Discount tire san diego

Although the proportion of Kmart and Wal-Mart stores that carry tires continues to dip, mass merchants now command more than a fourth of the replacement tire market, thanks in large part to the boom in tires at wholesale clubs.

And their market share promises to grow even larger--at the expense of independent tire dealers--now that national brands increasingly are turning to mass merchants as they wage their own battle for brand share.

In rapid succession this year, these national brands made their appearance in mass merchandiser shelves: * In April, Sears, Roebuck & Co., auto centers began offering Goodyear tires in addition to its private label lines, such as RoadHandler by Michelin; * In May, Sam's Club began carrying a special X line of tires that Michelin developed exclusively for warehouse clubs as part of its marketing strategy for hitting every channel distribution; * In June, Kmart began offering Kelly-Springfield tires in the 991 of its stores that still offer auto service in addition to the Uniroyal tires it started carrying in 1988 when it dropped its private label tires.

By October, Kmart will start offering a special XLE line of tires that Michelin developed for Kmart exclusively. Since Michelin owns Uniroyal and Goodyear owns Kelly-Springfield, Kmart was in a unique position to persuade Michelin to develop a line for its exclusive use.

In a mass market development last year, Wal-Mart began offering Douglas tires, a house brand of Kelly-Springfield, that gives its customers a budget-priced alternative to its main line of General tires.

As these national brands turn to mass markets,they have to walk a fine line to avoid antagonizing independents and their own dealers.

After Sears started to carry Goodyear, a number of dealers dropped the line in protest. Sears also would like to get Goodyear tires for its subsidiary tire chains, Tire America and National Tire Warehouse, which now must obtain the brand through diverters.

Michelin hopes to avoid offending its dealers by developing the different lines for different classes of trade so independents, which still control 51% of the replacement market, don't have to compete with discounters item for item.

As Kmart remodels and relocates existing stores and opens new ones it usually drops auto service and tires. The number of Kmart auto service centers has fallen to about 991 from more than 1,400 in the late '70s.

As Wal-Mart adds 165 stores a year, it includes auto service only on a selective basis, so the percentage of stores offering tires continues to slip. About 425 Wal-Mart stores carry tires, or less than 25% of the total of more than 1,750.

All new Sam's Clubs carry tires. To help merchandise them, Sam's developed with GNB, the battery vendor, an electronic kiosk that helps customers select the correct tire--and battery--size and stock number for their cars.

Warehouse clubs now account for 7% of the replacement market, estimated Modern Tire Dealer, an increase from 4% in 1986. Mass merchants, including the 875 Sears auto centers, and the 335 Montgomery War Auto Express Centers, command 19%, the trade magazine estimated, for a combined mass market share of 26%.

Hypermarkets such as Bigg's, Louisville, Ky., and Leedmark, Baltimore, both passed on tires. But Carrefour, which opened its second U.S. hypermarket last month in Voorhees, N.J., carries tires.

Kmart has tires in its three American Fare hypermarkets, which it now intends to convert into supercenters.

Even in its new store, Philadelphia-based Carrefour still has an archaic method of handling tires that warehouse clubs improved on years ago. At the French-owned Carrefour, customers must pick up tires from sales floor racks, cart them to the checkout for scanning on a vertical scanner and then push their carts outside to the tire shop for mounting.

Moreover, Carrefour has yet to develop a road hazard warranty program that provides much of the profit for tire sales, although it does offer free valve stems as part of its merchandising. Add-ons, such as road hazard warranty, balancing, and valve stems, help supplement the razor thin margins on tires, a highly competitive product.

In contrast, at Price Club, customers select tires from the sales floor of a tire shop before the main entrance and pay for them. Store associates then cart the tires into the installation bays and get customer's cars from the parking lot for installation while they shop.

As does Sam's, Price has its own road hazard warranty program at $3 per tire and balancing for $5.

Montgomery Ward also offers a road hazard warranty on the tire lines it carries: Michelin, Bridgestone, Pirelli, General and Road Tamers, and its private label brand. Ward preceeded both Sears and Kmart in adding national brands.

For a Michelin top of the line XH4 tire, with 80,000 mile tread wear guarantee, the Montgomery Ward in Chicago was offering a sale price last month of $85.13 for a 195/75 R14, the most popular size tire sold in the United States, compared to $94 everyday.

A lifetime balancing costs $9.99 per tire, a valve stem is $3, and a road hazard warranty costs 10% of the tire, or $8.51.

AutoSource, the aftermarket warehouse chain that Canadian Tire launched in Indianapolis, features a tire mezzanine on three sides of the 47,000-sq.-ft. store. The number of tires stored there lets customers know AutoSource is into tires in a big way.

To cut handling costs, AutoSource developed a conveyor line that lifts each tire on a hook from loading dock to storage.

San Diego-based Auto Parts Club, a chain of 11 warehouse stores, also carries national brand tires priced to appeal to professional installers, as well as do-it-yourself customers.

The environment also is impacting tire merchandising. Almost all retailers now charge a fee of about $1 to take junk tires off customers' hands.