Revenue growth has stabilized amid rebounding demand from retail
Los Angeles, CA (PRWEB) November 23, 2012
According to the National Association for Shoplifting Prevention, shoplifters commonly steal between $2 and $200 worth of goods per incident, depending on the type of store and item chosen. Annually, these incidents add up to more than $13.0 billion worth of goods stolen from retailers each year. In response, retailers seek to combat shrink (i.e. the loss of inventory and, subsequently, profit through theft) with systems from the Electronic Article Surveillance Product Manufacturing industry. “The industry's key drivers include demand from the retail sector and shoplifting rates,” says IBISWorld industry analyst Josh McBee. “Unfortunately for industry providers, the recession subdued downstream demand from retailers as high unemployment levels reduced per capita disposable income and decreased the amount consumers were willing or able to spend in stores.”
A reduction in the crime rate during the past five years has also reduced the impetus for stores to invest in anti-theft and inventory monitoring systems. Still, the perceived threat of theft and the added value of systems that both monitor theft and track data on inventory for in-store use have aided a positive revenue growth trend for the Electronic Article Surveillance Product Manufacturing industry. IBISWorld expects revenue to increase at an annualized rate of 1.8% during the five years to 2012. The industry has a medium level of market share concentration, and this level has risen in the past five years. “Mergers and acquisitions have driven growth for the largest companies in the industry, and the ongoing push to expand scope and achieve a higher degree of vertical integration will likely motivate continued M&A activity through the coming five years,” adds McBee.
Looking ahead, revenue is expected to increase 4.7% and total an estimated $494.4 million through the end of 2012. Since 2010, growth has stabilized on the back of rebounding demand from retail, following a recession-related dip. Meanwhile, conflicting movements in the prices of raw inputs like plastic resin and semiconductors have limited the ability of firms to grow profit through product prices. Instead, the largest industry firms, including major player Checkpoint Systems, have sought to increase operational efficiencies through mergers and acquisitions that expand the company's scale and scope. The growing presence of larger firms that offer a one-stop shop for EAS needs will likely increase competition in the industry and introduce an era of lower product prices that boost sales amid recovering demand from retail. Through 2017, revenue is forecast to increase. For more information, visit IBISWorld’s Electronic Article Surveillance Product Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures electronic article surveillance (EAS) products, which are used to help retailers protect merchandise from theft. Types of EAS technologies include magnetic, acousto-magnetic, radio frequency and microwave. Installation services and devices installed at the manufacturing level for purely logistical purposes (source tagging) are excluded from this report.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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