Dry Cleaning & Laundry Services
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 14,700 dry cleaners in the US provide services to clean and maintain clothing and home furnishings, such as drapes and bedspreads. Services are provided to both individual consumers and commercial accounts and include cleaning, alterations, and repairs. Most firms are independently owned, but may operate as franchisees of national chains.
Changing Regulations
Industry regulation of Perc (perchloroethylene) is continuing to become more stringent.
Green Cleaners as Market Opportunity
Some dry cleaners are using growing opposition to Perc as an opportunity to operate in a more environmentally-friendly way, and advertise their “green” status.
Industry size & Structure
An average dry cleaner has fewer than 10 employees and generates $440,000 in annual revenue.
- The US has about 14,700 firms with about $6.5 billion in annual revenue.
- The average establishment has over $100,000 worth of equipment, and spends around $7,000 a year on advertising.
- Dry cleaning establishments may be independently owned or operate as a franchise of a national chain.
- Segments include cleaning services for individuals and businesses, reselling, and alterations.
- Large companies include DryClean USA, Tide Cleaners, Comet Cleaners, and Martinizing Dry Cleaners.
Industry Forecast
Dry Cleaning & Laundry Services Industry Growth
Recent Developments
Oct 18, 2024 - Dry Cleaning Prices Up
- Prices for laundry and dry cleaning services were 5.7% higher in September 2024 compared to the previous year and were up 0.2% compared to the previous month, according to Consumer Price Index data from the Bureau of Labor Statistics (BLS). Employment by dry cleaning and laundry services fell 1.6% in July 2024 compared to a year ago, according to BLS data. Meanwhile, average wages per hour for nonsupervisory employees at dry cleaning and laundry services increased 4% in July 2024 year over year, reaching $19.15 per hour. Total revenue for dry cleaning and laundry services was $8.8 billion in Q1 2024, a 6.8% increase compared to a year ago and 1.6% lower from the previous quarter, according to the latest data from the Census Bureau. Consumer spending, a key driver for the industry, has improved modestly, rising 2.6% in June 2024 compared to a year ago and up 0.2% from the previous month, according to the Bureau of Economic Analysis.
- The US dry cleaning and laundry services industry is projected to grow at a CAGR of 1.9% between 2024 and 2028, according to a forecast for the “Other Services Sector” from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy‘s anticipated growth. The report noted that consumer spending, along with expenditure by businesses, drives the other services sector. Consumer confidence is expected to improve in the forecast period, which bodes well for the various other services sector. While the COVID-19 pandemic resulted in remote working rates higher than pre-pandemic, some major corporations like Amazon are bringing their workers back to the office full time. According to the report, “Personal consumption spending for dry cleaning and laundry services may rise as more people return to traditional workplaces and seek a wider array of entertainment and recreational activities.“ Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest rate levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025.
- Major tech employer Amazon has ordered workers back to the office five days a week beginning in January 2025, a move which may spur other companies to curb remote work. Demand for dry cleaning services increases as more workers return to their offices. Amazon CEO Andy Jassy made the announcement in September 2024, marking the company's latest shift in its office attendance policy. In 2023, Amazon asked workers to return to the office three days a week, a decision protested by many remote workers. Jassy said having Amazon employees back in the office full time will help improve collaboration, innovation, and the company's sense of culture. Amazon's decision comes as an increasing number of companies are giving their employees flexibility in their working arrangements, according to a new Flex Index report in ITPro. Per the report, 56% of surveyed businesses said they had an "employee's choice" model in 2024, allowing staff members to help shape their time in the office based on their personal needs, an increase over the 38% of firms with that model in 2023. Only 3% of companies have enforced full in-person return-to-office (RTO) mandates in 2024, compared to 8% in 2023. Working from home increased five-fold from 2019 to 2023 in the US, with the peak coming in May 2020 during the beginning of the Covid-19 pandemic, according to a Stanford Institute for Economic Policy Research report.
- Dry cleaning and laundry services will want to monitor a new proposed rule from the US Department of Labor (DOL) designed to protect workers from extreme workplace heat, according to American Dry Cleaner. The proposed rule requires employers to form an injury and illness prevention plan to control heat hazards in workplaces affected by excessive heat. The rule asks employers to evaluate heat risks and implement requirements for drinking water and taking rest breaks. In addition, employers will have to provide training, develop procedures to respond to employees who show signs of heat-related illness, and assist workers experiencing a heat emergency. The DOL expects to hold a public hearing at the end of the rule’s written comment period. The Occupational Safety and Health Administration (OSHA) currently conducts heat-related inspections under a program launched in 2022, in which agents inspect workplaces with the highest exposures to heat-related hazards to prevent worker injuries and illness.
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