The federal rebate program for energy-efficient appliances has helped drive demand
Los Angeles, CA (PRWEB) May 27, 2012
Declining household wealth, rising unemployment rates and unclear economic conditions resulted in low disposable income levels in the five years to 2012. “With less discretionary spending money available, American consumers cut back on their purchases of big-ticket items,” says IBISWorld analyst Eben Jose, including consumer electronics (e.g. TVs and stereos) and home appliances (e.g. washers and dryers). Retailers subsequently experienced revenue declines, which caused them to either close down operations or reduce their inventory levels. As a result, the TV and Appliance Wholesaling industry's revenue suffered from falling downstream demand. To this end, revenue is expected to decrease at an annualized rate of 2.6% to $82.0 billion over the five years to 2012. Despite this downward trend across the five-year period, demand conditions recovered with improvements in the economy in 2010 and 2011, and revenue rose 0.6% and 1.7%, respectively, over those years.
In addition to weakened downstream demand, wholesale bypass further decreased TV and Appliance Wholesaling industry revenue. In the past five years, large consumer electronics and home appliance retailers have become more willing to purchase directly from manufacturers and omit the wholesale intermediary. This practice allows stores to take advantage of lower prices. “Eliminating the middleman significantly reduced the number of supply contracts available to wholesalers and reduced industry profitability,” says Jose. Falling profit margins have forced some wholesale operators to exit the industry. As a result, the number of enterprises is expected to fall from 2,323 firms in 2007 to an estimated 1,993 in 2012. The majority of the businesses in the industry are privately owned and have been successfully supplying the local retail demand in their communities. As such, IBISWorld projects that the industry's market concentration will remain low through 2017.
Led by growing downstream demand, the wholesaling industry is forecast to experience growth in the five years to 2017. Improving consumer sentiment and household disposable income levels will encourage consumers to spend on electronics and appliances. In addition, technological developments, especially in regards to TVs, will likely encourage consumers to update older appliances, which will support demand as retailers turn to wholesalers to replenish their inventories. For more information, visit IBISWorld’s TV and Appliance Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry wholesale a range of electric household appliances such as refrigerators and washing machines as well as consumer electronics like TVs, DVD players and stereo systems. Goods are purchased from domestic and international manufacturers and then sold to mass merchandisers, department stores, home improvement stores and other appliance retailers.
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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