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Survey: Many in Laundry Industry Are Cutting Spending or Standing Pat this Year

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ALN Wire Survey Chart
ALN Wire Survey Chart

Bruce Beggs |

CHICAGO — The recession is cutting deep into many businesses and institutions, forcing managers to lay off workers and severely slash budgets. It’s apparent that the laundry industry is tightening its belt, as nearly 52% of respondents to American Laundry News’ most recent Wire survey say they plan to cut staff and/or reduce purchasing this year due to economic reasons.
Another 29.6% plan to hold staffing and/or purchasing steady. Only 7.4% of respondents say they’ll increase staff and/or capital expenditures. The remaining 11.1% say it’s too early in the year to tell if the recession will affect their operations.
Sixty-three percent expect economic conditions to get worse before they get better. Roughly 15% believe conditions will improve, while 11.1% believe they’ll stay the same. Another 11.1% are uncertain, because they’ve never seen it this bad before.
When asked about their operation’s greatest challenge created by this economy, many respondents point to having to make do with less. Some of their comments, offered in anonymity:
• “Costs for everything have gone up, and freight is out of sight. We will have to hold spending as much as possible and hold off on repairs until absolutely necessary. We will reduce staff through attrition.”
• “[There is a] lack of confidence in profits and to what extent do we transfer costs versus just absorbing the increased cost to do business.”
• “Most of my laundry customers are facing tight budgets but sustained levels of processing. My challenge as a supplier of laundry transport equipment is to help them get the best value for their budget dollars for new equipment and to find new ways to keep equipment that’s in operation staying in service longer.”
• “We will be eliminating unnecessary travel, which includes educational classes, etc.; not fill open positions; and [there will be] no overtime.”
• One respondent says the challenge will be “to remain proprietary and not be outsourced.” Another reports that their institution’s on-premise laundry was to have been closed last week.
• “The total freeze of capital spending by the laundry operators as a whole will destroy the machinery manufacturing suppliers.”
But while the weakened economy has thrown up some roadblocks, it has also created opportunity, some respondents say.
• “Customer service plays a key role in our business, and we are working at it with passion.”
• “Staffing has remained constant. No one wants to leave a job right now.”
• “We have reduced [the] number of times we deliver to our customers and are delivering more, but less frequently. This has given us time for other things.”
• “Suppliers are more competitive for business.”
• “[We have the opportunity] to show that we are needed.”
• “If you have cash, now is the time to buy and not sit on a nugget. Get going and buy.”
New Orleans will host the 2009 Clean Show in June, and tighter budgets could affect trade attendance. Roughly 41% of respondents are planning to attend, but 44.4% are not. The remainder is undecided. Of those who won’t be going, 61.5% say economic factors influenced their decision.
Subscribers to American Laundry News’ Wire e-mails — distributed weekly — are invited to participate in an industry survey each month. The survey is conducted online via a partner website. Each survey is developed so it can be completed in 10 minutes or less. Readers are encouraged to participate, as a greater number of responses will help to better define operator opinions and industry trends.
Click here and follow the menu instructions to sign up for the free e-mail service.
 

About the author

Bruce Beggs

American Trade Magazines LLC

Editorial Director, American Trade Magazines LLC

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.

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