Convenience stores up the ante in the sudsy business
It's the automobile version of wash, rinse and repeat â and the repeat part is what convenience stores and gas stations with car washes are trying to get a better hand in. Just take a look at some of the retailers in the convenience and petroleum retailing industry that are making headlines with an improved or expanded car wash experience:
- La Crosse, Wis.-based Kwik Trip Inc., with 350-plus locations, announced an aggressive construction schedule with at least 20 new stores slated for this year. Some will be in the 6,000-square-foot range, with double-bay car washes configured into the plans. One such store will open in central Wisconsin in July.
- San Antonio-based Valero Energy Corp. is upsizing its Valero Corner Store prototype to 4,600 square feet, which will accommodate a car wash and 16 fuel islands. There are currently more than 1,000 U.S. Valero Corner Store locations.
- Altoona, Pa.-based Sheetz Inc., with 431 stores, is also expanding some of its existing locations to 6,000 square feet, making room for a car wash and a drive-thru, among other improvements. One such store is slated to open next spring in Ligonier Township, Pa.
- Circle K Stores Inc., a division of Laval, Quebec-based Alimentation Couche-Tard Inc., recently expanded its car wash partnership with Mark VII Equipment Inc., the North American subsidiary of WashTec AG of Germany. In 2008, Mark VII began supplying car wash equipment, service and chemicals to Circle K's Southwest division. Last year, that relationship was expanded to include three additional regions and now, three more divisions have been added, according to Mark VII. Circle K operates more than 3,600 company-owned stores.
- Las Vegas-based Fabulous Freddy's, a car wash/convenience complex, just added an eighth location to its chain. It is intent on customers having "a fabulous experience," said founder/owner Freddy Smith, who created the one-stop business in 1998 after an unpleasant experience at a Las Vegas car wash. The chain is adding to its "Fabulous Player$ Club" gaming card, which takes advantage of its Sin City locale and allows adult customers to play and win free car washes, car detailing, sodas, hot dogs, oil changes and even gas.
- In the independent realm, the All-American Gas Station and Car Wash in Meadville, Pa., reported an all-time boom in car washes one year after it lowered the price of its gas by 10 cents below major competitors and offered a $5 car wash on Mondays and Wednesdays. According to local media reports, the business nearly quadrupled its total traffic with two-fold patronage from these changes.
Industrywide, a modest resurgence in car washes is being felt, according to the International Carwash Association (ICA). Data supplied by retail car wash locations through the ICA's Wash Count program shows that the U.S. car wash industry continues to recover with the overall economy, posting gains in both average car washes per location (wash counts) and average revenue per car wash (ticket average). In 2012, wash counts grew by 2.1 percent, while the ticket average grew by 2.6 percent.
"It was a year of slow recovery in 2012. It was not so different from other retail businesses," ICA CEO Eric Wulf told Convenience Store News.
The ICA began benchmarking its Wash Count program last year. With two years of data under its belt and now in its third year of data collection, there is solid ground for optimism in the overall car wash industry. "I think 2012's gains over 2011 are a hopeful sign for the industry," Wulf added.
THE FINER DETAILS
Looking specifically at the convenience sector, c-store car washes were up about 5 percent in 2011 (this is based upon supplier data, not actual retail data). Wulf expects 2012's convenience car wash growth to be consistent with that â in the low single digits. (The 2012 c-store data was still being calculated as of press time.)
"We're hearing from our members that c-store customers are looking at the car wash business more seriously. That's been happening for about the past 18 months," Wulf stated. "For operators of c-stores, what is becoming a real area of attention is the total customer experience going through the car wash."
Specifically, this means more attention is being paid to the finer details such as lighting in the tunnel bay; composite materials to make the walls bright; tri-colored foam for soaps and waxes; and improved scents.
"Basically, all things that touch the senses that don't require time through the service," explained Wulf. "In order for c-stores to make money in the car wash business, they're realizing the proposition has to be more than just trying to sell it to customers who show up for gas. They are competing with the independent car wash down the street, so it has to be more than just easy and quick. It has to have good value and quality. It has to be a great experience."
Russell Bell, director of corporate marketing and communications for Ryko Solutions Inc., a national supplier of car wash solutions, equipment, services and chemicals, agrees with that assessment. "What we hear from retailers is they want to provide the car wash experience â an efficient and clean wash that is quick but has good value â because that's when customers will come back to a c-store retailer for a car wash," he said.
With 75 percent of its business dedicated to c-stores, Ryko Solutions works with retailers to come up with promotional programs that utilize the car wash to drive sales into the store, according to Bell. "We will do whatever we can to help that along, such as a good pairing with a car wash; offering a free drink or candy bar with the service to get them into the store where they're likely to buy something."
Aside from adding promotional value and customer sensory details, there's also been an industry emphasis on cost management for the past few years. "Everything from water recycling [to] power and chemical usage," Wulf said. "Some operators are on it like hawks, looking at new technologies and the processes available to manage these costs."
TO TOUCH OR NOT TOUCH
Perhaps the biggest shift in the car wash industry lately, however, has been the leveling off between friction car washes and touch-free car washes. In 2007, sales of touch-free machines were two to one over friction machines, but currently, friction has a slight lead.
"The sales of friction over touch-free are really inconsequential â it's just about 50/50," Wulf said. "It's now almost as likely that a c-store will choose to buy a friction unit as it will buy a touch-free unit. And that speaks to the equipment evolution â the effective technological advancements in friction."
Ryko offers two touch-free machine solutions and one friction unit, but Bell reported they are equally popular with c-store customers. In its touch-free segment, Ryko came up with a second solution, Pulse, which has a "dramatically reduced" entry-level price point for new start-up or low-volume operators interested in automatic car wash systems.
"The brushes are so well-made and advanced now, [so] there are no concerns about the effect of friction on the cars. There is no damage," Bell said. "It's just a matter of c-store choice. Whatever the retailer is interested in and believes is the right choice for its clientele is what we suggest they go with. Both styles are excellent car wash services now."