CHICAGO — In StatShot surveys covering 18 months, drycleaners nationwide reported small average declines until the first quarter of 2008, anticipating the generalized economic meltdown experienced in the third quarter.
In the first three months of 2008, the StatShot panel — a group of industry operators who provide financial and cost data anonymously for use at AmericanDrycleaner.com — reported an average 14.6% drop in sales from the same period in 2007. In the second quarter, operators again reported a double-digit decrease of 14.2%.
The areas hardest hit were the West and South, both of which had grown in the early years of the century during a boom in home ownership. Drycleaners in these regions felt the effect of home foreclosures well ahead of the collapse of the subprime mortgage market and resulting crash on Wall Street.
Through much of 2007, drycleaners averaged only small average decreases, with some regions actually growing in sales. In the second quarter, operators in the Northeast reported a gain sufficient enough to offset small declines in other regions and produce a slight 1.1% decline. In the third quarter, sales fell an average of 4.0% nationwide, and in the fourth, improvement in the Midwest and South produced a nationwide average sales decline of just 1.0%.
Sales in the Midwest, in fact, stayed strong as the bottom dropped out of the market in first-quarter 2008. But by the second quarter, all regions were reporting a slump in sales, with operators in the West reporting sales declines of more than a third. Customers throughout the country cleaned fewer items or didn’t clean at all, panelists said; retail counter sales proved to be the most vulnerable.
In the third quarter of 2008, sales nationwide shrank further, but more slowly (-3.4%) — perhaps indicating that retail drycleaning has already seen the worst of the current recession.
Next month, StatShot will report drycleaners’ fourth-quarter results and begin to tabulate full-year numbers. AmericanDrycleaner.com needs your help with its surveys. All responses are kept strictly confidential to protect respondents’ proprietary financial information. E-mail firstname.lastname@example.org today to join the StatShot panel!