Home Improvement Stores in the US Industry Market Research Report from IBISWorld has Been Updated

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Improvements in consumer sentiment, disposable incomes and housing markets have boosted purchases of industry products, but intensifying price competition and the continued dominance of the industry's top players keep profit down; meanwhile, the do-it-for-me market offers an opportunity for growth, particularly for operators that provide additional services like installation. For these reasons, industry research firm IBISWorld has updated a report on the Home Improvement Stores industry in its growing industry report collection.

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Rising incomes will encourage consumers to invest more in home improvements

The Home Improvement Stores industry's revenue did not suffer as heavily as other construction-related industries over the past five years, thanks to rapid growth prior to 2008. According to IBISWorld industry analyst Eben Jose, “During that time, revenue growth was driven by the expansion of services, enabling operators to steal market share from hardware stores and wholesalers.” In particular, major players Home Depot and Lowe's leveraged their size and purchasing power to aggressively price goods, making them more appealing to consumers. In addition, smaller downstream contractors and construction firms increasingly looked to home improvement stores for contractor-related services, such as rentals.

Still, the industry's expansion slowed substantially from 2009 to 2011 after the subprime mortgage crisis decimated consumer demand for home improvement products. As people lost their homes and national homeownership levels declined, there was little demand for home improvements. Furthermore, consumers faced low disposable incomes as unemployment surged, leading to lower investment in home renovations and remodeling. As a result, revenue is expected to increase at an annualized rate of only 0.5% to $164.4 billion in the five years to 2013. Meanwhile, falling profit margins from 2009 to 2011 led many underperforming stores to close early in the period or be acquired by the industry’s major players, contributing to already-high market share concentration. Consequently, the Home Improvement Stores industry has failed to expand much over the period. Nonetheless, “a recent recovery in sales has led to rising industry profitability, which has helped reverse the industry’s contraction,” says Jose.

The recent economic environment has been favorable to the industry. Rising confidence in the economy and higher income has encouraged households to make bigger purchases and engage in more home improvement projects. As the economy continues to recover, these favorable conditions will continue through 2018. The number of housing starts is expected to increase further, leading to a rise in demand for home improvement supplies. As such, revenue is forecast to increase steadily over the next five years. However, profit margins will remain subdued as industry expansion forces prices down and pushes marketing costs up. For more information, visit IBISWorld’s Home Improvement Stores in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes stores that sell a broad range of home repair and maintenance goods, such as hardware, tools, electrical goods, lumber and structural material for construction and renovations. Stores that focus on a specific area like flooring or wall coverings are excluded from this industry. Operators purchase goods from domestic and international manufacturers and wholesalers, and sell them to end-users, such as do-it-yourself consumers and professional contractors.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

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.

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