Population and household growth are holding the industry afloat
Melbourne, Australia (PRWEB) October 19, 2012
A strong Construction division and high population growth have helped buoy the Australian Houseware and Gardenware Wholesaling industry over the past few years. While industry products are typically low in replacement levels, growth in population and outer suburban dwelling construction has aided the bottom line. As a result, sales revenue is expected to grow by 0.5% in 2012-13, to $2.48 billion. According to IBISWorld industry analyst Ryan Lin, “over the past five years, industry revenue has been a mixed bag”. While the Australian housing construction market stayed afloat due to the minerals and resource boom, the backdrop of the financial crisis and falling consumer sentiment hampered sales of houseware and gardenware products, flowing on to affect industry wholesalers. In the five years through 2012-13, industry revenue is expected to fall at an annualised 0.2%.
The years ahead pose a significant challenge for the Houseware and Gardenware Wholesaling industry in Australia, with global economic conditions still struggling. In addition, the growing trend for retailers to bypass wholesalers is creating little impetus for future growth in the industry. The growth of major hardware and gardenware retail outlets (such as Bunnings) that have sufficient market power to deal directly with manufacturers is marginalising the wholesale process in the industry. “Meanwhile, a continual fall in house prices and a Construction division focused on industrial works is lowering demand for the bulk of the industry's goods,” Lin adds. Over the coming five years, revenue is expected to decline. Maintaining the bottom line will come down to an expansion in national construction levels and recovering consumer sentiment.
The three largest players in the Houseware and Gardenware Wholesaling industry are Woolworths, McPherson's and Metcash. Together these companies have a low combined market share, reflecting a low industry market share concentration level. Over the past couple of years, concentration has increased as these players have won market share in an industry that continues to lose earnings. This trend is expected to continue in the coming years. Merger activity has led some operators to raise market share with consolidation and further takeovers expected to continue in the five years through 2017-18. Market share concentration is likely to increase as the retail environment succumbs to increased price competition from imported products and retailers seek new avenues of sourcing to improve margins.
For more information, visit IBISWorld’s Houseware and Gardenware Wholesaling report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry purchase household goods, like cutlery, tableware (including crockery), glassware and garden tools from manufacturers and sell them to retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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