III. Industry Analysis
The Laundromats industry has grown over the past five years. Rentals represent a core target market for the industry, and many consumers have opted to rent apartments rather than purchase homes over the past five years. Due to a combination of urban population growth, increased multifamily housing construction and rising urbanization, rental vacancy rates are anticipated to decline at an annualized rate of 0.8%. Low rental vacancy rates lead to an increase in industry demand. Consumers who rent residential homes or purchase homes are more likely to use an existing washer and dryer or purchase their own, rather than go to a laundromat.
The industry is highly competitive because there is little differentiation between laundromats in terms of quality of service and price. As a result, industry operator success is largely dependent on location. Establishments operating in regions with high consumer volume can benefit from decreased competition. In turn, laundromats predominantly operate in populous urban areas throughout the country.
Over the next five years, industry revenue is expected to continue to increase as more consumers rent vs. buy homes. Additionally, rising disposable income and falling unemployment will spur rising demand for industry services. Colleges and universities that offer coin- and card-operated washers and dryers for students are another prominent market for the industry. Rising disposable incomes will make college education more affordable, causing an increase in the number of college students.