A couple of stories have popped up pointing to danger signs for the economy that could have implications for many retailers.
The New York Times reports that “Goodwill stores are thriving,” which is “good news for the nonprofit organization that oversees Goodwill, the world’s largest thrift store chain. But it also signals that Americans in an uncertain economy are trying to stretch their dollars as far as possible.
“The organization, Goodwill Industries, said it surpassed $7 billion in revenue — a record — from its 3,400 stores in 2025, up roughly 7 percent from the previous year.”
The story notes that “Goodwill collects about six billion pounds of goods per year and tries to keep as many items in circulation as possible. Items that are not sold in stores go to outlets, where they are heavily discounted and sold in bulk by the pound, or they go through partner resellers. Some products may end up in overseas markets or recycling facilities.”
And, it isn’t just Goodwill: “Goodwill’s secondhand peers have also seen a boost. Savers Value Village, which operates more than 300 stores mostly in the United States and Canada, said net sales grew nearly 16 percent in its most recent quarter. The online consignment shop ThredUp said its revenue rose 34 percent last quarter.”
The Times writes that Goodwill isn’t complacent about the moment, saying that it is “also pushing an online auction site, which also had its biggest year ever, though it represents only a small portion of total sales. That platform sources goods exclusively from local Goodwill shops, with the proceeds of each sale going back to the affiliates that listed the item.
“Management sees the secondhand surge as an opportunity for expansion. That means more places for Goodwill to both gather goods and sell them. This year, Goodwill expects to add between 50 and 100 new stores across North America.”
The Times also reports on a new survey saying that “Americans are deeply pessimistic about their economic future, driven by financial anxiety among all but the oldest Americans and by a widespread belief that a middle-class lifestyle is out of reach for most people, a New York Times/Siena poll found.
“While a majority of people said that they could afford basics like rent, gas and groceries, most said they worry about the costs, and there was a pronounced sense that it has become more difficult, if not nearly impossible, to get ahead in America today.
“Majorities of voters said they do not feel confident in their ability to pay for housing, retirement and health care, all traditional staples of a middle-class lifestyle. Separately, more than half said housing and education are now so expensive that both have become unaffordable.
“Those rising costs have shifted perceptions of America as a place of upward economic mobility dominated by a comfortable middle class. Two-thirds of voters said they now think a middle-class lifestyle is out of reach for most people, and 77 percent say it has gotten harder to achieve than a generation ago.
“The economic worries persist across geographic, gender and racial lines. The only voters who seem less stressed economically are those over age 65, who express far fewer concerns about costs.
“Taken together, the findings illustrate how economic anxieties, feelings of insecurity and a bleak outlook for the future have continued to weigh on most voters despite a booming stock market and resilient consumer spending.”
KC’s View:
This is an environment that, as we noted yesterday, creates an almost perfect storm in which retailers such as Aldi, Dollar General and Walmart can thrive – and that can swamp conventional stores that are undifferentiated.
I keep making this point (and probably will until I turn out the lights here): It isn’t always or just about price, but it always should be about value, especially in this economic climate. And this has to be communicated transparently, persistently and consistently to shoppers by retailers.
As for the Goodwill growth numbers, well, those aren’t exactly Aldi expansion numbers, but no small thing for Goodwill.
Red flags are not to be ignored. They’re there for a reason.
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