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

If you read the fine print, special offers from Pep Boys aren't so special

By: Bob Ulrich

Tire sales are down at Pep Boys-Manny, Moe & Jack. So, what is the automotive parts chain doing about it?

For one, it is advertising on television. Here are the specials it offered on a TV spot I saw on cable recently.

1. Buy 1 tire for as low as $29.99.

2. Buy 2 installed tires and get a free express oil change.

3. Buy 3 installed tires and get a 4th tire free (after mail-in rebate).

As you might expect, there were restrictions to the offers, listed in fine print at the bottom of the screen. Here they are:

1. The $29.99 price only applies to the Cornell brand, size P155/80R13.

2. & 3. The ad promotes these tire brands: Cooper, Definity, Falken, Futura, Hankook and Nexen. However, the offer says it "excludes all other brands and special order tires." In addition, to get the free oil change, the offer "requires purchase of tire installation package, road hazard warranty, valve stems or TPMS reseal kit and balancing." Because of the use of the "or" in the print, it seems like all you have to do is buy one of the four items listed, plus balancing.

All three offers expire Oct. 16, 2011.

Pep Boys improved its profitability in its second quarter ended July 30, 2011. It posted net earnings of $13.9 million on net sales of $522.6 million. While the company's sales improved 3.5% compared to the same period last year, its profitability was up a whopping 31%.

Here's what CEO and President Mike Odell had to say about the results, which also sheds light on the company's tire strategy.

"Our maintenance and repair services remain stable, allowing us to mostly offset soft tire sales. Our experience has taught us that customers can only defer their tire purchases for so long, so we have continued our aggressive ‘surround sound’ promotional activity to ensure that Pep Boys remains top of mind for tire customers.

“Our strategic Service & Tire Center acquisitions are also helping the bottom line. In their first full quarter of operations under Pep Boys, the 85 Big 10 stores were accretive to earnings. And our organic Service & Tire Center sales continue to ramp up along their three-year maturity curve. As they achieve this maturity, they will also begin to contribute to earnings.”

The commercial said "Pep Boys does everything for less." Nothing in the ad indicates that is true. However, the company sure is experiencing a lot of success of late.

Related Topics: Big 10, Mike Odell, Pep Boys financials

comments

1. JOE | September 29, 2011 at 01:27PM
   It is easy to grow profit when you have employees that only make $8.00 or so dollars an hour. In reality you must pay to the skill set of all your employees. To maintain customer loyality you have to pay much higher rate. What is their comeback %%%%%

2. Daniel | October 10, 2011 at 03:05PM
   this is what gives us in the automotive industry a bad name. the have to always have a gimmicks where there is no discount. and JOE is also correct i couldn't pay a top tech 8.00 and hour i guess people get what they pay for. then they go home and complain, they ripped me off. then they come into my place and expect my 25.00 an hour tech to fix it for nothing. Boni Tire & Auto

3. Bob | October 10, 2011 at 09:27PM
   A few years back I was in Las Vegas when a friend asked me to look at a problem with their Ford station wagon. After a road test I noticed the steering wheel was off center. The friend informed me that they recently had a new power rack installed at Pep Boys.
   
   I assisted the friend in dropping the car back off and explained to the service writer the problem including the twisted tie rod boots. Two days later we returned for the car and my friend was informed that the car only needed an alighnment and was quoted a price for that service. Upon hearing this I stepped to the counter and suggested that we take the car to a reputable shop that I was aware of.
   
   The service writer became somewhat pale when he saw me. You see the first time I was in casual clothes, and today I was wearing a shop uniform since I was doing some unrelated dirty work with my friend.
   
   Bad folks, trying to charge again to correct a problem of their own making.

4. Ed | October 13, 2011 at 08:32PM
   Not all the techs make $8 per hour. The "Installers" ie: tire changers and oil change guys made $8-$12 flat rate. I made over $20 flat rate 12 years ago as a Master Tech, most ASE Certified techs made between $17-$22. The high comeback rate is due to the flat rate system - some techs get greedy and take shortcuts.