Again, we turned to Jobbers to get their answers or suggestions about questions we asked concerning pricing.
Is this what customers depend on to purchase what they need from the source they regularly buy from or does it matter that much? Do they shop around for the best prices to get the job done?
Our first query was: how important is pricing for your customers?
Alex Parker of Carquest Cobourg told us that over the last few years, the pricing on most product lines has been steadily increasing. Some more than others but the increases have affected most product lines.
Hamilton Discount Auto (HDA) had this to add: “In a competitive market the easiest thing that shops pick on is pricing as they claim consumers are constantly shopping around.”
With the increased cost of doing business—inflation/interest rates, how has that impacted pricing on the parts and products you sell to your customers?
HDA: It’s had a tremendous impact as rising operating costs at Suppliers have caused these prices to skyrocket and with inflation ballooning pricing is at the most sensitive currently.
Are there any particular parts that are proving particularly price-sensitive?
Parker: Rotors, batteries and lubricants are a few lines where I have noticed a larger increase in price and customers are getting more sensitive to the cost and shopping around more.
HDA: Almost anything to do with brakes and visual diagnostics—those are parts that can be deemed broken and/or defective as consumers can clearly see these items are needed. These are most in demand.
What has been your solution to help mitigate some of the impact of rising costs for your business as well as maintaining and growing sales/demand from your customers?
Parker: To offset some of the pricing increases we have had to compare pricing between suppliers more than ever before to keep us competitively priced.
HDA: We have had to narrow our gross profit and increase the number of items we use as lost leaders to maintain customer confidence and give them a boost.
How do you see the situation related to parts pricing over the next 12-18 months?
HDA: Hard to predict that far ahead, this is a pass-on effect. If manufacturers can curtail operational costs and pass that on, we will adjust accordingly. This also depends on the interest rates, if new vehicle sellers start to drop borrowing rates, this will have an immediate effect on consumer repairing trends.
Parker: I am optimistic that pricing will begin to become more stable with gas pricing staying steadier and interest rates starting to lower. But with more shipping disruptions happening around the world that might not be the case.
Anything else you’d like to mention?
Parker: It might just be the time of the year, but I am also finding fewer customers looking for cleaning products, accessory items or performance upgrades for their vehicles. This is a trend that I started to notice last summer that I believe is due to customers not having as much spare spending money.
