The recession caused steep declines in industry demand as disposable income levels fell
Los Angeles, CA (PRWEB) June 13, 2013
The Online Large Kitchen Appliance Sales industry faced severe revenue declines during the five years to 2013. “Sales of online large kitchen appliances rely heavily on activity within the housing market because the level housing starts and home purchases directly impacts industry purchases,” IBISWorld industry analyst Deonta Smith says. Therefore, when the housing bubble started to burst, online kitchen-appliance retailers immediately felt the negative effects of the recession's onset. In 2009 and 2010, industry revenue fell an estimated 27.1% and 11.6% respectively. Consequently, in the five years to 2013, industry revenue is estimated to fall at an annualized rate of 6.5% to $4.9 billion.
Online retailers are typically able to pass low transportation costs and reduced inventory costs on to consumers, lowering overall costs of products in the Online Large Kitchen Appliance Sales industry. During the past five years, however, low disposable income levels curbed both in-store and online purchases of large kitchen appliances. Despite the industry's numerous low-cost options for consumers, poor consumer sentiment continued to hamper demand. “Government incentives, such as consumer rebates on the Energy Star-qualified appliances, helped to somewhat spur industry demand in the past five years,” Smith says. In 2013, the industry is expected to receive a boost from overall economic improvement, specifically rising per capita disposable income levels, and industry growth is expected to accelerate to 6.7%.
The Online Large Kitchen Appliance Sales industry has a low level of market share concentration with the top four players accounting for less than 10.0% of industry revenue. Due to the competitiveness of online retailing, it has been difficult for players in this industry to capture market share. Online retailers compete heavily with regard to price because consumers can shop for industry products through several stores in a matter of minutes and tend to be price sensitive when purchasing products. Currently the following companies have the largest market share in the industry: The Home Depot; Sears, Roebuck and Co.; and Lowe’s.
In the five years to 2018, revenue is forecast to continue its upward trend. As demand for large kitchen appliances grows so will the number of online retailers; the number of enterprises is projected to rise. Demand for industry products will also rise because of the forecast increase in housing starts spurred by favorable consumer spending levels, and stronger consumer sentiment toward green and energy-efficient products. For more information, visit IBISWorld’s Online Large Kitchen Appliance Sales in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry retails major household appliances, such as household cooking appliances, laundry equipment, refrigerators, upright and chest freezers, dishwashers, water heaters and garbage disposal units, via the internet.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.