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 8,000 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 8,000 firms that employ about 129,100 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
Recent Developments
Apr 2, 2024 - Steady but Slow Industry Growth
- The consumer products rental industry is expected to experience slow 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, then see weak but steady average annual growth of about 1.7% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Consumer rental and leasing firm The Aaron’s Company posted fourth-quarter 2023 revenue of $529.5 million, down 10.2% compared to the same period in 2022. Full-year 2023 sales were $2.14 billion, which was 4.9% below 2022. The firm also notched a Q4 2024 net earnings loss of $12.4 million, up 110% over Q4 2022. The firm said the weaker performance in Q3 2023 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, Aaron’s launched a new omnichannel lease and customer acquisition program that led to solid ecommerce growth. However, the firm noted that a reduced lease portfolio would likely affect 2024 adjusted earnings.
- The Conference Board’s Consumer Confidence Index was relatively unchanged in March 2024 at 104.7 compared to February’s downwardly revised 104.8. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions— rose to 151.0 from 147.6 in February. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions— decreased to 73.8 from 76.3. Dana M. Peterson, Chief Economist at The Conference Board, said, “Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future. Confidence rose among consumers aged 55 and over but deteriorated for those under 55. Separately, consumers in the $50,000-$99,999 income group reported lower confidence in March, while confidence improved slightly in all other income groups. However, over the last six months, confidence has been moving sideways with no real trend to the upside or downside either by income or age group.”
- Amid inflation and high interest rates, consumers are relying more on credit cards as they pay more to maintain their lifestyles and burn through savings built up during the pandemic, according to The Wall Street Journal. In a conference call in December, the co-chief executive of JPMorgan Chase’s consumer bank said that, on average, the bank’s lowest-income customers had 12 days’ worth of cash before the pandemic. Today, those customers have about 15 days’ worth of cash, indicating they have spent nearly all their savings accumulated during the health crisis. In the third quarter, several of the largest banks - including JPMorgan, Wells Fargo, and Citigroup – reported increased unpaid balances on credit card accounts.
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