Retail and Consumer Services Key Terms

Tune in to basic vocabulary about retail and consumer services

By Lisa Maloney

Retail goods and consumer service providers are constantly walking a thin line, balancing profits and good business planning with the need to attract customers. Businesses in the retail and consumer services sectors use a wide field of research and statistics, much of it compiled by government or university research organizations, to guide their decision making. Brush up on these vocabulary key words to help you understand how retail and consumer business decisions are motivated and made.

Fiscal Year

A fiscal year is the unit of time, composed of 12 months, over which a company budgets its spending. The fiscal year may or may not coincide with the calendar year, and is set at the discretion of the company management. In retail businesses in particular, the fiscal year may be chosen to allow the year-end closing and inventory to be performed at a time that's most convenient for the company.
Try: InvestorWords.com explains the concept of a fiscal year, gives examples of how a fiscal year would be identified, and illustrates why having a fiscal year that does not coincide with the calendar year can be beneficial to companies.

Q1

Q1 is the abbreviation often used to refer to the first quarter of a fiscal year. Q2, Q3 and Q4 may be used to refer to the second, third and fourth fiscal quarters of a fiscal year respectively. For example, Q3 2008 would be the third quarter of the fiscal year 2008.
Try: Investopedia defines a fiscal quarter and gives the most common months designated by Q1, Q2, Q3 and Q4. Retail and consumer services businesses alike use fiscal quarters to report their earnings and measure dividends to stockholders.

Consumer confidence

A measurement of consumers' optimism that is often used to forecast buying trends, along with present and near future economic conditions. Consumer confidence indexes provide information to help steer business and marketing decisions in the retail and consumer service markets.
Try: The Congressional Budget Office explains consumer confidence and gives examples of consumer confidence indexes.

Survey Research Center

The University of Michigan's Survey Research Center compiles and publishes a widely used measure of retail and consumer confidence, the consumer interest index.
Try: The Survey Research Center at the University of Michigan Institute for Social Research explains what is measured in its surveys and how surveys are conducted.

Consumer price index

The consumer price index is a measure of the cost of living for urban consumers and is commonly used to measure inflation, which in turn is used as a guide for setting retail prices and adjusting consumer service business practices.
Try: U.S. Bureau of Labor Statistics publishes the consumer price index every month, with free charts, news releases, tables and reports available on its website.

Personal consumption expenditures

The personal consumption expenditures (PCE) price index, published by the U.S. Bureau of Economic Analysis, gauges consumer expenditures on goods and services.
Try: The U.S. Department of Commerce Bureau of Economic Analysis explains the PCE and what it measures.