CHICAGO — Most of us have never experienced a year like 2020. The coronavirus pandemic gripped the world and COVID-19 became a part of our daily lives. And as you’ll see in this annual State of the Industry Survey report, the self-service laundry business wasn’t immune to its economic impact.
We have to go back more than a decade, to our 2009-10 survey following the Great Recession, to find certain industry performance numbers as low.
But there’s reason to hold out hope, to believe the decline is a “blip” caused by a pandemic that government and healthcare officials are striving to end sometime this year. Many respondents to this year’s survey say their business performance will improve in 2021.
American Coin-Op’s annual State of the Industry survey report provides a litany of statistics valuable to store owners and investors. This year’s survey focused on 2020-21 business conditions, pricing, equipment, turns per day and utilities cost.
When asked about their 2020 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 comparisons to results of that vintage.
The survey is 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 2020
Slightly less than 46% of respondents purchased at least one piece of equipment (washer, dryer, water heater, vending machine, or other) in 2020, which is basically identical to the 2019-20 survey.
Following is a breakdown of 2020 purchases by respondent. (Editor’s note: Percentages do not total 100% because some buyers purchased equipment in multiple equipment categories.)
- 3.3% purchased at least one top loader, with the average buy being 11.0 machines.
- 32.2% of respondents purchased at least one front loader, with the average buy being 15.1 machines.
- 23.7% purchased at least one dryer (regular or stack), with the average buy being 17.2 machines.
- 10.2% purchased a water heater.
- 10.2% purchased a vending machine.
Card systems, a storage tank, water softener and an ATM were also listed as having been purchased.
2021 SHOPPING LIST
Operators were asked if they have purchased, or plan to purchase, new equipment in 2021.
Approximately 34% of respondents plan to add or have added some type of equipment (washer, dryer, water heater, vending machine, or other) to their mix in 2021. By comparison, that figure was 36% in last year’s survey.
Following is a breakdown of purchases operators have already made in 2021, or plan to make by the end of the year (percentages do not total 100% because some buyers purchased or plan to purchase equipment from multiple equipment categories):
- 10.2% of respondents have purchased, or plan to purchase, a new top loader this year, with the average buy being 4.5 machines.
- 23.7% of respondents have purchased, or plan to purchase, a new front loader this year, with the average buy being 15.3 machines.
- 11.9% of respondents have purchased, or plan to purchase, a new dryer this year, with the average buy being 17 machines.
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 apply.
Here are the results:
1. High cost of utilities (52.2%)
2. Finding/keeping good employees (49.2%)
3. Labor costs (30.5%)
4. Maintenance costs (28.8%)
5. Equipment abuse/vandalism, and rental costs (tie, 25.4%)
7. Too much competition (20.3%)
8. Other (13.6%)
9. Poor industry image (6.8%)
Operators were asked about their 2020 utilities cost (as a percentage of gross). The responses ranged from 5% to 55%. Collectively, respondents paid an average of 19.9% for utilities (as a percentage of gross), down slightly from 20.4% last year.
The most common individual response was 20%. Whereas 60.3% of respondents reported a utilities cost of 20% or less last year, 69% reported the same this year.
For many operators, utilities account for their largest store expense, second only to rent; 60.7% 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), while 66.7% place rent there. Meanwhile, insurance is the smallest store expense, numbered four or five on the list by 78.6%.
FORECAST FOR 2022
Roughly 64% of respondents are optimistic and believe their 2021 total business will be better than 2020’s. Nearly 29% expect business to be about the same, while 6.8% say their business won’t perform as well in 2021 as it did in 2020.
If you missed any earlier parts, you can read them here:
Audience breakdown; 2020 business vs. 2019 — Part 1
Drop-off, commercial and vending sales numbers; average turns per day — Part 2
Washer and dryer vend pricing trends — Part 3