As our sales data indicates, the demand for tableware products both from retail and food service clients has been weak since 2015 but may be rallying in 2018. Demand from individual consumers should be able to bounce back quickly but the downturning demand from food service may continue for longer time. 

Sector’s current, trend, causes behind trend, and future

Current and Trend

• Generally, the demand for glass tableware both from consumers and business clients has been weak in America market since 2015 but present a strong positive signal in 2018.
• The price of retail has been seen rising in 2018 after the continuingly decrease in both sales volume and price since 2015.
• Demand from foodservice clients, which started to decline in 2017, seems to be regaining rally as we see rising price in that market.
• The generally weak demand seems to have exerted huge pressure on competition for price and the decreasing price seriously hurt companies’ profitability. However, we are seeing it to be improved as price goes back on raising track in 2018.  

Causes behind the trend

Economy situation/consumers spending is the major factor influencing demand for tableware products from individual consumers.

Demand for tableware products from foodservice is eventually influenced by the consumers’ spending in restaurants. However, currently active merger &acquisitions may be the major driver behind strong demand from them for tableware products.

Factors that caused slowing down traffic in malls such as changes in shopping habits may also be the factors behind the slowing sown traffic in retail stores.

Industry Future

In a long period of time in future, consumers’ demand for tableware products should still be solid and growing while in-store retailers’ pressure caused by slowing down traffic will still exists.

Demand from business seems to be increasing.

 

General Financial Performance of Companies In the Sector

Demand for the glass tableware products from individual consumers has been weak in the past several years as indicated by the continuingly sluggish sales to retail clients. However, rising price in market of 2018 may be a positive signal for increase in demand from personal consumers.

Demand from foodservice clients seems to be weak as well after entering 2017 as a result of slowing down traffic of restaurants. However, rising price in market of 2018 may be a positive signal for increase in demand from food service providers.

As a result of decreasing demand in the past several years, companies have focused on competition of price to try to keep sales volume and, while it seems that market has had positive reactions to lowered price as seen among individual consumers and restaurants clients, the resulted increase in volume has not been able to offset the impact on profit/margin from the decrease in price. We thus see that companies’ gross margins continued to shrink in the past several years. However, we also see that companies in this sector have been able to charge more for their products since beginning of 2018, which may imply an increasing demand. A typical company’s gross margin has been seen down from about 24% of 2014 to about 19.5% in 2018.  The average SG&A as percentage of sales also went up as sales went down and caused the operating margin down to about 4.4% in 2018.

The typical average stock Price/cash flow ratio: 30 (interest/EBI ratio of 85%) and stock price/sales ratio is 0.2.

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