Coin-operated Laundries
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 9,500 coin-operated laundries in the US operate facilities with coin-operated or similar self-service laundry and dry cleaning equipment or supply and service equipment in other locations, such as apartments and dormitories. Some operators offer drop-off laundry services and some facilities offer a snack bar, coffee shop, or Wi-Fi access to occupy customers as they wait. Coin-operated laundries are also known as coin-op laundries, self-service laundries, and laundromats.
Dependence on the Rental Market
The coin-operated laundry business is highly dependent on the apartment rental market and occupancy rates.
Capital-Intensive Operations
The coin-operated laundry business is capital intensive and requires firms to regularly invest to maintain and replace equipment and implement new technology.
Industry size & Structure
The average coin-operated laundry operates out of a single location, employs about 4 workers, and generates about $500,000 annually.
- The coin-operated laundry industry consists of about 9,500 firms that employ about 41,000 workers and generate about $4.8 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 41% of industry revenue.
- Large firms, such as CSC ServiceWorks and Wash Multi-Family Laundry Systems, typically operate coin laundries in multi-unit housing settings, such as apartment complexes and dormitories.
Industry Forecast
Coin-operated Laundries Industry Growth
Recent Developments
Mar 12, 2024 - Inflation Remains Leading Issue
- Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
- According to the Institute for Supply Management, the ISM Services PMI showed growth in January 2024, marking the 13th consecutive month that the index remained above the baseline for growth. The report tracked the performance of 18 service sectors, out of which 10 showed gains in January. These sectors include Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Professional, Scientific & Technical Services; Public Administration; Utilities; Accommodation & Food Services; Construction; Other Services; Educational Services; and Management of Companies & Support Services. The “Other Services” category includes a range of industries including laundry and dry cleaning services. Seven sectors reported a decrease in January, including Information; Retail Trade; Real Estate, Rental & Leasing; Mining; Arts, Entertainment & Recreation; Wholesale Trade; and Finance & Insurance. The Services PMI report is based on data from purchasing and supply executives nationwide compiled by the ISM.
- Laundromat operators 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.
- Challenging housing conditions caused by high home prices and elevated mortgage rates generally favor the laundromat industry by creating a growing market of renters, who drive demand for laundromats. Existing home sales are expected to decline by 19% in 2023 over 2022 and remain flat in 2024, according to the 2024 Housing Forecast from Realtor.com. First-time homeowners accounted for 32% of all home sales in 2023, up from the record-low 26% in 2022, according to the National Association of Realtors. First-time homebuyers in 2023 had household incomes that were $25,000 higher than last year and were more likely to use financial assets to enter the market. A key demographic for laundromats, renters typically have limited access to laundry equipment where they live.
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