Definition of Retail Sales Per Capita

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Retail sales per capita is defined by the total number of households divided by the total retail sales to determine the average cash flow through each household. Gather data to locate trends in a particular market with information from a portfolio manager in this free video on business strategies.

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Video Transcript

Are you an economist, starting to calculate and look at retail sales per capita? Hi this is Roger Groh at Groh Asset Management. What does that mean? Well all you have done is taken the total number of households and divided it by total retail sales. You can do that in a city you can do it in a state you can do it in a country you can do it in a hemisphere you can do it in any area you want, but the key is that you got those to data points. Does it matter? Of course it does. Because it shows the amount of cash that is flowing through households, and the trend is the big thing. Does it work over the longer term? We do not think so, for instance the nature of per capita has changed a lot. Thirty years ago in the United States typically you had a husband and wife living in a home with one of them working, today fifty percent of the households only have one parent in them and that parent works. So I am not sure that today's data really applies to data from thirty years ago. But could you look year over year or maybe back a couple of years, of course, and it will be very valuable for you to have that. When you start to compare data between countries does it matter, of course you have to take into account though the basic services provided by each government and then of course the taxable side of things in each country. Many other countries supply the basics that we do not get here in the United States as part of their base tax program. For instance in many countries college education is included, whereas in the United States generally you have to pay for college education. Well the key in this is our retail sales going up. If they are, go for it, if they are not you are going to have a hard time. I am Roger Groh with Groh Asset, thank you very much for spending time with me.


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