The Future of Full-Serve Carwashing

Chip Burton, the owner of Shiner's One Stop locations in Florida, paved his way to success with convenience stores, gas stations and exterior carwashes with off-line services. Burton says he believes the number of full-service carwashes being built around the country is dropping and that this "trend" away from full-service will continue in the next few years due to a number of factors. MCC talked to Burton about his perspective on the full-serve carwashing industry.

MCC: Is full-service carwashing the "dinosaur" some people in the industry believe it to be?

Burton: It will continue in some form or another, but I know from talking to friends of mine from around the country that the rate of development of full-serve carwashes (new locations) is significantly less than many other types of facilities. Exteriors and stand-alone in-bays are where it's going.

MCC: Do you think this trend is happening all over the country or just in certain regions?

Burton: I think there are certain regions where the trend seems to be stronger than other regions. For example, in our market we have sandy soil that doesn't seem to get the interiors of the cars as dirty as quickly as the outside. So people are washing the exterior more often than getting the interior done.

And the financial strains of running a full-serve carwash are getting more and more difficult--that may not be as prevalent in California or the Southwest as it is in the Southeast, Midwest and New England where weather is a significant factor.

MCC: What do you think is driving this change in the industry?

Burton: Several factors are dictating this trend. Some of them are customer-driven, some are economy-driven and some are weather-driven.

• The commodity of time is becoming more important to the customer, and the time spent at a full-serve environment is probably 20 or 30 minutes. People are less inclined to spend that much time getting their cars washed.
• The frequency of full-serve use is getting less, and people are using alternate forms more often. ICA surveys have shown that people typically use different types of carwashes throughout the year. People will use a self-serve sometime, an in-bay automatic another time and a full-serve when they want a very thorough job or want to treat themselves.
• In talking with operators and reading about industry trends, I've found that full-serve volumes tend to be flat or, in fact, declining. On the contrary, exterior volumes and certainly in-bay automatic volumes are increasing. I think we should listen to that and understand that the customer's expectations are changing.
• The cost of property and land development is getting significantly higher, and carwash developers are forced to go to multiple-profit centers. In our case, we have one location that's a large gasoline facility, c-store and quick-service restaurant.
• The cost of labor has definitely risen. Labor is going to run 40 and 50 percent (in lower-volume situations) of every dollar that comes in by the time you fully burden it. And that's not going to get any less. That forces the price to go up, and every time you raise the price, you take out a slice of the market. The price of full-service is going to continue to escalate as the costs continue to escalate.
• The technology of equipment and chemistry has improved dramatically in the last 10 years. So it's now possible to clean and dry the exterior of the car with little or no people. Really all you need, from my perspective, is somebody to load the cars and prep them and collect that money, and there are certainly operators across the country who have eliminated even those positions. They're washing cars with no people.

MCC: Do you think upper-income customers with expensive cars are going to give up full-service and go with an exterior-only, in-bay or self-serve wash?

Burton: The do-it-yourself market is changing. Twenty-five years ago, self-service gas was not that popular. Today, it's 98 percent of gas purchases. And as far as upper-income customers, in most locations, that demographic makes up such a small percentage of customers that that sector alone won't guarantee financial success.

MCC: There are a lot of full-serve operators throughout the country who are doing well. Do you think they will continue to succeed despite the trend you're seeing?

Burton: I do. There's always going to be a demand, but I think the new-to-industry developer is going to be increasingly challenged because as costs have escalated, the cost of operation has escalated and he doesn't understand the challenges of full-serve carwashing. It's a tough, tough way to go. Competition is greater. There are more carwashes in all the markets than there ever have been.

MCC: What types of challenges are ahead for professional carwashes?

Burton: We are continually faced with our biggest competitor--the home carwasher. But in the last 10 years, the oil companies have done the best job of getting the home carwasher's business just by putting the washes everywhere. It's not necessarily the highest-quality product, but the expectation is lower. It has brought more people out of the driveway and into professional carwashing, and the oil companies are getting better at it. The conveyor operators complain about in-bay automatics, but I think it's an opportunity for conveyor washers to earn the in-bay customers business.

If you would like to contribute to Perspectives in an upcoming issue of MCC, please call the editor at (480) 990-1101, ext. 1454 or send an e-mail to tracyc@vpico.com.

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