CHICAGO — It’s been a battle: the self-service laundry industry vs. the recession. Some might also dub it the recession-resistant industry vs. the recession. Whatever you want to call it, it’s clear that the recession has impacted the industry.While I thought this year’s survey story would be dominated by the economic data, there were other aspects of the survey that caught my attention. You may be surprised at what operators had to say about a variety of subjects.American Coin-Op’s annual State of the Industry survey focuses on 2009/2010 business conditions, pricing, equipment, common problems, turns per day and expenses. In addition, for the first time, we look at utilities cost as a percentage of gross revenue.The State of the Industry survey is a random, unscientific electronic mail poll of American Coin-Op readers who operate stores.2009 BUSINESS vs. 2008 BUSINESSIn 2009, less than half of the respondents saw a business increase when compared to 2008.More specifically, 40.2% of the operators report an increase in business (gross dollar volume) in 2009 compared to 2008. In last year’s survey, 46% of respondents reported an increase in business. Nearly 60% of respondents reported a business increase in 2007 over 2006.The average 2009 business increase is 7.9%, down from 14% last year. Other past increases were 12.2% (2007) and 8.1% (2006).Here’s a closer look at the 2009 business increases (these figures relate to those reporting an increase, not all the respondents):
- operators with a business increase of less than 10%: 57.6%;
- operators with a business increase of 10 to 14%: 23%; and
- operators with a business increase of 15% or greater: 19.4%.
The largest increase in 2009 was reported to be 21%.Just about six out of 10 operators (59.8%) saw a drop in business last year. In the past three surveys, an average of 44.6% suffered a business decrease.The average 2009 business decrease is 13.7%, similar to last year’s figure (14.3 %). In 2007, the figure was 13.2%, and in 2006 the number was 15.2%.The losses varied quite a bit. Here’s a closer look at the 2009 business decreases:
- operators experiencing a business reduction of less than 10%: 36.5%;
- operators experiencing a business reduction of 10 to 14%: 9.7%; and
- operators experiencing a business reduction of 15% or greater: 53.8%.
Twenty-nine percent of the operators who lost business had a reduction of at least 20%. The largest decrease is 40%.Overall, these figures are a bit higher than last year’s figures. Prior to last year’s survey, the 2005 survey (2004 numbers) was most similar in terms of business increases/reductions. In that survey, 53% of respondents reported a business decrease.DROP-OFF-SERVICE BUSINESSIn a variety of business correspondence about the recession’s effect on business, one thing stands out: drop-off-service business seemed to be mentioned more than any other subject.While some operators complained that customers cut down on laundry visits during the recession or overstuffed machines, there seemed to be more of a consensus regarding a reduction in drop-off-service business. In tough economic times, some operators said customers were finding drop-off service to be a bit of an extravagance.If the operator-cited drop-off-service woes are true, the survey numbers didn't reflect them. Forty-seven percent (47.3%) of respondents report an increase in drop-off-service business (gross dollar volume) in 2009. In last year’s survey, approximately half of the respondents reported an increase. However, two years ago, 63% reported an increase in business.The average drop-off-service business increase is 6%. In 2008, the average drop-off business increase was 13.5%.Fifty-three percent saw a decrease in drop-off-service revenue. The average decrease is 24.2%. Last year the figure was 20.6%. Only a small percentage of this year’s respondents (14%) offer some type of drycleaning service, and about a quarter of them saw an increase in business.VENDING RESULTSOnly 32% of respondents had an increase in vending sales in 2009, down from 2008’s 46%. The average vending gain is 7.5%, down a bit from last year’s 10.7%.The average decrease in vending business is 15.4%, nearly identical to the previous year (14.7%). This figure is somewhat inflated by those with large reductions in income.Check back next Friday for Part II of this story.