Over the next five years, industry revenue is forecast to rise at an average annual rate of 0.4% to an estimated $9.4 billion
Los Angeles, California (PRWEB) October 25, 2011
Over the next five years, conditions are expected to improve slightly for the Dry Cleaners industry. Between 2011 and 2016, industry revenue is forecast to rise at a marginal 0.4% per year to $9.4 billion, according to IBISWorld, the nation’s largest publisher of industry research. Demand for this industry's services will be positively influenced by rising employment – particularly towards the end of the five year period – which will increase household disposable income and boost demand for laundering services for professional clothing. Additionally, food and accommodation establishments will receive a boost from rising consumer expenditures on discretionary services, prompting higher demand for linen and uniform laundering services. Between 2011 and 2012, industry revenue is projected to rise 1.3%.
Thanks to the recession, the past five years have left the Dry Cleaners industry out to dry: According to IBISWorld, over the five years to 2011, revenue fell at an average annual rate of 1.0%. The Dry Cleaners industry provides dry cleaning and non-coin-operated laundry services to consumers and to commercial clients such as hospitals, hotels and restaurants. With heightened unemployment decreasing disposable income, consumers began using more inexpensive services to launder and dry clean their clothes, such as household washers and dryers, home-use dry cleaning kits and coin-operated laundromat services. Additionally, with more consumers foregoing restaurants and hotels to save money during the recession, hotels and restaurants required fewer linens cleaned by industry operators. According to IBISWorld analyst, Caitlin Moldvay, revenue in the Dry Cleaners industry is expected to turn the corner in 2011 as consumers have begun purchasing more dry clean and wash-and-fold laundry services for professional clothing. “Between 2010 and 2011, revenue is expected to rise 1.1% to $9.2 billion,” says Moldvay.
The number of companies operating in the industry decreased in the Dry Cleaners industry at an average annual rate of 1.8% between 2006 and 2011 to an estimated 38,667 companies. Fewer companies remained in the industry primarily because of decreased demand and shrinking profit margins, which fell from 4.9% in 2006 to 4.3% in 2011. Profit margins felt pressure from rising utility costs, which are major expenses for operators. The industry has also been challenged by increasing environmental regulations over the use of perchloroethylene (perc), the most commonly used solvent for dry cleaners.
According to IBISWorld analyst, Caitlin Moldvay, over the next five years, industry revenue is forecast to rise at an average annual rate of 0.4% to an estimated $9.4 billion. “The industry will be positively affected by rising demand from hospitals, hotels and restaurants that require pick-up and delivery laundering services provided by the industry,” says Moldvay. “Furthermore, employment gains are projected to accelerate during the latter half of the five-year period, which will allow more consumers to use industry services rather than more inexpensive substitutes.” However, increased regulations will challenge the industry, prompting significant capital investment by operators and a continued consumer trend towards clothing that does not require dry cleaning.
For more information, download the full report from IBISWorld on the Dry Cleaners industry
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