In automotives, discounters stick with traffic-building chemicals - The DSN Productivity Report

Discount Store News, August 5, 1996

Wal-Mart launched its Tech 2000 private label line of inexpensive automotive oils and chemicals, including engine oil for 82 cents per quart and such chemicals as fuel injector cleaner and brake fluid. The Tech 2000 engine oil replaces the Wal-Mart name on private label motor oil.

Target also is getting into the magazine licensing game, paying for the rights to use the Car & Driver name on a new line of private label automotive products, including oil and air filters, antifreeze and car batteries. Target is still mulling over package design, but the first products should hit shelves this fall. The Car & Driver name will replace the Target name on filters. It remains to be seen whether Target puts the Car & Driver name on opening-price-point engine oil.

Target employs a traffic-building strategy of offering a wide range of price points on engine oil starting at about 84 cents per quart on a brand called Exel. It carries about 10 brands, ranging from regional brands like TropArctic to national brands such as Pennzoil, Quaker State, Castrol and Valvoline.

In hard parts, Target is only offering a handful of skus in spark plugs, whereas Wal-Mart and Kmart continue to keep a major presence in spark plugs and other tune-up parts.

Kmart is officially evaluating whether to keep its Motorvator private label brand of automotive chemicals, but it most likely will retain it in keeping with its strategy of skuing down: carrying the No. 1 and No. 2 national brands, plus a private label for good, better and best positioning.

In addition, Kmart is aggressively controlling inventory in automotives, as it is in other departments, though buying in smaller quantities for just-in-time delivery. Kmart is especially cautious about order size for promotional items, since it lacks the shelf space to stock leftover promotional goods that fail to meet its goal of 100% sell-through.

In another move to raise and conserve cash, Kmart sold its 900 or so auto service centers to Penske, which is putting up the cash to modernize auto service equipment and train personnel. The sale also slashed Kmart inventory costs by $50 million in tires alone.

         Automotives
         Productivity