Industry Analysis & Industry Trends
Due to the low-cost, high-value products they offer, operators in the Warehouse Clubs and Supercenters industry typically performs well regardless of the macroeconomic climate; however, when businesses and consumers have deeper pockets, they are likely to spend more at industry establishments. Despite overall industry growth, steep declines in the world price of crude oil have kept revenue gains slow over the period. Many industry operators retail fuel at establishment-run gas stations; therefore, as the world price of crude oil declined over the five years to 2016, the industry was forced to lower gasoline prices, which stifled revenue growth. Over the next five years, industry revenue will rise in line with the growing economy and recovering oil prices.
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Industry Report - Industry Key Buyers Chapter
This industry is highly concentrated, with the top four companies accounting for an expected 93.6% of industry revenue in 2016. Of these four companies, the largest two, Walmart and Costco, account for 69.8% and 17.4% of industry market share, respectively. Very few companies operate in this industry, with the numbers of industry enterprises expected to stand at a low 17 in 2016. The prevalence of industry behemoths like Walmart, make it difficult for new operators to successfully enter the industry. Given the high level of industry concentration and substantial capital required to generate enough revenue to compete with the major players, IBISWorld expects concentration to remain high and industry entrants to remain low.
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