As The New York Times (NYT) reported Monday (Jan. 26), the largest chain of its kind in the world saw record revenues of $7 billion last year, a sign that consumers are feeling pinched.
“We are pretty steady in almost any economic situation,” Goodwill CEO Steven C. Preston told the newspaper. “But when things are tight, we’re probably more likely to get that foot traffic.”
The report notes that holiday spending was strong last year, and consumers continued to purchase discretionary goods, even if they have to pay for them using installment offerings like buy now, pay later (BNPL) plans.
However, the NYT added, a mix of inflation, weakening job growth and high grocery and housing costs have caused U.S. households to try to stretch every purchase.
According to the report, other secondhand retailers are enjoying similar boosts. For example, Savers Value Village, which has more than 300 stores primarily in the U.S. and Canada, saw net sales climb nearly 16% in its most recent quarter. And fashion reseller ThredUp reported a nearly 34% revenue increase last quarter.
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“Secondhand stores are benefiting from many of the same forces we’re seeing across the broader economy,” said Michelle Meyer, chief economist of the Mastercard Economics Institute. “Consumers are becoming far more value‑conscious.”
Many of these consumers, PYMNTS wrote last week, find themselves on the lower tier of the K-shaped economy, in which two larger groups of consumers experience vastly different financial pressures.
“A much smaller number of wealthier individuals in the top arm of the letter K are thriving, while lower-income consumers in the bottom arm are stagnating or declining,” the report said.
Meanwhile, another new PYMNTS Intelligence report, “The New Checkout: Crimped Consumers Lean Into Online Retail and Digital Wallets,” stresses that grocery spending remains non-negotiable, even as people deal with increasing costs elsewhere.
The research found that 17% of consumers had experienced cash shortfalls for essential expenses in the previous 90 days, falling into the “high financial stress” cohort. That stress is concentrated among younger generations and people with children, groups that must keep purchasing groceries no matter their financial pressures.
“Rather than cutting back sharply, stressed households adapt. One way is by consolidating grocery purchases into fewer, higher-value transactions,” PYMNTS wrote.
“Consumers under high financial stress spent an average of $109 on their most recent grocery purchase, compared to $95 among low-stress shoppers. This result suggests fewer trips and more deliberate planning, not looser spending discipline.”
