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2019-20 State of the Self-Service Laundry Industry (Conclusion)

36% of respondents say they plan to acquire new equipment in 2020

CHICAGO — How do you know if you stack up favorably with other laundry owners across town and around the country? Would you consider 2019 a good year or bad year for you? Are your vend prices in line with those of other store owners?

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

This year’s survey focused on 2019-20 business conditions, pricing, equipment, turns per day and utilities cost.

(Special note: Polling was conducted prior to the March 13 coronavirus pandemic emergency declaration and related work-from-home and other measures that followed that may have adversely impacted laundry business volume.)

When asked about their 2019 business results, respondents were given the opportunity to state whether their results were up, down or unchanged. Surveys conducted prior to 2012 asked respondents only if their business was up or down, so keep this in mind if you’re making comparions to results of that vintage.

The survey is an unscientific, online poll of American Coin-Op subscribers who operate stores. Some percentages may not equal 100% due to rounding or other factors.

PURCHASED IN 2019

Slightly less than 46% of respondents purchased at least one piece of equipment (washer, dryer, water heater, vending machine, or other) in 2019, down from 48% the prior year.

Following is a breakdown of 2019 purchases by respondent. (Editor’s note: Percentages do not total 100% because some buyers purchased equipment in multiple equipment categories.)

  • 10.2% purchased at least one top loader. The average purchase was 5.0 machines per operator.
  • 23.7% of respondents purchased at least one front loader. The average purchase was 9.5 machines per operator. (Editor’s note: A single-owner purchase of 76 machines was not included when calculating the average.)
  • 11.9% purchased at least one dryer (regular or stack). The average purchase was 6.7 machines. (Editor’s note: A single-owner purchase of 86 machines was not included when calculating the average.)
  • 5.1% purchased a water heater.
  • 15.3% purchased a vending machine.

Changers, card readers, a water pressure pump and a ozone system were also listed as having been purchased.

2020 SHOPPING LIST

Operators were asked if they purchased, or plan to purchase, new equipment in 2020.

Approximately 36% 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 2020. By comparison, last year’s percentage was 44%.

Following is a breakdown of purchases operators have already made in 2020, or plan to make by the end of the year: (Editor’s note: Percentages do not total 100% because some buyers purchased or plan to purchase equipment in multiple equipment categories.)

  • 11.9% of respondents have purchased, or plan to purchase, a new top loader this year. The average is (or will be) 6.6 machines per operator.
  • 25.4% of respondents have purchased, or plan to purchase, a new front loader this year. The average is (or will be) 7.0 machines per operator. (Editor’s note: A single-owner purchase of 40 machines was not included when calculating the average.)
  • 13.6% of respondents have purchased, or plan to purchase, a new dryer this year. The average is (or will be) 12.5 machines per operator.

BIGGEST CHALLENGES

What would you say are your biggest challenges in operating your self-service laundry? American Coin-Op offered a list of eight, plus the chance to write in “other” choices, and asked operators to select all that applied.

Here are the results:

1. High cost of utilities (57.1%)

2. Rental costs (37.5%)

3. Finding/keeping good employees (34.0%)

4. Labor costs, and maintenance costs (tie, 32.1%)

6. Equipment abuse/vandalism, and too much competition (tie, 19.6%)

8. Other (10.7%)

9. Poor industry image (5.4%)

UTILITIES COST

Operators were asked about their 2019 utilities cost (as a percentage of gross). The responses ranged from 9.2% to 50%. Collectively, respondents paid an average of 20.4% for utilities (as a percentage of gross), down slightly from 21.7% last year.

The most common individual response was 20%. Whereas 57.8% of respondents reported a utilities cost of 20% or less last year, 60.3% reported the same this year.

For many operators, utilities account for their largest store expense; 69.2% of respondents place it either first or second on their list of five common expenses (rent, utilities, payroll, insurance, and loan payment for new equipment). Meanwhile, insurance is the smallest store expense, numbered four or five on the list by 74.1% of those polled.

FORECAST FOR 2020

(Reminder: Polling was conducted prior to the March 13 coronavirus pandemic emergency declaration and resulting measures impacting business.)

Roughly 58% of respondents are optimistic that their 2020 total business will be better than 2019’s. Nearly 34% expect business to be about the same, while 6.8% say their business will not perform as well in 2020 as it did in 2019.

Miss previous parts of this story? You can read them here:

Part 1 — Audience breakdown; 2019 business vs. 2018

Part 2 — Drop-off, commercial and vending sales numbers, and the average turns per day

Part 3 — Washer and dryer vend pricing