Paint and Wallpaper 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 1,400 firms in the US sell paint, wallpaper, and related supplies to consumers and commercial contractors. Major product categories include architectural paint; painting equipment; coatings; painting supplies; and wallpaper.
Sensitivity to Remodeling, Construction, and Economic Trends
Demand for architectural paint and wallpaper is dependent on the health of the remodeling and construction industry, which is cyclical and influenced by economic conditions.
Seasonal Fluctuations in Demand
The paint market is seasonal and subject to uneven demand throughout the year.
Industry size & Structure
The average paint and wallpaper retailing company employs less than 10 workers and generates $12 million annually.
- The paint and wallpaper retailing industry consists of about 1,400 firms that employ about 50,400 workers and generate about $16.6 billion annually.
- The large paint and coatings manufacturers, such as Sherwin-Williams, PPG, and Benjamin Moore, dominate the paint and wallpaper retail landscape through company-owned locations. Sherwin-Williams is also one of the largest distributors of wallpaper in the US.
- About 36% of firms generate less than $500,000 annually; 25% generate between $500,000 and $1 million annually.
- About 83% of firms employ fewer than ten workers.
- Franchises account for a small (about 2.5%) of the industry.
Industry Forecast
Paint and Wallpaper Stores Industry Growth
Recent Developments
Sep 23, 2024 - Home Improvement Spending to Benefit from Fed Rate Cut
- At its meeting in September, the Federal Reserve voted to reduce interest rates by half a percentage point, which would put the benchmark federal funds rate between 4.75% and 5%, according to The Wall Street Journal. Projections of fed officials’ moves suggest another four quarter-point cuts will come next year, which would bring the federal funds rate down to 3.5% by the end of 2025. Home-improvement retailers will benefit if lower interest rates translate into increased remodeling spending, according to Business Insider. Home Depot and Lowe’s have seen their fortunes erode as high interest rates have prompted homeowners to postpone big-ticket projects. High interest rates have also curtailed existing home sales, which are a key driver of remodeling demand.
- The number of building permits issued for single-family, privately-owned housing units, a demand driver for building inspection services, increased 2.8% month-over-month but declined 0.5% year-over-year in August 2024. Single-family housing starts grew by 15.8% month-over-month and increased 5.2% year-over-year in August. Single-family housing completions dropped 5.6% month-over-month but grew 8.4% year-over-year in August. The August rise in housing starts was helped by moderating interest rates. However, builders still face supply-side headwinds, including labor and lot shortages and stubbornly high prices for some types of building materials, according to the National Association of Home Builders (NAHB).
- Sales of existing US homes decreased by 2.5% in August from July and were down 4.2% year-over-year, according to the National Association of Realtors (NAR). Median existing home prices moderated from July’s all-time high, but August’s median home price rose 3.1% to $416,700 compared to August 2023. NAR chief economist Lawrence Yun said, “Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months.” Existing home sales are a demand driver for paint and wallpaper stores as sellers often make improvements before putting homes on the market, and buyers renovate before moving in.
- The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the second quarter of 2024 was 65, down one point from Q1 2024, according to a July 2024 report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the second quarter, the Current Conditions Index portion of the RMI fell one point to 73. The Future Indicators Index component of the RMI also dropped one point to 58 compared to Q1 2024. The NAHB noted that most remodelers continue to see steady demand, although some have reported slowdowns. Some wealthy homeowners are paying cash for remodeling projects amid high interest rates.
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