ATS Euromaster “Comfortable” with Reduced 380 Location Offering

ATS Euromaster has merged or closed 80 branches in the past year, as a result of the consultation exercise reported by tyrepress.com in September 2009 (see ‘ATS Euromaster “Reviewing” 80 Branches’ on tyrepress.com). In the time since that article, there has been a shift from the regional organisation towards a segmentation of the organisation of the business into Retail, Comprehensive and Truck, which group operations director Chris Hufflett characterised as giving “more emphasis” to the needs of the customer when he spoke to Tyres & Accessories. An additional element of this increased customer focus is the “significant investment” in mobile service vehicles, he continued, leaving ATS-E able to meet the figure of 10,000 breakdowns every month. And further investment in the ATS-E network is to come in the form of “£6 million rolling investment”, which will mainly go to “stronger locations”, MOT servicing, some location scouting and the continuing process of refurbishing and improving the facilities available in outlets.

Speaking about the smaller number of branches now operating under the ATS Euromaster banner, Hufflett suggested, perhaps unsurprisingly, that rather than viewing the decrease in the number of stores as a downgrading of ATS-E’s position in the market, the reduction in locations should be viewed as a positive decision to move away from smaller centres in favour of larger sites offering greater service level opportunities. “People can get hung up over the number of stores,” he said, arguing that instead there was a “critical mass” for the type of service ATS-E wants to offer. He says the focus for ATS-E is to sell more through its existing centres, while also pointing out that the network was “comfortable with meeting drive times” acceptable to customers (a figure he says company research puts at around 15 minutes for retail customers, and more for truck).

He also explained that from the network’s point of view, small centres are “broadly speaking not good in economic terms”, especially given conditions over the past year and a half. Instead, consolidation has been necessary, hence the stronger focus on larger existing stores and those created by merging smaller locations. With “top retail locations” gaining a turnover of “around £1 million” on average, it is clear that ATS-E wants to emphasise its depth of service offering ahead of its breadth of local coverage, at least in terms of centres. However, the presence of 900 service vehicles should go some way to alleviating the potential strain of losing 80 centres. Although with 380 centres still in operation – a number that represents an approximate “critical mass” for the present-day ATS-E – the network is still the UK’s second largest behind Kwik-Fit.

With Halfords’ promise to proceed with Nationwide Autocentres’ planned increases on the 224 outlets it held when the buyout took place and the growth in coverage and of other players in the market, will ATS-E’s streamlined network continue to function in its current form alone? On the continent, Euromaster will present information on its new European franchise concept from the Michelin stand at Reifen 2010 (see Reifen Preview in this issue for more details) – could the UK be another location for franchise plans?