MTD’s Exclusive Dealer Lists: Alive and Well

Forget about the recession for a moment. And the increasing competition from mass merchandisers and warehouse clubs. And the ever-decreasing profit margins on truck tires.

The independent tire dealer is alive and well.

There are more than 25,000 of you in North America alone. You dominate your industry.

Nearly two thirds of all passenger tires reach the market by way of independent wholesale and retail tire dealers.

That number may be even higher if you are a commercial dealer.

Mass merchants such as Sears and warehouse clubs the likes of Sam’s Club and Price/Costco generally shy away from the medium/heavy truck tire market.

As in the past, the key/to survival is adapting to the times.

Today, more and more of you are taking advantage of the various distribution groups created to give you a competitive edge.

Nearly 3,000 independent tire dealers are affiliated with the Top 13 Tire Distribution Groups in North America as determined by Modern Tire Dealer research.

The groups give them greater buying power, group advertising rates, and national warranties.

The dealers choosing to go their own way also are prospering, as evidenced by our fifth Top 25 Independent Tire Store Chains in North America list.

Top distribution groups

American Car Care Centers (ACCC), last year’s runner-up, jumped to the top of our distribution group list after increasing its membership from 500 a year ago to 634 dealer members as of September 1.

Bridgestone/Firestone Inc. (BFS) is a close second. BFS’s Affiliated Dealer Program increased from 150 to 440 in the last 12 months. Combined with 180 associate dealers in Canada (down from 205 last year), the 440 dealers give BFS 620 North American affiliates.

(BFS sold 21 Crown Tire locations to Vernon, British Columbia-based Kal Tire, Canada’s largest independent dealer, earlier this year, accounting for its drop in Canada.)

Both ACCC (Memphis) and BFS (Nashville) are based in Tennessee.

“Our goal is to work real closely with our new strategic business partner, Michelin Americas Small Tires,” says Dennis DeLeonard, ACCC’s general manager. “Our ultimate goal is to have 2,000 dealers for the year 2,000, and we’re on target for that.

“Our emphasis is on making our program better and better... and if you do that, people will beat a path to your door.”

Mike Cox, director of BFS’s Affiliated Dealer Program, says the strength of his program is that it incorporates many suggestions from dealers.

Big O Tires Inc. moves to third after increasing its franchisees from 345 to 360. The Englewood, Colo.-based company recently announced a slight decrease in gross profits for the quarter ended June 30 despite a slight increase in sales.

“The slowdown in replacement sales within the industry has resulted in gross margin reductions,” said Steven P. Cloward, president and CEO of Big O.

Goodyear Tire Centers in Akron changed direction with its franchise program, which explains its drop from number one to number four.

According to Hart Harding, manager of franchise tire centers, in 1992 Goodyear offered its franchisees the opportunity to become independent dealers. About 250 of the 600 chose this option. “Generally, those converting to independent dealers were well established operations that no longer required the additional business support offered through the franchise program.”

Metro 25 TIRE, based in Detroit, once North America’s top tire store franchiser, rounds out the top five distribution groups with 315 associate dealers.

An up-and-comer, Minneapolis-based S&M Co., was 14th in our research with 26 affiliated dealers doing business as Mr. Tire Auto Service Centers. CFO Chuck Lunde says plans for the publicly owned company are to expand even more. He estimates eight to 10 more affiliates will be on board by year’s end.

WHO’S WHO OF TIRE CHAINS

For the fifth year in a row. Discount Tire Co. finished as the largest inde­pendent tire dealer in North America.

The Phoenix, Ariz.-based retailer increased from 238 outlets to 275. And that number is expected to increase, according to President Bruce Halle.

He says Discount Tire plans to “continue growth and expansion in existing markets and in new markets, all intended to develop and support our long-term strategy.”

Les Schwab Tires moved into the second spot with the addition of 10 outlets in the last 12 months. With 167 stores, Les Schwab edges out third-place Winston Tire Stores (165 outlets).

Kal Tire, aided in part by the acquisition of 21 Crown Tire stores, finished in fourth place with 159 outlets. AKH Co. Inc., based in City of Commerce, Calif., jumped from seventh to fifth with an increase to 128 outlets. AKH does business as Discount Tire (not to be confused with Discount Tire of Arizona) and Evans Tire Stores.

The newest addition to the list is Tire Kingdom.

President Chuck Curcio repurchased the Riviera, Fla.-based dealership from Michelin North America Inc. earlier this year.

He had sold his then-65 store chain to Michelin in 1988.

Tire Kingdom’s 123 stores rank it seventh in our list, four stores behind Merchant’s Inc.

At the same time Tire Kingdom entered our list, moving from a tire company- owned chain to an independent one, Allied Discounts Tires did the opposite. The Orlando, Fla-based dealership, 14th on our list last year, sold its 46 outlets to Dunlop Tire Corp. at the beginning of the year.

The only other newcomer to our top 25 list is the J.H. Heafner Co. Based in Lincolnton, N.C., Heafner Tire and Products tied for 25th with Dobbs Tire and Auto Centers Inc. Each has 31 outlets.