Footwear prices over the past five years have been negatively affected by continued growth in the number of imports from low-cost producing countries
Melbourne, Australia (PRWEB) September 08, 2014
The Footwear Wholesaling industry in Australia has faced a challenging environment, with revenue expected to contract at an annualised 1.8% in the five years through 2014-15. Trading conditions across the industry have been affected by declines in the price of shoes and an increase in wholesale bypass activity. Fluctuations in retail demand for footwear, along with variations in disposable income, consumer sentiment and the trade-weighted index, also influenced industry performance during the period. According to IBISWorld industry analyst Claudia Burgio-Ficca, “industry profitability has suffered due to strong competition between players and declines in product margins.” Revenue is expected to rise by 0.8% in 2014-15, to reach $1.9 billion, due to the positive influence of several key external drivers.
Footwear prices over the past five years have been negatively affected by continued growth in the number of imports from low-cost producing countries. The resulting decline in the average price of footwear hindered revenue growth and constrained profitability for operators. “Despite growth in disposable income, retail spending was hindered by volatility in consumer sentiment and the changing domestic climate,” says Burgio-Ficca. Price discounting tactics by most major footwear retailers and department stores eroded product margins and industry profitability, leading to a contraction in establishment and employment numbers. Footwear Wholesaling industry revenue is forecast to rise over the next five years, as demand for footwear is driven by the performance of downstream retail industries such as footwear retailers and department stores. While anticipated growth in disposable income is likely to support increased spending on footwear, actual expenditure will be hindered by volatility in the consumer sentiment index. Footwear retailers are expected to continue to bypass wholesalers instead buying directly from manufacturers, leading to a loss of revenue for the industry.
The Footwear Wholesaling industry is has a low level of concentration, as the majority of industry participants are smaller sized operators with fewer than 20 employees. Technology change is low and the industry is subject to a low level of regulation. As a result, new operators are not significantly impeded from entering the industry and gaining a share of the market. The low capital investment required by new entrants also encourages new players to the market. Nonetheless, the growing trend of wholesale bypass may limit the success of new players. The industry is in the decline phase of its life cycle, characterised by a fall in establishment numbers, clearly segmented product groups and the continued influence of wholesaler bypass. As such, this may deter new players from entering the industry.
For more information, visit IBISWorld’s Footwear Wholesaling industry in Australia report page.
Companies in the industry are primarily engaged in wholesaling a range of footwear products to retailers, generally with minimum or no further development of the items. Most wholesalers in the industry undertake sales and administrative activities, such as establishing relationships with manufacturers and retailers to ensure the reliable supply and demand of stock, marketing and advertising their products, and storage and transportation of stock.
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IBISWorld industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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