Prices will continue to rise as more employer-sponsored centers open and the demand for early childhood education rises
Los Angeles, CA (PRWEB) January 24, 2014
Infant and child day-care services have a buyer power score of 3.6 out of 5.0. Scores closer to 5.0 represent better negotiating conditions for buyers. “Suppliers in the day-care market have not experienced high fluctuations in demand over the past three years and can expect a consistent level of business as the number of children aged nine and younger continues to grow steadily over the next three years,” says IBISWorld business research analyst Andrew Rebhan. Meanwhile, prices grew slightly in the three years to 2013 as suppliers benefited from decreasing levels of national unemployment; this price increase was mitigated by the moderate growth of the younger population demographic, however. As the unemployment rate declines, particularly among women, and more companies begin to sponsor child-care centers, buyers can expect a slight increase in infant and child day-care service prices.
Despite rising prices, buyers will benefit from the low level of market share concentration among day-care suppliers. The majority of the infant and child day-care services market is comprised of nonemployers that run private organizations. “High market fragmentation will increase price-based competition, but such leverage may be constrained because buyers will likely use suppliers within their local regions,” says Rebhan. The supply chain does not pose a significant risk to buyers, but buyers should consider the potential risks associated with operators with small profit margins that cannot manage their high input costs, such as wages for their caretakers or teachers.
Furthermore, buyers also benefit from an overall low level of price and driver volatility. Thus, while increased prices will hurt buyers' purchasing power, they will not be at risk of rapid price swings. The market for child day care has steadily evolved as early childhood is increasingly being seen as a crucial developmental stage for young children. Many suppliers are seeking to bolster their core curriculums with additional programs and extracurricular activities in order to lure buyers and stand out amongst the competition. Major vendors include Bright Horizons Family Solutions, Knowledge Universe, Learning Care Group and Primrose. For more information, visit IBISWorld’s Infant & Child Day-Care Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of infant and child day-care services. This market consists of home and center-based establishments that provide supervision and educational programs to infants and children during the day. These programs are designed to help support the emotional, social, physical and intellectual development of each child and infant. These services are primarily offered for preschool children, but many service providers also offer care for older children outside of their traditional school hours.
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
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