Monro Will Consolidate Retail Brands
As Monro Inc. continues to refresh the look of its 1,000-plus stores, the company also plans to streamline its retail operations and focus on five “regional power brands,” rather than the nine different nameplates it operates currently.
CEO and President Brett Ponton talked about Monro’s brand consolidation strategy during a call with investors following the company’s release of fiscal year 2019 results. He didn’t identify which of the retail brand names would be eliminated.
“We have acquired several regional brands over the years and operate two store formats in the majority of our key markets, with a focus on increasing store density. This brings us significant competitive advantages when it comes to sharing inventory and leveraging our distribution network across our store base.
“As part of our broader store refresh initiative, we will be leveraging customer data analytics and local brand awareness to consolidate our existing nine retail banners into five regional power brands.”
At the same time, Ponton says Monro will convert some of its service-focused stores into tire stores — “when we identify targeted demographics that favor a tire store format.”
Why make that move? To increase sales.
Ponton says, “Our service stores generate approximately $600,000 in annualized sales while our tire stores generate approximately $1.2 million in annualized sales.
“Tires make up a significant portion of the automotive aftermarket. By optimizing brand awareness and banner concentration in targeted markets we can increase our sales and relevancy in the marketplace without sacrificing service revenues.”
A test of success
Ponton says Monro conducted a pilot test in a mid-Atlantic market last year, and shifted “a few” selected service stores to a tire-oriented brand. “We are pleased to report these pilot stores are showing a meaningful improvement in both conversion and traffic. Importantly, the results of this pilot program were in line with the forecast of our analytic model, which gives us confidence in the execution of our brand consolidation strategy going forward. “Building upon the results of these pilot stores, we will analyze customer data, brand awareness and banner concentration market by market, and we will be methodically prioritizing markets where we see the strongest potential for increased visibility and traction of our tire banners.
“Overall our goal is to increase brand awareness in our regional markets while aligning our store banners with market demand to optimize growth specifically where we identify opportunities for higher tire sales.”