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Up is Up


11/15/2007
By Brian Cruickshank

Although the DIY market appears to be looking a little brighter, the commercial side of the business is where the real future growth will come.
 

For those in a more retail-type store environment, things are looking a little brighter. Not by much, but as a wise man once said, “up is up.”

Conventional wisdom in the industry says that the retail, walk-in, do-it-yourself (DIY) trade is a low-growth business. As vehicles get more complicated, it will get harder for the average shadetree mechanic to work on vehicles. But recent research suggests otherwise. According to the Automotive Aftermarket Suppliers Association (AASA), reversing earlier trends, all types of DIY activity increased last year. That’s good news for everyone in the aftermarket, but particularly those who depend on strong DIY sales to make their numbers.

Based on consumer surveys of vehicle maintainers conducted by Industrial Marketing Research Inc., AASA grouped service jobs into light, medium or heavy DIY categories. Examples of light DIY would include such “easy” jobs as replacing car batteries, adding antifreeze and installing new air filters. Jobs in the medium DIY category are more involved and include installing items such as brake shoes and pads and alternators. Jobs in the heavy DIY category require the most knowledge and level of expertise and include replacing fuel injectors and head gaskets.

The AASA data reveals that in 2006 a little more than half (52.9 percent) of vehicle maintainers performed light DIY on their vehicles, compared to 40 percent in 2005. Medium DIY increased slightly to 29.4 percent in 2006 from 27.9 percent in 2005 and heavy DIY showed the smallest increase, rising to 25.6 percent in 2006 from 25 percent in 2005. Up is up!

Now, of course, the majority of distributors pay particular attention to the wholesale trade, and that includes more and more of the retailers such as AutoZone and Advance. Each of these mega-retailers has a commercial program in place, each to a varying degree of success. It’s been my experience that you can’t make blanket statements about each program as each should  be judged on a store by store basis. But at the same time, new numbers from each reveal successes. Slight, yes, but “up is up,” right?

On a recent investor conference call, AutoZone reported an increase — albeit small — in its commercial sales totals. This is significant because this is the first such increase in two years for the Memphis-based retailer. It’s also important to mention that this increase was despite the company’s loss of the Midas contract. One explanation is that AutoZone is merely running more commercial programs in its stores. Indeed, the total number of AutoZone stores that have a commercial program is up from 2,134 stores a year ago to 2,182 today. According to the company, AutoZone’s commercial program represents a mere 1.3 percent of the total commercial market, so the company still has lots of room to grow.

Advance’s DIFM business, too, is up. We all know that the wholesale trade is a numbers business — deep inventories are an essential key and perhaps Advance’s  initiative to improve parts availability and deepen coverage is paying off.

Despite the good news about DIY business, both these companies know their futures rest with the professional trade, which is why they put so much effort into it. Even for the rest of us, an installer base that believes in the aftermarket means a bright future for us all.   















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