Industry profitability has taken a beating as industry operators continue to be undercut by low-priced imports.
New York, NY (PRWEB) June 03, 2014
The Dry Cleaners industry provides dry cleaning and laundry services to consumers and businesses, such as hotels and clinics. Over the past decade, shifting consumer trends toward casual clothing have reduced the need for dry cleaning services that are typically only used for formal and office wear. Moreover, the growing popularity of dry cleaning alternatives and advanced at-home laundering machines have captured an increasing share of industry demand. According to IBISWorld Industry Analyst Britanny Carter, “These long-term trends are expected to decrease revenue at an average annual rate of 1.6% to $2.1 billion over the five years to 2014.”
The Dry Cleaners industry has consistently declined over the past five years, as dry cleaning services are highly discretionary; revenue fell a notable 5.2% over 2010 as many consumers held off on dry cleaning services due to a decrease in disposable income. Economic recovery, however, has slowed declines in recent years and the growing number of high-income individuals that use industry services has aided demand conditions. Revenue declines are therefore expected to slow to 0.5% over 2014.
Dry cleaners have implemented price hikes over the five years to 2014 to maintain profitability amid falling demand. Based off data sourced from Statistics Canada, the consumer price index for dry cleaning services is expected to increase at an average annual rate of 3.9% per year over the period. While price increases have aided industry profit margins, dry cleaners are subject to high rent costs to maintain proximity to customers, with many operators struggling to remain profitable. Statistics Canada reported that a notable 27.9% of dry cleaners operated at a loss in 2010. Consequently, the number of industry establishments is expected to fall at an average annual rate of 2.2% to 3,262 locations over the period.
While changing consumer patterns will continue to reduce demand for the Dry Cleaners industry, the industry will benefit from accelerated income growth. “As consumers return to work, industry players will increasingly rely on other services, such as wash-and-fold laundering, to leverage increasingly busy schedules,” says Carter. As a result, industry revenue is forecast to decrease over the next five years. Ecofriendly dry cleaning services will also grow in popularity as mounting regulation and environmental concern spurs operators to purchase hydrocarbon and water-based solvent cleaning machines.
For more information, visit IBISWorld’s Dry Cleaners in Canada industry report page.
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IBISWorld industry Report Key Topics
The Dry Cleaners industry provides dry cleaning and laundering services. Companies may also provide drop-off and pick-up sites for laundries and dry cleaners. In addition, establishments may also offer specialty-cleaning services for garments and textiles, including fur, leather, suede, wedding gowns, draperies and pillows. This industry does not include establishments that offer coin-operated laundering and dry cleaning, nor those offering linen and uniform rentals.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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