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2018-19 State of the Self-Service Laundry Industry (Part 1)

Annual analysis reveals plenty of positives

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 and 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.

AUDIENCE BREAKDOWN

The dollars and cents can wait for a minute. Let’s examine the characteristics of those polled and their operations.

Roughly 56% of respondents own just one self-service laundry, while 44.5% are multi-store owners (20.4% of total respondents own two or three stores, 24.1% own four or more stores).

Approximately 44% of respondents own their store space, 35.2% rent their store space, and the remaining 20.4% say the arrangement varies by property.

Fully attended stores among the audience account for 35.2%. Roughly 26% are partially attended, and 20.4% are unattended. Among the remaining 18.5%, the arrangement varies by store.

Nearly 91% of laundry owners polled employ either full- or part-time workers in their stores. Roughly 60% of those respondents have four or more employees, while 20.8% employ two or three. The remaining 18.8% have only one employee.

On average, responding store owners have 3.1 full-time employees and 8.4 part-time employees (this calculation reflects averages by respondent, not by store).

As for payment types, 88.9% of respondents say they offer coin, 33.3% offer card, and 14.8% offer other non-coin systems (store owners were asked to identify every type that applies to their operations). Roughly 31% of respondents offer customers more than one method of payment.

2018 BUSINESS VS. 2017

For 2018, 81.5% of operators say their overall vended laundry business increased from that of 2017. Specifically, these operators reported an increase in business (gross dollar volume) last year compared to 2017.

In our 2017-2018 survey, 77.5% reported an increase, while 61.1% reported seeing sales growth in the survey prior.

The average 2018 business increase was 9.9%, down from 9.4% in 2017. Other past average business increases have been 11.2% (2016), 9.6% (2015), 8.9% (2014), 9.6% (2013), 11.7% (2012), 11.5% (2011), 10.8% (2010), and 7.9% (2009).

Following is a breakdown of 2018 business increases (the figures relate to those reporting increases, not all respondents):

  • Operators with a business increase of less than 10%: 45.5%
  • Operators with a business increase of 10-14%: 29.5%
  • Operators with a business increase of 15% or more: 25.0%

Just shy of 8% of operators faced a decrease in business (in gross dollar volume) in 2018, down from 10% in 2017. The percentage was 22% in 2016, 17% in 2015, 29% in 2014, 25% in 2013, 30% in 2012, 35% in 2011, 58% in 2010, and 59.8% in 2009.

The average 2018 business decrease in 2018 was 5.0%, less than the 6.7% average decline reported for 2017. Other prior average decreases have been 9.1% (2016), 16.3% (2015), 6.6% (2014), 8.7% (2013), 9.5% (2012), 10.2% (2011), 11.2% (2010), and 13.7% (2009).

Among respondents who reported experiencing business decreases in 2018, none of the individual declines were greater than 7%.

Slightly more than 11% of respondents say their 2018 business was unchanged compared to 2017 business.

Based on these survey results, the self-service laundry industry is, on average, quite healthy. The average business increase was half a percentage point higher than the year before, and the share of operators who enjoyed a better gross dollar volume was four percentage points higher.

The share of responding operators who saw 2018 business decline was a little more than 2% less than 2017’s accounting, plus the average business decrease in 2018 of 5.0% was less than the 6.7% reported for 2017.

Coming in Part 2 on Thursday: Drop-off, commercial and vending sales numbers, and the average turns per day