[Market Watch] PCO field reports from across the United States

GREGORY PEST PREVENTION
Greenville, S.C.
South Carolina has been hit hard by layoffs in the manufacturing sector, negatively impacting the residential pest control market, according to Ben Walker, vice president of operations for Gregory Pest Prevention, Greenville, S.C. “The economic conditions in South Carolina seem to have hit pretty hard,” he said. “We have had a lot of factory layoffs in our area. Unemployment has risen to an all-time high.” As a result, Gregory experienced a “significant decrease” in new residential pest control sales in 2003, but residential service increased in 2003 from 2002. Fortunately, the company’s commercial business stood strong. “By investing more money in advertising and training, we were able to have a significant increase for fiscal 2003 despite poor residential sales,” Walker said. And with one quarter already in the books for the coming year, the outlook for 2004 is promising. “We have seen a considerable increase in residential sales compared to last year,” he said. “Commercial sales have remained strong, and we have recorded record sales in our termite division since September of 2003.”

WESTERN EXTERMINATOR CO.
Anaheim, Calif.

California’s ongoing fiscal crisis is taking a toll on pest control companies in the state. “State and local governments are facing huge deficits and budget cuts,” observed Michael Katz, president of Western Exterminator Co., Anaheim, Calif. “We feel this will impact directly on our work with these agencies, such as local school districts,” he said. “This will also have a trickle-down effect as these cuts impact local economies.” Other factors negatively impacting small businesses include increases in payroll taxes and escalating workers compensation costs. On a more positive note, the housing market remains strong, which has provided a “great boost” for the company’s termite business. Katz said Western is anticipating “moderate growth” in 2004 with continued pressure on profits due to ongoing increases in fuel costs, insurance rates, payroll taxes and government fees. “We’re simply trying to focus on providing the best possible services to our customers while working hard to fend off the impact of all the various cost increases we’re facing,” he said.

COOK’S PEST CONTROL
Decatur, Ala.
Jim Aycock, president of Cook’s Pest Control, Decatur, Ala., describes economic conditions in his three-state market area as “mixed.” The manufacturing and retail markets have suffered in a down economy, but the service sector, including structural pest control, has performed well. “Unemployment remains fairly high,” he said, “but we still have difficulties in finding good people. Often we go through a great number of applicant interviews before we find that right person.” Aycock said Cook’s Pest Control had a solid year in 2003, but the company is anticipating an even stronger 2004. “Last year was a good year except for our termite swarm season, which did not occur,” he said. “Our budget for 2004 calls for double-digit growth. We feel that we have the right people to make our budget in 2004.”