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IBISWorld Industry Report 44311Consumer ElectronicsStores in the USSeptember 2012 Justin Waterman
2 About this Industry
2 Industry Definition
2 Main Activities
2 Similar Industries
3 Additional Resources
4 Industry at a Glance
5 Industry Performance
5 Executive Summary
5 Key External Drivers
6 Current Performance
9 Industry Outlook
11 Industry Life Cycle
13 Products & Markets
13 Supply Chain
13 Products & Services
15 Demand Determinants
16 Major Markets
17 International Trade
18 Business Locations
20 Competitive Landscape
20 Market Share Concentration
20 Key Success Factors
20 Cost Structure Benchmarks
22 Basis of Competition
23 Barriers to Entry
24 Industry Globalization
25 Major Companies
25 Best Buy Co. Inc.
27 RadioShack Corporation
29 Operating Conditions
29 Capital Intensity
30 Technology & Systems
30 Revenue Volatility
31 Regulation & Policy
32 Industry Assistance
33 Key Statistics
33 Industry Data
33 Annual Change
33 Key Ratios
34 Jargon & Glossary
www.ibisworld.com | 1-800-330-3772 | [email protected]
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The primary activities of this industry are
Retailing 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 US
Operators in this industry retail new computer peripherals and prepackaged computer software in additionto office equipment and supplies.
44313 Camera Stores in the US
Operators in this industry sell new cameras and photographic equipment and supplies, often in conjunctionwith repair services and film developing.
45112 Hobby & Toy Stores in the US
Operators in this industry retail new toys, games and hobby and craft supplies (except needlecraft).
45321 Office Supply Stores in the US
Operators in this industry retail new stationery, school supplies and office supplies in conjunction with newoffice equipment, furniture and supplies.
45331 Used Goods Stores in the US
Operators in this industry retail a wide assortment of used goods, including used consumer electronics.
81121 Electronic & Computer Repair Services in the US
Services in this industry include repairing and maintaining consumer electronic equipment, computers andoffice equipment, and other electronic equipment.
Industry Definition
Main Activities
Similar Industries
About this Industry
The major products and services in this industry are
Audio equipment
Computer hardware and software
Home and office equipment
Major appliances
Small electric appliances
TV and video equipment
Other
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About this Industry
81141 Appliance Repair in the US
Services in this industry include repairing and servicing home and garden equipment and householdappliances.
45411a E-Commerce & Online Auctions in the US
Operators in this industry retail consumer electronics via the internet.
45411b Mail Order in the US
Operators in this industry retail consumer electronics via catalogs or mail order forms.
Similar Industriescontinued
For additional information on this industry
www.appliancemagazine.com
ApplianceMagazine.comwww.ce.orgConsumer Electronic Association
www.census.govUS Census Bureau
Additional Resources
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Key External Drivers Per capita disposable income
Consumer sentiment index
ExecutiveSummary
Industry PerformanceExecutive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
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Industry Performance
Current
Performance
Key External Driverscontinued
External competition
Number of households
Index
100
60
70
80
90
1804 06 08 10 12 14 16Year
Consumer sentiment index
SOURCE: WWW.IBISWORLD.COM
%c
ha
nge
4
4
2
0
2
1806 08 10 12 14 16Year
Per capita disposable income
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Industry Performance
Current Performancecontinued
Electronics versushome appliances
%c
hange
8
12
8
4
0
4
1804 06 08 10 12 14 16Year
Industry revenue
SOURCE: WWW.IBISWORLD.COM
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Industry Performance
Electronics versushome appliancescontinued
External competition
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Industry Performance
External competitioncontinued
Future trends
IndustryOutlook
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Industry Performance
Future trendscontinued
Electronics
convergence andsaturated productmarket
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Industry Performance
Industry Life Cycle
The industry is underperforming
Products, markets and technology
This industryis Mature
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Products & Markets
Products & Servicescontinued
Major appliances
Computer hardware and software
Audio equipment
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Products & Markets
DemandDeterminants
Products & Servicescontinued
Home and office equipment
Small electric appliances
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Products & Markets
International Trade
Major Marketscontinued
Consumers aged 65 and over
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Products & Markets
Business Locations
%
30
0
10
20
South
west
West
GreatLakes
Mid-Atlantic
NewEng
land
P
lains
RockyMoun
tains
Southeast
Establishments
Population
Establishments vs. population
SOURCE: WWW.IBISWORLD.COM
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Cost StructureBenchmarks
Profit
Key Success Factors Having a wide and expandingproduct range
Proximity to key markets
Ability to control stock on hand
Experienced work force
Attractive product presentation
Having links with suppliers
Market ShareConcentration
Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Level
Concentration in thisindustry is Medium
IBISWorld identifies250 Key SuccessFactors for abusiness. The mostimportant for thisindustry are:
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Competitive Landscape
Cost StructureBenchmarkscontinued
Purchases
Wages
Sector vs. Industry Costs
Profit
Wages
Purchases
Depreciation
Marketing
Rent & Utilities
Other
Average Costs of
all Industries in
sector (2012)
Industry Costs
(2012)
0
20
40
60
Percentage
ofrevenue
80
100 3.5
7.13.4
3.01.5
72.0
9.52.7
9.93.9 1.6
0.8
70.0
11.1
SOURCE: WWW.IBISWORLD.COM
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Competitive Landscape
Basis of Competition Internal competition
Cost StructureBenchmarkscontinued
Depreciation
Other
Level & Trend
Competition in
this industry isMediumand thetrend is Steady
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Competitive Landscape
Barriers to Entry
Basis of Competitioncontinued
External competition
Level & Trend
Barriers to Entryin this industry areMediumand Steady
Barriers to Entry checklist Level
Competition Medium
Concentration Medium
Life Cycle Stage Mature
Capital Intensity Low
Technology Change Low
Regulation & Policy Light
Industry Assistance Low
SOURCE: WWW.IBISWORLD.COM
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Competitive Landscape
IndustryGlobalization
Barriers to Entrycontinued
Level & Trend
Globalization in thisindustry is Lowandthe trend is Steady
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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) financial 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%
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Major Companies
Player Performancecontinued
Financial performance
Best Buy Co. Inc. financial 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
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Major Companies
Player Performance
Financial performance
RadioShack Corporation financial performance
Year
Revenue
($ 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
RadioShackCorporationMarket share: 5.6%
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Major Companies
Other Companies
Circuit City CompanyExited in 2009
Player Performancecontinued
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Operating Conditions
Revenue Volatility
Technology& Systems
Capital Intensitycontinued
Level
The level ofTechnologyChange is Low
Level
The level ofVolatility is Medium
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Operating Conditions
Industry Assistance
Level & Trend
The level ofIndustry Assistanceis Lowand thetrend is Steady
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Jargon & Glossary
BARRIERS TO ENTRYBarriers to entry can be High,Medium or Low. High means new companies struggle toenter an industry, while Low means it is easy for a firmto enter an industry.
CAPITAL/LABOR INTENSITYAn indicator of how muchcapital is used in production as opposed to labor. Level isstated as High, Medium or Low. High is a ratio of lessthan $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 ofdepreciation.
CONSTANT PRICESThe dollar figures in the KeyStatistics table, including forecasts, are adjusted forinflation 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 industrymetrics. The inflation adjustments in IBISWorldsreports are made using the US Bureau of EconomicAnalysis implicit GDP price deflator.
DOMESTIC DEMANDThe use of goods and serviceswithin the US; the sum of imports and domesticproduction minus exports.
EARNINGS BEFORE INTEREST AND TAX (EBIT)IBISWorld uses EBIT as an indicator of a companysprofitability. It is calculated as revenue minus expenses,excluding tax and interest.
EMPLOYMENTThe number of working proprietors,partners, permanent, part-time, temporary and casualemployees, and managerial and executive employees.
ENTERPRISEA division that is separately managed andkeeps management accounts. The most relevantmeasure of the number of firms in an industry.
ESTABLISHMENTThe smallest type of accounting unitwithin an Enterprise; usually consists of one or morelocations in a state or territory of the country in which itoperates.
EXPORTSThe total sales and transfers of goodsproduced by an industry that are exported.
IMPORTSThe value of goods and services importedwith the amount payable to non-residents.
INDUSTRY CONCENTRATIONIBISWorld basesconcentration on the top four firms. Concentration isidentified as High, Medium or Low. High means the topfour players account for over 70% of revenue; Mediumis 40 70% of revenue; Low is less than 40%.
INDUSTRY REVENUEThe total sales revenue of theindustry, including sales (exclusive of excise and salestax) of goods and services; plus transfers to other firmsof the same business; plus subsidies on production; plusall other operating income from outside the firm (suchas commission income, repair and service income, andrent, leasing and hiring income); plus capital work doneby rental or lease. Receipts from interest royalties,dividends and the sale of fixed tangible assets areexcluded.
INDUSTRY VALUE ADDEDThe market value of goodsand services produced by an industry minus the cost ofgoods and services used in the production process,which leaves the gross product of the industry (alsocalled its Value Added).
INTERNATIONAL TRADEThe level is determined by:Exports/Revenue: Low is 0 5%; Medium is 5 20%;High is over 20%. Imports/Domestic Demand: Low is0 5%; Medium is 5 35%; and High is over 35%.
LIFE CYCLEAll industries go through periods of Growth,Maturity and Decline. An average life cycle lasts 70years. Maturity is the longest stage at 40 years withGrowth and Decline at 15 years each.
NON-EMPLOYING ESTABLISHMENTBusinesses withno paid employment and payroll are known asnon-employing establishments. These are mostly set-upby self employed individuals.
VOLATILITYThe level of volatility is determined by thepercentage change in revenue over the past five years.Volatility levels: Very High is greater than 20%; HighVolatility is between 10% and 20%; ModerateVolatility is between 3% and 10%; and Low Volatilityis less than 3%.
WAGESThe gross total wages and salaries of allemployees of the establishment.
Industry Jargon
IBISWorld Glossary
BIG-BOX STOREA retail store that is differentiated byits sheer size and large range of products, includingelectronics, household goods and other consumerproducts.
BLU-RAYAn optical disc format designed to displayhigh-definition video and store large amounts of data.
BRICK-AND-MORTARA store that has a physicalpresence and location, as opposed to an online retailer.
COMPARABLE-STORE SALESA retail measure used toassess the true performance of retail outlets by takingout the effect of new store openings and only looking atsales growth of existing stores.
POINT OF SALE (POS)A system used at checkout inretail stores using computers and cash registers tocapture transaction data at the time and place of sale.
RADIO FREQUENCY IDENTIFICATION (RFID)Atechnology that tracks products from the time theyleave the assembly line to the time they leave the storeby releasing continuous signals from a chip.
SMARTPHONEA mobile phone that offers advancedPC-like capabilities.
WHITE GOODSLarge electrical goods useddomestically, such as refrigerators and washingmachines, typically white in color.
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