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 12,400 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 nearly $2 million annually.
- The used merchandise retail industry consists of about 12,400 firms that employ about 205,000 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
Jul 12, 2024 - Growth Ahead for Resale
- According to a ThredUp report in the Wall Street Journal, the secondhand apparel market in the US was worth $43 billion in 2023, with an expected market growth of 11% a year on average through 2028. Even with the growing popularity of resale, the WSJ report says that sales growth has slowed recently for some resellers such as the RealReal, ThredUp, and Savers, which are growing slower than the overall market. While Goodwill has a steady supply of donations, online resellers such as ThredUp and the RealReal have sellers mail in or drop off goods, where they are processed and put online, an expensive process that can cut into profitability. Savers, a bricks-and-mortar reseller, is a more efficient reseller than Goodwill and the Salvation Army but can have challenges in procuring enough supplies of secondhand clothing to open new stores, according to the WSJ report.
- US retail sales were fairly level in May 2024 compared to a year ago, as consumer spending stabilized, according to a recent report from research firm Circana. According to Marshal Cohen, chief retail industry advisor for Circana, “The road to retail stability will be a bumpy one, as changes associated with seasonality combined with extreme year-over-year sales comps will bring more spending shifts for marketers to navigate. The good news is that if the price is right, the consumer will bite.” A recent survey showed that 40% of consumers will purchase an item immediately if there is a discount offer, rather than delay the purchase. Among different age groups, consumers aged 55 and older continued to be the only age group to increase their spending on discretionary general merchandise. Average monthly spending for the 55-plus group is up 4% in the first four months of 2024.
- 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 June 2024, after an uptick in May, according to data from The Conference Board. The Conference Board’s consumer confidence index was 100.4 in June 2024 from 101.3 in May 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those under age 35 and those in the income category of over $100,000. Plans for large appliance and smart phone purchases rose on a six-month basis, while plans for car purchases stalled.
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