Pep Boys tests service-only units; acknowledges slow growth in parts divisions

Discount Store News, Jan 26, 1998

MOORESTOWN, N.J. -- Pep Boys is going after the growing do-it-for-me segment of the automotive aftermarket with a new test of a service-only store opened this month that doesn't sell parts.

At the same time, Pep Boys is slowing the expansion of its parts-only chain, newly renamed Pep Boys Express from Parts USA, in recognition of the stagnant growth of DIY customers.

With the opening of the new test unit, Pep Boys now offers three different formats: its traditional parts and service; parts only; and now service-only units.

In a bid to attract business and professional customers, the new store, called Pep Boys Service and Tire Center, offers special amenities:

* Special fax and computer jacks on two waiting room desks, so working people can conduct business while they wait.

* A shuttle van that will take customers to their offices in a nearby corporate park if they chose not to wait, with pickup service when their car is ready. The service also applies to customers who want to wait at home.

* Beepers that Pep Boys lends customers to let them know when their cars are ready. The van will shuttle them to and from the Moorestown Mall across Route 38 where they can kill time at the mall's anchor stores, Sears, Boscov's and Strawbridge's, while Pep Boys works on their cars.

Pep Boys is making a pitch to line up a leased fleet business through ARI, a car and truck fleet leasing firm located just a mile away in Mt. Laurel, N.J. ARI is steering leasing customers to the new Pep Boys service facility.

In other moves to attract fleet operators, Pep Boys now is accepting credit cards issued for the use of drivers of U.S. government vehicles and has made agreements with AutoNation to recondition used cars and make warranty repairs at 14 used car superstores. It also signed test agreements with Republic Industries to maintain rental cars in its National and Alamo divisions.

The service-only center is a test, spokesman Bill Furtkevic said. But Pep Boys already is expanding the test with plans to open a second service-only unit in Maple Glen, Pa., sometime this summer.

Both stores are located in the metro Philadelphia market.

Inventory at the center is minimal (900 skus), including oil and filters, as well as tires, batteries and truck accessories on display at the entrance.

The service center acts as an installer customer of nearby Pep Boys Supercenters (combined parts and service units), which stock about 31,000 skus to supply repair garages and service stations in the commercial end of Pep Boys business, Furtkevic said.

The Moorestown service center is a former Silo consumer electronic showroom and measures 20,000 sq. ft., or larger than the prototype supercenter of 18,500 sq. ft.

Pep Boys has yet to settle on the size of the second service test unit that win be built from scratch, Furtkevic said.

The service center is identical to the service side of a supercenter, Furtkevic said, offering the same services at the same prices within a given market.

It offers 11 service bays, including two dedicated to tire mounting and front-end alignment and one dedicated to quick lube.

Quick Lube, in and out in 20 to 40 minutes and costing $21.95, is a new venture for Pep Boys and features a rack that lifts the car so two technicians can work on it at once. Conventional Pep Boys supercenters offer lube and oil change service on a first-come, first-serve basis without the quick serve attraction.

The center is one of only three Pep Boys stores to offer the Philips Carin CD-ROM-based navigation system at a hefty $2,399, installed. Along with other supercenters, Moorestown also installs the On-Guard GSP locator equipment at $899, installed, plus $17 a month monitoring fees.

It also installs car stereo systems and remote starting at $99.

In keeping with supercenters, the service-only facility offers only Futura tires, Pep Boys private label made by Kelly Springfield.

Batteries also are Pep Boys private label, Pro-Start, with the addition of NASCAR licensed batteries from Exide.

Like Pep Boys supercenters, the service-only store posts service prices on the wall, such as $33.98 for premium tire protection for two tires, including mileage warranty, valve stems, spin balance, road hazard warranty, and lifetime warranty.

Operating hours are two hours fewer per day than supercenters, which remain open until 9 p.m. In contrast, the Moorestown facility opens at 7 a.m. and closes at 7 p.m., Monday through Friday. Sunday hours are 8 a.m. to 5 p.m.

Service revenues accounted for 16.1% of Pep Boys income for the first nine months of '97 and are growing faster than revenue from parts sales. But one problem is poor utilization of its 4,500 service bays at its conventional supercenters in the late afternoon and evening. And Pep Boys is adding 1,000 service bays in '98.