CHICAGO — For the first time since 2014, the share of distributors reporting their business had improved year-to-year was larger than the prior year, according to the results of American Coin-Op’s annual Distributors Survey.
A majority of distributors is also expecting overall 2019 sales to surpass those of 2018.
More than half of distributors polled (56.3%) say that their total business—including sales of newly constructed vended laundries and replacement business—was better in 2018 compared to 2017.
When it comes to sales projections, an identical share (56.3%) believe their company’s 2019 overall sales will be better than 2018’s.
Approximately 19% of respondents say their 2018 business was worse than 2017’s, while 25.0% say that business has stayed the same.
Distributors listed in the American Coin-Op Distributors Directory were invited to participate in this year’s unscientific survey, which charts 2018 business and makes comparisons to previous years. In this three-part summary report, percentages may not add up to 100% due to rounding.
This year, 56.3% of distributors who were polled said business was better in 2018 than in 2017. That’s up from last year’s report in which 53.1% of distributors said 2017 business was better than 2016. The share of distributors reporting better business compared to the prior year was 63.6% in the 2017 survey, 67.4% in the 2016 survey and 68.3% in the 2015 survey.
Those who described their business in 2018 as being “better” attributed their company’s performance to the overall economy; availability of financing; equipment improvements and differentiation; and a greater market desire to retool older stores, among other factors.
The share whose business suffered in 2018 said factors like weakened demand, difficulty in finding good store locations, rental rates, government policies, and competition with other distributors in their area were at least partly to blame.
Slightly more than 58% of distributors polled say their replacement business was up in 2018 compared to 2017. This is about 10 points lower than last year’s survey in which just shy of 68% of distributors reported better 2017-to-2016 replacement business. By comparison, the share was 62% in the 2017 survey, 64% in the 2016 poll and 73.2% in the 2015 survey.
Roughly 13% of respondents say they saw 2018 replacement business decrease from that of 2017, while 29% say it remained unchanged.
American Coin-Op asked distributors to list the number of new laundries they built and/or to which they supplied equipment in 2018.
In this year’s survey, the share of distributors that built and/or supplied equipment to three or fewer stores in 2018 accounted for more than half of poll respondents: 58.6%. In comparison to previous surveys, that number was 62.1% in 2017, 48.8% in 2016, 40.5% in 2015, and 69.2% in 2014.
Companies building or supplying equipment to four or more new laundries in 2018 accounted for 41.4% of the total. In 2017, that number was 37.9%.
The actual number of new laundries that distributors were involved with in some way in 2018 ranged from just a single store to one respondent reporting his or her company dealt with 45 stores.
Following is a rundown of the most popular answers from this year’s survey:
Almost half of distributors surveyed (46.9%) said their new-construction total for 2018 was higher than the previous year. Comparing to previous surveys, 23.3% said their new-construction total was up for 2017; 33.3% said it was up for 2016; 35% said it was up for 2015.
Roughly 22% of distributors surveyed said their new-construction total was lower in 2018 than in 2017, which is down significantly from the 47% of distributors who said that total was lower in 2017 than 2016. Earlier surveys showed 29% with lower totals in 2016 than 2015, 24% with lower totals in 2015 than 2014, and 15% with lower totals in 2014 than in 2013.
Slightly more than 31% of distributors polled said their new-construction total for 2018 remained the same as 2017. That compares to 30% of distributors reporting no change for 2017 from 2016, 38% for 2016 from 2015, and 41% for 2015 from 2014.
In Part 2 coming Thursday: equipment mix and store size trends