A typical retail tire outlet operated by one of North America's 100 largest dealerships employs about 13, operates with 7.2 service bays, carries 7.3 tire brands and generates $1.87 million in sales, split 54/42/04 among tires, automotive service and other revenue sources.
This profile is gleaned from information from surveys submitted by more than 100 U.S. and Canadian dealerships for Tire Business' annual look at the tire retailing business in North America.
The top 106 dealers (106 thanks to a 14-way tie among 10-store dealerships for the 93rd spot) operated 4,218 stores as of Aug. 1, or an average of nearly 40 stores per dealership. The median dealership size is exactly half that, 20 stores.
The numbers culled from the 2004 surveys are very similar to those calculated from the 2003 report. The average store sales of $1.87 million were up only marginally from $1.81 million a year ago but up significantly from the $1.27 million reported in 2001, according to data from 60 dealerships that provided sales numbers.
The tire share of the average store's sales was down a percentage point from a year ago, while the auto service component grew by a point. Revenue from other sources was constant at 4 percent.
Of those companies that supplied revenue data, the tire share of their sales ranged from as low as 25 percent up to 100 percent, with auto service comprising as low as 0 percent up to a high of 75 percent. About two of every five dealerships said tires represented less than half of their sales income.
Automotive service continues to be significantly more profitable, according to those surveyed. The profit margin on automotive service last year was 66 percent (in a range from 35 to 80 percent) vs. 34 percent for tires and wheels (in a range from 21 to 66 percent), according to the data from the 60 dealers who responded to the question. The average is up slightly for both tires and service from the 2003 survey results.
All but a handful of the 100-plus dealerships profiled in the charts in this issue are privately owned-predominantly family owned. Two (STS Tire and Purcell Tire) are employee stock-owned and TBC Corp. (which operates Tire Kingdom Inc. and Big O Tires Inc.) is publicly held. In addition, in Canada, Goodyear owns 49 percent of Fountain Tire in Alberta and also is a minority shareholder in Coast Tire & Auto Service Ltd. in Nova Scotia.
Among the dealerships highlighted in this section, three are headed by women-Jennifer Dial at Appalachian Tire Products Inc. in Charleston, W.Va., Barbara Briggs at Briggs and Sons Tire of Fayetteville, N.C., and Karen Mendler of Friends Tire & Hi Tech Service of Indian Point, N.C.
Goodyear continues to be the brand of choice by the leading dealers, with 75 of the 100-plus dealers ranked naming it as one of the brands they carry. Michelin was next at 63 dealerships, followed by Dunlop, 54, BFGoodrich, 50, Kelly-Springfield, 45, Bridgestone, 44, Uniroyal, 42, Continental, 41, General, 40, Firestone, 39, Pirelli, 32, Cooper, 23, and Yokohama, 22.
When total outlets carrying the brands are considered, the picture is somewhat different, with Michelin slipping ahead of Goodyear and Michelin's associated BFGoodrich and Uniroyal brands following close behind and slightly ahead of Continental and General.
Of the typical dealership's brands, five-plus are manufacturers' flag or associate brands, with each dealership also carrying one to two private and/or import brands.