DEALERSHIP SNAPSHOTBy Bruce Davis, Special Projects Reporter
The continuing surge in consolidations among the industry's major players pushed the average size of a dealership in Tire Business' 2012 Top 100 independent dealers ranking to 58 stores, up three from a year ago, according to an analysis of data gathered by Tire Business.
Since a measurable portion of store growth by the top-tier competitors involved acquisitions of assets from companies already in the ranking, the median store count dropped two stores to 22.
The minimum size to qualify for the Top 100 this year dropped back to 10 from 11 a year ago as consolidations, buyouts and/or bankruptcies took a number of prominent players from a year ago—such as Kramer Tire, Martino Tire, Strauss Discount Tire, etc.—out of the mix.
In all, 41 dealerships out of the 105 that make up this year's ranking added stores in the past year, while 19 sold or closed stores, leaving 40 that had no net change in the number of stores.
At the same time, the average sales revenue of an outlet operated by a Top 100 dealership jumped 23 percent to $2.94 million, which can be attributed in part to the steady rise in tire selling prices throughout the 2011. The median sales revenue of a store—based on data from 60 companies that supplied sales information—was $1.4 million, down slightly from $1.43 million a year ago.
The typical dealership outlet derived 57 percent of sales from tires, 41 percent from automotive service and 2 percent from other, miscellaneous sources. This breakdown is skewed more heavily toward tires than a year ago at the expense of service revenue sources, Tire Business' analysis shows. Again, higher retail selling prices played a key role in this change.
Three of the dealerships, including No. 2 Discount Tire Co. Inc., are focused 100 percent on tires and associated services, while 13 indicated tires were less than half of revenues.
The typical Top 100 tire dealership offers more than 10 brands—seven flag, one to two import and one private—with Michelin, Goodyear and BFGoodrich the dominant brands, carried by 74, 73 and 72 dealerships, respectively, followed by Bridgestone and Dunlop (60 each), Continental (57), Kelly (52), Firestone (51), Cooper and Hankook (50 each), General and Pirelli (49 each) and Uniroyal (48).
All but four of the 100 dealerships in this year's ranking are privately owned, including Somerset Tire Service Inc. and Ben Tire Distributors Ltd., which are owned by employees.
Of the four firms publicly owned or controlled by outside financial holdings, three—TBC Corp., Monro Muffler Brake Inc. and Pep Boys-Manny, Moe & Jack—are among the six largest dealerships.
Additionally, Goodyear owns minority stakes in two Canadian dealerships, Coast Tire & Auto Service Ltd. and Fountain Tire Corp.
Nine of the dealerships in this year's Top 100 are affiliated with Tire Alliance Groupe (TAG), representing 293 outlets, with seven dealerships and 234 outlets flying the American Car Care Centers Inc. (ACCC) flag.
Other affiliations include: Good-year Tire & Service, carried by 17 dealerships at 425 locations; and Michelin's Alliance program, 19 dealers with 384 stores.
American Tire Distributors Holdings' Tires Pros network, which now numbers more than 500 locations, has just one dealer among the Top 100—Associated Tire Stores Inc. with 12 stores in Utah and Wyoming—since most Tire Pros dealers are smaller, one-, two- or three-store enterprises.
On the service side of the ledger, dealerships in the ranking operated an average of eight service bays per outlet.
Alignments, suspension work (shocks, struts, etc.), brakes and oil/lubrication top the list of services the largest dealerships offer (more than 97 percent of those for which information could be ascertained), followed by cooling system/air-conditioning maintenance/-repair at about 80 percent of dealers.
Less common among tire dealers are engine diagnostics, exhaust and transmissions, all falling below the 75-percent mark, with exhaust work the least common.
Looking at the market geographically, Bridgestone Americas' retail network—Firestone Complete Car Care, Tires Plus and ExpertTire stores—is the most prevalent name, with a presence in all 10 of the regional areas profiled by Tire Business, including being the largest in four—Southeast, Upper Midwest, Southeast Central and Southwest Central.
TBC Retail Group shows up in nine of the 10 regions, including No. 1 in the South Atlantic and Mountain regions, the latter with its Big O Tires Inc. franchise network. Discount Tire/America's Tire, No. 2 nationally with 840 outlets, has a presence in six of the 10 regions but is not No. 1 in any one of them.
See the thumbnail charts on the regions on pages 23 and 24 for the complete listings.
To reach this reporter: bdavis@ crain.com; 330-865-6145.
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