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By Barbara Grondin Francella
In the March 3, 2008 issue of Convenience Store News, "The Car Wash King" related Rutter's Farm Stores' plans to expand its car wash business from three locations to 14, two at existing stores and the rest at new or raze-and-rebuild sites.
CSNews recently checked in to see how the investment has paid off.
After quickly opening those car washes in its central Pennsylvania markets -- the last earlier this spring -- Rutter's is going forward with car washes at two of the three new stores it plans to build in 2009. There has been no strong competitive response to the profit center push, noted Scott Hartman, president and CEO of the more than 55-store chain, based in York, Pa.
"When we initially started building car washes, Sheetz opened two or three locations in our market, but I don't see them building more," Hartman noted. "It's not that easy to add car washes, since c-store real estate is pretty tight." Rutter's, however, was well positioned to add the profit centers. After years of wishing for larger sites to work with, Rutter's management team began buying bigger parcels as the store offer grew. "Now we acquire three acres when they are for sale, and we will put a car wash on the site," Hartman said. "We believe in maximizing our real estate."
The car wash business has not added much to a store's labor expenses. "We only dedicate store labor to cleaning the car wash," Hartman said. "In some cases, an employee travels store to store to clean them and make sure they are in good condition."
Keeping the car washes clean and running every day is crucial. "Part of our managerial staff's bonus is tied to making sure the car wash is in good working order and properly supplied," the retailer noted. "Down days are bad days."
The chain's sole self-wash installation is labor-intensive, however. "If someone is four-wheeling in the mud all day, they'd rather leave that dirt in our bay than in front of his house," Hartman said. "We won't be installing any more self-wash bays. We believe it's easier and more profitable to operate the other washes."
The retailer is evaluating the Jim Coleman Co.'s Fusion X friction rollover system it is using. "We have been a fan of the friction and frictionless wash, so we have been installing a solution that can offer both," Hartman noted. "There is a group of drivers who still prefers the frictionless wash. Frictionless makes up 10 percent to 15 percent of our sales now, and we are analyzing those figures to see if it makes sense to continue offering that option in the future."
Although Rutter's launched the car wash expansion during the country's worst economic downturn since The Great Depression, Hartman said it is difficult to judge the effect of the economy on car wash sales. "Weather is more of a variable than economics," Hartman noted. "This past winter was an excellent season for us because there were a lot of small snows, freezing and salt -- the optimal car wash conditions."
In terms of offer, Rutter's settled on two wash options, priced at $8 and $10, with an additional Rain-X service for $2. "A nice percentage of customers take the Rain-X," Hartman noted.