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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Jan 31, 2024 - Consumers Shift More Spending to Credit Cards
                                • 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.
                                • Consumers showed little sign of inflation fatigue this past holiday season, as US retail sales were robust in December. Total US retail sales increased 5.6% in December 2023 compared to the same month in 2022. However, furniture, electronics, and appliance store sales - demand indicators for consumer product rental stores – were mixed. While seasonally adjusted electronics and appliance store sales saw a 10.7% year-over-year increase in December sales, furniture and home furnishing store sales declined 4.7%. Consumers may have pulled back on spending for big-ticket items that are typically financed and sensitive to higher borrowing costs, according to The Wall Street Journal.
                                • Consumer rental and leasing firm The Aaron’s Company posted third-quarter 2023 revenue of $525.7 million, down 11.4% compared to the same period in 2022. This firm also notched a net loss of $15.6 billion, up 73.5% over Q3 2022. The firm said the weaker performance in Q3 2023 was chiefly due to lower lease revenue and fees, slower retail sales at its Aaron’s business, and reduced retail sales in the BrandsMart division. The Aaron’s Company also lowered its full-year revenue guidance to $2.12 billion - $2.17 billion from $2.12 billion - $2.22 billion.
                                • Most Americans, 56%, are optimistic about their household finances, according to TransUnion’s Q4 2023 Consumer Pulse Study. However, inflation remains top of mind for many consumers; 44% said inflation was their number one financial concern, and it was among the top three concerns for 79% of those surveyed. Of consumers who are using credit to deal with their inability to make bill or loan payments, 20% said they were using existing credit cards, 14% took out personal loans, and 12% opened new credit cards. Nearly two-thirds of survey respondents with student loans in forbearance said they were caught off guard when the Department of Education announced repayments would resume in October 2023.
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