The recession led consumers to shop for cheaper goods, benefiting thrift stores
Los Angeles, CA (PRWEB) April 25, 2012
Due to its countercyclical nature, the Thrift Stores industry enjoyed a level of high demand during the recession. The industry sells secondhand goods at low prices and thus benefits from periods of weakened consumer purchasing power. During the five years to 2012, unemployment jumped to a high of 9.6%, while per capita disposable income declined for the first time in two decades. Furthermore, says IBISWorld industry analyst Nikoleta Panteva, “The United States' poverty rate increased from a pre-recessionary level of 13.0% of the population to a high of 15.3% in 2010.” As such, demand for low-priced housewares and apparel jumped up. IBISWorld estimates that industry revenue increased 14.2% in 2009, bringing the five-year average growth to 3.5% between 2007 and 2012.
The number of industry participants has also climbed during this period. “While most of the industry operates on a not-for-profit basis,” says Panteva, “some players do collect part of their sales as income.” As industry profit margins increased between 2007 and 2009, new entrants were enticed into the space. The number of establishments has therefore increased from 66,453 in 2007 to an estimated 77,192 in 2012, displaying a 3.0% average annual rate of entry. Little national expansion occurs for the majority of firms in the Thrift Stores industry. Major players like Goodwill Industries International, Savers Inc. and the Salvation Army National Corporation, on the other hand, have longstanding positions in the industry and operate across the United States.
However, as the economy recovers, the Thrift Stores industry suffers. Unemployment has begun to abate, falling to 8.5% in 2012, and per capita disposable income has inched up over the past three years. Consequently, industry revenue has declined an estimated 0.4% in 2011 and is expected to fall through 2012 to $9.5 billion. This trend is forecast to continue into the next five years as consumers move away from secondhand stores and toward traditional brick-and-mortar and internet-based retailers. Over the five years to 2017, industry revenue is anticipated to decline. Additionally, government regulations, such as the Consumer Product Safety Improvement Act of 2008, may limit the type and amount of products that industry participants can accept, forcing them to change their product mix in the long run. For more information, visit IBISWorld’s Thrift Stores report in the US industry page.
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IBISWorld industry Report Key Topics
This industry sells used merchandise and secondhand goods at a discount price (except motor vehicles, motor vehicle parts, boats and mobile homes). The goods sold by industry operators are either donated directly or purchased from an organization that received the items as donations. Examples of companies in this industry include the Salvation Army and Goodwill Industries.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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