Competition from e-commerce sites and big-box retailers threatens industry performance
New York, NY (PRWEB) March 23, 2014
The Musical Instrument and Supplies Stores industry has fallen flat over the past five years. The industry, which relies on consumer spending, has met weak sales over the five years to 2014, resulting from tepid growth in per capita disposable income and consumer confidence, as well as increased external competition from mass merchandisers and online retailers offering lower prices. This has resulted in declining sales of musical instruments, sheet music and music supplies. Industry revenue is estimated to decrease at an annualized rate of 1.8% to $819.2 million over the five year period. With consumers' spending habits toward industry goods on the rise with improved consumer confidence, industry revenue is forecast to increase by 1.1% in 2014.
According to IBISWorld Industry Analyst Sally Lerman, “Industry operators have been left with declining revenue and stocked shelves due to consumers' growing tendency to shop online and mass merchandisers leveraging their economies of scale by adding low-cost musical instruments to their product lines.” Lacklustre performance has led to the merger and acquisition of some companies, while others have left the industry altogether. Therefore, the number of industry establishments has decreased at an average annual rate of 0.5% to 1,404 over the five years to 2014. Profit, however, has risen over the past five years. This can be attributed to patrons who are willing to purchase higher-end musical instruments from establishments where workers offer an increased level of knowledge and superior service.
In the five years to 2019, the industry is forecast to exhibit more steady growth, albeit at a slow pace. “Per capita disposable income and consumer confidence will increase as the economy continues to strengthen, providing consumers with more discretionary income for the industry's premium products,” says Lerman. Additionally, an increase in number of children aged 19 and younger, the industry's key market segment, is expected to boost demand for musical instruments. However, these gains will be largely offset by increasing external competition from e-commerce sites, whose technological advancement make online shopping more appealing, and mass merchandisers, whose product lines are expanding to include such items. Over the period, revenue is expected to increase.
For more information, visit IBISWorld’s Musical Instrument & Supplies Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
The Musical Instrument & Supplies Stores in Canada industry retails an extensive selection of musical instruments, such as violins and pianos, and associated products, such as microphones and amplifiers. These products are usually sold directly to end consumers. Many industry operators also repair and rent these products and provide music instruction.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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