How Independent Tire Dealers Are Standing Up To Their Biggest Competitors

How Independent Tire Dealers Are Standing Up To Their Biggest Competitors

When asked who their toughest competitor is, 30% of independent tire dealers pointed to national tire retail chains.

The tire industry is more competitive than ever, with independent dealers facing challenges from big chains, box stores and online sellers. But who do tire dealers see as their toughest competition, and how is the landscape changing?

When asked who their toughest competitor is, 30% of independent tire dealers pointed to national tire retail chains, followed by other local independent dealers at 21%. Dealers are also feeling competition from big box retailers, with 14% citing them as the top competitor. Online tire retailers and wholesale distributors took 13% and 12% of votes, respectively.

It’s no surprise the big chains are seen as the top threat – with hundreds of locations and deep pockets. But what makes these competitors so tough? The number one factor cited in our data was lower pricing, with 68% of respondents saying as much. Meanwhile, 35% say the fact that big chains have a large number of locations affects competition. Because of their inventory volume and amount of locations, chain retailers often can leverage that to offer reduced prices that independents struggle to match.

Other advantages of the bigger chains and competition, in general, are bigger marketing budgets and convenience factors.

We also asked dealers how competition has changed with the rise of private equity investment in retail chains. Private equity firms consolidate chains under holding companies and provide capital to expand through acquisitions and new store openings. 24% of our respondents said private equity is driving much higher competition, while 29% said it’s moderately increased competition. This data tells us that over half of respondents say private equity investment has intensified competition by enabling retail chains to rapidly expand and modernize stores in ways most independent dealers can’t afford.

Finally, we looked at the impact of competition from big box retailers. 33% of respondents said big box retailers have only moderately increased competition and 33% said competition stayed the same. Meanwhile, 17% of dealers say big box retailers have increased competition substantially. Our data also showed that 50% of independent tire dealers estimate having one to four big box stores within 10 miles of their location. Additionally, 41% of respondents have to contend with five to ten stores in close proximity, meaning tire buyers have more options – potentially limiting revenue for independent retailers.

Due to all the options your customers have, you need to differentiate yourself. While the competitive environment is demanding, fear not independent dealers – you still maintain key advantages like your local expertise and longstanding community ties. However, understanding the competition will allow independents to tailor offerings and demonstrate their unique value to the community.

Take Tire Review’s 2022 Top Shop winner, Telle Tire & Auto Service, for example. What does Telle, an independent tire dealer, attribute its success over competition to? Continuous training and education for techs, a marketing strategy that builds brand consistency for all locations and providing excellent customer service – meaning clean lobbies, loaner cars, and technicians that treat customers like family.

Tire industry competition continues to get fierce…how are you dealing with the competitive pressures in your market?

With over 23 locations across Missouri and Illinois, Telle Tire has made three acquisitions and added five new store locations in 2023 alone.

You May Also Like

Say Goodbye to Brake Noise Comebacks

To understand where brake noise comes from, it’s essential to grasp the mechanics of brake noise.

brake noise

Brake noise is one of the most controversial topics in brake repair. Where the noise is coming from and determining the right way to fix something may be complicated. However, the root cause is simple - all that squeaking, chirping and groaning originates at the contact point between the pad and rotor. Let’s talk about why understanding brake noise is key to preventing brake-related comebacks in this Tire Review Continental Tire Garage Studio video.

Plan to Protect Your Shop’s Growth

Lacking certain planning may lead to your hard-earned success disappearing in an instant.

Tire Sales: In-Store, Online, or Both?

The majority of tire dealers tell us their highest profit percentage comes from online tire sales, so why do many dealers stick to brick and mortar?

Tire sales in store vs. online
How Sales and Service Affect Tire Dealer Profit Margins

Tire dealers tell us their highest gross profit margins come from retail service work.

RwtN25 Profit margins
Tire Dealers Have Positive Sales Outlook for the Rest of the Year

Many tire dealers had a great 2022 and have high expectations for the rest of 2023.

Other Posts

European Replacement Tire Sales Plummet Across All Segments in Q3

ETRMA reported declines ranging from -6% in consumer to -21% in agricultural tires, warning of economic threats hammering demand.

VIP Tires & Service Executive Chairman’s Five Steps to Keeping Customers for Life

John Quirk says customers do not simply support VIP due to getting great service; it’s because his people build relationships.

Maximizing Motorcycle Safety and Performance with TPMS

While TPMS has been mandated for passenger vehicles in the U.S. and other countries, motorcycles are not yet a part of this legislation.

Goodyear Plans ‘Strategic Alternatives’ to Dunlop, OTR, Chemical Businesses

The company believes divesting these areas of focus could result in excess of $2 billion from portfolio optimization.