Health Supplement 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 5,700 health supplement stores in the US sell vitamins, nutritional supplements, body enhancing supplements, and related products. Companies may also carry additional product categories associated with healthy lifestyles, including organic/natural foods and personal care products; diet and weight management supplements; and specialty pet foods. The industry includes national and regional chains, franchises, and independent operators. Large retailers often stock several thousand stock keeping units (SKUs) in each store, across multiple categories and brands.

Consumer Skepticism

The world of health supplements is fraught with conflicting information.

Fads And Trends

Driven by new product proliferation, the health supplement industry is subject to fads and trends, which can cause uneven demand and cash flow.

Industry size & Structure

The average health supplement store operates out of a single location, employs 8 workers, and generates $1.3 million annually.

    • The health supplement retailing industry consists of about 5,700 firms that operate 10,000 stores, employ 44,000 workers and generate about $6.3 billion annually.
    • The industry is fragmented at the bottom with some large players at the top; the top 50 companies account for about 51% of industry revenue.
    • Large companies include General Nutrition Centers (GNC), Vitamin Shoppe, and Vitamin World.
    • The industry includes national and regional chains, franchises, and independent operators.
                                  Industry Forecast
                                  Health Supplement Stores Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 25, 2024 - Producer Prices, Employment Down
                                  • Producer prices for health supplement retailers fell slightly at the end of 2023 while employment declined by more than 7%, according to Bureau of Labor Statistics (BLS) data. Employment by health supplement retailers reached a low point for the year in Q4 2023. Compared to pre-pandemic levels, producer prices were up 20.5%, and employment was down 13.7% in December 2023. Additionally, consumer spending levels showed a slight upward trend in the first nine months of 2023, according to personal consumption expenditures data from the Bureau of Economic Analysis.
                                  • According to a new ConsumerWise report from McKinsey, consumers continue to “trade down,” changing the type or quantity of purchases for better pricing and value, in Q1 2024. About 76% of respondents reported engaging in trade-down actions in Q1 2024, compared to 77% in Q4 2023. Younger consumers tended to trade down more often than older consumers, while low and middle-income consumers traded down more frequently than high-income consumers, per the report. The report also shows that the percentage of consumers using the “buy now, pay later” option has remained mostly the same in Q1 compared to the previous quarter. Additionally, fewer consumers are delaying their purchases, with only 30% doing so in Q1 compared to 35% in Q4.
                                  • 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%).
                                  • 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.
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