30 Years of NOLN: 2001-2005

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We reflected on 15 years worth of National Oil & Lube News (NOLN) in the most recent July, August and September issues. We remembered marked moments, past Operator of the Year winners, challenges and triumphs. The year 2000 ended quietly for the fast lube industry with no major mergers or acquisitions, but that wouldn’t last long. Flip the pages with us on the years 2001-2005 as we continue reminiscing.

2001

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Independent Woman Part 1,” by Destiny’s Child

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Harry Potter and the Sorcerer’s Stone,” starring Daniel Radcliffe, Emma Watson, Rupert Grint and Robbie Coltrane

• Super Bowl Champs: Baltimore Ravens

• World Series Champs: Arizona Diamondbacks

• NBA Champs: Los Angeles Lakers

• “None of us will ever forget this day, yet we go forward to defend freedom and all that is good and just in our world,” said President George W. Bush as the U.S. grieved from the 9/11 terrorist attacks.

In 2001, most operators said they were still keeping a watchful eye on extended drain intervals.

“Several years ago, the threat of extended drain intervals sent the fast lube industry into a tailspin,” said Steve Christie, the executive director of the Automotive Oil Change Association (AOCA). “Although intervals have been extended somewhat by the customers on their own, and by manufacturers, the major changes have not materialized. We still see most recommendations in the 3,000- to 5,000-mile range for severe driving. However, other technological factors may begin to affect the industry as more ‘hybrid’ cars hit the market and fuel cells become more viable.”

One thing everybody in the fast lube industry could agree on in 2001 was finding and keeping good employees was getting harder and harder.

“Young people today have no work ethic,” said Sue Ackley, co owner of three Texaco Xpress Lubes in St. Louis, Missouri. “They are not on time. They don’t seem to take as much pride in their work, and they know if you get on their case too much or fire them they can always find another job right away. Pay does not even enter into the equation. You do not get better employees because you pay them more.”

Christie didn’t predict that the workforce selection would get any better in the coming year either.

“It appears the tight labor market will continue for the foreseeable future,” Christie said. “This means higher labor costs for lube operators.”

Overall, operators predicted 2001would bring consolidation, employee issues, extended intervals and higher oil prices.

The annual Tops in the Industry list included 70 fast lube chains and accounted for 6,431 total facilities. Jiffy Lube took its No. 1 position with 2,143 total operating stores, despite selling off 60 company-owned stores making its net growth from February 2000 to February of 2001 zero. Pennzoil 10-Minute Oil Change came in second place and Texaco Xpress Lube snagged third. A pair of Tennessee lube companies, Finish Line Express Lube and Kwikoil rounded out five new lube chains making the Tops list.

The 14th annual AOCA Convention and Fast Lube Expo found its way to Kansas City, Missouri. The four-day event, themed “Invest in Your Future,” attracted a crowd of more than 2,000 people with almost 190 exhibitors displaying their products and services.

The Operator Survey reported the average fast lube operator had been in business for 8.1 years and owned exactly two facilities with 2.8 bays each. The average number of fast lubes within three miles decreased from 6.4 oil change facilities in 2000 to 5.4 in 2001. In fact, 2001 marked the fifth straight year lube operators reported less oil change competition than the previous year.

The average cost of a basic lube, oil and filter (LOF) was $25.35; average number of cars serviced was 41.4; average oil change interval was 4,409 miles — only a slight increase from the year before; average hourly rate for a technician was $7.75; and 58 percent of respondents sent reminder cards to their customers.

Sue Ackley, co-owner of three Texaco Xpress Lube facilities in the St. Louis, Missouri area was named the 2001 Operator of the Year.

2002

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “How You Remind Me,” by Nickelback

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Spider-Man,” starring Tobey Maguire, Willem Dafoe, Kirsten Dunst and James Franco

• Super Bowl Champs: New England Patriots

• World Series Champs: Anaheim Angels

• NBA Champs: Los Angeles Lakers

• Tiger Woods won his second consecutive Masters.

By the time the January 2002 issue of NOLN rolled around, operators were prepared to make their predictions for the year. They had just closed the books on 2001 and despite the tragedies and poor economic news the U.S. underwent, operators said 2001 had been a more profitable year than 2000. Many attributed the increase to add-on services.

In 2002, operators forecasted more success, but it wouldn’t come easily. They were still concerned about extended drain intervals and competition but some operators were more wary of how the rising cost of goods would affect their businesses.

“My concerns are rising cost of goods, rising overhead and profits,” said Rex Duncan, owner of Mr. Speedy Car Care in Texarkana, Texas.

Other operators felt similarly.

“My biggest concern is as we squeeze our vendors for lower prices, the quality does not suffer,” said Rick Rocha, owner of three Royal Quick Lubes in the Hanford, California area and president of the California Oil Change Association. “The quality of our products reflects the quality of our services.”

Operators had a few changes in mind for their stores in 2002. They planned on continuing to emphasize quality, selling more add-on services, providing better service and running more promotions.

Mark Owen, owner of Colonial Oil Exchange in Farmington, Michigan had his eyes set on enlarging his fleet account business as a way to combat potential competition.

“I am afraid large companies, i.e. Wal-Mart, auto dealers and major department stores, will also open quick lubes,” Owen said. “This may hurt the small operator.”

AOCA held its annual convention in Reno, Nevada. The four-day event was themed “We Have the Winning Hand.” More than 2,000 people attended, and 165 vendors set up shop. The first seminar was entitled, “Generation X in a Baby Boomer World” and gave tips on how to manage, motivate and market to Generation X. Legendary basketball coach, Bob Knight, addressed the industry in a keynote speech entitled, “Team Building in Action.”

No surprise, the Tops in the Industry survey reported Jiffy Lube was still No. 1 and despite little growth in 2001, had added 74 stores since then for a total of 2,217 total operating stores. Pennzoil-10 Minute Oil Change held on to the No. 2 spot and Shell Rapid Lube snuck into spot No. 3 as a result of circumstances surrounding a ChevronTexaco merger.

The 15th annual Operator Survey unwrapped the state of the industry. The average fast lube was located in a city with a population center where 33,775 people lived and had 2.5 other lube facilities and 6.3 other auto-related facilities that changed oil within three miles of it. Of those shops, 88 percent discounted their oil changes by an average of $4.88 per oil change. Fifty-eight percent of average lube owners discounted their oil changes by an average of $3.31. Average cost of a basic LOF was $22.51; average break-even car count was 25.9; average number of cars serviced was 40.6; average hourly rate paid to technicians was $7.75; and 26 percent of respondents indicated they also operated a carwash.

Randy Todd, a fast lube veteran from Flushing, New York, was named Operator of the Year for 2002.

2003

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Lose Yourself,” by Eminem

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “The Lord of the Rings: The Return of the King,” starring Ian McKellen, Elijah Wood, Viggo Mortensen, Liv Tyler, Sean Astin, Orlando Bloom, Ian Holm, Kate Blanchett and Karl Urban

• Super Bowl Champs: Tampa Bay Buccaneers

• World Series Champs: Florida Marlins

• NBA Champs: San Antonio Spurs

• Apple launched iTunes.

Depending on who you asked, profits and business in 2002 were better or worse than 2001, and when we asked operators about what they saw ahead for the year 2003, some of them said they were feeling the effects of recent oil company mergers.

Several lube operators said they were having a positive impact on their lube businesses.

“The mergers have been beneficial,” said Gary Ollerenshaw, owner of Redmond Xpress Lube in Redmond, Oregon, “lowering our cost of goods, giving us more freedom on our choice of vendors and lowering credit card fees.”

Others agreed.

“While others are changing their name and identity, we have remained with the same oil brand we began with,” said James Allbritton, owner of Master Lube Express in West Monroe, Louisiana. “Customers feel we are the same people doing the same good job we always have. We have gained business based strictly on this point.”

However, the recent merger-related changes didn’t sit well with everyone.

“The sale of Texaco and the acquisition of Pennzoil by Shell has caused the public a lot of confusion,” said Kelly Zweifel, owner of Shell Rapid Lube in Garden City, Idaho.

The same suspects held the No. 1 and No. 2 spots on the 2003 Tops in the Industry list.  Valvoline Instant Oil Change moved up one place to No. 3. The chains with the most growth included Pennzoil 10-Minute Oil Change, Texaco Xpress Lube, Shell Rapid Lube, Valvoline Express Care, CITGO Lube, Phillips TropArtic Fast Lube and 76 Express Lube. Those shops shared one thing in common — most were branded oil company programs.

Charlotte, North Carolina, hosted the 16th annual AOCA Convention — which by the the photos in the May 2003 issue of NOLN, looks like it was a fire-juggling, model car-racing, vendor-dunking, heck of a good time! More than 2,000 people and 171 vendors attended, topping attendance at the 2002 Reno show.

According to the 2003 Operator Survey, the average cost of a basic LOF was $21.89; average ticket total was $39.18; the average number of cars serviced per day dropped to 37.6; and the average length of employment for managers was 4.7 years and two years for technicians. Since many fast lubes are located on busy roads, we decided to ask about traffic count. Operators said an average of 21,755 cars passed by their facilities each day.

For the first time in the history of the award, NOLN awarded Operator of the Year to two people. Rick Teasta and Mike Dobson, who were co-owners of the EZ Lube chain in Southern California, claimed the title of the 2003 Operators of the Year.

2004

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Hey Ya,” by OutKast

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Shrek 2,” starring Mike Myers, Cameron Diaz, Eddie Murphy and Antonio Banderas

• Super Bowl Champs: New England Patriots

• World Series Champs: Boston Red Sox

• NBA Champs: Detroit Pistons

• Janet Jackson’s wardrobe malfunction during the Super Bowl XXXVIII halftime show had everybody talking.

In 2004, operators had things like high-mileage and GF-4 motor oil on the brain. Of course, they were still concerned with steadily growing competition, too.

“With the car dealers, muffler shops and tire stores using oil changes as a loss leader, coupled with our aging population, I am worried about the future of our industry,” said John DeGreve, owner of seven DeGreve Oil Change centers headquartered in Moline, Illinois. “The older population has more time than money, and quick oil changes are not as important as low prices. They will spend the time waiting for their oil change if it’s cheap.”

Operators wondered if they’d have to stock both GF-3 and GF-4 motor oils or if the next-generation of GF-4 motor oil would truly be backward compatible with current cars. If so, they wondered would it be more expensive than GF-3 motor oil. Later in 2004, the International Lubricant Standards and Approval Committee voted to approve GF-4 for the next-generation of passenger car motor oil.

The Tops in the Industry rankings had 58 chains, accounting for 6,999 stores in total.  While the top three chains stayed the same, there was movement among the other seven chains in the top 10. The newly rebirthed Texaco Xpress Lube chain lead the way, falling in line at No. 4. Two years prior, the ChevronTexaco merger resulted in the chain being split. Some operators had opted to stay with the Xpress Lube signage while others rebranded as Shell Rapid Lubes. The largest percentage jump was because of the combined signage programs offered by ExxonMobil. The Mobil Lube Express/Exxon Superflo Fast Lube/Mobil 1 Lube Express program grew by 61 percent, adding 75 facilities for a total of 121 operating stores.

AOCA held its annual trade show in Orlando, Florida. The theme was “The Magic is Here.” Those who arrived early were invited to choose from two bonus educational sessions called, “Service Disney Style” presented by The Disney institute, or sit in on one of several round table discussions on topics like OSHA and motorcycle oil changes. Attendance at the 2004 expo was more than 2,000 people.

In 2004, the 17th annual Operator Survey surveyed 433 operators who accounted for more than 4,800 fast lube facilities and reported the average cost of a basic LOF was $28.40; ticket average was $45.43; 63 percent of respondents drug tested their employees and the average cars serviced per day was 37.

In 2004, Don Smith, president of Henley Enterprises, Inc. was named Operator of the Year.

2005

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Let Me Love You,” by Mario

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Star Wars: Episode III – Revenge of the Sith,” starring Ewan McGregor, Hayden Christensen, Natalie Portman and Samuel L. Jackson

• Super Bowl Champs: New England Patriots

• World Series Champs: Chicago White Sox

• NBA Champs: San Antonio Spurs

• Hurricane Katrina devastated the Gulf Coast.

When quick lube operators predicted the future in 2005, they were reeling from all the changes and issues 2004 brought like competition, pricing, extended drain intervals and declining car counts. Operators predicted 2005 would be a challenging year. Some cited category trends for passenger vehicle motor oil consumption being on the steady decline as a possible contributor to this. All operators agreed consumers were starting to understand the benefits of synthetics and rising motor oil prices would lead to more price shopping. Overall, operators were split down the middle. Some said the next 12 months would be harder than ever before, and others said it would be better than before.

The 2005 Tops in the Industry located a total of 59 fast lube chains, operating a grand total of 7,205 lube facilities. Meaning the chain stores had added more than 200 facilities this year.

No surprise, Jiffy Lube lead the way as the nation’s largest fast lube chain with a total of 2,165 open facilities. Pennzoil 10-Minute Oil Change and Valvoline Instant Oil Change stayed in spots No. 2 and No. 3.  Chains with strong brand recognition and marketing programs continued to report solid growth. Texaco Xpress Lube, Valvoline Express Care, CITGO Lube and Mobil 1 Lube Express all grew by at least 7 percent.

AOCA took its 18th convention to none other than New Orleans, Louisiana. The theme was “AOCA and All That Jazz.” More than 2,000 operators, managers, spouses and lube industry vendor personnel attended. Speakers included author, T. Scott Gross and his presentation entitled, “Positively Outrageous Service,” and author and Fox News channel commentator, Oliver North and his discussion of “America in the New Millennium.”

The 2005 Operator Survey reported operators were only servicing an average of 35.7 cars per day but ticket totals were on the rise. The average ticket total was $31.96, and operators were grossing $1,520 daily. The average cost of a basic LOF was $28.16, and oil change intervals stayed the same.

Dave Jensen, a native Canadian and operator of a Pennzoil 10-Minute Oil Change, was named the 2005 Operator of the Year.

Alongside the rest of the nation, the fast lube industry weathered many storms both metaphorically and physically in the five years between 2001 and 2005. They were affected by progressing motor oil technology, competition, mergers, and the ebb and flow of the economy and still came out victorious. Next month, we’ll look back at 2006-2010. Don’t miss it!

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