50 stores by 2005?: Great American Tire thinks its one-stop service concept will catch on
The idea for Great American Tire and Auto Service Centers started simply enough, with a combination service station/convenience store in Colorado in 1986. But owners Mark DeRose and Chuck Pecoraro were not satisfied.
So in 1998, their "multi-facility concept" was born. Great American Tire partnered with Shell Oil Co. to create a one-stop shop with a tire and automotive service center, a Shell Rapid Lube, a convenience store and gas station.
Four years later, there are 12 Great American Tire complexes in the United States, with another scheduled to open Nov. 13th in McKinney, Texas, a suburb of Dallas.
According to Janet Beaudry, vice president of marketing and sales, the company's goal is to make the experience of buying tires and automotive service an enjoyable one for the customer. To that end, Great American Tire posts its prices, displays its tires in cabinets and makes use of interactive tire and wheel kiosks to better inform car owners. Customers can watch their vehicles being serviced as part of the store design (there are between 10 and 12 bays at most locations).
Each outlet also furnishes its showroom with leather sofas, ample table space, copies of O and Food and Wine magazines, a refrigerator with bottled water and Game Boy players for the kids.
Great American Tire, based in Greenwood Village, Colo., plans to add another 38 stores in high-growth neighborhoods by 2005, according to Beaudry. Modern Tire Dealer recently caught up with her, and asked her about the company's expansion plans.
MTD: What are your expansion plans for the near-term?
Beaudry: Within the next three years, we'll have 50 total stores. Right now, we have our real estate team in each of the markets we’re interested in looking for the perfect corner, a high traffic, high commuter area.
MTD: Presently, you have 12 stores, or "multi-facilities" as you like to call them, located in suburbs rather than inner-city areas. Is that always your goal?
Beaudry: You have high growth in suburbs. Also, suburbs are critical because we need a big lot size, and you don't have two-acre lots in mature market areas. With our multi-facility concept, we need room for a Great American Tire and Auto Service Center, a quick lube, gasoline pumps and a convenience store.
MTD: I know Shell runs the quick lube, gas pumps and convenience store. Are they co-owners of each complex?
Beaudry: We own the complex, and we lease out part of the lot back to Shell. We choose each lot, obviously, with support from Shell, so each one has the demographics both Shell and Great American are looking for.
MTD: You sell tires manufactured by Michelin. Are they part-owners of Great American Tire?
Beaudry: We just sell Michelin brands exclusively. That's our relationship with Michelin. We sell Michelin, BFGoodrich, Uniroyal and Cavalier tires.
MTD: Will all your complexes be built from scratch?
Beaudry: As far as I know. Everything that has come across my desk has been (empty) lots.... We want the gas station and the convenience store next to the tire outlet because at that point we become a destination, a place where you can get everything for your car in one stop. We want to have that because that's what makes us more attractive to the consumer.
MTD: Fifty stores from scratch by 2005 seems very ambitious...
Beaudry: Every person in every department is focused on that goal, from the people in land development, purchasing, construction, marketing, sales, accounting, human resources -- everyone.
MTD: Is your business plan to eventually go public or set up a franchising program or both?
Beaudry: As of right now, there is nothing on the radar screen to go public or franchise. Saying that, we want all 50 stores to basically look and feel the exact same, to have the same level of customer service. That's why at this point we feel the need to keep them all in the company's portfolio.
MTD: Do you have any long-term goals in regard to number of stores?
Beaudry: Ultimately, if all goes well, there will be 300 stores. But that would be long-term. The immediate attention for all of us is the 50 stores.
MTD: Where will the stores be located?
Beaudry: The 50 stores will go into nine great markets. We're in Denver, Seattle, Phoenix, Atlanta and Sterling, Va., now. We will expand into the Dallas area Nov. 13. We want to expand into Chicago, northern Boston and southern Florida -- Dayton County in particular. There will be a minimum of five stores in each market (there are seven stores in the Denver area).
MTD: Are you targeting any particular type of customer?
Beaudry: The stores are designed to attract anyone who's in control of their car maintenance. In our stores, 60% of our customers, on average, are female. But our marketing efforts and expansion efforts target anyone who wants a clean, relaxing place to have their car serviced. In our industry, you don't hear people saying that buying tires or getting their vehicles serviced is relaxing. We kind of change the way people think about their service and what their experience should be.
MTD: What do you feel is unique about your complexes?
Beaudry: One of the unique things about Great American is its disclosure of all pricing, which also adds to the comfort level of our customers when they're in our store. Except for tax and environmental fees, it's all incorporated in the pricing, which I think reduces the stress. Everything's simplified. It's not pricing roulette. And our pricing is fair.
It's the same way we sell tires and service. (Our technicians) will pinpoint your needs and show you the needs of your car. We've taken all the complication out of servicing your car.
MTD: What do you mean by "fair" pricing?
Beaudry: We definitely are price-competitive in all markets in terms of the tires and services we sell. We're not the lowest price, or the highest price. We find the comfortable competitive price point within that market.