How The Economy Affects Autozone's Economy

AutoZone is not immune to economic downturn. The economy has a huge effect on AutoZone’s business. Fuel costs, unemployment rates, and other economic conditions affect consumers and the automotive parts industry (10-K: AutoZone, 2016). Gas prices have been lower in the past year than American’s have seen in recent years. Spending less to fill the tank has allowed consumers the luxury of a little extra cash in their pocket. Extra cash allows consumers to do more leisure activities including travel, which puts miles on their car. Increased miles will eventually equate to needed wear and tear; and eventually repairs. Unemployment rates can affect the amount of extra funds that consumers have to put into basic upkeep of their cars. Decreased

To capitalize on the do-it-yourself segment of the market, AutoZone has made getting the parts to make repairs as simple as possible. The organization realizes that when a customer needs a part, they need it right then; most are unwilling to wait. If AutoZone doesn’t have the required part, they risk pushing their customer in the direction of the competition. In 2016, AutoZone developed and implemented a new inventory deployment strategy (Denman, 2016). This strategy changed the delivery frequency from once weekly to multiple deliveries each week to ensure that the neighborhood stores had the necessary products in stock. They also rolled out the mega hub store concept. This is a store that is almost double the size of the typical store and can deliver products to stores in their region who may have depleted inventory on an item that is needed. The goal is to avoid having a customer leave a store without a part that they came to get. Because money is often a determinant of what repairs will be made and which ones will wait; AutoZone has expanded its product line to include parts that range from high-end to low-end. The good, better, best concept allows consumers to pick which price point that they can afford to