Advance Auto Parts plans to open five new stores on Long Island this year as high prices for new and used cars prompt more consumers to keep the vehicles they own rather than replace them, the company said.
According to analysts, increased auto and auto body repairs on older cars are among the reasons why the auto parts retail industry as a whole is experiencing strong sales growth, while new and used car sales continue to lag.
The five new Long Island stores that Advance Auto will open this year, in Port Jefferson Station, North Massapequa, Levittown, Lynbrook and Mineola, are among 60 opening nationwide, said Eli Rosa, vice president of Advance Auto operations in New York.
“There are several factors that influenced our decision to open new stores on Long Island. More used vehicles are being purchased and motorists are choosing to keep their vehicles longer, leading to an increase in average age of vehicles on the road. As the age of the vehicle increases, so does the demand for parts needed to perform the necessary maintenance,” said Rosa.
what to know
- Advance Auto Partswhich has 33 stores on Long Island, will open five more local stores this year: in Port Jefferson Station, North Massapequa, Levittown, Lynbrook and Mineola.
- High prices for new and used cars they are among the reasons why vehicle owners keep their cars longer instead of replacing them, which has led to higher costs at auto parts stores for maintenance.
- National average purchase price of a new car hit a record high of $48,516 in December, but had fallen to $47,749 in March, still 5.8 percent higher than the price a year earlier, according to Edmunds, an information firm in automotive retailer based in Santa Monica, California.
By adding stores, the Raleigh, North Carolina-based company is also trying to catch up with fellow parts retailers after years of store closings and lower profit margins, analysts said .
About 60% of Advance Auto’s sales come from repair shops and other commercial customers, while 40% come from do-it-yourself buyers.
Advance Auto Parts Inc. has 33 stores on Long Island, including one it opened in Oceanside in June.
Here’s the rundown of the five Advance Auto stores opening on Long Island this year:
Port Jefferson Station: The store will occupy a portion of Pep Boys’ 8,384-square-foot space, which will be downsized at 5170 Nesconset Hwy. The Advance Auto store will open in May, Rosa said.
North Massapequa: Advance Auto is leasing an 8,615-square-foot space at 817 Hicksville Road in Massapequa Plaza formerly occupied by a Goodwill, said Marvin Hartman, a broker with Garden City-based Pliskin Realty and Development Inc., which represents the retailer. The store will open in June, Rosa said.
Levittown: The auto parts store will open in a 6,935-square-foot space that a women’s clothing store in Mandee vacated in February 2022, Hartman said. The store at 3337 Hempstead Turnpike in the Levittown Mews shopping center will open in July, Rosa said.
Lynbrook: Advance Auto leases an 8,000-square-foot former Rite Aid at 400 Sunrise Hwy., Hartman said. The store plans to open in the fall, Rosa said.
Mineola: Advance Auto has leased a 9,356-square-foot former CVS building, Hartman said. That store is also slated to open in the fall, Rosa said.
Avoiding dealers
For auto parts retailers, which are included in the auto parts industry, growth has been spurred by consumers quarantined at home doing repairs as a hobby before the COVID pandemic -19, and people who keep cars longer, said Seth Basham, a retail company. research analyst covering the auto parts industry at Wedbush Securities, an investment firm in Los Angeles. New and used car prices hit record highs due to supply chain issues, microchip shortages and factory closures.
But the biggest hit has been inflation — auto parts retailers are paying more for wholesale inventory, so they’re raising their retail prices to maintain profit margins, Basham said.
The auto parts and labor industry typically sees annual sales growth of about 4% from DIY and commercial customers, but it grew 8.5% in 2022 and is forecast to grow 5% by 2023, according to a report by S&P Global Mobility and two other groups.
Vehicle prices have fallen slightly over the past year, but remain much higher than before the start of the COVID-19 pandemic in 2020. Customers are also holding onto vehicles longer due to the lack of new vehicles produced, which makes them invest more in repairs. of older autos, which supports the aftermarket parts industry, said Daniel Imbro, managing director and equity research analyst for auto retail at Stephens Inc. in Little Rock, Arkansas.
The national average purchase price of a new car hit an all-time high of $48,516 in December, but by March the figure had fallen to $47,749, which was still 5.8% higher than the previous year’s price , according to Edmunds, an auto sales information company. based in Santa Monica, California.
The national average purchase price of a used car rose to an all-time high of $31,095 in April 2022. In March 2023, the average price was $28,729, 4.8% below the price of the previous year.
Baldwin resident Howie Frisch was at Advance Auto in Oceanside on Monday to check prices on brakes he wants to put on his 2015 GMC Yukon Denali.
He and his wife typically buy a new vehicle about every five years because they prefer vehicles with low mileage, but with the price of a new Denali approaching $100,000 now, the couple decided to keep their 2015 SUV, which is paid, he said. Frisch, 67, a retired auto mechanic.
“I would have had a new car by now. … Car prices are crazy,” he said.
Baldwin resident Jason Aguerre, 40, was at Advance Auto in Oceanside on Monday getting his 2007 Acura RDX battery tested to see if it needed replacing.
He has always bought his used cars from friends or family, in part because he prefers not to have monthly car payments and because insurance costs less for older cars, he said.
“And, you know, it’s a lot easier to fix an older car than those newer cars,” he said.
Different motivations
Advance Auto is in a different position than its publicly traded peers, such as AutoZone and O’Reilly Auto Parts, because it has been closing unprofitable stores for several years and losing market share, analysts said.
The number of Advance Auto company-operated stores fell 9.9% to 4,770 between February 2014 and December 2022.
In the fourth quarter of 2022, Advance Auto’s net sales grew 3.2% to $2.5 billion compared to the prior-year period. But sales at stores open at least a year grew 2.1%, most of which were led by mid-single-digit DIY sales, such as increases of 5%, 6% or 7%
In 2022, Advance Auto opened 144 new stores and offices.
