A car wash can be a profitable venture for convenience stores, but retailers should ensure they do their homework.
By Howard Riell, Associate Editor
A well-run car wash operation can do plenty of good for a convenience store, from driving traffic to promoting value and squeezing revenue out of more of the site’s square footage. But promotions, marketing and maintenance have a lot do with getting the most out of them.
For retailers, Harvey Miller, owner of Car Wash Consultants in Newport Coast, Calif., prefers express exterior tunnel washes, in which customers are guided into the wash tunnel. “They remain in their vehicles through the washing process and are offered a free self-serve vacuum.” Run by an efficient manager, he added, they can prove highly profitable.
There are several types of car wash systems for operators to choose from including pressurized jet washing; in-bay automatics, which consist of an automatic machine that rolls back and forth over a stationary vehicle; tunnel washes, which use a conveyor to move the vehicle through a series of fixed cleaning mechanisms; chemical, or waterless car washes, which use chemicals to wash and polish the car’s surface; steam car washes that use a jet of steam and micro-fiber towels, some with detergent injection; and mobile car washes, which carry plastic water tanks and use pressure washers.
Miller, owner and operator of 32 car washes for 48 years, has worked as a consultant for 22 of those years. He said operators go wrong when they treat car washes like “third-class citizens.” One way is by not placing them in full view of customers. “Usually, the wash tunnel is in back of the c-store with no visibility and no exposure.”
According to Miller, the computer systems make it possible to sell unlimited monthly wash packages. Labor cost is not a problem, he added, since the express model requires only three employees working at one time. “Pay terminals will monitor extra services, and they will also sell wash packages.”
ALL IN THE WASH
Some keys to running a profitable car wash are having a good staff, doing regular maintenance on the equipment and using quality chemicals, according to Chris McKenna, president of McKenna Assets LLC in Redondo Beach, Calif., an international car wash consulting firm.
McKenna has seen a huge improvement in technology in the market during the last few years.
“With on-screen kiosk advisors and good lighting around signs, the technology has made a big difference. The use of point-of-sale (POS) systems is the absolute best way to control and monitor, from anywhere, your labor and costs in real time.”
First, choosing a good site is a matter of balancing the proper demographics, relative competition and traffic counts. Marketing can help drive business, McKenna has found. “The usual method is by offering promotions on gas and diesel with minimum purchases. You can also offer discounts on coffee and morning-type snack items to incentivize those commuting customers.”
McKenna added that too-common mistakes include not hiring the proper consultants and professionals, spending too much money on building costs and not properly vetting the site location.
“Running a profitable car wash is like running any other portion of your operation,” said Michael Jallo, who along with his brother Dan owns Park Avenue LLC in Parlin, N.J. The company operates five c-stores, one of which, in Linden, N.J., includes a car wash. “Control expenses versus sales. That said, having a good preemptive maintenance program helps reduce down time and repairs,” Jallo advised.
In New Jersey, he explained, the law mandates full-serve only for fueling and forbids cross-promoting any offering with gasoline purchases. “That creates some unique operational issues.”
Interestingly, the state’s full-service requirement works to the brothers’ advantage.
“We use our gas attendants to sell our cash promotions, which include multiple-wash discounts,” Jallo said.
He recommended that operators also make good use of inside employees to point customers to the car wash. “The cashiers can always upsell the wash better than any sign or promotion if they are properly motivated.” As motivation, his store offers cashiers a portion of the car wash sale as well as a bonus at the end of each month for the most sales.
Listening to consumers is just as important when offering car washes as with any in-store products, Jallo emphasized.
“The biggest mistake we made in the past was trying to sell the wash to the customer and not listening to what the customer wanted,” Jallo said. “Different markets require different systems, like touchless wash versus traditional cloth machine. Once you understand the demographics of your location, you can properly choose the type of machine your customers will choose for their needs.”
Logistics are important for a car wash, Jallo noted.
“Is it ‘customer friendly’ or does it require a training curve? Does it accept debit cards as well as credit? Does it provide change in bills, not coins, for customers who pay with large bills? Of course, the new dispensers that make it possible to add a wash to a fuel fill are also a big help, but our handicap of full-serve here in New Jersey means the customer never gets out of his vehicle.”
Site selection is a calculation that each operator must weigh, Jallo said. “But once the decision to add wash to your site is made, listen to your customers’ needs, not your car wash salesman’s needs.”
Having a good maintenance plan in place to keep the equipment running and site operational is important.
“Car wash remains the most profitable center in the convenient store business,” declared Amer Hawatmeh, president St. George Oil Inc. in St. Louis, Mo. He believes eye appeal in the form of a well-cared-for facility is crucial to the success of an operation and an often overlooked component to customer satisfaction.
“As they say, cleanliness is next to godliness,” said Hawatmeh. “If a consumer can see a clean and well-organized, well-maintained facility, he perceives that his car is equal to that, and is always happy to spend the $9 or $10 that should be charged.”
Regular preventive maintenance is just as crucial. A clean, well-organized, well-working machine with the proper chemicals in the proper temperatures of water give the best performance for the machine, added Hawatmeh, “which is obviously what you want to accomplish to get the customer to come back.”
Not every convenience store operator, however, has met with unqualified success in selling car washes. The fact is location and competition are still critical for success.
“I am sorry to say we will be getting out of the car wash business,” said Sam Odeh, president of Downers Grove, Ill.-based Power Mart, which has 25 locations in Illinois, Georgia and Florida. “More than half of our car wash sites have completely shut down their car washes.” Odeh said there are three primary reasons that he wants out of the car wash business:
- Maintenance costs;
- Utilities cost increases, especially water;
- Aggressive competitors with unlimited monthly wash plans.
Odeh said that a car wash offering can add a lot to a c-store. But like any other segment of a retail operation, it requires ongoing commitment and focus.