Why is self storage seasonal?

Self storage is not something that is particularly seasonal, you might have thought. After all, many of its customers are dismissed in the public imagination as compulsive hoarders or decluttering obsessives, not traits which change with the weather.

Yet when you examine the data it becomes immediately apparent that the time of year does do something to affect self storage customers. Demand tends to be weakest at the start of the year, in January, and then reaches its zenith in June or July. Why should this be?

January blues

The obvious explanation for fewer people needing storage in January is that the things which make them need more space at other times of the year aren’t happening then.

The housing market is the biggest culprit here, as people moving house usually account for 40-50% of all self storage customers.

The expense and inconvenience of moving house over Christmas puts many people off, leading to a seasonal downturn in house prices that Nationwide estimates at 1.5%. This makes the market go through a traditional January trough, creating a curve which self storage tends to follow, before they both pick up again in the spring.

The slack in demand this creates isn’t usually picked up by business users of self storage either, because they often vacate their units in January.

This is because many are retail organisations who store their Christmas stock in the months leading up to December, but then sell it off and don’t come back until nearer the end of the year.

And the other big customer demographic, students, either move out of storage in October at the start of term and then don’t come back until May, or leave in January after renting space for the Christmas holidays. Either way, little new demand comes from them at the start of the year.

The summer boom

All these trends then reverse in summer, especially June and July, as the housing market reaches its annual peak, businesses get their Christmas stock in and students go off on holiday.

This tends to be the best time of year for getting new tenants signed up, and thus when prices are highest.

Most self storage firms flexibly adjust their prices and special offers throughout the year to give themselves a boost in periods of weak demand. One of the UK’s major brands explains in its annual report for 2009 that it combated the ‘weak trading environment’ in January with ‘aggressive promotions and discounting’.

Given that many of the larger firms’ offers defer paying full rent until the second or third month of tenancy, new customers who take them up are unlikely to leave until the warmer months have begun.

Picking your moment carefully

The obvious lesson to be learned from this is that a discerning customer can make big savings if they sign up at the right time.

This isn’t appropriate if the circumstances that make storage necessary aren’t in place during January; but for someone who makes a New Year’s resolution of decluttering, for example, the benefits are clear.

The same storage company mentioned above went on to explain that its price per square foot was reduced by £1.50 across all stores that January, saving anyone who rented more than 66 square feet at least a hundred pounds a year.

So the fact that demand for self storage is rather seasonal can clearly be of benefit to consumers. For those who take advantage of it, there are bargains to be found.

2 Responses to “Why is self storage seasonal?”

1. Shurgard home storage says:

   June 13, 2010 at 6:21 pm

   We also noticed the shift in demand due to seasonal influences. Especially the holidays are a main factor that influences this shift. Furthermore, the sporting season can also be seen as a factor.

   regards,

   Scott Manning

2. David says:

   June 15, 2010 at 11:20 am

   Thanks for the comment, Scott. In what ways exactly does demand change during holidays and the sporting season?