Retail Prices for Motor Oil Edge Down


The average price per quart of motor oil in the U.S. automotive aftermarket industry declined 1 percent in the first six months of 2016, compared to a year earlier, according to retail sales data from NPD Group.

There are a number of things going on with motor oil pricing, Nathan Shipley, director and automotive aftermarket industry analyst for NPD Group, told a reporter. Private label is gaining share, and the major brands continue to promote their products at deeper discounts.

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NPD found that the movement toward lower-priced products selling in place of more premium products is evident when examining the automotive aftermarkets top three category trend drivers – batteries, motor oil and wiper blades – which represent more than 43 percent of total automotive aftermarket volume.

On the motor oil side, the two growing segments – full synthetic and high mileage – experienced quart price declines thanks in large part to more promotions in the first half of this year, compared to last year, NPD stated in a news release.

The only motor oil promotions we track are the in-store advertisements for the major retailers we track, Shipley said. NPD collects point-of-sale information on a weekly basis from more than 26,000 individual retail stores in the United States.

In terms of the overall automotive aftermarket industry, NPD noted that whereas growth rates for sales revenue have usually outpaced growth in sales units, mid-year 2016 results showed a turning point was reached. Unit/quart sales grew 1.8 percent in the first half of 2016, and for the first time in four years unit sales outpaced dollar sales within the industry.

A few key trends have been favorable to the automotive aftermarket industry so far this year, notably that miles driven continues to increase, and gasoline prices, on average, are lower than several years ago, Shipley stated. Nevertheless, the industrys performance in terms of dollar growth has been softer than prior years, influenced by a few main themes: the lack of major weather extremes such as extreme cold or rain, which generally provides a boost to the industry; a change in the mix of whats selling as we see from the decrease in average selling price, yet strong growth in unit sales; and the fact that two years of 4 percent dollar growth set high standards for 2016.

NPD forecasts that overall automotive aftermarket retail dollar sales will grow about 2.7 percent for the year, returning to a more modest rate of growth. Pricing, promotions and the categories in which consumers choose to invest for the remainder of the year will be influential to the year-end results, he said.

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