UniFirst Corporation SWOT & PESTLE Analysis

Strength

1. Broad product portfolio and services: UniFirst has a wide variety of products and services. They have about 40k SKUs in stock and 340k SKUs in total as of 2019, which include shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. At certain specialized facilities, they also decontaminate and clean clothes and other items which may have been exposed to radioactive materials and service special cleanroom protective wear and facilities. They also offer non-garment items and services, such as industrial wiping products, floor mats, dry and wet mops, restroom and cleaning supplies and other textile products. They also provide customizable garments with diverse range of designs to large customers. They have the largest in-house digital image processing capability, allowing them to convert an image provided by a customer into customized, mass producible embroidered emblems, typically within two days. Moreover their centralized services, specialized equipment and economies of scale have helped them to be cost effective and gain an advantage.

2. Broad customer base with geographic and end market diversification: UniFirst has a broad customer base with geographic and end market diversification. They serve businesses of all sizes with over 300,000 customer locations across United States, Canada and Europe. Their customers vary from small businesses to large companies covering virtually all types of industries. They are servicing to 253 “Fortune 500” companies and have a longstanding client relationship. Some major clients are Costco, Coca Cola, Walmart, Good Year, Hershey’s, Honeywell, Valvoline and many more. For some specialty garment segment, their customers also include some government agencies, R&D companies and utilities with operating nuclear reactors. They have a 90% customer retention rate with approximately 4.5 years of average contract duration.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Complying with Environmental regulations: UniFirst Corporation need to comply with various environmental regulations with respect to federal, state and local laws pertaining air pollution, water waste discharge, treatment and disposal of hazardous waste materials. They have to incur a lot of expenses to comply with environmental regulations which can have an effect on their operations and financial condition. Different markets have different environmental regulations which can affect an impact on the financials of the company. Even there are different local laws within the country itself. Like in US, Texas and Florida have different liability laws in case of environmental disaster and UniFirst has nationwide footprint across US, Canada and Europe. So UniFirst should carefully evaluate the environmental regulations in different markets they are operating or before entering new markets.

2. Laws pertaining to waste disposal: As more and more focus is given to protecting the environmental, the rules and regulations are becoming more stringent for the dispose of waste materials of manufacturing companies which impacts the environment. Over the years, UniFirst Corp. had to settle claims relating to disposal of hazardous materials because as per the law, the owner or the lessee is responsible to take care of the hazardous materials, so it is important that the company is complying with the regulations. Especially their nuclear garment decontamination facilities which have huge amounts of waste material that is very hazardous in nature. Mishandling of those waste materials or incompliance with laws pertaining to that can even cause shut down of those facilities.

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