Sears Canada announced in late March its intentions to lease the service bays in its Canadian operations to service vendors. That same month, U.S.-based parent, Sears, Roebuck and Co., opened its second Sears Grand store in an attempt to compete with Wal-Mart and other mass merchants on certain items, including automotive products. The moves, although independent of each other, left us wondering where the $41 billion retail giant is headed with its automotive offerings.
Canadian companies Kal Tire, President Tire and Active Green & Ross will operate 36 of Sears Canada’s 49 auto centers in their respective markets across Canada starting this month. The three auto service and tire providers will operate under separate licensing arrangements and their own banners. The remaining 13 service center locations will be closed and more than 775 Sears Canada employees will be affected by the move.
“In recent years, there has been significant change in the automotive aftermarket industry in Canada,” stated Brent Hollister, president and chief operating officer, Sears Canada, when announcing the decision. “That change requires sophisticated equipment and capital investment in an area of expertise, which Kal Tire, President Tire and Active Green & Ross are clearly focused and better able to support within their corporate strategies.”
From the outside looking in it would appear the move to lease service bays in Canada could be adopted south of the border to reduce costs. However, Sears in the United States doesn’t consider leased bays to be a viable option. Sears Spokesman Bill Masterson told Aftermarket Business the Canadian operation is entirely independent and Masterson does not foresee any similar move with the roughly 800 Sears Auto Centers in the U.S.
“We have no plans to change any of our Sears Automotive Center operations. They will continue to be part of Sears,” Masterson says.
Meanwhile the chain has been developing its Sears Grand pilot program. Two stores – one near Salt Lake City, Utah, the other just outside Chicago in Gurnee Mills, Ill. – have been opened under this model. Unlike the mall locations, these stores are freestanding behemoths (more than 200,000 sq. ft.) designed to attract customers interested in everyday shopping. They also have a dozen service bays.
Shoppers will find a diverse selection of convenience items and services, including a broader selection of automotive products. Fast moving SKUs such as car wash chemicals, waxes & polishes, floor mats, etc., have been added in this new model, Masterson says.
“The idea behind Sears Grand is to offer more everyday items for consumers who stop there more regularly. Expanding the automotive products is just an extension of that concept,” he says.
Other non-automotive additions to the Grand stores include milk, diapers, books, CDs and DVDs, pantry items and more. Because these stores are in the testing phase, and because the Illinois store just opened in March, Masterson did not want to share any details about how they are performing.
For distributors this test is worth watching, especially if they perform well. More Grand stores would mean more, fast moving SKUs in the retail environment. Masterson says the number of bays in the Grand locations will likely rise or fall depending on the demographics of the area, but additional service bays could add some business for jobbers selling parts to these outlets.
Sears is remaining fairly tight lipped about this project for competitive reasons. Masterson would not tell us where, when or if future Grand stores are scheduled to open. If we hear of new openings or gain greater insight into this pilot program, we’ll let you know.
