Consumables
Consumables are goods used by individuals and businesses that must be replaced regularly because they wear out or are used up. Retailers often make hefty profits by selling consumables — which can range from non-cyclical staple goods to discretionary items whose demand changes with the overall economy. Leading producers in the cleanroom consumables department include Berkshire Corporation and DuPont de Nemours, Inc. (DD), but smaller competitors are expected to compete for market share in regional markets. While certain consumables like food, gasoline, clothing, and personal hygiene products are ubiquitous, the world of consumables also has some interesting niche areas and sectors. For example, Wal-Mart Stores Inc. (WMT) and Whole Foods Markets, a subsidiary of Amazon.com Inc. (AMZN), both have announced they would roll back prices on consumables such as fresh produce, laundry detergent, and over-the-counter drugs.
What Are Consumables?
Consumables are goods used by individuals and businesses that must be replaced regularly because they wear out or are used up. They can also be defined as the components of an end product that is used up or permanently altered in the process of manufacturing such as semiconductor wafers and basic chemicals.
Understanding Consumables
Consumables can be compared with durable goods (durables) and are sometimes segregated into:
Stocks of companies that make consumables are considered safe harbors for equity investors when the economy shows signs of weakness. The reasoning is simple in that people always need to purchase groceries, clothes, and gas no matter what the state of the broad economy.
Many of the items measured in the basket of goods used to calculate the consumer price index (CPI) are consumables. Inflation in these items is closely watched because it can lower the discretionary income people have to spend on items such as cars, vacations, and entertainment.
Since staple goods are consumed at all times, they are considered non-cyclical, while more discretionary products are cyclical and can vary in demand with the economy.
Consumables Examples
While certain consumables like food, gasoline, clothing, and personal hygiene products are ubiquitous, the world of consumables also has some interesting niche areas and sectors. Here are just a small set of examples.
Related terms:
Basket of Goods
A basket of goods is defined as a constant set of consumer products and services valued on an annual basis and used to calculate the consumer price index (CPI). read more
Big-Box Retailer
A big-box store is a retail store that occupies a large amount of space and offers customers a variety of products. read more
Buy
Buy is a term used to describe the purchase of an item or service that's typically paid for via an exchange of money or another asset. read more
Consumer Discretionary
Consumer discretionary is an economic sector comprising non-essential products that individuals may only purchase when they have excess cash. read more
Consumer Goods Sector
The consumer goods sector is a category of stocks and companies that relate to items purchased by individuals and households for their own use. read more
Consumer Goods
Consumer goods are the products purchased by the average consumer. read more
Consumer Cyclicals
Consumer cyclicals are stocks of companies making consumer products that are greatly influenced by the ebbs and flows of the business cycle. read more
Consumer Price Index (CPI)
The Consumer Price Index (CPI) measures the average change in prices over time that consumers pay for a basket of goods and services. read more
Consumer Staples
Consumer staples are an industry sector encompassing products most people need to live, regardless of the state of the economy or their financial situation. read more