A Brief Synopsis When It Comes To Prediciting 2008

During the final quarter of 2007, the News began -contacting people we consider to be experienced in our industry. We wanted to ask them about what was happening now in our business and to ask them to make predictions about what could happen in our industry in the coming year. We spoke mostly by phone, but in person with people who were present at some of the sales events the News attended over the past several months. Some we spoke with have been in the laundry industry for years and years. Some are fairly new, but seem to us to be smart enough to know what is going on in the laundry trade. We asked them all, “What do you think will happen in our industry in the coming year?” Well that coming year has come, and so now we offer the following report of how some of our manufacturers, distributors, and laundry owners see the year ahead. Here is our synopsis: Construction of new laundries will remain at about the same level, but the overall costs for individuals getting into a laundry will keep climbing. Larger and even larger laundries seems to be everyone’s construction motto. You won’t see that changing any time soon. Bigger isn’t always better, but building small laundries appears to be a thing of the past. 2008 will likely see a further consolidation in the distribution of brand name products with the larger laundry equipment sales companies getting larger and larger. That isn’t necessarily a bad thing. Because of economies of scale, larger equipment groups can do proportionally more with fewer people than can the smaller companies. This could keep costs and new equipment prices lower to laundry owners. We can expect to see continued, modest improvements in equipment efficiency, but don’t expect to see any really revolutionary breakthroughs in overall laundry equipment designs this year. We will see manufacturers making their products safer and safer to keep them out of court defending against real and imagined injury lawsuits. These manufacturers will also, under pressure from environmentalists and governmental bodies, try to make their equipment more water and power efficient. The majority of those questioned think that card operating systems will lead the way in new laundries being built for the foreseeable future. Management controls and security are better with card systems. The differences between the initial costs for coin and card units don’t amount to very much, when looked at over time, as a laundry gets built. Electronics for security and management in laundries will continue to be more and more common. These new devices make it possible for laundry owners to remotely view what is going on in their laundry and to keep records of income from miles away. This is why we can expect to see laundry chains expanding across the nation, but this time with less management overhead to slow them down. Excessive levels of management doomed most chains in the past. Now with electronic operation, the overhead can be kept to a minimum. There will be expensive, restrictive water regulation by water districts across the western states with drought conditions, especially southern California. Added environmental and conservation controls will create the perceived need to restrict water consumption and give a plausible reason for the myriad water districts in the western states to raise their prices. This is the year that water and sewer charges will really hit marginal operators. Most predict that this will be the most significant problem for laundries in 2008. By significant, we mean that it is a make or break problem for smaller, mostly coin laundries in metropolitan areas. They will be forced to at least consider raising vend prices and they will thereby lose a competitive edge that pricing gives them competing with the larger and newer laundry operations that are now being built. Laundry owners who really watch their bottom line will continue to hold their own this year. This will be true even in areas with water usage restrictions. If laundry operators know the costs and rules, they can adjust pricing to match increased expense. Marginal laundry owners will suffer the most in 2008. There you have it. Most really intelligent and experienced laundry people with whom we talked, seem to think that these are the basic problems in our industry. While most predictions may not take place, some of them will, and that will impact us all in 2008 and beyond. We are still a viable and profitable business to be in, but this year will bring changes. Be ready and you will do well.