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    The Car Wash King

    Rutter's is expanding car wash sites nearly fivefold this year as part of a $55 million capital expenditure plan

    By Mehgan Belanger

    Rutter's Farm Stores, a 48-unit convenience chain based in York, Pa., opened its first car wash location in 2005 at a c-store in its hometown. The chain opted to add the service for three reasons -- it complemented the convenience store, it maximized the use of the real estate and it would make money -- according to Scott Hartman, president and CEO for Rutter's.

    "Ancillary services and better use of the real estate are keys to making profits in a shrinking gross margin world," he explained.

    Three years after the first facility opened, car washes are taking a prominent place in the chain's new store development, as every new store with the available land will have a car wash, Hartman said.

    Expanding the chain's car wash locations "fits our strategic goal to be the car wash king of our market," he said. "We had the land, and the overall projected store volumes said [the additions] would be successful."

    Car wash competition in the local market consists of a few Sheetz locations and Tom's convenience stores, operated by the Shipley Group, but most of the area's car washes are not related to c-stores, Hartman said. "It is very sporadic. There is no dominant player."

    To compete with the other car wash operators, Rutter's focuses on price, wash options and convenience of location.

    To hold the car wash crown, the chain plans to operate the most washes in the area, and will maintain its throne by continuing to build more washes, according to Hartman, who noted the strategy was instated two years ago to add car washes at every location that can support them.

    Rutter's will expand its car wash locations nearly fivefold in 2008, as part of a plan to invest $55 million in its chain -- the largest one-year capital expenditure in its history.

    The plan, which also includes the construction of 10 new convenience stores, will bring the number of Rutter's car washes from three to 14. Of the new facilities, two will be installed at existing locations, and nine will be a part of the new store openings during 2008, according to Hartman.

    "A little bit of this is timing," he told Convenience Store News when the investment plan was announced. "It takes so long to get approved these days. The majority of the stores have been in development for two to four years. The timing is that we have a lot of stores ready to go in 2008."

    The first of the facilities is expected to open this month. While the existing systems use the Karcher HD 9000 platform, the 11 new locations will rely on Jim Coleman Co.'s Fusion X friction rollover system, according to Hartman.

    In addition, the new car washes will feature the same "green" practices as the existing facilities, including water reclaim systems and soaps that are phosphate-free, Hartman said.

    "It's the proper thing to do to protect the environment, and it fits right in with our strategic green initiatives," he said. Other environmentally friendly investments by the company include a new recycling program, motion-detecting lights and a computer-based energy management system, among others.

    The chain offers four packages of washes, both brush and brushless. Prices range from $6 to $10, and the most expensive offer is the best selling, Hartman said. Ancillary services to all wash facilities include vacuums, carpet shampooing and wheel scrubs, while one store boasts two self-wash bays, he said. In addition, the chain is rolling out a new Rain-X offer to all its new stores, after launching a test of the product at existing stores in January, which costs customers $2.

    On average, the chain sees 1,000 washes per month per store, but that number is dependent on weather and season, Hartman said. Winter and early spring are the chain's best seasons for the car washes, due to the region's weather.

    "When they put salt on the roads, it is guaranteed to drive more washes," Hartman said.

    For comments, contact Mehgan Belanger, Associate Editor, at [email protected].

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