The ICSC Blog

Bet on art, accessories, and tire start-ups in 2012, report says

Many small retailers struggle to overcome overwhelming competition from national chains and big-box stores, causing most to go out of business within a couple of years after opening shop. But research firm IbisWorld has singled out four small-business retail sectors where mom-and-pops still have great prospects for success due to low costs, low barriers to entry and positive revenue growth prospects.

The firm pegs tire dealerships as the small retailers most likely to succeed in 2012. Changes in consumer preferences for more fuel-efficient tires and pent-up replacement tire demand from people who postponed purchases during the recession are expected to drive tire dealership revenues up an average 3.1 percent per year in the five years leading up to 2016, IbisWorld reports.

Handbag, luggage and accessory stores are another bright spot for mom-and-pops. IbisWorld projects an average annual growth rate of 5.1 percent in the sector through 2016. Art dealerships are also ideal retail start-ups, the firm says, because of the low levels of capital and labor required and the expected post-recession resurgence in wealthy consumers splurging on art. IbisWorld expects art dealership revenues to grow 4 percent in 2012 and at an annual rate of 4.3 percent through 2016.

Furniture stores are another easy entry point into retail for entrepreneurs. IbisWorld expects home ownership and per capita income to rise in 2012 and fuel furniture store revenues growth of 3.4 percent for the year and at an average annual rate of 3 percent through 2016.

Specialty food stores round out the list of hot prospects. IbisWorld says low initial start-up costs and expected revenue growth of 2.3 percent in 2012 puts shops that specialize in high-end gourmet foods on the road to early success.

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