Publisher’s Perspective: How’s Business? Gas Prices Aren’t Helping – UnderhoodService

Publisher’s Perspective: How’s Business? Gas Prices Aren’t Helping

Higher gas prices and the weather set the tone for business in April. How was business at your shop?

Once again, I’ve reached out to Nick Mitchell, senior vice president of research at Northcoast Research, an independent, full-service institutional equity research and trading firm headquartered in Cleveland, OH, for insights from its monthly research study. According to Northcoast Research, the shops in its survey sample experienced a slowdown in business for April.

One of the main factors that can influence the interpretation of data is the business condition from the previous year. Fortunately or unfortunately, depending on how you want to look at it, April 2010 was a nice month. Gas prices in April 2010 were much lower than they are now and the month also got started with some nice spring weather. These two factors accounted for some good numbers and, thus, a tough comparison for April 2011. This April, the weather had a negative impact on conditions with half the markets being tracked reporting an increase in precipitation and many markets reporting cooler temperatures. Cool weather and rain keep customers at home.

According to Mitchell, “many of the repair shops that saw their sales falter in April also attributed the sales decline to the effect of rising gasoline costs. These respondents also pointed to decreases in their average ticket as supporting evidence.”

Another data point tracked by Northcoast Research is the deferral rate of maintenance. This number had been trending lower (good news for you) for the last several months until April. Again, rising fuel prices, which also impact the price of food, are cutting into the household budget.

Northcoast Research measures optimism in the market with its Three-Month Outlook Index, which dropped 18.7% in April after a 9.5% rebound in March. According to Mitchell, “a slow start to May along with the pace at which fuel costs have risen, has brought on a reduced optimism among mechanics.”

Northcoast Research remains positive based on the underlying fundamentals within the automotive aftermarket industry, including the aging of the nation’s light vehicle fleet, and the ability for consumers to fund vehicle repairs if gas prices do not trump the gains that are being experienced on the employment front.

With the topic of high gasoline prices on everyone’s mind, shop owners have a unique opportunity to help maintain their customers’ vehicles for peak performance and the resulting improved gas mileage. It’s important to take the time to educate your customers that simple changes to their car care regimen can boost fuel economy and lengthen the intervals between each fill-up at the pump.

And, getting the best mileage in the short run will be helpful to the family budget in the long run. 

You May Also Like

EV Charging

Charging will get better as technology improves and drivers change their behaviors.

I once worked with a technician you might call considerate. When he used a piece of equipment, he would ensure everything was clean and properly put away. For example, we had a five-gas analyzer used for state emissions testing. After every time he used the machine, the hose for the tailpipe probe was neatly coiled and hung on the machine. When he used the machine, the hose was laid on the ground and not dragged across the shop’s floor. He also was the guy who would dispose of the filters left in the oil drain by other technicians.

Keep On Rockin’ Into The New Year

Nominations are still open for Vehicle Care Rockstars!

Being Happy Gets In The Way of Being Successful

Bryce Kenny says his greatest satisfaction comes from helping others to find the courage to chase their dreams.

Quality Triumphs!

We interact with our cars differently and today’s parts quality matters more than ever.

Putting Yourself First For Safety

Shop safety policies and procedures are only as good as those following them. Make sure you’re watching out for you!

Other Posts

It Ain’t Bragging If You Can Back It Up

For the great work they do, shop owners like Harrison Keyes talk less about “me” and more about “us.”

Why Is NHTSA Involved With RTR?

A closer look into NHTSA’s involvement with RTR.

Do OEM Service Bays Offer Opposition or opportunity?

With great power, of course, comes great responsibility.

How Effective Are Non-Competes

NCAs restrict workers, hinder innovation, and impact employment options.