‘Typical' tire dealership profile changes little in 2022

AKRON — Despite a near unprecedented scale of merger/acquisition activity in the retail tire/aftermarket auto service market over the past 12 months — with over 600 points of sales changing hands — the operating dynamics of a "typical" larger-scale, multi-store independent retail tire dealership in North America didn't change measurably.

According to data collected and analyzed by Tire Business, the typical Top 100 dealership operates 20 stores generating roughly $2.7 million in revenue per outlet with a dozen tire brands available.

The dealership size of 20 stores is the median of the 100 dealerships profiled in this year's report.

That's down from 22 a year ago and 21 the year before, reflecting in part the absorption of primarily mid-size dealerships by the larger, acquisition-driven dealerships.

As a result, the cutoff to make the Top 100 this year was 10 stores, down from 11 a year ago, helping to maintain the median number in the low 20s.

In contrast, the average size of a dealership in the Tire Business Top 100 now stands at 96 stores, up from 88 a year ago and 74 in 2020, reflecting the increasingly top-heavy nature of the ranking, which now features three dealerships with over 1,000 stores: Mavis Discount Tire with 1,322, Monro Inc. with 1,291 and Discount Tire/America's Tire, 1,119.

In addition, Tire Business research reveals there are 57 more dealerships just outside the top 100 collectively operating more than 445 stores — 12 with nine stores, 23 with eight and 22 with seven.

The average sales revenue of a store — based on data from 40 companies that supplied sales information — was just over $2.7 million.

The typical large dealership derived 54% of its sales from tires and related services, 40% from automotive service and 6% from other, miscellaneous sources, according to information derived from the 40 dealerships that shared that information with Tire Business.

The typical larger-scale dealership operates 6½ service bays per outlet, the data show.

The share of a dealership's sales represented by automotive service ranges from zero (Discount Tire) to 80% at Virginia Tire & Auto.

The typical Top 100 tire dealership offers a dozen brands — eight to nine flag and three to four import and/or private brand — with Michelin (carried by 65 dealerships), BFGoodrich (64), Continental and Firestone (60 each) the dominant brands available at the leading dealerships that make up this year's ranking.

Those brands are followed by Bridgestone (56), Cooper (54), Goodyear (51), General (48); Uniroyal (46), Pirelli (45), Hankook, Kelly and Yokohama (38 each), Dunlop and Sumitomo (36 each), Toyo (34) and Falken (31).

All but three of the 101 dealerships profiled this year are privately owned, including Max Auto Supply Inc. and Ben Tire Distributors Ltd., which are employee-owned.

The firms publicly owned or controlled by outside financial holdings — Monro Inc., Icahn Automotive and TBC Corp. — are Nos. 2, 4 and 5 on the largest dealerships ranking.

In addition, four of the largest dealerships — No. 1 Mavis Tire, No. 6 Les Schwab Tire Centers, No. 7 Sun Auto Tire & Service, and No. 10 Big Brand Tire Co. — are controlled by private-equity firms.

In Canada, Goodyear owns minority stakes in Beverly Tire and Fountain Tire Corp.

Three dealerships, Virginia Tire & Auto (16 stores) of McLean, Va.; Chabill's Tire & Service L.L.C. of Morgan City, La. (17 stores) and Pneus Ratté of Quebec City, Quebec (12 stores), have female top executives — Julie Holmes is co-CEO of Virginia Tire & Auto alongside her husband Michael Holmes; Beth Barron is CEO of Chabill's; and Charlayne Ratté is co-owner of Pneus Ratté, a Point S-affiliated dealership.

Among issues of concern to tire dealers, the ongoing technician shortage overwhelmingly was top of the list, cited by nearly three-fourths of dealers who responded to the Tire Business survey as their No. 1 or 2 concern. Inflation — both in general and as it relates to wage — was the No. 2 concern for over half the dealers, slightly ahead of supply-chain issues.

The Top 100 dealerships collectively operate 9,529 points of sale, up 500-plus, or nearly 6%, over the 2021 collective.

Looking at the Top 100 in terms on affiliation, there are:

• 169 Big O Tires outlets, operated by seven Big O Tires franchisees.

• 56 Car-X Tire points of sale operated by two franchisees; Monro Inc., owner of the Car-X franchise program, also operates 68 Car-X-badged points of sale;

• 56 Point S locations operated by two dealers in the U.S. and 42 outlets in Canada spread among three dealerships.

• one Tire Pros dealer, with 15 outlets.

In addition, Mavis Tire operates directly 42 of the 165 Tuffy Tire outlets under the Tuffy Tire franchise program it acquired in late 2021.