OPE Dealer Mid-year Progress Report

Outdoor Power Equipment (OPE) magazine recently asked several dealers about how their business fared in the first half of the year. Specifically, we asked them the following three questions:

1. What were your expectations for your dealership heading into 2012?

2. How has your dealership fared in meeting those expectations in the first half of 2012?

3. What are your expectations for your dealership in the second half of 2012?

OPE received the following responses June 13-20:

We expected to stay busy on the road, in the shop, and have strong parts sales going into spring. What happened was just the opposite. We had no snow in a year where our customers needed that snow money. Our shop and store were very slow until the middle of May, which is six weeks later than normal. We made a reduction in the amount of employees we have and are better off by doing it. Things have picked up to where they belong and we are very busy, but it will be hard to catch up to where we expected to be. I think the rest of the year will remain good and steady.
— Matthew Borden, vice president
Ed & Matt Equipment
Greenville, R.I.

1. What were your expectations for your dealership heading into 2012?
After a stronger-than-average finish to 2011 and strong early sales in 2012, I was optimistic that 2012 would continue the slow, but upward trend.
2. How has your dealership fared in meeting those expectations in the first half of 2012?
By April, our sales had flattened. And now, we are in drought conditions and mower sales have dried up along with the grass. Fortunately, we are diversified and have a few sectors that are doing OK, which are helping to offset the lack of traditional seasonal sales. In spite of the bright spots, we are well behind where we expected to be.
3. What are your expectations for your dealership in the second half of 2012?
Obviously, the lack of rain has hurt our mower sales, so, if we could get a change in the weather pattern, there might be some hope for an uptick in sales in that sector, but it is getting too late in the season to hope for much.
Even before things turned dry, sales had started to go flat. I think the reasons for the poor retail environment are complex and not likely to change. I am not optimistic about the second half of 2012.
— Roger Zerkle, owner
Zerkle Diversified Enterprises, LLC
Flat Rock, Ill.

1. What were your expectations for your dealership heading into 2012?
The expectations for our dealerships was higher than it has ever been! We took on a new line of equipment (Mahindra) and expected huge increases in our sales volume.
2. How has your dealership fared in meeting those expectations in the first half of 2012?
I think like in all markets around Ohio, we suffered “less than usual” Landscape Contractor business this spring. The largest variable contributing to that was the winter that preceded it and NO SNOW! In a typical year, Cincinnati can expect around 30-40 “snow events,” which require salt and/or plow service. The winter of 2011-2012 only provided about three opportunities to put down salt, and even those events weren’t very good, most of the time only applying salt once. The landscapers that depended on winter income to purchase new equipment in the spring, went in to the spring with their pockets empty. Our Mahindra business is off some, but overall (aside from Landscape Contractor business) we are doing OK.
3. What are your expectations for your dealership in the second half of 2012?
We obviously HAVE to stay profitable. Our management team has been able to pull off profitability the last several years, and this year will be no different. We have to maintain profitability to stay competitive with the banks, etc. We’ll adjust as necessary and keep it in the black — one way or another.
— Jason Hicks, inside sales, parts, and service manager
West Chester Lawn & Garden/Moe’s Outdoor Equipment & Supplies
Liberty Township, Ohio/Springboro, Ohio

1. What were your expectations for your dealership heading into 2012?
Moderate growth, particularly in our service division
2. How has your dealership fared in meeting those expectations in the first half of 2012?
We have not achieved the goals, primarily due to the winter without snow. This had a strong impact on service and sales.
3. What are your expectations for your dealership in the second half of 2012?
We expect the second half to be strong with a good fall cleanup season. We are concerned about the preseason snow blower tune-ups; since they did not need their snow blower last year, we will not be as busy. Hopefully, our attempts to educate our customers about the ethanol issue will result in them having fewer problems, which is positive for them but a negative for us. We are fine taking that hit though, since we feel like the ethanol issue is almost like blood money. We would much rather help our customers not have to deal with the problem.
— Steve Reitter, rental and service division manager
Robinsons Hardware & Rental
Hudson and Framingham, Mass.

1. What were your expectations for your dealership heading into 2012?
With no snow, we were concerned and correct.
2. How has your dealership fared in meeting those expectations in the first half of 2012?
We are off about 13 percent from 2011, which was a good year for us.
3. What are your expectations for your dealership in the second half of 2012?
Hope to keep it steady.
— Anonymous dealer

We had a good second half of 2011. Along with increased consumer activity, we were hit with a succession of damaging storms. Our shop and rental business were kept busy right through a surprise October snowstorm. 
We expected much of the increase in general consumer activity during 2011 to continue into 2012.
With the snow drought that lasted all winter, we ended the first quarter of 2012 flat. Even with reasonably good weather, our early spring was still a bit flat. Over the last few weeks, the pace is picking up, and it looks like 2012 will finish off as good as 2011.
— Rob Leiser
Leiser’s Rental & Sales
Easton, Pa.

I stocked up for a great 2012. The season did start out as I expected, and I was excited about that. However, I didn’t see July heat and slow business starting the end of April, and August-style weather mid-May and now June, with no relief in sight. If we don’t see some rain soon, I’m not sure if I will have a good second half of 2012. Will hope for a great fall, with hopes of it pulling us through this drought. It’s crazy; it rains before us, above us, and past us, just not on us. Even faced with laying off some of my employees, which I truly hate to do.
— Tony Nation
Nation’s Small Engine, Inc.
Hot Springs, Ark.

With every new year, we always have high expectations of the upcoming mowing/selling season. This year, we took on two new lines to try to make up some cuts in our year-end bonus. Our main goal is, as always, to try to move as much equipment as possible in the three short months of our selling season
An early spring started our season off and sales were steady. All our numbers looked like they were a month ahead of schedule. To date, our sales are 20 percent ahead of last year’s numbers. Some of our new products are working well for us, while others are not. You never know what will do well in the area you service until you try.
Our expectations for the second half of 2012 is cautious optimism. We hope our two new lines will continue to grow, as well as our other equipment lines. I am being very cautious on our inventory and trying to not get too heavy with all the talk about how bad the economy is. I’m afraid that the public has been hearing this for such a long time that sooner or later that is what they will think and sales will decline.
— John and Vicki Moon
Moon’s Farm-Yard Center, Inc.
Ulysses, Pa.

1. What were your expectations for your dealership heading into 2012?
With the economy making a long-awaited recovery, we were expecting to have an outstanding record year of new equipment sales.
2. How has your dealership fared in meeting those expectations in the first half of 2012?
This year started out exceptionally well. In the first six months of this year, we have exceeded all of last year’s sales.
3. What are your expectations for your dealership in the second half of 2012?
At this point, it largely depends on Mother Nature. We have not had any rain for two months, followed by election year, and the economy. People are holding on to see the outcome of all this.
— Jim L. Edwards, owner
Leland’s Mower & Tiller Repair
Carmi, Ill.

1. What were your expectations for your dealership heading into 2012?
I did not expect or plan for any overwelming increase in outdoor power equipment. We had expected sales to be pretty much flat through 2012.
2. How has your dealership fared in meeting those expectations in the first half of 2012?
We have been pleased with the first-half sales. Spring came on very strong in early March and April; a drastic change from 2011. With the good weather and above-normal temps, sales exceeded our expectations. When May came, sales went dead.
Our weather was not favorable in late April and early May for lawn work and gardening, although as the month of May progressed, sales came back — not so much on mowers but on trimmers and hedge trimmers.
3. What are your expectations for your dealership in the second half of 2012?
As we progress through June, we have seen steady numbers — same as 2011, if not higher; again, trimmers and hedge trimmers seem to be stronger than in the past, partly because we installed a 24-foot Echo wall display.
— Kevin Evers, vice president
Village Hardware Inc.
Leipsic, Ohio

1. What were your expectations for your dealership heading into 2012?
We were hoping that there would be an increase in sales and see people starting to spend money again. For the last three years, people have held back on spending. A lot of equipment has been patched together over the years and getting too old to fix. I think customers are getting to the point they have to buy new equipment. Where they buy it is up to us to get them in our store. Our goal this year is to get new customers to come to our store and keep our old customers coming back. 
2. How has your dealership fared in meeting those expectations in the first half of 2012?
I am happy to say we are having a very good year in sales. I’m finding that people are smarter shoppers and are willing to spend a little more for good service. We do little advertising and most of it is word of mouth. We have people coming in all the time and telling us their friends have sent them down to buy a piece of equipment. Having an honest reputation is what brings customers in. We service all types of equipment, so our service department has had a very busy spring. I am happy to say we are doing very good getting new business and keeping our old customers happy.  
3. What are your expectations for your dealership in the second half of 2012?
I think our second half will be as good as the first. If the weather gives us rain and sun, the grass will always grow. Equipment will get old and break down, and someone needs to fix it. New equipment needs to be sold, and people are tired of the big-box stores with no service. Our goal is treat the customer the way we want to be treated. Stand behind our service work, and get it done in a reasonable time frame. The way we’ve built our business is with a friendly smile, proud workmanship, and an appreciation for our customers’ business.  
— Dan Staples, president
Bayside Equipment
East Dennis, Mass.

1. What were your expectations for your dealership heading into 2012?
Slight increase.  
2. How has your dealership fared in meeting those expectations in the first half of 2012?
We are down about 2 percent. This is due to poor snow thrower sales in January and February. If we take snow out of the picture, we would have had a nice increase. Should mention total sales were up 36 percent from 2010 to 2011.
3. What are your expectations for your dealership in the second half of 2012?
Hopefully, lawn and garden sales will continue. We only carry two lines: Stihl and Toro. Stihl sales are strong. More concerned about Toro sales. 
— Paul Begick, president
Begick Nursery & Garden Center
Bay City, Mich.

Increased personal customer contact and service offerings.
I am in the process of developing a fully equipped service truck to provide onsite service for my customers and a flexible service schedule rather than a store location. It has been well received by my customers, reduced overhead, increased profitability, and allows flexibility. People like the fact that I can take the shop to them and save them time and money and hassle.
I expect this venture to increase volume as I expand this venture, and I am not limited as to where I can go to perform repairs. Should be a great year. Keep the faith!
— Mike Burke, president
Burke Power Engine Repair Inc./Mike’s Mobile Small Engines
Gold Bar, Wash.

Two things. Number 1: We in southern Illinois are experiencing the DRYEST year to date since 1907. There is nothing to mow, and nobody’s buying. Number 2: Power equipment margins stink! With our wood stoves, fireplaces, gas logs, etc., we average a 37-percent margin. On the power side, you are lucky to get 17 percent, and that’s only if your paperwork time has no value! Are we all saps?
— Dean Davis
Dogwood Fireplace & Lawn
Carbondale, Ill.