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WWW.IBISWORLD.COM                                            Consumer Electronics Stores in the US September 2012   1




IBISWorld Industry Report 44311
Consumer Electronics
Stores in the US
September 2012                                     Justin Waterman



2   About this Industry    17 International Trade                    32 Industry Assistance
2   Industry Definition     18 Business Locations
2   Main Activities                                                  33 Key Statistics
2   Similar Industries     20 Competitive Landscape                  33 Industry Data
3   Additional Resources   20 Market Share Concentration             33 Annual Change
                           20 Key Success Factors                    33 Key Ratios
4   Industry at a Glance   20 Cost Structure Benchmarks
                           22 Basis of Competition                   34 Jargon & Glossary
5   Industry Performance   23 Barriers to Entry
5   Executive Summary      24 Industry Globalization
5   Key External Drivers
6   Current Performance    25 Major Companies
9   Industry Outlook       25 Best Buy Co. Inc.
11 Industry Life Cycle     27 RadioShack Corporation


13 Products & Markets      29 Operating Conditions
13 Supply Chain            29 Capital Intensity
13 Products & Services     30 Technology & Systems
15 Demand Determinants     30 Revenue Volatility
16 Major Markets           31 Regulation & Policy




www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
WWW.IBISWORLD.COM                                                              Consumer Electronics Stores in the US September 2012   2



About this Industry

Industry Definition




Main Activities      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


                     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




Similar Industries   44312 Computer Stores in the US
                     Operators in this industry retail new computer peripherals and prepackaged computer software in addition
                     to office equipment and supplies.

                     44313 Camera Stores in the US
                     Operators 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 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 new
                     office 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 and
                     office equipment, and other electronic equipment.
WWW.IBISWORLD.COM                                                               Consumer Electronics Stores in the US September 2012   3



About this Industry


Similar Industries     81141 Appliance Repair in the US
                       Services in this industry include repairing and servicing home and garden equipment and household
continued              appliances.

                       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.




Additional Resources   For additional information on this industry
                       www.appliancemagazine.com
                       ApplianceMagazine.com
                       www.ce.org
                       Consumer Electronic Association
                       www.census.gov
                       US Census Bureau
WWW.IBISWORLD.COM                                                                                    Consumer Electronics Stores in the US September 2012                       4



Industry at a Glance
Consumer Electronics Stores in 2012




Key Statistics                   Revenue                                        Annual Growth 07-12                                    Annual Growth 12-17
Snapshot
                                 $80.9bn -2.6%                                                                                         3.0%
                                 Profit                                          Wages                                                  Businesses

                                 $2.2bn                                         $9.0bn                                                 39,354
                                       Revenue vs. employment growth                                                Per capita disposable income
Market Share
                                              10                                                                        4


                                               5                                                                        2
                                % change




                                                                                                         % change
                                               0                                                                        0


                                              −5                                                                       −2


                                             −10                                                                       −4
                                            Year 04    06   08     10     12     14     16     18                   Year      06        08   10      12     14     16     18
                                             Revenue                 Employment
                                                                                                                                                   SOURCE: WWW.IBISWORLD.COM
                        p. 25
                                           Products and services segmentation (2012)

Key External Drivers
                                                                                  9.9%          1.5%                       0.4%
                                                                             Home and office Other                     Small electric
Per capita disposable                                                          equipment                               appliances
income
Consumer
                                                            10.2%
                                                                                                                                         31%
                                                                                                                                        TV and video
sentiment index                                         Audio equipment                                                                  equipment
External competition
Number of households




                                                             18%
                                                       Computer hardware
                                                          and software


                         p. 5                                                                                                29%
                                                                                                                        Major appliances
                                                                                                                                                    SOURCE: WWW.IBISWORLD.COM
                                                                                                                                                  SOURCE: WWW.IBISWORLD.COM



Industry Structure               Life Cycle Stage                                            Mature         Regulation Level                                              Light
                                 Revenue Volatility                                        Medium           Technology Change                                              Low
                                 Capital Intensity                                              Low         Barriers to Entry                                           Medium
                                 Industry Assistance                                            Low         Industry Globalization                                         Low
                                 Concentration Level                                       Medium           Competition Level                                           Medium

                                 FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 33
WWW.IBISWORLD.COM                                        Consumer Electronics Stores in the US September 2012   5



Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage


Executive
Summary




Key External Drivers   Per capita disposable income       Consumer sentiment index
WWW.IBISWORLD.COM                                                           Consumer Electronics Stores in the US September 2012       6



Industry Performance


Key External Drivers
continued

                                                                            Number of households

                       External competition




                              Per capita disposable income                          Consumer sentiment index

                                     4                                                100


                                     2                                                 90
                       % change




                                                                            Index




                                     0                                                 80


                                    −2                                                 70


                                    −4                                                 60
                                  Year   06   08   10   12   14   16   18           Year 04   06   08   10     12   14     16    18


                                                                                                           SOURCE: WWW.IBISWORLD.COM




Current
Performance
WWW.IBISWORLD.COM      Consumer Electronics Stores in the US September 2012         7



Industry Performance


Current Performance
                               Industry revenue
continued
                                      8

                                      4

                                      0




                        % change
                                     −4

                                     −8

                                    −12
                                   Year 04   06   08   10   12    14    16    18


                                                        SOURCE: WWW.IBISWORLD.COM




Electronics versus
home appliances
WWW.IBISWORLD.COM      Consumer Electronics Stores in the US September 2012   8



Industry Performance


Electronics versus
home appliances
continued




External competition
WWW.IBISWORLD.COM      Consumer Electronics Stores in the US September 2012   9



Industry Performance


External competition
continued




Industry
Outlook




Future trends
WWW.IBISWORLD.COM      Consumer Electronics Stores in the US September 2012   10



Industry Performance


Future trends
continued




Electronics
convergence and
saturated product
market
WWW.IBISWORLD.COM                                                                                     Consumer Electronics Stores in the US September 2012    11



Industry Performance
Life Cycle Stage




                        30      Maturity                               Quality Growth
% Growth of profit/GDP




                                                                                                       Key Features of a Mature Industry
                                Company                                High growth in economic
                                consolidation;                         importance; weaker companies    Revenue grows at same pace as economy
                                level of economic                      close down; developed           Company numbers stabilize; M&A stage
                                importance stable                      technology and markets          Established technology & processes
                        25
                                                                                                       Total market acceptance of product & brand
                                                                                                       Rationalization of low margin products & brands


                        20




                        15
                                                                                                                 Quantity Growth
                                                                                                                 Many new companies;
                                                                                                                 minor growth in economic
                                                                                                                 importance; substantial
                        10                                                                                       technology change




                         5
                                                 Hobby & Toy Stores
                                                     Consumer Electronics Stores
                                                   Computer Stores
                         0                       TV & Appliance Wholesaling
                              Shake-out
                                                    Electronic Part & Equipment Wholesaling
                                                    Shake-out




                         –5

                                Decline                         Potential Hidden Gems                       Time Wasters
                                Crash or Grow?                  Future Industries                            Hobby Industries
                        –10
                          –10           –5                  0            5          10          15    20            25            30
                                                                                                      % Growth of establishments
                                                                                                                                        SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM                                       Consumer Electronics Stores in the US September 2012   12



Industry Performance


Industry Life Cycle

This industry
is Mature




                      The industry is underperforming     Products, markets and technology
WWW.IBISWORLD.COM                                                       Consumer Electronics Stores in the US September 2012      13



Products & Markets
Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations


Supply Chain          KEY BUYING INDUSTRIES
                      99        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 INDUSTRIES
                      42362     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.




Products & Services    Products and services segmentation (2012)

                                                         9.9%       1.5%          0.4%
                                                     Home and office Other      Small electric
                                                       equipment                appliances

                                             10.2%
                                          Audio equipment
                                                                                            31%
                                                                                           TV and video
                                                                                            equipment




                                              18%
                                        Computer hardware
                                           and software


                                                                            29%
                       Total $80.9bn                                    Major appliances
                                                                                                          SOURCE: WWW.IBISWORLD.COM




                      TV and video equipment
WWW.IBISWORLD.COM                        Consumer Electronics Stores in the US September 2012   14



Products & Markets


Products & Services                        Computer hardware and software
continued




                                           Audio equipment

                      Major appliances
WWW.IBISWORLD.COM                                 Consumer Electronics Stores in the US September 2012   15



Products & Markets


Products & Services                                 Small electric appliances
continued



                      Home and office equipment




Demand
Determinants
WWW.IBISWORLD.COM                                                  Consumer Electronics Stores in the US September 2012    16



Products & Markets


Demand
Determinants
continued


Major Markets        Major market segmentation (2012)
                                                          11.5%
                                                       Consumers aged
                                                         65 and older


                                        13.2%
                                     Consumers aged
                                      24 and younger                                  39.5%
                                                                                     Consumers aged
                                                                                        35 to 54



                                          17.3%
                                       Consumers aged
                                          25 to 34

                                                                   18.5%
                     Total $80.9bn                              Consumers aged
                                                                   55 to 64                        SOURCE: WWW.IBISWORLD.COM




                                                                        Consumers aged 55 to 64




                    Consumers aged 25 to 54




                                                                        Consumers younger than 25
WWW.IBISWORLD.COM     Consumer Electronics Stores in the US September 2012   17



Products & Markets


Major Markets           Consumers aged 65 and over
continued




International Trade
WWW.IBISWORLD.COM                                                                                   Consumer Electronics Stores in the US September 2012                 18



  Products & Markets

  Business Locations 2012


           West
            AK
             0.2                                                                                                                                New
                                                                                                                                               England
                                                                                                                                                                          ME
                                                                                                  Great                             Mid-                                  0.5


                                                                                                  Lakes                            Atlantic                1 2
                                                                                                                                                       NY     3
    WA                            MT                       ND                                                                                          7.0
                                                                                                                                                             5 4
     1.9                                                   0.3                 MN
                      Rocky
                                   0.5                                              1.8
                                                                                                  WI
  OR               Mountains                               SD
                                                            0.4
                                                                  Plains                              2.0                 MI
                                                                                                                           3.7
                                                                                                                                                     PA
                                                                                                                                                     3.8
                                                                                                                                                                  6
                                                                                                                                                                  7
   1.3             ID                                                                     IA                                           OH              9              8
                   0.7                   WY                                                                                             3.4
                                         0.3
                                                                 NE
                                                                                          1.3
                                                                                                              IL          IN                  WV VA
                                                                                                              4.5         2.2                    2.5

West NV
                                                                  0.5                                                                          0.5
                                                                                                                                   KY
                           UT                                                                   MO
                                                                                                                                       1.2             NC
           0.8
                            1.1                CO                       KS                      2.2                                                        2.8
                                               1.9                      1.1                                                     TN
                                                                                                                                                     SC
                                                                                                                    Southeast
                                                                                                                                 1.8
  CA                                                                                                                                                  1.3
  11.6
                                                                               OK                 AR                                          GA
                                                                                1.3                   1.0                        AL           3.0
                            AZ                                                                                      MS           1.4
                            1.9                NM
                                               0.6    Southwest                                                     0.8


                                                                        TX                             LA
                                                                                                        1.3                                                FL
                                                                        7.6                                                                                 6.6




West
           HI
           0.3           Additional States (as marked on map)                                         No. of establishments (%)

                         1 VT     2 NH         3 MA        4 RI                                             Less than 3%
                           0.2       0.5             2.0    0.3                                             3% to less than 10%
                                                                                                            10% to less than 20%
                         5 CT     6 NJ         7 DE        8 MD         9 DC
                           1.1       3.0             0.3     1.7              0.1
                                                                                                            20% or more


                                                                                                                                                SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM    Consumer Electronics Stores in the US September 2012                                                                19



Products & Markets


Business Locations         Establishments vs. population

                               30



                               20




                        %
                               10



                                0




                                    West

                                           Great Lakes

                                                         Mid-Atlantic

                                                                        New England

                                                                                      Plains

                                                                                               Rocky Mountains

                                                                                                                 Southeast

                                                                                                                             Southwest
                              Establishments
                              Population
                                                                                  SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM                                          Consumer Electronics Stores in the US September 2012   20



Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization


Market Share
Concentration

Level
Concentration in this
industry is Medium




Key Success Factors     Having a wide and expanding             Experienced work force
                        product range

IBISWorld identifies
250 Key Success
Factors for a
business. The most
                        Proximity to key markets                Attractive product presentation
important for this
industry are:



                        Ability to control stock on hand        Having links with suppliers




Cost Structure          Profit
Benchmarks
WWW.IBISWORLD.COM                                                          Consumer Electronics Stores in the US September 2012     21



Competitive Landscape


Cost Structure
Benchmarks
continued




                    Purchases
                                                                                 Wages




                               Sector vs. Industry Costs

                                                    Average Costs of
                                                    all Industries in      Industry Costs
                                                     sector (2012)            (2012)
                                             100
                                                          3.5                   2.7                       Profit
                                                          9.5                  11.1                       Wages
                                                                                                          Purchases
                                             80                                                           Depreciation
                                                                                                          Marketing
                                                                                                          Rent & Utilities
                                                                                                          Other
                     Percentage of revenue




                                             60

                                                         72.0                  70.0
                                             40




                                             20
                                                   1.5                   0.8
                                                                   3.0         3.9 1.6
                                                          3.4
                                                          7.1                  9.9
                                              0
                                                                                                            SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM                             Consumer Electronics Stores in the US September 2012   22



Competitive Landscape


Cost Structure                                     Other
Benchmarks
continued




                       Depreciation




Basis of Competition   Internal competition


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


Basis of Competition
continued




                       External competition




Barriers to Entry
                                                   Barriers to Entry checklist                     Level
Level & Trend                                      Competition                                  Medium
                                                   Concentration                                Medium
Barriers to Entry
                                                   Life Cycle Stage                             Mature
in this industry are                               Capital Intensity                               Low
Medium and Steady                                  Technology Change                               Low
                                                   Regulation & Policy                            Light
                                                   Industry Assistance                             Low

                                                                                 SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM       Consumer Electronics Stores in the US September 2012   24



Competitive Landscape


Barriers to Entry
continued




Industry
Globalization

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



Major Companies
Best Buy Co. Inc. | RadioShack Corporation | Other Companies




Major players
(Market share)      RadioShack Corporation 5.6%

                                                                                                                  46.5%
                                                                                                                   Other


                                                        Best Buy Co. Inc. 47.9%                                         SOURCE: WWW.IBISWORLD.COM




Player Performance

Best Buy Co. Inc.
Market share: 47.9%




                            Best Buy Co. Inc. (domestic segment) – financial performance
                                                              Revenue                              Operating Income
                            Year*                            ($ million)          (% change)          ($ 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; **Estimate
                                                                                                              SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM                                                       Consumer Electronics Stores in the US September 2012    26



Major Companies


Player Performance
continued




                     Financial performance




                     Best Buy Co. Inc. – financial performance
                                                       Revenue                       Operating Income
                     Year*                            ($ million)   (% change)          ($ 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; **Estimate
                                                                                                SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM                                         Consumer Electronics Stores in the US September 2012   27



Major Companies


Player Performance

RadioShack
Corporation
Market share: 5.6%




                     Financial performance




                     RadioShack Corporation – financial performance
                                         Revenue                          Net Income
                     Year               ($ million)   (% change)           ($ 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

                     *Estimate
                                                                                               SOURCE: ANNUAL REPORT
WWW.IBISWORLD.COM                           Consumer Electronics Stores in the US September 2012   28



Major Companies


Player Performance
continued




Other Companies




                     Circuit City Company
                     Exited in 2009
WWW.IBISWORLD.COM                                                              Consumer Electronics Stores in the US September 2012                           29



Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance


Capital Intensity
                                                                                     Capital intensity
                                                                                     Capital units per labor unit
Level
                                                                                      0.5
The level of capital
intensity is Low                                                                      0.4

                                                                                      0.3

                                                                                      0.2

                                                                                      0.1

                                                                                      0.0
                                                                                               Economy            Retail Trade        Consumer
                                                                                                                                      Electronics
                                                                                                                                        Stores
                                                                                            Dotted line shows a high level of capital intensity
                                                                                                                        SOURCE: WWW.IBISWORLD.COM




Tools of the Trade: Growth Strategies for Success


        New Age Economy                                                                                  Investment Economy
        Recreation, Personal Services,                                                                   Information, Communications,
        Health and Education. Firms                                                                      Mining, Finance and Real
        benefit from personal wealth so                                                                   Estate. To increase revenue
        stable macroeconomic conditions                                                                  firms need superior debt
        are imperative. Brand awareness                                                                  management, a stable
        and niche labor skills are key to                                                                macroeconomic environment
        product differentiation.                                                                         and a sound investment plan.

                                                                                                                                                  Capital Intensive
Labor Intensive




                                            Consumer
                                            Electronics
                                            Stores
                         Computer Stores              Hobby & Toy Stores
        Traditional Service Economy
                                                         TV & Appliance Wholesaling                      Old Economy
        Wholesale and Retail. Reliant         Electronic Part &                                          Agriculture and Manufacturing.
        on labor rather than capital to       Equipment Wholesaling                                      Traded goods can be produced
        sell goods. Functions cannot           Camera Stores                                             using cheap labor abroad.
        be outsourced therefore firms                                                                     To expand firms must merge
        must use new technology                                                                          or acquire others to exploit
        or improve staff training to                                                                     economies of scale, or specialize
        increase revenue growth.                                                                         in niche, high-value products.

                                                   Change in Share of the Economy                                       SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM      Consumer Electronics Stores in the US September 2012   30



Operating Conditions


Capital Intensity
continued




Technology
& Systems

Level
The level of
Technology
Change is Low




Revenue Volatility

Level
The level of
Volatility is Medium
WWW.IBISWORLD.COM                                                                                    Consumer Electronics Stores in the US September 2012    31



Operating Conditions


Revenue Volatility
continued




                      A higher level of revenue                                 Volatility vs Growth
                      volatility implies greater
                      industry risk. Volatility can                             1000        Hazardous                                     Rollercoaster
                      negatively affect long-term
                                                      Revenue volatility* (%)



                      strategic decisions, such as                                100
                      the time frame for capital
                      investment.
                                                                                    10
                      When a firm makes poor                                                                      Consumer Electronics
                      investment decisions it
                      may face underutilized                                          1                          Stores
                      capacity if demand
                      suddenly falls, or capacity                                  0.1      Stagnant                                           Blue Chip
                      constraints if it rises                                             –30            –10        10         30         50          70
                      quickly.                                                                         Five year annualized revenue growth (%)
                                                                                * Axis is in logarithmic scale
                                                                                                                                     SOURCE: WWW.IBISWORLD.COM




Regulation & Policy

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 Statistics
Industry Data                            Industry                                                                                                   Per Capita Dis-
                        Revenue        Value Added       Establish-                                                         Wages       Domestic   posable Income
                          ($m)             ($m)            ments        Enterprises Employment    Exports     Imports        ($m)       Demand            ($)
2003                    79,957.5         12,288.1         52,033          39,734      341,164        --          --         9,571.1       N/A           30,429
2004                    84,869.9         12,683.8         52,970          40,448      374,238        --          --         9,752.4       N/A           31,184
2005                    89,085.0         13,662.4         53,920          40,671      379,448        --          --        10,440.1       N/A           31,318
2006                    92,724.8         14,198.2         53,208          39,844      395,646        --          --        10,714.6       N/A           32,277
2007                    92,157.9         12,816.3         57,934          43,208      407,783        --          --         9,242.6       N/A           32,713
2008                    87,454.6         11,321.2         55,434          41,927      402,053        --          --         9,083.3       N/A           33,197
2009                    79,260.5         10,791.1         51,693          39,124      387,090        --          --         8,648.8       N/A           32,143
2010                    78,330.1         11,211.3         50,886          38,777      385,824        --          --         8,680.6       N/A           32,446
2011                    78,956.8         11,563.3         50,899          39,008      389,257        --          --         8,878.7       N/A           32,595
2012                    80,851.7        11,791.4          51,191          39,354     392,768         --          --         8,992.0       N/A           32,856
2013                    83,448.7         12,201.9         51,801          39,916      397,891        --          --         9,245.5       N/A           33,250
2014                    86,914.3         12,554.3         52,215          40,259      400,700        --          --         9,412.6       N/A           33,782
2015                    90,109.3         12,884.4         52,540          40,539      402,735        --          --         9,573.1       N/A           34,457
2016                    92,174.3         13,174.9         52,775          40,754      403,984        --          --         9,736.1       N/A           35,078
2017                    93,720.1         13,344.5         53,023          40,984      405,245        --          --         9,802.2       N/A           35,884
Sector Rank              13/63             13/63           16/63           15/63       11/63        N/A         N/A          11/63        N/A            N/A
Economy Rank            105/706          205/706          114/705        122/705       88/706       N/A         N/A        164/706        N/A            N/A



Annual Change                            Industry        Establish-                                                                     Domestic    Per Capita Dis-
                         Revenue       Value Added         ments        Enterprises Employment    Exports     Imports      Wages        Demand     posable Income
                           (%)              (%)             (%)            (%)          (%)         (%)         (%)          (%)          (%)            (%)
2004                        6.1               3.2            1.8            1.8          9.7        N/A         N/A            1.9        N/A              2.5
2005                        5.0               7.7            1.8            0.6          1.4        N/A         N/A            7.1        N/A              0.4
2006                        4.1               3.9           -1.3           -2.0          4.3        N/A         N/A            2.6        N/A              3.1
2007                       -0.6              -9.7            8.9            8.4          3.1        N/A         N/A         -13.7         N/A              1.4
2008                       -5.1            -11.7            -4.3           -3.0         -1.4        N/A         N/A           -1.7        N/A              1.5
2009                       -9.4              -4.7           -6.7           -6.7         -3.7        N/A         N/A           -4.8        N/A             -3.2
2010                       -1.2               3.9           -1.6           -0.9         -0.3        N/A         N/A            0.4        N/A              0.9
2011                        0.8               3.1            0.0            0.6          0.9        N/A         N/A            2.3        N/A              0.5
2012                        2.4               2.0            0.6            0.9          0.9       N/A          N/A            1.3        N/A             0.8
2013                        3.2               3.5            1.2            1.4          1.3        N/A         N/A            2.8        N/A              1.2
2014                        4.2               2.9            0.8            0.9          0.7        N/A         N/A            1.8        N/A              1.6
2015                        3.7               2.6            0.6            0.7          0.5        N/A         N/A            1.7        N/A              2.0
2016                        2.3               2.3            0.4            0.5          0.3        N/A         N/A            1.7        N/A              1.8
2017                        1.7               1.3            0.5            0.6          0.3        N/A         N/A            0.7        N/A             2.3
Sector Rank               27/63            38/63           34/63          27/63        39/63        N/A         N/A         37/63         N/A            N/A
Economy Rank             360/706         430/706          404/705        315/705      387/706       N/A         N/A        420/706        N/A            N/A



Key Ratios                                     Imports/                           Revenue per                                                       Share of the
                        IVA/Revenue            Demand           Exports/Revenue    Employee      Wages/Revenue     Employees      Average Wage       Economy
                            (%)                  (%)                  (%)           ($’000)           (%)           per Est.           ($)              (%)
2003                       15.37                 N/A                  N/A           234.37           11.97           6.56           28,054.25          0.10
2004                       14.94                 N/A                  N/A           226.78           11.49           7.07           26,059.35          0.10
2005                       15.34                 N/A                  N/A           234.78           11.72           7.04           27,513.91          0.11
2006                       15.31                 N/A                  N/A           234.36           11.56           7.44           27,081.28          0.11
2007                       13.91                 N/A                  N/A           226.00           10.03           7.04           22,665.49          0.10
2008                       12.95                 N/A                  N/A           217.52           10.39           7.25           22,592.30          0.09
2009                       13.61                 N/A                  N/A           204.76           10.91           7.49           22,343.12          0.08
2010                       14.31                 N/A                  N/A           203.02           11.08           7.58           22,498.86          0.09
2011                       14.65                 N/A                  N/A           202.84           11.25           7.65           22,809.35          0.09
2012                       14.58                 N/A                  N/A           205.85           11.12           7.67           22,893.92          0.09
2013                       14.62                 N/A                  N/A           209.73           11.08           7.68           23,236.26          0.09
2014                       14.44                 N/A                  N/A           216.91           10.83           7.67           23,490.39          0.09
2015                       14.30                 N/A                  N/A           223.74           10.62           7.67           23,770.22          0.09
2016                       14.29                 N/A                  N/A           228.16           10.56           7.65           24,100.21          0.09
2017                       14.24                 N/A                  N/A           231.27           10.46           7.64           24,188.33           N/A
Sector Rank                50/63                 N/A                  N/A            27/63           44/63           19/63            33/63            13/63
Economy 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.                                                                      SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM                                                                   Consumer Electronics Stores in the US September 2012     34



Jargon & Glossary


Industry Jargon      BIG-BOX STORE A retail store that is differentiated by           POINT OF SALE (POS) A system used at checkout in
                     its sheer size and large range of products, including            retail stores using computers and cash registers to
                     electronics, household goods and other consumer                  capture transaction data at the time and place of sale.
                     products.                                                        RADIO FREQUENCY IDENTIFICATION (RFID) A
                     BLU-RAY An optical disc format designed to display               technology that tracks products from the time they
                     high-definition video and store large amounts of data.            leave the assembly line to the time they leave the store
                     BRICK-AND-MORTAR A store that has a physical                     by releasing continuous signals from a chip.
                     presence and location, as opposed to an online retailer.         SMARTPHONE A mobile phone that offers advanced
                     COMPARABLE-STORE SALES A retail measure used to                  PC-like capabilities.
                     assess the true performance of retail outlets by taking          WHITE GOODS Large electrical goods used
                     out the effect of new store openings and only looking at         domestically, such as refrigerators and washing
                     sales growth of existing stores.                                 machines, typically white in color.




IBISWorld Glossary   BARRIERS TO ENTRY Barriers to entry can be High,                 INDUSTRY CONCENTRATION IBISWorld bases
                     Medium or Low. High means new companies struggle to              concentration on the top four firms. Concentration is
                     enter an industry, while Low means it is easy for a firm          identified as High, Medium or Low. High means the top
                     to enter an industry.                                            four players account for over 70% of revenue; Medium
                     CAPITAL/LABOR INTENSITY An indicator of how much                 is 40 –70% of revenue; Low is less than 40%.
                     capital is used in production as opposed to labor. Level is      INDUSTRY REVENUE The total sales revenue of the
                     stated as High, Medium or Low. High is a ratio of less           industry, including sales (exclusive of excise and sales
                     than $3 of wage costs for every $1 of depreciation;              tax) of goods and services; plus transfers to other firms
                     Medium is $3 – $8 of wage costs to $1 of depreciation;           of the same business; plus subsidies on production; plus
                     Low is greater than $8 of wage costs for every $1 of             all other operating income from outside the firm (such
                     depreciation.                                                    as commission income, repair and service income, and
                     CONSTANT PRICES The dollar figures in the Key                     rent, leasing and hiring income); plus capital work done
                     Statistics table, including forecasts, are adjusted for          by rental or lease. Receipts from interest royalties,
                     inflation using 2011 as the base year. This removes the           dividends and the sale of fixed tangible assets are
                     impact of changes in the purchasing power of the dollar,         excluded.
                     leaving only the ‘real’ growth or decline in industry            INDUSTRY VALUE ADDED The market value of goods
                     metrics. The inflation adjustments in IBISWorld’s                 and services produced by an industry minus the cost of
                     reports are made using the US Bureau of Economic                 goods and services used in the production process,
                     Analysis’ implicit GDP price deflator.                            which leaves the gross product of the industry (also
                     DOMESTIC DEMAND The use of goods and services                    called its Value Added).
                     within the US; the sum of imports and domestic                   INTERNATIONAL TRADE The level is determined by:
                     production minus exports.                                        Exports/Revenue: Low is 0 –5%; Medium is 5 –20%;
                     EARNINGS BEFORE INTEREST AND TAX (EBIT)                          High is over 20%. Imports/Domestic Demand: Low is
                     IBISWorld uses EBIT as an indicator of a company’s               0 –5%; Medium is 5 –35%; and High is over 35%.
                     profitability. It is calculated as revenue minus expenses,        LIFE CYCLE All industries go through periods of Growth,
                     excluding tax and interest.                                      Maturity and Decline. An average life cycle lasts 70
                     EMPLOYMENT The number of working proprietors,                    years. Maturity is the longest stage at 40 years with
                     partners, permanent, part-time, temporary and casual             Growth and Decline at 15 years each.
                     employees, and managerial and executive employees.               NON-EMPLOYING ESTABLISHMENT Businesses with
                     ENTERPRISE A division that is separately managed and             no paid employment and payroll are known as
                     keeps management accounts. The most relevant                     non-employing establishments. These are mostly set-up
                     measure of the number of firms in an industry.                    by self employed individuals.
                     ESTABLISHMENT The smallest type of accounting unit               VOLATILITY The level of volatility is determined by the
                     within an Enterprise; usually consists of one or more            percentage change in revenue over the past five years.
                     locations in a state or territory of the country in which it     Volatility levels: Very High is greater than ±20%; High
                     operates.                                                        Volatility is between ±10% and ±20%; Moderate
                                                                                      Volatility is between ±3% and ±10%; and Low Volatility
                     EXPORTS The total sales and transfers of goods
                                                                                      is less than ±3%.
                     produced by an industry that are exported.
                                                                                      WAGES The gross total wages and salaries of all
                     IMPORTS The value of goods and services imported
                                                                                      employees of the establishment.
                     with the amount payable to non-residents.
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Consumer electronics stores in the us industry report

  • 1. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 1 IBISWorld Industry Report 44311 Consumer Electronics Stores in the US September 2012 Justin Waterman 2 About this Industry 17 International Trade 32 Industry Assistance 2 Industry Definition 18 Business Locations 2 Main Activities 33 Key Statistics 2 Similar Industries 20 Competitive Landscape 33 Industry Data 3 Additional Resources 20 Market Share Concentration 33 Annual Change 20 Key Success Factors 33 Key Ratios 4 Industry at a Glance 20 Cost Structure Benchmarks 22 Basis of Competition 34 Jargon & Glossary 5 Industry Performance 23 Barriers to Entry 5 Executive Summary 24 Industry Globalization 5 Key External Drivers 6 Current Performance 25 Major Companies 9 Industry Outlook 25 Best Buy Co. Inc. 11 Industry Life Cycle 27 RadioShack Corporation 13 Products & Markets 29 Operating Conditions 13 Supply Chain 29 Capital Intensity 13 Products & Services 30 Technology & Systems 15 Demand Determinants 30 Revenue Volatility 16 Major Markets 31 Regulation & Policy www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
  • 2. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 2 About this Industry Industry Definition Main Activities 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 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 Similar Industries 44312 Computer Stores in the US Operators in this industry retail new computer peripherals and prepackaged computer software in addition to office equipment and supplies. 44313 Camera Stores in the US Operators 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 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 new office 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 and office equipment, and other electronic equipment.
  • 3. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 3 About this Industry Similar Industries 81141 Appliance Repair in the US Services in this industry include repairing and servicing home and garden equipment and household continued appliances. 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. Additional Resources For additional information on this industry www.appliancemagazine.com ApplianceMagazine.com www.ce.org Consumer Electronic Association www.census.gov US Census Bureau
  • 4. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 4 Industry at a Glance Consumer Electronics Stores in 2012 Key Statistics Revenue Annual Growth 07-12 Annual Growth 12-17 Snapshot $80.9bn -2.6% 3.0% Profit Wages Businesses $2.2bn $9.0bn 39,354 Revenue vs. employment growth Per capita disposable income Market Share 10 4 5 2 % change % change 0 0 −5 −2 −10 −4 Year 04 06 08 10 12 14 16 18 Year 06 08 10 12 14 16 18 Revenue Employment SOURCE: WWW.IBISWORLD.COM p. 25 Products and services segmentation (2012) Key External Drivers 9.9% 1.5% 0.4% Home and office Other Small electric Per capita disposable equipment appliances income Consumer 10.2% 31% TV and video sentiment index Audio equipment equipment External competition Number of households 18% Computer hardware and software p. 5 29% Major appliances SOURCE: WWW.IBISWORLD.COM SOURCE: WWW.IBISWORLD.COM Industry Structure Life Cycle Stage Mature Regulation Level Light Revenue Volatility Medium Technology Change Low Capital Intensity Low Barriers to Entry Medium Industry Assistance Low Industry Globalization Low Concentration Level Medium Competition Level Medium FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 33
  • 5. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 5 Industry Performance Executive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage Executive Summary Key External Drivers Per capita disposable income Consumer sentiment index
  • 6. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 6 Industry Performance Key External Drivers continued Number of households External competition Per capita disposable income Consumer sentiment index 4 100 2 90 % change Index 0 80 −2 70 −4 60 Year 06 08 10 12 14 16 18 Year 04 06 08 10 12 14 16 18 SOURCE: WWW.IBISWORLD.COM Current Performance
  • 7. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 7 Industry Performance Current Performance Industry revenue continued 8 4 0 % change −4 −8 −12 Year 04 06 08 10 12 14 16 18 SOURCE: WWW.IBISWORLD.COM Electronics versus home appliances
  • 8. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 8 Industry Performance Electronics versus home appliances continued External competition
  • 9. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 9 Industry Performance External competition continued Industry Outlook Future trends
  • 10. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 10 Industry Performance Future trends continued Electronics convergence and saturated product market
  • 11. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 11 Industry Performance Life Cycle Stage 30 Maturity Quality Growth % Growth of profit/GDP Key Features of a Mature Industry Company High growth in economic consolidation; importance; weaker companies Revenue grows at same pace as economy level of economic close down; developed Company numbers stabilize; M&A stage importance stable technology and markets Established technology & processes 25 Total market acceptance of product & brand Rationalization of low margin products & brands 20 15 Quantity Growth Many new companies; minor growth in economic importance; substantial 10 technology change 5 Hobby & Toy Stores Consumer Electronics Stores Computer Stores 0 TV & Appliance Wholesaling Shake-out Electronic Part & Equipment Wholesaling Shake-out –5 Decline Potential Hidden Gems Time Wasters Crash or Grow? Future Industries Hobby Industries –10 –10 –5 0 5 10 15 20 25 30 % Growth of establishments SOURCE: WWW.IBISWORLD.COM
  • 12. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 12 Industry Performance Industry Life Cycle This industry is Mature The industry is underperforming Products, markets and technology
  • 13. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 13 Products & Markets Supply Chain | Products & Services | Demand Determinants Major Markets | International Trade | Business Locations Supply Chain KEY BUYING INDUSTRIES 99 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 INDUSTRIES 42362 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. Products & Services Products and services segmentation (2012) 9.9% 1.5% 0.4% Home and office Other Small electric equipment appliances 10.2% Audio equipment 31% TV and video equipment 18% Computer hardware and software 29% Total $80.9bn Major appliances SOURCE: WWW.IBISWORLD.COM TV and video equipment
  • 14. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 14 Products & Markets Products & Services Computer hardware and software continued Audio equipment Major appliances
  • 15. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 15 Products & Markets Products & Services Small electric appliances continued Home and office equipment Demand Determinants
  • 16. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 16 Products & Markets Demand Determinants continued Major Markets Major market segmentation (2012) 11.5% Consumers aged 65 and older 13.2% Consumers aged 24 and younger 39.5% Consumers aged 35 to 54 17.3% Consumers aged 25 to 34 18.5% Total $80.9bn Consumers aged 55 to 64 SOURCE: WWW.IBISWORLD.COM Consumers aged 55 to 64 Consumers aged 25 to 54 Consumers younger than 25
  • 17. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 17 Products & Markets Major Markets Consumers aged 65 and over continued International Trade
  • 18. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 18 Products & Markets Business Locations 2012 West AK 0.2 New England ME Great Mid- 0.5 Lakes Atlantic 1 2 NY 3 WA MT ND 7.0 5 4 1.9 0.3 MN Rocky 0.5 1.8 WI OR Mountains SD 0.4 Plains 2.0 MI 3.7 PA 3.8 6 7 1.3 ID IA OH 9 8 0.7 WY 3.4 0.3 NE 1.3 IL IN WV VA 4.5 2.2 2.5 West NV 0.5 0.5 KY UT MO 1.2 NC 0.8 1.1 CO KS 2.2 2.8 1.9 1.1 TN SC Southeast 1.8 CA 1.3 11.6 OK AR GA 1.3 1.0 AL 3.0 AZ MS 1.4 1.9 NM 0.6 Southwest 0.8 TX LA 1.3 FL 7.6 6.6 West HI 0.3 Additional States (as marked on map) No. of establishments (%) 1 VT 2 NH 3 MA 4 RI Less than 3% 0.2 0.5 2.0 0.3 3% to less than 10% 10% to less than 20% 5 CT 6 NJ 7 DE 8 MD 9 DC 1.1 3.0 0.3 1.7 0.1 20% or more SOURCE: WWW.IBISWORLD.COM
  • 19. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 19 Products & Markets Business Locations Establishments vs. population 30 20 % 10 0 West Great Lakes Mid-Atlantic New England Plains Rocky Mountains Southeast Southwest Establishments Population SOURCE: WWW.IBISWORLD.COM
  • 20. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 20 Competitive Landscape Market Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalization Market Share Concentration Level Concentration in this industry is Medium Key Success Factors Having a wide and expanding Experienced work force product range IBISWorld identifies 250 Key Success Factors for a business. The most Proximity to key markets Attractive product presentation important for this industry are: Ability to control stock on hand Having links with suppliers Cost Structure Profit Benchmarks
  • 21. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 21 Competitive Landscape Cost Structure Benchmarks continued Purchases Wages Sector vs. Industry Costs Average Costs of all Industries in Industry Costs sector (2012) (2012) 100 3.5 2.7 Profit 9.5 11.1 Wages Purchases 80 Depreciation Marketing Rent & Utilities Other Percentage of revenue 60 72.0 70.0 40 20 1.5 0.8 3.0 3.9 1.6 3.4 7.1 9.9 0 SOURCE: WWW.IBISWORLD.COM
  • 22. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 22 Competitive Landscape Cost Structure Other Benchmarks continued Depreciation Basis of Competition Internal competition Level & Trend Competition in this industry is Medium and the trend is Steady
  • 23. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 23 Competitive Landscape Basis of Competition continued External competition Barriers to Entry Barriers to Entry checklist Level Level & Trend Competition Medium Concentration Medium Barriers to Entry Life Cycle Stage Mature in this industry are Capital Intensity Low Medium and Steady Technology Change Low Regulation & Policy Light Industry Assistance Low SOURCE: WWW.IBISWORLD.COM
  • 24. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 24 Competitive Landscape Barriers to Entry continued Industry Globalization Level & Trend Globalization in this industry is Low and the trend is Steady
  • 25. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 25 Major Companies Best Buy Co. Inc. | RadioShack Corporation | Other Companies Major players (Market share) RadioShack Corporation 5.6% 46.5% Other Best Buy Co. Inc. 47.9% SOURCE: WWW.IBISWORLD.COM Player Performance Best Buy Co. Inc. Market share: 47.9% Best Buy Co. Inc. (domestic segment) – financial performance Revenue Operating Income Year* ($ million) (% change) ($ 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; **Estimate SOURCE: ANNUAL REPORT AND IBISWORLD
  • 26. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 26 Major Companies Player Performance continued Financial performance Best Buy Co. Inc. – financial performance Revenue Operating Income Year* ($ million) (% change) ($ 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; **Estimate SOURCE: ANNUAL REPORT AND IBISWORLD
  • 27. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 27 Major Companies Player Performance RadioShack Corporation Market share: 5.6% Financial performance RadioShack Corporation – financial performance Revenue Net Income Year ($ million) (% change) ($ 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 *Estimate SOURCE: ANNUAL REPORT
  • 28. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 28 Major Companies Player Performance continued Other Companies Circuit City Company Exited in 2009
  • 29. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 29 Operating Conditions Capital Intensity | Technology & Systems | Revenue Volatility Regulation & Policy | Industry Assistance Capital Intensity Capital intensity Capital units per labor unit Level 0.5 The level of capital intensity is Low 0.4 0.3 0.2 0.1 0.0 Economy Retail Trade Consumer Electronics Stores Dotted line shows a high level of capital intensity SOURCE: WWW.IBISWORLD.COM Tools of the Trade: Growth Strategies for Success New Age Economy Investment Economy Recreation, Personal Services, Information, Communications, Health and Education. Firms Mining, Finance and Real benefit from personal wealth so Estate. To increase revenue stable macroeconomic conditions firms need superior debt are imperative. Brand awareness management, a stable and niche labor skills are key to macroeconomic environment product differentiation. and a sound investment plan. Capital Intensive Labor Intensive Consumer Electronics Stores Computer Stores Hobby & Toy Stores Traditional Service Economy TV & Appliance Wholesaling Old Economy Wholesale and Retail. Reliant Electronic Part & Agriculture and Manufacturing. on labor rather than capital to Equipment Wholesaling Traded goods can be produced sell goods. Functions cannot Camera Stores using cheap labor abroad. be outsourced therefore firms To expand firms must merge must use new technology or acquire others to exploit or improve staff training to economies of scale, or specialize increase revenue growth. in niche, high-value products. Change in Share of the Economy SOURCE: WWW.IBISWORLD.COM
  • 30. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 30 Operating Conditions Capital Intensity continued Technology & Systems Level The level of Technology Change is Low Revenue Volatility Level The level of Volatility is Medium
  • 31. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 31 Operating Conditions Revenue Volatility continued A higher level of revenue Volatility vs Growth volatility implies greater industry risk. Volatility can 1000 Hazardous Rollercoaster negatively affect long-term Revenue volatility* (%) strategic decisions, such as 100 the time frame for capital investment. 10 When a firm makes poor Consumer Electronics investment decisions it may face underutilized 1 Stores capacity if demand suddenly falls, or capacity 0.1 Stagnant Blue Chip constraints if it rises –30 –10 10 30 50 70 quickly. Five year annualized revenue growth (%) * Axis is in logarithmic scale SOURCE: WWW.IBISWORLD.COM Regulation & Policy Level & Trend The level of Regulation is Light and the trend is Steady
  • 32. 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
  • 33. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 33 Key Statistics Industry Data Industry Per Capita Dis- Revenue Value Added Establish- Wages Domestic posable Income ($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand ($) 2003 79,957.5 12,288.1 52,033 39,734 341,164 -- -- 9,571.1 N/A 30,429 2004 84,869.9 12,683.8 52,970 40,448 374,238 -- -- 9,752.4 N/A 31,184 2005 89,085.0 13,662.4 53,920 40,671 379,448 -- -- 10,440.1 N/A 31,318 2006 92,724.8 14,198.2 53,208 39,844 395,646 -- -- 10,714.6 N/A 32,277 2007 92,157.9 12,816.3 57,934 43,208 407,783 -- -- 9,242.6 N/A 32,713 2008 87,454.6 11,321.2 55,434 41,927 402,053 -- -- 9,083.3 N/A 33,197 2009 79,260.5 10,791.1 51,693 39,124 387,090 -- -- 8,648.8 N/A 32,143 2010 78,330.1 11,211.3 50,886 38,777 385,824 -- -- 8,680.6 N/A 32,446 2011 78,956.8 11,563.3 50,899 39,008 389,257 -- -- 8,878.7 N/A 32,595 2012 80,851.7 11,791.4 51,191 39,354 392,768 -- -- 8,992.0 N/A 32,856 2013 83,448.7 12,201.9 51,801 39,916 397,891 -- -- 9,245.5 N/A 33,250 2014 86,914.3 12,554.3 52,215 40,259 400,700 -- -- 9,412.6 N/A 33,782 2015 90,109.3 12,884.4 52,540 40,539 402,735 -- -- 9,573.1 N/A 34,457 2016 92,174.3 13,174.9 52,775 40,754 403,984 -- -- 9,736.1 N/A 35,078 2017 93,720.1 13,344.5 53,023 40,984 405,245 -- -- 9,802.2 N/A 35,884 Sector Rank 13/63 13/63 16/63 15/63 11/63 N/A N/A 11/63 N/A N/A Economy Rank 105/706 205/706 114/705 122/705 88/706 N/A N/A 164/706 N/A N/A Annual Change Industry Establish- Domestic Per Capita Dis- Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand posable Income (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) 2004 6.1 3.2 1.8 1.8 9.7 N/A N/A 1.9 N/A 2.5 2005 5.0 7.7 1.8 0.6 1.4 N/A N/A 7.1 N/A 0.4 2006 4.1 3.9 -1.3 -2.0 4.3 N/A N/A 2.6 N/A 3.1 2007 -0.6 -9.7 8.9 8.4 3.1 N/A N/A -13.7 N/A 1.4 2008 -5.1 -11.7 -4.3 -3.0 -1.4 N/A N/A -1.7 N/A 1.5 2009 -9.4 -4.7 -6.7 -6.7 -3.7 N/A N/A -4.8 N/A -3.2 2010 -1.2 3.9 -1.6 -0.9 -0.3 N/A N/A 0.4 N/A 0.9 2011 0.8 3.1 0.0 0.6 0.9 N/A N/A 2.3 N/A 0.5 2012 2.4 2.0 0.6 0.9 0.9 N/A N/A 1.3 N/A 0.8 2013 3.2 3.5 1.2 1.4 1.3 N/A N/A 2.8 N/A 1.2 2014 4.2 2.9 0.8 0.9 0.7 N/A N/A 1.8 N/A 1.6 2015 3.7 2.6 0.6 0.7 0.5 N/A N/A 1.7 N/A 2.0 2016 2.3 2.3 0.4 0.5 0.3 N/A N/A 1.7 N/A 1.8 2017 1.7 1.3 0.5 0.6 0.3 N/A N/A 0.7 N/A 2.3 Sector Rank 27/63 38/63 34/63 27/63 39/63 N/A N/A 37/63 N/A N/A Economy Rank 360/706 430/706 404/705 315/705 387/706 N/A N/A 420/706 N/A N/A Key Ratios Imports/ Revenue per Share of the IVA/Revenue Demand Exports/Revenue Employee Wages/Revenue Employees Average Wage Economy (%) (%) (%) ($’000) (%) per Est. ($) (%) 2003 15.37 N/A N/A 234.37 11.97 6.56 28,054.25 0.10 2004 14.94 N/A N/A 226.78 11.49 7.07 26,059.35 0.10 2005 15.34 N/A N/A 234.78 11.72 7.04 27,513.91 0.11 2006 15.31 N/A N/A 234.36 11.56 7.44 27,081.28 0.11 2007 13.91 N/A N/A 226.00 10.03 7.04 22,665.49 0.10 2008 12.95 N/A N/A 217.52 10.39 7.25 22,592.30 0.09 2009 13.61 N/A N/A 204.76 10.91 7.49 22,343.12 0.08 2010 14.31 N/A N/A 203.02 11.08 7.58 22,498.86 0.09 2011 14.65 N/A N/A 202.84 11.25 7.65 22,809.35 0.09 2012 14.58 N/A N/A 205.85 11.12 7.67 22,893.92 0.09 2013 14.62 N/A N/A 209.73 11.08 7.68 23,236.26 0.09 2014 14.44 N/A N/A 216.91 10.83 7.67 23,490.39 0.09 2015 14.30 N/A N/A 223.74 10.62 7.67 23,770.22 0.09 2016 14.29 N/A N/A 228.16 10.56 7.65 24,100.21 0.09 2017 14.24 N/A N/A 231.27 10.46 7.64 24,188.33 N/A Sector Rank 50/63 N/A N/A 27/63 44/63 19/63 33/63 13/63 Economy 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. SOURCE: WWW.IBISWORLD.COM
  • 34. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 34 Jargon & Glossary Industry Jargon BIG-BOX STORE A retail store that is differentiated by POINT OF SALE (POS) A system used at checkout in its sheer size and large range of products, including retail stores using computers and cash registers to electronics, household goods and other consumer capture transaction data at the time and place of sale. products. RADIO FREQUENCY IDENTIFICATION (RFID) A BLU-RAY An optical disc format designed to display technology that tracks products from the time they high-definition video and store large amounts of data. leave the assembly line to the time they leave the store BRICK-AND-MORTAR A store that has a physical by releasing continuous signals from a chip. presence and location, as opposed to an online retailer. SMARTPHONE A mobile phone that offers advanced COMPARABLE-STORE SALES A retail measure used to PC-like capabilities. assess the true performance of retail outlets by taking WHITE GOODS Large electrical goods used out the effect of new store openings and only looking at domestically, such as refrigerators and washing sales growth of existing stores. machines, typically white in color. IBISWorld Glossary BARRIERS TO ENTRY Barriers to entry can be High, INDUSTRY CONCENTRATION IBISWorld bases Medium or Low. High means new companies struggle to concentration on the top four firms. Concentration is enter an industry, while Low means it is easy for a firm identified as High, Medium or Low. High means the top to enter an industry. four players account for over 70% of revenue; Medium CAPITAL/LABOR INTENSITY An indicator of how much is 40 –70% of revenue; Low is less than 40%. capital is used in production as opposed to labor. Level is INDUSTRY REVENUE The total sales revenue of the stated as High, Medium or Low. High is a ratio of less industry, including sales (exclusive of excise and sales than $3 of wage costs for every $1 of depreciation; tax) of goods and services; plus transfers to other firms Medium is $3 – $8 of wage costs to $1 of depreciation; of the same business; plus subsidies on production; plus Low is greater than $8 of wage costs for every $1 of all other operating income from outside the firm (such depreciation. as commission income, repair and service income, and CONSTANT PRICES The dollar figures in the Key rent, leasing and hiring income); plus capital work done Statistics table, including forecasts, are adjusted for by rental or lease. Receipts from interest royalties, inflation using 2011 as the base year. This removes the dividends and the sale of fixed tangible assets are impact of changes in the purchasing power of the dollar, excluded. leaving only the ‘real’ growth or decline in industry INDUSTRY VALUE ADDED The market value of goods metrics. The inflation adjustments in IBISWorld’s and services produced by an industry minus the cost of reports are made using the US Bureau of Economic goods and services used in the production process, Analysis’ implicit GDP price deflator. which leaves the gross product of the industry (also DOMESTIC DEMAND The use of goods and services called its Value Added). within the US; the sum of imports and domestic INTERNATIONAL TRADE The level is determined by: production minus exports. Exports/Revenue: Low is 0 –5%; Medium is 5 –20%; EARNINGS BEFORE INTEREST AND TAX (EBIT) High is over 20%. Imports/Domestic Demand: Low is IBISWorld uses EBIT as an indicator of a company’s 0 –5%; Medium is 5 –35%; and High is over 35%. profitability. It is calculated as revenue minus expenses, LIFE CYCLE All industries go through periods of Growth, excluding tax and interest. Maturity and Decline. An average life cycle lasts 70 EMPLOYMENT The number of working proprietors, years. Maturity is the longest stage at 40 years with partners, permanent, part-time, temporary and casual Growth and Decline at 15 years each. employees, and managerial and executive employees. NON-EMPLOYING ESTABLISHMENT Businesses with ENTERPRISE A division that is separately managed and no paid employment and payroll are known as keeps management accounts. The most relevant non-employing establishments. These are mostly set-up measure of the number of firms in an industry. by self employed individuals. ESTABLISHMENT The smallest type of accounting unit VOLATILITY The level of volatility is determined by the within an Enterprise; usually consists of one or more percentage change in revenue over the past five years. locations in a state or territory of the country in which it Volatility levels: Very High is greater than ±20%; High operates. Volatility is between ±10% and ±20%; Moderate Volatility is between ±3% and ±10%; and Low Volatility EXPORTS The total sales and transfers of goods is less than ±3%. produced by an industry that are exported. WAGES The gross total wages and salaries of all IMPORTS The value of goods and services imported employees of the establishment. with the amount payable to non-residents.
  • 35. www.ibisworld.com | 1800-330-3772 | info @ibisworld.com Identify high growth, emerging & shrinking markets Arm yourself with the latest industry intelligence Assess competitive threats from existing & new entrants Benchmark your performance against the competition Make speedy market-ready, profit-maximizing decisions Who is IBISWorld? We are strategists, analysts, researchers, and marketers. We provide answers to information-hungry, time-poor businesses. Our goal is to provide real world answers that matter to your business in our 700 US industry reports. When tough strategic, budget, sales and marketing decisions need to be made, our suite of Industry and Risk intelligence products give you deeply-researched answers quickly. IBISWorld Membership IBISWorld offers tailored membership packages to meet your needs. Disclaimer This product has been supplied by IBISWorld Inc. (‘IBISWorld’) solely for use of, or reliance upon, the data or information contained herein. Copyright in by its authorized licenses strictly in accordance with their license agreements this publication is owned by IBISWorld Inc. The publication is sold on the with IBISWorld. IBISWorld makes no representation to any other person basis that the purchaser agrees not to copy the material contained within it with regard to the completeness or accuracy of the data or information for other than the purchasers own purposes. In the event that the purchaser contained herein, and it accepts no responsibility and disclaims all liability uses or quotes from the material in this publication – in papers, reports, or (save for liability which cannot be lawfully disclaimed) for loss or damage opinions prepared for any other person – it is agreed that it will be sourced whatsoever suffered or incurred by any other person resulting from the use to: IBISWorld Inc. Copyright 2012 IBISWorld Inc