Big O Tires LLC franchisees reached $800 million in retail sales in 2018, with 169 stores posting record sales. It was the sixth straight year of improved sales for the TBC Corp. subsidiary.
Store owners who gathered in New Orleans, La., April 29-May 2 for their annual meeting had much to celebrate in terms of 2018’s sales and results:
- Average store sales totaled more than $2 million.
- Retail sales were up 5%.
- Same-store service sales increased more than 6%.
- Car count was up more than 2%.
In addition, sales of MAST (Michelin Americas Small Tires) product grew more than 20% in 2018, and sales of branded tires were the highest ever in 2018.
TBC's Brant Wilson told Modern Tire Dealer that branded tires are Big O Tires’ fastest growing revenue segment. The major brands, however, are balanced with exclusive Big O Tires products.
“We were underpenetrated in branded tires, and we put a focus on ensuring customers knew that we sold the big brands. We’ve had a great growth from that but we’re still very conscious of our Big O Tires; that’s the heart and soul of who we are,” said Wilson, who is executive vice president for TBC and president and COO for the TBC Franchise Group.
He also said Big O Tires franchisees are chewing through 2019. From Jan. 1 through April 28, 2019, franchisees made significant gains over the year-ago period:
- up 8% in retail same-store sales;
- up 2.6% in car count; and
- up 6.9% in retail tire units.
Big O Tires surpassed its target to add 18 stores by two outlets to end 2018 at 458 franchise locations. There are now Big O Tires stores in 25 states, up two states versus the end of 2017. The new states are North Dakota and Texas.
A record year for wholesale tire sales
Big O Tires leveraged the creation of National Tire Wholesale (NTW) in 2018 to achieve a record year for wholesale tire sales.
NTW was formed by the combination of Michelin’s Tire Centers (TCi) distribution business and TBC’s Carroll Tire Co. The wholesale businesses were combined after TBC became a joint venture company owned by Michelin North America Inc. and Sumitomo Corporation of Americas (SCOA) in early 2018. At the time of the transaction, TCi was the nation’s fourth largest tire distributor, and Carroll was the fifth largest.
“During the integration there were system changes that we had to navigate,” said Wilson. “We are at the mid-90s fill rate. Almost 90% of the stores are getting more frequency deliveries because of the NTW footprint, and the customer service levels for NTW rate high with our dealers.”
Goal to grow fleet service
Big O Tires plans to continue its “Big O Yes” sales and marketing campaign, which was introduced in 2018. The dealer meeting also included a preview of profit workshops that will be available to dealers in 2019. In addition, Big O Tires leadership presented a new initiative for 2019: fleet service.
“We’ve been doing fleet but to make it a major initiative we’ve got to have systems, reporting and processes. We are now able to say it is a new initiative this year,” said Wilson.
The meeting included a presentation on Auto Integrate, a web-based real-time maintenance authorization software for the fleet management service industry. The software will be part of Big O Tires dealers’ point of sale systems.
“We’re leveraging TBC and their fleet muscle and partnerships and bringing that down to Big O Tires dealers. Fleet is going to be an area where it is critical to be attached to a big partner like TBC. You will see the fleet management companies going to national footprints and major players versus smaller independents. That’s what TBC has, the national footprint.”
Wilson said about half of Big O Tires dealers are offering fleet services. The goal is to bring it up to 80% of dealers over the next two years.