This market includes traditional pawnbrokers, stores which focus primarily on trading of second-hand goods – in particular jewellery and consumer electronics – and those whose main focus is high-interest lending such as payday loans, term loans and cheque cashing.
There is significant overlap between these activities with most leading operators now carrying out a mix of each.
We quantify the market size, historical growth rates, segmentation patterns and levels of industry profitability while reviewing key factors behind these figures.
The report builds on the version which we produced in 2012 but has been comprehensively updated, extended and re-written.
What are the objectives of this market report?
Pawnbrokers, second hand stores and high street payday lenders have grown at rapid rates over the last few years.
The industry is frequently in the news but is not well understood.
Lenders are often criticised for charging high rates of interest which exploit low-income consumers.
They are also frequently praised for offering credit to those who cannot obtain it from mainstream sources and giving them an alternative to illegal loan sharks.
This report aims to probe beneath these two statements, explore the factors behind the high rates of growth and provide a view on how likely it is to continue in the future.
Other questions the report considers include:
Was pawnbroking driven by a gold bubble or is there underlying growth in the market?
How does industry revenue segment between different service lines such as pawnbroking, payday / term lending, gold buying and retail? How do we expect it to change in the future?
Is ‘posh pawn’ now an important area?
Does comparison with the US market suggest potential for further growth?
Should Albemarle & Bond have been able to anticipate a slowing in the market?
Who is it useful for?
Operators of pawnbroking and retail payday loan stores
Investors in these businesses
Potential new entrants to the market
Market regulators and policymakers
Banks, analysts, consultants and other parties with interests in the sector.
What are the sources and methodology?
This report is based on:
Interviews with senior-level contacts in the pawnbroking market
Extensive research into published industry sources
In-depth analysis of the macroeconomic environment and relevant pawnbroking market drivers
Financial analysis of the accounts of companies in the industry.
Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions.
We also carry out an in-depth analysis of the relevant drivers of industry growth – including the macroeconomic environment, impact of the gold price and changes in the regulatory framework – setting out historical trends and available forecasts. Our forecast for industry growth is based on this analysis of historical trends and growth drivers.