Monro plans online tire sales for fleets

May 21, 2015

Monro Muffler Brake Inc.’s CEO and President John Van Heel outlined initiatives to improve comparable store sales, including online tire sales for commercial customers and more digital marketing and high-value consumer promotions to boost retail store traffic.

During the fourth quarter 2014 and fiscal 2015 earnings call, Van Heel told participants he is frustrated by Monro’s failure to increase comparable store sales and is tired of being “cautiously optimistic” about store profitability. He outlined the steps the company is taking to boost traffic, sales and profitability:

“I want to take a few minutes to tell you that while we have expanded our operating margin and increased earnings and the bottom line remains more important than the top line, I’ve been frustrated by our inability to combine this with higher comparable store sales especially in light of the 2% increase in comparable store oil changes over the past two years. I’m tired of being cautiously optimistic about the consumer and talking about deferrals, tire deflation and the weather.

“As a result we have recently taken significant steps to profitably grow traffic and sales. These include rationalizing our field management structure as well as strengthening and adding resources to recruiting, employee training and marketing.

"Additionally, we are aggressively moving to further integrate digital technology into our customer value proposition, specifically into Monro’s customer interaction, feedback and marketing activities. These initiatives are being implemented this quarter and next and I expect them to positively impact traffic and sales this fiscal year. They include:

* Website enhancement to improve the effectiveness of our search engine marketing and online tire search functionality coupled with a shift in spending to more efficient digital advertising.

* Increased collection of customer emails which allows Monro to communicate with our customers more effectively and efficiently. This is expected to increase collection of customer service reviews that we can use to increase conversions in our search ads and in website which will lead to higher store traffic and sales.

* Significant improvements to our online appointment process both on desktop and mobile devices to make it easier and quicker for customers to do business with any of our 999 stores. This includes a direct tie-in to our point of sale system that will allow our store personnel to respond directly and instaneously to our customers, a first for Monro.

* The launch of a new online tire ordering system for commercial customers local to our tire stores providing them with better visibility into tire pricing and availability. Their orders are communicated directly to our stores’ point of sale system, thereby increasing convenience, delivery speed and tire sales, also a first for Monro.

“We have also increased our focus on revitalizing the basic building block of our traffic, oil changes. We continue to drive traffic with our everyday low price oil change promotions while increasing customer value by offering free service checks on brakes, tires and batteries and more recently offering free wiper blades as well as additional discounts when customers open a Monro-branded credit card.

“These high-value promotions allow us to build trust and strengthen relationships with existing and new customers.

“As we’ve intensified our focus on these areas, we’ve identified many more opportunities to increase customer visits and sales and expand our digital capabilities. To help us with these efforts we’ve hired a new senior vice president of consumer branding and digital marketing along with a small group of dedicated staff that are responsible for quickly employing digital technology improvements across our websites and stores.

“I expect these initiatives to have a positive impact on our traffic and sales and most importantly profit this fiscal year while driving more efficiency in our marketing spend so I don’t have to cautiously optimistic about things.”

The company reported net income of $61.8 million on net sales of $894.5 million for its fiscal year ended March 28, 2015. That compares to income of $54.5 million on sales of $831.4 million for its previous fiscal year. For details see “Monro earns 13% more in fiscal 2015."