consumer electronics stores in the us industry report
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WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 1
IBISWorld Industry Report 44311Consumer Electronics Stores in the USSeptember 2012 Justin Waterman
2 About this Industry2 Industry Definition
2 Main Activities
2 Similar Industries
3 Additional Resources
4 Industry at a Glance
5 Industry Performance5 Executive Summary
5 Key External Drivers
6 Current Performance
9 Industry Outlook
11 Industry Life Cycle
13 Products & Markets13 Supply Chain
13 Products & Services
15 Demand Determinants
16 Major Markets
17 International Trade
18 Business Locations
20 Competitive Landscape20 Market Share Concentration
20 Key Success Factors
20 Cost Structure Benchmarks
22 Basis of Competition
23 Barriers to Entry
24 Industry Globalization
25 Major Companies25 Best Buy Co. Inc.
27 RadioShack Corporation
29 Operating Conditions29 Capital Intensity
30 Technology & Systems
30 Revenue Volatility
31 Regulation & Policy
32 Industry Assistance
33 Key Statistics33 Industry Data
33 Annual Change
33 Key Ratios
34 Jargon & Glossary
www.ibisworld.com | 1-800-330-3772 | [email protected]
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 2
The primary activities of this industry areRetailing new household appliances (e.g. refrigerators, washing machines and ovens)
Retailing new personal appliances (e.g. hair dryers, curling irons and electric razors)
Retailing computers alongside other household and personal appliances
Offering repair services in conjunction with retail operations
44312 Computer Stores in the USOperators in this industry retail new computer peripherals and prepackaged computer software in addition to office equipment and supplies.
44313 Camera Stores in the USOperators in this industry sell new cameras and photographic equipment and supplies, often in conjunction with repair services and film developing.
45112 Hobby & Toy Stores in the USOperators in this industry retail new toys, games and hobby and craft supplies (except needlecraft).
45321 Office Supply Stores in the USOperators in this industry retail new stationery, school supplies and office supplies in conjunction with new office equipment, furniture and supplies.
45331 Used Goods Stores in the USOperators in this industry retail a wide assortment of used goods, including used consumer electronics.
81121 Electronic & Computer Repair Services in the USServices in this industry include repairing and maintaining consumer electronic equipment, computers and office equipment, and other electronic equipment.
Industry Definition
Main Activities
Similar Industries
About this Industry
The major products and services in this industry areAudio equipment
Computer hardware and software
Home and office equipment
Major appliances
Small electric appliances
TV and video equipment
Other
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 3
About this Industry
81141 Appliance Repair in the USServices in this industry include repairing and servicing home and garden equipment and household appliances.
45411a E-Commerce & Online Auctions in the USOperators in this industry retail consumer electronics via the internet.
45411b Mail Order in the USOperators in this industry retail consumer electronics via catalogs or mail order forms.
Similar Industriescontinued
For additional information on this industrywww.appliancemagazine.com ApplianceMagazine.com
www.ce.org Consumer Electronic Association
www.census.gov US Census Bureau
Additional Resources
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 4
% c
hang
e
4
!4
!2
0
2
1806 08 10 12 14 16Year
Per capita disposable income
SOURCE: WWW.IBISWORLD.COM
% c
hang
e
10
!10
!5
0
5
1804 06 08 10 12 14 16Year
Revenue Employment
Revenue vs. employment growth
Products and services segmentation (2012)
31%TV and video
equipment
1.5%Other
29%Major appliances
0.4%Small electric
appliances
18%Computer hardware
and software
10.2%Audio equipment
9.9%Home and office
equipment
SOURCE: WWW.IBISWORLD.COM
Key Statistics Snapshot
Industry at a GlanceConsumer Electronics Stores in 2012
Industry Structure Life Cycle Stage Mature
Revenue Volatility Medium
Capital Intensity Low
Industry Assistance Low
Concentration Level Medium
Regulation Level Light
Technology Change Low
Barriers to Entry Medium
Industry Globalization Low
Competition Level Medium
Revenue
$80.9bnProfit
$2.2bnWages
$9.0bnBusinesses
39,354
Annual Growth 12-17
3.0%Annual Growth 07-12
-2.6%
Key External DriversPer capita disposable incomeConsumer sentiment indexExternal competitionNumber of households
Market Share
p. 25
p. 5
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 33
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 5
Key External Drivers Per capita disposable income Consumer sentiment index
Executive Summary
Industry PerformanceExecutive Summary | Key External Drivers | Current PerformanceIndustry Outlook | Life Cycle Stage
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 6
Industry Performance
Current Performance
Key External Driverscontinued
External competition
Number of households
Inde
x
100
60
70
80
90
1804 06 08 10 12 14 16Year
Consumer sentiment index
SOURCE: WWW.IBISWORLD.COM
% c
hang
e
4
!4
!2
0
2
1806 08 10 12 14 16Year
Per capita disposable income
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 7
Industry Performance
Current Performancecontinued
Electronics versus home appliances
% c
hang
e
8
!12
!8
!4
0
4
1804 06 08 10 12 14 16Year
Industry revenue
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 8
Industry Performance
Electronics versus home appliancescontinued
External competition
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 9
Industry Performance
External competitioncontinued
Future trends
Industry Outlook
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 10
Industry Performance
Future trendscontinued
Electronics convergence and saturated product market
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 11
Industry PerformanceLife Cycle Stage
SOURCE: WWW.IBISWORLD.COM
30
25
20
15
10
5
0
–5
–10–10 100 20–5 155 25 30
% G
row
th o
f pro
fi t/G
DP
% Growth of establishments
DeclineCrash or Grow?
Potential Hidden GemsFuture Industries
Quality GrowthHigh growth in economic importance; weaker companies close down; developed technology and markets
Time WastersHobby Industries
MaturityCompany consolidation;level of economic importance stable
Shake-out
Shake-outQuantity GrowthMany new companies; minor growth in economic importance; substantial technology change
Key Features of a Mature Industry
Revenue grows at same pace as economyCompany numbers stabilize; M&A stageEstablished technology & processesTotal market acceptance of product & brandRationalization of low margin products & brands
Computer StoresTV & Appliance Wholesaling
Electronic Part & Equipment Wholesaling
Hobby & Toy StoresConsumer Electronics Stores
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 12
Industry Performance
Industry Life Cycle
The industry is underperforming Products, markets and technology
This industry is Mature
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 13
Products & Services
TV and video equipment
Products & MarketsSupply Chain | Products & Services | Demand DeterminantsMajor Markets | International Trade | Business Locations
KEY BUYING INDUSTRIES99 Consumers in the US
Households are the primary buyers for consumer electronics stores. Purchases are made for private use in homes, rather than resale.
KEY SELLING INDUSTRIES42362 TV & Appliance Wholesaling in the US
This industry supplies household-type electrical appliances, room air-conditioners, gas clothes dryers or household-type audio or video equipment.
42369 Electronic Part & Equipment Wholesaling in the US This industry supplies electronic parts and equipment.
52222 Auto Leasing, Loans & Sales Financing in the US This industry helps retailers finance sales.
Supply Chain
Products and services segmentation (2012)
Total $80.9bn
31%TV and video
equipment
1.5%Other
29%Major appliances
0.4%Small electric
appliances
18%Computer hardware
and software
10.2%Audio equipment
9.9%Home and office
equipment
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 14
Products & Markets
Products & Servicescontinued
Major appliances
Computer hardware and software
Audio equipment
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 15
Products & Markets
DemandDeterminants
Products & Servicescontinued
Home and office equipment
Small electric appliances
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 16
Products & Markets
DemandDeterminantscontinued
Major Markets
Consumers aged 25 to 54
Consumers aged 55 to 64
Consumers younger than 25
Major market segmentation (2012)
Total $80.9bn
39.5%Consumers aged
35 to 54
18.5%Consumers aged
55 to 64
17.3%Consumers aged
25 to 34
13.2%Consumers aged 24 and younger
11.5%Consumers aged
65 and older
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 17
Products & Markets
International Trade
Major Marketscontinued
Consumers aged 65 and over
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 18
Products & Markets
Business Locations 2012
MO2.2
West
West
West
Rocky Mountains Plains
Southwest
Southeast
New England
VT0.2
MA2.0
RI0.3
NJ3.0
DE0.3
NH0.5
CT1.1
MD1.7
DC0.1
1
5
3
7
2
6
4
8 9
Additional States (as marked on map)
AZ1.9
CA11.6
NV0.8
OR1.3
WA1.9
MT0.5
NE0.5
MN1.8
IA1.3
OH3.4 VA
2.5
FL6.6
KS1.1
CO1.9
UT1.1
ID0.7
TX7.6
OK1.3
NC2.8
AK0.2
WY0.3
TN1.8
KY1.2
GA3.0
IL4.5
ME0.5
ND0.3
WI2.0 MI
3.7 PA3.8
WV0.5
SD0.4
NM0.6
AR1.0
MS0.8
AL1.4
SC1.3
LA1.3
HI0.3
IN2.2
NY7.0 5
67
8
321
4
9
SOURCE: WWW.IBISWORLD.COM
Mid- Atlantic
No. of establishments (%)
Less than 3% 3% to less than 10% 10% to less than 20% 20% or more
Great Lakes
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 19
Products & Markets
Business Locations
%
30
0
10
20
Sout
hwes
t
Wes
t
Gre
at L
akes
Mid
-Atla
ntic
New
Eng
land
Plai
ns
Rock
y M
ount
ains
Sout
heas
t
EstablishmentsPopulation
Establishments vs. population
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 20
Cost Structure Benchmarks
Profit
Key Success Factors Having a wide and expanding product range
Proximity to key markets
Ability to control stock on hand
Experienced work force
Attractive product presentation
Having links with suppliers
Market Share Concentration
Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure BenchmarksBasis of Competition | Barriers to Entry | Industry Globalization
Level Concentration in this industry is Medium
IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 21
Competitive Landscape
Cost Structure Benchmarkscontinued
PurchasesWages
Sector vs. Industry Costs
Profi t Wages Purchases Depreciation Marketing Rent & Utilities Other
Average Costs of all Industries in sector (2012)
Industry Costs (2012)
0
20
40
60
Perc
enta
ge o
f rev
enue
80
100 3.5
7.13.4 3.01.5
72.0
9.52.7
9.93.9 1.60.8
70.0
11.1
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 22
Competitive Landscape
Basis of Competition Internal competition
Cost Structure Benchmarkscontinued
Depreciation
Other
Level & Trend Competition in this industry is Medium and the trend is Steady
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 23
Competitive Landscape
Barriers to Entry
Basis of Competitioncontinued
External competition
Level & Trend Barriers to Entry in this industry are Medium and Steady
Barriers to Entry checklist LevelCompetition MediumConcentration MediumLife Cycle Stage MatureCapital Intensity LowTechnology Change LowRegulation & Policy LightIndustry Assistance Low
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 24
Competitive Landscape
Industry Globalization
Barriers to Entrycontinued
Level & Trend Globalization in this industry is Low and the trend is Steady
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 25
Player Performance
Major CompaniesBest Buy Co. Inc. | RadioShack Corporation | Other Companies
46.5%Other
Best Buy Co. Inc. 47.9%
RadioShack Corporation 5.6%
SOURCE: WWW.IBISWORLD.COM
Major players(Market share)
Best Buy Co. Inc. (domestic segment) – fi nancial performance
Year*Revenue
($ million) (% change)Operating Income
($ million) (% change)
2007-08 33,328 7.4 1,999 5.2
2008-09 35,070 5.2 1,758 -12.1
2009-10 37,138 5.9 2,103 19.6
2010-11 37,070 -0.2 2,054 -2.3
2011-12 37,615 1.5 1,855 -9.7
2012-13** 38,721 2.9 1,786 -3.7
*Year-end February; **EstimateSOURCE: ANNUAL REPORT AND IBISWORLD
Best Buy Co. Inc. Market share: 47.9%
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 26
Major Companies
Player Performancecontinued
Financial performance
Best Buy Co. Inc. – fi nancial performance
Year*Revenue
($ million) (% change)Operating Income
($ million) (% change)
2007-08 39,892 11.4 2,185 2.2
2008-09 44,737 12.1 2,014 -7.8
2009-10 49,243 10.1 2,368 17.6
2010-11 49,747 1.0 2,374 0.3
2011-12 50,705 1.9 1,085 -54.3
2012-13** 50,523 -0.4 983 -9.4
*Year-end February; **EstimateSOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 27
Major Companies
Player Performance
Financial performance
RadioShack Corporation – fi nancial performance
YearRevenue
($ million) (% change)Net Income
($ million) (% change)
2007 4,075.4 -11.0 236.8 222.6
2008 4,034.8 -1.0 189.4 -20.0
2009 4,073.6 1.0 205.2 8.3
2010 4,265.8 4.7 206.1 0.4
2011 4,378.0 2.6 72.2 -65.0
2012* 4,523.4 3.3 70.0 -3.0
*EstimateSOURCE: ANNUAL REPORT
RadioShack Corporation Market share: 5.6%
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 28
Major Companies
Other Companies
Circuit City Company Exited in 2009
Player Performancecontinued
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 29
Capital Intensity
Operating ConditionsCapital Intensity | Technology & Systems | Revenue VolatilityRegulation & Policy | Industry Assistance
Tools of the Trade: Growth Strategies for Success
SOURCE: WWW.IBISWORLD.COM
Labo
r Int
ensiv
eCapital Intensive
Change in Share of the Economy
New Age EconomyRecreation, Personal Services, Health and Education. Firms benefi t from personal wealth so stable macroeconomic conditions are imperative. Brand awareness and niche labor skills are key to product differentiation.
Traditional Service EconomyWholesale and Retail. Reliant on labor rather than capital to sell goods. Functions cannot be outsourced therefore fi rms must use new technology or improve staff training to increase revenue growth.
Old EconomyAgriculture and Manufacturing. Traded goods can be produced using cheap labor abroad. To expand fi rms must merge or acquire others to exploit economies of scale, or specialize in niche, high-value products.
Investment EconomyInformation, Communications, Mining, Finance and Real Estate. To increase revenue fi rms need superior debt management, a stable macroeconomic environment and a sound investment plan.
Computer Stores TV & Appliance Wholesaling
Camera Stores
Electronic Part & Equipment Wholesaling
Hobby & Toy Stores
Consumer Electronics Stores
Capital intensity
0.5
0.0
0.1
0.2
0.3
0.4
SOURCE: WWW.IBISWORLD.COMDotted line shows a high level of capital intensity
Capital units per labor unit
Consumer Electronics
Stores
Retail TradeEconomy
Level The level of capital intensity is Low
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 30
Operating Conditions
Revenue Volatility
Technology& Systems
Capital Intensitycontinued
Level The level of Technology Change is Low
Level The level of Volatility is Medium
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 31
Operating Conditions
Regulation & Policy
Revenue Volatilitycontinued
SOURCE: WWW.IBISWORLD.COM
Volatility vs GrowthRe
venu
e vo
latil
ity* (
%)
1000
100
10
1
0.1
Five year annualized revenue growth (%)–30 –10 10 30 50 70
Hazardous
Stagnant
Rollercoaster
Blue Chip
* Axis is in logarithmic scale
Consumer Electronics Stores
A higher level of revenue volatility implies greater industry risk. Volatility can negatively affect long-term strategic decisions, such as the time frame for capital investment.
When a fi rm makes poor investment decisions it may face underutilized capacity if demand suddenly falls, or capacity constraints if it rises quickly.
Level & Trend The level of Regulation is Light and the trend is Steady
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 32
Operating Conditions
Industry Assistance
Level & Trend The level of Industry Assistance is Low and the trend is Steady
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 33
Key StatisticsRevenue
($m)
Industry Value Added
($m)Establish-
ments Enterprises Employment Exports ImportsWages ($m)
Domestic Demand
Per Capita Dis-posable Income
($)2003 79,957.5 12,288.1 52,033 39,734 341,164 -- -- 9,571.1 N/A 30,4292004 84,869.9 12,683.8 52,970 40,448 374,238 -- -- 9,752.4 N/A 31,1842005 89,085.0 13,662.4 53,920 40,671 379,448 -- -- 10,440.1 N/A 31,3182006 92,724.8 14,198.2 53,208 39,844 395,646 -- -- 10,714.6 N/A 32,2772007 92,157.9 12,816.3 57,934 43,208 407,783 -- -- 9,242.6 N/A 32,7132008 87,454.6 11,321.2 55,434 41,927 402,053 -- -- 9,083.3 N/A 33,1972009 79,260.5 10,791.1 51,693 39,124 387,090 -- -- 8,648.8 N/A 32,1432010 78,330.1 11,211.3 50,886 38,777 385,824 -- -- 8,680.6 N/A 32,4462011 78,956.8 11,563.3 50,899 39,008 389,257 -- -- 8,878.7 N/A 32,5952012 80,851.7 11,791.4 51,191 39,354 392,768 -- -- 8,992.0 N/A 32,8562013 83,448.7 12,201.9 51,801 39,916 397,891 -- -- 9,245.5 N/A 33,2502014 86,914.3 12,554.3 52,215 40,259 400,700 -- -- 9,412.6 N/A 33,7822015 90,109.3 12,884.4 52,540 40,539 402,735 -- -- 9,573.1 N/A 34,4572016 92,174.3 13,174.9 52,775 40,754 403,984 -- -- 9,736.1 N/A 35,0782017 93,720.1 13,344.5 53,023 40,984 405,245 -- -- 9,802.2 N/A 35,884Sector Rank 13/63 13/63 16/63 15/63 11/63 N/A N/A 11/63 N/A N/AEconomy Rank 105/706 205/706 114/705 122/705 88/706 N/A N/A 164/706 N/A N/A
IVA/Revenue (%)
Imports/Demand
(%)Exports/Revenue
(%)
Revenue per Employee
($’000)Wages/Revenue
(%)Employees
per Est.Average Wage
($)
Share of the Economy
(%)2003 15.37 N/A N/A 234.37 11.97 6.56 28,054.25 0.102004 14.94 N/A N/A 226.78 11.49 7.07 26,059.35 0.102005 15.34 N/A N/A 234.78 11.72 7.04 27,513.91 0.112006 15.31 N/A N/A 234.36 11.56 7.44 27,081.28 0.112007 13.91 N/A N/A 226.00 10.03 7.04 22,665.49 0.102008 12.95 N/A N/A 217.52 10.39 7.25 22,592.30 0.092009 13.61 N/A N/A 204.76 10.91 7.49 22,343.12 0.082010 14.31 N/A N/A 203.02 11.08 7.58 22,498.86 0.092011 14.65 N/A N/A 202.84 11.25 7.65 22,809.35 0.092012 14.58 N/A N/A 205.85 11.12 7.67 22,893.92 0.092013 14.62 N/A N/A 209.73 11.08 7.68 23,236.26 0.092014 14.44 N/A N/A 216.91 10.83 7.67 23,490.39 0.092015 14.30 N/A N/A 223.74 10.62 7.67 23,770.22 0.092016 14.29 N/A N/A 228.16 10.56 7.65 24,100.21 0.092017 14.24 N/A N/A 231.27 10.46 7.64 24,188.33 N/ASector Rank 50/63 N/A N/A 27/63 44/63 19/63 33/63 13/63Economy Rank 636/706 N/A N/A 391/706 508/706 452/705 599/706 205/706
Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.
Revenue (%)
Industry Value Added
(%)
Establish-ments
(%)Enterprises
(%)Employment
(%)Exports
(%)Imports
(%)Wages
(%)
Domestic Demand
(%)
Per Capita Dis-posable Income
(%)2004 6.1 3.2 1.8 1.8 9.7 N/A N/A 1.9 N/A 2.52005 5.0 7.7 1.8 0.6 1.4 N/A N/A 7.1 N/A 0.42006 4.1 3.9 -1.3 -2.0 4.3 N/A N/A 2.6 N/A 3.12007 -0.6 -9.7 8.9 8.4 3.1 N/A N/A -13.7 N/A 1.42008 -5.1 -11.7 -4.3 -3.0 -1.4 N/A N/A -1.7 N/A 1.52009 -9.4 -4.7 -6.7 -6.7 -3.7 N/A N/A -4.8 N/A -3.22010 -1.2 3.9 -1.6 -0.9 -0.3 N/A N/A 0.4 N/A 0.92011 0.8 3.1 0.0 0.6 0.9 N/A N/A 2.3 N/A 0.52012 2.4 2.0 0.6 0.9 0.9 N/A N/A 1.3 N/A 0.82013 3.2 3.5 1.2 1.4 1.3 N/A N/A 2.8 N/A 1.22014 4.2 2.9 0.8 0.9 0.7 N/A N/A 1.8 N/A 1.62015 3.7 2.6 0.6 0.7 0.5 N/A N/A 1.7 N/A 2.02016 2.3 2.3 0.4 0.5 0.3 N/A N/A 1.7 N/A 1.82017 1.7 1.3 0.5 0.6 0.3 N/A N/A 0.7 N/A 2.3Sector Rank 27/63 38/63 34/63 27/63 39/63 N/A N/A 37/63 N/A N/AEconomy Rank 360/706 430/706 404/705 315/705 387/706 N/A N/A 420/706 N/A N/A
Annual Change
Key Ratios
Industry Data
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 34
Jargon & Glossary
BARRIERS TO ENTRY Barriers to entry can be High, Medium or Low. High means new companies struggle to enter an industry, while Low means it is easy for a firm to enter an industry.CAPITAL/LABOR INTENSITY An indicator of how much capital is used in production as opposed to labor. Level is stated as High, Medium or Low. High is a ratio of less than $3 of wage costs for every $1 of depreciation; Medium is $3 – $8 of wage costs to $1 of depreciation; Low is greater than $8 of wage costs for every $1 of depreciation.CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using 2011 as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the ‘real’ growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.DOMESTIC DEMAND The use of goods and services within the US; the sum of imports and domestic production minus exports.EARNINGS BEFORE INTEREST AND TAX (EBIT) IBISWorld uses EBIT as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding tax and interest.EMPLOYMENT The number of working proprietors, partners, permanent, part-time, temporary and casual employees, and managerial and executive employees.ENTERPRISE A division that is separately managed and keeps management accounts. The most relevant measure of the number of firms in an industry.ESTABLISHMENT The smallest type of accounting unit within an Enterprise; usually consists of one or more locations in a state or territory of the country in which it operates.EXPORTS The total sales and transfers of goods produced by an industry that are exported.IMPORTS The value of goods and services imported with the amount payable to non-residents.
INDUSTRY CONCENTRATION IBISWorld bases concentration on the top four firms. Concentration is identified as High, Medium or Low. High means the top four players account for over 70% of revenue; Medium is 40 –70% of revenue; Low is less than 40%.INDUSTRY REVENUE The total sales revenue of the industry, including sales (exclusive of excise and sales tax) of goods and services; plus transfers to other firms of the same business; plus subsidies on production; plus all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); plus capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.INDUSTRY VALUE ADDED The market value of goods and services produced by an industry minus the cost of goods and services used in the production process, which leaves the gross product of the industry (also called its Value Added).INTERNATIONAL TRADE The level is determined by: Exports/Revenue: Low is 0 –5%; Medium is 5 –20%; High is over 20%. Imports/Domestic Demand: Low is 0 –5%; Medium is 5 –35%; and High is over 35%.LIFE CYCLE All industries go through periods of Growth, Maturity and Decline. An average life cycle lasts 70 years. Maturity is the longest stage at 40 years with Growth and Decline at 15 years each.NON-EMPLOYING ESTABLISHMENT Businesses with no paid employment and payroll are known as non-employing establishments. These are mostly set-up by self employed individuals.VOLATILITY The level of volatility is determined by the percentage change in revenue over the past five years. Volatility levels: Very High is greater than ±20%; High Volatility is between ±10% and ±20%; Moderate Volatility is between ±3% and ±10%; and Low Volatility is less than ±3%.WAGES The gross total wages and salaries of all employees of the establishment.
Industry Jargon
IBISWorld Glossary
BIG-BOX STORE A retail store that is differentiated by its sheer size and large range of products, including electronics, household goods and other consumer products.BLU-RAY An optical disc format designed to display high-definition video and store large amounts of data.BRICK-AND-MORTAR A store that has a physical presence and location, as opposed to an online retailer.COMPARABLE-STORE SALES A retail measure used to assess the true performance of retail outlets by taking out the effect of new store openings and only looking at sales growth of existing stores.
POINT OF SALE (POS) A system used at checkout in retail stores using computers and cash registers to capture transaction data at the time and place of sale.RADIO FREQUENCY IDENTIFICATION (RFID) A technology that tracks products from the time they leave the assembly line to the time they leave the store by releasing continuous signals from a chip.SMARTPHONE A mobile phone that offers advanced PC-like capabilities.WHITE GOODS Large electrical goods used domestically, such as refrigerators and washing machines, typically white in color.
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