As the prices of every day consumer goods rise it seems the typical consumer is spending less and less money for furniture and clothing. The earnings forecasts so far this year, (for the majority of retail stores), has been continually gloomy. After all, if we need to spend more to feed ourselves, we’ll have to find a way to cloth ourselves for less money.
Interestingly, while sales for typical retailers like department, furniture, and clothing stores is falling, sales for consignment stores and discount retailers is rising. Over the past year retail sales in this sector have risen by 2.2 billion. Sales grew from $28.1 billion in February of ’08 from $25.9 billion in February of ’07. In fact, second-hand stores are known for withstanding economic downturns.
The trend for second-hand stores seems to be two-fold. First, consumers want to find a bargain. Consignment stores often sell brand new items, (with the tags still on), for 50 – 75% less than typical department stores. Second, consignment stores are now viewed as eco-friendly. Why purchase something new at full price, when you can purchase something that serves the purpose just as well, but is slightly used?
Second-hand shops and discount retailers are known for riding out economic downturns, but I find it interesting that consumers typically return to paying full price at department stores once the downturn is over.