It seems even Wal-Mart’s prices aren’t low enough for cash-strapped consumers. The CEO of Wal-Mart, Mike Duke, made a revealing observation of retail trends last month during a gathering of industry watchers in New York.
During the meeting, Duke said Wal-Mart’s customers were simply running out of money by the end of the month. Much of Wal-Mart’s customer base is comprised of consumers who live paycheck to paycheck.
“Purchases are really dropping off by the end of the month even more than last year,” several news outlets reported Duke as saying. “This end-of-month cycle is growing to be a concern.” In response, the company said it would be changing the product mix to foster more sales.
What’s to blame? Rising gas prices, for the most part. But there’s more damage done to the economy than just giving motorists something to gripe about. According to The Nielsen Co., which tracks consumer behavior, a price increase of 10 cents per gallon means an increase of $10.50 a month in household expenditures. That assumes Americans having an average 2.1 cars per household. With a 50-cent increase, it jumps to $52.50 a month. A recent study showed that a 10-cent increase in a gallon of gas means $1.5 billion a month is taken out of the economy. That’s $1.5 billion spent on a range of items, including automotive parts.
What can counterpros do about it? Besides drilling for more oil, it means reminding customers on the phone about any promotions your store or WD might be running, or any promos offered by manufacturers. Some counterpros I talked to recently said those promos can often be the linchpin in getting a sale. Also, consider more efficient delivery of parts. A while back, I wrote a column about UPS, which in 2006, looked to save more than $600 million in fuel costs by using mostly right-hand turns when possible. They use software to plot out their routes, which allows them to enjoy the savings. And the $600 million figure was back in 2006 when fuel prices weren’t $4 a gallon, like they are in many places today.
A hearty congratulations goes out to Bob Susor on his retirement. Susor has been president of NAPA and executive vice president of Genuine Parts Co. since 2003 and has been a lifetime member of the automotive parts business. A Vietnam veteran, Susor joined NAPA and Genuine Parts Co. in 1968 after graduating from The Ohio State University. Susor was awarded the AWDA Lifetime Achievement Award in 2010. At that time, Tom Gallagher, president, CEO and Chairman of Genuine Parts, said, “Bob is a long-time industry veteran who has devoted his entire 40-plus year’s career to the automotive aftermarket. He is well-known and highly regarded throughout the aftermarket.”
In addition, Dennis Welvaert, president of the North American Aftermarket Division and Australian Operations of Dayco Products, will retire Aug. 31. Welvaert, who began his career 41 years ago with Firestone Tire and Rubber and has been with Dayco since 1981, was promoted to president of the division in 2003, according to aftermarketNews.com, Counterman’s sister publication. He is a former chairman of AASA.
In a press release announcing his retirement, Welvaert said, “There is an alignment of circumstances that simply makes this the right time for me. Our company is in a good place, on solid financial footing and well-positioned in the marketplace. With the excellent management team we have at Dayco, the August date allows plenty of time for an orderly transition of leadership. As I said, the stars have aligned to make this the right decision at the right time for me.” t