Car washes are consistent money makers for c-stores, but evaluating how much revenue car washes can generate hinges on a range of factors from the type of car wash to the site’s location.
The car wash business is certainly resilient. The International Carwash Association (ICA) released its latest survey of car wash consumer expectations on Sept. 20, 2022, indicating durable demand during the recent gas price surge and strong usage intent in the coming months.
In the nationally representative survey of 774 U.S. adults conducted from Aug. 11-17, 2022, consumers were asked if their car wash frequency was impacted by the gas price volatility that began in March 2022. More than half (57%) reported washing the same amount or more frequently than before gas prices spiked. Now, in a decreasing gas price environment, nearly nine in 10 (86%) consumers expect to wash their vehicle about the same amount or more in the next 30 days.
“At GetGo, we’re proud to provide our guests with a convenient and eco-friendly option to clean their cars,” said Christopher Romba, WetGo regional business leader at Giant Eagle Inc., which owns and operates GetGo Café + Market. GetGo operates more than 260 locations throughout western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana.
GetGo offers 42 car wash locations all under the WetGo brand — except for 16 sites, which carry the moniker WetGo Pro. WetGo Pro sites include extras, such as dual lanes, free towels and free vacuums.
WetGo car washes are available in Indiana, Ohio and Pennsylvania.
The chain is in the process of opening its first standalone WetGo location in the coming months.
“From a business perspective, car washes can generate a lot of revenue with high profit margins,” Romba explained. “There are generally two types of car washes, and we have both across our footprint.”
In-bay car washes are touchless and usually operate autonomously. Tunnel car washes use a conveyor to pull the vehicle through a friction wash.
“Both types certainly have their place at convenience stores,” according to Romba. “Tunnel washes have a higher revenue potential, as you can feed vehicles through at a faster pace than at an in-bay wash, which can only wash one vehicle at a time.”
Giant Eagle has found that gift cards for washes and multiple wash packages make popular stocking stuffers. Mother’s Day and Father’s Day also tend to be a great time to promote car wash gift cards.
How much revenue a c-store’s car wash can generate can vary greatly, according to Steven Montgomery, president of b2b Solutions LLC in Lake Forest, Ill., a consulting firm whose areas of specialty include convenience retailing, retail operations and supplier and distributor networks.
Considerations that impact revenue include:
- Type of car wash
- Hours of operation
- Pricing, including member or subscription pricing
- Number and type of competitors and their pricing
Montgomery cited research reported in the National Association of Convenience Stores’ (NACS) ”2021 State of the Industry Report” in noting that car washes added to an existing site generated $10,389 per month of income.
“We typically see c-store P&Ls (profit and loss statements) with car wash gross margin in the 70-80% range,” Montgomery said. “However, the (percentage) can definitely vary outside that range based on some of the same factors that impact revenue, such the location’s pricing strategy and competitive set.”
Convenience stores used to offer a car wash discount when customers bought gas, noted Montgomery. “That practice has all but disappeared. Today, the most common promotions are a discount on the fuel price for the purchase of a car wash. Where allowed, this permits the retailer to post two prices — with and without a car wash.”
The technology involved in car washes continues to expand and evolve.
“Credit card readers are common. For those offering a subscription program, car wash license-plate recognition helps control the passing of a membership card to friends and family,” Montgomery said. “Others have installed vehicle-damage cameras to prevent false damage claims.”
WetGo regularly evaluates the new opportunities available to car washes through technology.
“There are now new intuitive tunnel wash systems that can automatically detect vehicle features like roof racks and trailer hitches to ensure the equipment doesn’t touch them,” Romba said.
Like Montgomery, he pointed to new state-of-the-art vehicle identification technology that can recognize license plates for guests who have subscriptions.
“This is an exciting industry,” Romba said. “And it’s continually evolving to make the experience easier, more efficient and more fun.”