Pool industry service prices increase between 5 and 10 percent from 2021 residential service price levels
When the country’s largest retail stores are losing money and facing economic uncertainty, can the pool and spa industry be far behind?
Price increases across the board have begun to curtail consumer spending on luxury items, according to the latest earnings reports from Target and Walmart, and experts say that the economy is entering a period of deep uncertainty. Target reported a 52-percent drop in profits last quarter, and Walmart’s profits fell by 25 percent. The companies say that they are incurring higher expenses due to supply chain issues and that increased prices are discouraging consumer spending on non-essential items.
“Growth was challenged by unusually high costs, resulting in profitability well below what we expected to be and where we expect to operate overtime,” said Target CEO Brian Cornell on the company’s latest earnings call.
According to the U.S. Bureau of Labor Statistics, consumer prices jumped 8.3 percent in April compared to 12 months earlier.
And it looks like the other shoe has begun to drop: The rising prices of goods and services has caused the pandemic-driven increased consumer
2022 Survey of residential service prices shows pool service companies are charging between 5 and 15 percent over 2021 prices. See story on page 18. spending to contract rapidly.
In a note to clients, Bespoke Investment Group said “Few companies are so entwined into so many aspects of the U.S. economy as [Walmart] and [Target], and their logistics and supply chain operations rival or exceed those of most other companies. If they’re having these types of issues keeping up with the rapidly changing environment, who isn’t?”
It is certainly apparent in the pool and spa service sector. Every year Service Industry News conducts a three-part industry survey to help pool maintenance professionals keep their fingers on the pulse of the industry. The results of this year’s billing survey show clear evidence that pool service professionals are struggling to keep up with acrossthe- board price increases. The cost of pool and spa service has risen dramatically in the year since Service Industry News last conducted its survey, and even more dramatically when compared to the year prior to the pandemic.
For example, in Southern California, where participation in our survey is always heaviest and therefore most reliable, service techs were charging an average of $102 a month for once-weekly service in 2019. According to responses to this year’s survey, that number has increased by about 50 percent since then.
The accompanying graphic shows how service pricing has changed from last year to now. In keeping with the nationwide statistics, in the last year, pool service firms have been forced to raise prices by 5 to 15 percent.
But the shifting buying patterns of Target and Walmart customers may be indicators of an economy on the brink of trouble, in which case the pool service sector would be wise to brace itself for a tough time ahead.
Because while a great many homeowners consider pool care an essential service, there are enough do-it-yourselfers out there who may want to tackle the job themselves as a cost-cutting measure.