California Dealer Wonders When Business Will Rebound After COVID-19
This story is the latest in MTD’s exclusive series of articles about how the COVID-19 crisis is impacting independent tire dealers. Stay tuned to www.moderntiredealer.com for more!
“It was like somebody turned off a faucet,” Scott Shubin, owner of Goodguys Tire & Auto Repair, says after California Governor Gavin Newsom ordered the state’s residents to stay at home in mid-March.
Customers started canceling scheduled maintenance like oil changes and tire rotations at Shubin’s eight locations, all of which are in the greater Fresno, Calif., area.
“When we started hearing about (the virus), it was going on in Asia. And you think, ‘It’s not going to happen here. And even if it does, it won’t be that bad.”
Business “just came to a screeching halt” during the second half of March.
“I remember when 9/11 happened. It slowed business a little, but it didn’t really impact our day-to-day business. In 2008-09, with the housing crisis, that affected us in California. We saw the impact of that. But business didn’t die. It just slowed up a little bit.”
The impact of COVID-19 “was almost immediate. We have nothing to compare this to.”
Needs (not wants)
“The jobs coming in today are things that are broken,” he says. “’My car doesn’t start’ or “I have four bald tires.’
“We also do some national account business – people who have company cars. We’ve seen a huge drop in those. Sales reps aren’t driving around.”
The decline in business forced Shubin to “make some moves. We’ve adjusted hours. We’ve tried not to cut back significantly, but we’re being smart about it. The goal is to keep everyone working.” Shubin says his employees understand the situation.
“They know what’s going on. We’re trying to be careful so we don’t overdo it.”
Fortunately, the company “has plenty of inventory so we’re not scrambling” for tires and parts, he says. “A lot of distributors have changed their deliveries. We have a company driver who can pick up parts, when needed.”
Despite downturns in other areas of its business, Goodguys’ ultra-high performance tire sales have remained healthy.
“Those customers are in a different economic class,” he explains. “They have discretionary income.”
His lower middle-class customers, however, will probably have to consider “downgrading. ‘I can’t afford $800. But maybe I could do $400 or $500. What do you have in that range?’
“We have our own credit card that gives them interest-free payments for up to six months. We’ll have to use everything in our toolbox to provide for them.”
When will business rebound in a meaningful way? It depends on when California will ease its shelter-in-place restrictions, says Shubin.
Newsom recently extended shelter-in-place orders. “And they might be extended even further.”
The unemployment rate is another indicator that Shubin will continue to monitor.
“People need to be able to get back to work so they can spend money with us. That’s the worry I have. When will everybody else bounce back?”
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