The UK dry-cleaning and laundry services industry grew by 19 percent between 1997 and 2001, to generate estimated sales of £1.34bn. The main sectors of the market are dry cleaning, laundry services and textile rental to both the corporate and the retail markets. The corporate sector accounted for the majority of sales in 2001, with textile rental as the leading sector. Outsourcing is now the norm for many companies that require textile services. It is often an established practice to rent linen and workwear from third parties, which then service and maintain it for the client group. The shift in the UK economy, from a manufacturing to a service base, was beneficial for this market, as aspects of presentation, such as corporate wear, have increased in importance and priority within client companies. Health and safety legislation and requirements have also boosted demand from manufacturing and process sectors.

In the retail market, the growth in spending from the mid-1990s onwards had a positive impact on sales. Increased spending on clothing encouraged consumers to take better care of their clothes in terms of laundering and dry cleaning. In addition to this, demand for domestic laundry and ironing services has also grown. Consumers are becoming more willing to invest money rather than time in these activities.

The UK dry-cleaning and laundry services market is very fragmented in terms of supply. There is a handful of companies offering a national service, but for the most part, operatives are small scale and local or regional. The increase in national chains of hotels and retailers has encouraged the development of national suppliers. However, the scale of business involved is a major barrier to potential new entrants.

The market is very exposed to the performance of the wider economy, and any downturn will have a negative impact, particularly on corporate sales. However, outsourcing of these types of services is long established and unlikely to be reversed. The consumer market will be affected by changing textile technology — which simplifies home care of clothing — as well as the advent of home 'dry-cleaning' products. Other services, such as ironing and laundry services for domestic clients, may provide more positive sales trends.

Key Note anticipates that market growth will slow but continue to increase in the short to medium term.