For convenience stores looking to boost revenues and profits, here’s an option they may not have considered: converting existing car washes to car-wash express tunnels.
An express tunnel, in which the car is moved by a conveyor along the bay where washing and drying systems are longitudinally installed, can wash more than one car at a time, stands out for its speed and performance and is staffed by car wash specialists.
Car washes in general are a large and growing market. There are approximately 50,000 retail car washes operating in North America alone. These generate $24 billion in annual revenues and have up to 4% growth potential per year, according to NCS, a leading car wash operator and the parent company of the industry’s leading brands. Some 15,000 of car washes are express tunnels.
Convenience stores have fared well in the car wash business. According to the North American Industry Classification System (NAICS), there were a total of $979.7 million in car wash receipts from operations in c-stores in 2013, the most recent year data was available. Additionally, ICA estimates the entire car wash industry makes more than $24 billion every year.
Understanding the benefits
Express car washes offer benefits for the convenience store and the customer alike. Consider this: Express has four to 10 times greater throughput capacity than rollovers, the more traditional type of automatic carwash in which users drive their vehicles into the wash bay and turn their engines off while the machine moves back and forth over the car in a number of passes. Customers, in turn, don’t wait more than six minutes in a queue of 20 cars.
Some retailers, such as Terrible Herbst Oil Co., in Las Vegas, have seen car-wash volumes increase. Terrible Herbst can also pair up the tunnels with free vacuums, which have become a marketing point for the convenience store player.
Express car washes also can help to boost other revenue streams. For example, Terrible Herbst has promotional signage at its tunnel wash offering a free 32-ounce fountain beverage with the purchase of the top wash package.
And there are various ways to profit off express car washes. A focus for Terrible Herbst is selling monthly wash memberships that offer unlimited car washes for a set amount. To encourage memberships, Terrible Herbst offers members a 20% discount at its quick lubes, and it awards employees commissions on monthly pass sales.
When it comes to converting to express car washes, convenience stores have advantages over other market participants. They are not exposed to typical entry barriers such as real estate or sewer and water services. Advantages to entry, by contrast, include the following:
- Real estate: Stores already have existing properties ready to convert
- Entitlement: A car wash permit may already be in place
- Sewer and water tap: These are already in place and operations are at scale — a back office is in place and some expertise is already in place.
Converting to an express tunnel takes expertise. An operator such as National Car Wash can assist with the following: ongoing consulting to optimize operations, revenues and profit; support with cleaning fluids, spare parts, on-site repair services and training; seamless integration of stall, start up and commission for the new car wash; development of a perfectly built solution based on discovery; uncovering investment objectives and audit installed base.
The timing may be ripe for convenience stores to take the plunge and improve car wash capabilities. An express car wash may be just the solution they have been seeking.
This post is sponsored by National Carwash Solutions