Price, price and price is all that cleaners want to talk about. Laundry and Cleaning News’ survey of the market examining the period of September-1997 to February 1998, compared with September1996 to February 1997 has certainly seen multiples putting the squeeze on independents.
By forcing independents to fight on their terms and offer cut-throat discounts, the multiples have scored a victory, but left industry pricing structures in tatters.
Discounting has also, in some instances, trebled the workload of an average independent, while failing to increase their cash turnover by any substantial amount.
“We’re having to work all hours just to keep our heads above water,” said one northern cleaner.
Others have had to look at ways of streamlining their operations, either by making staff redundant or by getting rid of older, less efficient equipment.
In contrast, cleaners in the south reported that while there may have been less custom, larger numbers of items were being brought in during an average visit.
In Scotland, “the pressure is on”, according to one cleaner. As such, “any small increase in volumes is good news”.
Other cleaners who said that putting their prices up had not affected their business, admitted that their shops were in areas where there was no major competitor.
Aggressive bidding and winning of contracts, coupled with tactical marketing yielded good results for cleaners in Northern Ireland and the Irish Republic.
The last few months of 1997 and the start of 1998 has seen the market start to settle down. Although many independents admit that this could be due to the lowering of their prices and to their greater efforts in marketing their services, several agree that the price wars are here to stay.
“It had to happen,” says a southern cleaner. “Customers have the upper hand. They call the shots.”