Productivity and profitability of retail trade in Croatia

In the domestic market, there has long been a problem of low productivity and profitability of retailers, which is why they resort to price increases and layoffs. For this reason, there is a need to develop a model that would facilitate the introduction of annual business objectives in retail companies. The aim of the paper is to examine the predictors of profitability and productivity of the retail sector (G47) using business statistics and selected methods. Annual aggregated data on a sample of leading companies (N=37.66% of turnover) in the retail sector are processed from the FINA database. The multiple regression method with collinearity analysis is used to examine the magnitudes of profitability and productivity. In the theoretical models, variables with a significant positive and negative influence on the profit margin and return on assets (ROA) of retail companies were identified. The results can provide more planning certainty and facilitate the setting of annual and operational targets for retail management by shedding light on the problem of productivity and profitability origins. Generalized performance models of a representative company are not reliable for other activities. Based on the theory of sales maximization and the testing of models, new relationships between revenues, costs and asset utilization have been discovered that are important for corporate management. Modeling profitability and productivity in this way extends the possibilities of statistical analysis to other sectors.