Mid-Year Report: Bruneel takes aggressive steps to survive slump

BOISE, Idaho — Craig Bruneel, owner of 11 Bruneel Point S Tire & Auto Service stores in Idaho — including eight in the greater Boise metropolitan market — thinks he may be too positive, given the economic disruption from the coronavirus.

But he may have a right to be. His business started the year upbeat, and when he saw the pandemic looming, he took steps to help his business survive the downturn in sales during March and April.

"We were having a great year — a great January and February. The first two weeks of March were excellent. And then when things shut down in the middle of March, our March (sales) dropped and it was below expectations, below the prior year in terms of performance," Mr. Bruneel said. Sales fell 20% in March and about 25% in April as the pandemic kept consumers at home.

Sales began picking up in May, and he is optimistic for the rest of the year.

Mr. Bruneel compared the economic chaos with the Great Recession of 2008-09 and immediately took action to protect his business.

"When we recognized what was going on (with the pandemic), we immediately tried to turn it into a positive," he said. "We looked at all our people and said, 'Look, sales are off. What are we going to do?'

"We analyzed all of our expenses, line by line, and said, 'Does this help us make a success in sales? If not, we're going to cut it.' So we really worked hard at cutting our expenses. We looked at our people. Everybody got nervous.

"In times of uncertainty, everyone started working harder. The ones that didn't, they weren't still around."

He said the company, started by his father in 1966, made an effort to change its culture to be "lean and aggressive."

"It was an opportunity for us to change our culture from one of — 'Hey, we're the best team and we're winning, and we're going to make lots of money' — to — 'Hey, we're going to make our team really good; let's get the performers and let's go from there.'"

He said the company went through its expenses "line by line." Some were simple to cut, he said, such as eliminating coffee in the shops.

"We looked at all the unnecessary expenses, and you save $100 here and $100 there and then pretty soon your requirement to pay all those bills is lower," he said.

"We also started to adjust hours and got aggressive about making sure that the people weren't just there because they were supposed to be there. We needed to put our resources working where the traffic and the volume and the flow and the work was. And so we got aggressive about that."

He said the dealership also sought discounts from vendors that experienced a drop in orders and from media, which lost advertisers during the business slowdown.

"We went to our suppliers and got some extra terms, because they had tires and no one was buying them all of a sudden. So we got aggressive on some extended terms to pay some things and some discounts. We kind of pushed every opportunity and spread that around."

He also negotiated lower rates for his radio advertising and other forms of advertising.

Mr. Bruneel also noted he sought ideas from his employees for ways to cut costs, and some came up with ways to improve service for less cost.

Many of the cost-cutting efforts will be permanent, he said, as part of his goal to change the culture of the company.

"That's why I like the term 'culture,' because it's just ingrained in us after awhile that this is what we do. Here's how we measure success. This is what a good day looks like," he said.

"A good day now is a little different than it was three months ago in terms of the key performance indicators. Because of that, it's been good. Those kinds of things we want to keep in place."

Some other procedures implemented during the pandemic were temporary.

Employees, for example, are not required to wear masks and gloves.

"We want our customers to feel comfortable. And most people who are uncomfortable, don't come out anyway," Mr. Bruneel said.

"We live in Idaho, and Idaho has less people, and there is very little experience with illness and the plague. ...

"In Idaho, most people are very comfortable (about not wearing masks). We haven't had a lot of (coronavirus) incidents, haven't had a lot of deaths."

He said that most of the local offices requiring employees to wear face masks do so by mandate of their corporate headquarters in New York, Los Angeles or other large cities.

"It's very minimal here in Idaho."

Under the state stay-at-home order, Bruneel Tire as an "essential business" had to lay off some employees, but the stores maintained their normal hours of operation.

"We felt it necessary to be here for our customers. Because of that, I think we gained some customers," Mr. Bruneel said.

"Our approach was in times of uncertainty, maybe the people who wouldn't talk to us in the past are now more open, looking for a way to save money or cut expenses, and they might listen to our approach to automotive service. So when it came to outside calls and businesses, we kind of got aggressive and found that to be kind of an opportunistic opportunity."

He said he continued to advertise while other businesses cut back on marketing.

The dealership also participated in a radio campaign to collect food items at its stores to donate to the local food bank.

"It gave us some good exposure at the time when the radio stations wanted some advertising done because so many people stopped doing things. It's been positive. I think it helped contribute to our fast rebound as businesses started to open up," he said.

The dealership also received federal loans through the Payroll Protection Program, which Mr. Bruneel said was "very helpful."

"We've gotten more of our people back to work because of that," he said. "We would not have been able to be as aggressive had we not done that."

When the stay-at-home orders were lifted in May, Mr. Bruneel said sales increased 12%, and so far in June sales are up 16% from a year ago.

"So we've kind of gained back what we lost."

For the rest of the year, Mr. Bruneel remains "very optimistic."

"We anticipate accomplishing all of our goals, but you also have to take into effect that we do live in Boise, Idaho. Boise is a booming economy," he said, adding that the dealership is looking to open additional stores.

"We're actively looking for opportunities to expand our footprint in our markets. There are places in town where we don't have good coverage, and we would certainly expect to continue to grow as our market grows."

The booming market also creates challenges, he said.

"I think that the challenge is to continue to provide good services. There are so many people that come into the market that think they can just undercut prices or do different things," he said. "We're continuing to grow the reputation of the auto repair dealerships in the market. I'm probably too optimistic, but as long as the government doesn't get in the way of things, I think we're all going to be very successful.

"I've been impressed with my staff. I've got really good staff that have really pulled through. I'm pleased with the work ethic of our employees and their commitment to success. That's been a very good thing," he said.

"Our vendors have been sympathetic and worked with us. I always feel the people we buy products from are part of our team and, not a surprise, but they continue to support us as we support them. We have good relationships with our vendors, our customers and our employees."