Feeling Optimistic: Mid-Year State of the Industry Update
We’ve reached the halfway point of 2015, which means it’s time for us to get a pulse on how the industry is faring so far.
I reached out to some operators to get their opinions on 2015 so far. Had they noticed any new trends and had our main topic of discussion from 2014 — the Affordable Care Act — made an impact on their business?
Business is booming for some and slightly stagnant for others.
“We’ve had a record-breaking year,” said Bev Cavinder, general manager of Oil N Go in Crown Point and Valparaiso, Indiana. “We’re up $20,000 over a year ago at one store, and it’s about the same at the other. Our car counts are up, our sales are up and our ticket averages are up.”
Tyson Daniels, owner of multiple Grease Monkey stores in Idaho, shares the same sentiments.
“Business is amazing,” Daniels said. “Our customer counts are up, our ticket averages are up, our employees are happy and motivated and everything is going well.”
Al Staley, owner of two E Z Oil Change shops in Greenville, Texas, attributes dealership competition to the slowdown at his locations.
“It’s slow and has been slow for the last four or five years,” he said. “We have so many dealerships around here — Nissan, Mitsubishi, General Motors and Ford. All these dealerships are doing $19.95 oil changes, and I just can’t compete with that.”
James Hardin, owner of American Lube Center in Longwood, Florida, has seen a slight uptick in business and is staying positive.
“I’ve seen a little bit of a pick up, but I’m trying to be optimistic. [Business] is about the same,” Hardin said. “I have seen an increase in some fleet activity these last couple of months, which has been positive. I’m hoping [the rest of the year is] going to be better.”
Speaking of emerging trends, Cavinder noticed fewer customers taking car-specific oil and opting for a less expensive option.
“People are choosing not to put dexos oil [in their car]; they’re choosing to use regular oil,” she said. “When [dealerships] sell a customer a car, they don’t tell them the car takes a more expensive oil. So, when the customer comes in for an oil change, they think we’re trying to sell them something they don’t need. It just frustrates me because the customer thinks we’re charging them $20 more to change their oil [for no reason].”
Hardin has noticed a shift in car care awareness.
“People are becoming more aware they need to keep their car’s maintenance up,” he said. “I see where people are trying to stay on top of it better than [previous years]. I don’t know if it’s because the economy is a little better, but [it’s what I’ve noticed].”
In the December 2014 issue of NOLN, I wrote an article about the impending use of Apple Pay (which you can find on page 56 of that edition) and what it could mean for your business. Now, six months later, I asked these operators if they’ve noticed customers using, or wanting to use, this form of payment. The resounding consensus is old fashioned credit cards are still the go-to payment option.
“I just accept credit cards and debit cards,” Staley said. “I haven’t updated my credit card machine in a while, which I need to do [soon] so it will accept the newer credit cards. However, I haven’t seen anybody trying to use [Apple Pay or Google Wallet].”
Daniels hasn’t seen the new technology being used at his stores, but he’s ready for it.
“I haven’t seen anyone use Apple Pay or Google Wallet, but we have the new readers ready to go for the customers when they want to use them,” he said. “I started using [Apple Pay] at convenience stores, and the clerks are a little shocked when they see people using it, which tells me there aren’t a lot of people taking advantage of the technology. But, I anticipate seeing [the use] grow.”
Cavinder hasn’t seen customers use Apple Pay or Google Wallet, but she has noticed them use their smartphones for something else.
“My customers show a coupon on the phone, which is very hard for us to track,” she said. “It opens the door for employees to give away stuff, but that’s what they’re using their smartphones for.”
Add-on services are big in the fast lube industry. It seems like headlight restorations and light bulb replacements — among others — are currently the leading add-ons for 2015.
“We’ve introduced headlight restorations, miniature bulb replacement, air conditioning recharges and belt replacements as add-ons this year,” Daniels said.
Hardin has beefed up inventory for one particular add-on service.
“I’ve increased my chemical inventory a little bit,” he said. “I haven’t really seen it pay off as much as I would have hoped. But I [offer] light bulb [replacement] and wiper blades as add-ons, too.”
Cavinder hasn’t incorporated any new add-on products, but Oil N Go is literally adding on.
“We’re getting ready to build a little repair building behind the Valparaiso location,” she said. “I have a detail bay at the Crown Point store that I’m turning into a repair shop, too. We’re going to do alignments, tie rods, brakes and motors. We’re going to try to do a lot of different repairs.”
Last year’s hot button issue was the impending implementation of the Affordable Care Act. Now that it has been implemented, operators are starting to see the effects it has on their business. Some operators still remain untouched, but others have noticed a change.
“It’s just got to the point where [my employees are] on their own,” Staley said. “I used to offer insurance. I would pay X amount of dollars for every employee to go toward their insurance, but it got to the point where my employees couldn’t afford the offset cost of the insurance.”
Daniels hasn’t noticed any effects from the Affordable Care Act, but he thinks it’s a matter of time before he does.
“We currently have fewer than 40 employees, so it hasn’t affected us,” he said. “We definitely want more information as our company continues to grow. I do see it affecting us in the future, but it’s not something we’ve had to deal with as of now.”
As for the rest of 2015, operators seem either optimistic or enthusiastic.
“I’m trying to be very optimistic,” Hardin said. “I’m making employee changes; I’m trying to cover areas I haven’t before, and areas of training, too. I think [the rest of the year] will go well in the long run, if we can get oil costs under control.”
New growth within his city has Staley encouraged.
“We’ve got a lot of business growth around here, so I’m hopeful things will pick up,” Staley said. “But, time will tell.”
Daniels is looking forward to what the rest of 2015 will bring.
“It’s going to be amazing,” he said. “It’s going to be a busy year with a lot of exciting things happening. We’re just going to continue to make the best of each day watch the company grow.”
With the new changes coming to her stores, Cavinder is excited.
“I expect [the remainder of 2015] to be great, especially with my new repair shops opening soon,” she said. “We’re going gung ho at the Valparaiso location. We have great customer service. I really zero in on that. As long as you take care of your customers, I don’t think you have to worry about your business.”
The industry seems to be in a good state with either slight or significant growth. Let us know how things are going for you. Email email@example.com to share your side of the story.