Although retail sales will drive demand, plastic bag regulations will impede growth
Los Angeles, CA (PRWEB) April 13, 2012
The Paper Bag and Disposable Plastic Product Wholesaling industry sells a variety of paper and plastic goods, including cardboard containers, paper and plastic bags, disposable dishes, wrapping paper and sanitary paper products. Wholesalers buy these products from manufacturers and sell them to retail stores, supermarkets, warehouse clubs and accommodation and food-service establishments. In 2012, the industry is expected to record $68.2 billion in sales, with a projected 3.5% increase from 2011. Over the past five years, though, revenue declined at a moderate 0.9% per year on average. Says IBISWorld industry analyst Caitlin Moldvay, “While sustained growth from supermarkets and grocery stores mitigated revenue declines, declining business and consumer spending during the recession resulted in an overall decrease over the past five years.”
The growing price of commodities, particularly during 2008 and 2009, created higher output prices in manufacturing industries, from which the Paper Bag and Disposable Plastic Product Wholesaling industry purchases. “Due to heightened competition, wholesalers were not able to pass on the full cost increases to downstream retailers,” says Moldvay. Instead, firms have had to lower prices and decrease margins. As a result of lower margins, many firms have been downsizing operations or leaving the industry. As companies downsized their US operations, as well as expanded overseas operations, market share concentration decreased. This trend is due to increasing demand for industry products from Asia and Latin America, while the US market has remained relatively stagnant.
Conditions will likely improve over the five years to 2017. IBISWorld estimates that industry revenue will grow at an average annualized rate of 2.6% to $77.3 billion. Improving economic conditions toward the end of the five-year period will likely bolster retail sales, driving demand for paper and plastic products distributed by the industry. A number of states have proposed regulations concerning the use of plastic bags, however. Should these regulations pass, industry operators will likely face decreased demand for plastic bags, which represent a substantial share of industry revenue. For more information, visit IBISWorld’s Paper Bag and Disposable Plastic Product Wholesaling report in the US industry page.
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IBISWorld industry Report Key Topics
Wholesalers in this industry purchase a range of paper and plastic products from manufacturers and distribute them to retail stores, manufacturers, food service outlets and agricultural producers. Industry products are wide ranging and typically include sanitary and tissue products, disposable cutlery and food trays, cartons, plastic and paper bags, paper party goods, and cardboard packaging. This industry does not include wholesale distribution of stationery or office supplies.
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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