Advance Auto Parts Grows Its Presence in California
Advance Auto Parts announced today that they are leasing the retail space of 109 Pep Boys stores in California, for conversion into Advance Auto Parts stores in the next 9-12 months. The agreement between Advance and Pep Boys, which was signed earlier this month, does not include any Pep Boys Service Centers.
In a statement, Brian Kaner, Pep Boys CEO, said, “The agreement announced today only reinforces Pep Boys Service position as a leading repair and maintenance provider for consumers and fast-growing fleets on the West Coast. The agreement this year will provide us with an opportunity to refresh our Service Center locations and reinvest in the market to meet emerging customer needs, particularly as demand for electric vehicle service grows in the region.”
Advance stated that this move was important strategically, as they grow their chain nationally into one of the largest markets. As of January 2, Advance operated 4,806 stores, plus another 170 Worldpac branches in the U.S., Canada, Puerto Rico, and the U.S. Virgin Islands. They also stock 1,277 independently-owned Carquest stores in these same locations, in addition to Mexico, Grand Cayman, the Bahamas, Turks and Caicos, and the British Virgin Islands.
Separately, the National Retail Federation (NRF) forecasted retail sales growth between 6.5 – 8.2 percent to more than $4.33 trillion in 2021 as more of the U.S. population is vaccinated, and the economy reopens. “We are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” said Matthew Shay, NRF president/CEO.
Early results show that retail sales in 2020 grew 6.7 percent to $4.06 trillion, which included intense pandemic disruption with online up, and brick-and-mortar stores down. Analysts at Bank of America last month selected Advance as one of four retailers they found attractive, issuing this statement: “The majority of AAP’s customers are professional auto repair shops, which were significantly hindered by the pandemic. With the pro auto service channel now in recovery, we think AAP is poised to benefit, as a recovery story with a multi-year margin growth opportunity.”
[Images: Advance Auto, Pep Boys]
Comments
Join the conversation
Pep Boys may be doing the smart thing and getting out of the retail auto parts business. It's only a matter of time before Amazon comes for the rest of them, even RockAuto. Same-day shipping for parts sounds good to me! One thing that bugs me about RA is if you need to exchange/return/core charge shipping. Amazon can take of that under a Prime account. Brake calipers are heavy! I do like my local Napa, especially after I took my 66 Mustang drums in for turning at O'Reilly's (I know a weak moment) and they said they weren't sure they could turn them - and proceeded to spend 30 minutes looking for batteries for their digital caliper! I left and went to Napa. They said no problem and took care of it.
My first "real" job was at a Kragen Auto Parts at 18 years old in the SF Bay Area. I learned about cars, but much more about human nature, working the register and parts desk. For all the advantages of a Rock Auto or Amazon, there is a population that needs parts in stock to get a vehicle rolling that day - many times people whose incomes depend on that car or truck functioning. Being a child of upper middle class professionals, I also learned about the cash economy at the store - once I found myself with a register with $3,000 in twenties after a couple of gentlemen bought crate engines in cash. Store policy required a safe drop at $600 to deter robberies, so I prepared an envelope to drop with the cash, only to find out that the drop slot wasn't wide enough to fit it! To this day, I don't think I've ever held that much physical cash at one time in my life. It's amazing more people don't knock over auto parts stores, especially ones that cater to cash-only populations.