Operators will continue to benefit from growing demand for premium chocolates
(PRWEB) January 18, 2015
The Chocolate Stores industry comprises specialty stores that retail chocolate to consumers. Unlike mass merchandisers such as supermarkets that may sell chocolate alongside other goods, these specialty stores sell chocolate products exclusively, with a focus on premium and seasonal chocolates. Over the past five years, higher disposable income has spurred purchases of specialty chocolates, spurring revenue growth for this industry.
The industry has performed exceptionally well over the past five years due to a combination of strong demand and high selling prices. IBISWorld Economic Analyst Amal Ahmad says in the updated report, “Whereas demand corresponds to disposable income, selling prices correspond to the price of cocoa, the key ingredient into chocolate production.” When cocoa prices rise, both producers and retailers of chocolate pass the cost downstream to consumers via selling prices. They are able to do so because demand for chocolate is strong and generally inelastic with respect to price. The price of cocoa has increased intermittently in 2010, 2011 and 2014, raising selling prices and boosting the revenue of retailers including chocolate stores. Brand name chocolate stores have benefited the most from these favorable conditions. These include See's Candies, Godiva and Lindt, which together generate about half of all industry revenue. Customers are more likely to purchase premium chocolates from well-known stores because the quality of their products is well established. Conversely, smaller independent chocolate stores rely on and benefit from local customer patronage.
IBISWorld expects demand for chocolate to remain strong through 2020. “Although the majority of chocolate will be retailed at supermarkets and other retailers outside the industry, industry operators will continue to benefit from rising disposable incomes and growing demand for premium chocolates,” Ahmad says in the updated report. Limited cocoa supply will also keep chocolate selling prices high, aiding industry revenue and profit. Overall, revenue is expected to grow through 2020.
For more information, visit IBISWorld’s Chocolate Stores in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes specialty shops and boutiques that retail chocolate products to consumers. Supermarkets, department stores, drug stores, mass merchandisers and online retailers are excluded from this industry. Establishments such as coffee shops, bakeries and franchise retail establishments that sell chocolate products also are excluded from this industry.
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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