Key Points:
- Observed traffic (per Advan) for auto part retail shows that DIY traffic took a hit in late April as gas prices spiked, but since settling down, traffic has improved. We see no evidence of any impact on commercial.
- O’Reilly has outperformed during the recent period, on a nationwide basis and in Texas, Florida, and California (a sampling of large states).
- Competitive intensity/encroachment is also a big topic/fear for the sector. Using our new Claude+Advan MCP, we show that the impact on incumbent locations from new store encroachment is temporary and modest.
- Should you want to talk about any of this, send me an e-mail.
This week, a number of readers reached out to ask if we were observing a slowdown in auto part retail traffic (something that others are showing). Obviously, there is a concern that higher gas prices are cutting into the discretionary spending of the DIY customer, and then there are adverse weather concerns (less heat less break & fix). Separately, for context, traffic data captures both the DIY and commercial side of the business; that’s in contrast to 3P credit card data, which largely captures only the DIY business (commercial is generally billed).
The graph below shows traffic per location, along with traffic to auto repair shops (108K locations in our data). NAPA is 15K locations and is beyond just GPC. As gas prices spiked upwards in late April, there was a clear negative response in traffic to stores. We are at a loss to explain why traffic to repair shops the other way, but that would be a tailwind for the commercial side. As gas prices began to recede in late May, store traffic improved. As suggested above, we suspect that most of this volatility was in the DIY side of the business, with AutoZone the most exposed (70% of revenue) and NAPA least (20% of revenue). As shown, NAPA had only a moderate downtick. Based on the firmer repair shop trend, we suspect that the commercial side of the business remained firm during May for all four retailers. Additionally, we do not observe a progressively weaker March, April, and May as others are showing.
Next, we asked Claude+Advan how trends varied between states, and the answer below shows that O’Reilly consistently outperformed in three important states – Texas, Florida, and California. Given that Texas is O’Reilly’s largest market, it's important that it extends its lead in it. NAPA is the largest share donor in all three states.
Last year, O’Reilly said that they were going to open more stores and a DC in Texas to take the pressure off some of its high-volume stores in the market. They added 5 new locations in ’26, 25 in ’25, and 27 new locations in ’24. AutoZone has also been adding locations to the state (+76 since 2023). As suggested by the above chart, the new locations don’t appear to have adversely impacted O’Reilly’s recent performance (in aggregate). However, the Claude+Advan MCP allows for a deeper dive. There were 120 openings in 2024 and ’25 between O’Reilly and AutoZone; as answered below, O’Reilly takes an initial hit, but that then quickly fades, which is what management communicated.
