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

                            Mar 5, 2024 - Producer Prices Down, Employment Costs Up
                            • Producer prices for the gift, office supplies, and stationery retailer category fell throughout 2023, reaching their lowest level in Q4, according to data from the Bureau of Labor Statistics (BLS). The decline occurred after several years of producer price increases following the pandemic. Employment for the gift, novelty, and souvenir retailer category increased in Q4 2023 compared to the previous year, per the BLS. However, employment levels have yet to return to pre-pandemic levels, down 7.1% from December 2019 to 2023. Employment costs for the category rose by 15% in December 2023 compared to a year ago, and wages are up 42% since 2019, according to the BLS. Additionally, consumer spending levels rose in the last half of 2023, a 3.1% increase in the third quarter and 2.8% in the fourth quarter, according to Reuters.
                            • According to a recent ConsumerSignals survey by Deloitte, about 75% of consumers worldwide have made at least one splurge purchase to treat themselves in the past month. The average amount spent on the last splurge purchase was $45. The survey examined consumer spending behavior and found that the three main drivers for splurge purchases were comfort (22%), relaxation (15%), and practicality/usefulness (12%). The most popular categories for splurge purchases included food and beverage (43%), clothing and accessories (18%), personal care (11%), electronics and accessories (8%), toys and hobbies (6%), health and wellness (5%), home and kitchen (3%), and household goods (3%). According to the Spending Intentions index, global total spending intentions remained consistent in January compared to December and were significantly higher than a year ago.
                            • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                            • 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.
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