Switching on: Recovery in the economy and housing markets will help the industry grow
London, UK (PRWEB) August 22, 2013
Operators in the Electrical Household Appliance Retail industry have faced pressure on many fronts over the past five years. According to IBISWorld industry analyst Christopher Edwards, “Intensifying competition from retailers not included in the industry has been a major problem with supermarkets, mass merchandisers and department stores dedicating increasing amounts of shelf space to electrical appliances and the growing popularity of online shopping has resulted in online retailers joining the ranks of the industry's rivals”. The situation has been worsened by recessionary economic conditions, a lasting effect of the 2008 financial crisis. Rising utility prices, high debt levels and fears over job security have made consumers weary of overspending, so discretionary purchases have declined significantly. Sales of big-ticket items such as fridges and washing machines have been particularly affected.
The stagnation of the housing market has reduced the number of new housing starts and residential property transactions, removing a major stimulus that prompts consumers to replace their appliances. Over the five years through 2013-14, industry revenue is estimated to decline at a compound annual rate of 3.6% to £8.8 billion. Intensifying competition has forced retailers to cut their prices to lure in consumers, which has adversely affected profit margins. The tough industry conditions have forced out a number of enterprises, of which Comet was the most prominent. The total revenue of industry retailers is projected to decline slightly by 1.0% in 2013-14 as small operators struggle to compete.
The industry is anticipated to slowly recover over the next five years as the state of the economy and housing market gradually improves. Edwards adds, “Renovation projects that were held off during the recession are likely to be revisited as consumers gain confidence in the economy." Higher awareness of the benefits of energy-efficient appliances is also projected to contribute to growth for retailers as consumers begin to switch over. However, competition from external retailers is likely to remain fierce and profit margins are not expected to expand significantly.
The Electrical Household Appliance Retail industry has a low level of market share concentration. The level of concentration measures the extent to which the top players dominate an industry. The largest players, Dixons Retail and Euronics, control 18.8% of the total market. The industry is highly fragmented and characterised by a high number of small and independent retailers that operate solely in a particular geographical region. These enterprises are often family-owned. It is expected that rival operators have moved to fill the gap left in the market left by the once-major player Comet. However, these operators face fierce competition from external players such as supermarkets and department stores.
For more information on the Electrical Household Appliance Retail industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Stores in this industry sell household electrical appliances classified as white goods. Products include washing machines, tumble dryers, refrigerators, freezers and electric cookers. Small domestic appliances such as microwaves, vacuum cleaners, kettles, toasters and irons are also included. Stores that specialise in selling audiovisual, computing and photographic equipment are not covered.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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