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Pep Boys: 31 tire centers in "13

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PHILADELPHIA—Pep Boys - Manny, Moe & Jack is budgeting $65 million this year to cover opening 31 Service & Tire Centers and seven supercenters.

This budget is nearly 19 percent higher than what Pep Boys invested in the year ended Feb. 2 but about 13 percent lower than the fiscal 2011 outlay.

Pep Boys did not elaborate on where the new tire centers would be located or whether all would be new constructions. Last year the Philadelphia-based tire, auto service and auto parts retailer opened 20 tire centers and six supercenters and converted seven supercenters into “super hubs.”

It also added speed shops at 17 existing supercenters, expanding the speed shop network to 74 locations, and said it plans to open up to 50 speed shops in 2013.

Commenting on the company's 2013 expansion plans, CEO Mike Odell said: “Our strategy leads with service now more than ever. We still favor the fundamentals for (do-it-for-me customer) over the long haul.

“The demand for maintenance and repair remains consistent, which has been driving the growth of our service customer base. We also still intend to provide a great value, but that value will be more oriented toward raising the customer experience that we deliver.

“There is a huge gap between the dealer experience and its cost and the rest of the automotive aftermarket with its lack of consistently positive customer experiences. We intend to own that position to fill that gap profitably and to use our retail business to further complement our repositioning.”

Pep Boys also is test marketing a new store concept, embodied in a prototype store that opened recently in Tampa, Fla., that is designed to appeal to a broader swath of customers.

“Our stores have historically been organized for car guys and people on a mission,” Mr. Odell said. “They can be intimidating for many customers.”

In the test lab in Tampa, Pep Boys said it created “neighborhoods” within the store that are designed to appeal to the firm's target customers.

“For our service customers,” Mr. Odell said, “this includes a more inviting exterior and interior physical environment.

“It also has a neighborhood adjacent to the customer lounge that pulls together the products that we carry that appeal to these customers that do not necessarily have deep automotive knowledge and may not even be very interested in their car, except as a mode of transportation.”

The prototype has a speed shop to reach the more traditional enthusiast customers and also caters to the DIY customer with Pep Boys' traditional range of auto parts and fluids.

“The changes...also include the use of technology and more tailored marketing messages and programs,” Mr. Odell said.
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