New tire outlet comes to ‘Les Schwab Country’

Published 5:00 am Wednesday, August 9, 2006

Central Oregon’s tire-selling business is getting more crowded as another longtime tire titan prepares to set up shop.

Next month, Scottsdale, Ariz.-based America’s Tire/Discount Tire Co. will open its first Central Oregon store in Bend, going hub to hub with Portland-based Tire Factory stores and Central Oregon’s own tire giant, Prineville-based Les Schwab Tire Centers, among others.

Tire industry experts say America’s Tire/Discount Tire Co. won’t threaten Les Schwab or Tire Factory, but consumers will benefit from increased price competition.

”Basically, I think ‘Les Schwab Country’ has grown quite a bit,” said Richard Nordness, executive director of the Northwest Tire Dealers Association in Kennewick, Wash. ”Just because (America’s Tire/Discount Tire Co.) is moving in next to Prineville, I don’t think that’s really noteworthy.”

What is unusual, Nordness said, is America’s Tire/Discount Tire Co. operating outside a major metropolitan area. That speaks to its interest in Bend’s growth, Nordness said.

Those most affected will be the smaller, independent tire retailers, he said.

”It is a competitive industry, and it’s increasingly more difficult for smaller, independent operators to be competitive,” Nordness said.

America’s Tire/Discount Tire Co. operates under the name America’s Tire in Oregon and parts of California because of trademark issues with the pre-existing Discount Tire Centers of Oregon and California, company executives said. In Washington, the stores are primarily called Discount Tire Co.

The Bend store, set to open Sept. 2, is located on U.S. Highway 97, near Lowe’s. It’s the first of what America’s Tire/Discount Tire Co. officials hope could become an expanded Central Oregon presence. It already has seven stores elsewhere in the state.

America’s Tire/Discount Tire Co. is sort of the Les Schwab of Arizona, Nordness said, noting that the company started in Ann Arbor, Mich., and relocated corporate headquarters to Scottsdale in 1987.

Like Les Schwab, America’s Tire/Discount Tire Co. has been in the industry for decades, since 1960. Les Schwab tires has existed since 1952.

Both companies are privately owned.

While outnumbered locally in stores, America’s Tire executives hope Central Oregonians will see a difference – and choose them. In order to compete for customers in the heartland of Les Schwab territory, America’s Tire is focusing on its large inventories of brand-name tires including Goodyear and BF Goodrich, at competitive prices, said Steve Beiser, regional vice president of the company.

”We haven’t gotten to where we are today by offering high prices and poor choices,” Beiser said. ”Our (business) model is to guarantee the lowest prices and best service.”

The company has more than 600 stores in 19 states. In 2005, sales hit $2 billion, said Joseph Valdez, public relations executive for The Lavidge Co., representing America’s Tire/Discount Tire Co.

Whereas America’s Tire focuses on the top tire brands, Les Schwab offers more exclusive, in-house brands, Valdez said.

Les Schwab has 405 stores in Oregon, Idaho, Washington, Montana, Utah, California, Nevada and Alaska, said Les Schwab representative Mary Jo Grimes. Of those, eight are located in Central Oregon.

Company sales are expected to hit $1.5 billion for 2006, she added.

Grimes refused further comment.

America’s Tire executive Beiser said although he admires the company Les Schwab has built, ”people deserve choices.” He believes his company’s reputation will keep customers coming back.

”We’re not going to change anything in the Bend store than any other store,” Beiser said. ”We just want to service our customers.”

Unlike Les Schwab Tire Centers, America’s Tire is not a full-service tire operation, which means it does no mechanical work, said Nordness, of the Northwest Tire Dealers Association.

America’s Tire does not, typically, offer cheaper products, Nordness said. But its brand-name stocks might lure customers.

”Discount may have some brand-name tires that aren’t necessarily brands that you are going to find through other distributors,” Nordness said. ”Brand choice is what they’re looking at. And when you’re buying in volume, it is a competitive market.”

Les Schwab, Tire Factory and America’s Tire can compete on price by buying large stocks of tires at the wholesale level, but smaller retailers often can’t afford it, Nordness said.

For David Cook, co-owner of Bend’s Goodyear Auto Care Inc., the entrance of another large tire retailer in Central Oregon is one more hurdle in an already difficult industry.

Profit margins on tires are low, Cook said, and tire prices have increased 20 percent for him in the last four years, reflecting higher energy prices. Petroleum is used in tire manufacturing.

Cook says he’ll match any competitor’s tire price that he can, but with companies like Les Schwab, Tire Factory and Wal-Mart in the area, business is increasingly tough.

That’s why his business focus is on brake alignments and other auto services.

”If I had relied on tires, I wouldn’t have been in business for a month,” Cook said of his 15-year-old business.

Marketplace