ECJ EUROPEAN Cleaning Journal

A survey has been conducted by the French cleaning association into the state of the industry, reports Christian Bouzols, ECJ correspondent.

The Fédération des Entreprises de Propreté - the French contract cleaning association - has published a survey showing the major developments taking place in the French cleaning sector.
The purpose of the study was to identify the main factors that are bringing changes to the industry, such as new regulations, customer expectations, and new pressures on work practices.

The picture that emerges is that the sector is undergoing major changes. The first finding
is that more than 50 per cent of the workforce are employed by fewer that one per cent of
the companies. This distribution has been fairly stable for a number of years.

During the 1990s and 2000s, the industry went through a wave of mergers. Although this development towards greater concentration has slowed down, it still continues to mark the cleaning market scene today, with the major companies continuing to see their turnovers grow.
Thus between 2003 and 2011, the turnover of the 10 largest cleaning companies grew from 3 billion to 4.5 billion euros, which equates to a 48 per cent increase over the period.

This change towards greater concentration, which was mainly due to the major groups practising a policy of taking over small and medium enterprises, has led to the belief that SMEs in the cleaning sector were in trouble and that their very existence was in peril.

However what the survey shows is that in 2012, cleaning SMEs not only still existed, but were displaying a certain energy that seemed to be lacking in the big groups. It turns out that this movement of acquisition and concentration is being fed by the continued creation of dynamic companies in the sector.

Even if one excludes sole traders, whose real activities and the duration of these activities are quite unpredictable, the sector gives birth to 2,600 new businesses each year. This dynamism is partly explainable by the fact that barriers to entry are low, in terms of both qualifications
and investment.

For a long time now, profit margins in the cleaning industry have been considered low, but they’ve fallen markedly since 2008. This situation is becoming quite worrying for the financial health, and even for the very survival, of many cleaning contractors.

About half of cleaning companies have seen a reduction in the demand for their services and about 30 per cent of them have had to face contract cancellations and the reopening of competition by their corporate clients.

Over a quarter of all companies have had to lower their prices. In order to compensate, they’ve had to increase their productivity and trim their profits even more.

It’s clear the cleaning sector’s vitality depends to a great extent on the health of the national economy. The current crisis has increased the number of company failures and reduced company creation (not counting sole traders).

The lacklustre economic environment also means that there are fewer surfaces to clean, and that therefore the potential market for cleaning companies has been reduced.