Gift and Souvenir Stores

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 13,700 gift and souvenir retailers in the US sell gifts, novelties, souvenirs, and related merchandise. Major product categories include souvenirs, novelty items, kitchenware and home furnishings, clothing and jewelry, seasonal decorations, greeting cards, and toys. Companies may specialize in a particular category, such as Christmas merchandise, Halloween costumes, or party supplies. The industry includes national and regional chains, franchises, and independent operators.

Seasonal Sales

Gift giving is seasonal, and peaks during gift-related holidays, such as Christmas, Valentine’s Day, and Mother’s Day.

Vulnerable To Economic Conditions

Gifts, souvenirs, and novelty items are discretionary purchases, and demand typically drops during economic downturns.

Industry size & Structure

The average gift and souvenir store operates out of a single location, employs about nine workers, and generates about $1 million annually.

    • The gift and souvenir retail industry consists of about 13,700 companies that employ about 134,800 workers and generate about $19 billion annually.
    • The industry includes national and regional chains, franchises, and independent operators.
    • The industry is fragmented; the top 50 firms account for 47% of industry sales.
    • Large companies include Party City Holdings, Harry & David (a subsidiary of 1-800-FLOWERS.COM), and Spencer Gifts (which also owns Spirit Halloween). Most Hallmark stores are independently owned.
                            Industry Forecast
                            Gift and Souvenir Stores Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Jan 3, 2024 - Consumer Confidence Up in December
                            • Consumer confidence levels rose in December 2023 for the second month in a row, following three consecutive months of declines, according to data from The Conference Board. The Conference Board’s consumer confidence index increased to 110.7 in December 2023 from 101 in November 2023. According to Dana Peterson, Chief Economist at The Conference Board, “December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.” Peterson added that the gains in consumer confidence were largest in householders aged 35-54 and households with income levels of $125,000 and above. Plans to purchase homes, autos, and large appliances rose moderately on a month-to-month basis as interest rates moderated.
                            • Gift and souvenir store owners will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to Chain Store Age. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                            • Lower consumer spending and continued high price levels are expected to limit growth in the US gift and souvenir stores industry, which is projected to grow at a slightly over 1% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. Employment levels in the industry have grown year to date, and employment costs have been stable as wages have stayed steady.
                            • A new report from the National Retail Federation and Appriss Retail shows returns for the retail industry reached $743 billion in merchandise in 2023, according to Chain Store Age. The rate in 2023 was 14.5%, lower than the 16.5% in 2022 and 16.6% in 2021. The average retailer faces $145 million in merchandise returns for every $1 billion in sales. Online sales have a higher return rate; 17.6% of merchandise purchased online is returned compared to 10% for pure brick-and-mortar returns. Over 15% of holiday gifts are expected to be returned, totaling some $148 billion. Fraudulent returns account for 16.5% of total holiday returns. Types of return fraud in 2023 included returns of used, non-defective merchandise (49%), the return of shoplifted or stolen goods (44%), returns of goods purchased on fraudulent or stolen tender (37%), and return fraud from organized retail crime organizations (20%).
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