A recent surge in sales has offset declines brought on by import penetration and the recession
Los Angeles, CA (PRWEB) April 27, 2012
Demand for domestically manufactured kitchen knives has collapsed over the last decade. The decline has been primarily driven by rising import competition, which has encouraged domestic retailers to source a growing portion for their kitchen knives from abroad. According to IBISWorld industry analyst Nima Samadi, as the recession hurt consumers, the rate of new household formation slowed and since most kitchen knives are purchased when people move into new homes, demand for kitchen knives and other cutlery followed. However, rising consumer spending and export demand has allowed revenue to post gains in 2010 and 2011. Over 2012, revenue is projected to increase 2.7% to $166.9 million, capping an annualized fall of 0.1% since 2007.
The Kitchen Knife Manufacturing industry has faced rising import penetration in the past decade. The low complexity associated with manufacturing the industry's products has made it easy for operators in some countries, such as China and Mexico, to exploit low labor costs and offer competitively priced products for import into the United States. Imports accounted for 22.8% of domestic demand in 2002 and grew to 54.5% by 2012. Key selling industries of kitchen knives also suffered large hits during the past five years. General merchandise stores experienced sharp declines in 2009, and home-furnishing stores (including specialty retail stores that sell kitchen products) suffered an annualized revenue decline of 2.0% since 2007. The decline in these key downstream retail markets' performance resulted in lower demand for kitchen knives. Over the five years to 2017, the industry is expected to continue its decline despite some growth at the beginning of the five-year period. “As the economy picks up, US housing starts are projected to increase strongly, along with a rise in income and consumer sentiment, helping drive demand for kitchen knives,” said Samadi. However, imports will limit industry growth and ultimately push back into a downward trend.
The Kitchen Knife Manufacturing industry has a low level of market share concentration. The top four operators will account for about 35.0% of industry revenue in 2012. CUTCO Corporation, the industry's largest player, holds a significantly larger portion of revenue than any of its competitors at 31.0% of the industry's total. The next largest player is Dexter-Russell, accounting for only 3.0% of industry revenue. The disparity shows the importance of brand name among the industry's participants. Large companies benefit from brand recognition and consumer preferences. Still, intense and mounting external competition from imports has defined the environment for some of the smaller players in the Kitchen Knife Manufacturing industry over the past five years. Imports have limited some domestic players' contribution to industry revenue. For more information, visit IBISWorld’s Kitchen Knife Manufacturing in the US in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry comprises establishments that manufacture kitchen knives for home and commercial use. The industry does not include firms that manufacture knives made of precious medals (e.g. silverware).
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.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.