It's beginning to sound like a worn-out song: the big just keep getting bigger.
Our latest rankings of the Top Retail Dealerships in North America (see list on pages 20-22) show that the mega-dealerships at the top keep growing — led by Discount Tire (1,046 stores), followed by TBC (733), fast-growing Monro Inc. (703), Mavis Discount Tire (654), Icahn Automotive Group L.L.C. (475 Pep Boys Service & Tire outlets) and Les Schwab Tire Centers (436).
In the last year alone, Tire Business found that as many as 160 stores have changed ownership in a dozen separate transactions. That includes 69 acquisitions from the Greenbriar Equity Group, a relative newcomer to the industry. New York-based Greenbriar, which acquired nearly 30 stores in Texas alone, is expected to stay in a buying mode, according to a spokesman.
Discount Tire/America's Tire, meanwhile, built 45 stores from the ground up and shows no sign of stopping.
Research tells us that the "typical" larger-scale, multi-store independent retail tire dealership in North America operates 23 stores — down from 24 a year ago — and generates about $2.7 million in revenue per outlet. Each also carries a dozen tire brands.
If you're an independent tire dealer, this news can be heartening — tires and automotive service are and will remain a viable industry. Don't take our word for it: The actions of investor Carl Icahn and businesses such as Monro and Greenbriar seem to be proof enough.
But this news can be just as disheartening for the independent dealer — there's a school of thought that if the industry keeps going as it is, with the big growing bigger, only powerful mega-dealerships with deep pockets will survive.
We prefer to believe there is room for both in a global market that continues to consume tires.
Four family-owned dealerships illustrate that point.
Capital Tire (Toledo, Ohio); Lewis General Tires (Rochester, N.Y.); Max Finkelstein Inc. (Astoria, N.Y.); and Ziegler Tire & Supply Co. (Massillon, Ohio, featured on page 1 of this edition) have survived and prospered for 100 years.
Think about all the changes in the industry that have occurred during that time. Through the invention and refinements of the automobile, to the invention of the radial tire, through the Great Depression and the Great Recession, these dealerships have persevered and are about to enter their second century of business.
The Zieglers have a family joke: "You got to start out with a lot of money," said Bill Ziegler, a second-generation owner. He said his Uncle Ralph told the first-generation brothers: "I don't understand it. You've been losing money since 1919, and you're still in business. You must have started out with a hell of a lot of money!"
Will the big retail dealerships continue to gobble up some of the little guys? Definitely.
As Baby Boomers retire, and family dynamics change, it is inevitable.
But if a dealership truly is committed to staying independent — while working through some of the potential fractious issues that have affected each of the four centenarians listed above — there is a place in the industry not for it to survive, but to thrive.
And that's good for everyone.