30 Years of NOLN, 2006-2010

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We reflected on 20 years worth of National Oil & Lube News (NOLN) in the most recent July, August, September and October issues. We remembered marked moments, past Operator of the Year winners, challenges and triumphs. Let’s take a stroll down memory lane continuing with years 2006-2010.

2006

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Bad Day,” by Daniel Powter

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Pirates of the Caribbean: Dead Man’s Chest,” starring Johnny Depp, Orlando Bloom, Keira Knightly and Jack Davenport

• Super Bowl Champs: Pittsburgh Steelers

• World Series Champs: St. Louis Cardinals

• NBA Champs: Miami Heat

• Steve Irwin, the enthusiastic “Crocodile Hunter” passed away while doing what he loved most, spending time with animals and teaching the world about wildlife conservation.

In 2006, most operators could agree the increasing cost of oil and other related goods were going to cut down on their profits.

“Our biggest challenge is our cost of goods,” said Todd Ward, owner of Kwik Kar Auto Service Center in Edmond, Oklahoma. “We have received many cost increases and are working hard to keep our gross profit at an acceptable percentage.”

Another major problem was the continued search for dedicated workers.

“The single greatest issue we face in 2006 is the recruitment and retention of qualified technical help,” said Mark Smith, owner of multiple Midas Auto Service Centers in Virginia. “The costs associated with employee turnover, both hard and soft, are very significant. Stability in this area will go a long way toward growing revenue and increasing the bottom line.”

Dale Kerr, owner of several Texaco Express Lube facilities in Louisiana couldn’t agree more.

“The biggest issue our lubes are challenged with is finding, hiring, training and motivating competent, drug-free employees,” Kerr said. “We start our employees well above minimum wage, and some of our techs make over $10 per hour with the bonuses we pay. And we must still constantly be looking for competent employees.”

Overall, operators predicted 2006 would bring challenges, such as rising prices and the search for more employees. Competition between quick lubes has always been present, but the race gets closer every year.

Operators had mixed reviews about whether 2006 would be better than previous years, again citing rising costs but contrasting that with consumers being more educated about taking proper care of their cars, thus increasing ticket averages for the year.

The annual Tops in the Industry list included 57 fast lube chains and accounted for 7,411 total facilities. Jiffy Lube took its No. 1 position, as it has every single year of the ranking’s 19-year history, with 2,164 total operating stores. Jiffy Lube dwarfed the next largest competitor by nearly a three-to-one ratio. Pennzoil 10-Minute Oil Change came in second place, and Valvoline Instant Oil Change snagged third. Rounding out the top five, Texaco Xpress Lube took fourth, and Valvoline Express Care slid into fifth.

The 19th annual AOCA Convention and Fast Lube Expo found its way to San Diego, California. The four-day event, themed “Set Your Sails For Success,” attracted a crowd of more than 800 industry movers and shakers, a figure that doesn’t include exhibitors from the nearly 200 companies at the convention.

The Operator Survey reported the average fast lube operator had been in business for 10.7 years and owned an average of 2.5 facilities with three bays each. The average cost of a basic lube, oil and filter (LOF) was $29.97; average number of cars serviced per day was 36.5, an increase from 35.7 in 2005; average oil change interval was 4,268 miles; average hourly rate for a technician was $8.59; and 42 percent of cars were equipped with an oil monitor.

Ricky Price, founder and president of FastLube, Inc., a three-store chain of Flagship FastLube stores based on the Hawaiian island of Oahu, was awarded 2006 Operator of the Year.

2007

Memorable Moments

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

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Spider-Man 3,” starring Tobey Maguire, Kirsten Dunst, James Franco, and Thomas Haden

• Super Bowl Champs: Indianapolis Colts

• World Series Champs: Boston Red Sox

• NBA Champs: San Antonio Spurs

• Steve Job introduced the iPhone.

In the first month of 2007, operators shared their opinions on what challenges and issues they thought would most concern the industry in the upcoming year. In the interviews, most operators agreed with the fact that there would not be any new challenges or even any extremely difficult challenges, just small challenges that the industry has faced for years.

In 2007, operators predicted there would be a trend continuing from last year — the trend of fewer operators with more stores as well as a consolidation of those not willing to be absorbed by those who try to absorb them.

Ray Sparling, director of marketing automotive lubricants, ConocoPhillips Company and Kendall Motor Oil brand, said it well when talking about problems when the industry was facing.

“Issues that have been impacting the fast lube industry, historically, will continue in 2007. I don’t believe there is a single greatest issue, but a collection of issues that fast lube operators will face. Some of these are: declining car counts, intensified competition from the car dealer segment, the challenge of competently communicating to customers the value of goods and services offered, differentiating their businesses, increased cost and supply and allocation of lubricants,” Sparling said.

Increasing gas and oil prices were another issue facing the quick lube industry in 2007.

“One major industry issue is the fluctuation in pricing of oil. Customers do not understand there is a difference in the oil we use and the oil used in the production of gasoline, so when the price of gas goes down, they believe our prices should go down, when in fact our oil prices keep going up,” said Julie Allis, operator of Athens, Pennsylvania-based Allis Enterprises LLC.

No surprise, the Tops in the Industry survey reported Jiffy Lube was still No. 1, despite a decline in total operating stores. Pennzoil-10 Minute Oil Change held on to the No. 2 spot, and Valvoline maintained its hold on the No. 3 position.

AOCA held its 20th annual convention in Dallas, Texas. The four-day event hosted nearly 1,600 fast lube operators, managers and technicians, and 180 vendors set up shop. Ricky Price, 2006 Operator of the Year, gave a seminar titled “New Owners Boot Camp,” which offered tips, tricks and a workshop to allow new operators to learn from one of the best in business.

The annual Operator Survey unwrapped the state of the industry. The average fast lube was located in a city with a population center where 32,287 people lived and had 2.5 other lube facilities and 5.2 other auto-related facilities that changed oil within three miles of it. Average cost of a basic LOF was $31.12, breaking the $30 mark for the first time; the average ticket total was $47.18; average number of cars serviced per day was 35.4; average hourly rate paid to technicians was $8.70; and the average number of hours of training a technician receives a year is 28.

Tim Embry, American Lube Fast owner and CEO from Atlanta, Georgia, was named 2007 Operator of the Year.

2008

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Low,” by Flo Rida feat. T-Pain

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “The Dark Knight” starring Christian Bale, Heath Ledger, Morgan Freeman and Michael Caine

• Super Bowl Champs: New York Giants

• World Series Champs: Philadelphia Phillies

• NBA Champs: Boston Celtics

• The first black president, Barack Obama, is elected.

If you ask a group of fast lube operators what single issue most affects the future of the industry, you’re likely to get as many answers as operators.

A few operators agreed the fact of rising prices affected their business or extended oil changes led to fewer cars serviced a day, while others talked about finding quality employees and keeping them being the toughest problem they are facing.

“In my opinion, the greatest single challenge will continue to be finding and keeping good employees,” said Rex Utsler, president and CEO of Grease Monkey International. “There is tremendous competition for people with the talents and work ethic required to deliver a superior service experience in our business. We have more and more people who can afford to purchase high-quality goods and services in the United States and fewer in the job market willing to work on the front line providing those services.”

For some, customer education was on their mind.

“We need to continue to remind our customers of the importance of a 3,000-mile oil change regimen,” said Dan Dobbins, owner and operator of Island Oil Change Service, a mobile lube in Medford, New York.

The same suspects held the No. 1, No. 2 and No. 3 spots on the 2008 Tops in the Industry list. The rest of the Top 10 included Texaco Xpress Lube, Kwik Kar, Valvoline Express Care, Mobil 1 Lube Express, Shell Rapid Lube, CITGO Lube and Grease Monkey.

Las Vegas, Nevada, hosted the 21st annual AOCA Convention — more than 900 operators, managers and technicians attended, as well as 140 vendors.

According to the 2008 Operator Survey, the average cost of a basic LOF was $32.37; average ticket total was $50.80, following the trend of increasing about $3 a year; the average number of cars serviced per day dropped to 33.9; and the average length of employment for managers was 6.2 years and 2.5 years for technicians. The best form of advertising was word of mouth, crushing the other forms of advertising with a whopping 62 percent.

Tom Morley, president of Berea, Ohio-based The Lube Shop, Inc. received the 2008 Operator of the Year award.

2009

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “Boom Boom Pow,” by Black Eyed Peas

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Avatar,” starring Sam Worthington, Zoe Saldana and Sigourney Weaver

• Super Bowl Champs: Pittsburgh Steelers

• World Series Champs: New York Yankees

• NBA Champs: Los Angeles Lakers

• Pop star Michael Jackson passes away from a heart attack.

 

In 2009, the same daunting issues seem to plague the industry. With oil prices rising, the search for employees and customer education on the tips of everyone’s tongues, our operators had plenty to talk about.

“Everyone has felt the pressure from oil companies as they continue to raise their prices to extraordinary levels,” said Steve Allison, president of Fort Lauderdale, Florida-based Atlantic Coast Enterprises. “Ever since I can remember, it has been quite apparent the major oil companies would alternate taking the lead in raising motor oil prices, with the other majors meeting that price within 24 hours.”

Operators predicted prices on inventory would stabilize in 2009 as suppliers scramble to keep customers and stay competitive. But the scrambling might also lead to something else — more mergers and consolidation between suppliers and operators will have less and less vendors to choose from.

The Top 10 Fast Lube chains remained the same from the previous year, with Jiffy Lube at No. 1, Pennzoil 10-Minute Oil Change at No. 2 and Valvoline Instant Oil Change coming in at No. 3. Jiffy Lube followed its trend of declining, dipping below the 2,000 store mark.

AOCA held its annual convention and trade show in Atlanta, Georgia. There were many sights to see in Atlanta, including the World of Coca-Cola and a 4-D theater.

In 2009, the 22nd annual Operator Survey surveyed more than 3,500 fast lube facilities and reported the average cost of a basic LOF was $34.38; ticket average was $52.04; 59 percent of respondents drug tested their employees and the average cars serviced per day was 32.4.

In 2009, father-and-son team of Harold and Jason Smith, owners and operators of Express Lube in San Antonio, Texas, earned the title of Operators of the Year.

2010

Memorable Moments

• No. 1 Song of the Year (according to Billboard’s Year-End Hot 100): “TiK ToK,” by Ke$ha

• No. 1 Movie of the Year, per box office gross (according to Box Office Mojo): “Toy Story 3,” starring Tom Hanks, Michael Keaton, Joan Cusack and Tim Allen

• Super Bowl Champs: New Orleans Saints

• World Series Champs: San Francisco Giants

• NBA Champs: Los Angeles Lakers

• Author J.D. Salinger dies at age 91.

 

In 2010, there were four recurring issues facing the lube industry: the recession, changing and emerging technologies, cost control and government legislation.

 “The slow economy causes people not to change their oil as often or do it themselves,” said Karl Krutsch, operator of Jiffy Lube and Carwash in Chicago, Illinois.

Operators feared the industry would be reaching a once-per-year oil change, dropping car count drastically.

The 2005 Tops in the Industry located a total of 53 fast lube chains, operating a grand total of 7,144 lube facilities.

No surprise, Jiffy Lube led the way as the nation’s largest fast lube chain with a total of 1,976 open facilities. Pennzoil 10-Minute Oil Change and Valvoline Instant Oil Change held spots No. 2 and No. 3.  The rest of the top 10 also remained the same, all with little change in the amount of stores. Castrol Premium Lube Express grew an astounding 333 percent, skyrocketing it into 16th place, from 38th last year.

AOCA took its 23rd convention to Las Vegas, Nevada. The theme was “Driven to Win in 2010.” More than 669 fast lube professionals representing a total of 2,520 stores attended. Education was the major theme of the convention, featuring more than 18 seminars ranging from fleet business to hybrid vehicles to re-refined motor oil.

The 2005 Operator Survey reported operators were only servicing an average of 31.7 cars per day, but ticket totals were on the rise. The average ticket total was $54.08, and the average number of miles between oil changes was 4,419. The average cost of a basic LOF was $34.14.

Karn Jilek and John Olstad, co-owners of Fargo, North Dakota-based JK Lube, Inc., received the 2010 Operators of the Year award.

The fast lube industry continued to provide great service through the ups and downs in 2006-2010. Affected by the economy, fears of longer oil change intervals and customer education, the fast lube industry strives to be great. Next month we’ll look back to 2011-2015! Don’t miss it!

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