#261. Business Trends that are thriving even in this economy – Part IIPosted on
We are continuing this week with our three-part series on the 2010 Trends, as identified by entrepreneur.com.
Business trends that are thriving even in this economy – Part II
4. Discount Retail
Everyone’s eating lower on the food chain these days. Consumer spending is down more than 30 percent from this time last year, to an average of $57 a day, according to a Gallup poll. And even those who can still afford to spend are beset by “luxury shame,” which means high-end retailers are out, and discount shopping is in. Wal-Mart’s earnings increased more than 5 percent this year, while Neiman Marcus reported a 14.8 percent drop in sales. And the dollar store? Long the domain of low-income shoppers and random cheapskates, dollar stores are doing brisk business with the middle class. Family Dollar saw record net income in 2009. It jumped 25 percent, to $291.3 million.
Another hand-me-down from the weak economy: Resale shops. In 2009, secondhand shops increased revenue by $223.3 million, according to IbisWorld. The National Association of Resale Professionals reports that secondhand stores had an average 31 percent increase in business this year. Uptown Cheapskate–a fledgling fashion-centric resale exchange franchise–opened two locations this year, with four more on the way.
Demand is exploding for locally grown and made products–which means more support for mom-and-pop stores. The dividend: For every $100 spent at a locally owned business, $68 comes back to the community. Only $43 recirculates from national chain stores.
The “buy local” ethos has its roots in the farmers markets movement: There are almost 5,000 farmers markets across the country, the result of more than 5 percent annual growth for the past five years, according to the Department of Agriculture. Nearly 60 percent of consumers say they try to shop at a farmers market. Wal-Mart and Safeway recently added “Locally Grown” sections to their produce departments, and the USDA launched a “Know Your Farmer, Know Your Food” marketing campaign.
Huge numbers of people are going back to school–ducking the bad economy, retraining for new jobs, even reinventing themselves completely. Total enrollment at universities and colleges is close to 12 million and climbing, says IbisWorld senior analyst Toon van Beeck, most likely because of unemployment. Or, as van Beeck puts it: “They’re up-skilling.” Certainly, 2010 will be a good year for higher learning institutions: Revenue is expected to grow 4.9 percent, to $421 billion. Enrollment at less expensive junior colleges, trade schools and online universities is also on the rise, particularly since student loan financing is still in short supply.
7. Parental Outsourcing
Taking care of the kids, scrubbing the toilets, checking in on Mom, helping with homework, coaching Little League–more people than ever are paying professionals to do their domestic chores. The trend even has a name: Parental outsourcing.
It’s something of a surprise, since recessions tend to affect the middle class more dramatically than the wealthy, and some services that seem like luxuries are still thriving. But the numbers tell the story. About 10 percent of all U.S. households now hire cleaning help; 70 percent of those clients make twice-a-month appointments (up from a once-a-month majority five years ago).
We will conclude our list next week. To see the Part I of our list, please visit here.