Commercial Dealers Work Around Pricing, Inventory Challenges

Oct. 11, 2022

Some of the country’s biggest commercial tire dealers are holding their breath to see how high inflation will go and how it will impact their businesses in the months to come. Many recently commented that high inventory levels have been a big challenge and they are hoping for more normalcy during the coming winter months.

In the meantime, dealers are finding a way to work around this issue as mergers and acquisitions continue to reshape the landscape.

The country’s largest independent commercial tire dealership, Southern Tire Mart LLC, recently acquired Phoenix, Ariz.-based Redburn Tire Co. and 26 Bridgestone Americas Inc.-owned GCR Tires & Service locations.

More recently, Green Bay, Wis.-based Pomp’s Tire Service Inc. acquired Elk Grove Village, Ill.-based Tredroc Tire Services Inc.

Both acquisitions have changed the rankings on MTD’s annual Top 25 Commercial Tire Dealer list, which can be viewed on page 54 of the October 2022 edition of MTD.  

Switching tiers 

Dealers who recently talked with MTD say tire pricing is pushing many customers - especially smaller fleets - to opt for less expensive products. But not all customers have been surprised by higher tire prices, according to some dealers.

“Customers, for the most part, are expecting the (higher) pricing,” says Bob Berlin, president of Pete’s Tire Barns Inc., which is based in Orange, Mass. “It’s the world we live in today.”

“Our customers understand the increases as they, too, have raised prices numerous times,” says Jim Stankewicz, president, Valley Tire Co. Inc., which is based in Charleroi, Pa.

However, John Ziegler Jr., vice president of Ziegler Tire & Supply Co., which is headquartered in Massillon, Ohio, says demand for tier-three and tier-four brands at his dealership has “increased dramatically” due to price hikes placed on already more expensive brands. “That - coupled with the major manufacturers producing much less of their tier-two products due to capacity - (has caused) customers to be more resistant to the higher pricing and definitely more value-seeking than in the past.”

Sourcing lower-tier products hasn’t always been easy, according to Ziegler. He says that major tire manufacturers are focused more on producing tier-one products. “It makes sense, but it’s hurting their lower-tier brands. And I’ve been spending more time trying to buy tires than sell tires.”

Ziegler Tire has started bringing in truck tire brands like RoadX, a “couple of TBC brands” and other brands and products.

Mick Pickens, president of St. Cloud, Minn.-based Royal Tire Inc., agrees that many customers are opting for lower-priced, tier-three or tier-four tires. In some cases, this is due to price and in other cases it is due to availability, he says. 

“Trucks and fuel and maintenance prices are crazy right now,” says Rick Benton, president of Blacks Tire Service Inc., which is based in Whiteville, N.C.

 Benton says he noticed smaller fleets are buying lower-tier tires at his dealership. “These smaller fleets are just trying to survive,” says Benton. “Most of the national fleets are making do, but these smaller fleets - they have to do what they can to save money.” 

Marty Herndon, CEO and chairman of Snider Tire Inc., which is based in Newton, N.C., says that “inventory levels are high, so we purchase what we can, when we can. We are able to source tires and brands fleet customers prefer about 80% of the time.”

Earl Colvard, president at Earl W. Colvard Inc. dba Boulevard Tire, whose base of operation is in Deland, Fla., says supply is still limited, which forces the company to purchase from “three tier-one suppliers to meet the needs of customers.”

Many dealers have told MTD that the supply situation looks to be improving. But some believe their dealerships won’t be in the safe zone until the first quarter of 2023.

“We are still making some substitutions and in some cases customers are settling for what we can get versus what they prefer,” says Carson Wright, executive vice president of Nebraskaland Tire, Kansasland Tire and Coloradoland Tire, which is based in Lexington, Neb.

Ziegler also believes once things start settling down in 2023, there will be greater normalcy within the pricing of tires. “I think the major manufacturers will start producing more. And a lot of tires are coming from overseas, which will fill the warehouses, and customers will start getting all that they need.”

Chris Chase, president of Frederick, Md.-based Rice Tire Co., agrees that truck tire inventory levels should be getting better towards the winter months. “We don’t always have the exact tire a customer wants, but we have been able to substitute, so we always have something to sell,” says Chase.

Making investments   

Despite challenges, commercial tire dealers continue to invest in their companies. Royal Tire’s Pickens says that he has expanded services that his dealership already offered. “This includes some mechanical and a significant amount of mounted wheel and on-site services,” he notes.

Some dealerships have added service trucks. Other dealerships are grappling with the ongoing labor shortage. Bob Feldbauer, CEO and president of Jack’s Tire & Oil Management Co. Inc., which is based in Logan, Utah, says his company is “focusing on our core competencies in an employee-constrained environment.”

Rice Tire acquired a new location in December 2021 and is working on a few more acquisitions that may be ready next year, according to Chris Chase. “We have also invested in more large OTR (service) trucks and that part of our business is growing.”

About the Author

Madison Gehring | Associate Editor

Madison Gehring is Modern Tire Dealer's associate editor. A graduate of Ohio State University, Gehring holds a bachelors degree in journalism. During her time at Ohio State, she wrote for the university's student-run newspaper, The Lantern, and interned at CityScene Media Group in Columbus, Ohio.