Warehouse Clubs & Supercenters in the US Industry Market Research Report from IBISWorld has Been Updated

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Led by Walmart, the industry has displayed exceptional growth in the past decade, as operators capitalize on rising consumer sentiment and demand for one-stop-shops; however, the industry's high concentration will lead to consolidation and fewer enterprises, as existing players choose to open smaller convenience-store-sized locations. For these reasons, industry research firm IBISWorld has updated a report on the Warehouse Clubs and Supercenters industry in its growing industry report collection.

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Improving incomes will boost revenue, but expansion into smaller stores will limit growth

The Warehouse Clubs and Supercenters industry has been one of the fastest-growing industries in the retail sector. IBISWorld estimates that revenue will rise at an annualized rate of 4.5% to total $438.2 billion in the five years to 2013. “The industry's ability to pass down lower prices on a range of merchandise to consumers has been the primary driver of this success,” says IBISWorld industry analyst Natalie Everett. “Even when household budgets were strained during the recession, the industry attracted new value-focused customers, leading to a strong financial performance.” In 2013, revenue is expected to jump 6.7% due to rising consumer disposable income.

With sales on the rise, the Warehouse Clubs & Supercenters industry has expanded in the five years to 2013. This industry is highly concentrated. Given the high level of industry concentration and substantial capital required to generate enough revenue to compete with the major players, IBISWorld expects concentration to remain high. According to Everett, “during the past two decades, the growth of supercenters and club stores has had a notable effect on grocery retailing in the United States, including a contraction of small "mom and pop" retailers and mergers and acquisitions (M&As) among large retailers.” In particular, the industry's two largest players, Walmart and Costco, have established new stores to capture a larger share of consumer dollars. As such, the number of industry locations has increased at an average annual rate of 3.4% to an estimated 5,217 over the five years to 2013. At the same time, however, the industry's dependence on economies of scale to keep prices low has resulted in mergers and acquisitions (M&As), decreasing the number of companies in the industry at an annual average rate of 4.7% to 26.

During the next five years, the industry will continue growing, albeit at a slower rate as retail giants such as Walmart and Target shift focus back to smaller, more conveniently sized stores amid concerns that supercenters and warehouse clubs have reached a point of saturation. Still, improving disposable incomes, consumer sentiment and corporate profit, all of which act as key drivers for the retail sector, will aid industry growth. Revenue is projected to increase in the five years to 2018. With rising sales, profit is also expected to increase slightly. Store expansion will be limited, however, as smaller operators continue consolidating to compete with the players that dominate market share. This trend, combined with the shift toward a smaller store format, will likely limit the industry's long-term growth. For more information, visit IBISWorld’s Warehouse Clubs and Supercenters in the US industry report page.

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IBISWorld industry Report Key Topics

The industry is made up of large stores that primarily retail a general line of grocery products combined with merchandise items. Warehouse clubs offer customers a wide selection of goods (often in bulk) at discounted prices in exchange for a membership fee that is paid by each customer. Supercenters are large discount department stores that also sell perishable groceries. Unlike warehouse clubs, supercenters do not have eligibility requirements for customers.
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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