The European textile rental market grew by 1.9% in 2012, reaching a value of 11.9billion Euros, according to a report by market researchers Interconnection Consulting.
The report shows that a move to outsourcing is now driving the market and it predicts that growth will continue at the same level during this year.
The Euro crisis caused many companies switch to textile rental as a cost-effective option. As a result, most West European markets increased by 2 - 3% with Sweden leading the way with 5.1% rise in 2012. However, fierce price competition resulted in markets that were flat or down in Italy, Austria, Denmark and Benelux.
Eastern Europe, comprising Poland, Hungary, Slovakia, Slovenia, Bulgaria, Czech Republic and Romania, grew by 4.1% in 2012 and 3.7% in 2013. Poland is still the leading CEE market in both size and development with growth of 7.7% in 2012.
Workwear rental accounts for 36% of the total European market. Increasingly stringent health and safety standards mean that demand is both high and stable. The sector accounted for 4.3billion Euros in 2012 and is expected to reach almost 5billion Euros by 2016.
The market is becoming more highly concentrated. The top three companies- Berendsen, Elis and Initial - increased their total share from 26.0% to 26.4% in 2012. The report found that the biggest players are becoming stronger and economies of scale allow them to charge lower prices. Presence in several countries is often crucial.
The researchers predict that price competition will become even fiercer in the near future with the focus shifting from West to East. Western European countries already have a high spend per inhabitant, the highest being Finland at 61.4Euros.
This is 120 times more than Romania, highlighting the potential in Eastern Europe and the report predicts that most companies will move East to maximise their share of this growing market.
