Despite significant setbacks during the recession, the industry has started to regain revenue
Los Angeles, CA (PRWEB) October 03, 2012
The Cleaning and Maintenance Supplies Distributors industry sells a broad line of products drawn from a wide-range of markets, including janitorial service companies, commercial and industrial buildings, government buildings and retail outlets. Similar to other distribution firms, demand for cleaning and maintenance supplies distribution has been volatile over the five years to 2012. “When the recession hit in late 2008 and continued through 2009, demand declined from downstream users as consumers reduced purchases in light of contracted budgets,” says IBISWorld industry analyst Deonta Smith. This hampered growth for many industry participants; however, as the economy began to recover and consumers experienced increasing disposable income, demand for end-users, such as industrial and commercial companies, began to grow, which boosted demand for cleaning and maintenance supplies distributors. Consequently, industry revenue is expected to increase 1.0% in 2012.
Over the five years to 2012, industry revenue is estimated to fall at an annualized rate of 1.8% to $12.1 billion. As the economy worsened and consumers reduced spending, competitive pricing became a big part of maintainability. Increased competition has caused some players to squeeze their profit margins by reducing the cost of their distributed items in order to maintain sales volumes. According to Smith, this pricing competition has forced some players to leave the industry altogether. In the five years to 2012, IBISWorld estimates the number of industry firms will decline at an annualized rate of 2.4% to 3,258. In the five years to 2017, industry revenue is expected to increase; healthcare centers will increasingly demand cleaning and maintenance supplies due to strict government regulation regarding cleanliness for the sector. Additionally, demand from local governments and educational institutions will rise over the next five years, as their budgets grow. Over the past five years, these sectors have faced significant cuts to their respective budgets to overcome deficits. However, with additional funding, this sector will have more money to spend on cleaning and maintenance services.
The Cleaning and Maintenance Supplies Distributors industry carries a low level of market share concentration, with the top four firms accounting for only about 24.6% of industry revenue in 2012. In general, the industry is made up of a large number of firms that are dispersed throughout the entire country. These firms typically cater to local or regional markets. According to the Worldwide Cleaning Association, the number of firms that operate locally (within a 60 mile radius of its location) or regionally (within its state), has reached close to 70.0% of all firms in the industry. In contrast, only about 15.0% of all firms compete on a national scale. This shows the widespread nature of the industry and the true lack of dominance and lack of national presence by any one firm. However, the industry's largest firm, United Stationers Inc., currently operates about 65 distribution centers across the country. For more information, visit IBISWorld’s Cleaning and Maintenance Supplies Distributors in the US industry report page.
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IBISWorld industry Report Key Topics
This industry distributes specialized equipment and supplies for cleaning and maintenance services on a merchant wholesale basis. Products include janitorial and chemical cleaning solutions, waste receptacles and facility maintenance.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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