Homewares revenue is projected to grow by 5.1 per cent in 2015-16, with growth of 1.9 per cent anticipated in 2016-17 according to the report. The slower growth in 2016-17 can be attributed to a projected fall in consumer spending and a decline in residential building construction activity, amid fears of an oversupply in multi-unit apartments.
Over the past five years, demand for houseware products has grown due to a rise in residential building construction, an increase in new dwelling commencements and alterations to existing dwellings. “Industry revenue growth has been further supported by rising household discretionary income, which has boosted consumers’ ability to spend on housewares,” said IBISWorld senior industry analyst, Spencer Little.
“Despite strong revenue growth over the past five years, industry profitability has been declining steadily, predominantly due to increasing price competition from internal and external competitors,” said Little.
Extensive promotional activities and simultaneous price discounting have raised advertising costs and caused expenses to grow at a faster rate than revenue, narrowing profit margins. The decline in profitability has not impacted on revenue over the five years through 2015-16, with industry revenue expected to rise at an annualised 3.7 per cent, to reach $1.6 billion.
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