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Sheldon Ziman 
Amy Peregoy 
301-457-3315

                          Retailers' Operating Expenses 
                      Near $700 Billion, Census Bureau Says

   The nation's retailers spent $699.3 billion on operating expenses in  
1997 compared with $546.2 billion in 1992, the Commerce Department's Census
Bureau said in a report today.

   The report, Business Expenses, 1997 Economic Census, found that retailers'
expenses over the five-year period increased 28 percent while sales grew
34 percent.

  The report provides national data on operating expenses for most sectors of
the economy. Examples of expenses include payroll, cost of fringe benefits,
rent, utilities, advertising and purchased computer services. Comparative data
for 1992 are included where available. For merchant wholesale and retail trades,
data on value added and other economic measures also are shown.

  Highlights from the report:

  Retail Trade

  - Operating expenses of the retail industry totaled $699.3 billion in 1997,
    27 percent of the $2.6 trillion in retail sales. Cost of goods sold were
    $1.8 trillion, 68 percent of retail sales.

  - Payroll in the retail industry made up 46 percent of operating expenses in
    1997, with an additional 8 percent for fringe benefits, 9 percent for rent
    and 6 percent for advertising services.

  - Of the major retail industry groups, home furnishings and equipment stores
    had the largest proportion of expenses for advertising services: 10 percent.

  Merchant Wholesale

  - Operating expenses for the nation's merchant wholesale employers totaled
    $438.2 billion in 1997, 18 percent of sales of $2.5 trillion. In
    1992 operating expenses were 17 percent of sales.

  - Payroll made up 45 percent of all 1997 expenses, fringe benefits, 8 percent,
    rent and depreciation, about 5 percent each.

  Service Industries

  - In the service sector, operating expenses of health services totaled
    $700.2 billion, 84 percent of the $834.1 billion in receipts and revenues of
    this industry. Payroll comprised 51 percent of their total expenses; fringe
    benefits, 10 percent; and depreciation, 4 percent. Data for health and 
    certain other service industries included nonemployers for the first time in
    1997 and, thus, are not directly comparable with 1992 data.

  - Operating expenses for the nation's hotels and other lodging places totaled
    $70.7 billion in 1997, 70 percent of receipts and revenues of $101.3 billion.
    In 1992, operating expenses were notably higher as a percent of receipts and
    revenues at 81 percent, with $57.9 billion in expenses and $71.8 billion in
    receipts and revenues. Payroll made up 40 percent of total expenses in 1997;
    fringe benefits, 10 percent; and depreciation, 9 percent.

  Operating expenses for communication services, trucking and warehousing, 
arrangement of passenger transportation, manufacturing, mining and construction
industries included in this report were previously released in other Census
Bureau reports. Expense data for the manufacturing, mining and construction
industries use the new 1997 North American Industry Classification System; data
for other industries are based on the old Standard Industrial Classification
system.

  Data on expenses are subject to sampling variability, as well as nonsampling
error. Sources of nonsampling error include errors of response, nonreporting and
coverage.

  The report will be available on the Internet and in the CD-ROM 97S Report
Series.