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2018-19 State of the Self-Service Laundry Industry (Conclusion)

44% of respondents say they plan to acquire new equipment in 2019

CHICAGO — Was 2018 a “good” year or a “bad” year for you? Is your pricing strategy in line with other store owners? Surely you chart the results of your self-service laundry business month by month. But how do you know if you stack up favorably with other laundry owners across town or around the country?

Answers to questions like these and more can be found in American Coin-Op’s annual State of the Industry survey, which offers store owners and operators a valuable opportunity to compare their operation to others in the industry.

This year’s survey focused on 2018-19 business conditions, pricing, equipment, common challenges, turns per day, and utilities cost.

When asked about their 2018 business results, respondents were given the opportunity to state whether their results were up, down or unchanged. This is a departure from pre-2012 surveys 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 readers who operate stores. Some percentages may not equal 100% due to rounding or other factors.

EQUIPMENT PURCHASED IN 2018

A little more than 48% of respondents purchased at least one piece of equipment (washer, dryer, water heater, vending machine, or other) in 2018, down from 50% in 2017.

Following is a breakdown of 2018 purchases by respondent. (Editor’s note: Percentages do not total 100% because some buyers purchased equipment in multiple equipment categories.):

  • 11.1% of respondents purchased at least one top loader. The average purchase was 10.6 machines per operator. (Editor’s note: A 200-machine purchase by a multi-store owner was not included when calculating the average purchase.)
  • 31.5% of respondents purchased at least one front loader. The average purchase was 9.5 machines per operator. (Editor’s note: Single-owner purchases of 150 and 146 machines were not included when calculating the average purchase.)
  • 20.4% of respondents purchased at least one dryer (regular or stack). The average purchase was 8.8 machines per operator. (Editor’s note: Single-owner purchases of 72 and 34 machines were not included when calculating the average purchase.)
  • 14.8% of respondents purchased a water heater.
  • 11.1% of respondents purchased a vending machine.

Changers and HVAC systems were also listed as having been purchased.

2019 SHOPPING LIST

Operators were asked if they purchased, or plan to purchase, new equipment this year.

Approximately 44% of respondents plan to add some type of equipment (washer, dryer, water heater, vending machine, or other) to their mix, or have already done so, in 2019. By comparison, last year’s percentage was 38%.

Following is a breakdown of purchases operators have already made in 2019, or plan to make by the end of the year. (Editor’s note: Percentages do not total 100% because some buyers purchased/plan to purchase equipment in multiple equipment categories.):

  • 5.6% of respondents have purchased, or plan to purchase, a new top loader this year. The average purchase is (or will be) 2.7 machines per operator.
  • 31.5% of respondents have purchased, or plan to purchase, a new front loader this year. The average purchase is (or will be) 7.1 machines per operator. (Editor’s note: Single-owner purchases of 300 and 134 machines were not included when calculating the average purchase.)
  • 18.5% of respondents have purchased, or plan to purchase, a new dryer this year. The average purchase is (or will be) 10.8 machines per operator. (Editor’s note: Two single-owner purchases of 72 machines each were not included when calculating the average purchase.)

BIGGEST CHALLENGES

What are your biggest challenges in operating your self-service laundry? In this year’s survey, American Coin-Op offered 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):

  • The high cost of utilities (64.8%)
  • Finding/keeping good employees (42.6%)
  • Labor costs (31.5%)
  • Rental costs (25.9%)
  • Maintenance costs (22.2%)
  • Other (18.5%)
  • Too much competition (16.7%)
  • Equipment abuse/vandalism (11.1%)
  • Poor industry image (3.7%)

UTILITIES COST

Operators were asked about their 2018 utilities cost (as a percentage of gross). The responses ranged from 10% to 65%. Collectively, respondents paid an average of 21.7% for utilities (as a percentage of gross), up slightly from 20.3% last year.

The most common individual response was 18%. Whereas 51.7% of respondents reported a utilities cost of 20% or less last year, 57.8% reported the same this year.

For many operators, utilities account for their largest store expense; 75.9% 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 84.3% of those polled.

FORECAST FOR 2019

Roughly 57% of respondents are optimistic that their 2019 total business will be better than 2018’s. About 35% expect business to be about the same, while roughly 7% say their business will not perform as well in 2019 as it did in 2018.

Here are links to earlier parts of this article:

Part 1 — Audience breakdown; 2018 business vs. 2017

Part 2 — Drop-off service/pricing; commercial business; turns per day; vending business

Part 3 — Washer and dryer vend pricing