Market Analysis Of The Laundry Business In Europe

Starting a laundry business in Europe can be daunting for new entrepreneurs. To understand the market, entrepreneurs need market research and analysis as part of their business plans. This involves collecting and thoroughly assessing information about your target market or industry. For entrepreneurs, a market analysis determines the viability of their business ideas and helps them understand the markets unique challenges. Investors also analyse the market to make good investment decisions.

When analyzing the laundry business market, you should consider how valuable the offered services, such as washing and dry cleaning, are. You should also analyse your target market, as seen in this laundry business analysis of Africa and Asia. This article provides an analysis of the laundry business in Europe.

Overview of the Laundry Business in Europe

The laundry business in Europe is thriving. The continent is located in the Northern Hemisphere and bordered by the Arctic Ocean to the North, the Atlantic ocean to the West, the Mediterranean Sea towards the South, and Asia to the East. With a population of over 741 million, Europe represents about 1/6th of the global economy. 

The European Union is a political and economic union of 27 European states. It is the second-largest global economy in nominal terms at $19.35 trillion. Germany leads the charge as the European country with the highest GDP, at $4.591 trillion. No longer a member of the EU, the United Kingdom has the second-highest GDP at 3.495 trillion. France and Italy follow suit with economies worth $3.130 trillion and $2.328 trillion each.

An analysis of the laundry business in Europe shows a booming market. In Germany, for instance, the Dry Cleaning services market generated £3.7 billion between 2019 and 2024. This was a 0.2% growth rate. In comparison, the UK generated revenue worth £1.4 billion in the same period, a 5.2% decrease in the industry’s Compound Annual Growth Rate(CAGR). 

France’s laundry and dry cleaning business generates an estimated £292 million, with around 4,500 laundromats.  In Germany, 4,215 laundry businesses were registered between 2019 and 2024, employing 56,791 people. This accounted for a 2% decline in industry workers. The UK, on the other hand, registered a total of 5,521 businesses, a 4.6% increase, and employed a total of 50,967 employees. 

Target Audience and Market

The European laundry and dry cleaning industry provides services to individuals and commercial/industrial clients. In the region, most private individuals wash their clothes at home instead of outsourcing to professionals. This means that the major target audience for European businesses is commercial and industrial clients, especially in the healthcare and hospitality industries. 

In Germany, laundromats mainly clean flat linen for the hotel industry, the healthcare sector, and a range of other professional businesses. This is similar to the UK, where the healthcare and hospitality sectors outsource their laundry needs to professionals. 

The location of your laundromat is also important. In the UK, London’s combination of high-income residents with a preference for convenience, and its high concentration of hotels and other businesses ensures that the laundry market thrives. London also has the most dry cleaners per capita in the UK, with one laundromat for every 2,976 people. 

In Germany, the central region houses more companies and inhabitants than the rest of the country. It therefore holds a large number of potential customers. 

The French industry shows a different story, however. Laundromats in France thrive in densely populated areas, mainly universities. This means that their target audience is made up mostly of students. Laundromats are strategically placed near universities generate higher sales than those in low-density areas. 

To calculate your total addressable market (TAM) for this audience, you first have to decipher two things: your number of potential clients and the average price they would pay for your services. Your TAM comes from multiplying those two factors together. With the right data, we can calculate the number of potential clients. 

For instance, let us assume that London has a total of 1148 hospitals and 942 hotels. About 70% of that market outsources their laundry to professional cleaning services, which means that the laundry businesses in London have 1463 potential clients from the healthcare and hospitality sector, their target market. 

If each business outsources 300 kg of weekly laundry at the price of £3.15 per KG, that equals £945 weekly revenue from just one company alone. This means that the laundry market in London alone can generate a projected weekly revenue of £1,382,535.

Laundry Business Market Trends in Europe

The laundry business in Europe has had low growth rates and high decline rates for the past few years. This can be attributed to the COVID-19 pandemic and the resulting lock down in 2020. The pandemic forced offices and businesses to close, and most customers did not need their laundry done professionally anymore. Ultimately, this compounded in a huge decline in the industry’s revenue.

This reduction can also be attributed to several growing trends in the European laundry industry. An analysis of the laundry business in Europe shows a growing trend: customers are becoming more environmentally conscious. This is leading to an increase in demand for eco-friendly, less harmful alternatives to the chemicals and processes used in the industry. Cashless, self-service laundries and laundry mobile apps are also growing in popularity as people are beginning to adopt cashless, digital lifestyles.  

Cashless, self-service laundries and laundry mobile apps are also rising in popularity. This is because people are beginning to adopt cashless, digital lifestyles. Following the rise in online services, the UK laundry business accounted for 29.10% of global online laundry service revenue in 2023.

Competition

A market analysis of the laundry business in Europe shows that the industry is highly localized. Many laundry and dry cleaning businesses in Europe are small and medium businesses, with a few exceptions in different countries. Some of these laundry businesses and franchises stand out. 

The Wash ME franchise has over 3000 self-service laundromats in France. They offer their numerous clients 24-hour service, 7 days a week.  The Wash ME franchise is a very digitally present, and eco-friendly laundry business. This shows in their detergents, which are hypoallergenic and eco-friendly. Their laundromats also use LED lights to conserve energy. 

At all locations, their machines have different systems and washing options available to their target audience. They also offer multiple payment methods, and their locations are accessible to people with reduced mobility. 

Similarly, Elis UK tailors its services specifically to industrial and commercial businesses such as food manufacturing and catering, the healthcare and hospitality sectors, and care homes across the UK. This franchise focuses on laundering linens, bedspreads, surgical gowns, and professional work attire for their target audience. 

Elis shows a deep understanding of their target audience in the complementary services they offer, such as cleanroom laundry solutions and washroom hygiene solutions. They are also partnered with organizations such as the NHS and Suez.

Barriers to Entry

The laundry business in the UK is subject to certain hurdles. Much like the laundry business in North America, market share concentration for this industry is low due to its localization. This means that it is highly price-competitive. The top four companies in this market in the UK barely generate more than 40% of all industry revenue.

Market analysis of the laundry business in Europe shows that environmental regulations are also a huge barrier to entry into this industry. Growing concerns about environmental changes have led the EU to impose regulation 648/2004, which imposes two-tier testing on the biodegradability of detergents, as they fall under the umbrella of Surfactants. This is because runoff from detergents was beginning to leak into bodies of water and cause algal blooms, which in turn block out sunlight to aquatic life living below the surface and affecting the ecosystem. 

Conclusion

A market analysis ensures that your business ideas are not only viable but also poised for growth and sustainability. As you embark on your journey in the laundry business, let this market analysis be your guide to achieving long-term success and profitability.