The recession boosted industry revenue as consumers attempted to spend less
Los Angeles, CA (PRWEB) August 26, 2013
The Used Goods Stores industry was able to capitalize on the recession because industry revenue largely runs counter to macroeconomic trends. Rising unemployment rates led to decreasing per capita disposable income levels, forcing consumers to cut their discretionary spending. “As a result, many consumers who customarily shopped at department stores turned to industry establishments to purchase inexpensive used goods instead of new merchandise,” according to IBISWorld industry analyst Stephen Hoopes. Consequently, industry revenue is expected to rise at an annualized rate of 2.4 percent during the five years to 2013, reaching $14.7 billion.
The Used Goods Stores industry maintains a medium level of market share concentration. The top four companies in the industry have improved their market share over the past five years through increasing establishment numbers and strengthened marketing efforts. “Industry operators made great efforts to bolster their brands and their images during the five-year period because the recession brought in a number of new consumers who had not shopped for used goods in the past,” says Hoopes. As a result, the most popular used goods stores were able to garner more sales from this burgeoning customer group than their smaller counterparts.
Not all recent trends have benefited the industry, however, as increased competition from discount department stores has hindered revenue growth. These stores are primarily to blame for the expected 2.3 percent drop in revenue in 2013. Mass merchandisers have principally eroded demand for used goods stores by offering a wide array of new household essentials at relatively low prices. In addition, increasing legislation with respect to the sale of children's goods has served only to increase operating and disposal costs for industry firms. Largely as the result of rising disposable income and competition levels, industry revenue is projected to decline over the five years to 2018. As the economic recovery gains traction, external competition will continue to increase as families with higher income levels seek new rather than used items; this factor is anticipated to be the ultimate reason for the industry's long-term decline. In response to this increased competition, however, used goods stores are expected to become more specialized. Some will carve out a niche specializing in high-quality, low-priced used merchandise like designer clothing.
For more information, visit IBISWorld’s Used Goods Stores in the U.S. industry report page.
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IBISWorld Industry Report Key Topics
Used goods stores collect or purchase used merchandise and sell these goods directly to consumers. The industry includes thrift stores and pawnshops but excludes stores that sell secondhand motor vehicles and parts such as automobiles, recreational vehicles, motorcycles, boats and tires.
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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