New York, NY (PRWEB) August 13, 2014
Like many retail sectors that sell discretionary products, the Hat and Cap Stores industry felt the negative effects of the recession. When per capita disposable income declined for the first time since 1991, consumer confidence crashed in 2009. As a result, industry revenue fell an estimated 4.8% over the year. Fortunately for industry players, the slowly rebounding economy aided the return of spending on hats and caps, albeit at a slower pace than in the years prior to the recession. These small-ticket items are favored by Generation Y or millennial shoppers (typically those born in the 1980s and 1990s); as this demographic increasingly penetrates the workforce, demand for industry products is expected to grow. IBISWorld estimates that this demographic shift has largely offset recessionary declines. Industry revenue is expected to grow at an average annual rate of 4.7% over the five years to 2014, to total $2.1 billion. This includes a 4.1% boost in 2014 alone.
Still, competition from nonindustry hat sellers has constrained industry growth and profitability. Brick-and-mortar retailers have felt the effects of the internet for the past decade. According to IBISWorld Industry Analyst Edward Rivera, “The convenience of shopping from home, coupled with the ability to compare prices across products and websites, has lured consumers away from physical establishments and toward virtual stores.” Mass merchandisers also pose a competitive threat because they offer discount prices on similar items. These establishments have posed a threat in the past, however, the budgetary constraints brought about by the recession have shifted consumer preference toward discounted items. In response, brick-and-mortar retailers are expanding their product selections to invite and retain shoppers. This trend is likely to continue in the five years to 2019, as operators face a mature industry with little room for organic growth.
Hat and cap stores are forecast to post solid growth over the next five years. “Rebounding economic conditions will lead to increasing per capita disposable income and consumer sentiment, boosting expenditures on discretionary items like headwear,” says Rivera. IBISWorld projects industry revenue will grow at over the five years to 2019. Despite this growth, competitive pressures from online retailers, in conjunction with a decline in available leisure time, will continue to limit growth opportunities for industry players.
For more information, visit IBISWorld’s Hat and Cap Stores in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises stores that retail a wide range of hats and caps. Many retailers also undertake sales and administrative activities, such as customer service, advertising and cash handling. This industry excludes apparel and sporting goods retailers that generate a lessor portion of revenue from selling hats and caps.
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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