Security Guards and Patrol Services

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 7,000 security firms in the US provide security guard, patrol, and related services, including personal and property protection. Security guards are a supplement to public law enforcement, and act as a deterrent to crime. The majority of industry revenue comes from securing buildings and parking facilities. Other services include crowd control and bodyguard services. In addition to guards, firms use electronic security systems or guard dogs to enhance protective services. Firms may provide consulting services, such as security system design or training.

High Cost Of Failure

The nature of the security business puts companies at risk for liability for personal injury, property damage, and financial losses.

Limited Pricing Flexibility

The security guard services industry’s struggle to maintain profitability is complicated by stubborn low growth in pricing.

Industry size & Structure

The average security guard and patrol services provider operates out of a single location, employs 112 workers, and generates $4 million annually.

    • The security guard and patrol services industry consists of about 7,000 firms that employ about 758,800 workers and generate nearly $30 billion annually.
    • The security guard and patrol services industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for 64% of industry revenue.
    • Large companies include Securitas USA, Allied Universal Security, and Canada-based GardaWorld. Some large firms are foreign-owned or have international operations.
    • The industry includes large international companies, regional firms, franchises, and independent operators.
                                  Industry Forecast
                                  Security Guards and Patrol Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Feb 1, 2024 - Security Guard Industry Price Growth Outpaces Wages
                                  • Producer prices charged for security guard and patrol services were up significantly early in the fourth quarter of 2023 compared to a year earlier. In Q4, security and armored car services wages were up moderately but were outstripped by the gains in pricing. The faster pace of price growth relative to wages could signal a cushion for industry margins. Industry employment was up slightly in Q4 2023, year-over-year.
                                  • US retailers increasingly report that theft is contributing to higher “shrink,” which is hurting profitability, according to The Wall Street Journal. Shrink is a retail industry term for the difference between inventory on the books and inventory that’s on hand. Theft is only one contributor to shrink in addition to lost or damaged items or inaccurate record keeping. According to a recent analysis by investment bank William Blair, US retailers experienced $142 billion in inventory shrink in 2023, up 25% from 2022. Shrink in 2023 was about 2% of total retail sales, the highest level since 2015. Analysts say they need more data to help curtail shrink, including how companies are reacting to it, if those efforts have been successful, and the costs of shrink control efforts. However, companies often don’t calculate shrink in the same way and are sometimes cagey about disclosing financial details related to shrink.
                                  • Persistent work-from-home patterns in the wake of the pandemic and years of overbuilding have contributed to the highest office vacancy rates in at least 40 years, according to The Wall Street Journal. In the fourth quarter of 2023, 19.6% of US office space was vacant, according to Moody’s Analytics. The Q4 2023 vacancy rate was above the previous high of 19.3% seen in 1986 and 1991. Office vacancies rose steadily in the late 1980s and early 1990s after decades of overbuilding, primarily in the South, where inexpensive land and relatively lax regulation spurred speculative office development. Many vacant office properties were built between the 1950s and 1980s, and the current demand is for more modern space. While office demand rebounded in the 1990s amid a rapidly expanding economy, the impact of remote work on current office demand means occupancy may take longer to recover. Weaker office occupancies could reduce demand for security guard services.
                                  • As many US downtown areas experience rising crime, the security guard industry has seen significant growth, according to recent reporting in The New York Times. Private businesses and schools in urban areas are increasingly turning to private security as police and other first responders are often overwhelmed by rising levels of crime, homelessness, drug overdoses, and mental illness. Average police response times in some cities – including New York City, New Orleans, and Nashville – have risen by as much as 50% in recent years as police departments struggle to retain the officers they have and recruit new ones. Some cities are hiring security guards directly to fill their policing personnel gaps.
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