The five largest U.S. fast lube chains all saw store totals remain the same or decline over the past year, as the economy and increased competition constricted growth, according to the National Oil & Lube News 2010 Tops in the Industry Ranking.
NOLN published its annual lists of the largest fast lube chains and other oil change providers in its March 2010 issue. Jiffy Lube remained atop the fast-lube chains list with 1,976 stores, down 1 percent from 1,999 stores in 2008. The other largest fast-lube chains included Pennzoil 10-Minute Oil Change (887 stores, same as in 2008), Valvoline Instant Oil Change (850, same as in 2008), Texaco Xpress Lube (450, down 9 percent) and Kwik Kar (386, same as in 2008).
A lengthy recession and a high unemployment rate that shows no signs of diminishing any time soon have made conditions tough on a number of shops, and indeed the overall industry store population has contracted, NOLN said.
Competition has come from diverse sources. Were getting a lot more competition from tire stores, muffler shops, full service auto facilities – even dealerships to some extent are focusing more on the quick oil change concept, and thats really putting a lot of pressure on fast lube operators to respond and hold market share, NOLN Editor Garrett McKinnon told Lube Report.
Walmart Tire & Lube Express, classified as an oil change-plus shop, again topped all oil change lists with 2,524 total U.S. stores. Rounding out the top five in the category were Bridgestone Retail Operations (2,112 stores), Goodyear Gemini Automotive Care (1,908), Midas Auto Service Experts (1,578) and TBC Retail Group (1,200). Bridgestone and TBC now represent groupings of several shop brands operated by a single company.
The associated lube chains list of independent operators owning six or more branded facilities was again led by North Florida Lubes with 60 Texaco Xpress Lube locations, followed by Southern Express Lube (38 Mobil Lube Express and four Shell Rapid Lubes locations) and Pioneer Quick Lube (28 Pennzoil 10-Minute Oil Change locations).
While acknowledging the fast lube industry saw little growth this past year, McKinnon emphasized it has been more stable. Like with any mature industry, you reach a point where you can have market saturation, and you start getting competition at the edges from nontraditional performers, he continued. Then the core group of industry responds, and you just keep evolving like that for a while.
The rising number of automotive dealership closures may give the fast lubes industry an opening for growth in the coming years. In its March issue, NOLN highlighted an Urban Science research report that concluded 2009 set a record for the number of automotive dealerships closed in the United States in one year. Urban Sciences Franchise Activity Report showed the nationwide dealership count for the year fell by 1,605, or 8 percent, to 18,841. The count fell by 881 dealers in 2008. Normal attrition in a year is about 1 percent.
By some accounts a couple thousand dealerships have closed in the last two years, and that does make it a little easier for fast lubes to compete, McKinnon noted.
Among U.S.-based oil change operations with facilities overseas, the study reported 1,732 Mobil 1 Centers overseas as of Feb. 28, a 26 percent jump from 2009. Texaco/Caltex Xpress Lube placed second with 1,432 locations, unchanged from 2009. Midas Auto Service Experts saw a 7 percent decline from 2009 to 946 locations this year.
NOLNs full 2010 Tops in the Industry Ranking includes statistics on estimated overall dollar-figure sales of the fast lube industry, estimated do-it-for-me market share held by fast lubes, total number of fast lubes in operation and other key industry metrics.
The complete study is available to NOLN nonsubscribers for $75. To order, e-mail Misty Dolan at misty.dolan@noln.net. Information about subscribing to NOLN, a monthly magazine for the fast lube industry headquartered in Lubbock, Texas, is available at www.noln.net.