Confidence in the economy and rising incomes will boost the industry from recessionary lows
New York, NY (PRWEB) June 03, 2014
Although lawn and garden care continues to remain popular among Canadians, operators in the Lawn and Outdoor Equipment Stores industry have contended with difficult economic conditions over the past five years. During the recession, increased unemployment rates and unstable economic conditions led to low disposable income, causing households to delay spending on discretionary products, including lawn and outdoor equipment. While both consumer sentiment and disposable income have revived since the end of the downturn in 2009, industry operators have struggled to generate enough revenue to meet prerecessionary levels. According to IBISWorld Industry Analyst Will McKittrerick, “Industry growth has lagged largely due to operators' heightened competition with home improvement stores, whose national presence and economies of scale enable them to undersell industry operators.” As a result, industry revenue grew at a subdued average annual rate of 0.7% to $640.5 million over the five years to 2014.
Not everything has been doom and gloom for industry operators; some of the industry's poor performance over the period was partially offset by sales of less expensive products, such as leaf blowers and lawn mowers. Furthermore, industry revenue has picked up since 2012 thanks to rising consumer confidence and discretionary spending. Increases have been partially driven by an uptick in residential renovation expenditure, which signals that consumers are using more professional landscape services to handle their gardening needs, stimulating demand for lawn and outdoor equipment. Therefore, industry revenue is estimated to increase 2.9% in 2014.
“Over the five years to 2019, renewed confidence in the economy and increased discretionary income are expected to boost the industry,” says McKittrerick. During this period, IBISWorld projects industry revenue to increase. Households will likely resume purchases of new lawn and outdoor equipment they delayed during the recession. Moreover, a rise in sales of big-ticket items, such as riding mowers, will support revenue growth. However, lawn and outdoor equipment stores will continue to face rising competition from home improvement stores, which will place increasing price pressures on industry operators.
The Lawn and Outdoor Equipment Stores industry is highly fragmented and exhibits a low level of market share concentration. In 2014, IBISWorld estimates that there are about 369 enterprises operating in the industry, with no single operator accounting for more than 1.0% of industry revenue. The majority of businesses in the industry are privately owned and focused on supply local demand in and around their single store locations. In 2014, IBISWorld estimates that about 49.2% of industry establishments will be small, with fewer than five employees, while only about 4.5% of total establishments are expected to employ more than 20 workers.
For more information, visit IBISWorld’s Lawn and Outdoor Equipment Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
The Lawn and Outdoor Equipment Stores industry retails outdoor power equipment. Establishments in the industry also retail replacement parts and may provide repair services.
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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