CHICAGO — Do you wonder how your self-service laundry business measures up to others in the industry? Did you have a “good” year or a “bad” year in 2016? Is your pricing comparable with others?
You can find the answers to questions like these and more in American Coin-Op’s annual State of the Industry survey. Its results offer store owners and operators a valuable opportunity to compare their operation to others in the industry.
This year’s survey focused on 2016-17 business conditions, pricing, equipment, common challenges, turns per day, and utilities cost.
When asked about their 2016 business results, they were given the opportunity to state whether their results were up, down or unchanged. This is a departure from surveys compiled in 2011 and earlier, when respondents were asked only if their business was up or down. Keep this in mind as you’re making comparisons to previous years’ results.
The survey was an unscientific, online poll of American Coin-Op subscribers who operate stores. Some percentages may not equal 100% due to rounding or other factors.
What do you think are the biggest challenges facing your self-service laundry? In the annual survey, American Coin-Op provided a list of eight, plus the opportunity to write in “other” choices, and asked operators to select all that they thought applied.
Here are the results (remember, respondents could pick any or all from the list):
1. High cost of utilities (68.5%)
2. Labor costs, and finding/keeping good employees (tie: 35.6%)
4. Rental costs (31.5%)
5. Maintenance costs (28.8%)
6. Equipment abuse/vandalism (23.3%)
7. Too much competition (20.6%)
8. Other (15.1%); marketing, security, and time management were mentioned
9. Poor industry image (11.0%)
TURNS PER DAY
Turns per day refers to the number of cycles (turns) that each of a store’s machines completes each day. For each machine class (top loader or front loader), you can calculate it using total cycles for a one-week period divided by the total number of machines in the class, then dividing that number by seven.
Currently, the average turns per day for top loaders amongst respondents is 3.6, down slightly from last year’s survey (3.8). For front loaders, the number is 3.8, also down from last year’s survey (4.1).
Operators were asked about their 2016 utilities cost (as a percentage of gross). The responses ranged from 8% to 36%.
Collectively, they paid an average of 21.7% for utilities (as a percentage of gross), down slightly from 20.2% last year.
There was a tie for the most common individual response: 25% or 30% (most common in last year’s survey was 20%). Whereas nearly 63% of respondents reported a utilities cost of 20% or less last year, just 38.4% reported the same this year.
For many operators, utilities account for their largest store expense; 77.8% of respondents place it either first or second on their list of five common expenses (rent, utilities, payroll, insurance, and loan payment on new equipment). Meanwhile, insurance is the smallest store expense, numbered four or five on the list by 76% of those polled.
FORECAST FOR 2017
More than 65% of respondents are optimistic that their 2017 total business will be better than 2016’s. Roughly 30% expect business to be about the same, while just over 4% say it will not perform as well in 2017 as it did in 2016.
Miss earlier parts of our analysis? Here you go:
Part 1: 2016 overall business vs. 2015; breakdowns of drop-off, commercial laundry and vending business
Part 2: Vend prices for wash and dry
Part 3: 2016 equipment purchases and what operators will be shopping for this year
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].