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WWW.IBISWORLD.COM
Madeline Hurley
16 International Trade
29 Key Statistics
Industry Definition
17 Business Locations
29 Industry Data
Main Activities
Similar Industries
19 Competitive Landscape
Additional Resources
29 Annual Change
4 Industry at a Glance
29 KeyRatios
5 Industry Performance
22 Barriers to Entry
Executive Summary
22 Industry Globalization
Current Performance
23 Major Companies
Industry Outlook
25 Operating Conditions
13 Products & Markets
25 Capital Intensity
13 Supply Chains
27 Revenue Volatility
14 Demand Determinants
15 Major Markets
28 Industry Assistance
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Main Activities
Similar Industries
WWW.IBISWORLD.COM
Additional Resources
IBISWorld
WWW.IBISWORLD.COM
Industry at a Glance
Lawn & Outdoor Equipment Stores in 2015
Key Statistics
Snapshot
Revenue
Profit
Wages
Businesses
$6.8bn
3.7%
2.2%
$164.0m $859.7m 5,613
Per capita disposable income
% change
Tractor Supply
Company
16.5%
% change
Market Share
-4
-8
-12
Year 07
1
0
-1
-2
09
11
13
Revenue
15
17
19
21
-3
Year
08
10
12
14
16
18
20
Employment
SOURCE: WWW.IBISWORLD.COM
p. 23
6.2%
6.8%
Repair services
17.0%
49.5%
Private spending on
home improvements
Demand from
landscaping services
Consumer
Confidence Index
20.5%
p. 5
Industry Structure
Decline
Regulation Level
Light
Low
Technology Change
Medium
Low
Barriers to Entry
Medium
Industry Assistance
None
Concentration Level
Low
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 29
Industry Globalization
Low
Competition Level
High
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Industry Performance
The
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Industry Performance
185
175
$ billion
% change
0
-1
155
-2
-3
Year
165
08
10
12
14
16
18
20
145
Year 06
08
10
12
14
16
18
20
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Industry Performance
Current
Performance
Downstream demand
is back
External competition
hurts sales
Consumer
confidence
received a boost from rising
household income and
employment levels
WWW.IBISWORLD.COM
Industry Performance
External competition
hurts sales
continued
Alternative-energy
products
Companies
have lost a
significant portion of their
customers to national scale
players
sold at lower prices, Home Depot
recorded exceptional growth from sales
of more environmentally friendly
outdoor equipment (i.e. powered by
other means than gas) over the period.
In contrast, lawn and outdoor
equipment stores have yet to fully
capitalize on this trend due to the fact
that the majority of their products still
run on gas.
WWW.IBISWORLD.COM
Industry Performance
External competition
intensifies
Industry revenue
8
4
% change
Industry
Outlook
0
-4
-8
-12
Year 07
09
11
13
15
17
19
21
SOURCE: WWW.IBISWORLD.COM
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Industry Performance
External competition
intensifies continued
Technology is key
Advances
in e-commerce
will disproportionally
benefit larger companies
websites and mobile platforms to reach
their customers in new ways. These
technologies help connect consumers to
the products they want and add
convenience to their shopping experience.
Nevertheless, advances in e-commerce
will disproportionally benefit larger
companies, especially home improvement
stores and e-tailers that are already
running well established websites. These
companies are able to make large
investments in online services to promote
their products and deals. In the crowded
world of online sales, visibility is key, and
larger stores currently dominate the
e-commerce marketplace for lawn and
outdoor equipment. These large retailers
will continue to outcompete smaller
industry operators online over the fiveyear period.
WWW.IBISWORLD.COM
Industry Performance
Life Cycle Stage
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
15
10
Quantity Growth
Landscaping Services
0
-5
Decline
Shrinking economic
importance
-10
-10
-5
10
15
20
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Industry Performance
industry
is D
eclining
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Supply Chain
81411
99
Consumers in the US
Lawn and equipment retailers cater to the lifestyle needs of recreational farmers and ranchers.
33311
42382
6.8%
6.2%
Repair services
17.0%
49.5%
20.5%
Total $6.8bn
Lawn and garden machinery,
tools and parts
Lawn and garden machinery makes up
the largest share of industry products,
accounting for an estimated 87.0% of
total revenue in 2015. Products sold
within this segment include push and
riding lawn mowers, leaf blowers,
mulching machines and snow clearing
equipment. Over the five year period to
2015, demand for these products has
increased, driven by rising consumer
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Demand
Determinants
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Demand
Determinants
continued
Major Markets
7.7%
6.1%
Government
Farmers
30.1%
Professional consumers
Total $6.8bn
Household consumers
Household consumers account for the
largest market for the industry,
representing roughly 56.1% in 2015.
They purchase lawn and outdoor
equipment such as lawn mowers, leaf
blowers and snow machines for their
homes. This market is sensitive to
fluctuations in consumer sentiment
and disposable income, since these
factors affect consumer spending.
Household purchases of industry
wares are also dependent on weather
cycles. Revenue from this segment
returned during the recovery, driven
by improved consumer confidence and
discretionary spending. Furthermore,
the green revolution has helped peak
consumers interest in gardening and
outdoor lawn care activities, driving up
56.1%
Household consumers
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Major Markets
continued
International Trade
Farmers
Farmers and ranchers are expected to
account for 7.7% of the total market. While
they generally shop directly from
manufacturers or wholesalers, they also
purchase small tools and equipment from
lawn and outdoor equipment specialty
stores. Farmers can invest in purchasing
new lawn and outdoor equipment when
their income increases. Generally, this
market is sensitive to fluctuations in farm
income and direct government payments to
farmers in the prior year. Volatility in crop
prices have made downstream demand
from this market segment extremely
volatile during the past five years.
Government
Government market segment includes
state and city lawn maintenance
departments, schools, museums and
recreational facilities. These entities
use lawn and outdoor equipment to
manicure and maintain public parks,
school grounds, city hall lawns,
roadside property and other public
areas and their surrounding
properties. This segment is sensitive to
the budgets and spending patterns of
federal, local and state governments.
Local and state government
investment is anticipated to increase
this year for the first time since the
economic downturn; as a result,
revenue from this segment is expected
to rise in 2015.
WWW.IBISWORLD.COM
West
New
England
AK
0.1
Great
Lakes
WA
ND
MT
1.9
Rocky
Mountains
ID
OR
1.4
West NV
0.3
2.0
SD
0.2
WY
0.6
MN
0.2
0.3
Plains
CO
0.6
KY
1.1
OK
1.4
NC
3.9
TN
AZ
NM
0.4
0.3
Southwest
TX
4.9
HI
0.3
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
0.6
1.6
1.0
2.2
2.0
0.4
SC
Southeast
1.5
MS
AL
2.6
2.0
GA
3.3
1.6
LA
2.2
FL
5.3
Establishments (%)
0.3
1.2
AR
0.8
2.5
5.1
WV VA
3.0
1.7
2.4
CA
West
5.2
MO
KS
0.6
OH
4.1
3.2
6.9
IN
IL
0.7
UT
PA
4.8
2.2
1.0
1 2
3
NY
5.5
5 4
MI
2.7
IA
NE
0.1
WI
ME
MidAtlantic
9 DC
0.0
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Southwest
Southeast
Plains
New England
Rocky Mountains
Establishments
Mid-Atlantic
Great Lakes
0
West
Business Locations
Population
SOURCE: WWW.IBISWORLD.COM
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19
Competitive Landscape
in
this industry is L ow
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks
Share (%)
53.2
13.2
3.4
0.1
SOURCE: US CENSUS BUREAU AND IBISWORLD
Profit
Profit margins (measured as earnings
before interest and taxes) vary among
lawn and outdoor equipment retailers,
because larger stores are generally able to
achieve extra cost savings through
purchasing in bulk. For example, Tractor
Supply, the industrys largest player, is
expected to earn 10.8% profit in 2015,
more than triple the expected industry
average of 2.4%. In the five years to 2015,
average industry profitability has grown
slightly alongside the economic recovery,
per capita disposable income and
demand for industry products.
WWW.IBISWORLD.COM
20
Competitive Landscape
Wages
Employee compensation, including payroll
and benefits, is the next largest expense for
the industry, representing about 12.6% of
revenue in 2015. Most industry players are
small, and therefore rely heavily on
employees for daily operations. These
activities include register operations,
organizing store displays and other
customer service tasks. Over the past five
years, wages as a share of revenue have
fallen slightly from 15.2% in 2010. This
change indicates that employers have cut
back on their workforce in an attempt to
keep costs down. Nevertheless,
maintaining quality workers is an
important point of competition for industry
operators trying to differentiate themselves
from large retailers like home improvement
stores. Therefore, wages are expected to
increase as a share of industry revenue over
the next five years.
Industry Costs
(2015)
3.2
8.8
2.4
12.6
71.5
66.1
100
80
Percentage of revenue
Cost Structure
Benchmarks
continued
n Profit
n Wages
n Purchases
n Depreciation
n Marketing
n Rent & Utilities
n Other
60
40
20
0.8
4.7
9.2
1.8
0.7
4.2 1.3
12.7
SOURCE: WWW.IBISWORLD.COM
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21
Competitive Landscape
Cost Structure
Benchmarks
continued
Basis of Competition
Level & Trend
ompetition
C
in this
industry is H
ighand
the trend is S
teady
Internal competition
Operating in a saturated and fragmented
market, industry players are exposed to
high competition. Operators compete
with one another on the basis of store
location, price and quality of goods,
merchandise assortment and
presentation and customer service.
The Lawn and Outdoor Equipment
Stores industry is subject to strong price
competition. Industry operators price
products to maximize returns, while
remaining conscious of the price charged
for similar items by rival competitors. In
particular, low prices offered by stores
can make a particular operator more
desirable than those that retail products
at relatively higher prices. However, such
price competition can be dangerous. If
not monitored closely, price competitions
can cut into profit margins, forcing
underperforming stores to close. In
addition, industry operators compete on
the basis of product quality; generally,
consumers will shop at stores that offer
the best range of quality products to
choose from.
Customer service is another important
basis of competition among operators,
WWW.IBISWORLD.COM
22
Competitive Landscape
Basis of Competition
continued
Barriers to Entry
Industry
Globalization
Level & Trend
lobalization
G
in this
industry is L owand
the trend is S
teady
High
Low
Decline
Low
Medium
Light
None
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Major Companies
Tractor Supply Company | Other Companies
Major players
(Market share)
83.5%
Other
Player Performance
Tractor Supply
Company
Market share: 16.5%
SOURCE: WWW.IBISWORLD.COM
Revenue
($ million)
(% change)
Operating Income
($ million)
(% change)
2010
669.4
13.4
49.0
44.3
2011
778.8
16.3
64.9
32.4
2012
858.2
10.2
80.4
23.9
2013
950.3
10.7
94.7
17.8
2014
1,005.3
5.8
103.8
9.6
2015
1,127.6
12.2
121.3
16.9
*Estimates
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
Other Companies
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Operating Conditions
of capital
intensity is L ow
Capital intensity
Economy
Retail Trade
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Maids,
Nannies &
Gardeners
Equipment
Stores
Capital Intensive
Labor Intensive
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity
continued
of
Technology Change
is M
edium
WWW.IBISWORLD.COM
Operating Conditions
Level
The level
of
Volatility is L ow
Volatility vs Growth
1000
Revenue Volatility
Hazardous
Rollercoaster
100
10
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
Regulation is
Lightand the
trend is S
teady
WWW.IBISWORLD.COM
Operating Conditions
Industry Assistance
Industry Assistance
is N
oneand the
trend is S
teady
Associations
The industry benefits from a number
of trade associations that help promote
WWW.IBISWORLD.COM
29
Key Statistics
Industry Data
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sector Rank
Economy Rank
Industry
Revenue Value Added Establish($m)
($m)
ments
7,166.1
1,134.3
5,894
6,726.8
1,110.9
6,073
6,380.3
1,080.5
6,121
5,632.6
1,019.6
5,913
5,686.6
940.4
5,873
5,906.1
1,029.9
5,784
6,194.8
1,061.6
5,936
6,538.5
955.8
5,942
6,757.1
1,066.4
5,915
6,834.5
1,071.6
5,921
7,010.4
1,078.0
5,918
7,155.8
1,096.7
5,932
7,333.9
1,099.8
5,938
7,478.2
1,122.8
5,990
7,614.5
1,136.8
5,980
57/63
59/63
62/63
832/1373
982/1373
601/1373
Exports
---------------N/A
N/A
Imports
---------------N/A
N/A
Wages
($m)
912.2
909.1
901.8
856.3
866.5
888.2
813.8
844.6
863.7
859.7
877.3
882.0
898.0
904.1
915.5
57/63
883/1373
Domestic
Demand
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Industry
EstablishRevenue Value Added
ments
Enterprises Employment
(%)
(%)
(%)
(%)
(%)
-6.1
-2.1
3.0
1.9
-1.3
-5.2
-2.7
0.8
1.5
0.2
-11.7
-5.6
-3.4
-3.6
-6.6
1.0
-7.8
-0.7
-1.0
-0.1
3.9
9.5
-1.5
-1.8
0.0
4.9
3.1
2.6
2.5
-0.9
5.5
-10.0
0.1
-0.6
-1.5
3.3
11.6
-0.5
0.1
1.3
1.1
0.5
0.1
-0.5
-1.3
2.6
0.6
-0.1
0.2
1.4
2.1
1.7
0.2
-0.3
-0.4
2.5
0.3
0.1
0.2
1.2
2.0
2.1
0.9
0.2
-0.2
1.8
1.2
-0.2
0.1
0.8
46/63
56/63
43/63
45/63
36/63
1107/1373 1279/1373 1067/1373 1116/1373 999/1373
Exports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Imports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Wages
(%)
-0.3
-0.8
-5.0
1.2
2.5
-8.4
3.8
2.3
-0.5
2.0
0.5
1.8
0.7
1.3
51/63
1184/1373
Annual Change
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sector Rank
Economy Rank
Key Ratios
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sector Rank
Economy Rank
Enterprises Employment
5,708
28,370
5,816
28,011
5,904
28,054
5,691
26,194
5,634
26,161
5,534
26,154
5,672
25,917
5,637
25,521
5,640
25,856
5,613
25,517
5,627
25,886
5,610
25,781
5,624
26,081
5,636
26,039
5,643
26,238
60/63
58/63
543/1373
798/1373
IVA/Revenue
(%)
15.83
16.51
16.93
18.10
16.54
17.44
17.14
14.62
15.78
15.68
15.38
15.33
15.00
15.01
14.93
30/63
1139/1373
Imports/
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Exports/
Revenue
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Revenue per
Employee
($000)
252.59
240.15
227.43
215.03
217.37
225.82
239.02
256.20
261.34
267.84
270.82
277.56
281.20
287.19
290.21
26/63
749/1373
Wages/Revenue
(%)
12.73
13.51
14.13
15.20
15.24
15.04
13.14
12.92
12.78
12.58
12.51
12.33
12.24
12.09
12.02
13/63
845/1373
Employees
per Est.
4.81
4.61
4.58
4.43
4.45
4.52
4.37
4.30
4.37
4.31
4.37
4.35
4.39
4.35
4.39
27/63
945/1373
Average Wage
($)
32,153.68
32,455.11
32,145.15
32,690.69
33,121.82
33,960.39
31,400.24
33,094.31
33,404.24
33,691.26
33,890.91
34,211.24
34,431.20
34,721.00
34,892.14
17/63
1020/1373
Share of the
Economy
(%)
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
59/63
982/1373
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Industry Jargon
IBISWorld Glossary
WWW.IBISWORLD.COM
IBISWorld Glossary
continued
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