ICA: What’s Next for Car Wash?

By Lauren Shanesy

The retail sector overall is facing volatility—consumer concerns about the economy mean they have tightened spending and are looking for value from the purchases they do make.

At The Car Wash Show this week in Nashville, Tennessee, Eric Wulf, CEO of the International Carwash Association, took the stage to talk about the state of the car wash industry, the trends shaping the business and how operators can find success.

Here’s what’s top of mind for car wash operators today:  

1. The industry is stabilizing, but competition is heating up
After a peak period of M&A growth and rapid new-to-industry site builds, the car wash market is what some would call oversaturated, meaning differentiation is now both tougher than before and even more critical. Market saturation is now the No. 1 operator concern, according to survey data presented by Wulf.

Across multiple data sources, operators are seeing mid-single-digit growth—roughly 5% to 7% in the last 12 months, which is in line with future forecasts—with no sustained periods of decline predicted. M&A activity has cooled from peak levels and is now in a more historically “normal” state, said Wulf.

While the industry overall is stable, site performance varies. Operators on a panel following Wulf’s presentation noted that newer sites are outperforming, while older, more mature locations are seeing lower single-digit growth. In highly competitive markets, overbuilding is creating additional pressure.

“That 6% number shows the industry is healthy—but that’s also the average,” said Tom Fuller, owner of Team Car Wash. “Half the stores are doing better and half the stores are doing worse.”

The panelists noted that operators also need to pay attention to the importance of preventive maintenance and make investments in aging assets or other parts of the business to ensure they can continue to serve customers.

“You’re now seeing a more robust supply market, specifically around the express industry. People are investing in their people, their product and their systems,” said Keith Lutz, CEO at Kleen-Rite Corp. “It's a change from a reactive to a preventive maintenance approach. We have to do what's right by the customer and have what our stores need on the shelf so they can stay functional in operation.”

2. Memberships matter, but aren’t the only revenue route
While memberships aren’t always the right business model for convenience retail car washes, subscriptions do offer a predictable, recurring revenue stream. According to survey data shared during the session, some sites are generating as much as 80% of revenue from memberships.

Additionally, 91% of members say they plan to keep their car wash subscription, while fewer than 5% expect to cancel in the next 90 days. Nearly nine in 10 members also say they would tolerate a price increase if quality remains consistent (70% for non-members). Car wash memberships are now viewed by consumers as essential services—ranking alongside streaming subscriptions like Netflix or Spotify in terms of perceived value, according to the survey.

However, Wulf emphasized that “a member is only one type of customer, and a membership is only one type of loyalty. If you’re forgetting about those that come to us occasionally and who may never give us that credit card … I think we’re missing something.”

Fuller noted that as consumers are becoming more price sensitive, his higher-priced memberships have become harder to sell in the current environment. “Our average club price is about $60 a month. In the last six weeks, it's been more difficult selling those clubs than it has been the $30 price for the exterior.”

Tiered pricing and value messaging will be increasingly important, as will balancing subscription growth with strong appeal to one-time users, according to speakers at The Car Wash Show.

3. Is self-serve making a comeback?
The car wash market today feels dominated by new, multitunnel and express washes, but Lutz is seeing “a tremendous amount of growth in the self-serve segment. I’m here to declare that it is not dead—it is still alive and well.”

Self-serve models have a lower entry threshold for operators, with Lutz citing entry points closer to $1 million than the $5 million-plus likely needed for a tunnel operation. “Now you're seeing both existing operators and new investors entering the space and rehabbing sites that were underperforming to make them inviting to the consumer again. The express model added a professionalism to the business that the self-serve industry followed, and it's paying dividends.” He noted that many operators are seeing 25-30% returns on their investment.

4. Car wash is a hyper-local business
Despite the rise of multisite operators and national platforms, performance still comes down to the individual site, said Wulf. Roughly 70% of members use only a single “home” location, with fewer than 10% visiting multiple sites. “That tells us this is a local business. What matters at the end of the day is where that wash is and how well it’s performing.”

In addition to site selection being a critical success criteria, Wulf said that operators should focus on being community businesses. “Think about the social license that comes with opening a business. How do we treat the communities that we're in? It’s the idea of intelligent growth—being mindful of how we are presenting ourselves to communities when 10 car washes are all trying to come into the same town. How do you make sure you’re telling your story about all the good things you do for the community?”  

5. “Quiet quitting” customers are a risk you can’t ignore
Operators pay a lot of attention to membership churn, but Wulf noted that non-member churn is also a key metric to track. “We can’t forget about the folks that come to us occasionally,” he said.

Survey data showed operators significantly overestimate how often dissatisfied customers complain or ask for rewashes while underestimating how often they disengage entirely. If non-members quietly drop out of the customer base, operators could miss a key signal about declining experience or value at their wash.

“If we're not measuring things like the quiet quitting from non-subscribers, we're missing a piece of the puzzle,” he said.

6. Employee training and culture are critical
People drive consistency—and consistency drives retention.

One of Fuller’s top-of-mind agenda items for the industry: double down on building culture and training employees. In today’s market, where many operations are similar and it can feel impossible to differentiate yourself, people can be the way you do that for your business.

“People is something I think we all need to focus on. I'm excited about the investment the whole industry is making in people. This is becoming a career opportunity for people across all parts of the industry,” Fuller said.

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