Over the past few months, I've heard a familiar tone in my conversations with retail and supplier leaders in the industry - everyone seems to be waiting for... something.
Waiting for the retail platform deck to get reshuffled. Waiting for the next big transaction. Waiting for the One Big Beautiful Bill's accelerated depreciation to ignite store construction. Waiting for interest rates to fall further. Waiting for consumer strains to be alleviated. Waiting for "the next big thing."
But what if this isn't just a pause, but a stage? What if this is as good as it gets - at least for a while?
This might sound pessimistic, but today’s market feels different depending on your vantage point. If you used leverage in anticipation of ongoing double-digit growth, the continuation of 2020-era lending rates, and assumed mid/high teen multiples as your exit strategy, your mood is certainly dampened. If you took a more conservative approach and built your model on incremental profitability, continual efficiency gains, and have maintained a stable balance sheet, you're likely more satisfied today.
Regardless, the car wash industry is certainly in a new period.
The express format is now old enough to drive, and the subscription model is almost ready for middle school. There may already be a new innovation peeking up at us from its crib... or, maybe the priority for today's car wash market isn't finding the next big thing, but the consistent - and sometimes tedious - application of lessons that are all around us.
Collectively, the car wash industry has hoisted a lot on to its shoulders. Buoyed by plentiful capital, abundant acquisition targets, underdeveloped white space, and a pandemic performance proof, the car wash industry experienced a thrilling multi-year ride. Companies grew store and head count, business media fawned, trade show aisles were packed - and private equity swarmed in with enthusiastic conviction. But today's industry leaders have less the permanent grin and more frequently a furrowed brow. Why?
Because success isn't easy - and the work is hard.
So what are the lessons around us? Here might be a few:
Technology. A new unit may cost $8MM to build and three years to ramp, while an investment in automation may pay for itself in weeks if properly implemented. Marketing and monitoring may be the clearest examples.
Talent. We’ve minted plenty of new vice presidents of such and such, but real and enduring performance advantages still live at the site level, in how teams are hired, trained, led, and supported.
Temperance. You can ski downhill with lots of weight on your back, but every added pound - or layer of debt - makes progress tougher when the hill flattens. Paying down loans, self-financing growth, or even slowing down expansion might be today's best approach.
Whatever our hopes for the future or mistakes of the past, let's not forget the strong fundamentals that endure in today's car wash industry: we continue to deliver more value to our customers, and we continue to grow.
Maybe it's time to focus more on progress, and less on pace.
Eric Wulf is the CEO of International Carwash Association. His newsletter series, The Next Move, aims to highlight the shifts, challenges, and opportunities that matter most in the car wash industry. Subscribe to The Next Move on LinkedIn to be notified when new editions are published.