Reportedly, there are more than 17,500 conveyor car wash locations in the U.S. According to the 2023 Top 50 U.S. Conveyor Chain List, 88.3 percent of the leading conveyor chains are exterior washes and only 11.7 percent provide assisted services.
This along with recent and notable M&A activity underscores the fact that car wash industry growth is occurring mostly with exterior washes. Despite the shifting dynamics, there is still demand for assisted services and full-service conveyors remain a strong source of industry wash revenues.
According to the results of Auto Laundry News annual operator surveys, most full-service conveyors do a lot more than wash the exterior. In addition to interior vacuuming and hand finishing, more than 67 percent of respondents offer detail shop services such as upholstery cleaning, sanitizing, waxing, and buffing services. Historically, the most popular non-auto profit centers at full-service have been greeting cards, coffee bars, and fast food.
The employee count to deliver services varies between 17 on weekdays and 21 on weekends. This includes full- and part-time staff. Most respondents describe hiring as difficult to very difficult. Average full-service hourly wages have increased from $8.89 in 2013 to $11.44 in 2023 with 67 percent of respondents reporting more than $12.00 an hour.
As shown above, respondents have been reporting consistently greater average wash volumes whereas reports of average daily traffic have remained consistent. This underscores the continued demand and willingness of consumers to pay higher prices for assisted services despite the obvious growth of exterior washes.
In 2013, full-service average gross revenue was $14.90 per car and average price for a hand wax was $56. The average is now more than $20, and more than 70 percent of respondents are charging above $18. The average price for a hand wax is up to $70.
Consequently, washing a little more than 200 cars every day at $20 a car equals more than $1.5 million in annual sales.
Conversely, as shown above, the data suggests it costs increasingly more to clean, shine, and protect vehicles.
The most common equipment to generate sales includes prep gun, over under conveyor, foam applicator, motorized curtains, rocker brush, wrap-around, high-pressure arch, water-repellent arch, ceramic arch, led lights, and air dryer.
As for advertising and promotion, social media, direct mail, and newspaper ads remain the most common way to reach customers. More than 80 percent of full-service respondents have a website.
Over the last five years, respondents reported cost of goods as percentage of total revenues as 20.6 percent, on average. Utilities were the highest at eight percent of sales. Over this period, respondents indicated operating expenses exceeding 60 percent of sales with labor the greatest expense consuming over $0.40 of each sales dollar.
Consequently, the data implies that full-service remains a profitable enterprise despite its higher operating cost.
Full-service is affected more by season than other types of washes. For example, there is not much variation in the percentage of wash business done by season for exterior and self-service washes.
Whereas in many regions, there can be as much as a 50 percent increase in full-serve business during winter as compared to what occurs during some summer and fall months.
As for the future, back in 2013, 20 percent of full-service operators planned for an expansion within the next 12 months. One half of them planned to build an express wash.
In 2015, expansion plans dropped to 11 percent. By 2017, the percentage of full-service respondents planning expansion dropped to none and has remained at none ever since.
Arguably, the industry will see a reversal of these trends once inflation and supply chain disruptions normalize.
Bob Roman is a car wash consultant and can be reached at email@example.com.