Dry Cleaning/Laundromat Industry Overview

Published: November 1, 2024
Last Updated: November 1, 2024
Night time photo of a wash & dry laundromat. A silhouette stands in the doorway with blue and red neon signs advertising available dry cleaning services

Photo by Mike Balbus on Unsplash

Key Takeaways 

  • Low & Slow Growth: The Covid-19 pandemic hit coin-operated laundromats in Canada hard, speeding up a decades-long decline in the number of operating businesses (Knox, 2021). Despite reporting a drop in revenue in 2023, dry cleaners are expected to grow at a rate of 1.2-1.7% from 2024-2028 (Brock, 2023). 

 

  • Innovative Community Engagement: Reading programs (Davis, 2023), soap exchanges (Jansen, 2024), and welcoming atmospheres (Kruzel, 2024) have become increasingly important factors to building and retaining clientele. 

 

  • Adoption of New Technologies: Dry cleaning and laundromat owners have adapted to new challenges in the industry by restructuring how they do business. Some new adoptions include pick-up and delivery services (“Wash, Fold, Deliver”, 2021; “ParcelPal Announces”, 2021), self-service kiosks (Kioskmarketplace.com, 2022), coinless point of sale systems (Kioskmarketplace.com, 2023) and eco-friendly machinery (“Global Commercial Laundry”, 2022).

 

 

Industry Performance Snapshot 

  • The number of operating laundromats and dry cleaners in Canada has decreased over the past 20 years from 1,784 in 2004 to 1,092 in 2022 (Pearson, 2023). 

     

  • Typically, these businesses have few employees with 60.2% employing only 1-4 people (Government of Canada, 2023a)

A 2023 Statistics Canada chart showing the total number of laundromat and dry cleaning businesses in Canada, separated into categories based on the number of employees and by province/territory.

 

  • 58.1% of dry cleaning and laundry services were reported to be profitable in 2022 with an average revenue of $252.8 thousand (Government of Canada, 2023c). These statistics vary, with linen and uniform supply earning more profit (Government of Canada, 2023d) and coin-operated laundries earning less profit (Government of Canada, 2023b). 

 

  • Canadian dry cleaners in 2023 reported profit margins of 6.8%. Large costs for this industry include wages, equipment, and utilities like water and electricity (Brock, 2023).

A 2023 IBISWorld graph showing the average operating costs by industry and sector as a percentage of revenue for dry cleaners in Canada.

Industry Outlook

  • The global dry cleaning and laundry services market is expected to grow at a compound annual growth rate of 4.1% from 2020-2027 with the largest growth occurring in the linen and uniform supply sector at 4.5%  (“Global Dry-Cleaning”, 2021)

 

  • Laundromats are seen as a necessary service, especially for those living in high-density locations (Godfrey, n.d.). As of 2024, 22% of Canadians report not owning a washing machine and 28% report not having a dryer (Bashir, 2024). 

 

  • Despite slight losses in 2023, the Canadian dry cleaning market revenue is expected to grow at a rate of 1.2-1.7% from 2024-2028 (Brock, 2023).

A graph reporting the total revenue of Dry Cleaners in Canada from 2010 through 2023 with a five-year outlook to 2028.

Industry Trends and Challenges

  • Customer retention and location are crucial factors in a laundromat or dry cleaner’s success (“Laundry Facilities”, 2024). To build community support, business owners have been implementing new programs to increase customer engagement. These vary from providing snacks and a place to watch television (Kruzel, 2024) to starting small libraries and reading programs for young children (Davis, 2023). 

 

  • Increased regulation and public concern around sustainability are large challenges facing the laundry and dry cleaning industry (Brock, 2023; “Laundry Facilities”, 2024). New laundry machinery from companies like IPSO (“IPSO Announces”, 2021) and introduction of programs by individual laundromat owners seek to address this challenge (Jansen, 2024).

 

  • As a result of the Covid-19 pandemic, the dry cleaning and laundromat industry has seen a trend towards self-service kiosks and new digital technology (Kioskmarket.com, 2022). Companies like PayRange are offering digital software solutions to reduce or eliminate reliance on traditional coin-operated systems (Kioskmarket.com, 2023). 

 

  • The use of pick-up and delivery laundry services for individuals and businesses represents a new trend in the industry (“Wash, Fold, Deliver”, 2021; “ParcelPal Announces”, 2021). While this innovation shows promise, business owners must also consider additional expenses, such as delivery vehicles and transportation costs, involved in these processes (“Laundry Facilities”, 2024).

Sources

Bashir, U. (2024, August 1). Household appliances ownership in Canada 2024. Statista. Retrieved from https://www.statista.com/forecasts/998563/household-appliances-ownership-in-canada 

Brock, M. (2023, August). Dry cleaners in Canada: Industry report 81232CA. IBISWorld. Retrieved from https://my.ibisworld.com/ca/en/industry/81232ca/at-a-glance 

Davis, J. (2023). Cleaning clothes is just one mission of new laundromat: Business offers community services, support. Crain’s Detroit Business 39(19), 12. Retrieved from https://www.proquest.com/abicomplete/docview/2814965324/D86C3E52426D4392PQ/9?sourcetype=Trade%20Journals

“Global Commercial Laundry Machinery Market to Reach US$5.9 Billion by the Year 2026: Abstract: What`s New for 2022? - Global competitiveness and key competitor percentage market shares. - Market presence across multiple geographies - Strong/Active/Niche/Trivial.” (2022). NASDAQ OMX’s News Release Distribution Channel. Retrieved from https://www.proquest.com/abicomplete/docview/2661867703/fulltext/4362B914051B430CPQ/1?accountid=14656 

“Global Dry-Cleaning and Laundry Services Market to Reach US$87 Billion by the Year 2027: Abstract: Global Dry-Cleaning and Laundry Services Market to Reach US$87 Billion by the Year 2027 Amid the COVID-19 crisis, the global market for Dry-Cleaning and Laundry Services estimated at US$65.” (2021). NASDAQ QMX’s News Release Distribution Channel. Retrieved from https://www.proquest.com/abicomplete/docview/2555876766/citation/7828C906FDC4BE6PQ/1?accountid=14656 

Godfrey, C. (n.d.). Laundromat startup costs - everything you need to know. Swoop.  Retrieved from https://swoopfunding.com/ca/start-a-business/laundromat-business/ 

Government of Canada. (2023a, May 25). Businesses- Canadian Industry Statistics dry cleaning and laundry services - 8123. Retrieved from https://ised-isde.canada.ca/app/ixb/cis/businesses-entreprises/8123 

Government of Canada. (2023b, May 25). Summary - Canadian Industry Statistics coin-operated laundries and dry cleaners - 81231. Retrieved from https://ised-isde.canada.ca/app/ixb/cis/summary-sommaire/81231

Government of Canada. (2023c, May 25). Summary - Canadian Industry Statistics dry cleaning and laundry services - 8123. Retrieved from https://ised-isde.canada.ca/app/ixb/cis/summary-sommaire/8123 

Government of Canada (2023d, May 25). Summary - Canadian Industry Statistics linen and uniform supply - 81233. Retrieved from https://ised-isde.canada.ca/app/ixb/cis/summary-sommaire/81233

“IPSO announces new products & technologies.” (2021, June 15). Canada NewsWire. Retrieved from https://www.proquest.com/canadiannews/wire-feeds/ipso-announces-new-products-amp-technologies/docview/2540675492/sem-2?accountid=14656 

Jansen, M. (2024, May 1). Laundromat helps reduce single-use plastic: Sustainable economy: Soap exchange products available to all through social enterprise in Ganges. Gulf Islands Driftwood. Retrieved from https://www.proquest.com/canadiannews/newspapers/laundromat-helps-reduce-single-use-plastic/docview/3049295642/sem-2?accountid=14656

KioskMarketplace.com (2023, June 28). PayRange teams with laundromat software provider on management solution. Retrieved from  https://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=bsu&AN=164626278&site=ehost-live&scope=site&custid=s5672194  

KioskMarketplace.com (2022, June 20). Dry cleaners adopting self-service technology. Retrieved from https://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=bsu&AN=157639312&site=ehost-live&scope=site&custid=s5672194 

Knox, J. (2021, June 13). Don’t miss laundromats? Wait until you need one. Times - Colonist. Retrieved from https://www.proquest.com/canadiannews/newspapers/dont-miss-laundromats-wait-until-you-need-one/docview/2540435143/sem-2?accountid=14656

 Kruzel, H. (2024, August 21). All hail to Greater Sudbury’s humble laundromats. The Canadian Press. Retrieved from https://www.proquest.com/canadiannews/wire-feeds/all-hail-greater-sudburys-humble-laundromats/docview/3096407426/sem-2?accountid=14656 

“Laundry facilities & dry cleaning services - Quarterly Update 8/26/2024.” (2024). First Research Industry Profiles. Retrieved from https://www.proquest.com/abicomplete/docview/3097458537/abstract/8828A8A1F51C459EPQ/1?accountid=14656

“ParcelPal announces signing of Canadian laundry service deal as part of its growth plan.” (2021, August 31). National Post (Online). Retrieved from https://www.proquest.com/canadiannews/blogs-podcasts-websites/parcelpal-announces-signing-canadian-laundry/docview/2567947091/sem-2?accountid=14656

Pearson, N. (2023, Jan 9). Laundromats are dying in Canada. We can’t just call that a wash. The Globe and Mail. Retrieved from https://www.proquest.com/newspapers/laundromats-are-dying-canada-we-can-t-just-call/docview/2763181739/se-2 

“Wash, fold, deliver: Mobile laundry service comes to Central Okanagan.” (2021, October 9). The Morning Star. Retrieved from https://www.proquest.com/canadiannews/newspapers/wash-fold-deliver-mobile-laundry-service-comes/docview/2580537567/sem-2?accountid=14656

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