Used Merchandise 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 13,500 used merchandise retailers in the US resell previously-owned goods, except for motor vehicles (autos, boats, motorcycles, recreational vehicles). Major revenue categories include used clothing, antiques, furniture, collectibles, books, and jewelry. Antiques are items over 100 years old. Collectibles may be old, but less than 100 years old. The industry includes permanent flea markets, but excludes pawn shops.

Variable Supply

Sources of supply for the used merchandise industry can vary and are often erratic.

More Resale Shoppers

More shoppers plan to frequent resale stores, as the used merchandise industry evolves and adopts features of the traditional retail model.

Industry size & Structure

The average used merchandise retailer operates out of a single location, employs 11 workers, and generates $1 million annually.

    • The used merchandise retail industry consists of about 13,500 firms that employ about 148,500 workers and generate $15.4 billion annually.
    • The used merchandise industry is fragmented; the top 50 companies account for 33% of industry revenue.
    • The industry includes chains, franchises, and independent operators.
    • Large firms include Savers, Once Upon a Child, and Play-It-Again Sports.
    • Large non-profit service organizations, such as Goodwill and the Salvation Army, operate used merchandise retail locations.
                              Industry Forecast
                              Used Merchandise Stores Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 13, 2022 - Inflation Puts Sector Under Pressure
                              • Inflation, as measured by the US Bureau of Labor Statics' Consumer Price Index (CPI), increased 0.4% month over month in October, the smallest increase since July, and 7.7% year over year. The CPI measures what consumers pay for goods and services. Consumer spending, the economy’s main engine, grew more slowly in the third quarter than in the second, after adjusting for inflation and seasonality. The year-over-year inflation increase was the smallest since January. June’s 9.1% year-over-year inflation rate was the highest in four decades. “A strong labor market and strong job growth supports strong demand, which allows inflationary pressures to stay elevated,” said Blerina Uruci, US economist at T. Rowe Price. “You’ve got more demand chasing goods and services, the supply of which is being impaired at the moment.”
                              • Discretionary spending is under pressure due to high inflation, and used merchandise stores are likely to be negatively impacted. Analysts at market and investment research firm Cowen said that unit sales in retail “remain weak,” with “real sales” down from last year in sporting goods, department stores, and clothing and accessories. The sales to inventory spread for most of the retailers Cowen covers has turned negative this year, with trends worsening in Q2. Leading retailer Walmart has canceled “billions of dollars” in planned orders to align inventory with demand. Walmart Chief Financial Officer John Rainey said that the company is reducing exposure to some areas, including sporting goods, electronics, and home furnishings.
                              • Changing consumer preferences are a key driver behind the rising popularity of strip malls. Christina Boni, a retail analyst at analytics firm Moody’s, said that what consumers want is low-stakes, low-commitment shopping. “How far you have to walk from where you park, how you get to the store itself, the ease of entry. Those things are just much more conducive in a striplike situation as opposed to a mall,” she said. Strip malls make it easier for people to pop in and not just buy, but also return items. And they can also lend themselves to not popping in at all. “One big driver, certainly, I think, is the acceleration of buy online, pick up curbside,” said Brandon Svec, the director of retail analytics at CoStar Group. Curbside pickup has become one of the shopping hallmarks of the pandemic. Svec’s proof that it’s boosting interest in strip malls? The current strip mall vacancy rate is at 8%, he said. “That is well below even pre-pandemic levels and is at its lowest level since before the great financial crisis.”
                              • Retail giant Walmart has launched Walmart Restored, a section of Walmart.com that sells only used or refurbished products. Walmart Restored offers computers, TVs, smartphones, cameras, audio gear, large and small appliances, and video games. Company officials say that the program is intended to counter rising prices. Walmart says that all products listed on Walmart Restored have been professionally inspected, tested, and cleaned. It offers a 90-day free return policy to help boost customer confidence in the used products.
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