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Product Showcase
GetGo’s WetGo Pro car washes offer free air, free-to-use microfiber towels and vacuums.
Mach1 convenience stores in Illinois saw a 6% drop in wash counts when the pandemic arrived, but revenue held flat because the customers using the car washes were purchasing higher-priced washes. It also didn’t allow a pandemic to slow its expansion plans, opening two travel centers in 2020, both of which included car washes.
The chain’s monthly memberships stayed consistent as well, providing a predictable revenue source, noted Michael Meyer, facility operations officer for Meyer Oil Co., which owns and operates 23 Mach1 convenience stores in Illinois, 19 of which offer in-bay car washes. “Six of the sites have two in-bay washes — both a soft touch and touch-free option. And finally, at three of the sites, we offer manual wash bays,” he said.
Having all in-bay units helps keep labor costs manageable and allows the chain to keep the washes open 24 hours, Meyer added.
Now, car wash demand appears to be on the rise. “Summer of 2021 is looking very optimistic compared to the same timeframe as last year,” Meyer said. “Wash counts are up around 6% and revenue is up around 10%.”
GROWTH AHEAD
The U.S. car wash service market size is predicted to climb to $20.74 billion by 2028 and is expected to expand at a compound annual growth rate (CARG) of 4.8% from 2021 to 2028, according to “U.S. Car Wash Service Market Size, Share & Trends Analysis Report by Type (Tunnels, Roll-over/In-bay, Self-service), and Segment Forecasts, 2021 – 2028.”
According to the report, roll-over/in-bay car washes dominated in 2020 at 41.8% share of the market as their low operating costs, small footprint and low water consumption make them attractive to operators. This trend is also being driven by auto dealerships entering the car wash market and selecting in-bay units. In-bay washes are expected to expand at a faster CARG than other car wash types during the forecast period, the report noted.
Self-service-type washes are also growing in popularity as more customers prefer to wash their vehicles themselves. This segment is predicted to grow at a CARG of 4.9% from 2021 to 2028, per the report.
WETGO PRO
When the pandemic first hit last spring, the industry saw a slowdown in car washes, noted Sean McBride, vice president of carwash at GetGo Café + Market, which operates 266 c-stores in Pennsylvania, Ohio, West Virginia, Maryland and Indiana, as well as 41 car washes — 29 conveyor car washes and 12 touch-free washes. “We rolled our sleeves up. Where a lot of (car washes) decided just to shut down and/or hunker down, GetGo and Giant Eagle as a whole decided they wanted to try and serve the neighbors as best as they could (including with car washes),” McBride said. “We pushed forward as best as we could with new protocols. Sometimes they were coming over by the day.”
The work paid off. Despite industry trends, GetGo car wash volumes have stayed consistent during the pandemic. “We had a growth year last year,” he said. McBride attributed that growth to the chain’s car wash subscriptions, and the mid-pandemic launch of its new WetGo Pro car wash, which rolled out to the Pittsburgh market in fall of 2020.
WetGo Pro washes feature a longer wash tunnel, cutting-edge cleaning equipment and faster wash times. Plus, it provides a suite of free-to-use options, including free vacuums.
So far, GetGo has converted 10 of its existing locations to WetGo Pro locations, with four additional car washes set to be converted to the WetGo Pro model by Nov. 1 of this year.
“When we launched the WetGo Pro series, we converted the sites to having multiple lanes in the front, with a full-time concierge working there,” said McBride. This ‘dual-gated access method’ is a first for the Pittsburgh area, according to GetGo, and includes a designated lane for car wash subscription members. “The concierge is working the lines to influence subscription sales, as well as navigate the customers through the point of sale if they’re struggling a little bit. And that’s greatly helped us with our processing speeds,” McBride said. “We try to make it a twoperson operation, so one person’s managing the kiosk, and one person’s managing the car wash.”
WetGo Pros feature a modern building design and measure 120 feet in length. They also offer natural lighting to eliminate light transition. Customers remain in their car for the wash as it is guided through the tunnel, where it is washed with soap and numerous brushes, rinsed with a spot-free solution and dried with high-powered touchless driers.
“Inside the wash tunnel, we did add some horsepower cleaning,” McBride added. GetGo also added various components to help the washes run cleaner and more efficiently.
GetGo is known in Pittsburgh for offering free air, so it seemed a fitting extension to offer free services attached to the car wash as well.
“At the exit, each facility has somewhere between eight to 10 free vacuum stations,” McBride said. In addition to free air, GetGo added free-to-use microfiber towels and free mat cleaning.
“There’s a little machine that lets customers stick the mat in, hit a button, and the mat goes in one end, comes out the other end,” McBride explained.
Once the next four car washes are converted in November, GetGo is switching gears to a new-build strategy, as many of the existing car washes are not able to be converted to the WetGo Pro model, due to layout constraints at the existing sites.
The company opened its first new-build WetGo Pro site in November 2020 in Latrobe, Pa. “We plan to build 10 new sites over the course of the next 24 months,” McBride said. Five of those car washes will be standalone sites, four will be built on upcoming GetGo sites, while one will be added to an existing GetGo location. “On the new-build sites, we’re building the tunnel to 125 feet, and we think we’re going to have processing hours of 125-plus cars an hour that we’re able to wash there,” he said. Each wash is expected to take about two minutes. WetGo is also putting a focus on its subscriptions. “Wash subscriptions aren’t that new to the car wash business, but I think it’s still somewhat new to the c-store business,” McBride said. That’s because many convenience stores don’t have the car wash scale to implement the program. “We’re unique in the fact that we had a lot of conveyor washes for being a c-store, not a lot of touchfrees. Knowing that we had unused capacity, it made sense to us to start offering a subscription to expedite the process quicker,” he said. “We offer subscriptions for as low as $17.99 for the base package.
And then, $34.99 is our top package. We’re finding, right now, that about somewhere between one-third to one-half of our business is now coming from the subscription service.” Subscriptions offer a “win-win” for both car wash operators and customers, McBride noted. Customers save money on car washes, especially if they plan to GetGo opened its first new-build WetGo Pro site in November 2020 in Latrobe, Pa., and plans to build 10 new sites over the next 24 months.
GetGo plans to connect its existing loyalty brands, including its car wash program and its AdvantagePay and Giant Eagle Shoppers program.
wash their car more than twice a month, while operators are no longer at the mercy of weather patterns.
Thanks to subscriptions, “we have good income flow coming in no matter what,” McBride said.
Now, GetGo’s set to take its car wash subscription program to the next level. “We have our other existing loyalty brands, with AdvantagePay and Giant Eagle Shoppers. And we’re going to be connecting these programs into a larger loyalty program. So, imagine if you were in all three, you’re going to get an Amazon Prime-type experience.”
LOOKING AHEAD
Mach1 has kept its car wash promotions steady throughout the pandemic. “Our primary promotion of offering a fuel discount with a wash purchase has stayed strong as long as our fuel gallons continue to grow,” Meyer said. Like WetGo Pro, Mach1 car washes also feature free vacuums to incentivize its customers to visit its washes over the competition.
Looking ahead to the end of 2021, Meyer said several factors, including the price of fuel, the overall economy and the weather, will determine whether sales end the year on a high note. For example, if the fall weather brings dry and dusty conditions, more customers are likely to opt for car washes, leading to strong fall car wash sales.
Meanwhile, “if fuel continues to rise, consumers will have less discretionary spending on non-essential items,” he said.
Still, today’s landscape continues to look different than it did pre-pandemic. “The morning rush hour traffic just isn’t there,” McBride said. “It doesn’t kick in until later. That holds true as you look at gas transactions right now, too. At some point, we hope to see that uptick, and/or the business comes back between the 7 a.m. to 9 a.m. hours, but that’s the only pocket that I still haven’t seen really come back.”
Car washes, like most retail segments, are also facing the hurdle of the ongoing labor shortage brought on by the pandemic. This is one of the biggest challenges facing car washes, which need employees in various capacities to keep the washes running, McBride noted.
“I would tell you that for the full-serve operators, I don’t think their business is ever coming back. I think it’s attributed to mainly the labor side of it,” he added. “They’re not going to be able to find the (employees) to be able to clean the inside of these cars. When you look at the full-serve power-wash market, on busy days, there would sometimes be upwards of 30 people working one shift.”
McBride expects to see more car washes across the industry as a whole to start shifting services onto the customer, such as offering an exterior-only wash and providing free vacuums and towels.
For the rest of 2021, “as far as the business cycle goes, I think for the most part, you should be flatter, better depending on the weather,” McBride predicted.
“The economy seems to be okay, depending on who you’re talking to. One person will tell you it’s going to crash any minute. Another person will tell you it’s still on the rise. But I think, right now, a lot of things would have to go bad for a customer to cancel their $30 wash subscription right now. Especially if they’ve gotten used to using it,” he said.
At press time, McBride said he hoped hurricane season would start to decelerate.
Fingers crossed for a dry, dusty fall. CSD
Evaluating REAL ESTATE Sites
Creating an evaluation procedure for site selection can help c-stores streamline the decision-making process.
John Matthews • Gray Cat Enterprises
Evaluating potential new sites for the multi-unit operator can be a daunting task. The operator is constantly chasing several potential opportunities — whether through new builds or through acquisitions — only to have a few select sites come to fruition.
Complicating the site selection process is generally a lack of an evaluation tool that can be used for all departments that are a part of the decision-making process. This evaluation tool should address all the components of the site: location, build-out and remodel costs, landlord terms, a financial Proforma, etc., to provide a complete assessment of the property. Following are the key components to include in your real estate site evaluation form.
STEP 1: IDENTIFY NEW POTENTIAL SITE
First, you need to identify the site attributes. Where is it located? Who is the site owner? When does the lease begin and end? In addition, the real estate team should assess what classification the premises should be tagged — is it in a residential area? Industrial? Retail? The site attributes should also indicate the size of unit and the other tenants that are in the center (if applicable).
Tenant:
Site Owner:
Address:
Premises Classification: (Circle One) Residential Retail Never Developed Light Industrial Recreational
Site Dimensions (in SF): Delivery Date: Rent Commencement Date:
City/Town:
Commerical Heavy Industrial Currently Farmed Forest Conservation Area
Other Tenants:
State:
STEP 2: SITE RIDE AND REVIEWS
Next on the list should be an assessment of the demographics that make up the potential site. Determine what is the ethnicity mix for the unit. Also, based on the location and whether the demographics support a growing area, you should assign an overall grade to the viability of the unit.
Is it on a busy corner with easy access in a growing area? If so, that would be an “A” rating. A midblock location with access from a divided highway may garner a “B” or “C” rating. Lastly, most retailers have different tiers of their stores from basic to a flagship or premier location. Now would be a good time to label the anticipated unit here.
After the demographics and the site rating are complete, an overall evaluation of the general area should be completed. Assess the overall condition of the area and streets. Does the traffic flow freely? Is it walkable? What are the impediments to customers visiting the site? Overall, is the site accessible as well as visible? In addition, you should start thinking about the product mix based on the demographics as well.
Condition of Area: Condition of Street:
Traffic Congestion: Adjacent Land Use: Describe Site Access - Ingress & Egress:l
North:
Major Stores Affecting Location: Parking:
North:
Accessibility of Site:
South: East:
Visibility:
South: East:
West: West:
Objectives: (why will this property be an asset for the company?) Initial Evaluation: (description of location including main features in favor and against the property) Site Features and Topography: (ie. elevations, unique natural features, site slope, cliffs, hills, depressions, erosion, sedimentation, drainage paths, etc.)
Walkability Rating:
Risks: (what in the property may pose a risk for the company?)
Product Options: Other:
STEP 3: PRELIMINARY CONSTRUCTION COSTS
Now it is time to have the facilities team make their assessment. The team should be looking at all the costs for the build-out or remodel of the unit including permitting, design, construction, equipment and capital labor. At this point, the facilities team should have a ballpark number in hand to hand over to the operators so that they may build their Proforma model.
1 Permits & Design $ 4 Capital Labor
$ 2 Construction $ 5 Miscellaneous $ 3 Equipment & Fixtures $ 6 Overhead & Profit $
Armed with the capital costs to build the site, the operations team should plug its projections into the financial Proforma. Included, but not limited to, should be the following: sales revenue, expected gross margin, operating expenses, rent, other income and taxes.
STEP 4: ESTIMATED SITE ECONOMICS
With that information as well as the expected buildout cost, the financial Proforma can be created, and the return-on-investment (ROI) can be determined. Most Proforma’s are projected to 10 or 15 years and the operations team can provide the annual escalators to their projections.
STEP 5: SITE AND FLOOR PLANS
To further explain the site, the following documents should be included in the real estate site selection package: Site plans, floor plans, elevations and pictures. Pictures should include street views, overhead images from Google Maps and street maps.
STEP 6: LOI AND NEGOTIATION
Next, the real estate team should include the Letter-of-Intent (LOI) from the landlord for all to review if this is going to be a rental location. Included in an LOI should be the landlord information, the uses, the guarantors, restrictions, etc. In addition, the LOI should include items pertaining to the terms from the duration to the options and any out clauses. Next up, outline all the rents, PSF (per square foot), CAM (common area maintenance) charges and any other additional charges. Lastly, the LOI should include taxes, insurance, security deposits, broker fees and signatures.
STEP 7: SIGN OFF
Once the evaluation site attributes are complete, the owners of each section review the overall document and determine to either go forward with a signoff or kick it back to the team for further evaluation. This is the moment of truth for the site. The business owners of their respective areas must be aligned here for the site to move to the final approval stage.
STEP 8: FINAL APPROVAL
At this stage, the executive team either blesses or sends the site back for further evaluation. Generally, if the executive team has worked in tandem with the business leaders in identifying the attributes they are looking for in a new location, this approval process should be simple.
In summary, having structure around your site selection evaluation will streamline the process for all parties involved and enable an organization to move projects through the pipeline much faster (or eliminate potential sites quicker). When an organization is trying to grow — organically or through acquisition — it is prudent to have the necessary backup for each new site so that when you do a post-analysis in the future, you can refer to the documented decisionmaking process for each location.
Title
VP, Real Estate Director of Operations Director of Operations Facilities Business Development Typed Name Signature Date
John Matthews, president and CEO of Gray Cat Enterprises Inc., is responsible for the management of all consulting activities for the firm, which include retail consulting for multiunit operations, interim executive management and project management. Prior to founding his own company in 2004, Matthews held senior management positions as president of Jimmy John’s Gourmet Sandwiches and as vice president of marketing, merchandising, facilities, corporate communication and real estate at Clark Retail Enterprises Inc. Additionally, Matthews worked for nine years in marketing management as the national marketing director of the Little Caesars Pizza Corp. He can be reached at john.matthews@graycatenterprises.com.
