Bob Ulrich

Editor

Bob Ulrich was named Modern Tire Dealer editor in August 2000. He joined the magazine in 1985 as assistant editor, and has been responsible for gathering statistical information for MTD's "Facts Issue" since 1993. He has won numerous awards for editorial and feature writing, including five gold medals from the International Automotive Media Association. Bob earned a B.A. in English literature from Ohio Northern University and has a law degree from the University of Akron.

» More

Walmart: always playing catch-up, but always trying

By: Bob Ulrich

Wal-Mart Stores Inc. (which drops the hyphen whenever it can, so I will, too) may or may not be your greatest competitor. With more than 3,000 tire-selling outlets in the United States, it certainly can affect your bottom line.

Did you know Walmart will implement a program that will allow customers to order products online and pick them up a few hours later from their local stores? It is called "Pick Up Today," and it is a trend among retailers, including Sears Holdings Corp.

Walmart is rolling out the program nationwide as you read this. Its purpose, according to consumer savings expert Andrea Woroch, is a simple one: to increase store visits.

"The Pick Up Today program isn't revolutionary," she says. "Sears, LL Bean and several other major merchants already have similar offerings. But Walmart is by far the largest merchant to make the move, setting the bar for its competitors."

Walmart already offers a "Site to Store" program, which offers free shipping on tire purchases.

"Orders typically take 1-2 days to process and usually arrive at the store 7-10 business days later," says Woroch.

The new program will make tires available faster than that. Walmart offers five brands: BFGoodrich, Continental, General, Goodyear and Michelin.

Sounds like a great idea. Offer a variety of tire brands at a place that can complete the purchase within hours.

Just like almost any independent tire dealer does, although with fewer brands (the average independent tire dealer offers 11.4 different brands).

Still, it does make Walmart, which, in the U.S. alone, had sales of close to $260 billion and operating income of $19.9 billion in its fiscal 2011 ended Jan. 31, more competitive. And that doesn't count its Sam's Club subsidiary.

Related Topics: Mass merchandisers, Sam's Club, Sears Auto Centers, Walmart

comments

1. jeff | May 19, 2011 at 09:59AM
   Certainly another scenario supported by select manufactures that continues to erode the profitability of independant tire dealers. In the past a dealer would make a sale based upon their inventory (investment) or customer service (people who source the tires to satisfy the customers needs). The big box retailers could never compete because they did not make the inventory investment and did not have the same level of urgency for the sale. Now technology investment by the big box retailers replaces inventory investment and customer satisfaction by people. Does it sell more of these major brand tires? Do the independants show their hallmark resiliancy and move more sales to tier two brands? We'll see.
   
   This move absolutley will push prices down and squeeze margin. When you have a virtual catalog (every product made available) with minimal investment and do not have to consider any of the costs associated with having product in stock your pricing may be much lower. It will happen as we already see that with Costco.

2. Don | May 19, 2011 at 01:51PM
   It is unfortunate that some majors like Goodyear choose to distribute their tires thru Walmart, it makes for unfair competetion and really cheapens the image of the tires we sell.Actually this is true of all the mass merchandisers , Sam's,Sears and others.

3. Frank | January 18, 2012 at 07:38AM
   I notice that Bridgestone/Firestone is not on the list of brands that Walmart sells. This is one more reason to partner with them. They value their dealer relationships more than any other major brand.