Editor's note:
The following letter is in response to the March 2008 Bottom Line by Larry Silvey.
Dear Editor,
You are drinking too much AA (Advance/AutoZone) Kool-aid! I quote:"This is a fundamentals business . . . there's no substitute for hot shot delivery, parts availability, knowledgeable outside salespeople, knowledgeable counter people, logical and fair return policies and so on."
Your job is to report the truth about our industry! The time is soon coming when Wall Street will turn away from our industry.The retail house of cards is slowly falling apart. Wall Street doesn't want to hear about a mature industry with slower inventory turns and higher expenses.
Advance and AutoZone's cost of doing business are already high compared to traditional aftermarket distribution.They have raised their profit margins too high, so that the traditional aftermarket "jobbers" now offer the DIFM and DIY market better prices than the retailers do. It is time Wall Street understands "this is a fundamentals business!" Moreover, there is no magic or smoke and mirrors when it comes to the fundamentals.
Dan Walker
Vice President of Walker Auto Stores
Dear Dan, Actually, I think we're in agreement. Something must have gotten lost in the translation.Advance or any other auto retailer cannot have success with commercial accounts unless it, in essence, becomes a jobber.
Larry Silvey
Editor-in-Chief