During the next three years, the price of heated display cases is forecast to increase due to rising demand among downstream markets and rising freight and labor costs
Los Angeles, CA (PRWEB) May 15, 2014
Heated display cases have a buyer power score of 3.5 out of 5. This score indicates that buyers have slightly more power in negotiations due to the competitive nature of the heated display case market. Supplier costs increased due to higher purchasing, freight and gasoline expenses, prompting suppliers to raise prices. However, there were several factors that boosted buyer power during the past three years. These factors include a low level of product specialization and low switching costs. The price of heated display cases increased at a relatively slow rate during the past three years as the economy slowly recovered. After the recession, more consumers abandoned prerecession habits and increased their spending on food items at delicatessens, grocery stores, restaurants and sports arenas. “In response to increases in consumer spending, demand for heated display cases among key buyers increased, which caused suppliers to respond by raising prices to expand thin profit margins,” says IBISWorld procurement analyst Jeffrey Cohen.
While the past three years mostly benefited buyers of heated display cases with regard to negotiation power, suppliers were hit with a variety of problems that hurt buyer power. For instance, freight costs and the price of gasoline increased during this time and distributors responded to these trends by passing the costs off to buyers in the form of higher product prices. “These trends hurt buyer negotiation power by reducing suppliers' willingness to negotiate,” adds Cohen.
Buyer negotiation power is strong due to a variety of factors that are centered on the fact that heated display cases are homogenized products. Firstly, because there are hundreds of suppliers of heated display cases in the wholesale and manufacturing channels, buyers have a wide selection to choose from. Top suppliers in the market include Edward Don & Company, TriMark USA Inc. and Wasserstrom Company. In addition, it is relatively easy for a buyer to switch suppliers because several suppliers buy products from the same manufacturer and also have vast experience serving buyers in a variety of industries. For more information, visit IBISWorld’s Heated Display Cases procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of heated display cases. Heated display cases are used for holding and displaying warm foods to promote impulse food sales. These cases are generally sold through food service distributors.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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