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Distributors Remain Optimistic (Part 1 of 2)

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(Photo: ©iStockphoto.com/porcorex)

Bruce Beggs |

CHICAGO — Upon studying the results of this year’s American Coin-Op distributor survey, there are reasons to be optimistic about the state of the self-service laundry industry.

Nearly half of respondents said business was better in 2010 than it was in 2009. Better yet, nearly two-thirds of respondents predict that 2011 business will be better than 2010.

Every distributor listed in the American Coin-Op Distributors Directory prior to June 1 was invited to participate in the unscientific survey.

2010 BUSINESS

Last year was a bounce-back year for many distributors, based on the survey results. Forty-six percent of respondents said business (sales of newly constructed stores plus replacement business) was better in 2010 than 2009. Approximately 21% said business was worse in 2010 than 2009, and 32.1% said business was comparable in both years.

In the 2010 survey covering 2009 business, only 15.6% said business was better in 2009 than 2008, while 49% said business was worse in ’09 than ’08.

For those experiencing a change in business in 2010, the No. 1 reason, by far, was the economy. But it’s interesting that it was cited either as a positive or a negative, depending on the respondent.

Those who thrived saw investors who were inspired by upticks in the economy, or who chose to look into the coin laundry business after losing their jobs.

Distributors whose business suffered in 2010 lamented over changing demographics, tight lending/lack of financing, and potential investors unwilling to spend. One businessman partly blamed his company’s downturn on the BP oil spill.

REPLACEMENT BUSINESS

Replacement-business figures also showed signs of improvement from our report one year ago. In replacement business only, 39.3% of respondents said business was up last year compared to 2009. That’s compared to 20% who saw their replacement business increase from 2008 to 2009.

Roughly 29% saw replacement business fall in 2010, and 32.1% said their level of replacement business was unchanged from 2009.

The figures in this category have proven to fluctuate over the last several years. In the 2009 survey for 2008 business, 40% of respondents saw replacement business rise, and only 29% saw business dip.

NEW-LAUNDRY CONSTRUCTION

American Coin-Op asked distributors how many new laundries they built and/or to whom they supplied equipment in 2010. Fifty-six percent of respondents built or supplied equipment to three or fewer new laundries. In the 2010 survey for 2009 business, this figure was 62%.

How many new laundries are distributors dealing with in some fashion? Here are the most popular answers from this year’s survey:

  1. 2
  2. 0
  3. 1
  4. 4
  5. 5

Distributors were also asked if their 2010 new-construction total was more, less or the same when compared to 2009. Nearly 41% said new construction was up in 2010 (by comparison, that figure was only 14% in the 2010 survey for 2009 business), 37% percent said new construction was down, and 22.2% said new construction was the same in 2010 and 2009.

EQUIPMENT MIX

How to equip a store is a critical decision for an owner. Generating revenue is vital to an operation’s success, but overcrowding with equipment can be a detriment.

Fifty-four percent of the new stores had at least one top loader, down just a bit from last year’s figure (62%). (It should be noted that a handful of respondents chose to skip the top-loader question when taking our online survey, so the figure may be even a bit lower than 54%. It’s possible some respondents didn’t install any top loaders, and skipped the question as a result.)

More specifically, here are the most popular numbers of top loaders put into new stores in 2010:

  1. 0
  2. 6
  3. 5
  4. 10
  5. 12

Newly constructed laundries in 2010 have 3.8 top loaders. (This figure factors in the stores with no top loaders.)

Here are the most common numbers of front loaders installed in newly constructed laundries last year:

  1. 40
  2. 30
  3. 15
  4. 12
  5. 37

Newly constructed laundries in 2010 have an average of 26.9 front loaders. This is down only slightly compared to last year’s figure (27.3).

The average newly constructed laundry in 2010 has 32.1 dryer pockets. That’s compared to 32.6 dryer pockets in 2009.

Wednesday: Does size matter …

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

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