Equipment replacement may lower utility expenses

Laundry equipment is becoming more efficient with each new generation of models. However, it also means that 10-year-old washers or dryers may be far less efficient compared to the latest models. New, highly programmable machines using less electricity, natural gas and water than older models are a strong motive for replacing older equipment.

A recent CLA Insights Report on equipment replacement showed that many operators seem to be aware of this advantage. Most of them agreed that lower utility costs are one of the main benefits of retooling a laundry. In that respect the laundromat industry seems to be a perfect example of green, sustainable practices that coincide well with sound business strategy. Consequently, a laundromat could position itself as an eco-friendly business.

According to the CLA Industry Survey, the average laundromat spends 22 percent of gross revenues to cover the costs of water, sewer, gas and electricity. As a general rule, stores with older washers and dryers see that ratio increase to 30 percent or higher, depending on the age of their machines and vend pricing. The survey also showed that the most profitable laundromats (those reporting more than 20 percent net profit) experience an average expense ratio for utilities at just 19 percent.