Home Improvement Stores in the US Industry Market Research Report Now Available from IBISWorld

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The subprime mortgage crisis decimated consumer demand for home improvement products while national homeownership levels declined. For these reasons, industry research firm IBISWorld has added a report on the Home Improvement Stores industry to its growing industry report collection.

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Rising incomes will cause consumers to invest more in home improvements

The Home Improvement Stores industry is a mature retail industry characterized by a high degree of market concentration and homogeneous product lines, leading to high levels of price competition. Major players Lowe's and the Home Depot account for more than half of the industry’s total market share (see IBISWorld report 44411 for major player market shares). Concentration increased from 2009 to 2011 due to this rising competition and decreased demand: under these conditions, the Home Depot and Lowe's took advantage of economies of scale and opened stores, while many smaller industry players closed their doors.

Furthermore, do-it-yourself customers, who buy supplies for their own home improvement projects, supply much of the industry’s demand; do-it-for-me (DIFM) and professional customers also purchase industry goods and services. In the years prior to 2008, industry operators expanded their service offerings to gain market share; the popularity of these services translated to strong industry revenue and protected the industry, to some extent, from the crippling effects that the recession had on other construction-related industries.

Still, According to IBISWorld Industry Jocelyn Phillips, “the Home Improvement Stores industry's expansion slowed substantially from 2009 to 2011 after the subprime mortgage crisis decimated consumer demand for home improvement products.” National homeownership levels declined and consumers faced low disposable incomes as unemployment surged; these factors led to lower consumer investment in both new construction and home renovations and remodeling. “Low profit and an inability to keep up with intense price competition from large operators, forced many underperforming stores to close early in the period,” says Phillips, causing the number of industry establishments to decreased in 2013.

Nonetheless, the recent economic environment has been favorable to the industry. Rising confidence in the economy and higher incomes have encouraged households to make bigger purchases and engage in more home improvement projects, leading to a jump in revenue in 2012. Overall, industry revenue is expected to increase in the five years to 2013. The recovery in sales has increased industry profitability; margins have also increased from 2008 to 2013. As the economy continues to recover, these favorable conditions will likely continue through 2018. The number of housing starts is also expected to increase further, leading to a rise in demand for home improvement supplies. As such, revenue is forecast to increase by 2018. Even so, IBISWorld expects profit will fall, as industry expansion forces prices down and pushes labor and marketing costs up.

For more information, visit IBISWorld’s Home Improvement Stores in the US industry report page.

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IBISWorld industry Report Key Topics

Stores in the Home Improvement Stores industry sell a broad range of home repair and maintenance goods, such as hardware, tools, electrical goods, lumber and structural material for construction and renovations. Hardware stores, which are generally smaller and consequently sell fewer items, are excluded from this industry. Home improvement companies purchase goods from manufacturers and wholesalers, and sell them to end users, such as do-it-yourself consumers and professional contractors.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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.

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Gavin Smith
IBISWorld Inc.
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