Specialty concepts evolve, waxes shine bright - automotive supplies - Discount Industry Annual Report: part 2: Merchandising and Productivity Analysis

Discount Store News, July 16, 1990

Sears' Western Auto chain is building 15,000-square-foot stores, compared with its chainwide average of 9,000 square feet. Moreover, it continues to close the small mom and pop associate stores that carry the Western Auto name.

Pep Boys is closing its remaining 5,000-square-foot "dry" stores, without service, and replacing them with 22,000-square-foot prototypes that include 10 service bays.

The Warehouse Club, a Chicago-based warehouse chain of 12 stores, is edging into the service business, starting with quick lube and oil service. With seven units already converted, the chain will complete the rollout year-end. At $10.99 for lube, oil change and filter, the service has increased tire sales by 20 percent at each unit.

Wal-Mart's hypermarkets in Texas also offer quick lube service.

Service also will be a major merchandising element for Canadian Tire Corp, which is re-entering the United States market with a four-store test in Indianapolis.

Stores for the as-yet unnamed chain probably will run to at least 15,000 square feet, including 5,000 square feet of storage, another 5,000 square feet of retail floor space and five to 10 service bays, including quick lube bays leased to a franchised operator.

What remains undetermined is whether its U.S. stores will be merchandised around the same home and auto concept that built Canadian Tire into the largest auto chain in Canada, with 1989 sales of $2.5 billion (Canadian) from 400 stores.

Auto service among full-line discounters suffered two more regional casualties over the past year.

Financial problems prompted S.E. Nichols, New York, to close about 28 auto service centers in its 34 stores this spring and to start converting the chain to a deep discount drug format.

Financial problems also spelled the end of auto service in the 11 TSS stores in metro New York when the chain liquidated.

The environmental movement has caught on in automotives. Chief Auto, Dallas, and Pep Boys are recycling used motor oil.

And Chief and K mart both are recycling junk car batteries. K mart stands ready to pay $2 apiece for 40 million junk batteries that now clutter garage and basement alike.

Sluggish new car sales translate into good news for the aftermarket, since motorists are keeping their cars longer. About one-third of cars on the road are at least 10 years old and prime candidates for aftermarket purchases.

Cars of such vintage also tend to be easier for backyard mechanics to work on and many still have carburetors that can be rebuilt and points and condensers to replace. What will happen to the DIY aftermarket when all cars are as hard to work on as a 1990 model is easy to predict, a shift toward less demanding projects such as oil and filter changes and waxing and washing.

As an offset, Americans are driving their cars more miles per year, and total vehicle registrations continue to increase, albeit at a slower pace.

Oil sold at retail increased to about 700 million gallons last year from about 650 million in 1988. But that included oil that quick lube centers use.