Discount Tire CEO: 'Nothing Is Off the Table'
Muglia Talks New Markets, Electric Vehicles, the Addition of New Services and What the Rest of 2021 Holds
As CEO of Discount Tire, Dean Muglia oversees the largest independent tire dealership in the U.S. With 1,100 total stores, Discount Tire is known for its traditional, “tires-only” model, but “I think you will see us experiment with other services more,” Muglia recently told MTD.
The Scottsdale, Ariz.-based chain - which was founded by 2014 MTD Tire Dealer of the Year Bruce Halle - recently began selling and installing windshield wipers at its locations. “We recognize the world is changing fast and so are the needs of our customers,” says Muglia, who has been with Discount Tire for more than 30 years and in his current role since January 2020.
In this MTD exclusive - Muglia’s first interview with a tire industry publication - he discusses why “nothing is off the table” when it comes to adding other services. He also discusses new and future markets for Discount Tire, the dealership’s ongoing investment in technology, how it’s preparing for electric vehicles and more.
MTD: Discount Tire maintains the largest footprint of any independent tire dealership in the United States and continues to add stores in new markets. Has it become increasingly challenging to maintain Discount Tire’s value proposition as growth continues?
Muglia: We’re at 1,100 stores now and we’ve actually ventured into our 36th state, which is pretty exciting. We now operate in Pennsylvania. That’s a nice entrance into the East Coast market, which we’re really focusing on. When I think about our value proposition and consistency throughout the chain since 1960, when Bruce Halle started the company, we’ve worked tirelessly to provide a consistent experience and even more so over the years, the focus on ‘customer obsession’ has increased within the company. I think a big part of what makes us so successful is our people. We’re still a family-run company, we’re people-first and we have a very strong culture.
MTD: You mentioned Pennsylvania as a new market. Has the company entered any other new markets during the past 12 months?
Muglia: I’m sure there have been markets in existing states. We’re targeting St. Louis, Mo., later this year. You’ll see some stores pop up in St. Louis.
MTD: When you move into a new area, you have to recruit people. Where do you find good employees to perform tire service and also work the sales counter?
Muglia: When we go to a new market, we’ll ask people who might be interested in living in that market because we want to staff some of the more senior positions with existing employees. It’s a way for them to grow and move up in the company. So we will typically staff stores in new markets with people from other markets and they will begin recruiting to fill out their staff. We don’t need ASE-certified technicians, so I think that also helps. It hasn’t been easy. This is a tight (labor) market. But we’ve been managing through it.
MTD: Discount Tire has made significant investments in its fleet service business. What opportunities do you see in that segment?
Muglia: We’ve always been in the fleet business. It’s just never been a very big push on our part. It almost grew out of necessity. But I would say that stepping back and looking at fleets today, we felt we were under-represented in that space.
MTD: Discount Tire has never been shy about investing in technology, as exemplified recently by the roll-out of your mobile tread depth check system.
Muglia: That’s really part of our focus on that end-to-end, omni experience - starting with the online investments we’ve made, enhancing our website and leveraging Treadwell, which is our proprietary tool and big data initiative that can hone in on customers’ true needs, based on what they drive, where they drive and how they drive. We also leverage that tool in all of our stores. Then that transitions into our customers investing in booking a time and coming to our stores. And we’re leveraging tools like the tread depth readers to capture (tire) data more accurately. It also makes it easier for our people. Instead of pen and paper, they now have a digital device in the palm of their hand that they can use to capture tread depth data.
MTD: Among its competitors, Discount Tire has remained unique in that it has stayed true to its original format of tire installation-only and has not ventured into auto service. Do you foresee a time when this could change?
Muglia: I think you will see us experiment with other services more. We recognize the world is changing fast and so are the needs of our customers. There may be some services that we choose to offer in our stores and there may be other services we may choose to partner on, depending on the needs of our customers.
MTD: There’s a big push to accelerate the electrification of vehicles and that will have an impact on tire design and construction. What impact will electric vehicles have on independent tire dealerships? How is Discount Tire preparing for the all-electric future that people believe will materialize at some point?
Muglia: We see electrification coming fast and autonomous vehicles probably a fast-follow after that. It’s going to change the landscape of the automotive industry. We don’t offer a full suite of (auto repair) services so we can be selective on those services that we do offer. Electrification is one area we can look at in terms of additional offerings. Certainly windshield wiper blades are something vehicles of the future will need. We’re taking the needs of consumers today and tomorrow into consideration.
MTD: What can we expect to see from Discount Tire during the second half of 2021?
Muglia: With store growth, we traditionally target 50 new locations each year. During the pandemic, we slowed down a little, but we’ve restarted our engines and are moving at full speed. We’re looking at modernizing our stores a little bit more, including some of the interiors. We’re looking at replacing traditional signage with digital options. And we’re really focused on keeping each customer safe. I think you’ll continue to see how Discount Tire evolves in how we look and how we go to market.
MTD: What's your take on the current state of the retail tire market?
Muglia: I would say it's generally positive. We're seeing vaccinations continue to roll out. We're seeing states and economies reopen. There's a lot of stimulus in the market right now from the government. People want to get out and do road trips. We're starting to see gas consumption return to more traditional levels. There are a lot of positives. Now there are certainly some headwinds. Supply chain constraints are a bit of a headwind - getting product from overseas - but we're managing through that. But overall, we see the second half of the year to be pretty strong for our industry. We're pretty excited.