CUYAHOGA FALLS, Ohio — The reduced traffic and sales at retail tire dealerships and auto repair shops during the pandemic have in turn hurt some tire wholesale businesses.
"We have seen a downturn in the amount of customers going into our customers' (stores) who we distribute to, so naturally we've seen a downturn in business," Brian Gollub, director of purchasing and distribution for Sullivan Tire Co., said.
Norwell, Mass.-based Sullivan Tire operates its own retail and commercial stores throughout New England in addition to distributing to other retail dealerships.
Mr. Gollub said the wholesale customers are buying fewer tires because, even though the businesses are considered "essential" services under state stay-at-home orders, there are fewer retail consumers buying tires.
"Every single state in New England has a stay-at-home order for non-essential personnel, so what that means for us right now is people aren't driving. ... I think people are being very cautious and staying home. I think traffic has been affected downwards as much as 40% to 50% in a lot of these locations that we sell to," Mr. Gollub said.
William Watkins, owner of Owego, N.Y.-based Moore's Tire Sales Inc., which distributes to about 4,000 customers in Pennsylvania and upstate New York, estimated that about 20% of them have closed temporarily during the pandemic — and "that's hurt us a bit."
He said his company has suspended sales calls and visits to its customers.
Moore's Tire has not laid off any of its 160 employees yet, Mr. Watkins said, noting that he was planning to apply for federal aid under the recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act, which includes provisions for small businesses to apply for federal loans to cover payroll under the Paycheck Protection Program.
In the meantime, he has shortened the hours of operation at his company's four retail stores and 11 warehouses, including closing on Saturdays.
Likewise, Sullivan Tire has curtailed its operations to avoid layoffs, Mr. Gollub said.
"The only action we've taken is we've cut back on overtime and we've cut some of our store hours to match the business cycle better. Typically our stores in retail would be open 7 a.m. to 6 p.m. Now we're closing at 4 p.m. during the week and on Saturday."
With 1,300 employees, Sullivan Tire may not qualify for the CARES aid, but Mr. Gollub said the company is investigating other support programs.
While tire plants have shut temporarily during the pandemic, both wholesalers said they have enough tire supply to fill orders for the time being.
"We had seen (plant closures) coming, so we talked to our manufacturers that we deal with directly and made some pretty good deals," Mr. Watkins said.
"Things in New England started to deteriorate about the third week of March, businesswise. So we had already placed orders and we agreed to take all those orders in. So we have a very robust inventory going in to Q2 and business has slowed down precipitously," Mr. Gollub said.
"Right now we have a very strong inventory position."
"It's too soon to tell because business is so soft right now, but we have plenty of tires. Now what it's going to be like when we all go back into full operations and the consumers are able to drive again — and the plants are just starting to open up and maybe are behind the eight-ball as far as making enough tires to fill the pipeline — that's when we might run into trouble with fill rates. But I think there's plenty of tires out there right now for the marketplace," he said.
"We're keeping a very positive outlook. We're worried about things in this order: we're worried about our people, we're worried about our customers and we're worried about our suppliers.
"And we're trying to make sure that with all those entities, we're sensitive to their needs and we're trying to be fair and reasonable with everybody and take a humanistic approach to this problem first — and business comes second after all those other things are OK," Mr. Gollub said.