Higher consumer spending will lead more people to spend money traveling, raising revenue.
Los Angeles, CA (PRWEB) June 15, 2013
The Restaurant and Hotel Equipment Wholesaling industry's performance is driven by a number of factors including the state of the economy and travel-related trends. During the recession, industry revenue declined as downstream restaurants and hotels made fewer capital improvements in light of poor consumer demand; however, in 2010, the industry started recovering from the negative effects of the recession. “During this recovery, specifically from downstream markets for industry wholesalers, the Restaurant and Hotel Wholesaling industry has posted continuous growth,” IBISWorld industry analyst Stephen Morea says. In the five years to 2013, industry revenue is expected to increase at an annualized rate of 1.9% to total $23.6 billion. In 2013, the industry is estimated to rise 2.6%.
Since 2010, consumer spending has played a big part in helping the industry return to growth. “Steady job and economic growth increased disposable income levels, and with higher incomes, people were more willing to spend on nonessential things like eating out and traveling,” Morea says. For example, in 2010, domestic trips grew and are expected to continue increasing in 2013. The number of international arrivals into the United States is also expected to increase in 2013, but at a much stronger rate. Increased sales in these downstream industries justified the need for capital improvements like kitchen expansions and equipment upgrades. The positive growth of consumer spending is forecast to continue in the five years to 2018.
The Restaurant and Hotel Equipment Wholesaling industry has a low level of concentration, with the four largest companies in the industry controlling less than 10.0% of industry revenue. Currently, the industry’s four largest companies are: Sysco, Standex International Corporation, US Foods and Carlisle Companies. Historically, this industry also has low concentration because of its geographical diversity throughout the United States. High distribution costs relative to overall price in most product segments limited the geographic area throughout which firms compete. However, technological improvements, particularly software that coordinates product sales and the available supply and transportation management systems, have automated the shipping process, lowering labor costs and increasing the efficiency of moving goods. Even with these technological advancements, market share concentration is expected to remain low.
During the five years to 2018, improving economic conditions will encourage hotel and restaurant operators to resume their expansion and growth plans, resulting in more hotel and restaurant equipment purchases. Restaurants will likely look to industry participants for technologically advanced, energy-efficient and multi-purpose kitchen products and equipment. These newer, automated products offer higher margins to hotel and restaurant equipment wholesalers, and as a result, industry revenue is forecast to increase. For more information, visit IBISWorld’s Restaurant and Hotel Equipment Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry distribute, sell and repair commercial machines and equipment used in restaurants and stores. These products include cooking equipment, dishwashing equipment, balances and scales, soda fountains and food-service fixtures and signs. This industry excludes the wholesaling of refrigeration equipment, which are included in the Refrigeration Equipment Wholesaling industry (IBISWorld report 42374).
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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