Carpet and Upholstery Cleaners

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 7,000 firms in the US primarily clean rugs, carpets, and upholstered products, typically on-site at the customer’s premise. Residential customers account for 85% of sales, while commercial customers account for about 15% of sales. Firms may also offer damage restoration, janitorial and custodial, hard surface floor cleaning, water damage restoration, and auto detailing services.

Sensitivity to Economic Factors

Carpet and upholstery cleaning is a discretionary expense and a service that is easy to delay when finances are tight.

Industry Contraction

The carpet and upholstery cleaning industry has contracted over time, as has the size of the carpet market.

Industry size & Structure

The average carpet and upholstery cleaner operates out of a single location, employs about 5 workers, and generates about $670,000 annually.

    • The carpet and upholstery cleaning industry consists of about 7,000 firms that employ about 36,000 workers and generate about $4.7 billion annually.
    • The industry is fragmented; the top 50 companies account for about 23% of industry revenue.
    • Franchises account for about 19% of the industry. Major franchise operators include Stanley Steamer, Chem-Dry, and ServiceMaster.
    • Most firms operate within a limited geographical market; in an industry survey by Cleanfax, 95% of respondents serviced a 200-mile area.
    • Carpet and area rugs account for about 30% of the US flooring market, according to Floor Covering News.
                                  Industry Forecast
                                  Carpet and Upholstery Cleaners Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 12, 2024 - Growth Projected for Contract Cleaners
                                  • A new report from Technavio found that the contract cleaning services market is expected to grow by over $164 million at an annual CAGR of nearly 7% from 2022 to 2027, according to Cleanlink.com. North America is projected to account for a 35% share of the global market growth, primarily due to increased construction activities and enhanced service offerings. Contract commercial cleaning firms often include commercial carpet cleaning services. Greater demand from the commercial sector, in particular the health care and hospitality segments, is expected to drive the growth of the contract cleaning services market.
                                  • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                                  • Nearly 20% of office space in major US cities was not leased as of Q4 2023, with the continuing popularity of remote work and a long-standing oversupply contributing to higher vacancy rates, according to Moody’s Analytics data in the Wall Street Journal. The 19.6% vacancy in the fourth quarter of 2023 was slightly higher than the 18.8% a year ago and is the highest vacancy rate since 1979. The top three US cities with the highest office vacancy rates in Q4 were all in Texas: Houston, Dallas, and Austin. Some industry analysts think the higher vacancy rate could linger due to the continuing popularity of working from home. Office occupancy levels are a demand indicator for cleaning services.
                                  • Carpet and upholstery cleaners will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
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