CHICAGO — While there are signs of recovery for both the economy in general and the drycleaning industry in particular, the new year will bring its share of challenges to those who have survived the roller-coaster of economic downturns, pandemic realities and customer behaviors. A new year, however, offers the promise of renewal. Will 2023 be kinder to the industry than the past few years?
In Part 1 of this series, we looked at some of those challenges that are lingering, and what the economic indicators are predicting for 2023, and in Part 2, we examined where we are as an industry, and how the new year might play out. In Part 3, we assessed one of the biggest headaches that 2022 brought — a tight labor market — and how that might evolve in the coming year. Today, we’ll conclude this look into 2023 by asking if there are reason for positivity as we enter the new year.
Room for 2023 Optimism?
So, are there things to look forward to when it comes to 2023? Mary Scalco, CEO of the Drycleaning and Laundry Institute (DLI), is optimistic for the coming months.
“I think those people who are left have the skills they need to move forward,” she says. “They’ve learned so much, and they’re not afraid anymore. They say, ‘Well, what in the hell could happen now?’ They have faced these challenges, and they realize they are so highly resilient, that they can face whatever — and I don’t think that challenges are going to be anywhere near as rough as what we’ve come through.”
“Small-business owners have navigated through some tough times through COVID, inflation, and labor shortages,” says Holly Wade, executive director of the National Federation of Independent Business (NFIB) Research Center. “With inflation and supply chain disruptions easing, some of these pressures should make operating a small business less stressful, offering owners more time to focus on growing their business.”
Christopher White, executive director of America’s Best Cleaners (ABC), is also is optimistic for 2023: “As tough as it is to say, the consolidation of our industry was long overdue. It hurts me to see so many great, well-intended people have to close their businesses, but in the end, there was a reason it happened. For those who are still standing, I believe there is plenty of opportunity to grow within the market and to increase the share of wallet from existing clients.”
Dry cleaners who embrace modernization, he adds, will see the benefits going into the future.
“Labor will continue to be a challenge, but seeing some of the technologies showcased at the Clean Show and EXPOdetergo, I believe we are seeing incremental innovation and growth of software to make business more streamlined and client-centric and technologies that will offer efficiencies in cleaning, finishing, and packaging in our production facilities.”
“The good news for the dry cleaner is that the customer who is their core is the one who still has money,” says economist Chris Kuehl, managing director of Armada Corporate Intelligence. “The people who make under $50K are the ones who are giving up on discretionary spending, but those who make $70K and above, they’re still sitting at about $3.4 trillion in excess savings. So that core market of business professionals and women — they still have the money to spend on dry cleaning and still will.”
But to get the best out of the new year, White believes planning is key.
“Create a strategy and marketing plan for 2023, make a budget, and communicate these with your teams,” he says. “Hold yourself and your teams accountable to the plan, and keep going, keep growing and make adjustments as needed. Nobody can predict the future, but we can be proactive instead of reactive.”
For Part 1 of this series, click HERE. For Part 2, click HERE. For Part 3, click HERE.
Have a question or comment? E-mail our editor Dave Davis at [email protected].