Los Angeles, CA (PRWEB) September 21, 2012
The performance of the Walk-in and Cabinet Cooler Manufacturing industry is largely dependent on the performance of its markets. Commercial coolers, or refrigerators, are used in food service establishments, grocery stores and supermarkets and storage and warehouse facilities. According to IBISWorld industry analyst Nikoleta Panteva, during the recession, consumer demand for restaurant meals declined as incomes shrunk and budgets tightened. Meanwhile, demand from refrigerated storage waned 2009 as economic activity slowed in all industries. Revenue for the Walk-in and Cabinet Cooler Manufacturing industry fell 10.3% in 2009, as a result. Downstream demand remained weak in 2010, pushing industry revenue down by a further 6.2%.
Credit conditions also tightened during the recession, limiting restaurants', grocers' and warehouses' ability to borrow money to invest in new capital, contributing to poor industry performance. Profit margins (measured as earnings before interest and tax) fell from 20.5% of revenue in 2007 to a low of 14.2% in 2010. Fortunately, activity in downstream industries – including the construction of new nonresidential buildings – has propped up industry revenue and profit since 2011. IBISWorld expects revenue to grow 3.8% in 2012 while profit increases to 19.3% of revenue. Still, the revenue declines in 2009 and 2010 have largely defined the five-year period to 2012; industry revenue is expected to decline at an average annual rate of 0.8% to $3.1 billion. “With construction activity continuing to pick up steam over the next five years and demand from downstream industries returning, the Walk-in and Cabinet Cooler Manufacturing industry is set to rebound steadily,” says Panteva. The value of nonresidential construction is forecast to grow from 2012 to 2017, creating opportunities for the industry's participants, since a significant portion of demand is generated through new-building construction. As such, IBISWorld anticipates industry revenue to grow over the five years to 2017.
The Walk-in and Cabinet Cooler Manufacturing industry exhibits a low level of market share concentration. IBISWorld estimates that the top four industry players will account for less than 5.0% of industry revenue in 2012. This industry is highly fragmented with a diverse array of refrigeration equipment and parts with numerous applications. Low industry concentration stems partly from the diversity of products manufactured in this industry but also from the high number of small- and medium-sized businesses. Some firms specialize in products for specific downstream markets in nonresidential buildings, such as restaurants, convenience stores, supermarkets and grocery stores. Although there are a large number of small establishments, the large firms in this industry generate a substantial amount of income. Many manufacturers also partake in the wholesaling of goods, particularly the larger players. Larger players hold a greater amount of market share because they have the ability to manufacture and wholesale, which eliminates a middleman, and provides greater scope for competition. For more information, visit IBISWorld’s Walk-in and Cabinet Cooler Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures walk-in cabinet coolers (or refrigerators) and freezers. These products are primarily used in the restaurant and retail sectors, but they may also be used for warehousing and other applications.
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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