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 the Home Improvement Stores industry’s products, but intensifying price competition and the continued dominance of the industry's top players keep profit down in the five years to 2019. For these reasons, industry research firm IBISWorld has updated a report on the Hardware Stores industry in its growing industry report collection.

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Rising incomes will cause consumers to invest more in home improvements.

The Home Improvement Stores industry is a mature retail industry characterized by a high degree of market concentration and homogeneous product lines, leading to high levels of price competition, particularly between major companies Lowe's and the Home Depot, which combine to generate more than 90.0% of annual industry revenue. In the years prior to 2009, industry operators expanded their do-it-yourself service offerings to gain market share; the popularity of these services translated to strong industry revenue and protected the Home Improvement Stores industry to some extent, from the crippling effects that the recession had on other construction-related industries.

According to IBISWorld Industry Analyst Jocelyn Phillips, “The industry's expansion slowed substantially from 2009 to 2011 after the subprime mortgage crisis decimated consumer demand for home improvement products.” National homeownership levels declined and consumers faced low disposable incomes as unemployment surged; these factors led to lower consumer investment in both new construction and home renovations and remodeling. Low profit and inability to keep up with intense price competition from large operators forced many underperforming stores to close early in the period: the total number of industry companies dropped 1.8% in 2010.

“However, the recent economic environment has been generally favorable to the industry,” says Phillips. Rising confidence in the economy and higher incomes have encouraged households to make bigger purchases and engage in more home improvement projects. Revenue is expected to temporarily falter in 2014; as the 30-year mortgage rate is expected to increase, industry revenue will likely decrease 3.2% this year. Nonetheless, overall industry revenue is expected to increase at an annualized rate of 2.2% to $143.6 billion in the five years to 2014. The recovery in sales has increased industry profitability; margins have increased from 7.0% of revenue in 2009 to an estimated 9.8% in 2014. As the economy continues to recover, favorable conditions will likely continue through 2019. The number of housing starts is expected to increase further, likely leading to a rise in demand for home improvement supplies. As such, revenue is forecast to increase, however, IBISWorld expects industry profit to fall slightly, as industry expansion forces prices down and pushes labor and marketing costs up.

For more information, visit IBISWorld’s Home Improvement Stores industry in the US industry report page.

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IBISWorld industry Report Key Topics

The Home Improvement Stores industry sells a range of home repair and maintenance goods, such as hardware, tools, electrical goods, lumber and structural material for construction and renovations. Hardware stores, which are generally smaller and consequently sell fewer items, are excluded from this industry. Home improvement companies purchase goods from 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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