ROCHESTER, N.Y. — As Monro Inc. continues gobbling up independent tire and auto service retail chains across the country, the behemoth retailer is taking time to consolidate, realign and update its operations.
During Monro's fiscal fourth-quarter conference call May 21 with investment analysts, President and CEO Brett Ponton detailed the company's strategies in the areas of brand consolidation, store redesign, acquisitions, product mix and online sales.
In addition to continuing to expand its geographic territory, Monro has set its sights on increasing its customer base through its partnership with Amazon.com as well as development of its own online sales channel.
- This story appears in the May 27 print edition of Tire Business.
Meanwhile, Monro is putting more focus on tire sales with the intention of shifting some of its auto service-focused locations to tire-focused operations and reducing the number of retail brands its stores operate under.
Monro closed its fiscal year on March 30 with 1,197 company-operated stores and 98 franchised locations, which generated a record $1.2 billion in sales.
Over the years Monro has acquired and continued to operate several regional retail brands. Now Monro said it will be leveraging customer data analytics and local brand awareness to consolidate its existing nine retail banners — Mr. Tire Auto Service Centers, Tire Choice Auto Service Centers, Tread Quarters Discount Tire, Ken Towery's Tire & Automotive, Autotire Car Care Centers, Monro Auto Service and Tire Centers, Tire Warehouse, Tire Barn Warehouse and CarX Tire & Auto — into five regional brands and "take advantage of this opportunity to convert service stores to tire stores when we identify targeted demographics that favor a tire store format."
Monro didn't identify which five brands it will move forward with. A spokeswoman said the company "will analyze customer data, brand awareness and banner concentration market by market and will be methodically prioritizing markets where they see the strongest potential for increased visibility and traction of their tire banners."
Monro has operated two store formats in the majority of its key markets with a focus on increasing store density. Its service store formats — Monro Auto and CarX — each generate about $600,000 in annualized sales per store while the more tire-focused stores generate about $1.2 million in sales per location.
"Overall, our goal is to increase brand awareness in our regional markets, while lining our store banners with market demand to optimize growth, specifically where we identify opportunities for higher tire sales," Mr. Ponton said.
He added, "By optimizing brand awareness and banner concentration in targeted markets we can increase our sales and relevancy in the marketplace without sacrificing service revenues. Importantly, last year we piloted this rebranding strategy at a district in the mid Atlantic, shifting our few selected stores to tire-oriented brands."
Meanwhile, Monro has begun to modernize and standardize the appearance of its stores as part of its drive for consistency across all its locations that currently include a wide range of stores and formats.
The store "refresh" began with 31 pilot stores in the Rochester, N.Y., market in the third quarter and will be extended to about 50 stores in the South during the fiscal first quarter.
Mr. Ponton said "the completion of our stores reimaging has led to a sequential improvement in traffic and comparable store sales trends at these stores from the third quarter to the fourth quarter of fiscal 2019."
The modernized store layout is on track to be rolled out across the company's remaining markets and store formats over the next three to five years, he said.
"We continue to actively capitalize on acquisition opportunities, which remain a core pillar of our growth strategy," Mr. Ponton said,