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
Recent Developments
Mar 7, 2024 - Employment, Wages Up
- According to data from the Bureau of Labor Statistics, employment by used merchandise retailers increased throughout 2023, reaching a high point in Q4 2023. Employment levels rose 4.2% in December 2023 from a year ago and were up nearly 12% from 2019. A competitive labor market in recent years has caused used merchandise retailers to increase hourly wages. Average hourly wages have grown nearly 20% from 2019 to 2023, per the BLS. In 2023, average hourly wages increased throughout the year, reaching a high of over $16 in Q4. Additionally, consumer spending levels rose in the last half of 2023, a 3.1% increase in the third quarter and 2.8% in the fourth quarter, according to Reuters.
- 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%).
- Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
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