Convenience, Appearance Touted : Competition Drives Car Care Into Malls
The middle-aged woman with the red-tinted hair had only one reason for visiting the Fountain Valley auto care shopping center. Her Winston tires needed repair and the center offered the closest Winston shop.
No, she admitted, it didn’t matter that the center boasts 12 auto-related shops and that she could buy a muffler, get an engine tuneup or have her transmission overhauled, all in a single trip. It didn’t even matter that the clean and landscaped center looks more like the average neighborhood shopping center than a hangout for grease monkeys.
But, after surveying the stucco and tile-roofed center, the woman changed her mind. Gibraltar Transmission shop, she said, looked promising. So did the Smog Tech emission control checkup center and the Nissan repair shop. “Next time I need them, I’ll come here.”
The reaction is exactly why Taylor Grant and a growing army of developers are racing to line up prime real estate and sign up national auto care franchise operations for malls devoted almost entirely to auto service shops.
“It’s really no different than a restaurant row or a cluster of home improvement and furniture shops,” says Grant, the Newport Beach developer often credited with creating the auto care center concept in Huntington Beach in 1979. “When everything is all together, it helps customers remember where to go when they need their cars serviced.”
Few Gas Station Mechanics
Although there are no firm counts, according to the best estimates the nation currently has between 200 and 300 auto care centers, most of them in the Sun Belt region stretching from their home base in Southern California to Florida. And the number is rapidly growing, with some developers saying that the ranks will swell to 2,000 by the early 1990s.
There are several reasons why.
Foremost, auto experts say, is the fact that the squeezed petroleum industry and the growing sophistication of automobiles have combined to make the neighborhood gas station mechanic an endangered species.
According to Motor Service Magazine, about 100,000 gas stations nationwide currently offer repair service, about half the number of 15 years ago. In California, the number of stations with repair service has dropped from a peak of nearly 20,000 in 1971 to about 6,200, according to the Southern California Service Station Assn.
“The neighborhood gas station mechanic has faded away just like the general practitioner who made house calls to his patients,” explains Steve Sheaton, the association’s executive director.
Furthermore, the complicated inner workings of today’s
autos, including electronic fuel injection and computerized sensors, have weeded out all but the most hearty of the do-it-yourself mechanics.
Developers are betting that their neighborhood centers can offer an equally convenient and substantially more attractive substitute, particularly for the growing number of working women who are responsible for getting their cars serviced.
Beyond customer convenience lies a host of converging trends that is driving auto care specialists out of back alley garages.
The more sophisticated engines have created the need for a series of highly trained specialists. Furthermore, the $80-billion-a-year auto care market has been invaded by franchise-hungry corporations offering everything from eight-minute oil changes to 20-minute tuneups.
These corporations, such as Gibraltar Transmission, Pit Pros and Jiffy Lube, don’t need to be taught elementary real estate lessons and are quick to see the value of retail auto care centers.
For example, Precision Tune-Up expects that 30% of its new shops will be located in centers. Safelite, the nation’s largest auto glass installer, is concentrating its new shops in the mini-malls. And Gibraltar Transmission has already put about half of its shops in these centers and plans to build centers of its own.
“It makes getting good locations affordable, especially in high-cost areas like California,” says Jim Mason, a Safelite site selector.
Another benefit to retailers is that the mini-mall developers are responsible for winning the zoning and other governmental land-use approvals that often prove too frustrating to the average shopkeeper. This service is particularly beneficial in master planned communities, such as those dominating southern Orange County, and in cities with tough building controls.
The tenants pay for the developer’s effort. Lease charges at auto care centers typically cost at least 25% to 35% more than industrial property or stand-alone retail locations.
Although mini-mall formulas and sizes vary, most are anchored by a traffic-producing, well-known tenant, such as a Winston Tire or Jiffy Lube, just the way most general shopping malls have at least one big name department store. The rest of the tenants usually include a car wash and up to 20 more service shops and auto accessory stores.
Happy Working Together
Some developers, including Commerce Center’s Grant, are experimenting with adding traditional retail and service outlets, such as restaurants and personal care shops, to attract customers while they wait for their cars. Although the three restaurants have done well in Grant’s Fountain Valley Center, a toy store has folded and traffic remains spotty at a hair dresser and nail care shop.
But most auto care retailers say they are happy doing business among other car care outlets.
“All of us refer work back and forth within the center,” reports Ray McClees, manager of the Winston Tire Shop in Fountain Valley.
Phil Vincent, manager of neighboring Gibraltar Transmission, likens the center to a “little family” where all the tenants know each other, and customers feel comfortable letting the shopkeepers pass a car from service bay to service bay.
“We’ve done in six months what it took us two years to do when we were in an industrial park in Costa Mesa,” says Jack Kee, owner of Jack’s German Auto Repair Service. “We get referrals from the other tenants and the restaurants bring in a lot of potential customers.”
Still, some retailers remain cautious and even skeptical.
Tim O’Brien, executive vice president of Econo Lube N Tune, says that while his company has leased, and even built, auto care centers, his preference is still a high-profile, stand-alone shop. “I like my own identity,” O’Brien says. “If a center gets too large, it’s a jungle for the customer.”
Safelite’s Mason notes that because the mini-mall concept has become one of the hottest trends in retailing, it has attracted the usual array of unsavory characters. “It’s time to beware,” he urges. “Like the rest of real estate, there are good deals and bad deals.”
