N O W A T T H E C A R W A S H : Dog Shampoos And W I - F I To Counter Big-box Rivals

Thursday, June 15, 2006

Small Shops Soup Up Services More Horsepower for Drying

THE BATTLE IS ON to primp your ride. Facing growing competition from the likes of Home Depot Inc. and Sam's Club, car washes around the country are launching new services aimed at grabbing customers' interest. Some are promising shorter cleaning times and opening plush waiting rooms with Wi-Fi service. Others are pitching Netflix-style discount plans in which customers pay monthly for unlimited washes. Some are even washing the family dog. The changes are striking in a conservative business long dominated by mom-and-pops and small chains. But technological shifts that have cut labor costs are making the car-wash business more profitable and attracting a number of new and formidable entrants. At the end of April, Costco Wholesale Corp. opened a test car wash at a Seattle store; Home Depot opened convenience stores with gas stations and car washes earlier this year at two stores in the Nashville, Tenn., area; it hopes to open another location in Atlanta later this year and more down the road. Nine Sam's Club locations now have car washes, and the company, owned by Wal-Mart Stores Inc., anticipates opening more. Wal-Mart already has five Murphy Oil Corp. car washes at its stores. Meanwhile, many gas stations, convenience- store and gas chains like QuikTrip Corp. and even car dealerships have expanded their car-wash operations. The technological changes include more-powerful drying systems (100- plus horsepower, compared with 30 horsepower previously) that have cut out the need for human dryers at the end. Car washes are also automating payment and finding ways for drivers to load their cars onto the conveyer belts or into the wash without humans helping. Some companies, including Home Depot, have dispensed with the conveyer belt; they clean the car in a garage-like bay that consultants say is cheaper to install and operate, using equipment that adjusts to accommodate vehicles of different sizes. Many big-box retailers and gas stations are using the latest technologies to offer a cheap, no-frills car wash, at prices as low as $4 to $6. Most of their washes just clean the exterior of the car -- unlike the traditional full-service wash, with interior cleaning and extras like hand waxes and detailing. At smaller car washes and chains, a basic full-service wash can cost $7 to $18, though some offer exterior car washes for as little as $2 or fancier washes for $50 or more. Though some smaller car washes have also adopted automating technologies, the big-box retailers and gas stations have siphoned off some customers. According to the International Carwash Association, an industry group in Chicago, about 46% of car washes now are automated car washes at gas stations, up from about 40% six years ago. Gary Burns, a 53-year-old insurance agent from Woodland Hills, Calif., in the past year switched from a full- service car wash to a gas-station wash. "It was not only less expensive, it was more convenient," says Mr. Burns, who gets his Acura RL washed after filling it up with gas. Traditional car washes hope their new offerings will attract back customers like Mr. Burns. This spring, Turtle Wax Inc., which operates 20 full-service car washes in the Midwest, says it cut the duration of its basic $12 wash to 10 minutes or less from more than 15 minutes previously. Turtle Wax increased a measure it calls tunnel speed by about 10%, and it now uses two employees per car, rather than one, for tasks like interior vacuuming and drying. Turtle Wax says it should be able to average 100 cars per hour on a day with good weather, up from 60 cars per hour. It has already added Wi-Fi to some waiting rooms, and next year, it plans to roll out more services, including personalized greetings for customers (recognized by their license-plate numbers), new "aromatherapy" scents for vehicles, such as lavender, and waiting rooms featuring Internet kiosks and turtles in decorative aquariums. Other car washes are adding services varying from valet washing to convenience stores to oil changes. Castle Bay Car Wash in Bentonville, Ark., will pick up your car at your home or business and bring it back clean in 11/2 to two hours for $50. ProntoWash USA LLC, which has 21 U.S. locations in malls and office buildings, will wash your car while you shop or work. (The cost ranges from $15 for an exterior wash of a regular vehicle to about $200 for a deluxe wash, including exterior hand waxing and interior shampooing, of a Hummer.) In March, Michigan chain Jax Kar Wash launched a 48-hour clean-car guarantee that enables customers to bring their car back for a free wash within two days if they aren't satisfied, and Fire House Car Wash locations in Colorado now give the fourth wash free to customers who buy a package of three coupons ($47 to $68 total depending on the extent of the wash). Then there's the spread of the dog wash. Last fall, central Illinois chain Car Wash City opened a dog wash where customers pay as little as $2 to shampoo their canines. Pioneer Car Wash & Detail in Draper, Utah, and Dog Gone Clean in York, Pa., have also opened dog-washing stations this year. (The Yellow Submarine Carwash in Medford, Ore., opened with a dog wash earlier this year but closed it, partly because the dogs soiled the landscaping, barked at each other and ran around without leashes.) In Arizona and California, Wash Depot Holdings Inc., a chain of 72 full-service car washes in 13 states, offers a $21.99-per-month pass for unlimited washes, and Autobell Car Wash Inc., with 44 full-service locations in North Carolina and Virginia, introduced a similar $39.95 monthly unlimited plan last year, compared with the $12.95 cost of one basic, full-service wash). Car washes hope new pricing plans will help them increase revenue from the customers they do have. The Mister Car Wash chain just launched a monthly "Unlimited Wash Club" for exterior washes in Houston, its largest market, and now offers it in four states. John Lai, vice president of market development, says the plan, which costs about $20 per month, can quadruple what the average customer spends annually. There are limits to the new offerings, however. The monthly unlimited passes generally are tied to one license- plate number, so consumers wanting unlimited washes for several vehicles would need to buy several passes. Sometimes, customers also have to buy a certain number of months to participate. To join the Autobell Wash Club, for instance, customers need to agree to buy at least a six-month membership. Car washes also typically tack on extra charges for bigger vehicles. The explosion of incentives to lure people into car washes may just be beginning. Besides the big companies, more individual investors, including stockbrokers, doctors and lawyers, are getting into the car- wash business, say consultants like Harvey Miller, an industry consultant in La Quinta, Calif. Meanwhile, the pool of potential car- wash customers may actually be shrinking for now. The car-wash association says that typically, consumers squeezed by high gas prices temporarily cut down on car washes.

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