Consumer Products Rental

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,300 consumer products rental companies in the US provide rental services for a wide variety of household and personal goods and items used for special events. Major rental or leasing revenue categories include home entertainment equipment; special events equipment; household furniture and furnishings; and formal wear, costumes, and accessories. Companies may also rent recreational goods, such as boats, skis, and bikes. Firms may also sell goods or allow customers to purchase goods during the rental period.

High Risk Customers

Many customers of consumer products rental providers can be considered high risk, and may be more likely to default or miss payments than traditional retail customers.

Competition from Traditional Retailers

Consumer products rental providers face competition from traditional retailers, such as consumer electronics stores, furniture stores, department stores, and mass merchandisers.

Industry size & Structure

The average consumer products rental provider works out of 1-2 locations employs 15-16 workers and generates $3 million annually.

    • The consumer products rental industry consists of about 8,300 firms that employ about 131,500 workers and generate about $24.2 billion annually.
    • Industry concentration varies according to product category. In the consumer electronics and appliance and video rental categories, the top 8 companies account for 87-89% of segment revenue. In the formal wear and home health equipment categories, the top 8 companies account for 50-59% of segment revenue. Other categories, such as recreational goods rentals, are fragmented.
    • Establishments that rent consumer electronics and appliances account for 35% of firms and 36% of industry revenue. Establishments that rent home health equipment account for 14% of firms and 20% of industry revenue.
    • The industry includes national chains, franchises, and independent operators.
    • Large companies include Aaron's, Rent-A-Center, and divisions of The Men's Wearhouse (tuxedo rentals).
                                Industry Forecast
                                Consumer Products Rental Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jun 3, 2024 - Steady but Weak Industry Growth
                                • The consumer products rental industry is expected to experience weak but steady sales growth in the coming years after posting anticipated negative growth in 2024. The industry’s year-over-year sales rose 0.9% in 2023 after rising 0.5% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to drop to -0.7% in 2024, rise 1.1% in 2025, then see weak but steady average annual growth of about 1.9% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                • Sales of existing US homes decreased by 1.9% in April from March and were also down 1.9% year-over-year, according to the National Association of Realtors (NAR). High home prices and interest rates may be continued barriers to entry for some potential homebuyers. The median price for all types of homes in April was $407,600, up 5.7% from a year earlier. As of May 16, 2024, the 30-year fixed-rate mortgage averaged 7.02%, up from 6.39% for the same period in 2023. NAR chief economist Lawrence Yun said, "Home prices reaching a record high for the month of April is very good news for homeowners. However, the pace of price increases should taper off since more housing inventory is becoming available." Consumers may rent new furniture, appliances, and electronics after buying a home.
                                • Consumer rental and leasing firm The Aaron’s Company posted first-quarter 2024 revenue of $511.5 million, down 7.7% compared to the same period in 2023. The firm also notched a Q1 2024 net earnings loss of $142 million, compared to positive net earnings of $12.8 billion in Q1 2023. The firm said the weaker performance in Q1 2024 was chiefly due to lower lease revenue and fees at its Aaron’s business, and reduced retail sales in the firm’s BrandsMart division. To drive improved demand, in the fourth quarter of 2023, Aaron’s launched a new omnichannel lease and customer acquisition program that helped drive a 94.1% rise in ecommerce recurring revenue growth in Q1 2024. The firm expects full-year 2024 revenues to be between $2.05 billion and $2.15 billion.
                                • The Conference Board’s Consumer Confidence Index increased in May 2024 to 102.0 compared to April’s upwardly revised 97.5. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions— rose to 143.1 from 140.6 in April. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— increased to 74.6 from 68.8. Dana M. Peterson, Chief Economist at The Conference Board, said, “Consumers’ assessment of current business conditions was slightly less positive than last month. However, the strong labor market continued to bolster consumers’ overall assessment of the present situation. Views of current labor market conditions improved in May, as fewer respondents said jobs were ‘hard to get,’ which outweighed a slight decline in the number who said jobs were ‘plentiful.’ Looking ahead, fewer consumers expected deterioration in future business conditions, job availability, and income, resulting in an increase in the Expectation Index. Nonetheless, the overall confidence gauge remained within the relatively narrow range it has been hovering in for more than two years.”
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