Hardware sales will improve as the housing market strengthens with the economy.
New York, NY (PRWEB) February 09, 2014
The Hardware Stores industry has experienced steady recovery since the hammering it endured during the recession. As the housing market has become healthier and consumers have become more confident, they have returned to improving and updating their homes. Low mortgage rates have also enabled many individuals to become homeowners, which increases demand for Hardware industry products. IBISWorld estimates that industry revenue has increased at an average annual rate of 3.2% to $22.6 billion over the five years to 2014.
The industry has had to battle continued lower consumer spending as well as increased external competition from the Home Improvement Stores industry (IBISWorld report 44411). According to IBISWorld Industry Analyst Kerry Coughlin, “To adapt to these changes, companies renovated their businesses to attract more customers by diversifying their product lines and changing store floor plans.” In 2014, IBISWorld estimates that revenue will increase 0.3% thanks to increasing per capita disposable income and rising consumer confidence. These factors will lead to an increase in consumer spending on the retail level, which includes hardware stores.
Over the five years to 2019, industry revenue is projected to grow. “The recovering housing market and increased spending on home improvement projects will help boost industry demand,” says Coughlin. Revenue growth and profit will remain low, however, because of increasing competition from home improvement stores and online retailers. IBISWorld estimates that profit will represent 2.0% of industry revenue in 2014.
Despite rising revenue, the number of enterprises operating in this industry is expected to fall over the five years to 2019. This decline is largely due to expanding competition from online retailers and big-box home improvement stores such as Lowe's and The Home Depot. The majority of firms in this industry are part of cooperatives, which are business organizations owned and operated by a group of individuals for their mutual benefit. Hardware cooperatives act as wholesalers and exercise large buying power, which translates to low-cost purchases for their members. Cooperatives also issue loans and provide advertising for new members.
The Hardware Stores industry experiences a medium level of concentration. The industry has faced increasing competition from home improvement stores (IBISWorld report 44411). This is caused many small operators to close down or they have been taken over by a larger operator (in either industry).
For more information, visit IBISWorld’s Hardware Stores industry in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Hardware Stores industry primarily retail a broad range of new home renovation equipment and supplies. Hardware, plumbing, electrical and paint-related tools are the most commonly stocked goods.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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.