A Look at the International Laundromat Market
Laundromats are no doubt a staple of American urban life. However, the business model has long since evolved into a global phenomenon, adapting to diverse cultures, economic landscapes, and consumer preferences worldwide.
From the compact storefronts of Australia to the bustling streets of Europe, and the tropical open-air setups of Asia to the community-centric hubs in Latin America, the international laundromat market offers a fascinating glimpse into the intersection of culture, technology, and commerce.
This month, we go beyond borders to explore the intricacies of the international laundromat market. From the nuanced differences in design and customer demographics in Australia to the rapid growth and adoption of laundromats in Europe, and the innovative services and cultural nuances shaping laundromats in Asia and Latin America, we delve into the diverse tapestry of the global laundry industry.
Let’s uncover the unique challenges, innovative solutions, and cultural influences that define the international laundromat landscape, offering insights into how these businesses are evolving to meet the changing needs of customers worldwide.
Australia
In Australia, perhaps the most notable difference in the design and layout of laundromats, compared to those in the United States, is simply the size of the stores.
“Laundromats are generally much smaller in Australia than in the U.S., with the typical self-service laundromat being less than 1,000 square feet,” said Anthony Brittain, the owner of Queensland Laundries Pty. Ltd. (www.bubbleandsqueak.net.au), which operates five self-service laundries throughout Brisbane in Queensland, Australia. “The typical store will comprise around nine washing machines of various sizes – generally, 20-pound capacity up to 60 pounds – and eight dryers.
Brittain noted that the largest laundromat in his market featured about 25 washing machines and a similar number of dryers.
Another primary difference between the overall laundromat markets in Australia and the U.S. is the fact that approximately 99 percent of all housing, including apartment buildings, boast on-site laundries.
“Even a one-bedroom apartment generally will include its own laundry facilities – not a shared laundry room within the apartment block, but laundry equipment within the apartment unit itself,” Brittain said. “This means that laundromats are far less of a ‘community service.’”
Instead, laundries in Australia are used predominantly by lower socio-economic customers who may not own washers and dryers, as well as those whose machines currently might be broken and awaiting repairs.
“There is a growing class of customers who choose not to buy machines and prefer to outsource,” Brittain added. “This is partially driven by a very tight rental market, where leases can be short – such as six months – and moving furniture and appliances all the time can become cumbersome, as nearly all apartment and house rentals in Australia are unfurnished.”
There also is a growing category of customers who appreciate that laundromats are able to provide wash and dry services in a more time-efficient manner than at home, especially for larger families.
“In response to this trend, the laundromat market here has been quick to upgrade its services,” Brittain stated. “The dirty, old, coin-operated laundromats are being replaced or overtaken by new, clean, fresh facilities that offer larger, more efficient equipment in more comfortable settings than in the past – typically featuring lounges, heating and air conditioning, televisions, and other amenities.”
In addition, weather remains a significant driver of business for laundry owners in Australia.
“We have a very temperate climate, and even in the middle of winter, most cities are warm enough for people to dry their laundry at home on a clothesline,” Brittain explained. “When we have wet weather, revenue will increase as people are unable to leave their washing out to dry.”
Another driver of laundromat business, according to Brittain, has been the growing trend of dual working parent families in Australia, where the scarcity of time has led them to tackle their laundry tasks more quickly in larger, commercial-grade machines.
“As far as laundromat services and amenities, I haven’t seen anything in Australia that I haven’t seen in the U.S.,” Brittain said. “However, the store fit-outs in Australia do appear to be higher end and to offer more comfortable customer facilities than I have seen in many U.S. laundromats.”
Like laundromats everywhere, utilities remain the lifeblood of laundry operations in Australia, and operators there have not been immune to higher energy prices, with electric and natural gas prices increasing by more than 100 percent over the last two years or so.
It’s no longer efficient for any laundromats to use dryers powered by electricity, so stores there now must be fitted with a reliable supply of gas, which can be local city or town gas or even bottled gas in some marketplaces.
Comparatively, there is a much lower level of environmental regulation in Australia, with all water drainage/sewer services provided as part of the standard domestic market.
“Our stores are required to have a license for commercial trade waste – such as water – but this requires no additional investment in plumbing or other services, and it only costs $100 per year for the license,” Brittain said. “However, our water supply is still relatively expensive.”
Australia is a global leader in payment technologies, and thus cash usage is lower than most other countries. In fact, the vast majority of payments for all goods and services – from supermarkets to restaurants to laundromats – are made by tapping credit or debit cards, or by mobile pay, such as Apple Wallet, etc.
“Tangerpay, for instance, is a Brisbane-based technology company that provides merchant facilities and software services for laundromats,” Brittain added. “We accept cash at one of our locations, but this is only because the machines are a bit older and had the functionality. All in all, coins create more issues than they’re worth, especially with regard to security, the time required cash collections, machines getting dirtier as a result of the coin slots, and the increased likelihood for physical malfunctions.”
Pricing structures also are quite different when compared to those in the U.S., with much higher pricing due to smaller market sizes.
“At our most expensive store, the smallest, 18-pound washing machine is about $4.50 USD, but then add $1 for warm water and $2 for hot water,” Brittain explained. “Our largest washing machine at 60-pound capacity is about $12 USD for a standard wash, increasing to nearly $16 USD for a hot-water wash with extra rinse cycles. Meanwhile, our large dryers are 64 cents US for four minutes, while our smaller dryers provide five minutes of drying for that same amount. In our ‘cheapest’ location, the washing machines are about $4, $6, and $8 USD for the three different sized units.”
Like most marketplaces around the world, laundromat pricing models in Australia are driven by a combination of (1) generating a sufficient return on capital for the owners’ investment, and (2) competitive factors within the local market.
“Of course, we will attempt to increase customer pricing in order to increase profits,” Brittain said. “But we understand we need to be delivering a high-quality service so that it’s still an attractive product for our customers.”
Wash-dry-fold services in Australia are relatively uncommon, and Brittain’s laundromats currently do not provide this offering.
“We are in the process of understanding where the key drivers of demand are for this, but with most customers having their own laundry facilities at home, the only compelling reason for them to use a wash-dry-fold service would be to save time,” he explained. “With relatively expensive machine pricing, the wash-dry-fold business doesn’t currently offer the same profit margins as self-service laundry.
“I also should note here that the minimum wage in Australia is quite high at nearly $20 USD per hour, with significant penalties for long shifts, weekends, and public holidays. There are a few owners providing this service, with the current rate at about $1.40 USD per pound.”
Similar to the situation in the U.S., Australia has experienced significant inflationary pressures since the COVID-19 pandemic, but the laundromat industry there has been quite successful at passing on those higher overhead costs.
“We’ve increased prices twice over this period, with virtually no impact on our turns per day or volume,” Brittain acknowledged.
Beyond payment technology, Australia does very limited manufacturing, so all of the washers and dryers are sourced from overseas.
In Australia, the local communities and social interactions don’t play as large a role in the culture of laundromats as they do these days in many U.S. markets, according to Brittain.
“I haven’t witnessed laundromats in Australia being as community-minded as some are in the U.S.,” he said. “However, it remains a key part of our marketing strategy.
“In 2022, Brisbane experienced a major flood, and we provided a substantial discount to our customers as a community service and to assist where we could. This was still profitable for us, and it allowed us to acquire a large number of new customers, especially those who normally wouldn’t have previously used a laundromat’s services. They were able to discover that it’s a clean, safe, efficient method of processing their families’ laundry.”
Most laundromats there are located in smaller, suburban shopping centers, similar to U.S. strip malls. Also as in the U.S., these shopping centers provide a range of community services.
“When we’re looking at new locations, we will endeavor to be part of a shopping center that provides doctors, news agents, bakeries, butchers, coffee shops, restaurants, and other community services,” Brittain said.
He added that there currently is a high level of demand for laundromats because many of today’s stores are offering a new and improved product and service than Australian self-service laundries of the past. However, with a large number of new laundromat openings, competitive pressures are emerging.
“It’s important to understand market positioning and customer demand and to ensure that we’re always providing a better product than others,” Brittain noted.
Energy costs in Australia represent the single largest overhead cost, other than rent. Brittain explained that his operation utilizes solar power at some of his facilities, which significantly reduces operating costs during the day.
Equipment maintenance and repair is very similar to the process in the U.S. “Getting technical assistance with machine repairs is relatively straightforward, although I’m located in a capital city and have a good relationship with local distributors who are able to provide servicing and repairs,” said Brittain, who added that he’d be more concerned with this aspect of the business if he were located in a more rural area and/or had older equipment.
“In all, we’ve had success in offering a premium product to our customers,” Brittain said. “It seems they are less price-sensitive, provided our machines are always working, and the premises are air conditioned and remain clean. If customers don’t have a positive experience, they will look to our competitors.
“No doubt, U.S. operators would like to charge some of the vend prices we are obtaining on our washers and dryers. However, this is strictly due to market size and that situation likely will change if laundromats become more prevalent – although currently in urban areas, one can find a laundromat located within about three miles.”
Europe
The European laundromat market was valued at $3,757.2 million USD in 2020 and was expected to expand at a compound annual growth rate (CAGR) of 9.1 percent from 2021 to 2028, according to data from business consulting firm Grand View Research.
The laundromat industry in Europe has changed in response to several trends. The first is that, for most consumers, meeting the demands of work and personal lives leads to a time crunch. European laundry owners are capitalizing on this reality by offering their customers time-saving convenience in the form of wash-dry-fold services, with some operators also providing pickup-and-delivery services such as in the U.S.
Furthermore, the European segment of the laundromat business has been moving toward maturity and stability with predictable rates of turnover, as well as increasing values of existing laundry businesses. Development of new turnkey facilities, and equipment expansion and replacement is also trending in the industry.
Moreover, clean clothes, like food and shelter, are considered a necessity of life worldwide, and laundromats provide a basic hygiene service. While laundries are found in virtually all neighborhoods across Europe, similar to the U.S., stores have been observed to perform exceptionally well in predominately renter-occupied, densely populated areas. These areas are increasing in number each year throughout the region. The rapid population growth, coupled with the expansion of rental housing, has increased the customer base for laundries in Europe.
The growing number of residential constructions, rapid urbanization, and an increasing number of nuclear families are acting as major drivers for market growth.
Specifically, Germany has dominated the European laundromat market, accounting for the largest revenue share of 17.1 percent in 2020, according to Grand View Research. Housing policies that offer incentives to renting are driving the number of rented households in Germany. This trend bodes well for the continued adoption of laundromats. Additionally, the rise in the number of migrants in the country is helping drive the service demand among residential consumers.
The growth of the industry also is partially due to the emergence of cards and other electronic payment methods such as RFID contactless credit cards or NFC-enabled mobile wallets. These cost-effective alternatives to cash have made cash management easier and safer for laundromat owners.
France is expected to witness a CAGR of 9.2 percent in its laundromat market and accounted for a revenue share of 16.3 percent in 2020. The country’s population reached 65.2 million in 2020, and approximately 40 percent of that population rented their apartments or houses, according to research. This clearly reflects a positive outlook for the laundromats in this country.
Although historically fragmented in France, the laundromat market there has experienced a recent tendency toward laundry franchise models, which allow operators to benefit from shared services for marketing and maintenance, as well as preferential financial conditions for the acquisition of equipment.
But, to fully understand the differences in European laundromats versus stores in the U.S., one fact must be considered, according to Marco Treggiari, the director of Speed Queen licensed stores in Europe.
“Many Europeans are still not very familiar with the laundromat concept,” said Treggiari, who also owns and operates eight laundromats in Rome. “About 95 percent of Europeans have never used a self-service laundry, and the other 5 percent have done so only in emergencies, such as their home washers being temporarily out of order.”
To pique the interest of prospective customers, Treggiari explained that his own personal laundromat designs focus on colors, lighting, comfortable seating, and furniture.
“The average laundromat space in Europe and the number of units are definitely smaller than in the U.S. – usually around 1,100 square feet, with 12 to 14 pockets – but it’s growing,” said Treggiari, whose company has opened approximately 1,200 licensed laundromats in 28 countries and 480 cities.
The use of dosing pumps to inject detergent and softener is a key difference between some European laundries and typical U.S. stores, according to Treggiari.
“While the majority of laundromats in the U.S. require the customer to bring or buy detergent, in Europe all of the Speed Queen laundries include detergent injection,” he noted.
However, what’s really changing the market in Europe is the addition of ozone technology, which is now used in hundreds of laundries in Italy, France, the Netherlands, Scotland, Ireland, Poland, and other key markets.
“Of course, by using ozonized water, we wash in cold water, thus creating a huge saving in energy use – as well as making life easier for the customers because they’re no longer being asked to set the water temperature or separate colored garments,” Treggiari said.
As far as economic factors influencing the affordability and accessibility of laundromats in Europe, a rough comparison between the cost of washing and drying at home versus using a laundromat shows that, similar to in the U.S., the first option is often more expensive – given the cost of utilities, detergents, machines, equipment maintenance, space, and the time required to wash clothes at home.
“To fully exploit those savings, people need to change their daily routines, and that change takes time,” Treggiari explained. “A typical European family with children may run their washing machine twice a day. It will take time to change those habits to begin collecting the family laundry for a week and then going to a self-service laundry.
“I think it’s also worth mentioning that more than 60 percent of my customers are men,” he added. “That’s kind of a cultural revolution in Europe, as the laundry task here typically has fallen to women in the past.”
Two of the biggest challenges to operating a laundromat in Europe, according to Treggiari, are familiar to most U.S. operators as well. They are cleanliness and customer service, especially given the fact that the majority of European laundries are self-service.
“To attract, engage, and build customer loyalty, laundromats must be pristine, and the store owners must be able to offer quick remote assistance,” Treggiari said. “Again, 95 percent of European laundry customers are initially surprised by this service. However, a lot of them eventually stop using their home machines.
“The level of satisfaction has been explosive, and it is then up to the laundromat owner to keep the level of design, cleanliness, and remote service at their highest points.”
From Asia to Latin America
From Asia to Latin America, laundromat adapt to local norms, resource constraints, and consumer preferences in unique ways – often diverging significantly from the U.S. model.
One striking difference lies in the size of laundromats, particularly in densely populated cities like Hong Kong and Tokyo. With space at a premium, these establishments often feature compact footprints, housing a limited number of machines, sometimes as few as five to seven. To optimize efficiency, stack washer-dryers are common, allowing for more equipment within a confined area.
Additionally, open-air laundromats prevail in tropical climates, though they face challenges with machine durability due to salty air environments.
“Many overseas laundromats are located in tropical climates and are open-air laundromats,” said Matt Herricks, international sales manager – Latin America, Europe, the Middle East, Africa, and Oceania Regions for Dexter Laundry. “Long-term, the salt air is harsh on machines, but 304 grade stainless steel holds up well if regularly maintained.”
Cultural nuances also significantly shape the operation and atmosphere of laundromats worldwide. In Asia, for instance, the absence of heated dryers historically led to reliance on air drying.
“I lived in Asia more than 25 years ago, and I remember not having a proper heated dryer,” explained Jeff LaRico, international sales manager – Asia-Pacific Region for Dexter Laundry. “My cotton clothes had to either be hung dry or spun dry. My clothes went from medium to XL over time. Nowadays, residential washers and dryers are more prevalent; however, the residential dryers still aren’t large or powerful enough to handle items like futon covers and bedding.”
In Malaysia, the ritual of removing shoes before entering reflects cultural respect and cleanliness, while in China, lingering stigma surrounding laundromat hygiene persists.
Internationally, laundromats offer a range of services not commonly found in the U.S. Drop-off laundry services, popular in South Korea, capitalize on lower labor costs, while innovative concepts like fully automated kiosks with café amenities elevate the customer experience in Japan. Specialty offerings such as shoe and futon washing cater to specific needs, highlighting the adaptability of laundromats to local demands.
“In some countries like Mexico, water is a valuable resource, and it needs to be trucked into regions that have no nearby bodies of water from which to pull,” Herricks noted.
In such regions of water scarcity, such as parts of Mexico, laundromats adjust water usage through machine settings and technologies like variable frequency drives. Costa Rican customers prioritize biodegradable soaps to minimize environmental impact, reflecting a broader global trend toward eco-conscious practices.
Although not necessarily more technologically advanced, international laundromats often embrace mobile payment options more extensively. App-based payment methods are prevalent, reflecting a broader cultural acceptance of digital transactions. Moreover, in some regions, the demand for dryers is higher, leading to a more balanced revenue split between washers and dryers than in U.S. markets.
Moreover, grand openings of laundromats tend to be more significant events in many other countries.
“Depending on the local religion and customs, many laundromat owners will have a religious leader bless the location and machines,” LaRico pointed out. “Additionally, high-ranking local politicians and major media outlets will often be present. In Malaysia, for example, we recently attended a grand opening that had a formal Chinese dragon dance ceremony for a grand re-opening.”
These ceremonies reflect the importance of community and tradition, fostering a sense of belonging among the customers. In contrast to the U.S., where many laundromats still serve primarily functional purposes, stores overseas can serve as social hubs in many cultures.
Government regulations, including import restrictions and energy infrastructure limitations, shape the operational landscape of laundromats internationally. Economic factors such as labor costs and water prices influence affordability and accessibility, driving consumer behavior and industry trends.
Internationally, as in the U.S., customer satisfaction is influenced by factors like convenience, reliability, and service quality. In densely populated urban areas, proximity to amenities and efficient operations enhance customer experience. The adoption of technology, coupled with a focus on data-driven insights, promises to further elevate service standards and customer satisfaction.
As international laundromat owners deal with changes in what customers want and new technology, they have a chance to come up with new ideas. Using digital tools, being more eco-friendly, and getting involved in the community can make laundromats better all around the world. This can bring people together from different backgrounds and help the global laundry industry change and improve.
