ELI GREENBLAT
August 21, 2017
The Australian
Super Retail Group, whose retail chains include Rays, Rebel and Supercheap Auto, is scrambling to build up its retail defences against the looming arrival of Amazon, switching its focus to strengthen its bricks and mortar offer by inking a deal with German tech and manufacturing giant Bosch to open car service workshops.
Combining Bosch’s auto expertise with Supercheap Auto’s large retail footprint and consumer base, the pair have developed a new independent full service auto workshop to be called AutoCrew.
The workshops will initially be located in the Greater Sydney area, with the first AutoCrew set to open in Western Sydney in early 2018. It will offer drivers a full automotive service powered by Bosch’s diagnostic and workshops technology.
The workshops will offer independent fast-fit services with Bosch parts. Bosch will also provide diagnostic and service training for the workshops. This will be supported by Supercheap Auto’s service reputation, quality, reliable automotive products and extensive market knowledge.
According to data from IBISWorld, the ‘Do-It-For-Me (DIFM)’ car service market in Australia is fast growing, with a total present value of around $24 billion, while at the same time the servicing and parts market remains highly fragmented.
In June Super Retail Group (SUL) chief executive Peter Birtles came out swinging against investor concerns over Amazon, arguing it could defend and grow its margins in the face of an onslaught by the US retail giant.
Mr Birtles highlighted recent research on Amazon in the British and US markets, where auto, sports and leisure category spend was estimated to only make up 2 per cent of sales.
Mr Birtlesrelied on analysis by Hitwise that showed Amazon would probably hit sales of 2-3 per cent of the combined auto, leisure and sports categories, representing sales of $200 million-$300m.
“Super Retail Group has been anticipating market disruption for a number of years and its strategy positions the group for continued growth despite the anticipated disruption,” Mr Birtles told a Morgan Stanley emerging companies conference.
“Our analysis concludes that the market disruption will not be as detrimental to Super Retail Group as implied by some market commentary and the recent share price fall.’’
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