As the economic recovery gains traction, external competition will continue to increase.
New York, NY (PRWEB) September 29, 2014
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. For these reasons, industry research firm IBISWorld has updated a report on the Used Goods Stores industry in its growing industry report collection.
The Used Goods Stores industry was able to capitalize on the recession, but industry performance has suffered with the recovering economy. Revenue for the industry largely runs counter to macroeconomic trends. “Rising unemployment rates led to decreasing per capita disposable income levels, forcing consumers to cut their discretionary spending,” according to IBISWorld Industry Analyst Stephen Hoopes. As a result, many consumers who customarily shopped at department stores turned to industry establishments to purchase inexpensive used goods instead of new merchandise. Yet, industry revenue is expected to fall at an annualized rate of 2.2% during the five years to 2014 to reach $14.1 billion, alongside general macroeconomic improvements.
While the number of industry operators has fallen consistently since 1997, rising used goods sales buoyed the number of industry operators in the beginning of the five-year period. While the number of companies ultimately declined at an annualized rate of 0.9% during the five-year period, company figures increased in both 2010 and 2011. The majority of these new entrants were for-profit players, drawn by the increasing popularity among individuals for exchanging used goods for cash.
In addition to falling unemployment, increased competition from discount department stores has hindered industry revenue growth; these stores are partially to blame for the expected 5.3% drop in industry revenue in 2014. “Mass merchandisers have eroded demand for used goods stores by offering a wide array of new household essentials at relatively low prices,” says Hoopes. In addition, increasing legislation with respect to the sale of children's goods has served only to increase operating and disposal costs for industry operators.
Largely a result of rising disposable income and competition levels, industry revenue is projected to decline. 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. However, in response to the increased competition, used goods stores are expected to become more specialized, carving out niches in high-quality, low-priced used merchandise such as designer clothing.
For more information, visit IBISWorld’s Used Goods Stores in the US 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.