Fewer Cars, Higher Sales at Quick Lubes

Share

While car counts continued to decline at U.S. quick lube facilities, down by 1.5 cars per day from 2008 to an average 32.4 cars per day this year, the average ticket increased 2.5 percent to $52.04 and average yearly sales per store also rose, according to National Oil & Lube News 2009 Fast Lube Operators survey.

Certainly car counts are down, and thats always an issue and has been for many years, NOLN Editor Garrett McKinnon told Lube Report, while noting that ticket averages, overall sales and profit margins were all up. The industry as a whole I think did a whole lot better economically speaking than a lot of people probably thought they would.

Published in the September issue of NOLN, the 2009 Fast Lube Operators survey compiles data from 3,702 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 fast lube industry, and companies operating more than 30 stores or MT30, the large corporate chains. In 2009, the number of facilities operated per response in the LT30 category averaged 2; it reached 381 for the MT30 category. Data in this article refers to the LT30 category, unless otherwise noted.

The average price of a standard, full-service lube, oil and filter change reached $34.38 in the LT30 category, up 6 percent from last year.

The average cost of goods sold for a standard, full-service lube, oil and filter change rose almost 4 percent from $12.75 last year to $13.24 this year.

Larger corporate lube chains spent more to purchase the land and building for the newest fast lube they own – an average of $875,000 for the MT30 group compared to $552,545 for the LT30 companies. The big chains reported an average daily traffic count of 22,500 in front of their best store, compared to 20,0777 at the smaller stores. The MT30 group reports an average population of 51,667 in a three-mile radius of their best store, while an average of 20,837 people live within three miles of stores in the LT30 category.

Yearly sales per store in the LT30 category average $558,395, up more than 4 percent from 2008; the MT30 group reports a $666,750 average. Smaller operators pay more for their motor oil. The LT30 group reports paying $7.96 for its highest volume bulk oil, up more than 3 percent from 2008 and a nearly 46 percent increase from 2005. By comparison, the MT30 group pays an average of $6.56 per gallon.

It seemed like fast lube operators did a really good job of tightening their belts and controlling costs, doing what most businesses are doing to weather the storm, McKinnon told Lube Report. It certainly looks like that post recession – whenever the economy does get hopping again – the industry will be poised to continue to take a leadership role in the automotive maintenance segment, especially with the pressures that dealerships have been under.

Shells Pennzoil brand retained its lead as the best selling motor oil in fast lubes. Pennzoil was listed as house oil by 25 percent of the LT30 fast lubes (see chart below for the rest of the LT30 results). Mobil 1 continued to dominate synthetic sales, with 58 percent of the LT30 group listing it as their best seller.

Best Selling Motor Oil in Fast Lubes

Motor Oil Brand

Percentage of LT30 operators listing brand as their house oil in 2009

Pennzoil

25%

Valvoline

14%

Mobil

12%

Quaker State

8%

Castrol

7%

Chevron

5%

Havoline

5%

Shell

5%

Private Label

11%

Other Name Brand

8%


One change in this years survey came in the overall breakdown of motor oil sales. We did group the synthetic blend and traditional categories together, which we did not do last year, McKinnon said. So many companies, like ConocoPhillips and I believe now Citgo, are now making their base formulations out of synthetic blends. We just feel that blurs the distinction between what a conventional and what a synthetic blend is, so we group those together into one category.

On average, the overall motor oil sales breakdown in the LT30 group consisted of 72 percent conventional/synthetic blend, 8 percent high mileage, 10 percent full synthetic, 2 percent diesel and 5 percent other.

A new question for this year asked fast lube operators to break down their motor oil sales by weight and grade:

Breakdown of Motor Oil Sales by Weight/Grade

Weight/Grade

Percentage of sales among LT30 operators

5W-20

21%

5W-30

49%

10W-30

19%

5W-40

2%

15W-40

8%

Other

1%


NOLNs 2009 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 free from NOLNs web site at www.noln.net through Sept. 30. Starting Oct. 1, the report will be available from NOLN for $100. For information or to purchase a copy, call NOLN at 1-800-796-2577 or 806-762-4464. Lubbock, Texas-based NOLN is a monthly magazine for the fast oil change industry.