The price of food cooking and smoking machinery has been increasing due to higher input costs and freight costs
Los Angeles, CA (PRWEB) December 31, 2013
Food cooking and smoking machinery has a buyer power score of 3.1 out of 5. The score means that suppliers have slightly more power in negotiations, based on their ability to raise prices on food cooking and smoking machinery, which have gone up at an annualized rate of 2.4% during the three years to 2013. According to IBISWorld analyst Jeffrey Cohen, “Supplier costs increased due to higher purchasing, freight, and gasoline costs, thus prompting them to raise prices. Factors that boosted buyer power include low switching costs and a low level of product specialization.”
The price of food cooking and smoking machinery increased at a moderate rate during the past three years as the economy slowly recovered. A growing number of consumers abandoned prerecession habits and spent more money on meals at restaurants and traveling. “As consumer spending grew, demand among key buyers, specifically restaurants and hotels, increased,” Cohen says. “As demand increased, distributors responded by increasing prices in an effort to expand slim profit margins.” Additionally, distributors were hit with a variety of problems during the past three years that further negatively affected buyers. As the price of steel, a key input in the production of food cooking and smoking machinery, increased, manufacturers passed this cost off to distributors. In addition, freight costs and the price of gasoline increased during this time and distributors passed these costs off to buyers by increasing the overall price of products. These trends have reduced negotiation power for buyers because distributors are defined by slim profit margins and are less willing to negotiate.
Buyer negotiation power is positively affected by the fact that food cooking and smoking machinery are standard products. Because there are hundreds of suppliers of food cooking and smoking machinery in the retail, wholesale and manufacturing channels, buyers have a wide selection to choose from (though wholesalers are the main suppliers typically selected). In addition, when a buyer wants to switch suppliers, this is relatively easy because several suppliers buy products from the same manufacturer and have vast experience serving buyers in various industries. For more information, visit IBISWorld’s Food Cooking & Smoking Machinery procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of commercial food cooking and smoking machinery. Food cooking machinery includes a variety of equipment used to cook food such as, fryers, ovens, ranges, grills, rotisseries, kettles, griddles, steamers and charbroilers. Products excluded from this report are warmers, toasters, concession and storage equipment. Sales channels through which food cooking and smoking machinery are sold include direct, mail order, online, retail and wholesale, with direct sales being the most common. The main buyers of these products are restaurants and hotels, educational institutions and sports arenas.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement 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.