No matter the economic challenges, Winmark® retail resale franchised brands continue to beat the odds and remain on top with our recession-resistant franchises. We thrive even during times of economic recession and uncertainty because of our multi-channel retail model.
During the Great Recession, more than 170,000 small businesses closed between 2007 and 2009. During that time, retail sales were the weakest they had been in 35 years. Still, our resale franchises persevered and adapted to the changing economy.
Now, in the wake of the global pandemic, 100,000 small businesses were permanently closed. Recent data from the International Franchise Association’s 2021 Economic Outlook for Franchising found that the number of retail food, products and services establishments grew by an estimated 1.2 percent and is expected to expand by 3.3 percent in 2021.
Despite local government restrictions, changes to consumer habits and shopping fears surrounding the coronavirus, our retail franchises have consistently performed well and provided necessary products and services to consumers throughout the pandemic.
What Makes a Recession-Resistant Business?
While there is no guarantee any industry would be unaffected by a recession, specific industries do well during times of widespread unemployment and economic crisis.
A recession-resistant business is a business that can weather market changes and economic instability. These companies provide goods or services which fulfill a consumers basic needs rather than their wants, creating a continuous high demand, despite economic volatility.
While specific industries such as the travel or hotel industry might experience a significant loss during economic downfall, industries like resale goods, home services and healthcare tend to stay in demand. Industries like this do well because people look for products and services at a better value to stretch their budgets.
What Makes a Business Resilient?
With retail store closures worldwide and a shift in spending habits, consumers are less likely to spend their usual amounts on clothes and shoes, let alone luxury items because they aren’t essential. Because of this, many consumers have switched to shopping local and shopping resale to stretch their dollar.
While the coronavirus caused massive closures, layoffs and lost profits for various industries, our resale retail franchises proved to be resilient. Despite the challenges, our business model allowed us to continue to support consumers during a difficult time, offering them essential items. Because of our franchisees' agility, creativity and adaptability, and multi-channel offerings, we were able to serve our customers.
How Winmark Remains Recession-Resistant and Provides Basic Needs
Resale retail brands aren't as susceptible to the rise and fall of the economy as traditional retail stores because they benefit from offering quality goods at a better value.
Winmark retail franchises thrive during a down economy because they are in a strong position to help consumers find in-demand products and offer quality used items at a lower price point than traditional retailers.
Our unique buy-and-sell business model allows people to find quality used items at highly discounted prices and sell their clothing for cash on the spot. This model brings customers into our locations, onto our social selling platforms and onto ecommerce sites – specifically for Music Go Round®, Play It Again Sports® and Style Encore®.
The Benefit of Opening a Franchise in a Recession
During a recession, many fear job loss and worry about financial security. Owning a franchise allows you to take control of your future; it gives business owners an extra level of support during difficult economic times.
With fantastic support at the franchise level, the development of new ecommerce and multichannel experiences and a growing inventory of valuable items, Winmark resale franchise owners are uniquely positioned to meet today's consumer demand.
Click here to learn more about Winmark's franchise opportunities.