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Philadelphia Challenge

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Philadelphia Challenge

First of two parts

Not everyone in Philadelphia sells tires and service. It just seems that way to the tire dealers who work in the “City of Brotherly Love.”

Row housing is the reason. According to the “Philadelphia Row House Manual,” almost all of the neighborhoods in Philadelphia, “from Mount Airy to Pennsport, are defined by their row house streetscapes.”

The one– to four-story houses are attached to each other, forming long rows on both sides of narrow streets. The result is a city saturated with vehicles — and auto repair shops

“With the row homes on any given block, there could be 100 cars!” says Craig Myers, co-owner of Allen Rubber Co. Inc., which does business as Allen Tire & Service on the northeast side of Philadelphia.

“There are a lot of row home communities. There are a lot of cars, and a lot of opportunity.”

Wholesale deliveries

For Allen Tire, opportunity comes in the form of wholesale distribution.

“There are a huge number of auto repair places,” says Myers. “They are on top of each other, and we can service them the best because we can get to them the fastest.

“If they need tires, they want to get those guys off the lift. It’s no different here than in other places. Lift time is expensive.”

Don’s Service Center Inc. gets deliveries from Allen Tire daily, “sometimes five or six times a day,” says Don Dunning, who owns the operation with his wife, Dot.

Don’s Service Center has been fixing foreign and domestic cars since 1979. Don says his customers usually drop off their cars at night or in the morning and pick them up by the end of the day. “You always have a couple here or there who want it right away,” adds Dot.

Another Allen Tire retail customer, Buyer’s Tires and Autocure, didn’t have “tires” in its name when it opened almost seven years ago.

“I got into this business because of service,” says owner Stuart Beyer. “There are five million service places (in the area), but only a couple tire places. I put tires in my name because I thought it would generate calls, generate business and differentiate myself from some of the other people.”

Beyer describes the area as very blue-collar.

“I’ll offer whatever I get my hands on. But the market around here is a private label market. Tires are so expensive now, regardless of what you get.”

He keeps “maybe 100 tires or less in stock because Allen Tire can get it to me by the time the wheel’s off. I don’t have the room to store everything. There are too many sizes.”

Philadelphia is an urban city, separated from New Jersey to the east by the Delaware River. A number of big wholesale distributors can be found in western New Jersey: Reliable Tire Distributors Inc., Englewood Tire Distributors (which was purchased by Terry’s Tire Town Holdings Inc. late last year), and American Tire Distributors Inc., to name a few.

“I’m just grateful they are on the other side of the river!” says Myers.

 Phil McConnon, vice president of Allen Tire’s wholesale division, says being located in the city since 1932 has its advantages.

“One of the challenges for wholesalers on the outside of the city is a cost-effective method to work their way in. Philadelphia is an older city. It is already established, with the land already in use. There are not a lot of new builds.

“The expressways won’t take you to the dealers. You have to travel through the city streets, often two or three times a day per dealer. Distributors not located in the city quickly find out how difficult the logistical aspect of selling the city of Philadelphia is.”

Allen Tire supplies 300 retailers with tires and wheels. Other local tire distributors include Future Tire Co., Traction Wholesale Center Inc. and Ardmore Tire Inc.

From the tire retailer’s point of view, the lack of space in the city puts storage at a premium, “so that makes us that much more valuable to them,” says McConnon. “As a wholesale distributor, your challenges are to get product to these dealers in a timely manner. People are very neighborhood-oriented when they purchase tires. Loyalty is a factor. We want our dealers to think of our inventory as if it were theirs.”

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Philly demographics

Philadelphia is both a city and a county, although the metropolitan area can extend not only to other counties in eastern Pennsylvania, but also to New Jersey and northern Delaware. According to the United States Census Bureau, Philadelphia is the largest county in the state, with more than 1.5 million people and 670,171 housing units. However, it is the second smallest in land mass at 134.1 square miles.

The makeup of the county, based on Census Bureau estimates and definitions, is as follows:

 • percent female: 52.8%;

• white persons: 45.9%;

• black persons: 44.3%;

• Asian persons: 6.6%;

• persons under 18 years old: 22.5%;

• persons 65 years and older: 12.1%;

• home ownership rate: 55.3%;

• median household income: $36,251;

• mean travel time to work: 31.5 minutes.

The latest data the Census Bureau has for retail sales in the county is for 2007, when they totaled $11.1 billion.

“The population of Philadelphia County has declined since the 1950s due to a loss of jobs, a search for safer and affordable neighborhoods, and suburban development,” write the authors of the row house manual. “In the past 20 years, downtown Philadelphia has grown in population and value, as people rediscover city life and see value in row house neighborhoods.”

Row houses are seen as “a sensible solution to living in town, providing an opportunity to own and maintain a home, and have a much smaller footprint on the environment, literally and figuratively.”

Do it for me

Most of the big national players in the tire industry can be found in metro Philadelphia. Mass merchandisers such as Wal-Mart Stores Inc. and Sears Holdings Corp. are there. So are warehouse clubs like Sam’s Club, Costco Wholesale Corp. and BJ’s Wholesale Club Inc.

Monro Muffler Brake Inc., fourth on the Modern Tire Dealer 100 list, expanded its footprint in the area when it purchased Vespia Tire Centers Inc. last year. Large regional independent dealers include NTB, part of the TBC Retail Group; Somerset Tire Service Inc., sixth on the MTD 100 list; and CJ’s Tire & Automotive Services. Noticeably absent is Discount Tire Co. Inc.

But Pep Boys-Manny, Moe & Jack has called Philadelphia home since it was founded in 1921. Robert Sammons, vice president of merchandising, says Pep Boys has 60 outlets in the area, including 11 Service & Tire Centers. Not surprisingly, Philadelphia is one of Pep Boys’ top markets.

“It’s one of the few markets where we have a dedicated tire distribution center.”

Sammons says the Service & Tire Centers are “a major growth area for us.” Compared to Pep Boys Supercenters, the tire outlets are smaller, with six to eight bays versus 10 to 11. And they don’t offer parts (do-it-yourself sales account for 20% the company’s total sales).

Of the 740 Pep Boys stores nationwide, 171 are Service & Tire Centers.

“While we are still opening Supercenters, most of our new store openings are Service & Tire Centers. We believe with vehicle complexity changes and the aging of the population, do-it-for-me is going to grow faster than DIY.”

Pep Boys sells BFGoodrich, Bridgestone, Continental, Cooper, Falken, Firestone, General, Hankook, Michelin, Nexen, Pirelli, Uniroyal and Carlisle brand tires, plus its own Cornell, Definity and Futura private brands.

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Blatt Tire & Service

The Historic District in downtown Philadelphia is not zoned for vehicle repair shops. The closest tire dealer to what is known as the “Old City” is Blatt Tire & Service.

Within walking distance of the Liberty Bell and Independence Hall, Blatt Tire has been a fixture at the 10th and Callowhill St. location for 50 years. But there has been a Blatt Tire in Philadelphia since 1919. Ricky Blatt, third-generation owner and service manager, says he only recently found out his grandfather, Mort Blatt, lost his first business, a gas station, when he bet all his money on the legendary thoroughbred, Man o’ War, to win the Sanford Stakes in 1919. It was the only race Man o’ War ever lost.

“I didn’t know we went bankrupt and started over again, and it was all over a horse!” says Blatt, who studded tires for his grandfather when he was 10 years old.

Blatt carries Michelin, BFGoodrich, Uniroyal, Goodyear, Bridgestone, Firestone, Continental, General, Dunlop, Pirelli, Toyo, Yokohama and Vogue tires. He always has offered multiple brands because it gives him a lot of options.

“Buying was always a key part of the business back in the day, and it still is,” says Blatt. “If you can buy a tire at the right number, then you’ll always be competitive.

“The evolution of tire company programs sort of forces you to buy from them in order to get the discounts. When we’re buying outside a program, however, we shop everything heavily. There are no boundaries at that point.”     ■

In the second of our two-part series on the Philadelphia tire market, four other tire retailers will share secrets of success.

Philly by the numbers -- Major tire retailers with more than one store

Nationwide retailer Pep Boys-Manny, Moe & Jack was founded in Philadelphia in 1921, so it is not surprising that 60 of its 740 stores sell tires in the metro area. Eleven of them, including two on the other side of the Delaware River in New Jersey, are Service & Tire Centers.

The city of Philadelphia and its suburbs also play host to these multiple-store tire dealerships.

 • Monro Muffler Brake, 5 (plus 1 in Woodbury, N.J.).

• Blatt Tire & Service, 3.

• Firestone Complete Auto Care, 3.

• Allen Tire & Service Centers, 2 (plus 1 Trio Tire & Service outlet in Cherry Hill, N.J.).

• Philadelphia Tire Service, 2.

• Sears Auto Centers, 2.

There are three 3 J’s Discount Tire stores in metro Philadelphia. Two, including one in Claymont, Del., are run by Jay DeMaio. The other, in Swarthmore, Pa., is run separately by Joe DeMaio Jr.

The 3 J’s Discount Tire chain was started by Joe DeMaio Sr., who retired and now operates Airport Discount Tire & Auto in Essington, Pa. (“Buy 4 tires and get $20 in free gas”).

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