CHICAGO — Four years have passed since American Coin-Op last polled the industry on raising vend prices and the primary factors behind such hikes have changed little.
Helping to offset utility costs is the primary reason why the majority of coin laundry operators polled (63.8%) make the decision to raise their store’s vend prices, according to results of the latest Your Views survey.
Other operators boost prices primarily because they “want to generate more revenue” (12.8%), to “afford new equipment” (8.5%), or because their store “has the lowest price in my area” (6.4%). Equal shares of 4.3% say they “just raise prices every so often” or for “other” reasons, including that it’s “never one reason” behind the decision to raise prices.
More than 70% of operators “don’t publicize price hikes in any fashion.” Seventeen percent let their customers know about price increases and their reasons behind them. Roughly 13% “make minimal effort to announce a price hike.”
Nearly 90% have raised washer prices this year, or intend to do so before 2023. Just 2.1% of operators polled have not raised their prices nor intend to do so, and the remaining 8.5% are unsure about what they’ll do.
Regarding dryer prices, 53.2% of respondents have raised their prices or intend to do so before 2023. Roughly 36% have not raised prices nor intend to do so, and the remaining 10.6% are not sure what they’ll do.
When raising either machine category’s price, the increase was generally 25 or 50 cents, based on individual respondent responses, but at least one respondent reported increasing their vend price by $2. Some respondents chose only to increase washer prices. Related to dryers, some operators didn’t change the vend price but instead reduced the number of minutes in a cycle to produce the desired result.
Half of respondents expect to lose no customers when they raise prices, 47.8% predict their customer loss to be 1-10%, and just 2.2% predict losing 11-20%. No one who took the survey believes they will lose more than 20% of customers from raising prices.
Finally, the survey asked store owners for their general philosophy about raising vend prices, and whether they found it easy or hard to take that action. Here are some of the responses:
- “It’s very hard. Most customers know I only do it because I have to, to stay in business. And to keep my employees, who most customers like, making a decent living.”
- “Easy because everything is going up. There is a strong chance of utilities to go up high and it is better to step raise, if necessary, than to work at a loss, lose good people, let the shop fall into disrepair, and stop growing.”
- “I always worry about the increase. Is it enough or too much? Always feel better when done and two weeks down the road, revenue is up.”
- “My costs normally go up every year, so I already plan small increases in some washers each year. However, utility costs have skyrocketed this year. I’ve had to do several across-the-board price increases to try and keep up.”
- “It’s a hard decision to make if I’m not giving anything of value in exchange for higher prices. So whenever I do any retooling, building updates and so on, it’s very easy to justify large price increases, but if we do nothing, it’s hard for me to make that choice.”
- “It is only hard because I am the price leader in my area. When your competitors haven’t raised prices in over two years and we have had two increases and another is needed, it is a little scary.”
- “The decision makes itself. When operating costs go up, I do not have a choice. If I am not making enough to replace the machines in a few years, why keep the doors open?”
American Coin-Op’s Your Views survey presents an unscientific snapshot of the trade audience’s viewpoints. Percentages may not add up to 100% due to rounding.
Subscribers to American Coin-Op emails are invited to participate anonymously in an industry survey each quarter. The entire trade audience is encouraged to participate, as a greater number of responses will help to better define owner/operator opinions and industry trends.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].