Auto Parts Retailers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 15,400 auto parts retailers in the US sell automotive parts, supplies, and accessories. Companies may also sell batteries, lubricants, audio equipment, tires, and used products. While the majority of revenue typically comes from do-it-yourself (DIY) customers, large companies may have sizable commercial (do-it-for-me, DIFM) sales. Some companies offer repair, installation, or maintenance services.
Increasing Vehicle Complexity
The growing use of electronic components has increased the complexity of vehicles, resulting in a shift away from DIY jobs and towards DIFM.
Competition
Auto parts retailers compete with a variety of alternative sources, including traditional retailers (mass merchandisers, discount stores, hardware stores, supermarkets, drugstores, convenience stores) and auto dealers.
Industry size & Structure
The average auto parts retailer operates out of a single location, employs fewer than 20 workers, and generates about $3-4 million annually.
- The auto parts retailing industry consists of about 15,400 companies that employ 392,300 workers and generate about $57 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top 20 firms account for about 59% of industry sales.
- Large companies include AutoZone, Advance Auto Parts, and O'Reilly Automotive Stores.
- Some large auto parts distributors have retail operations.
Industry Forecast
Auto Parts Retailers Industry Growth
Recent Developments
Mar 7, 2024 - Producer Prices, Wages Up
- According to data from the Bureau of Labor Statistics, producer prices for automotive parts and accessories retailers increased steadily during the third and fourth quarters of 2023. Producer prices rose nearly 34% between 2019 and 2023, indicating a consistent growth trend. Employment levels in the industry have exceeded their pre-pandemic levels, having grown by 5% between 2019 to 2023. In recent years, wages have also risen significantly in a tight labor market, with average hourly wages up 3.3% in 2023 compared to 2022 and 32% from 2019, per the BLS.
- Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
- Hybrid market share is expected to grow in 2024 as consumers continue to see hybrids as a comfortable choice in a transition away from internal combustion engine (ICE) vehicles, according to Edmunds' “2024 Predictions” report in Repairer Driven News. The hybrid market share reached nearly 10% in November 2023, an increase of 99% year-over-year compared to the previous year’s 4.9% share. Hybrid vehicles are outpacing EV demand, as EV market share grew by 25% during the same period. According to Ivan Drury, director of insights at Edmunds, “Sales are taking off for the humble hybrid. You’d be hard-pressed to find a hybrid—they’re almost all sold out. They’re vehicles for people who want to live their life with more benefit and less complexity.” Shifts in consumer vehicle preferences affect demand for selected auto parts.
- More online shoppers would prefer free shipping over same-day delivery, according to a new Forrester report shared by Retail Dive. About 75% of US online consumers say that free shipping is among the most critical criteria they consider when deciding where to shop online, while only 20% selected next-day or same-day delivery as a key factor. Retailers such as Amazon, Target, and Walmart have invested in same-day and next-day delivery capabilities as a competitive differentiator to speed up delivery times for consumers. Nearly 50% of consumers surveyed by Forrester said the option for same-day delivery has little impact on which retailer or brand they will buy. The average delivery time cited in the article between placing and receiving an order was four days as of April 2023. Consumers have expressed interest in buying online and picking up at a nearby store (22%), curbside pickup (27%), and drive-through pickup options (15%).
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