Improving consumer spending will encourage hotel and restaurant growth, boosting revenue
New York, NY (PRWEB) November 04, 2014
The Restaurant and Hotel Equipment Wholesaling industry distributes commercial cooking, dishwashing, tableware and food-service equipment to restaurants, hotels and drinking establishments. Therefore, industry performance is dependent on economic factors, which affect these downstream markets, including employment and consumer spending as well as travel-related trends. In addition, industry demand is dependent on the level of nonresidential construction, as the building of new restaurants and hotels naturally increases sales of commercial cooking and other industry related equipment commonly sold by industry wholesalers. Last, because most restaurant expansions are financed by loans, the availability of credit is crucial to the Restaurant and Hotel Equipment Wholesaling industry.
According to IBISWorld Industry Analyst Stephen Morea, “industry revenue declined during the recession, as downstream restaurants and hotels made fewer capital improvements in light of poor consumer spending and demand.” Although business conditions began to improve, food-service operators were still hesitant to invest in kitchen expansions, given the fragile state of the economy. Therefore, the industry did not recover until 2011. Since then, however, the industry is expected to post four years of continuous growth.
Over the past five years, increasing Canadian employment and disposable income levels played a major role in helping the industry return to growth, as consumers were more willing to spend on leisure activities such as traveling and dining out. Rising downstream restaurant, hotel and food service sales, in turn, justified the need for capital improvements and kitchen expansions, which bolstered Restaurant and Hotel Equipment Wholesaling industry revenue. These positive factors will contribute to an expected industry revenue increase in 2014. Nevertheless, strong recent gains barely offset earlier losses, as industry revenue is expected to increase marginally in the five years to 2014.
During the five years to 2019, improving consumer spending will encourage hotel and restaurant operators to resume expansion and growth plans, resulting in more equipment purchases. “Restaurants will likely look to industry operators for labour saving, energy-efficient and multipurpose kitchen equipment to help maximize space and cut-down on costs,” says Morea. As a result, industry revenue is forecast to increase during the five years to 2019.
For more information, visit IBISWorld’s Restaurant and Hotel Equipment Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
The Restaurant and Hotel Equipment Wholesaling industry distributes, sells and repairs commercial machines and equipment generally used in restaurants and stores. Products include balances and scales, cooking equipment and dishwashing equipment.
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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