Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/244093
Facts section: Tire dealer profle Tire dealers vs. car dealers Both are making noise; only one is way up in market share I s the independent tire dealer market a mature market? You might say that. Independent tire dealers have owned their stores an average of 22 years, and 68% are single-store locations. Te typical owner is a Caucasian male in his 50s. Tat will change eventually, at least for 37% of the owners who have their children in the business. But what about the other 63%? Even with a succession plan, many of those dealers might be willing to sell for the right price. Two of the largest players in the retail market are looking for those very opportunities. Monro Mufer Brake Inc. owns 941 outlets in 22 states and the District of Columbia. Nearly 44% of them are independent tire dealerships doing business as Mr. Tire, Tread Quarters Discount Tires, Autotire, Tire Warehouse, Tire Barn, Towery's Tire and Auto Care and, since August, Curry's Auto Service. Te rest, classifed under "Miscellaneous" in Charts 23 and 24 below, are mufer shops that also sell tires. (Chart 24 indicates which channel received the tires from the factory. Tey are either then wholesaled or sold directly to the end user. Each tire sale is only counted once.) "On a combined basis, the acquisitions we have completed and announced... in fscal 2014 represent nearly 5% annualized sales growth, and we are encouraged by the opportunities for additional atractive acquisitions by our fscal year end (on March 31, 2014)," says John Van Heel, CEO and president. Pep Boys-Manny, Moe & Jack is also on the prowl for new Service & Tire Centers. Te mass merchandiser purchased 17 Discount Tire Centers in Southern California from AKH Co. Inc. last fall. Te acquisition gives the company 211 tire dealerships in addition to its more than 540 Pep Boys stores and Supercenters. Chart 23 U.S. CONSUMER TIRE RETAIL MARKET SHARE (Based on retail sales) Pep Boys averages 10 bays per retail store. Te average independent tire dealership averages eight bays. But car dealerships are selling more tires at the retail level than ever before, and they are growing at a faster rate than any other distribution channel. In 1999, they accounted for 1% of the replacement consumer tire market. Tat number has increased dramatically since then. Retail market share by distribution channel Channel 1999 2013 Independent tire dealers Mass merchandisers Warehouse clubs Company-owned stores Auto dealerships Miscellaneous outlets 59.5% 17.5% 8.0% 8.0% 1.0% 1.5% 60.5% 14.0% 8.5% 7.5% 7.5% 2.0% Since 2005, auto dealerships have more than doubled their share of the consumer tire market. Ford Motor Co. and its more than 600 Quick Lane Tire & Auto Centers outlets nationwide deserve a lot of the credit — no other vehicle manufacturer has its own tire-specifc retail stores. In the fall, Ford aggressively ran a full-page color advertisement in USA Today promoting its Quick Lane tire and automotive services. Te ad promoted what is becoming an industry standard: a mail-in rebate on the purchase of four tires. Goodyear, Dunlop, Continental, Hankook, Pirelli, Bridgestone and Yokohama were the brands associated with the rebate, which jumped to $140 if the Quick Lane credit card was used. (Quick Lane also sells the Michelin, BFGoodrich, Uniroyal, General, Toyo and Firestone brands.) For an oil change, the stores charge as high $39.95. Tat Chart 24 CONSUMER TIRE DISTRIBUTION CHANNEL MARKET SHARE Distribution channel 2012 Initial channel 2013 2011 Independent tire dealers 60.5% 60.5% Independent tire dealers 77.0% 77.0% Mass merchandisers 14.0% 14.0% Tire company stores 8.0% 8.0% Warehouse clubs 8.5% 8.5% Tire companyowned stores 7.5% 7.5% Auto dealerships 7.5% 7.0% Miscellaneous outlets 48 2013 2.0% 2.5% Miscellaneous* 2009 2007 75.0% 74.0% 8.5% 8.5% 15.0% 15.0% 16.5% 17.5% * Miscellaneous includes mass merchandisers, warehouse clubs, car dealers, auto parts chains, muffer shops and oil companies/service stations. MTD January 2014