Q2 update: Momentum builds in DIFM channel

Aug. 2, 2013
Pent up consumer demand for repair work lets loose.

Each month, we survey the owners of more than 300 automotive repair facilities to get a read on consumer demand for auto parts and service work. According to the results of our surveys, sales trends in the "do it for me" (DIFM) channel showed improvement during the second quarter as sales grew year-over-year and growth seems to have accelerated sequentially with the strongest trends coming in the first half of the quarter. 

The unseasonably cool temperatures across the country had the effect of shifting some routine maintenance work from the DIY channel to professional installers, which likely explains the sales strength that technicians reported early in the quarter. Additionally, we would be remiss not to remind readers that business trends in April had the added benefit of a favorable calendar shift. Specifically, Easter occurred in March this year versus April last year, which means that the garages that are open on Sunday essentially had an extra operating day this year.

Traffic Trends Improve  

Whether it was driven by a favorable calendar shift or unseasonably cool weather, one thing is clear: traffic trends were stronger than they had been in some time. Indeed, numerous contacts indicated that their monthly car count statistics were better than they had seen in months, as consumers reappeared to perform long-deferred maintenance work. While we would not characterize traffic across the industry as overly robust, the fact remains it has gone from a headwind to a tailwind in recent months. 

Outlook Remains Optimistic

As we look ahead, most technicians see a continuation of favorable demand trends. The reasons typically given for the upbeat outlook are: 1) easy comparisons on the horizon (recall that summer sales were very challenged last year); 2) the recent re-emergence of the consumer in garage bays has technicians thinking that a release of pent-up demand is beginning; and 3) a more favorable macro environment that is punctuated by relatively stable gas prices. While the technicians in our survey are optimistic that positive business trends will continue through the summer, we want to see how business fares in June (survey not completed at the time of release) and July before we get too excited about demand trends, as we have concerns that a weather-related mix shift from the DIY channel is responsible for the recent uptick that garage owners are reporting.  

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