As I write this column, the average price of a gallon of gas in the United States is $3.20. By the time you read this column, some experts predict it may be nearing $4 per gallon.
It isn’t so much the price of gas that should concern this industry — after all, car care businesses don’t struggle with many regular transportation costs aside from perhaps chemical deliveries. Rather, it is the trumped up effect this record-breaking number will have on an economy that’s already in a “slow down” — to quote a modest President Bush.
While some operators have blamed gas prices for lagging volumes or revenues for years now, the better argument is that weather has primarily caused more bad days than good days in certain regions of the U.S. There are no scientific studies or surveys exclusive to the carwash industry to back me up, but my hunch is that until recently, gas prices had at best a modest effect on our industry. If the price of gas were the issue, then European carwashes would be practically non-existent by now.
But today’s high gas prices join a credit and mortgage mess in the United States, validating the industry’s concern over discretionary spending. And let’s not forget the media hype — the six o’clock news is as much a force in the matter as the gas prices themselves.
But what’s really worrying is what I’m hearing from manufacturers and distributors to this industry, some of whom claim this has been their worst year in memory. Recently, PC&D surveyed its readers to learn how the economic situation might be affecting association membership and tradeshows. The response from operators was exactly what I had expected — most carwashers want to attend as many tradeshows as financially possible. But the response from vendors to the industry was alarming — some were outright accusing associations of trying to take them under.
Most likely, this means consolidation of suppliers is coming. And if consolidation of the carwash supply industry does indeed become a reality, what is the fallout? Carwash operators need to start considering their relationship with vendors now in order to better prepare for the future.
The purpose of this column isn’t to spell doomsday for our industry. Despite its definition as a discretionary expenditure, there will always be a “need” for carwash services — especially as consumers become more environmentally-conscious and demanding of convenience.
Instead, I want to point out that sometimes the bigger issue isn’t if Jane Doe or John Doe has the money to spend at your carwash, but rather how this affects the carwash food chain. If there is a small decrease in Janes and Johns, there may be a larger decrease in new investors and in carwash operators who are willing to put money into their locations. This, in turn, affects the carwash suppliers, distributors and manufacturers who largely fund the innovations and improvements to our industry.
In this industry, it’s always something. A few years ago, it would have been the new investor boom and oversaturation. A decade before that it was the convenience store operator with a freestanding IBA. And before that, it was free carwashes with a fill-up and before that, the price of gas.
But just because you have an excuse doesn’t mean it’s a good one. It only means you have to try harder, get more inventive and dedicate yourself to improving your business. After all, you’ve got to buy the $4 gas, too.
Kate Carr is the editor in chief of Professional Carwashing & Detailing®
Magazine and pays $3.32 a gallon in Northern
New York. You can send your grumblings, compliments and suggestions to email@example.com