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Nu-Tread Tire's adapting to change in demographics New markets, trends Succession planning

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EAST BOSTON, Mass.—With the independent tire market as competitive as it is, staying successful in business for more than eight decades is a feat.

Despite changing demographics, innovations and the economic ebbs and flows of its local market, East Boston's Nu-Tread Tire & Auto Service Center has worked hard for the past 81 years to adapt, to change when necessary and to continue grow-ing and evolving.

Owner Bob Katz said the dealership was started by his attorney father Irving Katz who, in 1933, purchased some retreading equipment for $50. He teamed up with his brother to set up a small storefront location.

The retreading operation continued until the early 1970s when the dealership decided to close that side of the business “because it was either time to expand or time to give up,” Mr. Katz told Tire Business.

There was government regulation occurring at the time and the business would have needed more space, which it did not have, so it became a retail-only tire dealership.

When the younger Mr. Katz graduated from college in 1971, he went to work for his dad for a short time. But his father thought his son could learn from working in a tire maker-run store and suggested he go to work for a Goodyear company-owned store, as Nu-Tread was a Goodyear independent dealership.

Bob Katz said he thought he would work there for about a year, but remained for nearly a decade, learning the methods and procedures for running a tire dealership.

He took over Nu-Tread in 1982 after his father's death. “So I didn't get to work with him very much other than when I was in school,” he said.

In taking over the tires-only business, Mr. Katz said he was faced with a choice. Although there were many shops that just sold tires, he found the trend was to add automotive repairs—and he had the experience, since he was an ASE-certified automotive technician.

Today, automotive services comprise more than half of Nu-Tread's sales, according to Mr. Katz.

The decision to add auto service was not the only change Mr. Katz tackled. When he took over the business in the early 1980s, the surrounding neighborhood was roughly 80 percent Italian, but “through the years that has changed.”

The Hispanic population has grown significantly, he said, and if the company was going to stay there in retail, it needed to be able to communicate with those customers in Spanish.

“We still don't do a great job,” Mr. Katz said, “But we're much better than we used to be.”

One way Nu-Tread is reaching out to the Hispanic community is through its website—www.nutreadtire.com—which is offered in English and Spanish, a change that was implemented five years ago.

Another way is through its signage. Nu-Tread has a sign posted outside its shop in Spanish stating that it sells used tires starting at $24.95, a popular tire choice in the Hispanic community. The sign in Spanish indicates Nu-Tread is welcoming to Hispanic patrons and the business will address them in Spanish, Mr. Katz said.

“We have two employees that speak Spanish,” he said.

Mr. Katz said he is looking for someone to work the counter full time who can speak Spanish, but for now he has one employee in the shop who floats in and out “when we need him to translate.”

This has become a big part of the business, he said, with about half of the company's sales coming from Hispanic customers in East Boston. The shop caters to customers in bordering cities that are not as heavily Hispanic, but that portion of the area's population is definitely growing, Mr. Katz said.

The business is looking into running Spanish TV, cable or radio advertising. And with the advent of Internet marketing, Nu-Tread also is looking to be a little more involved in Hispanic media.

The response from the Hispanic community has been positive, Mr. Katz said, noting “the best advertising is word-of-mouth.”

Advertisements on TV, print, radio, etc. are a little more direct and quicker, Mr. Katz said, but word-of-mouth is the strongest.

To help capitalize on that, last year as the company celebrated its 80th anniv-ersary, it put out a special flyer, both in English and Spanish.

One key to success is realizing that every market is different—and that means having to understand the one in which you operate, Mr. Katz said. He described Nu-Tread's market area as sort of old-fashioned. The people are not as affluent and the cars they drive tend to be older. Consequently, the tire sizes needed are not as extreme as some of the newer, 19-inch versions and larger.

Operating slightly behind the curve has worked in Nu-Tread's favor, Mr. Katz said, allowing the dealership to learn new techniques and see what other dealers are doing, so it can be ready for new trends as they arise a year or two down the road.

Mr. Katz said one of his biggest disappointments has been the tapering off of sales at its Air Travel Service Corp. operation, which caters to the auto service needs of travelers using Boston's Logan International Airport.

Air Travel Service works on customers vehicles while they are traveling, saving them time and parking fees because Nu-Tread would take them to the airport and pick them up upon their return.

“It's convenient, inexpensive and it works great,” Mr. Katz said.

While the dealership continues to offer this service, it's been on a smaller scale recently, Mr. Katz said.

This part of the business received a lot of favorable publicity when it opened and helped expand Nu-Tread's geographic area because anyone who used Logan Airport was “within our reach,” he said.

The disappointment comes, Mr. Katz said, because the business is in a commercial/residential area where some local residents feared it would become a pay-to-park lot. The service eventually met with such local opposition that Mr. Katz decided to scale it back.

“We had plans to bring the store to other cities, which some day I may want to do that,” he said. “Sometime I may want to bring it to someone because of all the time and effort we put into that part of the business.”

Mr. Katz said he had thought the concept could become “like a hotel where the customer can select the city for a reservation,” then have his or her vehicle repaired while they were traveling.

“It was quite different than the normal run-of-the-mill tire business,” he said.

Someday, he said, he may look into offering consulting to anyone interested in establishing this type of operation. Locations near airports have potential, he said, noting dealers have reached out to him in the past about implementing such a business.

Retirement also is beckoning, Mr. Katz said, although he has not yet set a date. He acknowledged he does not have any “iron clad” succession plans, but does have some thoughts.

Mr. Katz has three children—a 22-year-old son and 20-year-old twins, a boy and a girl. He said he is proud they are all doing well in college, yet he's not sure if their skill sets are right for the business. While his elder son works for Nu-Tread and possibly could take over, he's more artistic and may choose to take a different career path.

Another possibility is selling the business outright or having its employees take over. All is up for discussion. He also has thought about developing the property since the area's housing is at a premium and real estate values are high.

“Then again, it might continue for another 80 years, but that's, I'd say, a long shot,” he said of Nu-Tread's future.

To reach this reporter: jkarpus@ crain.com; 330-865-6143. Twitter: @jenniferkarpus

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Previous | Published March 18, 2019

Where can you expect to see the most growth in 2019?

Tire sales
45% (34 votes)
General automotive service
15% (11 votes)
Brakes, shocks and other undercar services
7% (5 votes)
Add-on business
15% (11 votes)
Anywhere we can get it.
19% (14 votes)
Total votes: 75
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