The ``typical'' dealership included in this year's listing of North America's top independent retailers operates 33 stores and reports annual sales of approximately $50 million, about 65-75 percent of which are derived from retail-related activities, with the rest coming from a mix of commercial and wholesale business. This portrayal is based on data gleaned from Tire Business' most recent annual survey of leading tire dealerships in the U.S. and Canada.
Thirty-three is the median number of stores. Because of the top-heavy nature of the rankings, the average number of stores, at 78, is more than twice the median. Both the median and average are up over last year: the median by three, and the average by six.
The average sales per store stands at about $1.2 million, up slightly from the 1998 figure. Hawaii's Lex Brodie Tire Co. tops the list with $3.4 million per store, followed by: Les Schwab Tire Centers and Forrest Tire, each with slightly more than $3 million per store; Discount Tire, with $2.5 million per store; and Dunlap & Kyle and Everybody's Oil Corp. (Tire Barn) at $1.5 million.
On average, tire sales represent 54 percent of retail sales among the companies that provided data, vs. 37 percent for automotive service and 9 percent for other activities, which include wheels and gasoline.
Tires (including mounting, balancing etc.) represent as little as 20 percent of retail sales among the responding companies, ranging up to as high as 100 percent; the automotive service portion of retail sales ranged from zero to as high as 70 percent.
Automotive service continues to be the profit driver for nearly all dealerships responding. The average profit margin for service, 64.2 percent (in a range from 42 to 90 percent), is more than twice that for tires, 31.5 percent (ranging from 19 to 48 percent), or for wheels, 26 percent (in a range from 15 to 45 percent).
Independent tire dealers surveyed for this section consider other independent dealers their most serious competition, although mass merchandisers and tire company stores have the respect of most independents as well.
On a scale of 1 to 7 (1 being most serious), dealers rated other dealers at 1.98 vs. 2.4 for mass merchandisers and 2.74 for tire company stores. Warehouse clubs were rated a 3 out of 7, while car dealerships, auto parts stores and mail-order operations were all rated at 5 or above.
Of the 75 companies profiled, seven make their headquarters in California, five in New York, and four in Florida.