Like their smaller counterparts, the country's largest tire dealerships face a number of ongoing challenges. For many, finding auto service technicians tops the list. (The 2023 edition of the MTD 100 - our exclusive look at the largest tire dealerships in the U.S. - is available for viewing here, starting on page 36.)
Tim Winkeler, CEO and president of Auburn, Maine-based VIP Tires & Service, says recruiting experienced auto service technicians has been particularly difficult.
“We have career path programs. We have lots of technical school partnerships. We’re doing a lot of things to attract young people to our industry. But at the same time, with the growth we’re having, we’re always in need of more experienced mechanics.
“Demand for tires is good. But with new car sales being suppressed and the overall (automotive) fleet aging, demand for auto repair is phenomenally strong,” he says.
“Not that it was ever easy, but today it seems especially challenging” to find master technicians — “and finding enough of them to satisfy the need we’re seeing.
“I think we’re doing better than most, but if we could hire another ASE master tech at each of our stores tomorrow, they’d be (immediately) busy.”
John Miller, CEO of Monroe, Ind.-based Southern Indiana Tire, which is part of Best-One Tire Group, says recruitment is still a challenge for his dealership, “but nowhere near what the problem was last year.”
Retention remains a challenge, he says, but that’s improving, too. “Best-One, as a whole, held sessions last year on acquisition, retention and expansion,” he says. “I think we’re doing better with onboarding. We’re able to be a little more selective.
“For a while there, it was if they had a pulse, they were hired, but we’re getting better candidates now. We really try to stay close to them, (using) intentional touch-bases to try to keep them longer.”
The bigger challenge facing Southern Indiana Tire is high tire inventory levels, according to Miller, who traces the problem back to the end of 2022, when “suppliers, all of a sudden, became flush with product. We were getting eight to 10-month-old back orders flying into the warehouse.”
Best-One has diligently worked to lower inventories, he says. “We’ve been selling products out to our existing customer base. We’re not ordering much. We’ve isolated some older inventory. We’ve moved inventory from store to store. We’ve done some discounting.”
Through it all, “we’ve been able to maintain our gross profit.”
Joe Zaccheo, president and CEO of Norwell, Mass.-based Sullivan Tire Co. Inc., cites inflation as one of his dealership’s main challenges. “The consumer has little-to-no disposable income. And there’s been a run-up in the cost of tires. That’s been an issue.”
“The consumer is just trying to pay their bills,” adds Paul Sullivan, Sullivan Tire’s vice president of marketing. “The consumer is under enormous stress. The income gap is just too great.”
He expects “the flight to price” will continue. Sullivan believes this creates challenges for dealers who have traditionally hung their hats on promoting flag brand products.
“When people start to not think about the premium tire — and the value and equity of that premium tire — and would rather buy based on prices … we have to be careful. It’s easy to sell on price, but you can’t build your business on the lowest prices. You sell quality and the equity of a brand. We need to continue to do that.”
Other MTD 100 dealerships cited these challenges:
“The impact of both regulator and individual bank actions and their impact on cash availability and lines of credit for our customers.” — Callaghan’s Best-One
“Our biggest challenge continues to be hiring talent for our store locations.” — Gill’s Point S Tire & Service
“We, too, are navigating through issues related to inflation. Tire demand for the first half of 2023 (was sluggish).” — Tire Discounters Inc.
“People, rising utility costs and inflation.” — Valley Tire Co. Inc.
“Customer acquisition and retention. Online price shopping makes it more difficult to drive new business in the door and keep current customers coming back.” — Ted Wiens Tire & Auto Centers
“Soft sales market, overstock of products, pricing not coming down as quickly as we would like and customers cautiously buying.” — McCarthy Tire Service Co. Inc.
“Hiring employees and employee retention.” — Wonderland Tire Co.
“Excess inventory and a slowing market.” — Jack’s Tire and Oil Management Co. Inc.
“Continuing labor market, higher than normal inventory and expense for carrying inventory.” — Graham Tire Co.
“Recruiting and retaining entry-level and general labor employees at competitive wages.” — C.J.’s Tire & Automotive
“Our biggest challenge is finding, recruiting and retaining quality people. We are in growth mode, so we are always in need of good people.” — Flynn’s Tire Group
Click here to view the 2023 MTD 100.
