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Pawnbrokers & Payday Loan Stores: UK market profile and forecast 2013

  • ID: 2725968
  • Report
  • November 2013
  • Region: United Kingdom, Great Britain
  • 56 Pages
  • Apex Insight
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  • Albemarle and Bond
  • Borro
  • Cash Generator
  • CNG Holdings
  • Instant Cash Loans
  • Ramsdens Financial
  • MORE
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 2012 version but has been comprehensively updated, extended and re-written.


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?


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.


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.
Note: Product cover images may vary from those shown
2 of 5


3 of 5


  • Albemarle and Bond
  • Borro
  • Cash Generator
  • CNG Holdings
  • Instant Cash Loans
  • Ramsdens Financial
  • MORE
Pawnbrokers & Payday Loan Stores summary - 7
- Market background
- Market growth and drivers
- Competitive landscape
- Outlook

Pawnbrokers & Payday Loan Stores market overview - 9
- Description
- Services
- Adjacent markets: online alternatives to these services
- Pawnbroking
- Purchase / sale of second hand items.
- Loans
- Other services
- Customer needs and implications for pawnbrokers & payday loan stores
- Research into customer needs
- “Posh Pawn”
- Internet pawnbroking
- Value drivers for pawnbrokers & payday loan stores
- Borrowing costs

Pawnbrokers & Payday Loan Stores market size and growth - 16
- Number of stores
- Use of franchised stores
- Revenue per store
- US market and betting shops comparisons
- Tax treatment
- More new entrants and niche focus

Pawnbrokers & Payday Loan Stores market drivers
- Discussion of key drivers
- Growth in target consumer segment
- Availability of other forms of credit
- Gold price
- Macroeconomic trends
- Unemployed and under-employed
- Wage levels and household disposable income
- Personal insolvencies
- Student debt
- Access to mainstream banks and credit sources
- International comparisons
- Consumer credit
- Credit cards
- Gold market trends
- Regulation

Competitive landscape
- Focus
- Profitability
- Store and employee productivity

Pawnbroker & Payday Loan Store chain profiles
- Instant Cash Loans / The Money Shop (Dollar Financial Corporation)
- Cash Generator
- Cheque Centres
- H & T Group Plc.
- Albemarle and Bond
- Cash Converters
- Ramsdens Financial
- Borro
- Oakam

Market Forecasts
- Unemployment
- Household disposable income
- Gold price
- Store numbers
- Service mix trends
- Market forecast
- Risks to the forecast


List of Figures

1. How consumers used their most recent loans
2. Reason for using a particular pawnbroker / %
3. Five most common reasons for taking out a loan
4. Reasons for taking out agreement
5. High cost credit types APR / %
6. Total amounts paid including principal / £
7. Historical UK pawnbroking / loan store market size / £m
8. Historical numbers of pawnbroker and money shop stores
9. Pawnbrokers’ franchised store numbers, franchised stores as % of total stores
10. Revenue per store / £m
11. H & T average pawn loan / £
12. UK GDP in current prices (money GDP), inflation (GDP deflator) and real GDP / % annual changes
13. Historical number of unemployed and underemployed / m
14. Number of people in employment / m
15. UK average wages and real household disposable income annual growth rates / % annual change
16. Historical number of new debt solutions per year / ’000
17. Historical UK number of bank branches
18. European countries number of bank branches per million people in 2011
19. European countries bank branches CAGR (1999-2011) / %
20. Number of adults without a bank account/cannot access credit
21. UK outstanding consumer credit / £m
22. Number of credit cards in issue / m, end of year
23. Percentage of gross lending not repaid / %, year average
24. Historical gold price / £ per ounce
25. UK and Ireland gold scrappage and consumption / tonnes
26. H & T Gold purchase margin / %
27. Leading UK pawnbrokers market share by number of stores and latest revenues / £m
28. Revenue growth rates of leading pawnbrokers – CAGR %
29. Comparison of leading chains
30. Historical segmentation of pawnbrokers’ gross profit / %
31. Latest pre-tax profit margins of pawnbroking chains / %
32. Leading pawnbrokers’ latest revenues per store / £m
33. Revenue per employee / ‘000
34. Instant Cash Loans Ltd. summary financials
35. DFC Global revenue segmentation, 2009-13 / %
36. Cash Generator Ltd. summary financials
37. Cash Generator revenue segmentation, 2011-12, Q3 2013 / %
38. Cheque Centres Group Ltd. summary financials
39. Cheque Centres revenue segmentation, 2010-12, Q3 2013 / %
40. H & T Group Plc. summary financials
41. H & T gross profit segmentation, 2010-12, Q3 2013 / %
42. Albemarle & Bond Holdings Plc summary financials
43. A & B gross profit segmentation, 2010-12, Q3 2013 / %
44. Cash converters (UK) holdings Plc. summary financials
45. Ramsdens Financial Limited. summary financials
46. Ramsdens revenue by segment 2010-13 / £m
47. Borro Limited summary financials
48. Oakam Ltd summary financials
49. UK nominal GDP, inflation (GDP deflator) and real GDP / % annual changes
50. Unemployment and underemployment / m
51. Number of people in employment / m
52. UK real household disposable and average income / % annual change
53. Gold price forecast / £/oz
54. Pawnbroking – Forecast market size / £m
Note: Product cover images may vary from those shown
4 of 5
- Albemarle and Bond
- Axcess Financial
- Borro
- CNG Holdings
- Cash Converters
- Cash Generator
- Cheque Centres
- Dollar Financial Corporation
- H & T Group
- Instant Cash Loans
- Oakam
- Ramsdens Financial
- SRC Transatlantic Limited
- Speedy Cash
- The Money Shop
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown