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2018-19 State of the Self-Service Laundry Industry (Part 2)

58.1% of store owners saw higher drop-off service biz in 2018

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.

NO DROP-OFF IN DROP-OFF

Drop-off service has been trending upward in recent years. While popular again in 2018, the share of operators seeing increased business in that category was high but not quite as high as the prior year.

Roughly 58% of operators reported that drop-off service business (in gross dollar volume) increased for them in 2018, compared to 68% in 2017, 61% in 2016 and 52% in 2015.

The average increase in drop-off service business last year was 29.8%, compared to 26.1% in 2017, 18% in 2016 and 52% in 2015.

Just shy of 10% of respondents saw a decrease in drop-off business. That compares to 16% in 2017, 6.5% in 2016 and 15% in 2015.

The average decline in drop-off service business in 2018 was 17.3%. This compares to 2017’s 7.8%, 2016’s 15% and 2015’s 16%. Other previous average declines have been 11.3% in 2014, 9.0% in 2013, 18.1% in 2012, 18.1% in 2011, and 24.2% in 2009.

Roughly 32% of respondents say their 2018 drop-off business was unchanged from the previous year. That compares to 16% for 2017, 35% for 2016 and 36% for 2015.

DROP-OFF PRICING

Current drop-off pricing (in dollars per pound) ranges from $1 to $2.50, 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. $1.00 (29.6%)

2. $1.25 (18.5%)

3. (tie) $1.20 and $1.50 (14.8%)

Overall prices for drop-off service remain consistent with previous years’ surveys. In total, 10 different drop-off prices were reported in this year’s survey (compared to 14 reported in last year’s poll).

Roughly 57% of operators who took the annual survey offer drop-off service, compared to the 54% who responded to last year’s poll.

COMMERCIAL BUSINESS

Among store owners who offer commercial laundry services, 37.0% reported that business (in gross dollar volume) increased for them in 2018. The average increase was 12.6%.

Just shy of 8% of respondents saw a decrease in this category. The average drop in business was 15.0%.

Roughly 56% of respondents say their 2018 commercial laundry business was unchanged from the previous year.

TURNS PER DAY

Turns per day refers to the number of cycles (turns) that each of a store’s washers completes daily. For each machine class (top loader or front loader), you can calculate this using total cycles for a one-week period divided by total number of machines in the class, then dividing by seven.

Currently, the average turns per day for top loaders amongst respondents is 3.5, up slightly from last year’s survey (3.2). For front loaders, the average number is, coincidentally, also 3.5 turns per day, down from last year’s survey (3.9).

VENDING VITALS

Although fewer respondents reported seeing better vending sales business (in gross dollar volume) in 2018, the average increase was greater than the previous year.

Roughly 56% of respondents reported their sales increased in 2018, a slight dip from the 60% who reported increases in 2017. Slightly more than 10% reported a decline in vending sales in 2018, compared to 12% for 2017. Operators reporting no change in vending sales for 2018 accounted for 33.3%, compared to 28.1% in the prior year’s survey.

The average vending sales increase was 14.3%, up from 2017 (12.7%). The average decrease in 2018 was 6.9%, compared to 12.3% reported for 2017.

Coming in Part 3 on Tuesday: Washer and dryer vend pricing

Miss Part 1? You can read it HERE.