Competition Stiffens in Fast-lube Market


While Jiffy Lube continues to dominate the next largest fast-lube chain by more than a two-to-one ratio, Wal-Mart, with its 2,342 Wal-Mart Tire and Lube Express stores (not considered traditional fast lubes), has overtaken Jiffy Lube as the largest oil change provider in the nation, according to National Oil & Lube News.

Jiffy Lube, which has 2,176 total stores, continues to grow its franchised facility population while gradually divesting its company-owned stores, which are down by nearly half during the past nine years. It projects to add 80 more stores by years end.

Fifty nine fast-lube companies operating a total of 7,555 oil-change facilities are included on the 2007 list of top U.S. fast lubes published in the March issue of National Oil & Lube News. NOLN defines a fast lube as a business whose primary sales model is the offer of quick, convenient motor oil changes. A fast-lube chain is any six or more fast lubes owned by the same company, and/or operated under the same or similar signage.

NOLN ranked the following as the dozen top ranking U.S. fast lubes:

  1. Jiffy Lube, wholly owned by Shell Oil Co., with 1,914 franchised and 262 company-owned stores.
  2. Pennzoil 10-Minute Oil Change, 887 independently owned stores wearing Pennzoil signs. The brand is also owned by Shell Oil.
  3. Valvoline Instant Oil Change, 790 company-owned and franchised stores.
  4. Texaco Xpress Lube, 500 independent facilities.
  5. Valvoline Express Care, adding 17 facilities to its Express Care signage program during the past year, and now numbering 404 independently owned stores.
  6. Kwik Kar, 383 company-owned stores. It expanded its turnkey program by 15 facilities during the past year.
  7. Mobil 1 Lube Express, 284 independently owned facilities. Mobil added 47 facilities to its ranks last year, the most facilities and largest percentage growth in the industry.
  8. Shell Rapid Lube, 275 independently owned stores. For the first time in several years, the company indicated it planned to open additional facilities in the coming year.
  9. Citgo Lube, 206 independent stores, expanding by three shops from last year.
  10. Grease Monkey, 191 primarily franchised stores (and one company-owned) stores. Sold two company-owned stores, but added five franchised facilities in the past 12 months.
  11. ConocoPhillips Lube Shop, 181 independent stores. Grew by 18 facilities last year, second in the industry, and said it expects to grow by an additional 30 stores in the coming year.
  12. Express Oil Change & Service Center, 160 franchised and company-owned stores. Added & Service Center to its name the past year to better represent its increased focus on complete automotive maintenance and repair.

NOLN puts businesses such as mass-merchant retailers, muffler shops, car washes, dealerships, etc. that offer oil changes as an add-on service in a category it calls oil change-plus. The category includes Wal-Mart, Midas, Firestone and other providers of oil changes.

Garrett McKinnon, NOLN editor, told Lube Report one trend in the rankings is the continued rise in regional companies, which might have anywhere from 20 to 50 stores concentrated mostly in a specific region of the country. It seems like these companies have been able to shoulder in and compete successfully with Jiffy Lube, at least on regional turf, and have been in an acquisition mode as of the last couple of years, McKinnon said.

He said competition continues to heat up as more and more shops that used to specialize in mufflers, brakes, tires or transmissions decide to get into the oil change and more general automotive care business.

In some markets fast-lubes have become almost overbuilt, McKinnon added. This has resulted in more fast-lube companies seeking to grow through acquisition.

We dont see the same new construction numbers we did five or 10 years ago, he said. There are a few emerging suburban markets where people are still building fast-lubes. But by and large, a lot of companies are going into an area and saying, If I want to expand in this area, its going to be easier to buy out my competition rather than open up [new fast-lubes] and try to beat them that way.

He said growth continues also in signage programs, where oil companies offer independent operators agreements under which they maintain full operational discretion while requiring that a certain percentage of the oil in the facility is one of the oil companys brands. Examples include ExxonMobils Mobil 1 Lube Express branded program, and Chevrons Texaco Xpress Lube signage program.

Previously independent operators are often trying to make a go of it by allying with a strong brand, McKinnon explained. Thats a trend thats really picked up steam the last five years as the industry got more competitive.

The complete Tops in the Fast-Lube Industry Survey, including growth projections for the top chains, projected industry sales figures, and information about the oil change-plus chains, is available at no cost to paid subscribers to NOLN at the magazines Web site, Non-subscribers can purchase the full survey for $30.

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