaluating these patterns in a single-input Hsieh–Klenow framework, we find labor allocative efficiency rises and then falls below its initial level—but the decline is entirely attributable to e-commerce, an industry whose NAICS definition pools disparate production technologies.
Previous versions circulated as "National Chains and Trends in Retail Productivity Dispersion" (CES Working Paper 25-64 and BLS Working Paper 570, 2025) and "Productivity Dispersion and Structural Change in Retail Trade" (CES Working Paper 23-60, December 2023). The revised CES Working Paper 23-60R keeps that earlier title but is a separate paper on retail productivity growth, listed separately.
Cite
@techreport{smith2026national,
title = {National Chains, Online Shopping, and Trends in Retail Productivity Dispersion},
author = {Smith, Dominic A. and Blackwood, G. Jacob and Giandrea, Michael D. and Grim, Cheryl and Stewart, Jay and Wolf, Zoltan},
institution = {U.S. Bureau of Labor Statistics},
type = {BLS Working Paper},
number = {594},
year = {2026},
url = {https://www.bls.gov/osmr/research-papers/2026/ec260070.htm},
}