DIY growth amid high car prices driving Advance Auto to open 5 LI stores, retailer says

Advance Auto Parts plans to open five new stores on Long Island this year, as high prices for new and used cars spur more consumers to maintain the vehicles they have instead of replacing them, the company said.

Increases in do-it-yourself and auto shop repairs on older cars are among the reasons that the auto parts retail industry overall is seeing strong sales growth while sales of new and used cars continue to lag, analysts said. 

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, Advance Auto’s vice president of operations in New York. 

“There are a variety of factors that influenced our decision to open new stores on Long Island. More used vehicles are being purchased and motorists are deciding to keep their vehicles longer, leading to an increase in the average age of vehicles on the road. As vehicle age increases, so does the demand for parts needed to perform necessary maintenance,”  Rosa said.

By adding stores, the Raleigh, North Carolina-based company also is trying to catch up to its auto-parts retail peers after years of store closings and lower profit margins, analysts said.

About 60% of Advance Auto’s sales comes from repair shops and other commercial customers, while 40% comes from DIY shoppers.

Advance Auto Parts Inc. has 33 stores on Long Island, including one that opened in Oceanside in June.

Here is the rundown on the five Advance Auto stores opening on Long Island this year:

Port Jefferson Station: The store will take an 8,384-square-foot chunk of the space from Pep Boys, which will downsize 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 Rd. in Massapequa Plaza that was formerly occupied by a Goodwill, said Marvin Hartman, a broker at Garden City-based Pliskin Realty and Development Inc. representing 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 Mandee women’s clothing store vacated in February, Hartman said.  The store at 3337 Hempstead Turnpike in the Levittown Mews Shopping Center will open in July, Rosa said.

Lynbrook: Advance Auto is leasing an 8,000-square-foot former Rite Aid at 400 Sunrise Hwy., Hartman said. The store is scheduled to open in the fall, Rosa said.

Mineola: Advance Auto has leased a former CVS building that is 9,356 square feet, Hartman said. That store is also scheduled to open in the fall, Rosa said.

Dodging dealerships

For auto parts retailers, which are included in the auto aftermarket parts industry, growth has been spurred by consumers quarantined at home doing repairs as a hobby earlier in the COVID-19 pandemic, and people keeping cars longer, said Seth Basham, a retail equity research analyst who covers 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 shutdowns.

But the biggest impact has been inflation — the  auto parts retailers are paying more for wholesale inventory, so they’re raising their retail prices to maintain profit margins, Basham said.

Typically, the auto aftermarket parts and labor industry sees about 4% annual sales growth from DIY and commercial customer sales, but it grew 8.5% last year and is projected to grow 5% this year, according to a report from S&P Global Mobility and two other groups.

Vehicle prices have dropped slightly over the last year but are still much higher than they were before the COVID-19 pandemic began in 2020. Customers also are keeping vehicles longer because of the lack of new vehicles being produced, causing them to invest more in repairs of older cars, which is supporting the aftermarket parts industry, said Daniel Imbro, managing director and equity research analyst for automotive retail at Stephens Inc. in Little Rock, Arkansas.

The national average purchase price of a new car hit a record high of $48,516 in December, but by March the number had fallen to $47,749, which still was 5.8% higher than the price a year earlier, according to Edmunds, an auto retail information company based in Santa Monica, California.

The national average purchase price of a used car rose to a record high of $31,095 in April 2022. In March 2023, the average price was $28,729, which was 4.8% below the price a year earlier.

Baldwin resident Howie Frisch was at Advance Auto in Oceanside on Monday to check out prices for brakes that he wants to put on his 2015 GMC Yukon Denali. 

Typically, he and his wife buy a new vehicle about every five years because they prefer vehicles with low mileage, but with the price of a new Denali close to $100,000 now, the couple decided to keep their 2015 SUV, which is paid off, said Frisch, 67, a retired auto mechanic.

“I would have had a new car already … Car prices are crazy,” he said.

Baldwin resident Jason Aguerre, 40, was at  Advance Auto in Oceanside on Monday having the battery in his 2007 Acura RDX tested to see if it needed to be replaced.

He always has bought his cars used from friends or family members, partly because he prefers to not 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 from 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.

Advance Auto's number of company-operated stores fell 9.9% to 4,770 between February 2014 and December 2022.

In the fourth quarter of last year, Advance Auto’s net sales grew 3.2% to $2.5 billion compared  with the period a year earlier. But sales at stores open at least one year grew 2.1%, most of which was led by mid-single-digit DIY sales — such as 5%, 6% or 7% increases.  

In 2022, Advance Auto opened 144 new stores and branches.