By Jim Utter
Director of Journalism
Data from the International Carwash Association’s (ICA) Pulse Report reveals a noticeable decline in growth expectations for the car wash industry, signaling potential challenges ahead. The findings, shared by Bob Klein, ICA’s Research Director, during the November webinar “The Pulse of the Car Wash Industry ’24: A Springboard for ’25 Planning,” provide insights into how the industry’s outlook is shifting.
Key Findings from the ICA Pulse Report
Declining Optimism Among Retailers
The percentage of car wash owners expressing optimism about current industry conditions fell to 43% in Q3 2024, down nearly 20 points from Q2. Looking six months ahead, 46% of retailers remain positive, but this also represents a sharp decline.
Bob Klein highlighted the trend:
- In Q2, retailers anticipated an 11% year-end revenue growth, but in Q3, that projection dropped to 5%.
- Historically, the industry has enjoyed steady growth of 12% annually over the past two years, making the recent 50% decline in projections particularly striking.
“My preliminary Q4 data indicates optimism remains low, hovering around that 5% growth level,” Klein said.
Profitability Expectations Hold Steady
Despite the dip in optimism, the majority of car wash locations open for at least 12 months expect profitability to either:
- Remain the same (29%), or
- Increase (45%).
The Role of Subscription Sales
One bright spot in the report is the growth of subscription sales, with 57% of retailers expecting increases in this area. However, non-member sales are a growing concern:
- Nearly 29% of retailers anticipate a decline in non-member sales.
- Data from the Q3 2024 Car Wash Industry Report by Rinsed, which tracks 2,000 locations, mirrors this trend. Subscription growth increased by 16.6%, while non-member sales declined by 5.3%.
Suppliers Show More Optimism
Suppliers in the car wash industry remain comparatively positive, with:
- 54% expressing optimism about current conditions, and
- 63% feeling positive about the six-month outlook.
However, suppliers also foresee slower revenue growth, expecting it to decline from 14–15% in recent years to around 7% in 2024.
Emerging Concerns in the Industry
Several factors are driving this cautious outlook:
- Non-Member Sales Decline: Retailers and consumers alike are flagging this as a problem area.
- Revenue Growth Slowdown: Both retailers and suppliers anticipate significantly reduced growth rates compared to the past two years.
- Economic Uncertainty: Ongoing shifts in consumer behavior and market conditions are contributing to a “watch and wait” approach for many in the industry.
Looking Ahead to 2025
While the industry continues to face challenges, opportunities for growth—particularly through subscription models—remain strong. As the sector prepares for 2025, industry leaders are keeping a close eye on emerging trends and adapting their strategies to navigate potential headwinds.
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