Like so many facets of a convenience store operation, a car wash can attract new customers and enhance revenue, but only when handled correctly.
In this instance, correct handling means everything from finding a big enough location, knowing the competition, having the right type of equipment to focus on speed of service, providing for preventive maintenance, developing savvy marketing and, whenever possible, controlling the weather wouldn’t hurt.
In July, York, Pa.-based Rutter’s Farm Stores, which operates 52 convenience stores in York, Adams, Cumberland, Franklin and Lancaster counties, said it plans to invest more than $55 million this year to build 10 stores and 11 car washes.
But it’s more than just c-store operators looking at the profitability of car wash operations. Consumer products giant Procter & Gamble’s decision to leverage its brand equity has led to its opening a pair of corporate-owned Mr. Clean Performance Car Washes in the Cincinnati area over the past year, and it’s talking about franchising throughout Ohio and Kentucky.
The challenge remains how to make a car wash a point of difference, a destination and a profitable part of the retail mix.
A good place to begin is at the beginning.
“First of all, make sure that the car wash itself is functioning and in good shape,” said Mark Thorsby, executive director of the International Car Wash Association in Chicago. ”Oftentimes c-store guys, particularly when the wash is in conjunction with gas, don’t always pay good attention to the functioning.”
Second, operators must make sure that their site looks good—that the trash is picked up, the lights work and are turned on, there is fresh paint and not a whole lot of rust.
Then, of course, comes marketing. Thorsby called himself a firm believer that “the most effective marketing that c-store and petroleum marketers have come up with in the last few years is simply the advertising at the pump.”
Thorsby recommended special day promotions, reasoning that the No. 1 reason people wash their cars is special occasions. “We’re going to come up soon with a slew of them: Veteran’s Day, Thanksgiving, Christmas, all the holidays that roll around in November and December,” he said. “On Halloween, for example, operators might want to give $5 off on all orange and black cars. Be smart and playful in terms of marketing your wash.”
ICA members have also seen good results from frequent-washer clubs and other loyalty programs. “I’m led to believe that in the c-store car wash environment margins ought to be in the 25% to 35% range,” Thorsby said.
In today’s economic environment, if people are buying a car wash it’s a choice, said Paul Vercollone, vice president of VERC Enterprises, a 21-unit, family-operated convenience store operator based in Duxbury, Mass.
“Make sure that you are giving a quality wash,” Vercollone said. “What we are selling is clean, and in my mind it really doesn’t matter if the price is $3 or $4. If you’re not ending up with a clean car you might go someplace once, but you’re not going to go back.”
VERC offers three levels of washes at $8 (wash, spot-free rinse and air dry), $10 (includes undercarriage and ‘wheel blasters’) and $12 (with triple-foam polish). Pricing at its two tunnel locations ranges from $10 to $18.
“Get what the product is worth, and do a good job,” Vercollone said. “I’ve been in the car wash business for 35 years, and a good job is what people come back for. Being in the car wash business, the first thing I learned was that it’s all about quality.”
VERC also operates a pair of stand-alone tunnel-style (driver remains inside) car washes. Its lone c-store outlet with a double-bay automatic car wash opened about four years ago. “Originally, we didn’t have car washes in our c-stores because the equipment in the in-bay automatic units (used by most c-stores) wouldn’t do as good a job as we could do in the tunnels,” Vercollone explained. That, however, has changed over the last dozen or so years. Manufacturers make and market “fantastic equipment now in the in-bay automatics, and it really can put out a nice job.”
What can retailers do to boost their business? “I think that a lot of gasoline/convenience store operators need to do a better job of marketing their car washes,” insisted Bob Roman, a carwash consultant and president of RJR Enterprises based in Clearwater, Fla. “I think that there is a real disconnect between the owners and operators and the people who take care of their car washes.”
Most gasoline convenience store operators don’t, in fact, take care of their own car washes, Roman said. Instead, they rely on equipment distributors and manufacturers to do that for them through preventive maintenance contracts, which include routine maintenance and repairs as well as restocking of chemicals.
The most effective way to market a car wash, Roman maintained, is by leveraging its value proposition. “This is where some convenience store operators fall down, because they have a high-volume gasoline station, but only a single in-bay automatic on the property with a pretty limited production capacity of only eight or 10 cars an hour,” he said. “So at certain times the car wash is overwhelmed, and can have long lines.”
Roman also favors suggestive selling by store personnel. “A word to the wise: They are going to perform better when they have an incentive to sell more washes.”
Equipment + Speed=Convenience
Whether c-stores with car washes find themselves at an advantage or disadvantage compared to mainstream car wash is the subject of ongoing debate, according to Thorsby. “The question is what to do with the customer. In a c-store environment the operator is trying to get the customer out of their car into the c-store. In the car wash environment, particularly with the types of washes that exist, the customer wants to stay in the vehicle.”
The choice of machines—touchless automatic, cloth in-bay automatic, cloth rollovers, among others—also has competitive implications.
“When a person puts in a cloth unit at a c-store he is competing with the tunnels, the guy who just has a car wash,” Vercollone shrewdly observed. “I think the tunnel will do a superior job because there are usually attendants there who will find spots where dirt may not come off, like bird droppings or a tough spot to clean on the wheels. To compete against that is a little tougher than with just another in-bay automatic unit, which is a different animal.”
Vercollone plans to expand the number of stores that include car wash facilities, although until relatively recently doing so didn’t make much sense. “First of all, in the Northeast the footprint is much smaller than in other parts of the country,” he explained. “Beyond that, as full-time car washers we were never happy with what we saw convenience stores doing with car washes. We only built this site about four years ago when we saw the in-bay automatic equipment getting better.”
Consumers tend to notice—and appreciate—the difference. CSD>