---
title: AutoZone Shows Why Repair Businesses Perform Well During Recessions
description: "One other outperformer stands out: AutoZone. The Memphis-based company is America’s largest seller of aftermarket auto parts and accessories.AutoZone performed well during the 2008-09 financial crisis"
---

<https://www.nlopchantamang.com/trends/signals>

# [AutoZone Shows Why Repair Businesses Perform Well During Recessions](https://www.nlopchantamang.com/trends/signals/signal/autozone-repair-businesses-perform-well-during-recessions)

 Written by [Trung Phan](https://www.nlopchantamang.com/trends/signals/author/trung) | Mar 24, 2020 11:10:29 PM

**The Signal: **US stocks have gone through one of the wildest rides in recent weeks as the coronavirus pandemic has spread across the globe. At the bottom of the market, the S&P 500 officially entered [bear market territory](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3132) (a 20% index decline) for the first time in more than a decade.

Over this span, two of the worst-performing segments of the S&P 500 have been:

- **Travel: **Cruise liners (Carnival, Norwegian Cruise, Royal Carribean) and airlines (American Airlines, United, Delta, Alaska) have tumbled as the travel and tourism industry have abruptly shut down.
- **Energy:** A Saudi-initiated oil price war has shaken the oil and gas industry, with oil prices falling some 30%.

But two other sectors have (relatively speaking) weathered the storm better:

- **Consumer Staples**: Firms that provide basic consumer goods -- particularly items that are apt to be stockpiled -- have outperformed the market (e.g., Kroger, Campbell’s, Clorox, General Mills).
- **Healthcare**: A number of pharmaceutical companies (Gilead, Regeneron, Eli Lilly) that are searching for coronavirus treatments have also outperformed.

One other outperformer stands out: [**AutoZone**](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3133). The Memphis-based company is America’s largest seller of aftermarket auto parts and accessories.

AutoZone performed well during the 2008-09 financial crisis and -- with the odds of a [recession recently rising sharply](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3134) -- we looked into the firm’s old financials to see how it was able to navigate the previous crisis.

According to the AutoZone’s 2009 [annual report](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3135), its post-crisis performance was buoyed by the fact that consumers -- with tighter pockets -- were delaying new purchases and opting to repair and do maintenance on existing cars:

*"During [2009] as the economy was challenged with higher unemployment, our product sales shifted noticeably to maintenance-related categories and away from more discretionary purchases. As purchasing behaviors changed, we focused our marketing efforts on helping customers properly maintain their vehicles….[including] late-model parts coverage."*

**The Opportunity: **In the event of another recession, it is highly likely that consumers will shift from new purchases (especially big-ticket items) to repairs and maintenance.

The opportunity around this change in consumer behavior is predominately in three buckets: 1) supplying parts and tools for DIY repairs; 2) offering repair services; 3) creating [repair video content](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3136).

Aside from auto parts, other big retailers provide replacements for appliances, lawn and garden tools, HVAC and related home parts. They include [Repair Clinic ($57m revenue), PartSelect ($24m), AppliancePartsPro ($44m), Parts Inc. ($21m), and Marcone ($150m)](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3137). And, of course, Amazon has over 100k items in its "[replacement parts store](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3138)."

Based on reviews for the replacement part companies, there seems to be a major need for *accurate *parts listings. Reviews for [Repair Clinic on a third-party review ](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3139)website express frustration with parts on offer and delivery times, which suggests that a localized option in large markets may be worthwhile.

With major disruptions in existing supply chains, there is a clear opportunity to source and bring relevant parts to market: Using [Ahref](https://thehustle62422.acemlnb.com/lt.php?notrack=1&s=464883b9eb98efcb30e66001092f3634&i=172A371A2A3140)’s search data, we identified the following categories that may see increasing demand for repair services during a recession.

[View full post](https://www.nlopchantamang.com/trends/signals/signal/autozone-repair-businesses-perform-well-during-recessions)

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