2016-2017 State of the Self-Service Laundry Industry (Part 1)

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(Photo: © iStockphoto/Rasica)

Bruce Beggs |

Annual analysis reflects vended laundry strength

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.

KNOW YOUR AUDIENCE

Before getting into the dollars and cents, let’s examine the characteristics of those polled and their operations.

Roughly 54% of respondents own just one self-service laundry, while 45.8% are multi-store owners (31.9% of total respondents own two or three stores, 13.9% own four or more stores).

Approximately 40% of respondents own their store space, 48% rent their store space, and the remaining 12.3% say the arrangement varies by property.

Fully attended stores among the audience account for 38.4%. Roughly 33% are partially attended. The remaining 28.8% are unattended.

Nearly 92% of laundry owners employ either full- or part-time workers in their stores. Roughly 61% of those respondents have four or more employees, while 29.4% employ two or three. The remaining 10% have only one employee.

On average, responding store owners have 1.3 full-time employees and 6.0 part-time employees (this calculation reflects averages by respondent, not by store).

Roughly 71% of respondents operate coin-only stores, 5.6% operate card-only stores, and 23.6% offer both, according to the survey results.

2016 BUSINESS VS. 2015

For 2016, 61.1% of operators say their overall vended laundry business increased from that of 2015. Specifically, these operators reported an increase in business (gross dollar volume) last year compared to 2015.

In last year’s survey, 71.4% of respondents reported an increase, while 58.8% reported seeing sales growth in the survey prior.

The average 2016 business increase was 11.2%, up from 9.6% in 2015. Other past average business increases were 8.9% (2014), 9.6% (2013), 11.7% (2012), 11.5% (2011), 10.8% (2010), 7.9% (2009) and 14% (2008).

Following is a breakdown of 2016 business increases (the figures relate to those reporting increases, not all respondents):

  • Operators with a business increase of less than 10%: 52.3%
  • Operators with a business increase of 10-14%: 22.7%
  • Operators with a business increase of 15% or more: 25.0%

Roughly 22% of operators faced a decrease in business (in gross dollar volume) in 2016, down from approximately 17% in 2015. The percentage was 29% in 2014, 25% in 2013, 30% in 2012, 35% in 2011, 58% in 2010 and 59.8% in 2009.

The average business decrease in 2016 was 9.1%, a sizable drop from 16.3% in 2015. Prior average decreases were 6.6% in 2014, 8.7% in 2013, 9.5% in 2012, 10.2% in 2011, 11.2% in 2010, 13.7% in 2009 and 14.3% in 2008.

Here’s a closer look at 2016 business decreases (again, the figures relate to those reporting decreases, not to all respondents):

  • Operators with a reduction of less than 10%: 62.5%
  • Operators with a reduction of 10-14%: 6.3%
  • Operators with a reduction of 15% or more: 31.3%

About 18% of respondents say 2016 business was unchanged compared to 2015 business.

These figures continue to reflect a strong industry, on average. While the percentage of respondents reporting an overall increase in business in 2016 was about 10 points lower than last year’s survey, the average business increase was greater than the previous year’s for the second straight year.

And while the share of responding operators who saw 2016 business decline was about 6 points higher than 2015’s accounting, the average business decrease in 2016 of 9.1% was significantly less than the 16.3% reported in 2015.

DROP-OFF DIRECTION

Drop-off service—making the most of customers’ desire for convenience—ticked upward again. Roughly 61% of operators reported that drop-off service business (in gross dollar volume) increased for them in 2016, compared to 52% in 2015 and 18% in 2014.

The average increase in drop-off service business last year was 18%, up from 2015’s 13.7% and 2014’s 12.3%.

Just 6.5% of respondents saw a decrease in drop-off business, which is 8.5 percentage points lower than 2015’s 15% and 20.5 points lower than 2014’s 27%.

The average decline in drop-off service business in 2016 was 15%, compared to 16% in 2015. Previous average declines were 11.3% in 2014, 9.0% in 2013, 18.1% in 2012 and again in 2011, 18.8% in 2010, and 24.2% in 2009.

Roughly 35% of respondents say their 2016 drop-off business was unchanged from the previous year. That’s compared to 36% for 2015 and approximately 55% for 2014.

DROP-OFF PRICING

Current drop-off pricing (in dollars per pound) ranges between $0.80 and $1.85, based on the survey responses.

Following is a breakdown of the most popular drop-off service prices (per pound), followed by the percentage of operators who use them:

  1. $1.25 (32.5%)
  2. $1 (25%)
  3. (tie) Multiple between $0.95 and $1.50 (5% each)

Overall prices for drop-off service remain consistent with previous years’ figures. In total, 14 different drop-off prices were reported in this year’s survey.

Roughly 55% of operators who took the annual survey offer drop-off service, compared to the approximately 51% in last year’s poll.

GONE COMMERCIAL

Among store owners who offer commercial laundry services, 46% reported that business (in gross dollar volume) increased for them in 2016. The average increase was 20.1%.

About 11% of respondents saw a decrease in this category. The average drop in business was 25.5%.

Roughly 43% of respondents say their 2016 commercial laundry business was unchanged from the previous year.

VENDING VERDICT

Vending sales business (in gross dollar volume) for 2016 ticked slightly downward when compared to 2015 reporting. Approximately 38% of respondents reported their sales increased in 2016, which matches the percentage of respondents in this group for 2015. But 19% reported a decline in vending sales business for 2016, compared to 10% for 2015. Operators reporting no change in vending sales for 2016 accounted for 44.8% of respondents, compared to 52.5% in the prior year’s survey.

The average vending sales increase was 11.9%, down slightly from 2015 (11.2%). The average decrease in 2016 was 10.3%, compared to 15.5% reported for 2015.

Check back Thursday for Part 2, including trends in wash/dry pricing

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

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