Around the Industry: Wal-Mart Revamps Auto Care Centers
According to a recent report from Bloomberg, Wal-Mart Stores Inc.’s auto centers are getting a service overhaul.
To improve the experience and entice more customers, the company is dedicating staffing and training programs to the department. A new class of salaried assistant managers will be assigned to the auto care centers, where they’ll oversee merchandise and services, said Kory Lundberg, a spokesman for the Bentonville, Arkansas-based company.
The changes are meant to yield benefits beyond the auto centers. Customers are likely to shop around the stores as they wait for their cars to be fixed, Burt Flickinger, managing director at Strategic Resource Group in New York, told Bloomberg. The company has been trying to improve sales in the U.S. division, which recently reported comparable-store sales that missed analysts’ estimates.
“People will be spending at Wal-Mart auto care. Then, because they’ll have an hour to shop, they’ll probably be spending more in the supercenter,” Flickinger said.
Wal-Mart’s more than 2,500 auto care centers in the U.S. historically have been underused. Since they’re usually hidden on the side of stores, some shoppers don’t even know they exist, Flickinger said.
Wal-Mart performs millions of tire and oil services a year, according to its website. Half of the new managers for the auto centers will be promoted from the hourly ranks within stores, Lundberg said. The managers, who will be deployed nationwide, are currently being trained in Bentonville on topics such as customer service, operations and compliance.
The company’s auto initiative could take market share from vulnerable competitors, such as Sears Holdings Corp., which has had success in its car care business despite companywide troubles, Flickinger said.
“It’s shocking that prior Wal-Mart leadership didn’t identify this as an opportunity to capitalize on, especially since they’ve invested in all the other key captive consumer areas — from vision care to pharmacy,” Flickinger said.
Still, it’s hard to tell how much of an impact the latest improvements might have, Brian Yarbrough, an analyst at Edward Jones in St. Louis, told Bloomberg.
“They usually have waiting rooms where you can’t even see inside the store,” Yarbrough said. “Usually, auto stores have better margins, but it’s not like they have a massive waiting room.”
Customers also may not think to go shopping while they wait, he told Bloomberg. “People shopping, then sitting around with their bags while they wait in small chairs — I’m not sure how that works.”
The company has no plans to make any physical changes to the auto care centers, Lundberg said.