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 1,500 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 $8 million annually.

    • The paint and wallpaper retailing industry consists of about 1,500 firms that employ about 40,600 workers and generate about $13 billion annually.
    • The large paint and coatings manufacturers, such as Sherwin-Williams, PPG, Kelly-Moore, and Diamond-Vogel, 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Feb 17, 2023 - Remodeling Growth to Slow in 2023
                                  • Home remodeling spending is expected to continue growing in 2023 but will gradually slow throughout the year, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 14.1% to $473 billion in the first quarter of 2023 compared to Q1 2022. On a year-over-year basis, quarterly remodeling spending levels are forecast to rise 9.9% in Q2. In the third quarter of 2023, remodeling spending will reach $492 billion, up 5.8% over Q3 2022. Spending will then decline to $485 billion in Q4 2023, 2.6% over Q4 2022. The Joint Center for Housing Studies Project Director Carlos Martín said, “Slowdowns in existing home sales, house price appreciation, and mortgage refinancing activity coupled with growing concerns for a broader economic recession will cool home remodeling activity this year.”
                                  • US retail sales at building material and garden equipment and supplies dealers, which includes paint and wallpaper stores, fell nearly 10% on an unadjusted basis in January 2023 compared to the same month a year earlier. Seasonally adjusted building material and garden equipment and supplies dealer sales rose 0.3% in January compared to December. Consumers may be pulling back on spending amid high inflation and economic uncertainty. In a recent survey by PwC, 69% of consumers said they plan to cut back on nonessential spending over the next six months. About 15% of consumers said they plan to eliminate nonessential spending.
                                  • Home builder sentiment moved higher in February, according to the National Association of Home Builders (NAHB). Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose seven points to 42 in February 2022, although the HMI remained in bearish territory. Any HMI reading over 50 indicates that more builders see conditions as good than poor. While headwinds, including high construction costs and materials shortages, continue to challenge home builders, the NAHB suggests February’s improvement in builder sentiment could signal that easing mortgage rates and gradually improving affordability could attract more buyers to the US single-family market.
                                  • While supply-side issues like labor and materials shortages were among home builders’ primary concerns in 2021 and 2022, attracting buyers is expected to become more of a problem in 2023, according to a recent survey by the National Association of Home Builders (NAHB). In 2022, 55% of home builders felt negative media reports were making buyers more cautious, but 79% feel that way for 2023. In 2022, 49% of home builders felt prospective buyers believed home prices or interest rates would drop if they waited, while 80% of home builders expect buyers to have a wait-and-see approach in 2023. Just over 40% of home builders were concerned about the employment and economic situation in 2022, but 73% expect to be concerned about these issues in 2023.
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