IBISWorld has expanded its industry research report collection to include the Pawn Shops Industry and other industries within Financial Intermediaries
Los Angeles, California (PRWEB) September 22, 2011
With this surge in transactions of pawn loans, the pawn shops industry's profit margins have steadily increased from about 15.5 percent of revenue in 2006 to an estimated 17.5 percent in 2011. The rising rate of defaults on pawn loans has helped earnings even more, allowing stores to collect higher transaction fees and generate additional earnings by selling collected collateral. Meanwhile, the industry's high profit margins have led to an influx of new players that want to take part of the success. The number of enterprises has increased at an average annual rate of 2.6 percent over the past five years, from 4,666 players in 2006 to an estimated 5,294 in 2011.
Nevertheless, news for the pawn shops industry has not been all good. Poor economic conditions that have helped drive pawn loans have caused the industry's retail sales to fall. Since the industry mainly offers discretionary products like jewelry and consumer electronics, waning consumer confidence and falling disposable income created little impetus for pawn shops' retail demand. Weak consumer spending, which continued through 2010, caused retail sales to continue fall. According to the 2010 Trend Survey published by the National Pawnbrokers Association (NPA), some pawn brokers' retail sales declined by up to 15.0 percent, with many businesses falling at even higher rates.
As the economic recovery gains traction, the industry's revenue growth is expected to slow. While retail sales will likely rebound, sales generated from pawn loans are projected to decrease considerably as consumers become equipped with heavier wallets and lending standards become more lax. In the five years to 2016, IBISWorld analyst Janet Shim forecasts that revenue will increase at an average annual rate of just 1.3 percent to $6.6 billion.
For more information, download the full report from IBISWorld on the Pawn Shops industry.
Pawn Shops Industry Report Table of Contents
About this Industry
Industry at a Glance
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Jargon & Glossary
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