Shifts in the General merchandise sector

ImageIt is expected that by 2015 the general merchandise stores sector will reach a value of $1 560 million, which would be a 22.1% increase since 2010. The apparel and footwear segment is the largest in the industry, accounting for 21.5% of the total value. The American market is the dominant one, with a whole 39.4% of the global market value. It comes as no surprise, as Wal-Mart, which is the leading player in the industry, is a US based company, generating a 32.8% share of the whole sector’s value.

As retailers have generally emphasized on increasing their local supply chains to their product sourcing, there are a lot of problems with companies trying to set new operations. First mover advantages both in geographic and marketing aspect contribute further to the almost impossible to cross entry barriers.

This, however, is not necessarily bad news for stock investors. Companies such as Wal-Mart, dominating their markets have performed stably over the last year and their position serves as proof that previous investment will pay up in the future. With the recovering of the economy the sector has grown greatly, with consumer spending increasing along with average income and analysts are confident in future market value increases.

 

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