Sullivan Tire Eyes More Growth in 2023
'Considerable Opportunities' Exist For Dealership, Say Execs
Sullivan Tire Co. Inc. is in growth mode. The Norwell, Mass.-based dealership added four stores to its network this past year via the acquisition of C&R Tire, a two-store dealership with outlets in Worcester and Sturbridge, Mass., and the purchase of Central Tire, a dealership with retail and commercial operations in Sanford and Shawmut, Maine.
MTD recently discussed what’s next with Joe Zaccheo, Sullivan Tire’s president and CEO, and Paul Sullivan, the company’s vice president of marketing. (Zaccheo was named Sullivan Tire’s president and CEO this past April. He’s been with the dealership for more than 25 years.)
In addition to operating more than 75 retail locations, Sullivan Tire has more than 15 commercial tire outlets and more than a dozen distribution centers. The company also operates three Bandag retread plants.
MTD: How would you describe Sullivan Tire’s business in 2022?
Zaccheo: We are up. We’re growing our business and our top line is up double digits versus last year.
Sullivan: More importantly, we’re up in the number of consumers we service each day.
Zaccheo: We also had a growth spurt in our retreading business. We saw a 25% increase in retreading. And our truck tire sales are showing an uptick versus last year.
MTD: What have some of your other bright spots been?
Zaccheo: Hiring has been a bright spot. We lost a few (employees), but we’re net positive 100 employees. We’ve been able to lower our turnover. We’ve stepped up screening new employees.
We’ve upgraded all of our locations. And we’re not open on Sundays, so we’re focusing on work-life balance. I think our message of family and taking care of our employees – we've done a better job with that.
Sullivan: We’re doing a much better job of onboarding people. And day-to-day communication throughout the company has been (a strong point.) We are out there in force, visiting locations.
MTD: Sullivan Tire continues to add stores. Can you tell me about your latest acquisitions and why they’re important?
Zaccheo: Our acquisition in Worcester and Sturbridge was a company called C&R Tire. We were one of its biggest suppliers. We had developed a relationship with them. Worcester is a growing city and it was a market we wanted to get back into.
We wanted to head west in Massachusetts. This – along with the Sturbridge location – gave us that opportunity. And it will spin into other opportunities. The Sturbridge location had a car wash, so we’ll be in the car wash business.
We also acquired a company called Central Tire, which is a microcosm of Sullivan Tire. They have commercial, wholesale, retreading and a little bit of retail. The stores came with a very loyal customer base. They’re very sales-oriented and we also had supplied tires to them. We closed on (the Central Tire deal) in October and haven’t skipped a beat.
Sullivan: We are honored to be part of the history and legacy of these businesses.
MTD: What are the advantages of growing through acquisition versus new stores in the New England market?
Zaccheo: There’s a lot of factors. When acquiring existing businesses – especially ones we sell to – we know the culture, we know the employees and we know the customer base. It’s a more seamless transition. These companies are accepted in their communities.
Land in New England is very expensive and the cost of construction has gone through the roof. Building new is a longer-term play and a more expensive play.
MTD: What opportunities do you see in 2023 and beyond?
Zaccheo: As we look at the next quarter, we know there’s a lot of talk about a recession. There’s a possibility that when a car comes in, (the owner) may spread out its repairs over a period of time. That’s something we’re anticipating.
But we stay away from the bad news and focus on the positives. I think miles driven will probably be up next year. A lot is affected by gas prices and things are headed in the right direction from that standpoint.
Sullivan: We know the average automobile is close to 12 years old. And a set of tires today is expensive. People are looking for good value and they’re looking for trust.
Zaccheo: We’re going to continue to look at electric vehicles and how to service them – making sure our employees are properly trained. We’re going to continue calibrating advanced driver assistance systems.
Sullivan: We have considerable opportunities to grow. We have a lot that we’re looking at right now. It’s going to be a tremendous year of growth for us.