PC&D MAGAZINE
Examining self-service statistical trends
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From Volume 26, Issue 12 - December 2002
by: Robert Roman
 
 Related Information
  Table 1: States by region
  Table 2: Population
  Table 3: Self-service wand-bays only (industry averages)
  Table 4: Households by tenure (owned)
  Table 5: Households by tenure (rented)
  Table 6: Wand-bay only by region (1990-2001)
  Table 7: Households by income

As a follow-up to last month’s article focused on full-service trends, this article expands on PC&D’s benchmark reports by providing a demographic profile for each region and an outlook on several key self-service carwash trends.

Time trending

Time trending involves fitting a line to a data series that best reflects the shape of the series.

Depending on which form best represents the data, this line can be linear or curvilinear.

The objective of time trending is to remove the random pattern from a data series and reveal both the cyclical and trend patterns.

Trending equations are useful for data that have a downward or upward cyclical and trend pattern, as much data that will affect self-service carwashes do.

Trending equations can also confirm a horizontally trended or stationary series when regression between the data and time produces a coefficient of determination near zero.

In other words, there is no correlation between the stationary series and the increasing years, which represent time.

The limitation of time-series analysis is that trend lines describe the pathway of the data being examined and not the causes influencing the pathway.

As such, the reader should take care in extrapolating the trends presented here, since weather patterns and economic phenomenon could change the historical trend in the future.

Analysis and outlook

Time series analysis shows that the periodic growth rates for price per minute, revenue per month and revenue per car have kept pace with the rate of inflation, which has been fluctuating around 3.0 percent since 1990.

The underlying trend for each of these variables was found to be upward and statistically relevant for each region and for the industry average composite.

On the other hand, the trend in the wand-bay utilization rate, number of competing bays and average annual wash volume were found to be stationary for each region and for the industry average composite.

If these trends continue, revenue growth will remain primarily a function of price charged per minute. Time series analysis also shows that average location age is growing at a rate of about 3.8 percent per year.

Some of the major demographic components of wand-bay volume such as population, households and income are projected to grow during the next five years. However, this growth is expected to occur at slightly decreasing rates from what was observed during the period of 1990 to 2001.

Some changes ahead

The most notable demography suggests that the do-it-for-yourself market is in for some changes.

For example, data for households by tenure (owned versus rented) shows that the average annual growth rate for owned households is expected to continue to be greater than the growth rate for rented households across all regions.

In addition, the number of households with income under $20,000 to $59,999 - the range of income that represents approximately 76 percent of self-service users - is expected to continue to decrease over time across all regions.

If these trends continue, the ranks of the typical self-service user will include more customers with higher incomes that are homeowners (also increasing the potential for driveway washing).

We can also expect that these structural changes will tend to be more pronounced in areas with higher population growth rates such as the Mountain, Southwest, Southeast and West regions.

The most notable regional statistics indicate that low price does not necessarily ensure higher revenues.

As shown in Table 6, regions with historically lower revenue per minute tend to have higher annual wash volumes but they also tend to have lower annual revenues.

Robert Roman is a former carwash and detail shop operator and is president of RJR Enterprises (www.carwashplan.com), a Clearwater, FL-based company that provides professional services to the carwash industry.
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