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Commercial Laundries: The Unprecedented Cost Pressures Affecting The Sector

Like many sectors, the pandemic has had a devastating impact on commercial laundry businesses, having had virtually no government support throughout the lockdowns even though volumes dropped by up to 80%. Unfortunately, the lifting of restrictions has brought a new set of issues, particularly severe staff shortages and problems in the supply chain. 

The main way staff shortages are being addressed is by increasing wages to attract job seekers to the industry. According to the Textile Services Association, this has resulted in the following rise in wages: drivers up by 25%, production up by 10% and wage gap inflation in other roles up by 10%. Utilities and chemical costs are also rising at a worrying rate too.

Many laundries also supply textiles services such as linen hire to the hospitality industry too.  Here the prices are skyrocketing, with sheeting and bedding up by 55% and container freight costs by 300%. This not only affects operations but dramatically changes the cost base, too, as these types of massive inflationary pressures cannot be absorbed by businesses that already work to minimal profit margins. 

Adam Hickingbotham, Head of GFNR & Services at Beacon, explains 'Like the hospitality sector, commercial laundries are struggling with staff shortages due to the pandemic and Brexit. This means that some businesses have been unable to adequately deal with the spike in demand following the lifting of lockdown restrictions. This should start to remedy itself over the coming weeks, but if you have issues, it's important to keep the lines of communication open with your supplier.'  

Unfortunately, many of you have already received price change notifications from your linen supplier or may do in the coming months. Please be assured that Beacon is continuously working behind the scenes to challenge any price change requests and is proactively attempting to mitigate any unavoidable increases. This often includes negotiating a reduced percentage increase or deferring the implementation date. In fact, although double-digit price rises seem to be the norm across the sector, so far, all Beacon linen supply partners have kept their increases to single figure rises. Hopefully, this evidences the real value that Beacon can bring to supplier negotiations.

Contact

If you would like further information on the current market conditions or advice on how you can work more proactively with your supplier, you can speak to Adam using the details opposite.

 

Alternatively click the callback request button, and one of our team of experts will be back in touch to see how we can help.