Lawn & Outdoor Equipment Stores in The US Industry Report

Lawn & Outdoor Equipment Stores in the USDecember 2015 1
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Planting seeds: Environmentally friendly products

will present an opportunity for the industry
IBISWorld Industry Report 44421
Lawn & Outdoor Equipment

Stores in the US
December 2015
Madeline Hurley
2 About this Industry
16 International Trade
29 Key Statistics
Industry Definition
17 Business Locations
29 Industry Data
Main Activities
Similar Industries
19 Competitive Landscape
Additional Resources
19 Market Share Concentration
29 Annual Change
19 Key Success Factors
4 Industry at a Glance
29 KeyRatios
30 Jargon & Glossary
19 Cost Structure Benchmarks

21 Basis of Competition
5 Industry Performance
22 Barriers to Entry
Executive Summary
22 Industry Globalization
Key External Drivers
Current Performance
23 Major Companies
Industry Outlook
23 Tractor Supply Company
11 Industry Life Cycle
25 Operating Conditions
13 Products & Markets
25 Capital Intensity
13 Supply Chains
26 Technology & Systems
13 Products & Services
27 Revenue Volatility
14 Demand Determinants
27 Regulation & Policy
15 Major Markets
28 Industry Assistance
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
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About this Industry

Industry Definition
Operators in this industry sell lawn and

outdoor power equipment and
replacement parts to household
consumers, farmers and ranchers, and
other professional workers. Products
include rotary mowers, rear engine
riding mowers, garden tractors and
Main Activities
The primary activities of this industry are
shredders, chainsaws, leaf blowers,

brush cutters, hedge trimmers and
more. Players in this industry also
provide repair services. This industry
excludes home improvement stores and
e-commerce companies selling lawn and
outdoor equipment.
Retailing garden power equipment

Retailing lawn power equipment
Retailing outdoor power equipment
Repairing lawn and outdoor power equipment
Retailing farm equipment and tools
The major products and services in this industry are

Farm equipment and tools
Push lawn mowers
Repair services
Riding lawn mowers
Other lawn and garden machinery and parts
Similar Industries
44411 Home Improvement Stores in the US

Home improvement stores retail a broad range of goods, including hardware and tools.
44422 Nursery & Garden Stores in the US
These stores sell a broad range of goods such as plants, fertilizers and farm equipment.
45331 Used Goods Stores in the US
This industry sells secondhand or used outdoor power equipment.
81141 Appliance Repair in the US
Companies in this industry provide repair services for outdoor power equipment.
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About this Industry
Additional Resources
For additional information on this industry

www.greenindustrypros.com
GreenIndustryPros.com
www.gardenresearch.com
National Gardening Association
www.opei.org
Outdoor Power Equipment Institute
www.retailingtoday.com
Retailing Today
IBISWorld
writes over 700 US

industry reports, which are updated
up to four times a year. To see all
reports, go towww.ibisworld.com
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Lawn & Outdoor Equipment Stores in the US December 2015
Industry at a Glance
Lawn & Outdoor Equipment Stores in 2015
Key Statistics
Snapshot
Revenue
Annual Growth 10-15
Annual Growth 15-20
Profit
Wages
Businesses
$6.8bn
3.7%
2.2%
$164.0m $859.7m 5,613
Per capita disposable income
Revenue vs. employment growth
% 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
Products and services segmentation (2015)
6.2%
6.8%
Per capita disposable

income
Repair services
External competition for

the Lawn and Outdoor
Equipment Stores industry
17.0%
49.5%
Riding lawn mowers
Private spending on
home improvements
Other lawn and garden

machinery and parts
Demand from
landscaping services
Consumer
Confidence Index
20.5%
p. 5
Push lawn mowers

SOURCE:
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SOURCE:
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Industry Structure
Life Cycle Stage

Revenue Volatility
Capital Intensity
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
Executive Summary | Key External Drivers | Current Performance

Industry Outlook | Life Cycle Stage
Executive
Summary
Bolstered by a revival in spending on

home improvements, the Lawn and
Outdoor Equipment Stores industry has
recovered significantly over the five years
to 2015. As consumers confidence in the
economy and disposable income
improved, households increased their
spending on items such as lawn and
garden tools. Downstream demand from
the Landscaping Services industry
(IBISWorld report 56173) also increased
as the housing and construction market
revived and homeowners and businesses
resumed lawn and garden repair and

maintenance projects put on hold during
the recession. As a result, industry
revenue is expected to increase by 3.7%
to $6.8 billion, including a 1.1% increase
in 2015.
Despite positive signals from a number
of economic indicators driving the
industrys recovery, the industry has been
threatened by fierce external competition
from home improvement stores. Big-box
stores such as these are leveraging their
size to achieve significant cost savings on
comparable products, passing the
difference down to consumers in the form

of lower prices. Industry sales, though
increasing, have been hampered by this
competition. Operators have been forced
to lower their margins to remain
competitive, and many merged in an
attempt to remain profitable while others
exited the industry entirely. As a result,
the number of enterprises is expected to
decline at an annualized rate of 0.1% to
5,613 over the five years to 2015.
While rising consumer confidence and
increasing disposable income hint at
better times ahead for industry operators,
external competition will continue to
threaten operators. The Home
Improvement Stores industry (IBISWorld
report 44411) is expected to continue to
undersell industry operators over the
next five years, while an emerging group
of online sellers further erodes operators
sales. The emergence of a new line of
environmentally friendly products that
feature gas substitutes and lower
emissions will present an opportunity for
lawn and outdoor equipment stores to
recover some lost demand. Nevertheless,
large home improvement stores will be
better positioned to satisfy the emergence
of environmentally conscious customers.
As a result of such mitigating factors,
IBISWorld forecasts that revenue will
increase at a modest annualized rate of
2.2% to $7.6 billion through 2020.

Generally speaking, lawn and outdoor
equipment supplies are discretionary.
Therefore, a rise in household
disposable income increases consumers
inclination to purchase industry goods,
driving up industry revenue. Disposable
income is expected to increase slowly
over 2015, creating a potential
opportunity for the industry.
External competition for the Lawn and

Outdoor Equipment Stores industry
Lawn and garden equipment supplied by
this industry competes with comparable
products offered by home improvement
giants such as The Home Depot and Lowes.
Large home improvement stores can
generally offer lower prices while providing
the convenience of a one-stop shop, stealing
customers away from lawn and outdoor
The
industry has been threatened by

fierce external competition from home
improvement stores
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equipment specialty shops. While external

competition for the Lawn and Outdoor
Equipment Stores industry is expected to
decrease slightly in 2015, the external threat
of home improvement stores is likely to
grow in the next five years, presenting a
potential threat to the industry.
Private spending on home improvements
This industry is sensitive to the level of
private investment in residential
improvements, including spending on
lawns and gardens. Since the housing
markets collapse, investment levels have
decreased overall, leading to lower demand
for lawn and outdoor equipment. However,
increased expenditure on do-it-yourself
(DIY) projects, including at-home
landscaping to improve curbside appeal,
has offset some of the industrys losses.
Private spending on home improvements is
expected to increase over 2015.
Demand from landscaping services

Landscaping service providers are major
buyers of industry products. Therefore,
when downstream demand increases,
landscapers will be more likely to
increase their expenditure on new lawn
and outdoor equipment supplies.
Demand from landscape services is
expected to grow in 2015.
Consumer Confidence Index
The Consumer Confidence Index
measures the level of consumer
optimism toward economic conditions
such as unemployment, economic
growth and inflation. When consumer
perceptions of the economy are
positive, households will spend
more freely on industry items,
supporting demand. The Consumer
Confidence Index is expected to
increase over 2015.
Private spending on home improvements

3
185
175
$ billion
% change

continued
0
-1
155
-2
-3
Year
165
08
10
12
14
16
18
20
145
Year 06
08
10
12
14
16
18
20
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Current
Performance
The Lawn and Outdoor Equipment Stores

industry has spent the past five years
digging out of the economic recession.
Retailers slowly gained ground over the
past five years as recovering consumer
confidence and disposable income
increased discretionary spending, driving
demand for new lawn and garden
equipment. Over the five years to 2015,
industry revenue is expected to increase at
an annualized 3.7%, as consumers release
pent up demand for industry goods. In
Downstream demand
is back
After three years of declining revenue,

lawn and outdoor equipment store
operators began to experience recovery
in 2010. Household spending on
industry products returned to force as
the overall economic outlook improved.
Additionally, consumer confidence
received a boost from rising household
income and employment levels. With
discretionary income to spend,
consumers returned to lawn and outdoor
equipment stores to purchase products
for a variety of lawn care and gardening
projects put on hold during the
recession. For example, industry growth
was accompanied by a rise in sales of
big-ticket equipment such as riding
mowers. According to the Outdoor
Power Equipment Institute, an
association of power equipment
manufacturers, US shipments of riding
mowers are expected to experience
strong growth through 2015.
Demand also returned from a number
of downstream industries that use lawn
and outdoor equipment. The
Landscaping Services Industry

(IBISWorld report 56173) in particular
benefited from an increase in home
improvement investments. Homeowners
who had curbed spending after the
housing market collapse resumed
outdoor projects to improve their gardens
and lawns. Further, many who had opted
to do yard work themselves during the
recession hired landscaping services
instead. Residential gardeners and
ground maintenance personnel also saw
an uptick in business for mowing lawns,
trimming trees and bushes. This
downstream market, alongside persistent
demand from the consumer do-ityourself (DIY) segment, helped bolster
revenue during the period.
While the Lawn and Outdoor Equipment

Stores industry was able to capture
enough revenue to return to growth after
the recession, sales have been threatened
by intense external competition from
big-box stores. During the past decade,

home improvement stores have emerged
as leading lawn and outdoor equipment
retailers, eroding industry revenue in
turn. In 2015 Lowes, the second-largest
External competition
hurts sales
2015 specifically, revenue is expected to

increase 1.1% to reach $6.8 billion. Despite
this growth, industry operators continue
to experience fierce external competition
from home improvement stores. Big-box
retailers captured a considerable amount
of industry demand during the recovery
by offering customers popular products at
competitive prices. Because of this,
industry revenue is expected to stay below
prerecessionary levels for the duration of
the period.
Consumer
confidence
received a boost from rising
household income and
employment levels
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hurts sales
continued
player in the Home Improvement Stores

industry, is expected to generate an
estimated $4.6 billion in outdoor
equipment revenue, which is equivalent
to 67.6% of the Lawn and Outdoor
Equipment Stores industrys total
revenue during the same year.
The national scale of operations of these
external competitors has enabled their
dominance. This is because home
improvement stores are better able to
gather data on consumption patterns
nationwide and have been able to stock and
sell the most sought-after products,
maximizing shelf allocation and
profitability. Additionally, through
established long-term relationships with
suppliers and manufacturers and cost
Alternative-energy
products
The rising popularity of alternativeenergy outdoor power tools that run on

gas substitutes and produce lower
emissions has intensified external
competition. In September 2008, the
Environmental Protection Agency
finalized a new emission-control
program to reduce hydrocarbon
emissions from new lawn and garden
equipment by 35.0% over 2011 and
2012. Home improvement stores have
been quick to capitalize on these trends
by allocating more shelf space for
green equipment, such as battery
powered lawn mowers and blowers
instead of traditional gasoline or diesel
powered gear. By offering a wider
selection of recognizable brand products
savings through bulk purchasing, home

improvement stores have been able to
afford lower price markups, passing their
savings down to consumers. Unable to
compete with their larger rivals on price,
companies have lost a significant portion of
their customers to national scale players
outside the industry. In response, the
industry has consolidated, contracting at
an annualized rate of 0.1% to 5,613
operators in the five years to 2015. Many
smaller stores have been absorbed by
larger retailers who are attempting to scale
up in size in an effort to compete with
mounting pressure within and outside the
industry. Employment declined as well,
falling at an average annual rate of just
0.5% to 25,517 over the same period.
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.
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intensifies
The Lawn and Outdoor Equipment stores

industry is expected to experience slower,
yet steady growth over the next five years.
As the US economy continues to recover,
the industry will benefit from increased
consumer confidence and higher
disposable income. However, external
competition from the Home
Improvement Stores industry (IBISWorld
report 44411) will be a persistent threat,
as big-box stores continue to draw
customers away from specialty stores. In
the five years to 2020, industry revenue
is forecast to increase at an annualized
2.2% to reach $7.6 billion.
In line with the expected continuation
of the economic recovery, per capita
disposable income is estimated to
increase at an annualized 2.5% over the
five years to 2020. Renewed confidence
in the economy and higher levels of
available discretionary income will help
drive retail purchases. As the recovery
continues to take hold, consumers are
expected to buy more lawn and
outdoor equipment, though at lower
rates than they did in the previous
five-year period.
Better economic conditions will also

allow consumers to invest in home
improvement projects, including their lawns
and gardens. Aging baby boomers in
particular will likely drive up sales of
big-ticket items as they approach retirement
and spend more time on home
improvement and gardening projects.
Moreover, the growing importance of
technological advancements will impact the
way industry operators do business, shifting
their focus from in-store to online sales.
External competition from the Home

Improvement Stores industry will continue
to intensify over the five years to 2020.
Large home improvement centers, such as
the Home Depot and Lowes, have
established themselves as leading lawn and
outdoor equipment retailers. Consumers
will be unlikely to turn away from these
stores due to their lower prices and wider
selection of products. Furthermore, home
improvement stores provide the
convenience of one-stop shopping, as they
offer a number of home improvement
products along with those sold in specialty
shops, allowing them to further entice
consumers away from the Lawn and
Outdoor Equipment Stores industry. This
is projected to place increasing price
pressure on industry operators. In order to

attract and retain customers, lawn and
outdoor equipment stores will be forced to
reduce their markups, resulting in lower
margins. Profit is expected to decrease
from 2.4% in 2015 and remain close to
2.2% in the five years to 2020.
External competition will also come
from an emerging group of online
retailers. E-tailers are businesses that sell
their wares exclusively online directly to
customers. Their presence has disrupted
many well-established relationships
between manufacturers, wholesalers and
storefront retailers, as manufacturers and
wholesalers are bypassing traditional
brick-and-mortar stores and selling more
goods to e-tailers. Internet sales are
Industry revenue
8
4
% change
Industry
Outlook
0
-4
-8
-12
Year 07
09
11
13
15
17
19
21
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intensifies continued
becoming increasingly popular among

customers because they offer both
convenience and price comparability, not
offered by traditional brick and mortar
stores. Because of this, the number of
industry businesses is only expected to
increase at the average annual rate of
0.1% to 5,643 in the five years to 2020.
Technology is key
US consumers are increasingly interested

in buying green or energy-efficient
products. In response, industry operators
have begun carrying more
environmentally friendly products. For
example, Black and Decker recently
expanded its line of outdoor tools with
interchangeable battery packs, while
Husqvarna launched an EcoSmart
marketing campaign. Supported by the
Environmental Protection Agencys
standards to reduce hydrocarbon
emissions from small spark-ignition
engines in lawn and garden equipment,
IBISWorld forecasts that eco-friendly
machines will continue to drive industry
sales over the coming year and beyond.
In addition to helping the environment
by eliminating pollution, batterypowered mowers can offer consumers
cost savings since these machines require
less maintenance and last longer.
As industry products evolve, so do
operators methods for advertising and
selling. Industry operators are expanding
their virtual presence by investing in
The number of employees is expected to

rise slightly more rapidly at an
annualized 0.6% to 26,238 workers.
Although employment growth is expected
to be modest, industry operators will
need to hire a knowledgeable and service
oriented staff in order to differentiate
themselves from big-box stores.
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.
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Life Cycle Stage
The industry is estimated to underperform

relative to the US economy
Consumers are purchasing fewer
goods from industry operators
% Growth in share of economy
The number of enterprises is stagnating

as competition increases
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
High growth in economic

importance; weaker companies
close down; developed
technology and markets
15
Key Features of a Decline Industry

Revenue grows slower than economy
Falling company numbers; large firms dominate
Little technology & process change
Declining per capita consumption of good
Stable & clearly segmented products & brands
10
Quantity Growth
Many new companies;

minor growth in economic
importance; substantial
technology change
Home Improvement Stores
Landscaping Services
0
Maids, Nannies & Gardeners
Lawn & Outdoor

Equipment Stores
Tractors & Agricultural Machinery Manufacturing
Nursery & Garden Stores
-5
Decline
Shrinking economic
importance
-10
-10
-5
10
15
20
% Growth in number of establishments

SOURCE: WWW.IBISWORLD.COM.AU
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Industry Life Cycle

This
industry
is D
eclining
The Lawn and Outdoor Equipment

Stores industry is in the declining stage of
its life cycle. Over the 10 years to 2020,
industry value added, which measures
the industrys contribution to the US
economy, is expected to increase at the
average annual rate of 1.9%. This is
comparatively slower than US GDP,
which will increase at an estimated 2.2%
over the same period. Increasing
competition from the Home
Improvement Stores industry has
heightened the competitive environment
for the industry, causing many to exit
altogether. By providing the most soughtafter machines, such as riding and
electrical lawn mowers, at lower prices,
home improvement stores have
significantly hurt industry revenue. The

emergence of internet retailers and their
heavily marked down products has only
compounded this problem by convincing
some consumers to make their purchases
online. Unfortunately for industry
players, the level of external competition
is only forecast to increase through 2020,
contributing to the industrys decline.
In the face of heightened competition,
industry operators have either merged
with other players or exited the industry
completely. As a result, in the ten years to
2020, enterprise growth will stagnate. As
the industry continues to consolidate, a
greater number of large regional
operators will emerge to control a more
significant share of the industrys market.
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Products & Markets
Supply Chain | Products & Services | Demand Determinants

Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES

56173
Landscaping Services in the US

Landscaping services in the United States require outdoor power equipment in order to
manage and maintain clients properties.
81411
Maids, Nannies & Gardeners in the US

Gardening services in the United States require outdoor power equipment in order to manage
and maintain clients properties.
99
Consumers in the US
Lawn and equipment retailers cater to the lifestyle needs of recreational farmers and ranchers.
KEY SELLING INDUSTRIES
Products & Services
33311
Tractors & Agricultural Machinery Manufacturing in the US

Firms in this industry manufacture tractors and agricultural machinery and sells to lawn and
outdoor equipment retailers
42382
Farm, Lawn & Garden Equipment Wholesaling in the US

Firms in this industry wholesale farm, lawn and garden equipment to lawn and outdoor
equipment retailers
Products and services segmentation (2015)
6.8%
6.2%
Repair services
17.0%
Riding lawn mowers
49.5%
Other lawn and garden

machinery and parts
20.5%
Push lawn mowers
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
confidence and disposable income levels.

However, lawn and outdoor equipment
are mostly considered discretionary
purchases. Furthermore, many products
within this category are expensive, big
ticket items; standard riding mowers can
range anywhere between $1,000 and
$3,000. As a result, revenue generated
from this segment has risen only
gradually during the past five years.
Coming off of the recession, many
consumers have opted to purchase less
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Products & Markets
Products & Services

continued
expensive lawn and garden machinery,

such as push lawn mowers that cost
between $150 and $350, rather than
more expensive power tools that come
with higher markups.
Farm equipment and tools represent a
small share of industry products,
accounting for only 6.8% of revenue.
Most farmers and ranchers purchase
equipment and tools such as
cultivators, chainsaws and tractors
directly from manufacturers through
farmers cooperatives or wholesalers,
where they can purchase goods at lower
prices. However, some farmers
continue to buy agricultural sprayers
and sprays, harvesting tools and parts,
pest control bait and traps, insecticides
and other accessories from industry
operators. Over the five years to 2015,
demand for this segment has stagnated.
Early in the period, high levels of farm
Demand
Determinants
Lawn and outdoor equipment is

considered discretionary, so the level of
disposable income generally determines
spending at specialty retail stores.
Consumers are more inclined to invest in
purchasing new equipment when their
disposable income rises, and they try to
save by repairing the existing equipment
when their income is under pressure.
Over the past five years, discretionary
spending rose slowly from recessionary
lows due to positive job growth and
improved housing and stock values.
Like other areas of the home, property
owners must spend money to maintain
their gardens and lawns. In turn, an
increase in home improvement spending
typically coincides with a rise in demand
for industry products, as consumers and
lawn care specialists require tools to do
maintenance. As the economy improves,
homeowners have begun to spend more
income and government subsidies

increasingly allowed farmers to
purchase industry products. In 2014
and 2015 however, as farm income
sharply declined, many farmers
decreased their new farm equipment
purchases in order to save money.
Repair services
Repair services will account for roughly
6.2% of industry revenue in 2015. This
segment has been fast growing over the
past five years due to poor economic
conditions early in the period. As
consumer confidence in the economy and
disposable fell during the recession, a
rising number of households opted to fix
existing equipment rather than buy new
tools. However, revenue generated from
repair services is projected to have
declined towards the tail end of the five
years to 2015 as higher disposable
income allowed consumers to make new
equipment purchases.
on home improvement projects delayed

during the recession. An increase in
existing home sales, coupled with slow
growth in the economy and recovering
consumer sentiment, has helped
convince homeowners to buy more lawn
and outdoor equipment. It has also
increased demand for gardeners and
landscapers who primarily rely on
industry products.
External competition from home
improvement stores unfavorably affects
demand. Comparable items offered at
lower prices by big box retailers, home
improvement stores and e-tailers will shift
consumer spending away from industry
operators. Over the past five years, external
operators have been aggressively
expanding their presence across the
country, leading to heightened competition
levels. In turn, demand for goods supplied
by lawn and outdoor equipment stores has
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Products & Markets
Demand
Determinants
continued
Major Markets
declined rapidly as consumers flock to

larger home improvement store locations
on- and offline.
Weather is an important demand
determinant. For example, springtime
flooding negatively affects the sale of
most lawn and garden equipment, while
moderate to heavy snowfall during
winters usually results in a surge in
demand for snow shovels. Exceptionally

cold weather at the outset of 2014 is
estimated to have negatively impacted
demand for industry products.
Differences in temperature, rainfall and
soil consistency can also cause plant
stock and soil amendments to vary from
market to market. Consequently, demand
for specific products differs by region.
Major market segmentation (2015)
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
demand for gardening and power

tool equipment.
Professional consumers
Professional consumers include lawn care
service providers, building contractors and
golf courses. This category is estimated to
account for 30.1% of the market in 2015.
These consumers purchase lawn and
outdoor equipment to sustain their
businesses by servicing clients properties or
improving their own aesthetic appeal. Along
with the household segment, this market
group has also recovered over the past five
years, in line with the strengthening
economy. Households have increased their
use of professional contractors to help
maintain their lawns and gardens during the
period as a result of rising employment and
disposable income. Consequently, revenue
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Products & Markets
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.
As merchandise trade figures are

classified to the relevant upstream
manufacturing industries, lawn and
outdoor equipment stores have low (i.e.
zero) trade by convention. However, the
industry retails products that are

sourced from foreign suppliers, such as
agricultural machinery (discussed in
IBISWorld report 33311) and power
tools (33399).
from this segment is expected to have

increased during the period.
WWW.IBISWORLD.COM
Products & Markets

Business Locations 2015
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
Additional States (as marked on map)

1 VT
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
WWW.IBISWORLD.COM
Products & Markets
Distribution of establishments vs. population

40
30
20
10
Southwest
Southeast
Plains
New England
Rocky Mountains
Establishments
Mid-Atlantic
Great Lakes
0
West
Similar to most retail industries in the

United States, the geographical spread of
lawn and outdoor stores closely reflects
the distribution of population. In theory,
the greater the number of residents, the
stronger the demand will be for industry
products. Weather conditions,
demographics, housing density and
average lawn acreage and farm
distribution also drive consumer demand
for industry products. These factors may
also explain why some regions have a
greater share of establishments than
population. In 2015, IBISWorld estimates
that establishments will be most highly
concentrated in the Southeast region,
which constitutes the highest share of
population in the United States.
With 25.5% of the population, the
Southeast is home to about 30.2% of total
industry establishments. Along with a
large population, this region contains a
large concentration of farmland and
outdoor recreational facilities. The Great
Lakes and Mid-Atlantic regions account
for the second and third most
establishments with 20.0% and 16.2%,
respectively. These regions demand a
significant amount of industry products
due to their prominent agricultural
presence and inclement weather
conditions. Consumers often use industry
Business Locations
Population
merchandise in order to maintain their

lawns and farms during extreme seasonal
weather fluctuations.
At the other end of the spectrum, the
Rocky Mountains region is expected to
account for only 2.1% of total
establishments. This trend follows the
population distribution, since the region
accounts for the lowest share of the nations
population at 3.6%. Additionally, this region
has a smaller concentration of farmland and
outdoor recreational facilities.
WWW.IBISWORLD.COM
19
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 L ow
Key Success Factors

IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks

industry exhibits very low concentration.
The industry is highly fragmented with
one major company controlling an
estimated 16.5% of market share. The
majority of operators are privately owned
and focus their operations on meeting
local and regional demand in and around
the communities where theyre
headquartered. In 2015, over 80.0% of the
total participants are expected to have
fewer than 10 employees, while only 3.6%
will employ more than 20 workers.
However, industry concentration has
Having a high profile in the market

Having a high profile in the market
enables firms in the industry to be
preferred over home improvement stores.
Establishment by employment size (2015)*

No. of employees
1 to 4
10 to 19
20 to 99
More than 100
*Estimate
Share (%)
53.2
13.2
3.4
0.1
SOURCE: US CENSUS BUREAU AND IBISWORLD
increased in recent years as the industrys

largest company expanded its operations
and smaller players consolidated or exited
the industry all together.
Attractive product presentation

Operators should clearly display products in
an appealing manner to promote purchases.
Ability to control stock on hand

Operators need to ensure that adequate
stock controls are in place to reduce
inventory costs and increase stock turns.
Having links with suppliers

Operators should have well-established
relationships with key wholesale
suppliers to ensure timely delivery and
manage purchase costs.
Proximity to key markets

Operators should be located in areas with
high retail exposure to maximize
exposure to consumers.
Experienced work force

Employees with high knowledge of the
products are able to recommend the right
products to customers.
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.
Additionally, as many unprofitable

operators consolidated or exited the
industry entirely, average industry profit
has increased.
Although profit has increased over the
past five years, competition from home
improvement stores has kept growth
somewhat subdued. By offering a large
selection of industry goods at lower
prices, these large retailers have
increasingly taken away consumers from
industry operators. Over the next fiveyear period, increasing competition from
home improvement stores will continue
placing downward price pressure on
WWW.IBISWORLD.COM
20
industry operators, forcing them to

reduce their markups, thus resulting in
low stagnant margins.
Purchases
Purchase costs are the largest expense for
the industry, accounting for about 66.1%
of total revenue. This factor is typical for
the retail industry, because stores must
obtain a large volume of inventory in
order to sufficiently meet consumer
demand. Inventory items are purchased
from a large number of wholesalers,
generally without long-term contracts.
Purchases also include store displays,
cleaning and maintenance supplies and
inventory management systems. Over the
five years to 2015, purchase costs have
slightly diminished, with strong
competition and the increased
penetration of less expensive imports,
reducing prices of inventory goods.
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.
Sector vs. Industry Costs

Average Costs of
all Industries in
sector (2015)
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
WWW.IBISWORLD.COM
21
Cost Structure
Benchmarks
continued
Rent and utilities

Rent costs for this industry are expected
to account for 2.9% of total revenue in
2015. This cost largely covers leases paid
on store premises, along with any
additional expenditure for the use of
rented equipment or machinery.
Depreciation and utility costs are
estimated to be 0.7% and 1.2% of total
revenue, respectively. These three costs
are expected to decline or remain
relatively flat through 2015 as industry
retailers continue to consolidate.
Other
Operators also incur a variety of other
costs, such as marketing and advertising
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.
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,
expenses, general administrative costs

and accrued interest costs. Within these
costs, marketing and advertising have
become increasingly important in the past
five years, due to heightening external
competition. In order to set themselves
apart from home improvement stores and
to increase awareness, operators have
actively engaged in advertising through
catalogs, direct mailing circulations and
radio advertisements. Operators are also
investing heavily in online advertising in
order to compete with big box stores with
well-established websites. IBISWorld
estimates that advertising expenditure
will account for about 1.3% of revenue
in 2015.
because consumers often desire specific

information about products and require
knowledgeable staff. Therefore,
consumers will more likely shop at stores
where they are more confident of
receiving advice from knowledgeable
employees. In the five years to 2015,
operators have increased their focus on
adequately training employees to address
various customer queries.
This industry faces high competition from
large home improvement centers, including
The Home Depot and Lowes. These large
stores are able to maximize costs savings by
establishing relationships with
manufacturers and purchasing large
volumes of inventory at once, allowing them
to offer discounted products to consumers.
The industry also competes with a variety of
new online retailers who may bypass
retailers and sell directly to customers. For
example, manufacturers are increasingly
engaged in direct sales with customers
through online purchases. These companies
build, package and deliver their goods to the
homes of consumers who shop for their
products online. Other companies operate
WWW.IBISWORLD.COM
22
Basis of Competition
continued
solely online and buy and ship to customers

directly from manufacturers or wholesalers.
By selling their wares remotely, these
operators can avoid sales tax, allowing them
to dramatically reduce their prices.
In order to compete with larger home
improvement stores and online retailers,
industry operators focus on hiring and
training knowledgeable staff to put a
Barriers to Entry

industry has medium barriers to entry for
prospective operators. While there are no
licensing requirements, and few
government regulations or resource
constraints that prevent firms from
entering the industry, investment costs
and high competition can serve as
potential barriers. The initial cost of
establishing retail outlets and purchasing
inventory can be substantial for potential
industry entrants. Because most operators
already carry an extensive range of
products, new entrants must find a niche
market or incur a considerable first-time
inventory purchase cost to meet consumer
demand and remain sustainable.
While not regarded as a formal barrier
to entry, high levels of competition might
also prevent new entrants. Many
operators compete for the same
customers with similar products.
Furthermore, the industry faces high
competition from home improvement
stores, which have established links with
suppliers that have been built over time.
Level & Trend

arriers to Entry
B
in this industry are

Mediumand S
teady
Industry
Globalization
Level & Trend
lobalization
G
in this
industry is L owand
the trend is S
teady

industry has a low level of globalization.
Most industry operators are small to
medium sized, so they do not have the
resources to operate globally. As a result,
premium on customer service. Industry

operators can offer personal, expert
service before and after sales that is
uncommon in big box stores and
nonexistent online. This personal touch
works especially well when operators
focus on selling niche products where
staff can showcase their unique
knowledge to customers.
Barriers to Entry checklist

Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
High
Low
Decline
Low
Medium
Light
None
In order to stay competitive, firms

entering the industry often need to
expend large sums on product promotion
and advertisements. This is particularly
true for web promotion, which is
increasingly important as more
customers switch to online shopping to
purchase industry wares. New entrants
will find it increasingly difficult to match
the technical capabilities of large home
improvement stores websites that use
cutting edge software and supply chain
management techniques to target
customers and offer them better deals.
most revenue from these stores is

generated in the United States on a local or
regional basis. In addition, international
trade is not accounted for in the industry,
further attributing to low globalization.
WWW.IBISWORLD.COM
Major Companies
Tractor Supply Company | Other Companies
Major players
(Market share)
83.5%
Other
Tractor Supply Company 16.5%
Player Performance
Tractor Supply
Company
Market share: 16.5%
Tractor Supply Company is one of the

largest retail farm and ranch stores in the
United States. Through 1,382 stores
across 49 states and its online presence,
the retailer supplies the needs of
recreational farmers, ranchers,
tradesmen and small businesses. The
company employs about 21,000 people
and is headquartered in Brentwood, TN.
Each Tractor Supply Company store
carries more than 15,500 unique
products, including equine and pet
products, agricultural maintenance tools,
lawn and garden power equipment and
truck and towing tools. The company
sources its goods from an assortment of
over 700 vendors, both domestic and
international. Its distribution network
spans the United States with inventory
centers in Indiana, Georgia, Kentucky,
Maryland, Texas, Nebraska and
Washington. To generate store traffic,
Tractor Supply Company advertises its

merchandise through newspaper
circulars, customer targeted direct mail
and internet offerings.
Financial performance
In the past five years, the company has
exhibited considerable growth, with total
revenue expected to increase at an
average annual rate of 11.9% to $6.4
billion in 2015. Of this, roughly 22.0% (or
$1.4 billion) is generated from the sales
of hardware, tools and truck equipment,
which include lawn and outdoor
equipment. Company industry-specific
revenue is generated through its sales of
lawn and gardening equipment, including
blowers and trimmers, brush and root
removal equipment, lawn mowers and
sprayers and spreaders.
Tractor Supply Companys growth, in
spite of a constrained retail environment,
Tractor Supply Company (Industry-specific segment) - financial

performance*
Year
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
SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
can be attributed to the retailers targeted

merchandising programs, strategic
product sourcing, inventory and
markdown management and wideranging brand offerings. Over the past five
years, the company has opened 381 new
stores and increased its total floor space
by over 35.0%. During the period, the

company has consistently achieved profit
margins of more than double the industry
average. In the five years to 2015,
companys industry-relevant revenue is
expected to increase at an average annual
rate of 11.0% to reach $1.1 billion.
Other Companies

industry is composed of a large number of
small and independent players, with most
businesses only catering to local or
regional demand. In 2015, an estimated
96.4% of industry enterprises will be
small companies with fewer than 20
employees, while an estimated 53.2% of
total enterprises are expected to employ
fewer than 5 employees. Due to its
fragmented nature, the industry exhibits a
low level of concentration, with only one
major player accounting for a
considerable market share.
In the five years to 2015, large home
improvement stores such as The Home
Depot and Lowes have become
significant threats to the industry. Home
improvement stores have been
successfully competing for lawn and
outdoor equipment demand by providing
one-stop shopping conveniences as well
as the perception of high quality.
Consequently, the industry has
experienced considerable pressure, due
to heightened competition from the
Home Improvement Stores industry
(IBISWorld report 44411).
trimmers, leaf blowers, pressure washers

and snow blowers. The Home Depot
operates more than 2,000 retail stores in
the United States, Canada, Mexico and
China. According to the companys website,
its top brands of lawn and outdoor
equipment include ECHO, Ariens, Power
Care and John Deere. In 2015, The Home
Depot sells lawn and outdoor equipment
through its outdoor and garden product
segment, which is estimated to account for
$6.6 billion in revenue.
The Home Depot Inc.
Estimated market share: N/A

While not classified as a player in this
industry, The Home Depot Inc. retails a
large share of lawn and outdoor power
equipment and parts to household and
professional consumers. As the largest
home improvement retailer in the United
States, the company offers a range of
industry products, such as mowers,
Lowes Companies Inc.
Estimated market share: N/A

Lowes Companies Inc., incorporated in
1952, is the second-largest home
improvement retailer in the United States.
However, the company is not classified in
the Lawn and Outdoor Equipment
industry. Similar to The Home Depot,
Lowes offers a range of lawn and outdoor
equipment, such as mowers, trimmers,
leaf blowers and other products.
Throughout its more than 1,830 stores in
the United States, Canada and Mexico, the
company retails a range of products such
as appliances, paint, lumber, flooring,
building materials, tools and electrical
equipment. Lowes also carries an
extensive selection of lawn and
landscaping supplies, including outdoor
power equipment; however, similar to The
Home Depot, this retailer is not classified
in the Lawn and Outdoor Equipment
stores industry. Lowes sells industry
products through its lawn and garden
product segment, which is estimated to
generate $4.6 billion in 2015.
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility

Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is L ow

Stores industry has a low level of capital
intensity. Operators put a premium on
customer service and will spend more on
wages for highly trained staff with
expertise in industry products than on
computerized systems or facilities. For
the average operator, an estimated $0.06
is allocated to capital expenditures for
every one dollar spent on wages. Capital
expenditures in this industry include
fixtures and fittings for store lights, cash
registers, point-of-sale (POS) systems,
storage units and other equipment. The
industry has undergone a considerable
transformation over the past 10 to 15
years with the introduction of computer
scanning technology. These systems
allow operators to simplify labor tasks
Capital intensity
Capital units per labor unit

0.5
0.4
0.3
0.2
0.1
0.0
Economy
Retail Trade
Lawn & Outdoor

Equipment
Stores
Dotted line shows a high level of capital intensity

and minimize the level of human error in

processing purchases. POS systems have
enabled operators to computerize their
Tools of the Trade: Growth Strategies for Success

Investment Economy
Recreation, Personal Services,

Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
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
Traditional Service Economy

Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Home Improvement Stores

Landscaping Services
Nursery & Garden Stores
Lawn &
Tractors & Agricultural
Outdoor
Machinery Manufacturing
Equipment
Stores
Change in Share of the Economy
Capital Intensive
Labor Intensive
New Age Economy
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.
WWW.IBISWORLD.COM
Capital Intensity
continued
inventory, resulting in better stock

control and cost efficiencies.
The industry incurs labor costs because
operators need to employ staff for their
stores to help stock and sell their wares.
Employee duties include customer service,
maintaining store displays and processing
Technology & Systems The Lawn and Outdoor Equipment Stores

Level
The level
of
Technology Change
is M
edium
industry has repeatedly responded to the

changing needs of customers for safer and
environmentally friendly products.
Combining technology with the changing
needs of consumers and commercial users
has allowed the development and sale of
new products. Within the retail industry,
the major types of capital improvements
involve the introduction and upgrading of
communications technology. In particular,
this includes online services through
websites that allow customers to search
inventory lists, check pricing, place and
print out orders and be billed
electronically. Having an online presence
can also serve as important marketing
devices for operators. However, while
more dealers are choosing to enter the
online marketplace, maintaining a web
presence is only beneficial if companies
have the means to stock large inventories
and fulfill a large number of orders. This
excludes many smaller operators from
internet competition.
Technological advances that have
occurred within the retail industries
include the introduction of computer
scanning cash registers and automated
warehouse equipment. New automatic
vertical storage machines makes it easier
for operators to handle small parts while
consumer purchases that a store cannot

function without. Unlike capital costs, which
can vary between years, labor costs are a
consistent annual expenditure incurred by
industry players. As such overall capital
intensity is expected to experience little
change over the next five years.
conserving floor space. Computerized

businesses management systems help
increase staff productivity by
streamlining and simplifying processes.
For example, inventories are now stored
on computers and can be accessed with
ease by staff across stores. Staff can use
these systems to manage the stock and
flow of wares and cut down on time
traveling across storefronts to tally
inventory. Other advances focus on
helping operators store their inventories
more efficiently.
Advances in product development are
also changing the wares operators sell. In
particular, new gas-free motor
technology called CORE, Conductor
Optimized Rotary Energy, has allowed
for the creation of a new line of hedge
trimmer, lawn mower, blower and back
pack blower products that are both
environmentally friendly and energy
efficient. This equipment runs on light
weight hybrid power cells that allow it to
store and deliver all the power of a gas
engine but with less noise. This new
product line is expected to replace the
traditional two-cycle gas engines that
have historically dominated the industry.
Their energy efficient qualities are
expected to appeal to both environmental
and price conscious consumers.
WWW.IBISWORLD.COM
Level
The level
of
Volatility is L ow
IBISWorld estimates that revenue for the

Lawn and Outdoor Equipment Stores
industry has exhibited low volatility over
the five years to 2015. Revenue has
grown as little as 1.0% in 2010 and as
much as 5.5% in 2013. Given the
discretionary nature of industry
products, demand is primarily influenced
by fluctuations in the overall level of real
household disposable income and
consumer confidence. Private investment
in home improvement also affects
potential sales, because consumers often
engage in gardening and landscaping
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
projects in order to improve the resale

value of their property.
Fluctuations in industry revenue during
the past five years were in large part due
to changes in consumer sentiment and
disposable income as well as the housing
market and renovation activity. As the
economy recovered and consumer
confidence rebounded, customers were
more willing to purchase industry goods
previously put off during the economic
downturn. Over the next five years,
revenue growth is expected to be even less
volatile, however, slightly more subdued.
Volatility vs Growth
1000
Revenue volatility* (%)
Revenue Volatility
Hazardous
Rollercoaster
100
10
Lawn & Outdoor

Equipment Stores
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
Five year annualized revenue growth (%)

* Axis is in logarithmic scale
Regulation & Policy

Level & Trend
he level of
T
Regulation is
Lightand the
trend is S
teady
Regulations that are relevant to this

industry are generally covered by
individual states. States have enacted their
own antitrust laws to ensure that the
general public is provided with the best
prices, quality and choice. Companies
must comply with the Fair Labor
Standards Act and various state laws
governing matters such as minimum wage,
overtime and other working conditions.
Store owners must also comply with the
provisions of the Americans with
Disabilities Act of 1990, as amended,
which generally requires that stores be
accessible to customers with disabilities.
Efforts to pass national legislation that

would force online retailers to pay sales
tax may indirectly affect the Lawn and
Outdoor Equipment Stores industry.
Federal law currently states that retailers
are only required to collect sales tax from
customers if their business has a physical
presence in the state where their goods
are purchased. This excludes most online
retailers who engage in remote sales, or
purchases without origins. The lack of
sales tax allows online retailers to sell
their goods at a cheaper cost than brickand-mortar stores, giving them a
significant advantage with customers.
WWW.IBISWORLD.COM
Regulation & Policy

continued
The Marketplace Fairness Act,

introduced in 2013, would close this
loophole. Although multiple versions of
this legislation have been introduced, the
bill has yet to be passed. If the law is
passed, it would greatly diminish one of
the primary advantages online retailers
have over industry operators who operate
out of brick and mortar establishments.
In the absence of federal action, a group

of state legislators have formed the
Streamlined Sales Tax Governing Board, a
body to implement the Streamlined Sales
and Use Tax Agreement. The Agreement is
an effort to streamline the administrative
burden on retailers that collect sales tax
across multiple states. Twenty-four states
have currently singed the agreement.
Industry Assistance
While tariffs are applicable to industry

goods, they do not apply at the retail level.
Retail operators purchase goods from
importers and wholesalers after the tariff
has been applied. However, a change in
the tariff rate will affect the price of a good
before its purchased for online sale. For
example, a decline in tariffs on parts used
to assemble lawn mowers could result in
falling purchasing costs for operators if
overseas importers were able to offer
components at a cheaper price than
domestic manufacturers. This would allow
industry operators to sell fully assembled
products at a lower price to consumers.
operators and their wares as well as

industry specific interests. For
example, GreenIndustryPros.com
provides news, product trends and
management tips for landscape
contractors and equipment dealers.
Also, the Outdoor Power Equipment
Institute is an international trade
association who holds a membership
of manufactures of powered lawn and
garden maintenance products. The
association ensures that
manufacturers adhere to
environmental and safety guidelines.
While this association is geared toward
manufacturers, it assists the industry
by allowing retailers to stock the latest
products that are safe for users and
the environment.
Level & Trend

he level of
T
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
Domestic Per capita disposDemand

able income
(%)
(%)
N/A
1.2
N/A
0.6
N/A
-1.3
N/A
0.3
N/A
1.6
N/A
1.3
N/A
0.0
N/A
1.7
N/A
3.1
N/A
2.5
N/A
2.5
N/A
2.6
N/A
2.2
N/A
2.4
N/A
N/A
N/A
N/A
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

($)
35,461
35,870
36,082
35,600
35,705
36,294
36,759
36,771
37,410
38,551
39,534
40,525
41,559
42,468
43,493
N/A
N/A
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
Figures are in inflation-adjusted 2015 dollars. Rank refers to 2015 data.
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
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon
BIG BOX STOREAlso known as a supercenter,

superstore or megastore is a physically large retail
establishment, usually part of a chain.
DO-IT-YOURSELF (DIY)A category of customers that
includes homeowners who purchase products and
complete their own projects
PUSH MOWER (STANDING MOWER)A machine that

a person must push to cut a lawn.
RIDING MOWERA power mower that individuals can
ride on, which is a popular alternative for larger lawns.
GREENA category that includes goods, services, laws,

guidelines and policies that have little to no impact on
the natural environment.
IBISWorld Glossary
BARRIERS TO ENTRYHigh barriers to entry mean that

new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITY Compares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labor; medium is $0.125 to $0.333 of capital to $1
of labor; low is less than $0.125 of capital for every $1 of
labor.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
real growth or decline in industry metrics. The inflation
adjustments in IBISWorlds reports are made using the
US Bureau of Economic Analysis implicit GDP price
deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISE A division that is separately managed
and keeps management accounts. Each enterprise
consists of one or more establishments that are under
common ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTS Total value of industry goods and services
brought in from foreign countries to be sold in the
United States.
INDUSTRY CONCENTRATIONAn indicator of the

dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industrys contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industrys life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industrys products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT Businesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a companys profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
WWW.IBISWORLD.COM
Jargon & Glossary
IBISWorld Glossary
continued
VOLATILITYThe level of volatility is determined by

averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
20%; high volatility is 10% to 20%; moderate
volatility is 3% to 10%; and low volatility is less than
3%.
WAGESThe gross total wages and salaries of all

employees in the industry. The cost of benefits is also
included in this figure.
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Lawn & Outdoor Equipment Stores in the USDecember 2015 1

Planting seeds: Environmentally friendly products

IBISWorld Industry Report 44421

Lawn & Outdoor Equipment

2 About this Industry

19 Market Share Concentration

19 Key Success Factors

30 Jargon & Glossary

19 Cost Structure Benchmarks

Key External Drivers

23 Tractor Supply Company

11 Industry Life Cycle

26 Technology & Systems

13 Products & Services

27 Regulation & Policy

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

Lawn & Outdoor Equipment Stores in the USDecember 2015 2

About this Industry

Operators in this industry sell lawn and

The primary activities of this industry are

shredders, chainsaws, leaf blowers,

Retailing garden power equipment

The major products and services in this industry are

44411 Home Improvement Stores in the US

Lawn & Outdoor Equipment Stores in the USDecember 2015 3

About this Industry

For additional information on this industry

writes over 700 US

Lawn & Outdoor Equipment Stores in the US December 2015

Annual Growth 10-15

Annual Growth 15-20

Revenue vs. employment growth

Products and services segmentation (2015)

Key External Drivers

Per capita disposable

Farm equipment and tools

External competition for

Riding lawn mowers

Other lawn and garden

Push lawn mowers

Life Cycle Stage

Lawn & Outdoor Equipment Stores in the USDecember 2015 5

Executive Summary | Key External Drivers | Current Performance

Bolstered by a revival in spending on

resumed lawn and garden repair and

difference down to consumers in the form

Per capita disposable income

External competition for the Lawn and

industry has been threatened by

Key External Drivers

Lawn & Outdoor Equipment Stores in the USDecember 2015 6

equipment specialty shops. While external

Demand from landscaping services

Per capita disposable income

Key External Drivers

Lawn & Outdoor Equipment Stores in the USDecember 2015 7

The Lawn and Outdoor Equipment Stores

After three years of declining revenue,

Landscaping Services Industry

While the Lawn and Outdoor Equipment

big-box stores. During the past decade,

2015 specifically, revenue is expected to

Lawn & Outdoor Equipment Stores in the USDecember 2015 8