Customers have long ventured into local conveniencestores to grab a bottle of windshield washerfluid or oil for their cars. Years ago, a small displaywould hold a few bottles of automotive fluids in caseof an emergency. Today’s suppliers are stepping it up withprivate label accessories and automotive fluids (engine oil,brake fluid and power steering fluid) that can save retailersa significant amount over national brands, while deliveringhigher profit margins than ever.
San Antonio-based Tesoro Petroleum most often getsrequests for oil, washer fluid and antifreeze in its Western U.S.stores, seeing margins of 36% from the category. The chainuses McLane and Core-Mark products, stocking brands suchas Pennzoil and Zerex. The car care accessories are merchandisedon inline gondola shelving and peg sets, and sellanywhere from 79 cents to $2.49.
“The automotive category is a staple section customersexpect to find in a convenience store,” said Scott Huggins,merchandising category manager for Tesoro.
Although, in general, automotive remains a relatively lowprofitcategory for Tesoromaking up about 8% merchandisesalesdepending on a store location, this category can beone of the most popular sections. Chains scattered alonginterstates and heavily traveled roads find themselves centerstage for customers seeking automotive products duringtravel. Highway conveniencelocations, suchas TravelCenters of America
LLC, have to keep a heavily-stocked automotive sectionbecause of the amount of traffic from commercialdrivers and motorists that pass through the doors daily.
Like all merchandise in c-stores, location dictatesproduct mix. While national brands have long dominatedthe automotive category, private labels are beginning toencroach on the market. Road Tech, McLane Co.’s ControlLine of automotive products, is gaining speed within theindustry, popping up as more and more retailers realize thebenefits of stocking these products. Having McLane backingthe products helps boost credibility with retailers willing totake on an unknown label.
“We didn’t realize the demand for automotive accessories,”said Isaac Schlabach, private label administrator for RoadTech. “Retailers have customers coming in during a pinchlooking for these products, so we turned our attention to creatingan accessories line.”
The accessories division is a venture that Road Techstarted eight months ago after numerous requests from retailers.Items such as the pencil tire gauge and emergency fusekit have proven to be big sellers, with suppliers struggling tokeep with up inventory requests. The line also supplies automotivechemicals, additives, lubricants and accessories ata lower cost and are equal or higher quality than nationalbrands, Schlabach said.
While automotive oils have long been the backbone ofthe category, new lubricants and additives are bulking upthe product offerings as Road Tech consistently adds newitems to its roster.
Small chains sometimes opt to pick up 10 of the most popularitems knowing that they’ll enjoy a profit margin of 35-45%.As the automotive sector continues to grow, retailers are seeingprivate label sales make up 15-20% of gross sales.
“C-stores are more accepting of private labels than otherretail outlets,” said Schlabach. “Once retailers replace thenational brand items with ours, the difference in incrementalsales is quite noticeable.”