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What's the score?

October 11, 2010
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After writing a column extolling the attributes and benefits of belonging to the International Carwash Association (Association), I received quite a few comments from independent carwash operators explaining why they don't belong to the Association.

Basically, these operators don't like the idea of the Association participating in events like the National Association of Convenience Stores (NACS) Convention and the Chevron/Texaco North American Marketing Convention.

Who is the competition?

Independent carwash operators are a diverse collection of "mom and pop" investors who typically own one carwash site.

This group is represented by a number of member-driven regional, state and international organizations, while the gas and c-store operators are represented chiefly by the Petroleum Marketers Association of America (PMAA) and NACS.

PMAA represents over 8,000 independent petroleum marketers. The mission of the PMAA is to nationally unify petroleum to further the common business interests of the industry.

NACS represents 1,900 retail and 1,800 supplier members in an industry that has over 130,000 outlets with fuel sales of over $220 billion. The mission of NACS is to represent the convenience store industry and assist members in increasing value, effectiveness and profitability.

Who are the major players?

Some of the big time operators in gas include:

  • BP, the world's largest integrated oil concern, with 14,700 gas sites in the U.S.;
  • Exxon/Mobil with 16,000 sites; and
  • Chevron with 19,000 sites.

Wal-Mart, the world's largest retailer, also sells gas and has been experimenting with carwashing. There are also small-fry retailers like:

  • 7-Eleven, the largest chain of c-stores, with 5,800 outlets;
  • Valero Energy with 4,700 gas sites; and
  • Grocery concerns like Kroger Co. and Albertson that operate up to 800 c-stores and over 230 gas sites respectfully.
What are the trends?

There are approximately 170,000 gasoline sites in the U.S.

The number of gasoline sites with c-stores is growing as the total number of gas sites has been shrinking by about 0.3 percent-per-year. More than 60 percent of gasoline sites now have convenience stores.

The number of customers using a carwash at gas and c-store sites has jumped from 34 percent to 42 percent, and the recent trend in construction has been towards larger, more modern and more profitable sites

What is the strategy?

In order to offset the volatility in fuel prices and margins, shrinking sales of cigarettes and other products and increased competition, convenience and gas retailers are leveraging good locations and sites with multiple services to create the one-stop shopping experience that most of today's consumers prefer.

Gas and convenience store operators may need this larger scale to compete effectively, but the presence of an expanded or hyper-convenience store with gas, food, carwash, etc. will make life exceedingly more difficult for a "mom and pop" carwash operator in a local market.

In the past, the typical gas site was usually a small kiosk with four to eight multiple product dispensers that might sell 100,000 gallons-per-month and wash 16,000 cars-per-year.

Today, the trend is towards much larger gas sites that have the capacity to sell 450,000 gallons-per-month and wash as many as 70,000 to 100,000 cars-per-year.

Who needs help?

In Canada, 15 percent of retail gas sites have carwashes. Based on the Association's carwash census, this percentage is about 28 percent in the U.S. At 35 percent, this would represent 49 percent of the adjusted carwash market in 2004. At 50 percent, it would be 58 percent of the adjusted market.

In some respects, helping the petroleum and convenience industries become better carwash operators makes about as much sense as this country sending a contingent of experts overseas to help the Chinese become better manufacturers, when China simply does not need our help.

Robert Roman is a former carwash, express lube and detail shop operator and is president of RJR Enterprises (, a leading consultant to the carwash industry. Robert is a member of International Carwash Association and PC&D's Honorary Advisory Board.

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