Light truck accessories pace automotive sales - in discount stores - Annual Industry Report, part 2

Discount Store News, July 18, 1988

Light Truck Accessories Pace Automotive Sales

The automotive aftermarket just keeps on truckin'.

As light truck sales continue to capture market share in total vehicle sales, sales of pickup, van and fourwheel parts and accessories are increasing rapidly at an 11 percent clip. That compares with growth of the total automotive aftermarket at 2.8 percent in 1987.

Outpacing the overall market was the growth of discount automotive aftermarket retailers, including full-line discounters, catalogers and specialty discounters. In 1987, these discounters accounted for better than 10 percent of the automotive aftermarket, an estimated $10.1 billion out of a total of $93.6 billion in parts and service. Specialty auto parts discount chains accounted for $4.3 billion in 1987.

With the exception of Wal-Mart, discounters share of the service component, $20.9 billion, continues to slide as automotive service over the past year became even more of an endangered species at full-line discount chains.

Venture closed its remaining 26 service centers in February and has leased the service bays at at least 13 of its 76 stores to tire operators, such as Western Auto's (now Sears) Tire America. Last August, Zayre closed service bays at its last 108 stores that still offered automotive service.

K mart continues its policy of skipping automotive service in favor of soft lines at all new stores and is closing many service centers when remodeling mid-size stores and using the space for apparel expansion. The handwriting appears to be on the wall for automotive service at many of the 500 mid-size stores. Of K mart's approximately 2,200 stores, only an estimated 1,275 offer auto service.

In contrast to K mart's policy, many new Wal-Marts include auto service bays. Out of 1,114 Wal-Mart stores, more than 200 offer auto service. Wal-Mart plans to add 125 new stores this year on top of 134 last year.

Car care malls, which are the hottest new wrinkle in the automotive aftermarket, have drawn the first automotive specialty chains over the past year. Out of the 550 car care malls expected to be operating by the end of the year, three have attracted specialty chains, two Schuck's units in Kansas City, Mo., and one Western Auto store in the Fort Worth, Texas, market.

In the case of Western Auto's mall, the developers, the Thompson family of 7-11 fame, have been unable to attract any car care specialty tenants after Western Auto became the first.

Speculation centers on the reluctance of specialty brake, muffler, tune-up and tire chains to locate in the same mall with Western Auto, which provides general car service that would compete with them all.

On the other hand, Goodyear, which also offers general auto service, co-exists with specialty shops in many another car care mall, leading to another theory: following its financial problems from taking Southland private this spring, the Thompson family might be having difficulty developing its car care mall subsidiary.

The rapidly booming quick lube field continues to attract the attention of some discounters and specialty chains.

Wal-Mart opted for a quick lube operation, rather than general automotive service, at its Hypermarket USA, opened last December outside Dallas.

OTASCO, Tulsa, Okla., is testing quick lube centers at about 20 of its 222 stores.

The latest to venture into the field is USA-1 Auto Parts, a 17-store, parts-only chain based in New York, which is preparing to add quick lube service at four or five of its larger stores.

Pickup trucks are becoming the "cheap" second, or even first car of the '80s. Light truck sales accounted for 31.2 percent, or 4.7 million, of the 14.9 million vehicles sold in the United States in 1987. In 1988, the percentage will increase to 34 percent, the Automotive Parts and Accessories Association predicted.

Youthful buyers--25 percent of whom are women--often economize with a basic pickup and then rush immediately into the aftermarket to customize them with, say, bed liners, running boards, sliding windows, tool boxes, and special lights and light bars. A substantial percentage spend $1,000 to $1,500 to set their pickups apart from others on the road, the Specialty Equipment Manufacturers Association reported.

With automobiles, aftermarket retailers normally have to wait four to six years for parts to wear out before they can count on big ticket aftermarket sales. Anything for light trucks sells, and wherever appropriate, manufacturers are taking pains to announce that existing automobile products also can be used on light trucks.

All of which helps explain why even chains such as Bradlees, with its soft goods emphasis, have expanded into pickup truck accessories over the past year. Another example: Harts places special emphasis on truck accessories in its new Big Bear Plus hypermarket that opened last month near Steubenville, Ohio.

In merchandising, tires are rolling along. Western Auto bought in rapid succession two tire specialty chains, Tire America and NTW, and now operates a total of 116 tire centers. Capitalizing on its tire expertise, Western Auto expanded last summer into a branded tire program that features virtually every major brand of tire, either in stock or as a special order. Before that, Western Auto offered only its private label program.