Will There Be More Price Increases in 2023?
Dealers Share Their Thoughts, Predictions
Price hikes were a hot topic in 2022. MTD wanted to find out if tire dealers are expecting another year of price increases.
“I really don’t think we will see as many price increases in 2023 as we did in 2022,” says Joe Flynn, president of Flynn’s Tire & Auto, which is based in Hermitage, Pa.
“I think it’s because tires are more readily available. The shipping container crisis has subsided – for now – and I just think from supply alone being better, it will help with pricing.”
Brett Matschke, president of Richlonn’s Tire & Service Centers, a five-outlet dealership based in Muskego, Wis., says his “gut feeling” is that there will not be a “rapid ascension” of prices like the market saw last year and in 2021.
“I believe the manufacturers certainly incurred an increase in cost, just like the rest of my business incurred the increase cost of both labor and manufacturing materials, but I don’t believe we’re not going to see any price increases – but I would hope not at the rates we saw last year.”
Ryan Benton, vice president of Black’s Tire Service Inc., which is based in Whiteville, N.C., says his 2022 price increase worries are still weighing on him, so the 2023 market hasn’t crossed his mind much.
“Lord only knows” if there will be more increases in 2023, he says. “But I sure hope not!”
“We haven’t been able to pass on (all of) the price increases we have already taken – especially to our commercial customers. And we have not been able to pass them on as fast as we get them, so we are playing catch-up right now.”
Price increases also can impact the way tire dealerships invest their earnings, according to Benton.
Hikes last year “made a significant impact on our profitability, which we use to reinvest in our company,” he says.
“We use our profitability to keep our locations, equipment, trucks and people suited up to provide the best service we can.”
Brandon Johnson, chief operating officer at Eagle Tire Pros – a single-location dealership in Jacksboro, Tenn. - says he witnessed many of his customers prepare for economic uncertainty in 2022.
“There is always the big ‘R word’ on people's minds – a recession. If you couple that with some of the tire prices and different SKUs jumping 10% to 30%, it makes it really hard for folks on a budget.”
Johnson says suppliers need to “step-up and look at ways they can be more efficient and keep those costs low.”
Another reason Flynn believes tire increases will be kept more at bay is financial experts' predictions on consumer spending in 2023.
According to Flynn, experts are saying that the consumers’ appetite for spending money is going to be less in 2023 – meaning “the demand for tires just won't be there as much.
“So if they’re more cautious and bring the demand down and the supply is bigger than the demand, I don’t expect to see price increases.”