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, 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
Recent Developments
May 24, 2024 - Industry to Rebound, Then Growth Tapers off
- The US paint and wallpaper stores industry is expected to return to the black in 2024 after posting negative growth in 2023. The industry’s year-over-year sales growth rose 11% in 2022, then fell to -4.2% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to rise slightly to 0.9% in 2024, then rise to 5.6% in 2025. The industry will then see steady but gradually tapering growth with rises of 5.5% in 2026, 4.6% in 2027, and 4.2% in 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- A recent downturn in Home Depot’s sales could signal that a decade-long surge in home improvement spending is softening, according to The Wall Street Journal. In May, Home Depot reported first-quarter revenue of $37.26 billion, down 4.2% from the same period a year earlier. The home improvement giant also revised its full-year guidance downward to a sales decline between 2% and 5% from a February estimate of flat 2024 growth. Some industry observers suggest homeowners may have completed many of their home projects during the pandemic. Consumers may also be pulling back on their spending amid growing economic uncertainty and high interest rates and inflation.
- Multifamily developers’ confidence declined in the first quarter of 2024, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) fell three points in Q1 2024 to 47 compared to the first quarter of 2023. The Multifamily Occupancy Index increased by one point to 83 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include a tight lending environment, higher borrowing costs, and difficulties with getting projects approved. A large number of multifamily projects currently underway is expected to dampen starts. The NAHB expects multifamily starts in 2024 to drop by 28% as development activity declines.
- Sales of existing US homes decreased by 1.9% in April from March and were also down 1.9% year-over-year, according to the National Association of Realtors (NAR). High home prices and interest rates may be continued barriers to entry for some potential homebuyers. The median price for all types of homes in April was $407,600, up 5.7% from a year earlier. As of May 16, 2024, the 30-year fixed-rate mortgage averaged 7.02%, up from 6.39% for the same period in 2023. NAR chief economist Lawrence Yun said, "Home prices reaching a record high for the month of April is very good news for homeowners. However, the pace of price increases should taper off since more housing inventory is becoming available." Existing home sales help drive demand for home improvement spending. Homeowners often make renovations before putting their house on the market, and buyers typically do remodels and upgrades before moving in.
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