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 12,600 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 16 workers, and generates over $1 million annually.

    • The used merchandise retail industry consists of about 12,600 firms that employ about 206,200 workers and generate $24.4 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

                              May 7, 2024 - Estimated 45,000 Retail Store Closures Expected by 2028
                              • A new UBS report in Retail Dive projects that 45,000 retail stores may close in upcoming years as online sales gain share. Online retail penetration is expected to rise to 26% from 21%, with retail sales growth of 4% by 2028, as the industry focuses more on fulfillment and distribution centers. If the closures occur, USB said the total number of stores in the US will fall from 958,533 to 913,500. Other factors driving closures include a tighter lending environment, higher operational costs, and consumers spending more on services than goods. The report stated that sporting goods, clothing, consumer electronics, home furnishings, hobby, book, and music stores have closed the most locations since the first quarter of 2019. Retailers are expected to incorporate existing stores as an important piece of their omnichannel capabilities in the future, as consumers are becoming more demanding for convenience or immediate deliveries.
                              • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                              • According to a new ConsumerWise report from McKinsey, consumers continue to “trade down,” changing the type or quantity of purchases for better pricing and value, in Q1 2024. About 76% of respondents reported engaging in trade-down actions in Q1 2024, compared to 77% in Q4 2023. Younger consumers tended to trade down more often than older consumers, while low and middle-income consumers traded down more frequently than high-income consumers, per the report. The report also shows that the percentage of consumers using the “buy now, pay later” option has remained mostly the same in Q1 compared to the previous quarter. Additionally, fewer consumers are delaying their purchases, with only 30% doing so in Q1 compared to 35% in Q4.
                              • A new report from the National Retail Federation and Appriss Retail shows returns for the retail industry reached $743 billion in merchandise in 2023, according to Chain Store Age. The rate in 2023 was 14.5%, lower than the 16.5% in 2022 and 16.6% in 2021. The average retailer faces $145 million in merchandise returns for every $1 billion in sales. Online sales have a higher return rate; 17.6% of merchandise purchased online is returned compared to 10% for pure brick-and-mortar returns. Over 15% of holiday gifts are expected to be returned, totaling some $148 billion. Fraudulent returns account for 16.5% of total holiday returns. Types of return fraud in 2023 included returns of used, non-defective merchandise (49%), the return of shoplifted or stolen goods (44%), returns of goods purchased on fraudulent or stolen tender (37%), and return fraud from organized retail crime organizations (20%).
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