Car counts continue their 13-year decline at U.S. quick lube facilities, which are servicing an average of 33.9 cars per day this year, down 1.5 carsfrom 2007, while the average ticket rose nearly 8 percent in the past year to $50.80, according to National Oil & Lube News 2008 Fast Lube Operators Survey. Operators faced a 19 percent hike in the average per-gallon cost of their highest volume bulk oil over the last year.
Led by rising oil costs, the average cost of goods sold for a standard, full-service lube, oil and filter change rose more than 10 percent, from $11.55 last year to $12.75 today. Operators are responding by increasing prices and offering more services, NOLN Editor Garrett McKinnon told Lube Report, and more people now offer good/better/best oil changes.
The price of that standard, full-service lube, oil and filter change now averages $32.37, up just 4 percent from last year. But more than a third of all oil changes now involve synthetic blend, high mileage, full synthetic or diesel oils, helping raise the average ticket.
Published in the September issue of NOLN, the 2008 Fast Lube Operators Survey compiles data from 4,124 facilities in all 50 U.S. states. NOLN presents survey results in two categories: for companies operating less than 30 stores or LT30, which represent the majority of the industry, and companies operating more than 30 stores or MT30, the large corporate chains. In 2008, the number of facilities operated per response in the LT30 category averaged 2.2; it was 269.8 for the MT30 category. In this article, unless otherwise noted, all data are for the LT30 category.
Corporate chains spent more to buy the land and building for the newest fast lube they own: an average of $860,125 for the MT30 group vs. $584,430 for the LT30 companies. In another measure of their better locations, the big guys report an average daily traffic count of 37,500 in front of their best store, compared to just 21,207 at the smaller companies. And the MT30 group reports an average population of 55,278 in a three-mile radius of their best store, while an average of just 29,296 people live within three miles of stores in the LT30 category.
Yearly sales per store in the LT30 group average $535,803; in the MT30 group its $626,364. And the smaller operators pay more for their motor oil. The LT30 group reports paying an average of $7.68 per gallon for its highest volume bulk oil, up 19 percent from 2007 and a 65 percent leap over 2004. By comparison, the big chains are paying an average of $7.23 per gallon.
Shells Pennzoil brand keeps its lead as the best selling motor oil. Pennzoil was listed as house oil by 29 percent of the LT30 fast lubes, followed by Valvoline (14 percent), Castrol (12 percent), Chevrons Havoline (10 percent), ExxonMobils Mobil (9 percent), Shell (6 percent), Chevron (5 percent), Shells Quaker State (5 percent), and others (10 percent). The Mobil 1 brand dominates synthetic sales; 53 percent of the LT30 group listed it as their best seller.
Of note, oil changes now account for only 69 percent of the average fast lubes gross sales, down from 75 percent just four years ago. Over recent years, NOLNs McKinnon said, the traditional fast lube has become less distinct. Theres a blending of roles. Traditional muffler and brake shops are now changing oil, and fast lubes are adding services.
When new fast lubes are built today, McKinnon continued, there are often two oil-change bays, plus a third bay for light repair work, such as brakes and suspensions.
NOLNs 2008 Fast Lube Operators Survey includes detailed data on operations, prices, customer demographics, employees, sales, oil and equipment, other services offered, insurance and advertising. The complete report is available from NOLN for $65. For information or to purchase a copy, call NOLN at 1-800-796-2577 in the United States, or 806-762-4023. More information about Lubbock, Texas-based NOLN, a monthly magazine for the fast oil change industry, is available at www.noln.net.