Fourth-Quarter Survey Results Show a Stalled Recovery

Posted December 18, 2020 at 1:24 pm



Robert W. Baird & Co. and TRSA recently released the results of their December 2020 (Fourth-Quarter 2020) Uniform & Linen Rental Survey. The latest survey results show a decline in several key metrics compared to last quarter’s survey.

Key uniform rental survey findings include:

  • Rental Revenue Trends. 62% of respondents fell short of internal revenue projections for the quarter, a near record, with the relative spread between exceeding/falling short hitting a 14-year record (only 5% exceeded expectations).
  • Add/Stops. Employment-driven expansion at existing accounts (i.e., Add/Stop Diffusion Index) fell to 40.5 in December, retesting historical lows (excluding second-quarter 2020’s “shock”) and down from the share rebound to “neutral” in third-quarter 2020 (47.5).
  • No-Programmers. More modest decline, but new sales interest diffusion index fell to 45.2, back into negative territory. Importantly, this metric has only been negative three times in the past 10 years (twice this year alone). Last quarter was neutral, at 50.
  • Growth Outlook. Despite generally weak metrics in fourth-quarter 2020, responses show average 12-month growth expectations little changed (slightly improved), from third-quarter 2020 now at roughly 3%. Weaker than historical trend (3-5%), but not universally negative. Clear bifurcation in results too; firms with heavier hygiene/sanitation exposure (and general geographic/end-market mix) faring better.

Key linen rental survey findings include:

  • Rental Revenue Trends. 83% of respondents cited rental revenue trends falling below expectations in fourth-quarter 2020 with 11% citing revenue near expectation and 6% above expectations. This is similar to second-quarter 2020’s nadir and sharply lower than third-quarter 2020.
  • No-Programmers. No-programmer interest showed quarter-over-quarter deterioration and turned negative at 38.2 after turning positive last quarter (53.6). This is only the second negative reading in this index in the five years we have tracked it, with both occurring this year.
  • Growth Outlook. Forecasted 12-month revenue outlook held stable at +1.6%, below the forecast for uniform rental (roughly 3%) and below previous years’ forecasts of roughly 5%.

To view the full results, click here. For more information, contact Andrew Wittmann, managing director, senior research analyst, Baird Institutional Equities & Research, at awittmann@rwbaird.com or Justin Hauke, vice president, senior research associate, Baird Institutional Equities & Research at jhauke@rwbaird.com.

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