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Franchise Sign Shops Fuel Industry Growth, says Web Consulting

(August 2004) posted on Mon Aug 09, 2004

"A very slow cannibalization of other markets"?


Franchise sign shops continue to drive sign-industry growth, according to consultant Web Consulting Inc. The sign franchise segment grew by nearly 4% in 2003, accounting for total sales of more than $740 million, and is the fastest-growing buying segment of the sign industry. Web Consulting projects similar growth in 2004, resulting in total retail sales of $770 million.

"This growth did not come at the expense of any one segment, but was instead fueled by the cannibalization of all other signage market segments"?vinyl, commercial, and electric," says Lisa Onesto, senior consultant. "This trend by the franchise segment"?a very slow cannibalization of other markets"?is expected to continue."
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The sign industry in total achieved an 0.6% growth in 2003, says Web Consulting, reaching a sales total of nearly $9.3 billion. For 2004, the consulting group projects total industry growth to remain modest but slightly stronger than 2003 at 1.5%.

"The sign market continues to meet increased competition from digital printing occurring in other market segments," says Onesto. "This is not an uncommon phenomenon, as we've seen it in other industries"?. More and more market segments such as digital printers, photo labs, and reprographic houses are moving outside their historical applications or customer base and into signage, graphics, and banners. Now, not only is a sign shop competing with other sign shops, but also with other outside, nontraditional segments." (Web Consulting, www.web-na.com)


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